Embedding Organizations: Societal Analysis of Actors, Organizations and Socio-economic Context (Advances in Organization Studies)

EMBEDDING ORGANIZATIONS

Advances in Organization Studies Advances in Organization Studies includes cutting-edge work in comparative management and intercultural comparison, studies of organizational culture, communication, and aesthetics, as well as in the area of interorganizational collaboration — strategic alliances, joint ventures, networks and collaborations of all kinds, where comparative, intercultural, and communicative issues have an especial salience. Purely theoretical as well as empirically based studies are included.

General Editors Stewart Clegg School of Management University of Technology Sydney Quay Street, Haymarket P.O.Box 123 Broadway, NSW 2007 Australia [email protected] Alfred Kieser University of Mannheim D 68 131 Mannheim Germany [email protected]

Volume 4 Marc Maurice and Arndt Sorge (eds) Embedding Organizations Societal analysis of actors, organizations and socio-economic context

Embedding Organizations Societal Analysis of Actors, Organizations and Socio-Economic Context

Edited by

MARC MAURICE Laboratoire d’économie et de sociologie du travail, Aix-en-Provence

ARNDT SORGE University of Groningen

JOHN BENJAMINS PUBLISHING COMPANY AMSTERDAM/PHILADELPHIA

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The paper used in this publication meets the minimum requirements of American National Standard for Information Sciences — Permanence of Paper for Printed Library Materials, ANSI Z39.48–1984.

Library of Congress Cataloging-in-Publication Data Embedding organizations : societal analysis of actors, organizations, and socio-economic context / edited by Marc Maurice, Arndt Sorge. p. cm. -- (Advances in organization studies, ISSN 1566-1075 ; 4) Includes bibliographical references. 1. Economics--Sociological aspects. 2. Sociology--Study and teaching. 3. Political science--Study and teaching. I. Maurice, Marc. II. Sorge, Arndt. III. Series. HM548.E45 2000 306.3--dc21 99-087043 ISBN 90 272 3301 2 (Eur.) / 1 55619 747 0 (US) (Pb: alk. paper) CIP © 2000 – John Benjamins Publishing Company No part of this book may be reproduced in any form, by print, photoprint, microfilm, or any other means, without written permission from the publisher. John Benjamins Publishing Co. · P.O.Box 75577 · 1070 AN Amsterdam · The Netherlands John Benjamins North America · P.O.Box 27519 · Philadelphia PA 19118-0519 · USA

Table of Contents Preface Chapter 1 General introduction Marc Maurice and Arndt Sorge

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PART I. THEORY, METHODOLOGY AND EPISTEMOLOGY

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Introduction

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Chapter 2 The paradoxes of societal analysis. A review of the past and prospects for the future Marc Maurice Chapter 3 The diabolical dialectics of societal effects Arndt Sorge Chapter 4 Societal or systems effects? Erhard Friedberg Chapter 5 Towards a relational approach to the study of variety in the situated creativity of economic actors Olav Korsnes Chapter 6 The implications of ‘societal analysis’ for a programme of research Jean-Michel Berthelot Chapter 7 Theoretical problems in international comparisons: Towards a reciprocal improvement of societal analysis and régulation theory by methodic structuralism Bruno Théret Chapter 8 Positivist, hermeneutical and postmodern positions in the comparative management debate Niels G. Noorderhaven

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TABLE OF CONTENTS

PART II. THE ECONOMY Introduction 141 Chapter 9 The contribution of societal analysis to the economic theory of the firm François Sellier Chapter 10 Explaining changes in institutional frameworks: Societal patterns of business coordination David Soskice

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PART III. THE ENTERPRISE

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Introduction Chapter 11 Understanding the globalization strategies of German and British multinational companies: Is a ‘societal effects’ approach still useful? Christel Lane Chapter 12 The evolution of teamwork at Rover: Societal, sectoral and organizational explanations Frank U. Mueller Chapter 13 The societal effects school and transnational transfer: The case of Japanese investment in Britain Chris Smith and Tony Elger

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Chapter 14 The transfer of business practices to Britain and France Edward Lorenz

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Chapter 15 Society, organization and work in China Malcolm Warner

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PART IV. GOVERNMENT, PUBLIC POLICY AND PUBLIC SERVICES

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Introduction

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Chapter 16 Deregulation and societal systems Philip Almond and Jill Rubery

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Chapter 17 Do we compare societies when we compare national university systems? Christine Musselin Chapter 18 Path dependencies of education systems and the division of labour within organizations: Formalizing the societal effects perspective Jerald Hage

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Chapter 19 Reintroducing public action into societal enalysis Eric Verdier

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PART V. GENDER, THE FAMILY AND WORK

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Introduction Chapter 20 Is it time to gender the societal effect? Jacqueline O’Reilly

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Chapter 21 Societal analysis and social change in the family division of labour Marie-Agnes Barrère-Maurisson Chapter 22 Male and female patterns of labour force participation: A comparison between France and Japan Hiroatsu Nohara

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Chapter 23 Conclusions Marc Maurice and Arndt Sorge

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References Authors

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Preface We would first and foremost like to thank all the authors who reponded to our Call for Papers so willingly and competently. A number of translations of papers from French into English were competently done, as usual, by Andrew Wilson. Secretaries in three places were supportive in the administrative work and the compilation of an array of papers and their transformation into book chapters: Ingrid Burmeister, Eliane Cadeau, José van Gerwen and Margreet Morren. Our past employers graciously supported this book venture by funding translation and facilitating travel and editorial meetings: Laboratoire d’économie et de sociologie du travail (CNRS), Aix-en-Provence (France), Humboldt University Berlin and the Work and Organization Research Centre (WORC) at Tilburg University (The Netherlands). We gladly remember the support of Dr. Bianka Ralle at the time that we conceptualized and planned this book. And finally, we take pleasure in signing this preface in the town which has come to symbolize the approach which is put forward and discussed here, as the real or ‘virtual’ home of both of us: Aix-en-Provence, June 1999 Marc Maurice Arndt Sorge

Chapter 1 General introduction Marc Maurice and Arndt Sorge

Societal analysis, in the way it was developed at the Laboratoire d’économie et de sociologie du travail (LEST) at Aix-en-Provence, is a general theoretical and methodological approach for the investigation and explanation of social, economic and political phenomena, in a societal perspective. As such, it is a crossdisciplinary approach which has come about through the combined contributions of scholars from different disciplines and which is meant to be useful in different social science disciplines. It is one of several approaches particularly useful for comparisons between societies, but a societal perspective may similarly be useful in a single-country study. What the approach has to contribute is that it alerts the scholar to the importance of seeing social, economic and political phenomena as reciprocally constitutive of each other, across the habitual borders of domains, spheres, levels and action systems. What this means precisely will be developed below. The approach has never been intended to stylize ‘society’ as a secluded and monolithic entity. Nor has it ever been intended to explain phenomena by referring to supposedly general ‘societal characteristics’ or ‘variables’ which, as it were, ‘impact’ on ‘lower level’ phenomena. It was by no means intended to found the importance of societal effects on a new ‘grand theory’ of society in the conventional meaning of this notion. The approach emerged in a fairly pragmatic way, from the cooperation of different scholars: one was a sociologist of work and organization (Maurice), one an industrial relations scholar (Sellier), and one a labour economist (Silvestre). The development of the approach thus became an exercise in cross-disciplinary research. All this had to have consequences for the composition of the present book. Its net has been cast widely, across several topics and institutional domains. Themes which are otherwise treated in different and more specialized volumes are grouped together here. This is only consequential because, following the approach, societal articulation can only be demonstrated by linking a treatment of different domains of society, the economy and the polity.

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It is worth recalling at this stage some important and basic theoretical characteristics of societal analysis. Many readers will not have been aware of these, even if they have read some societal analysis writings. This may partly be related to the pragmatic development of the approach, and a reluctance to advance it in an axiomatic form. An axiomatic treatment was deliberately kept in check, and so was hypothetico-deductive reasoning, as going against the theoretical qualities necessary for the societal analysis envisaged. But there are inevitably fundamental principles to any approach. Those governing societal analysis are few, and they have already been stated, but they need to be repeated. The first major theoretical characteristic is the insistence on the reciprocal, interactive constitution of actors and spaces, as one constituent of ‘the societal’. Spaces are identified by a meaningful function of social action, such as ‘organizing’, ‘generation of competence’ (which in the French original is referred to as ‘qualification’), innovation etc. Societal effects originate from the reciprocal constitution of spaces, and the distinctiveness of a particular society lies in the features that a specific type of reciprocal constitution has brought about. Spaces are seen as internally structured by this mechanism; the structuring that spaces have acquired then tends to be reproduced through interactive relations between spaces, which gives it a quality that may be called ‘institutional’. However, since the reproduction does not reproduce something which remains identical in concrete terms, we are not dealing with institutions in a reified form. Actors do innovate practices, which reduces the inertia usually implied by institutions. But since actors cannot extricate themselves from the societal interdependency of actors and spaces, they paradoxically replicate some more abstract qualities of practices even as they innovate them. More is explained in the following chapter by Maurice, in the first part. Social actors can thus be seen to be continuously engaged in the structuring of spaces, and in turn being structured by them, in a non-deterministic relationship. This is marked by relatively enduring and continuously changing patterns, coupling actor predispositions and structures of action spaces. This characteristic is not a monopoly of societal analysis alone. In addition to the principle of reciprocal constitution of actors and spaces, there is the principle of the interactive constitution of spaces with regard to each other. Action spaces are inter-linked in such a way that they condition each other reciprocally. This does not happen in a mechanical or impersonal way: it rests on the operation of the actor-space interaction already mentioned. Human acts, whether consciously or unconsciously, with regard to their prerequisites and consequences, typically reverberate across the full range of societal spaces. Hence society is not defined as a particular kind of social collectivity, with maximum self-sufficiency and based on a distinctive set of integrating values as, for instance, in structural functionalism. Society is that space which unites all imaginable and meaningful spaces of action, through the existence of relatively

GENERAL INTRODUCTION

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enduring patterns of interaction. And these bring forth continuously changing institutions. It is typical for the approach that no exhaustive and logically compelling list of spaces was suggested. Those classifications of spaces and their dimensions which the approach has offered were developed in a piecemeal and pragmatic way, so that researchers may happily engage in their further development. They did, however, emerge from the two core themes in the sociology of work and their inter-relations: Organizing and competence formation. But otherwise, classifications of spaces used admittedly have changed and been extended. This should not be considered a sign of theoretical neglect but a drive to avoid the dogmatism inherent in, for instance, the Parsonian scheme of the social system subdivided into the polity, the economy, a fiduciary system and latent pattern maintenance. In other words, scruples that any terminology of spaces may turn out to be socially constructed and specific, therefore in need of ongoing development and adaptation, led the proponents of the approach to treat them pragmatically with intention. In dealing with societal identity over time societal analysis has always distinguished two levels of change, one more abstract and the other more concrete. Concrete practice, arrangements and actor predispositions do change over time. Germans discover divisional organization as something useful, the French upgrade the technical quality of their foremen, and the British do away with rigid job territories. Societal identity, however, is not rooted in the banal unchangingness of such practices. Being constituted by typified patterns of interaction between action spaces, it remains visible, in the midst of change, in the qualitatively specific form that such changes take on. This tends to link new practices to existing logics of action. This would even happen after full-scale revolutions. More on that will also be said in the following chapters. The characteristics mentioned show to what extent societal analysis is open to further development, through rearrangement of spaces and reconsideration of societal specificity over time. This has to a surprising extent gone unnoticed. Partly it is related to the unaxiomatic exposition of the approach, partly to the misunderstanding or simply neglectful reading of its major statements. One part of the story is also the translation of the major work into English, which took out the interactionist connotations and emphasized firm categories, determinate and sometimes deterministic wordings. It is preferable to refer to the French original (Maurice et al. 1982). It had always been meant to be an approach rather than a theory in the sense of ‘positivist’ epistemology. However, this was not simply a flaw due to the pragmatic origin of societal analysis in the co-operation of scholars from different disciplines in a specific research project. An understatement of the theoretical axiomatics was certainly felt to be an asset and a creative contribution at a time when the helplessness of a number of grand theories in

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different fields was becoming patently obvious. Theoretical openness was necessary to break free from the shackles of structural functionalism, orthodox marxism, neo-classical economics, contingency theory and universalistic industrial relations systems theories. The approach originated at a time, towards the end of the 1970s, when dissatisfaction with such dominant approaches was overwhelming. In sociology, Alvin Gouldner had diagnosed this ‘coming crisis’ as one in which the attention would shift to theories of social action, rather than structure. A similar impetus was provided by Alain Touraine, and a rapidly growing interest could be observed in action and meaning centred approaches such as symbolic interactionism, ethnomethodology, the young Marx of the Parisian manuscripts rather than the ‘old’ one of dialectical and historical materialism. On the other hand, it was not the intention of the pioneers of societal analysis to jettison structuralist elements indiscriminately. Interdependencies between the structuring of different spaces making up society even had a systemic ring to them. A new balance of structuralist and action- and actor-centric elements seemed to be called for. It should be recalled that this period, towards the end of the 1970s, was before such new statements as Giddens’ structuration theory were available, before Elias’ earlier pioneering work on the ‘civilizing process’ was expanded into a larger figuration sociology approach, and also before the combined work of Crozier and Friedberg or Bourdieu became visible. All these works performed parallel and related, although different, articulations of the ‘macro’ and the ‘micro’, of structure, behaviour and meaning, and the latter two were explicitly discussed as related but different approaches in Maurice et al. (1982). In this sense, societal analysis was to a large extent interactionist theory ‘avant la lettre interactionniste’. What it did not do, however, contrary to other parallel and subsequent authors, was to abandon ‘the societal’. Alain Touraine (1981) had projected a ‘sociology without society’. Much as societal analysis had taken up his earlier plea for a sociologie de l’action, it certainly could not follow him on that score. The ‘societal’ aspect remained crucial. But societal analysis could insist on this with much more ease since it had never followed earlier, exaggerated, tendencies to use ‘society’ as co-terminous with a very narrow range of constituent properties, such as in ‘capitalism’, ‘industrial’ or ‘post-industrial society’. Nor could it ever fall back on the conceptual dissolution of society, into a multitude of actor-system reciprocities. The persistent interest in society is best expressed as one in ‘the societal’, not in ‘the society’ crystallized in the nation state, as only one possible form of societal articulation, to use a term which translates Georg Simmel’s notion of ‘Vergesellschaftung’. Compared to other theoretical ventures, societal analysis has consistently given much greater importance to investigating societal effects, rather than to manifest and concentrated ‘theory-building’. The first major research report with

GENERAL INTRODUCTION

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the Franco-German comparison had more than 800 pages, and major works to follow such as on mechatronics in Japan, computerized machine-tools in France and in Britain and Germany, electronics development in France and Japan, are all distinguished by empirical richness in a proportion to theoretical heaviness which is more favourable to the former than elsewhere. Since the approach was pioneered, there has been a continual and continuous tendency for other scholars to take disproportionate notice of the first study (on France and Germany), to some extent also the Franco-German-British comparison, but to disregard the theoretical passages which could be found in Maurice et al. (1982) and also earlier in Maurice et al. (1977). The result has been some confusion and misunderstanding about the precise nature of the approach. Societal analysis was deliberately intended to be a rather open-ended approach, not only in the way spaces were handled and axiomatic or nomothetic theory-building were restricted, in keeping with interactionist traditions. There was also an emphasis on the combined use of many research methods (case studies, analysis of available records and data, both qualitatively open and more standardized forms of enquiry). This gave the overall research approach a degree of complexity that made it difficult to transmit in ready-made form. This has been linked to theoretical openness. The combined effect led to difficulty in diffusing and transmitting practice of the approach in a less personalized form. All those who have stood more actively for the approach have done so on a basis of personal socialization into the craft and practice of societal analysis, which has usually been extensive through personal dialogue and cooperation, compensating for the difficulty in providing a concentrated and ready-made articulation of its essence, in theory and methods. As a result, practice of and adherence to the approach has been more limited. This book will show that there are, however, important ‘critical sympathizers’ who have often come up with studies that help to advance societal analysis, although their studies did not deliberately follow it in theory or method. The goal of the present book follows from what we have tried to explain so far. Besides the obvious wish to celebrate about twenty-five years of analyzing and explaining societal effects, there is a need to do the following: – Clarify the approach after 25 years of development and application; – Confront societal analysis with critique and external suggestions about what needs to be done; – Help to sharpen and focus the debate between proponents and critics of the approach; – Re-state the principles of societal analysis at a time when its topical value and possible contribution are often doubted. Whereas we are confident that a number of issues in the debate will become less problematic as a result of this book, we are also confident that controversy about

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the inevitable importance of societal articulation, notably in a time of internationalization of economic activity and public governance, will not recede. We are happy to be able to address such issues here. The structure of the book follows from the basic tenets of the approach. If societal articulation matters, it has to be shown to matter across spheres and domains of society in such a way that issues and solutions in differentiated spheres are connected. This is why the range of topics is wide, and it stretches from classical and overarching themes in theory, methodology and epistemology to new issues in gender relations which were less scholarly prominent when the approach emerged. Shorter and more specific introductions are provided for each part of the book.

PART I THEORY, METHODOLOGY AND EPISTEMOLOGY

Introduction The choice of texts for this section is partly arbitrary to the extent that most authors in this book deal with theoretical, epistemological and methodological questions in their own way. Selection was guided by the relative importance given to such kinds of question, for instance, by the co-editors who have taken part in the pioneering stage of societal analysis, in its construction and diffusion: Marc Maurice and Arndt Sorge. Looking at the origins of the approach from a distance, Maurice deals with the ‘paradoxes’ that underlie and structure it. This makes it possible to remind readers of its key notions, doing away with some misunderstandings. The paradoxes in question do translate the logic of a theoretical method which is not based on explicit axiomatics. They are, in a way, the lynch-pins in developing a progressive understanding of an approach characterized by an attention to interdependencies of phenomena (or dimensions), subject — however — to a tension due to their dualist character: The principal interdependencies operate between the universal and the specific, the local and the global, and actors and “spaces”. The dynamics of societal analysis is thus founded on dialectical relations between actors which are historical ones, situated in time, and “spaces” which are structured and changing. The dynamics in this way link both, elements of stability and change within ‘non-identical reproduction’. In this respect the contribution by Sorge complements the preceding one by making an additional point. The emphasis on the ‘dialectical’ and ‘paradoxical’ character of societal analysis serves to translate its capacity to integrate dimensions which are apparently opposed or contradictory but, still, jointly contribute to the construction and deconstruction of actors and the “spaces” in which their identities and relational capacities express themselves. The notion of ‘functional dialectics’ proposed by Sorge makes it possible to reveal the potential of the approach without being misled by ‘functional equivalence’, a notion which in the light of this approach is reductive. The importance given to the contingent character of our international comparisons (France-Germany, Britain-Germany, France-Japan) by Sorge is echoed in the contribution by Friedberg, continuing an old debate between the authors of societal analysis and strategic analysis. The intention of Friedberg’s treatment, which has its foundations in his Le pouvoir et la règle (1993) is to go beyond this

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debate which at times became polemical, by underlining the proximity between our respective approaches, in their most recent expression. Observable differences that remain between them are thought to be due to their historical orgins and specific types of initiating research. This would certainly require from both sides some more explicit treatment of the question if a fundamental accord exists.1 Korsnes’ contribution illustrates a different way of appropriating societal analysis, considering its theoretical and methodological implications on a higher level of reflection. Stressing the original quality of the methodology of comparison practised, the ‘comparison of the incomparable’, he sees it related to that proposed by Ragin (1987) by calling it ‘relational’. This also makes an emphasis on affinity with other authors possible, notably Ritzer and Gindoff (1994), but also Elias, Alexander, Bourdieu, Giddens, Latour and others, although there would be conflict between them on a number of other points. This reading of societal analysis testifies to a profound understanding of its conceptualization, through highlighting the eclectic qualities. This also allows the author to point to some of its limits, for instance the difficulties of articulating temporal dimensions with dimensions of spaces in the construction of objects of research (the ‘relational problem par excellence’). Théret on the other hand proposes quite a different approach, opposing ambitious theoretical perspectives, dealing with difficult questions that deserve closer attention. He juxtaposes societal analysis and the ‘regulation school’ to show their respective interests and limits. Following the author the result is a picture of complementarity which would be feasible by combining the approaches: what he calls ‘societal analysis of regulation’, the foundations of which largely follow structuralist method as practised by Lévy-Strauss, which he has already applied to the study of national systems of social security. However the familiarity of the author with societal analysis is limited, particularly its more recent manifestations. It has shown a capacity to build in actors at intermediate levels, which he holds up for the régulation school. Also the focus of societal analysis on national societies is in no way restrictive or necessitated by its theoretical construction. Whilst we appreciate much of Théret’s theoretical drift, the question remains whether it is possible to provide the structuralist grounding for a ‘societal analysis of regulation’, in the objectivist way suggested by Théret. These are well understood difficulties, also illustrated by the chapters by Berthelot and Noorderhaven, following very different styles of reasoning and approaches. Known for his recent works in the logic of scientific inquiry, Berthelot tackles a logical reconstruction

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The contribution by C. Musselin in Part IV (this volume), founded on a Franco-German comparison of universities, is less optimistic and provokes questions which are complementary and enrich the debate

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of societal analysis in order to evaluate its scientific quality and capacity of generalization. Although we cannot present the subsequent stages of the argument, this is developed with the shine and rigour that leaves little room for the authors criticized to escape the final diagnosis and save the ‘scientific’ status of their approach. The only way out, following Berthelot, would be either a ‘dialectical scheme’ or an ‘agency based scheme’ founded on the initiative of collective and individual actors and their structuring power. We wonder if this is not what the authors of the approach are doing already, contributing dialectically these two ‘scientific schemes of intelligibility’, possibly at the risk of subverting the borders between approved ‘scientific schemes’. Putting the chapters by Berthelot and Noorderhaven next to each other, the contrast is striking. Berthelot enables the founders of societal analysis to get to know the diverse trails on which they have wandered, and at times the dead ends these may lead to. This is always very fruitful for an approach marked by a particularly complex empiricism. On the other hand, Noorderhaven’s contribution is located within quite a different context, that of hermeneutics and its postmodernist critique. He attributes to societal analysis a position between positivist logic and an affinity with hermeneutics. This would then make it possible to criticize it from a post-modernist point of view. Are these different readings of our approach , interesting and innovating as they may be, not a little reductive? Is not ‘undecidability’, after all, one of the key concepts of that post-modern philosophy which Noorderhaven follows? Together, all the texts presented in this first part bring about a rich diversity of reflections and perspectives, over and above what is perceived as societal analysis, which appear to open new possibilities for its development. However most of the new perspectives are not radically new. Publications of the group of societal analysts emerging from Aix have in part only had relatively limited diffusion, after the initial Franco-German comparison. Would this not be an invitation to discover or re-read them to place the whole range of comments and critiques embodied in this part of the book in particular, within the context of a broader reading of societal analysis literature?

Chapter 2 The paradoxes of societal analysis A review of the past and prospects for the future Marc Maurice

As several of the contributions in this volume make clear, it is not at all easy to describe the “epistemological status” of societal analysis. Is it a “theory” or a “methodology”? Is its “paradigm” functionalist, structuralist or even hermeneutic in nature? Rather than engaging in such a debate ourselves, we would prefer here to focus our attentions on the “cognitive strategies”2 underlying this approach rather than seek to reconstruct its “framework of intelligibility”, whose logical formalism may well seem somewhat reductionist,3 even if it means falling into the trap of “justificatory dialectic”.4 In other words, in our examination of an approach that combines both induction and deduction, we will seek to highlight not only the dynamic of its attempts to render the real world intelligible but also the logic and coherence of its conceptual tools. Although we cannot claim to be conducting an exhaustive survey of the history or genesis of societal analysis through the various stages of its development, we will consider a few crucial periods in which decisions were made whose theoretical or methodological implications can be better explained a posteriori. In so doing we will refer to certain “key notions” that mark out this route and that are associated either with new objects of research or new societal contexts.5 It is undoubtedly no accident that these notions are often presented in binary form — as conceptual dualities — that constitute the series of “paradoxes” on which the heuristics of our approach is based. This indeed marks a break with the hypo2.

To use the expression adopted by Le Moigne (1995: 63).

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Not that such evaluations are not, in our view, legitimate, since they have the enormous merit of helping researchers immersed in the practical business of research to remain aware of the principles underpinning their work.

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Berthelot (1990: 200 etc.).

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Which is characteristic of the “open” nature of an approach that is more inductive than deductive.

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thetico-deductive logic that draws its inspiration from the Popperian schema.6 From one point of view, it would seem to have greater affinities with certain constructivist epistemologies, such as that developed, for example, by Barel (1989), which revives the dialectical approach. Similarly, as we shall see, some of the concepts used in our approach have some similarity to those used by Anthony Giddens (1984). Although they adopt different approaches, both of these authors make use of a sort of dialectic that enables them to go beyond the rational or logical concept of the “social system” and its functioning. For Barel, the objective is to analyse “a system as a paradox” (1989: 19).7 For his part, Giddens, while locating himself in a different style of constructivism, tends to go beyond the distinction between “individual subject” and “societal object”, “macro” and “micro” or even “actor” and “structure”, thereby distancing himself from both methodological holism and individualism, as well as from a structuralism without actors.8 However, that which might characterise the originality of societal analysis may also constitute an obstacle to any attempt to ford the river of “theoretical generalisation”, i.e. to attain the status of “scientificity”.9 It is undoubtedly somewhat uncomfortable to be stuck in midstream, but it is perhaps the price that has to be paid if the tried and tested heuristics of our approach is to be safeguarded and its analytical potential in new empirical and conceptual investigative spaces is to be developed. A review of some of the “cognitive strategies” underlying our approach will contribute to both a better understanding of our theoretical stance and an evaluation of the value and limits of that approach.

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The initial paradox: “Comparing the incomparable”

This paradox reflects the methodological split that has characterised the logic of societal analysis since the outset (1972) and by virtue of which it can be placed among the classic paradigms of international comparison.10 In reformulating the

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On this subject, we share, in our own way, the positions described by Passeron (1991) as a “non-Popperian space of natural reasoning”.

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This applies, for example, to the relationship between the individual and society, the singular and the universal (which certainly reflects the logic of our approach): “the social paradox, as well as the individual paradox, is that the universal can only ever be expressed in singular form, which means two things: that there is no universal expression of the universal and that the singular expression is more than simply the expression of singularity” (Barel 1989: 191).

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Giddens (1984: 15–15, 49–50, 266–267).

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Such a conclusion seems to follow from the rigorous diagnostic presented by Berthelot in his contribution to the present volume, which at the same time offers a great deal of encouragement for us to continue our research.

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Maurice (1989).

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terms of the commission entrusted to them, namely to compare relative pay levels “for the same jobs” in German and French firms, the LEST researchers were making a decisive choice, the effects of which were to guide their subsequent research. Indeed, the initial commission, which came from a state economic agency, clearly belonged to the classic tradition of statistical analysis that seeks to neutralise the “job” variable in order to measure the “wage” variable, thereby making it possible to compare that which can be compared. Such a commission was wholly in line with the scientific method based on the famous principle of “all other things being equal”.11 The LEST researchers, who were closer to sociological thinking and a casestudy approach that sought to contextualise categories, were more interested in reconstructing categories by locating them within the sets of principles (or logic) underpinning the “space” of which they were part.12 Thus these different approaches contain the familiar series of antitheses (between quantitative and qualitative analysis, statistical studies and case studies), whose theoretical and methodological implications have been highlighted by Desrosière,13 among others. They are indeed “two different ways of constructing a totality” as well as categories, and two different ways of conceptualising generalities. In keeping with its multidisciplinary foundations, in which economics and sociology are combined, societal analysis is based both on the processing of statistical data and the compiling of monographs or case-studies. In this case, however, the categories of statistical analysis are themselves “socialised”, as it were, that is they are related to the social conditions in which they were produced.14 Consequently, occupational categories and the criteria of seniority and age, training and formal qualifications, or even the “job” itself, do not have the same meaning from one country to the next, nor the same effects as those attributed to them in neoclassical economics (human capital theory, for example). In societal analysis these categories, far from being treated as desocialised variables that are therefore independent and “comparable”, are considered rather as the expression of specific modes of managing and organising the division of

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Passseron (1991: 111–133).

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In the reference work that lay the foundations for our approach, there are several examples of statistical data processing, particularly on seniority and occupational categories, that highlight the significant differences in these indicators from one country to the next: Maurice (1982: 49–50.

13.

Desrosieres (1989: 1–9).

14.

In the same vein, Desrosières (1989: 9) has pointed to one of the recent trends in certain statistical methods employed in the social sciences, which to some extent involves a reconstitution of the descriptions contained in monographs that take groups or spaces rather than “variables” as a starting point for suggesting “global patterns of coherence”.

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labour and social relations.15 Such a concept of data processing necessarily entailed a break with the classic criterion of “comparability”, “the locus and status of which tend to be displaced by societal analysis” Maurice (1989: 184–185). As Berthelot (1987) has noted most pertinently, the methods of comparison most commonly used in international comparative studies (and this is particularly evident in comparisons of statistical data) produce “random facts that have been uprooted from the system of intelligibility that gives them meaning” (Berthelot 1987 408–411). In this case, comparability is based on categories or criteria whose “continuity” (from one country to another) is postulated. Or, conversely, it is concluded that the categories of analysis cannot be compared because of their “high degree of cultural discontinuity, which renders any “term-for-term” comparison irrelevant”. In both cases, the principle of comparability is identified with a technical difficulty or as a limitation of comparative methodology. In societal analysis, on the other hand, the principle of comparability is no longer regarded as a problem to be solved or a difficulty to be overcome, but becomes rather the object of analysis: “If term-for-term comparisons cannot be made, it is because the differences identified are part of a system of social interactions that produces these differences as so many aspects of its specificity” (Berthelot 1987: 411). This is, indeed, the meaning given to the paradox of the “comparison of the non-comparable”.

2.

The articulation between the “macro” and the “micro”, and the notion of “coherence”

One of the difficulties in classical international comparisons is, as we have seen, that of the conditions under which the comparison is realised, which require adherence to the principle of “all other things being equal”. Both sociologists and economists then bring into play another principle, that of “functional equivalents”, a key notion in the universalist functionalist approaches that Merton (1957) incorporates into his sociological theory. Societal analysis keeps its distance from the notion of “functional equivalent” since it is a concept that tends to neutralise the “social construction” of the objects of analysis that gives them their specificity and historicity.16 It is indeed the process of the “construction” of “actors” and “spaces”, which is at the heart of societal analysis, that is reflected in 15.

As Halbwachs has noted (cited by J.C. Passeron 1991: 126, note 13), the requirements of statistical studies lead to a line of reasoning in which “in order to study a country’s demographic characteristics, it would appear to be necessary to take as a starting point a population that belongs to no country ”.

16.

Brossard and Maurice (1974); Maurice (1979).

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the “macro/micro” relationship. Even so, the meaning attributed to this duality has to be clarified here, particularly since the use we make of it in our typology of comparative methods (Barell 1989) has given rise to misunderstandings. Such an expression (used in both economics and sociology, and even in history) introduces, through metaphor, a sort of hierarchy of “magnitudes” in the analysis of the observed phenomena that equates to different “levels”. The “macro” tends to encompass the “micro”, as if one was the exterior of the other or the micro was a miniaturisation of the macro. In certain cases this particular quality attributed to the “macro” is such that it confers upon it if not the status of causality then at least a superior position in the explanation (in economics, this may apply to “capital” or “market”, in sociology and history to “national culture” or even, in another register, to the dialectic between “infrastructures” and “suprastructures”).17 Despite its outward appearance as a relatively neutral analytical tool, the macro/micro rhetoric is as imbued with representations and ideologies as it is pregnant with theoretical implications.18 Societal analysis tends to reach beyond this rhetoric by giving comparability a new status. In so doing, it conceptualises the macro/micro antithesis differently, problematising it as “sets” of interdependent relations in which “actors” and “spaces” are perceived in their relationship to the wider society. This constitutes the basic postulate of societal analysis which was given expression, originally, in the emblematic notion of “societal effect”, to which we will return later. The construction of such sets of structural and relational interdependencies gives them a “coherence” that excludes any term-for-term comparison between their various constituent elements.19 This notion of “coherence” has also given rise to misunderstandings, as if it excluded, a priori, any element of dynamism or change, of contradiction or conflict.20 As understood in our approach, the notion of coherence must be understood as the revealing of connections between interdependent dimensions 17.

Thus economists endeavour to surmount the “no bridge” between macro and micro (or at least to mitigate its consequences) by refining their theoretical thinking on the micro foundations of macroeconomics. On this topic, see E. Malinvaud, Théorie macroéconomique, 1981, Paris, Dunod, p. 49, 65–68.

18.

Desrosières (1989) has revealed the different logics or principles associated with statistical techniques, on the one hand, and monographic descriptions on the other, demonstrating that they emphasise different orders of “magnitude”.

19.

Societal analys tends to “socialise” these elements, whereas other paradigms tend, as we have seen, to “desocialise” them in order to render them comparable or compatible with the scientific method.

20.

We concede that some of our early publications may have given rise to such reductionist interpretations, concerned as we were at that time to highlight the interdependencies between the various dimensions of our analysis — a concern fully justified by our findings.

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of analysis. This in no way prejudges the nature of those connections or interdependencies. They may as equally well be an expression of cooperation as of competition, of consensus as of opposition, of tension or of conflict. Authors as diverse as Marx and de Tocqueville have highlighted “societal patterns of coherence” in keeping with the principles underlying their respective approaches. These patterns of coherence reflect rather the notion of “model” which they help to construct. The term “virtual” model comes to mind as a way of expressing the paradoxical meaning we attribute to the notion21 in the inductive approach we frequently adopt. Similarly we have recently (Maurice 1995a: 37) put forward the notion of “flexible coherence” to give expression to the ability of a “set of interdependencies” (or “societal grouping”) to give an account of processes of transformation and change. A notion of this kind goes hand in hand with the principle of endogenous explanation, which we share, and that of the dynamic of an analysis couched in terms of process. Ultimately, our approach integrates the macro/micro antithesis while at the same time going beyond it by taking into account the interactive construction of actors and spaces in their relationship to the wider society. In this case, “macro” and “micro” help to construct each other. It is this dialectic that differentiates our approach from both the “theory” of isomorphism and that of structural equivalences, since it is based on examination of the relations between “actors” and “spaces” rather than on parallels between or “imitations” of “forms” or “structures” in organisations or institutions.22

3.

The actor/space dialectic

The preceding observations have made clear the meaning attributed to the notion of “social construction” in reference to the reconceptualised macro/micro relationship. In this respect it might well be considered that the macro/micro rhetoric in a way reveals the inability of certain approaches to deal with the dialectical relationship between “actor” and “social structure”. Let us begin by outlining here our concept of the notions of “actor” and “space”, as well as the nature of the relationship between them. 21.

This notion is used here by analogy. In our approach, the “model” itself (whether it be the Japanese, German or French “model” of the firm) is a “social construct”, which tends to relativise its meaning. As for the Taylorian “model”, detailed studies conducted in different countries have revealed that it took different forms in each case, with each society appropriating this “model” in its own way, in accordance with the resources at its disposal and its particular configurations of actors. Cf. Maurice (1993).

22.

P.J. Dimaggio and W.W. Powell, “The iron cage revisited : institutional isomorphism and collective rationality in organizational fields”, American Sociological Review, 1983, vol. 48, 147–160. See also Panovsky’s classic studies of Gothic architecture (1951).

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The notion of “space” was originally an “empirical concept” used to denote the forms and processes of skill acquisition and development in the workforce of German companies. This was termed the “qualificational space”. In this case, the use of the notion of “space” enabled us to go beyond the rhetoric of (skill/ qualificational) “levels” in order to develop an analysis in terms of “processes” and the “quality” of the relations between actors and of the forms of socialisation to which they are subject.23 By virtue of its openness, it does not prejudge either the nature of the quality of the processes at work (or any causal relationship that might exist). In this sense, therefore, the notion of space is extensive in both its meaning and analytical capacity, since it describes both the modes of existence of employees within the firm and the way in which that firm manages their mobility, resources and social relations. Thus it can be both structured and structuring, result or resource, and is able to take account of both stability and dynamic, reproduction and change. It is for this reason that the notion has been extended in our approach to other spheres of application — organisational space, industrial space and innovation space — between which there is some degree of coherence (which does not preclude the existence of tensions or conflicts) to the extent that they are constructed in accordance with a similar analytical logic that combines, in a dialectical approach,24 both the structural and the relationship to the actors. Indeed, it is because “actors” and “spaces” are conceptualised as being interdependent that it can be concluded that there are no actors without spaces, and vice versa. This brings us close in this respect to the position of Giddens: (1984: 74–75). Similarly, the “structural” (as a set of recursively organised rules and resources) is not “external” to the agents; this constitutes a rejection of the meaning functionalists attach to the notion of structure, which appears to be “external” to human action. According to Giddens, this concept is linked to the opposition between “individual subject and societal object” (1984: 65).25 However such parallels do not necessarily imply a similarity of approach, since Giddens’ purpose is to develop a “theory of the constitution of society”. This is not the aim of societal analysis, whose “theoretical” contributions are still con23.

In this case, the notion reflected the relative continuity between the “qualification” of the skilled manual worker (Facharbeiter) and that of the engineer; with the dual apprenticeship system constituting the foundation on which the professionality of the Meister (master craftsman) and that of the graduate engineer could develop in accordance with the same underlying logic.

24.

However, there are differences between these various spaces, particularly in respect of “time domain”, which may give rise to tensions or transformation processes between them.

25.

Giddens also uses the notion of “societal”, referring to “the societal object” (which is opposed to the “individual subject”) and the “societal totality” (to denote something close to “society as a whole”). We shall return to these notions when we deal ourselves with the notion of “societal”.

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fined to empirical generalisations, even though they do not exclude certain forms of theoretical generalisation in their particular sphere of competence. Let us now turn to the meaning and status societal analysis attributes to the notion of “actor”. Like the notion of space, that of actor has the status of a “social construct”. In this sense, far from being definable a priori and substantively (as a given), it is apprehended in its relational capacity and as part of a space (or spaces) that helps to shape its identity, while that space is itself structured by the action (or the strategies) of the actor.26 Thus we are dealing with an actor located in a space that he helps to structure, while that same space helps to determine the conditions under which the actor himself exists; thus the space is both a resource and a sphere of activity. As can be seen, our approach to the actor is consistent with a structural logic that grants the actor autonomy and freedom of action in a context that is necessarily structured by various forms of regulations or conventions.27 Similarly, the notion of actor is not confined in this case to the “individual subject”. It can equally well be applied to categories and groups of actors (occupational categories, for example) and, by extension, to the collective actors making up a particular organisational entity, such as a firm’s R&D department, or even the firm itself. In such cases, we are dealing with a sort of “macro-actor”,28 which may characterise an organisation or an institution. The justification for extending the notion in this way is that these “collective actors” also are both structured and structuring in nature. Should the notion of actor also be extended to non-human “intermediates” (or “hybrids”), as Callon and Latour do in their analysis of “technico-economic networks” (Callon 1991)? Although this point of view has not up to now been incorporated into our practices, we do take the view that multiple mediations exist between actors and spaces, such as that occasioned by an NC machine tool, for example, or a computer program that helps to structure the interdependent relations between actors and spaces.29 26.

Friedberg (1993: 223–225).

27.

Certain positions shared by societal analysis are to be found in Crozier and Friedberg (1977), although these two approaches differ in their theoretical orientation. On this subject, see Maurice 1994).

28.

While at the same time avoiding the biases already mentioned in this respect.

29.

Thus we have observed that not only is the way in which a particular technology is implemented linked to the professionality of the operator but also that that professionality can contribute to the development of the technology itself. There are considerable differences between countries in this respect, and these differences reveal the particular forms of “socialisation” not only of the actors and their spaces but also of the technological tools themselves. This is all the more evident since information technologies now increasingly incorporate relatively unstable intangible knowledge and investments that help to shape the forms of mutual socialisation to which the various “actors” in a socio-technical entity are subject. This is why attention is now being focused in societal analysis on interactive processes of collective learning, of which technologies themselves are a part.

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One final characteristic of actors as perceived in societal analysis is that they have an historical dimension. In other words, the “construction of the actors” has temporal and historical dimensions that help to shape the actors’ identity and their form of existence in society. In this sense, it is possible to speak of actors located in a space-time system.30 Thus the very notion of “construction” gives expression to the process through which the actors acquire their identity (or professionality) and their capacity for action. These processes are located within a particular time domain (or time domains), but can also be analysed from the synchronistic perspective of the interdependencies that constitute them. Thus the professionality of French, German or Japanese engineers is acquired through different processes, in which theoretical and practical knowledge, skills and know-how are acquired in specific ways, involving, to varying degrees, the diffusion and acquisition of knowledge within the higher education system and learning processes in and by the firm; as a result, account is taken of the relations between universities and firms and the multiple mediations through which such relations become more or less active or effective. The relations between the higher education system and firms have their own history in every country, and have themselves evolved over time. Thus it is no part of our purpose to go back in time, as if the essence of social phenomena could be revealed by seeking out their origin.31 However, investigation of certain historical dimensions can highlight the relative importance of particular processes (or of the effect of the interdependencies they involve) for the understanding or intelligibility of the “construction of the actors”.32 In this respect, the professionality of engineers is certainly located in different time domains in different countries. In investigating the formation of that professionality, our aim was not to provide an historical interpretation of the phenomena analysed but rather to take account of the historicity of the education system (including higher education) and the industrial system in order better to identify those dimensions of our analysis most relevant to an understanding of the processes at work today in the “construction of the actors”, with “engineers”

30.

On this subject see Passeron (1991: 87) who takes the view that: “the historicity of the object is the reality principle of sociology”, and conceives of the sociological argument as a toing and froing between historical contextualisation and the scientific method” (1991:. 79). See also Giddens (1984: 361–362).

31.

Which is more or less what is involved in certain “culturalist” approaches. On this subject, see Maurice et al. (1992).

32.

Similarly, in the societal approach, interdependencies between the qualificational, industrial and innovation spaces are observed, and the differences between them in the time dimension may help to improve our understanding of antecedency phenomena and the links between them.

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serving as an example.33 In other words, the explanations provided by societal analysis are undoubtedly synchronic in nature (highlighting “patterns of coherence” based on interdependencies); however because the object of enquiry is “historical actors”, those “patterns of coherence” are contingent, as is the analysis of them. Thus it is not a question of choosing between societal effect and historical effect,34 opposing the static character of societal analysis to the dynamic nature of historical analysis. In other words societal analysis involves a sort of dialectic between the synchronic and the diachronic, although the synchronic is given a certain degree of methodological priority.35 This brings us to the following question: can societal analysis deal adequately with change?

4.

The static/dynamic dialectic: Synchronicity and diachronicity

Although at its outset societal analysis highlighted “national patterns of coherence”, it does not, for all that, stick stubbornly to the construction of unique, immutable totalities. Even in its early days it was sensitive to the variability in (international) space of societal forms and arrangements; more recently it has demonstrated its ability to deal with variability over time and with the dynamic of the same phenomena. Recognition of the historical nature of the construction of actors and spaces and of the historicity of the processes involved renders the economic and social principles at work more intelligible, making it possible to take account of both their relative stability and their dynamic of change. Nevertheless this recourse to the time dimension and thus to the contingent nature of “social constructs”, does not mean that history is, in this case, the ultimate explanatory principle. In fact priority is given in our approach to the endogenisation of the explanation. This has its roots in the documenting and analysis of the systems of interdependent relations between actors and spaces in particular spheres of activity, depending on the objects of enquiry. In the case of the innovation space, for example, various actors and spaces are involved, including the actors in the national system of scientific and technological research and in firms’ R&D departments, as well as intermediate organisations in both the 33.

Thus the existence in France of engineering schools, the most important of which (Ecole Polytechnique, Ecole Centrale, etc.) play a part in the training of the elite, enhances our understanding of the status of engineers in French firms and the social distance that separates them from manual workers and technicians. The processes involved in the “construction” of German and Japanese engineers are different and have encouraged the development of industrial relations systems that place greater emphasis on cooperation, to the extent that collective learning processes allow knowledge and skills to be shared, which in turn influences the nature of social relations in the workplace.

34.

As Lutz (1989), for example, tends to do.

35.

On this subject, our position is close to that of E. Friedberg (1993a: 235–243).

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public and private sectors.36 In other words, these “social constructs” or “sets of interdependencies” are the object of international comparison, as analytically coherent systems. It is precisely the contingent (i.e., in this sense, historic) nature of these constructions that also confers on them a certain “irreversibility”.37 This reflects the specificity of the systems of interdependencies observed, which are located in time domains and spaces specific to each society. Such systems are, of course, always fragile and unstable because the various elements of which they are composed are themselves subject to tensions and dynamics that work them incessantly. Innovation is an exemplar in this respect. In a way the understanding derived from the synchronic viewpoint enhances the intelligibility of the diachronic approach. In other words the stress placed on the constructed and coherent nature of the systems of interdependencies analysed in empirical and conceptual terms, and therefore captured in a synchronic perspective, does not conflict with the attention paid to the dynamic phenomena of change or transformation that are always present in a society, in its institutions and in its firms. As Friedberg points out (1993a: 242), precise empirical knowledge of the interdependencies that help to bring relative stability to the “social constructs” observed helps to highlight and render intelligible the processes that also contribute to the change or transformation of their component elements (how the identity of the actors and the “systems of actors” and their capacity for learning change, how skills and technologies evolve, the trajectory of an innovation ). It also makes it possible to evaluate the various time domains that co-exist within these same “social constructs” and that may contribute to the dynamic of change (or to innovation).38 In other words, the synchronic approach constitutes, paradoxically, a valuable analytical tool for rendering change and its dynamic intelligible, and to some extent it also allows us to ask useful questions of history itself.39 36.

Which equates to the comparative Franco-Japanese research carried out in the 1990s. Such research requires a minimum level of knowledge of the phenomena under investigation: evolution of the education system, of the training of engineers and of the modes of organising R&D in the industrial sector in question.

37.

The irreversibilities (and path dependency phenomena) that exist in our approach are associated with the systems of interdependencies it entails: these systems are constructed over time but are rendered intelligible synchronously. On this subject, see: M. Callon (1992); Nelson (1995); Dosi (1988); Boyer et al. (eds., 1991).

38.

Differences in the time dimension (e.g. a greater or lesser degree of inertia in some of the elements making up an interdependent system) can produce tensions (or contradictions) in the system, which may give rise to a dynamic of change or reconstruction. Such phenomena can be observed in the development and implementation of any new technology, or in a process of innovation.

39.

In Silvestre (1986), there is a typology of change based on comparative studies conducted by LEST researchers in France, Germany and Japan. This typology (mechanical, organic and structural) is used to describe the reactions of each country to economic crisis in terms of the flexibilisation of work and employment.

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This leads us to another aspect of change that has to be clarified here, since it also concerns our analytical approach. Does not the priority given to endogenous explanation tend to emphasise “self-maintenance processes” and therefore reproduction mechanisms? And does this not give rise to a certain stability in the phenomena under investigation, thereby reinforcing the “static” image of societal analysis already alluded to with reference to the notion of “coherence”? In fact, any such bias is linked to an unjustified “functionalist” interpretation of our approach and to a reductionist concept of the notion of structure. As Sorge points out in the next chapter, the “actor/space” duality must be understood as being in a “dialectical relationship”. In other words, the notion of “construction” (of actors/ spaces) must be seen as a dialectic between the static and dynamic (or interactive) elements of which it is composed.40 The static elements reflect the relative stability of the identity of the actors in their relationship to spaces, captured at a given moment (in synchrony). However this relative stability should not be perceived as a sort of permanent (or atemporal) equilibrium. In fact, in the words of Friedberg (1993a: 242), it is a “non-stationary process”. Consequently, far from being identically reproducible over time, social constructs and the processes by which they are produced have a capacity, being contingent, for both self-maintenance and “non-identical reproduction”. This is illustrated, for example, by a comparative analysis of innovation processes in French and Japanese firms. In each case, the innovation process comprises elements of continuity and discontinuity (or rupture). This goes hand in hand with changes in both the identity of the actors and their skills (with new actors sometimes emerging) and the spaces in which they evolve. The notion of innovation space emerged from such analyses, as did the paradoxical notion of “organised creativity”, which is a particularly pertinent way of describing the innovation space in Japan (Lanciano, Maurice et al. 1993). In our analyses we have used the notion of space rather than that of structure in order to avoid the ambiguities and the biases associated with the latter notion; we do not of course seek to deny the analytical value of this notion, which characterises the approach itself (which we gladly describe as both “structural” and “relational”). In our approach, actors and spaces are both structured and structuring; however these structural effects should not be understood in a static sense. The “structuring” processes that emerge from the interactions between actors and spaces are, on the contrary, a source of transformation and change. The notion of structure (and structuring) should be understood here in a “dynamic” 40.

Sorge (1998) advances the notions of “flows” and “structures” to indicate the meaning we attribute to the “construction of actors and spaces”: “The interactional aspect (of societal analysis) makes it impossible any longer to define the stability of these structures in a static way; rather, stability is to be defined in terms of a balance of flows, in such a way that the identity of the structure is maintained even as it changes”.

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sense, as both “constraining and enabling”.41 Thus the importance attributed in our analyses to the mobility of actors in “organisational spaces” and “occupational spaces” reflects the structuring capacity that mobility has within these spaces, both for the actors and for the space in which they evolve, while at the same time constructing their productive capacity. Nevertheless such processes do not develop in a social vacuum but rather (in this case) in a “social relation”, that of the firm apprehended in the context of the wider society.42 This of course is an essential dimension of societal analysis. However, in what sense can we speak of “societal”? Can the term still be used in the age of globalisation? It is to such questions that we now turn.

5.

The dialectic of “local” and “global” regulation: The paradox of the societal effect

There is no doubt that societal analysis still bears the marks of its origins in a comparison of wage hierarchies in German and French firms.43 It was out of this comparison that the emblematic notion of “societal effect” was born, whose implications, together with those of “firm effect”, reflect the critical approach of economists seeking to go beyond neo-classical theory. An initial empirical study of wage differences between firms (1970) did indeed reveal the relative autonomy that firms enjoy in the management of pay, with wages no longer appearing to be determined solely by market forces.44 In turn, however, the hierarchical effect revealed by the Franco-German comparison was to put into context the autonomy of the firm itself, which was shown to be influenced by the complex relationships between itself and the wider society (an insight that called into question the universalising power of the “competitive model”). 41.

As Giddens (1986: 74–75) pointed out. It is scarcely necessary to point out that Georges Gurvitch (and others, such as Bachelard) stressed the dialectical perspective of the notion of structure, which goes beyond the “false division” between static and dynamic elements in society and makes it possible to consider structures as “permanent processes” ).

42.

It should be noted that, to date, societal analysis has developed mainly in the sphere of the firm and of manufacturing industry; however, its analytical capacity can also be applied to other sectors and objects, such as services, for example, as has already been done with software and computer services companies in France and Japan (1992). Several contributions to the present volume apply societal analysis to spheres and objects other than the firm, including the family, the State and social protection.

43.

As already noted, this study was carried out by LEST researchers at the beginning of the 1970s in response to a request from a public body. This initial, mainly statistical study was followed by larger-scale studies, which led to the development of societal analysis.

44.

See Daubigney et al. (1971). This initial study, carried out in the Marseille region, was followed by the Franco-German comparison (1972) just mentioned.

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Against this background, the notion of societal effect has given rise to misunderstandings and to criticisms from both economists and sociologists, as is apparent in this volume. This notion may indeed give the impression of a sort of determinism exerting its effect on the firm from outside.45 It has also been interpreted as an holistic approach that some have likened to a culturalist46 approach and others to a form of structuralism. It is not our present purpose to reply point by point to these criticisms or misunderstandings; rather we will seek to recall the (theoretical and methodological) significance of the notion of “societal” as we have used it until now, while at the same indicating in what direction it might develop in future in order to address new issues including, among others, that of the intra-national level of the sector or region and economic internationalisation and globalisation (which is giving rise to an extensive literature). It is indeed pertinent to examine the ability of societal analysis to give an account of all these phenomena, since it is precisely this that some authors say calls into question the relevance of our research and even the notion of “societal” that serves as an analytical referent for that research. Let us briefly outline some of the issues in the current debate on economic globalisation and the various forms of capitalism associated with it. This will enable us better to locate the question of the relevance of the “societal” approach. Two questions are in fact combined in the recent economic literature: that of the various forms of capitalism and that of economic internationalisation (which now tends to be termed globalisation). As in any debate of this kind, there are divergent positions. Some economists take the view that the question of “national forms” of capitalism is already outmoded. Rather the question to be answered now is whether or not they might survive the increasing hegemony of international financial markets. Predictions of the “decline of the nation state” form part of this particular rhetoric, and even if national differences persisted, they would no longer, from this point of view, be “associated with disparities in social performance”. Thus “national systems and the different forms of capitalism can survive only by integrating themselves into an international order”. Nevertheless, it should be noted that the no less fundamental question of the economic, political and social conditions under which this integration might take place is left open, at least in one of the recent books that attempts to synthesise the debate.47 Thus the

45.

Which may have its roots in the reference to institutions (education system, R&D system) at national level, although our approach cannot be likened to that of the neo-institutionalists. This interpretation (in terms of exteriority) is also found among advocates of methodological individualism.

46.

Our view on this matter has been explained elsewhere: Maurice et al. (1992).

47.

The quotations below are taken from Crouch and Streeck (1996: 24–25).

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question at issue here is the survival of the national forms of capitalism most usually cited, namely those of Japan, Germany and the United States, and sometimes even the “exceptional” form of capitalism that prevails in France. Implicitly it is the various national “models”, a rather outdated notion these days, popularised by Albert (1993) that are at stake: Will the “Anglo-American” model triumph over the so-called “Rhenish” model (of which Japan and Germany are the exemplars)? Sometimes, however, the questions asked are more subtle: are some countries more resistant than others to the “irreversible” wave of globalisation or, much more rarely, is the very notion of globalisation a useful and relevant one?48 Similarly some voices have been raised (and to some extent already forgotten) in support of the view that “globalisation and the abandonment of protectionism and other constraints on competition have made the role of nation states even more important” (Porter 1986). Nevertheless, over and above these frequently confused debates, there are some theoretical tendencies that both reflect the continuity of a school of thought that is already long established but whose ability to address the questions briefly mentioned above is very real and can play a useful role in bringing advocates of convergence theory to their senses.49 These tendencies are the neo-institutionalist and “régulation” schools which, to cut a long story short, take as their starting points the institutions that structure contemporary economies rather than the preferences of economic agents that form the basis of methodological individualism. As R. Boyer says of the analyses of “globalisation” mentioned above, “they mark a return to pre-Keynesian theories, in which national specificities played no part” (Boyer 1996). A more recent book (Amable et al. 1997) contains a valuable series of theoretical and empirical analyses of “innovation systems in the era of globalisation” that both explain and put into context the effects of globalisation by highlighting the dynamic of innovation systems in each country based on particular institutional networks. They also tend to put into context the convergence argument itself.50 As should be clear by now, we feel closer to these latter approaches, even if we part company with them on several points.51

48.

For example, Airaudi (1994) and Guaino (1996).

49.

This “theory”, albeit in new forms, has left its mark on the current debates on economic globalisation, since there are intellectual affinities between this ideology and the economic (and sometimes sociological) thinking based on the principle of methodological individualism.

50.

B. Amable, R. Barre, R. Boyer (1997), Les systèmes d’innovation à l’ère de la globalisation, Economica, 401 p.

51.

Cf. on this subject Theret (1997), and his chapter in this volume which deals with the same theme.

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Towards a wider definition of “societal” As we have seen, the notion of “societal”52 was initially defined in terms of its relationships with sets of social phenomena located empirically and historically within national spaces (in the sense of nation states: Germany, England, France, Japan). It did not imply any a priori theory of “society” as such, any more than it denoted in itself a causational or explanatory principle that could be applied to the phenomena observed in the subsequent research projects. It can be understood only in terms of the dialectical process leading to the construction of the “actor/ space” duality, in which it constitutes the “theoretical” referent (as a system for understanding real-world phenomena) while at the same time forming part of a methodology wholly in keeping with its own logic. In other words, the term “societal” refers both to a theoretical orientation and to a methodology that expresses the original paradox of the “comparison of the non-comparable”. If there is no such thing as term-for-term comparability, it is through their location within a societal space that the analytical categories can acquire meaning, namely that inherent in their very specificity. Viewed in this light, the term “societal” carries the two meanings of the notion of “society”: society as a generic term, sometimes rendered as “global society”, whose scope or sphere of application has still to be defined, and (French, German, Japanese) society as expressed, reductively, in the notion of the nation state.53 We will return to the opportunities offered by Giddens’ conceptualisation for a more open approach to the debate on economic globalisation. The first thing that has to be explained is the capacity for generalisation inherent in the notion of societal (whose use in the term societal effect has undoubtedly given rise to misunderstandings).54 Societal analysis is not locked into (nor is it confined to) comparison of “national groupings” whose empirically constructed coherence merely describes differences between countries. Even though a comparison of this kind generates new knowledge both about the social phenomena observed and the logic of their interdependence within each of the national groupings, societal analysis makes it possible to go beyond this heuristic technique. Even though it has not yet been wholly fulfilled,55 its objective is to achieve 52.

The use of the term has on occasions been challenged: Héran (1991).

53.

Thus in this latter case Giddens (1986: 200–223) prefers the term “societal totalities”, although the boundaries of these totalities are not delimited a priori. A particular society can be made up of several internal or external social systems (p. 223).

54.

This notion has its origins in the critical approach adopted by economists at LEST towards studies by neo-classical economists that seek to measure the effect of one variable on the other, in accordance with the scientific principle.

55.

See Berthelot’s contribution to the present volume.

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a certain level of generalisation, which involves various levels of analysis and deserves to be briefly outlined here. The logic of our approach (which is more inductive than deductive) leads to a reformulation of the classic notion of generalisation (the one that prevails in the standard scientific reasoning associated with deductive logic). In our case it might be said that we are dealing with a process of generalisation, for which the empirical research carried out to date has laid the foundations or defined the principles. Thus comparisons involving several countries (particularly France, Germany, Japan and Great Britain) have allowed us gradually to reveal the sets of interdependent relationships between dimensions of analysis that are relatively comparable from one country to another. Such sets of relationships have made it possible to reveal and give meaning to the “patterns of coherence” associated with each of the national societies observed and described as such. On this basis, the process of generalisation, which might be defined as a shift from national effect to societal effect, can be revealed in different forms but in accordance with the same analytical logic. Thus within each form or pattern of coherence, the notion of “societal” can gradually attain a higher level of generalisation as it extends new sets of interdependent relationships to new objects and referents (by taking into account, for example, the “family space” or the “public action space”) construction of “new alliances” between them. Similarly, “societal patterns of coherence” can extend their generalising capacity to any object or entity that, in any society, produces interdependent relationships between the actors and spaces of which they are constituted. Going beyond the firm or the education system, for example, these objects of entities could include social mobility and gender relations in society. In extending in this way the notion of “societal” and the capacity for generalisation of which it is the vehicle, emphasis will be given, in accordance with the logic of our approach, to those systems of interdependence between actor and space of greatest relevance to the objects of investigation as well as to the mediations associated with them. In consequence the concepts of socialisation and organisation will be used as analytical tools through which these objects and the conditions under which they exist in society are to be “socialised”. In other words, all objects are apprehended and analysed in the societal space in which they acquire meaning;56 this calls into question the hypothesis of “social neutrality”, on which universalist theories and the type of generalisation (and therefore rationality) associated with them are based. These assertions have methodological and theoretical consequences. Societal analysis is not a ready-made theory but rather a continuing process of generalisation that takes its bearing on successive comparative exercises. This produces a sort of innovatory dynamic between them. Having opted to compare 56.

This is simply a development of the type of analysis presented in Chapter IV of Maurice et al. (1982: 235–292).

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national societies in pairs (France/Germany or France/Japan), the introduction of a new country makes it possible to confirm or to call into question the previously established patterns of coherence, together with some of the systems of interdependent relationships associated with them. However the dynamic driving this process of generalisation functions within the basic logic of the “non-comparable”, which tends to specify the notion of generalisation itself. This has then to be interpreted in accordance with the paradoxical logic of the relations between the singular and the universal (Barel 1989: 191). Thus what we are dealing with is a shift in the status of comparability, from the juxtaposition of national effects to the explanation of societal patterns of coherence. This shift also reflects the transition from the production of a knowledge effect to that of an intelligibility effect. The process of generalisation, therefore, is based on the interdependent relationships that link systems (or networks) of actors and organisational or institutional forms. Such a process is not, of course, infinite, since the modalities of such associations and social relations are themselves relatively limited. What is important in rendering them intelligible is an understanding of the principles underlying their variability in time and space.Thus what we are dealing with is a form of “generalisation” that is itself paradoxical, since the process whereby it is constructed takes account both of the uniqueness of the actors’ existence in society and the relatively limited nature of the principles that regulate relations between them.This dual logic reflects the deep meaning of societal analysis, which is that it is capable of revealing patterns of coherence and formulating questions that are independent of national specifications while at the same offering insights into why such specificities exist.57 In this respect, societal analysis, through its interdisciplinary nature, the “intermediate” levels at which its conceptualisation is located and the priority it gives to “endogenous” explanations, can contribute, in conjunction with other disciplines and theoretical tendencies, to the renewal of the social sciences and the construction of “new alliances” between them.58 Can the notion of “societal”, as a conceptual tool and a theoretical and methodological orientation, also be applied to economic globalisation? The response has to be formulated differently in accordance with the diverse range of issues raised by this phenomenon. While it is true that societal analysis has to date emphasised international comparisons as a sphere of empirical investigation, it can reasonably be supposed that the relevance of national spaces is not called into question by economic globalisation or by the ongoing process of 57.

This is a paraphrase of an analogous statement in Maurice et al. (1982:. 256).

58.

Our approach is very close to several tendencies in the economics of innovation: Edquist (1997); L’économie industrielle de la science, N° 79, 1997, (special issue). Revue d’économie industrielle. See also Gazier et al. ( eds, 1998.) and Boyer (1989).

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European integration, even if it is conceivable that nation states might disappear at some point in the future.59 On the other hand, the national space and the nation state must not be thought of as closed spaces but rather as open spaces capable of change on a variety of different levels (economic, political, social). Proliferating international comparisons, in recent years, do indeed tend to highlight the diversity of reactions from actors at national level faced by international competition and the globalisation of markets. Thus the aim is, on the one hand, to give an account of the dynamic of these changes and the processes through which the actors in a given national space contribute to them and, on the other, to integrate more closely into the analysis the variability of intra-national phenomena (sectorisation of the economy, regionalisation) that contribute in their own way to the formation of “national patterns of coherence”. Here again we encounter the analytical dialectic that characterises our approach, in which links are forged between the forms of sectoral, regional, national, supra-national and international regulation to which the various actors active in these different spaces contribute. This renders our analysis ever more complex, since these spaces are not simply juxtaposed one with the other but usually overlie or cut across each other. This undoubtedly raises methodological questions that remain to be investigated, but it can be concluded that, in essence, the principle of “comparing the non-comparable” retains its validity as a means of addressing these complex phenomena, at least in so far as they are susceptible of explanation. Thus the logic of the argument outlined above leads to a reformulation of the notion of societal, which is no longer necessarily associated solely with national spaces (i.e. those spaces enclosed by the boundaries of nation states).60 The first imperative, therefore (in accordance with the logic of an approach that is not deductive), is to examine the various spaces described above as “social constructs”. The aim here is to “deconstruct” the natural analytical categories (including the State, nation, sector, region and institutions themselves), as has already been done in the case of the firm, occupational categories and formal qualifications, in order to analyse the processes by which they become societal phenomena. This is entirely in keeping with the “non-comparable” principle as we 59.

Recent comparative, qualitative and quantitative research has highlighted structural differences so great, particularly in education systems, forms of mobility, career patterns, industrial relations systems, gender relations and family structures, that they are very unlikely to be eliminated by economic globalisation in the medium-term. These social institutions and structure are indeed deeply rooted in the history and cultural system of each country. See the contribution by J. Hage to the present colume.

60.

A whole series of questions are not addressed here, particularly the relativity and variability in time and space of the concept of the nation-state, which are often highlighted by sociologists and historians (especially Giddens 198) and Braudel 1979). Nor has any mention been made here of multinational firms, which are examined in several of the contributions to the present volume. On this subject, see Amable et al. (1997).

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understand it. However this does not imply that any a priori theory of the State, of the education system or of the firm is at work. Depending on the objects of inquiry, these various “actors” will be mobilised to a greater or lesser extent in accordance with the role they play in the “social constructs” under observation. From this point of view, the term “societal” has to be understood in a more open sense, which takes it well beyond the (always contingent and historical) confines of the nation-state. The metaphor of a societal “system” without boundaries might be used here, a “system” of actors and spaces (both structured and structuring) that equates to “units” engaged in the production and exchange of market and non-market, tangible and intangible goods, involving collective actors or configurations of actors that vary in time and space. Such an interpretation of the notion of “societal” might be applied, by extension, both to national entities and to those supra-national or international entities that are involved, to varying degrees, in what is known as economic globalisation.61 Each of these societal spaces are themselves dynamic and fluid and are characterised by a range of different time domains. Thus they are also susceptible to a greater or lesser degree of inertia.62 Nevertheless, if it is to retain its specific analytical capacity and avoid the risk of dilution into a multiplicity of “groupings” or “spaces” (those associated with globalisation), this opening up of the notion of societal must be accompanied by a firm focusing on the local level. In other words, the very logic of societal analysis, and the priority it gives to endogenous explanations, leads its advocates to take the “local” as their starting point for consideration of the “global”.63 This means that a certain priority is given to the “local”, which serves as a basis for revealing the “global”. Such metaphorical notions must be reflected in the conceptualisation of our approach, while at the same time avoiding the “macro/ 61.

It is interesting to note at this point the views of an historian who has been observing globalisation over a long period, since his observations allow us to put the process of globalisation into context, while at the same time giving it a diversified content that goes beyond an exclusive preoccupation with the economy. Fernand Braudel (1979: 34) points out that globalisation is not a recent phenomenon and warns against mistaken interpretations of a “world economy governing society as a whole and determining by itself the other orders of society” (the cultural, social and political spheres). For him, “society is defined above all as “the totality of its various sub-units”; although they can be separated analytically, each subunit in fact commingles with the others.

62.

In this respect, we concur with the concluding remarks in the book by Salais and Storper (1993: 394): “One of the issues at stake in such (comparative) studies is to understand national identities, which are complex and constructed, and therefore fluid, but at the same time rooted in a particular history. The objective is not to enhance the standing of the national space in and of itself but rather to show how, by virtue of the crucial importance for each country of international cooperation and trade, each national identity is now constructed in an international, even global space through the mutual interaction between national identities and the interdependence of economic developments”.

63.

Thus parodying the slogan of some management experts “Think locally, act globally”.

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micro” antithesis that may well be reproduced in that between “global” and “local”. Thus our concept of the firm in society is based on the set of processes (socialisation, organisation, social relations) that contribute to the construction of the actors and of the spaces in which productive activity takes place. The “effects” of the various institutions (education system, industrial policy, industrial relations system) are both mediated by a multiplicity of “intermediaries” and endogenised by and in the practices of firms and of the actors in them. Similarly, the innovation space within a firm is constituted in and by the relations that the firm develops with the scientific and technical space, the education and training space and the industrial space, which not only reflect in part State policies in each of these spheres but also take part, directly or indirectly, in international or supranational entities. Once again, therefore, we encounter the paradox of the “endogenisation of the external” (Maurice 1994), already mentioned above. Indeed, this type of analysis tends to put into context the universalist tendencies of some theoretical approaches, which usually go hand in hand with the theory of social convergence, of which the rhetoric of economic globalisation is undoubtedly one of the latest manifestations. It is true that the original choice of spaces (which also involve forms of social relations), namely the educational, organisational and industrial spaces, involve collective actors (themselves operating in institutional spheres) that tend to stabilise the configurations or societal groupings associated with them. Moreover the interdependencies between these spaces reinforce this tendency, depending on the time domains within which they are located, because they also pertain to the “structural” domain in which the very notion of “societal” itself is rooted.64 This simple reminder also reveals some of the limits of the rhetoric of globalisation, which merely accentuates the limits of (neo-classicial) economic rhetoric itself.65 The “cognitive strategy” of societal analysis is, once again, to bring its critical capacity to bear on these new developments in the economic sphere, taking suitably adapted research practices as a starting point.66

64.

Changing a country’s education or industrial relations system undoubtedly takes longer than altering financial flows in international trade.

65.

The rhetoric of globalisation is usually based on analysis of financial flows and commercial exchanges, without any consideration being given to the organisations or actors involved in them in their capacity as “social construct” in the sociological (or anthropological) sense of the term. In other words, such analyses are based on categories that are asocial or even ahistorical.

66.

An opportunity of this kind has presented itself in the shape of the current project on Higher Education Systems and Innovation, directed by E. Verdier at LEST, which involves a comparison of innovative firms in five countries, some of which are multinationals.

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Conclusion: New challenges for societal analysis The preceding observations have brought to the fore the key notions in societal analysis while at the same time clarifying the logic of the relationships between them. By way of conclusion we will indicate some of the directions in which societal analysis might develop, both from the “theoretical” and “methodological” point of view and in terms of spheres and objects of research. While societal analysis might at the outset have seemed innovative relative to the theoretical context in both economics and sociology, it might now appear somewhat outmoded, as has already been noted.67 However, it may seem less outmoded if, instead of focusing on the empirical data (”historical” and therefore dated, as has already been noted), account was taken of the way in which these data are apprehended, processed and interpreted; in other words, if consideration were given to the logic of the approach itself and the conceptual (or theoretical) referents that inform it. Quite apart from the fashionability that characterises the arrival in the “market” of new trends in research (an area in which France excels, even though many of these theories do not travel well), some of them have certain characteristics in common.68 For Alain Caillé (1996) these approaches constitute a sort of “third way”69 between holism and traditional methodological individualism. More recently Théret has compared (as we shall see below) the societal effect and régulation approaches, revealing their respective value and limitations and suggesting that “the gap between them be bridged through the application of dialectics” in order to create a hybrid framework for structural analysis defined as the “societal approach to regulation”. This is not the place to enter into a debate with the author on this subject, but we would stress that it now seems perfectly possible to locate societal analysis within an “extended family” without having to give up those elements that constitute its originality, while at the same time enriching it by entering into dialogue with those schools of thought with which it has affinities. The contributions to the present volume by Nohara, who uses the notion of “family convention”, and Verdier, who proposes that of “societal convention” as 67.

The inductive nature of the approach and the absence of formalisation and modelling do tend to weaken it. In certain quarters, the Franco-German comparison seems to have become obsolete, in that the data on which it is based are no longer quite the same today. The authors of this founding study concur with this view, while at the same time stressing that the principles underlying their approach retain their relevance, as recent research has shown. Thus a comparison of vocational qualifications in Germany and France (Möbus and Verdier (eds., 1997). See also the contributions of Verdier and Nohara to the present volume.

68.

We are referring here to Caillé (1996). The author points to a “family likeness” between convention theory, symbolic interactionism and the anthropology of sciences.

69.

This notion seems to us questionable, since it calls to mind a sort of compromise or middle path, which is unacceptable in epistemological terms.

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a means of analysing public action and the coordination of the actors involved in it, are evidence of the opening up of societal analysis to concepts that have their roots in the new schools of thought alluded to above. Similarly, this approach continues to demonstrate its critical capacity in respect of analyses rooted in neoclassical economics, whether it be a question of the theory of the firm or, more recently, of the economics of innovation. This is exemplified by Sellier’s contribution to the present volume, and the jointly edited book dedicated to J.-J. Silvestre (Gazier et al. eds.,1998). While the firm still constitutes one of the principal focal points of our approach, that approach has also demonstrated its capacity for dealing with new fields of analysis, including women’s work and the family, employment and unemployment and the construction of vocational qualifications (op. cit.).70 It is worth noting that all these studies bring the State (and public policies) into play to a much greater extent than our early research. The question of the use of the nation state as a reference point, which emerges as the “sole locus of societal closure” (Théret 1997), and of the nation as a locus for the expression of societal coherence constitute one of the main methodological and theoretical challenges for a “re-examined” and developed71 societal analysis. In particular it will be necessary to reformulate the notion of “societal” and take account of the interdependencies between different “societal spaces”. The phenomenon of economic globalisation is also an area in which societal analysis can exercise its critical capacities in order to contribute, in its own way and in accordance with its own logic, to a debate that is still largely unresolved. As has already been pointed out, this question also has its element of paradox, since the trend towards globalisation seems to be accompanied by a “reinforcement of scientific, technical and economic specialisations”, which may strengthen the international complementarity of the various national systems in the sphere of innovation (Amable et al. 1997: 356–358). In this respect Sorge, in his own theoretical writings (1991, 1993), has already underlined this phenomenon of specialisation, which he interpreted dialectically as an element in the “neo-contingency theory” within societal analysis.72 The hypothesis of societal specialisation had in fact already been put forward in Maurice et al. (1982: 259– 260, note 9), with particular attention being paid to the possible interactions between the forms taken by the structuring of work and skills and those taken by the structuring of manufacturing industry in each country. 70.

See the studies by Daune-Richard (1998), Barrère-Maurisson (1995) and Benoit-Guilbot (1987, 1989) listed in the bibliography.

71.

This question will be a particular focus of attention in a current study of multinational firms in five countries, the purpose of which is to examine the relationship between education, research and innovation.

72.

And thereby linking up with another debate within the sociology of organisations, which is not without implications for the debate on economic globalisation.

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Thus these observations can be taken as an encouragement for societal analysis to plunge even deeper into the field of its own “specialisation”; this in turn should enable it to develop cooperative or coordinative relations with other approaches. At a time when the notion of globalisation is threatening to take over the debate, it is all the more urgent to focus firmly on the “societal”, which, in accordance with the logic of our approach, also means giving priority to actors over institutions.73

73.

Touraine (1981), having pointed to the historical divide between “the sociology of institutions, i.e. of systems” and “the sociology of change, i.e. of actors” (”there is virtually no connection between Durkheim and Weber”), proposed “a sociology without society” as the title of his paper. In doing so, he was stressing the decline of a notion of society as a set of social relations, institutions, norms and cultural values in favour of the notion of a society produced by social relations; he then interpreted the change as the study of the transition from one system of social relations to another, with “diachronic analysis being subordinated to synchronic analysis of social relations” (1981: 11). An approach of this kind can be interpreted as an antidote to a substantive concept of institutions and society, a notion that societal analysis reflects in its own way.

Chapter 3 The diabolical dialectics of societal effects Arndt Sorge

Introduction The central argument of this contribution consists of the following ideas, which are inter-linked: First, the greater part of the criticism leveled against the societal effect (SE) approach rests on the misunderstanding that it reified societal structures, that it neglected the variety of action systems and characteristics within a society, and that it failed to deal with the evolution and change of such systems and characteristics over time. Second, this misunderstanding hinges on the fact that the dialectics inherent to societal effects were not sufficiently stressed from the beginning, although they could be found in early comparisons, and that they were not recognized despite their visibility. Third, if we strengthen the consideration given to such dialectics, empirically and conceptually, we greatly expand the explanatory range of SE analysis, and we link it with other approaches in a much more fruitful way. In the title of the paper, the devil is invoked for several reasons: One is that many scholars are convinced that dialectics is a devilish trick to cover up inconsistency of interpretation and arbitrary manipulation of findings. Another is that deployment of dialectical theory involves an author in complicated reasoning which, if inconsistency and arbitrariness are to be avoided, is diabolically demanding. It rests on the ungratefully persistent taking of the devil’s advocate role. It is therefore not surprising that the original SE proponents did not explicitly develop dialectics at length. But the original de-emphasis of SE dialectics also led to diabolical misunderstanding. The last, but not least, reason for invoking the devil is a personal preference for ironic alliteration. The first section of the paper will explore the meaning of dialectics in social relations, to provide a theoretical point of departure. Note that here we are not mainly dealing with dialectics in an epistemological or methodological context. This would overburden the paper. Dialectics is merely addressed, as a technique of theory-building and interpretation of findings which, formally speaking, tries

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to come to grips with simultaneously positive, negative and neutral associations between different phenomena. The subsequent section shows how readers and commentators were probably set on the wrong track by the initial and most widely recognized Franco-German comparison, and how that study had to be read more intelligently. From studies and texts following on the initial work on France and Germany I then adduce a number of examples which show the operation of dialectic effects in empirical results and in the further theoretical development of SE reasoning. The last section then shows the implications that making dialectics explicit has, not only for the development of SE theory and research in the narrow sense of the “Aix group”, but also for other students.

Dialectics in social relations Dialectics is founded on the admission or consideration of theoretical systems in which both a specific statement and its exact opposite are possible. I am mainly concerned with dialectical relationships between phenomena that are taken to be real world events (Realdialektik), such that negative, positive and neutral association can occur under the same set of circumstances. This does not mean that improved specification of circumstances under which, specifically, negative, positive and neutral association occur, is excluded. But the core understanding of dialectical relations, within the present argument, lies in a linkage between discrepant sets of relations, as something which is not merely an unsatisfactory and transitory stage on the way to better specification, but one which is at least as persistent as non-dialectical (“positivist”) and corroborated statements. Dialectics are seen to attach to the construction of societal space and the subspaces into which this is decomposed. Now, what is “society”? Contrary to perceptions of critics, societal analysis has always used it in the following way: Society is that place in human life, as an enforced and enacted imagination, in which all the aspects of social life are tied up together and where the necessary interdependence of these aspects takes shape. Neither economic autarchy, nor political sovereignty, identical values or homologous institutionalized practices are necessary criteria for societies. They have lived for ages with dialectical complexity and ambiguity. It might even be said that if there is a privileged place for dialectics it is in the thick of human action and the complexities of societal space. And these privileges are mutually enforcing. Let us see how this works, exploring dialectics from a “macro” end, because you have to start somewhere. Assume that the social inequality, compared between two societies is larger in one society than in the other with regard to remuneration, whereas in the other it is larger than in the first with regard to health service provision. These discrepant differences may be accidental discrepancies or they may be linked. Which-

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ever is the case, it makes a substantial difference. Social scientists are often unhappy with statements to the effect, for instance, that larger inequality in remuneration will be associated with lesser inequality of health service provision. What such a statement appears to show is that social inequality is a meaningless concept. Dialectical relationships are not meaningful because they are cumulative. Relationships are cumulative if they extend across a larger range of social spaces and their dimensions, and if this extension makes them robust. For instance, social inequality may conventionally be considered a stable and meaningful concept, to the extent that various life chances, forms of behaviour and social patterns coincide with a great number of its dimensions. Dialectical relations, however, imply that absence of cumulation or discrepancies equally indicate meaning and robustness, and to be well specified they have to explain why this is so. Thus, it may be that discrepant inequalities not only form a meaningful pattern but also maintain a system of inequality better than if inconsistencies did not occur. A totally congruent or consistent system of stratification, more or less devoid of discrepancies, is likely to be quickly overturned. This leads to a formal specification of the ingredients of real-dialectical relations. Let all manner of co-variant relations or associations be called “types”, since typologies can be reduced to co-variant associations expressing functional relations (Hempel 1968 ). Dialectical relations are then distinctive for: – the contextual specificity of types (rather than general applicability), – meaningful inversion of types under different but proximate contexts, or systematic linkages between types and their opposites (rather than extension of types over proximate contexts), – developmental or evolutionary stability, reproduction or growth of types, through the deployment of their opposite (rather than themselves). The second ingredient describes functional dialectics, as relations where a type is stabilized by its opposite, whereas the third ingredient describes historical dialectics, such that a type is interdependent with its opposite, advancing and supporting the opposite type. Real dialectics have fascinated philosophers and researchers from antiquity up to the present. They were conceptually applied in schemes as diverse as Jesuit rhetoric in the Counter Reformation, idealist Hegelian philosophy of history and Marx’s materialist view of societal structure and evolution. Probably the most significant sociological contribution in terms of real dialectics bisected and expressed in a nut-shell, is Lewis Coser’s (1956) statement about the reciprocal interdependency between conflict and integration, supplanting the earlier functionalist perspective which had limited itself to a trade-off between conflict and integration. Note that in Coser’s perspective, societal conflict and integration are characterized by both types of relations, one “negative” (conflict being to the detriment

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of integration) and one “positive” (the conduct of conflict having an integrative function, through conflict becoming “civilized” and actually producing rules of the game and common orientations). The example shows that dialectics are involved at two conjoined levels. A statement about conflict being linked to integration has what can be called an “internal” dialectic, which consists of the inverted relation between conflict and integration as types. Internal dialectics always exposes a positive association between a type and its opposite. But then, this does not mean that dialectics excludes inverting the inversion; on the contrary, it requires it. Thus from what may be called a “meta-dialectical” level, inverting the inversion leads to the original antinomy between types. This, as it were, comes back via the “meta hatch” of dialectical reasoning. Indeed, a consequential application of dialectics leads it to question its own principles and temporarily revert to positivism. The implications of such a step will be explored later. The complexity of real-dialectical relations in a Marxist treatment would be referred to by using the word “contradictions”. I largely avoid this word because it tends to conflate epistemological and real-dialectical aspects. And although Marx did distinguish between antagonistic and non-antagonistic contradictions, through subsequent usage by commentators hungry to diagnose fundamental tensions, shifts, transformations, cleavages etc., the word has become overly evocative of the dramatic, as if contradictions were waiting to be resolved for society to be a better place to live in. Dialectics has become linked with ideas about societal ruptures and fundamental transformations. But earlier on in the history of ideas it had very much formed part of quite a different view. This was expressed in concepts about a fitting balance between a principle and its opposite (such as weightiness and lightness in the design of Greek temples). Also the golden section, as a standard for dividing up a line segment into sub-segments such that the relation between the length of the overall segment to that of the larger sub-segment is equal to the relation between the length of the larger sub-segment to the smaller one, expresses a standard which is operationally precise and dialectical in character. It enacts a balance between internal and transcendental opposition, albeit in the paradoxically closed confines of a line segment. To that extent, Western ideas have established dialectics as a basis for defining both aesthetic beauty and timeless validity. Such a standard qualified for “classic” status. However we are not concerned here with a metaphysical unison of aesthetics, ethics and reflection. But let us see if we can turn an age-old intellectual instrument of our culture to new use, in a mundane theoretical and research problem entirely divested of the philosophical tussles between harmony and revolution.

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“Absent” and unexploited dialectics in the Franco-German comparison The first major research result of the SE approach (Maurice et al. 1977) could not help but strike the reader with an inbuilt contrast. Where detailed results are concerned (tables, interview quotes), and the way these are connected to lead to an explanation, the reader saw that there was an emphasis on the impressive coherence (cohérence = “hanging together”) of characteristics of work organization (competence requirements, training systems, labour markets, career paths, pay differences, industrial relations, etc.). Differences between French and German society and work systems were tackled by using reciprocal constitution of phenomena in different social spaces (of organizing, competence generation, industrial structuring etc.), as the major mechanism of explanation. This mechanism has a decidedly systemic flair, through the emphasis on fairly general, pervasive and stable inter-relationships within a societal space that looked like a “social system”. With this accent goes the impression that French and German society, as others, impress by the specific statics of their architecture, and by the stability of that architecture over time. Yet, on the other hand, the authors also insistently used such terms as “coherences and contradictions”. They also very much stylized the figure of the “actor”, in an interactionist meaning, and pleaded for a sociology of action. Certainly the greatest intellectual debt on the sociological side of the approach was owed to the Chicago School in the sociology of work (Hughes 1958). This interactionist and dialectical accent, however, was not that easily picked up. JeanDaniel Reynaud, even in the first presentation and discussion of the report, at a conference in early 1978, interpreted the approach as a “Mertonian scheme”. Its proponents, however, answered that they were not concerned with societally different functional equivalents rooted in different value systems, geared to solving basically identical industrial problems. They saw societal patterns as also arising from differential identification, definition and selection of problems and goals. Although the comparison in a way assumed comparability with regard to similar challenges arising from unit size, products, technology and regional implantation, the explanation was built on a framework which saw actors as enacting different sets of goals and functions, which is beyond “functional equivalence”. Much as this could be found in the literature, the point did not seem to percolate down to students of work and organization, although it could be found in the literature in many places. Empirically, it emerged from the text or sub-text of interview quotations, and these were matched by the theoretical sections of the report and the book that followed. These showed actors seeing themselves as meaningfully engaged in the continuous construction and re-construction of the systems they were part of. Such actors were not hemmed in by systemic con-

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straints but actively selecting and (re)-interpreting systemic references, maintaining a balance between acceptance of systemic references and initiative in their own construction of meaning. This theoretical slant was made particularly explicit in the discussion of the position that societal analysis took, vis-à-vis other approaches. In Maurice et al. (1982: V.2), it was expressly related to Bourdieu’s concept of habitus, as one that combines social-structural references with their transcendence through action, and with actor-system reciprocity following Crozier and Friedberg. Again, it could have been expected that readers would have seen the “coherent” societal architecture sketched out in the comparison as one which was not immutable but counterbalanced by “contradictions”. It was meant to be an architecture in which workmen were continuously rushing about in great numbers, re-arranging walls and openings, repairing the roof, redecorating the interior and exterior, putting in new pipes, shafts and lines. Where Maurice et al. begged to differ with, or add to, Bourdieu, Crozier and Friedberg, this was not in the actor–system reciprocity mentioned. They simply added that the meaning and reference of social action had to comprise more explicit and prominent societal elements. Such terms of reference were not required to be overly stylized, setting them apart from other terms or claiming an overriding status. To pick up the architectural metaphor again, the workmen engaged in the continuous (re-)construction of the building had to be conceived as actors who necessarily could not limit their horizon, or province of meaning, to a specific sub-set of the architecture. They were not merely concerned with walls, or doors, water pipes, electricity, etc. Although workmen do, of course, partly limit their horizon to some extent, trying to withdraw to a niche or aspect of the building over which they have authority, the consequences of their action through the larger building project would expose them to the play of reciprocally intertwined “choices” and “constraints” that subtly integrate their specific action into a larger set of interdependencies: These could be formulated in the following ways: Do not put the door in that wall, it weakens static support too much; we do not need a heating system of that capacity because we will be putting in double glazing and roof insulation in two years time; and so on. In other words the reciprocal adaptation of action across differentiated spaces of society always gives a societal reference to human action, even when it is not perceptible as such but translated into pragmatic references. Likewise, such a concept does not exclude a more differentiated space of “building”, or “society”. Just as workmen designing and building a house would not accept “the” building as the sole referential framework but tend to include its physical environment and infrastructure, so can society be conceived as a multilayered space which is not bounded by nation-state borders. This conception of society works without reification, and without a reified nation-state in particular,

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this being an idealist idea with monopolistic pretentions of focusing all salient values and institutional characteristics upon itself. Societal analysis admits highly differentiated notions of society. It follows Simmel (1968) and his concept of complex sets of collectivities, identified by specific measures and dimensions of societal articulation (Vergesellschaftung), a word which does not translate that comfortably. Such societal identities, which may indeed be multiple, are processually created through interdependencies and interaction. This problematicizes the idea that only one collectivity is sufficient to define a societal horizon. But it does insist on the inter-relationships not only between people but also between differentiated fields of social action, including — and this is what I emphasize here — dialectical relationships. The theoretical specification of societal analysis thus included, from the outset, a trait which went against the grain of comparative system statics. Although it was not immediately clear to readers, the early texts sketched out took on board dialectic effects. One basic dialectic occurs between actors and systems. Consider the views offered by an interviewee in a French firm of the earlier Franco-German comparison, expressing a communis opinio of hard-graft production people of the time, about the then recent introduction of diplômes and instituts universitaires de technologie. The comment was that the reform was a failure, for there was no apparent use for such diplômés, without practical work experience: this was a clear case of discrepancies between specific actors’ strategies and the evolution of education systemic properties. A particular social type (technician) is not congruent with a new type of technician offered by the education system. However actors did not leave it at that, despite the discrepancy felt, as a later study showed (Maurice et al. 1986). Through training and a finely differentiated career of new entrants, starting with simple jobs and moving on to more demanding ones, practical inexperience was gradually removed. Modification of personnel policy allowed increasing utilization of such job seekers. More recent social typing in France is rich with epithets and phenomena such as la nouvelle maîtrise, indicating recruitment of technologically more qualified staff whose practical experience remains to be built up. Such ideas and events address the dialectics of technical upgrading of employees. Much as technical upgrading was felt to be advantageous, under the specific auspices mentioned, it first seemed to invert the positive relation with the functioning of the enterprise, thereby entering a dialectical relation. The perceived practical inexperience of new types of college students in the white-collar production technician range of jobs was felt to be an impediment to insertion into the workforce. But confronted with this type of job applicant French enterprises resorted to another innovative step, i.e. insertion by slotting into simpler jobs initially to acquire experience and to climb up in the job hierarchy. On closer inspection, climbing up a finely graded job hierarchy turns out to be a tradition-

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ally established form of socialization, notably in France with its characteristic distance between school and college based technical education and practical generation of competence. It was facilitated by segmented work systems and finely graded hierarchies in the division of labour. In this way educational innovation has reproduced established societal patterns — a typical display of inter-temporal or historical dialectics. In addition, functional dialectics could also be observed. The Franco-German comparison had pointed out that in the overall system of education transition from basic general education to selective secondary education was much more frequent in France, whereas in Germany there was selection which the authors had called “brutal” in that access to more selective secondary education happened at an earlier age (between 10 to 12 years). This would have to be diagnosed, following the terminology of the authors, as a much more “continuous qualificational space” in France, at least as far as socialization in general education is concerned. In vocational socialization and grades, however, the inverse result was observed and highlighted: higher level education and training were more added-on to lower level socialization, and people featured careers across superimposed levels of socialization processes in Germany. Thus Germany was characterized by a more continuous qualificational space, and the continuity was certainly not “cumulative” through applying to vocational and general socialization alike. And this continuity in German vocational education and training did not mean a higher amount of upward social mobility in Germany: quite the opposite. This helps to stress functional dialectics as an important ingredient of interdependencies. A systematic development of vocationalism in training at all levels was striking in Germany, together with less segmented work systems. These are in turn a functional corollary of the propinquity between education and work experience, despite sharp distinctions between general and vocational schools. And this implies organizations which have a centre of gravity lower than in France, which restricts vertical mobility, although the vocational education and training system promotes continuity in the vertical dimension. The mode of organizing promotes stabilization of status rather than the “suction” effect, which in France pulls qualified workers from “ordinary” work upwards with much greater force. These examples demonstrate that a characteristic of a particular society, even if it is strongly developed and extended over different spaces of action, or spheres of meaning, unfailingly seems to be interdependent with its inverse along a different dimension. Visibly, we are not dealing with accidental variation but explicably negative association, which in turn is interdependent with its opposite, positive association along other dimensions. Whilst we had concluded an earlier article with some propositions formu-

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lated in the tradition of nomothetic theory-building, on the basis of some parallel or non-dialectical inter-relationships between the spaces of organizing, socialization, careers, industrial relations, etc. (Maurice et al. 1980), this reflected only one side of the approach. It did neglect the dialectical side of things and may thereby have misled some readers. This side is linked with the “actors and action” aspect of the approach, which had certainly been stressed in the theoretical foundations of Maurice et al. (1982), but seems to have been neglected by readers, in view of the conceptual insistence on the positive association of characteristics across spaces of society and their dimensions in the more empirical parts.

Diverse dialectical effects in later studies The role of dialectics in larger societies can be approached via countervailing tendencies that occur in the process of social differentiation of roles, other elements of social structure, and their attached or underlying provinces of meaning. On the one hand, there is a visible tendency for the extension of characteristics. Thus it can be demonstrated that inequality does tend to be more or less pronounced between societies, and inequality affects mobility, compensation and life chances together, across a range of institutional spheres and social spaces. But the extension of characteristics is counteracted by what may be called “provincialization”. Provincialization reduces the salience of a characteristic to a circumscribed province of meaning. It is meaningful within this province, but not beyond. Or, its meaning beyond this province implies inversion. On top of that, extension may paradoxically happen by inversion and provincialization of opposed types. Competent actors know in which provinces to enact or invoke which types of meaning, and they do not experience the paradoxicality of overall societal patterns and systems of meaning as burdensome or worrying. Furthermore, extension and provincialization of characteristics are dialectically linked, in such a way that they are not merely counteracting tendencies but themselves reciprocal complements. The use of these tendencies of extension and provincialization in combination leads us to perceive and compare societies, much as we perceive and compare buildings. Of course, buildings can be compared according to dimensional and extensive characteristics alone, one being larger, broader, flatter, etc. than another, having larger windows, smaller rooms, thicker walls, more bricks than concrete, etc., throughout. But this is a meaningful comparison of buildings only in part. Buildings have an element of design which combines differential application of countervailing principles. For instance, Walloon houses are not simply more or less decorative than Dutch houses, but they tend to have a

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decorative front and a back which is much less appealing, whereas a Dutch house tends to have uniform appeal from all sides. Provincialization of characteristics within dialectical inter-relationships therefore gives rise to the need for qualitative comparison. It forces us to consider the differentiation of a building via meaningful provincialization within the extension of spaces. The simultaneity and inter-relatedness of extension and provincialization in society is, in societal analysis, reflected through the combination of countervailing approaches. It is both structuralist and interactionist, and it has performed this combination parallel to, or following, the “structuration” perspective of Giddens (1986) and “figurational” sociology following Elias (1977). Figurations demonstrate how ongoing interaction between types of actors typifies the actors in return and allocates meaning to specific provinces, such as in the gradual civilization of manners in the princely court analyzed by Elias. This civilization is originally restricted to a province of meaning (the court), but it also becomes extended beyond, mainly to the extent that chains of interdependencies between people get longer and courtly manners spread, as Elias argued. One of the most evocative figurations in the world of work is represented by the Anglo-Saxon occupational and social grouping, built on socialization by apprenticeship or pupilage, such as in the craft guild and union and in the professional association of lawyers, medical practitioners, architects, engineers, accountants etc. In this figuration we find occupational (training and recruitment, careers, labour markets, representation of interests, control over work practice) and “private” elements, in the clubbishness extending from the Northern working men’s club in a locality, to the other end of the social stratification spectrum, the middle class elite club in Pall Mall. This figuration had historically been spread in British society in such a way that despite and because of the extension of the organizing principle, in typical paradoxicality, any given institution was marked by social closure. Next to the part of society governed by this principle there also emerged a domain in which it did not apply to that extent, notably that of unskilled or semi-skilled workers and clerical or commercial service jobs. Still, at the last turn of the century, Britain had become a society singularly marked by occupational groupings endowed with common law, custom and practice-based rights, obligations and functions. Even industrial enterprises were very much decomposed into occupational groupings. In Germany, however, the emergence of the territorial state and statute law had circumscribed to a smaller range the overall province within which such occupational goupings prevailed. This included the artisanal guilds and a more restricted range of “free professions” (freie Berufe), where “free” means selfgoverning. Social closure and self-governance of professional practice were thus more restricted and legalistically formal than in Britain. This comparison is largely quantitative. It does not immediately require the qualitative comparison of

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the design of figurations. The latter is, however, necessary once we look at what happened to occupational groupings over time. That society in which the salience of occupational groupings appeared to have reached its largest extension, Britain, henceforth became marked by their decline, as shown in the increasing importance of the corporatively unattached and unfettered firm, the open commodity and labour market, the decline of apprenticeship and union influence and the rise of occupationally unspecific labour markets and higher education. In Germany we witness a phenomenon which appears to go in the opposite direction. There has arisen a generalization of occupational training according to a publicly ordained pattern, a larger network of corporatist institutions endowed with public functions, a pattern of careers and labour markets strongly marked by occupational specificities and trajectories. The difference between developments in Britain and Germany poses a puzzle. How can societal analysis account, not only for this type of social change but also for this happening in opposite directions and representing a clear weakening of societal characteristics established at an earlier point? Clearly if Sorge and Warner had done a British-German comparison in 1902 it would have underlined the weakness and restriction of salient occupational groupings in Germany, caught in a stranglehold between new capitalist entrepreneurs in unregulated areas and the ascending bureaucratic nation state which had even outlawed unions during the initial period of largescale industrialization. How can societal effects be identified within this welter of not only social change but social change against previously established contrasts? The rudimentary explanation offered by Sorge and Warner (1986) is the following, and it was also developed at greater length by Streeck (1992: 105– 136). The coverage by occupational groupings was not only a phenomenon marked by extension but also by a qualitatively specific design of provinces of meaning. We see that the articulation between the modern bureaucratic state, with its statute law, its power to generalize rights and obligations, and private and quasi-public associations, was stronger in Germany, it grew and helped to extend a previously more restricted figuration to a much wider range. In Britain, conversely, the rise of statute lawmaking largely bypassed the world of occupational groupings. Not being articulated with the state order and its formal machinery to that extent, such groupings did not become part of a generalized and formally valid scheme. On the other hand, what is striking about German society is the rather seamless articulation of the formal and the informal side of work and organizing, statute law and custom and practice, government and interest groups, an articulation which transforms a contrast between conflicting principles into an integrated continuum. This scheme of things dates back to a political settlement in mediaeval times and early modernity, whereby provincial princes asserted sovereign political authority over towns and left the socio-economic functions of guilds

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intact, building a bridge between the two via estate-based representation. This evolution started with the subjugation of most Hanse towns and “free imperial towns” in the Middle Ages by princes, and it ended in about 1866. The result was firmly established at the dawn of the twentieth century, and it was concentrated on urban areas. Roughly speaking, the urbanization of society was therefore prefigured to imply the generalization of corporatist and legalistic links between the polity and practices in the world of work relations, as a dominant mode of intermediation which was in a very tenuous relation with political democracy. This is despite the fact that the integrated Germany of 1872 was the first society in Europe with unrestricted male adult suffrage, and postWorld War I Germany the first European society with full adult suffrage. Democratization in no way implied the disappearance of corporatist regimes, which had fused with princely and bureaucratic rule. In 1933 German voters even placed greater trust in the generalization of populist corporatist leadership, over all the spheres of life and of society, against government by liberal compromise within a more circumscribed domain. Well into the Federal Republic, Germans were still asking themselves whether parliamentary democracy, which meant government by “generalist laymen”, was such a good idea for a country that had become accustomed to the rule of corporatively and hierarchically mandated professionals. In a dialectically interesting twist, democracy then became more legitimate by the new democratic order proving capable of “running society”, through articulation with a corporatist apparatus. This is a more recent dialectical twist of events, which has greatly alleviated previous conflicts between democracy on the one hand and authoritarian corporatism on the other in Germany. In this way it is possible to explain why Beruf (occupation) became singularly important in contemporary Germany whilst such a category lost its salience in Britain. It also becomes clear that even the thorough shift that occurred in the relative salience of occupations also represents a continuation along previously established tracks. This is what makes the overall diagnosis necessarily dialectical. It is a diagnosis perfectly in tune with the analysis of societal effects, which allows the incorporation of fundamental and long-running change. There is, in this Anglo-German comparison, not only a historically dialectical twist. The fact that occupational identity took stronger roots in Germany might lead to the inference that inter-firm labour mobility should be greater in Germany than in Britain, for workers socialized with regard to general vocational criteria can be expected to be more mobile between firms. Indeed in the FrancoGerman comparison one point had been that socialization at the place of work itself was more firm-specific in France, and that this tied in with a type of external labour mobility which in Germany remained within, or closer to, an occupation and the specific industry. However the opposite was the case when looking at mobility in Britain and Germany. The society with the more pervasive adherence

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to occupational socialization, diplomas and career trajectories is also the one with a lower inter-firm labour mobility. Are we then to conclude that, alas, the relationship is too weak or ambiguous to yield an interpretation? If we consider that occupational identity and regulation in Germany very much happens through the involvement of corporate actors, i.e. strong employers’ associations, unions and concertation at national and regional levels, through codetermination over vocational training and the importance of salary bargaining at levels above the enterprise, then we see a chain of relationships which points towards inter-firm differences in wages and other working conditions, which are powerful motivators for changing employment. These are smaller in Germany than in Britain, and they can be smaller because collective bargaining is effective at higher levels of aggregation, which in turn requires a stronger corporatist machinery at such levels, and this machinery also happens to be one which makes occupational socialization operate. In this way reasonably clear-cut and generally applicable occupational profiles are indeed linked with lower inter-firm labour mobility, although they were constructed with a view to permitting it. Not only are German unions bargaining for “the same pay for the same work” but employers also find it in their interest to keep inter-firm differences in check, in order to stabilize socialized and experienced labour within the pool of resources of the enterprise, protecting it against poaching. Protection against poaching is, of course, in the interest of enterprises everywhere, but the question is whether they can bring themselves to counteract the temptation to poach. This can only happen via collective bargaining or governmental wage decree and, either way, it requires machinery for decision-making and implementation which is specific and does not follow from a universal capitalist order. Another example of dialectics at work in societal effects occurred fairly early, in the development of the approach. A non-dialectical reading of the Franco-German comparison would have led to see job rotation and work autonomy as related to the prevalence of practical vocational training in a society, whereas restriction of autonomy in work execution would be linked to a greater role for more school-bound technician and engineering education. The more a society trained and educated people at the place of work itself, the higher would also be the work autonomy which such workers could subsequently enjoy. Conversely, in segmented work systems, the work autonomy of direct workers would be smaller because more selective school-bound education helped to superimpose a layer of personnel which monopolized the more discretionary tasks. Germany and France forming a supposedly clear-cut contrast, one would have expected that other societies could be placed in between them. Grootings and Hövels (1981) had compared a chemical industry site in the Netherlands with the chemical sites investigated by Maurice et al. (1977; 1982; 1980). It emerged that the increasing job rotation and emphasis on work au-

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tonomy in the Dutch site was related to a change in the company’s recruitment policy, which went over to recruiting technician school leavers (middelbaar beroepsonderwijs) for process work jobs, instead of people with lower vocational qualifications or none at all. At the German chemical sites studied earlier, job rotation and broad-based training using rotation were linked with reference to general regulations governing training for “chemical operator”, as a nationally recognized skilled worker profile. In the parallel French plants there was neither job rotation nor recognized occupational profiles associated with chemical operator work. Could Holland now conceivably be located between France and Germany, having less segmented direct production work systems than France but going away from German-type skilled training as a framework for chemical operations? Technician education in Holland played a role which was entirely different from that in French society at the time. Such recruits were first initiated into ordinary process production jobs and, in order to make this acceptable given their aspirations, job rotation was brought in. Evidently there was a qualitatively different policy and idea with regard to technician education. It was not “German”, although it was used in conjunction with the promotion of work autonomy, for it was not added on to craft apprenticeship training in mid-career. It was not French, either, although it represented school-based education before the start of a work career, for it was not aimed at a more selective stratum of jobs. It was something original, not simply in-between but over and above the FrancoGerman contrast. This was one of the first cases alerting us to the fact that elements of types which in the Franco-German comparison appeared well integrated within the respective type and thereby radically opposed between the types, were in another societal setting and after some years almost freely and eclectically recombined. As another country was added, this added additional meaningful dimensions. Let us see how this worked out. Whilst elaborate and frequent basic vocational training is in conflict with a system that privileges selective and more academic vocational education, in a dynamic perspective things are turned on their head. Over time, expansion of technician education as it happened in Holland tends to subject this to a certain amount of “trivialization”, giving it a more mundane, everyday character at the same time as opening up a reconciliation of new work aspirations with job opportunities in a work system. Actors then try to alleviate the contrast between basic and more demanding sorts of work. In the case of the Dutch chemical company this meant that middle-level technical education became associated with the generation of practical experience and responsibility, by systematic job rotation, which in Germany had become associated with basic apprenticeship training in the industry concerned. More recently some informants say that systematic job rotation and an

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increasing emphasis on operator competence and responsibility has become the state of the art in much of Europe’s chemical industry, following, it was said, German patterns. If this is so, then this heightens the importance of allowing for greater differentiation between a concrete mechanism for generating competence and the respective socio-institutional “shell” in which it occurs, that is an institutionally particular type of education and career pattern. Presumably in France technical secondary education would provide that shell, in a similar way to the Netherlands, whereas skilled training in the chemical operator trade has held its position in Germany. Some of those involved in such discussions, including contributors to this volume, would probably look at this as an example of international “best practice” being spread and counteracting societal specificities. Societal analysis would however argue that the precise working of transformed structures remains to be investigated. The more up-to-date comparative picture requires a comparison which has to be as detailed and rigorous as the past ones. The transfer of specific mechanisms to different institutional shells, which also evolve themselves, cannot be taken to imply that work systems and their encompassing societies grow to be more similar. Awaiting matched case research, which would shed more light on the question, we argue that the dialectics involved in qualitative change, through the transfer of specific mechanisms or de-contextualized “best practice”, implies a re-contextualization by “eclectic” but again societally distinctive re-combination. The Dutch example proved this point. Probably the most enriching experience in the differentiation of societal effects was added by the Franco-Japanese comparison (Maurice et al.1988). Again it is useful to start with a reading of such differences which would emerge in a more positivist perspective. At first sight France and Japan have a number of things in common. Secondary education systems are very much differentiated into more and less highly rated elements: subject-centred streams and school locations differ very much in France, and individual schools in Japan. The public education and training system is very much general, whereas vocational education is less highly rated or very weak in Japan. In both countries, practical learning very much happens in the enterprise in a less publicly regulated way, and it is integrated into job performance and career progression along finely differentiated jobs in larger career trajectories. Seniority is very important in salary determination and careers in both countries. Higher education is similarly highly differentiated into different universities and colleges with different degrees of selectivity and renown. Certainly, industrial relations, labour markets and social security systems are strikingly different between the countries. Here France is not at a greater distance with respect to Germany. But with regard to the other aspects mentioned in the paragraph above, there certainly is a prima facie case for greater similarity

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between Japan and France than France and Germany. This similarity would have led one to suggest, in a positivist view, that the Japanese enterprise should be governed by a similar internal social inequality, vertical segmentation of careers and vertical climbing within internal labour markets. The difference between France and Germany had been that French society and enterprises tended to project individuals on a vertical climb, such that the duration of holding a specific job was lower, whereas German society tended to stabilize individuals in a job range and in the industry more successfully. But the picture has to be differentiated further: “Stability within a job range” is not a homogeneous operational concept. Although Japanese employees are more stable in this sense than in France, on an everyday basis, they move about between different jobs in a plant and in the larger enterprise a great deal, to such an extent even that the researchers often had difficulty pinning down what precisely the job held by an employee at a given moment was. Japanese employees were much less slotted into a specific job, with a precise position in work processes and in the social structure of the enterprise, compared to their French counterparts. Evidently, individuals seem to be “stable” in qualitatively different ways in different societies, and the extent of stability or mobility very much depends on the precise dimension addressed. Vocational roles in France are rather job-specific, and individuals and enterprises accordingly conceive of fairly clear occupational trajectories. In Japan the vocational role appears to be enterprisespecific, incorporating much greater latitude of placement and deployment without the need for re-defining the role. In Germany the role of an employee appears to have the highest amount of occupational loading, and there is no notion of the individual mainly being attached to an enterprise. But it is also true that the ambiguity normally associated with occupational identities also implies a looser attachment to specific jobs in organizations, and more latitude of deployment than in France. At the top of the enterprise things are somewhat different from the shop or the office floor, as Bauer and Bertin-Mourot (1995) had shown. Enterprise top management in Germany features internal climbers to a much greater extent than in France, where top managers more frequently come in from the outside. And the internal vertical climb of French managers that reach the top is often characterized by greater rapidity in a specific “fast track”. Although France and Japan share extended and deep hierarchies, the picture with respect to rapidity of advance and salary differentials are quite different. It is the Japanese enterprises that stabilize individuals more effectively within a range of jobs, notably in the range of technician and engineering jobs in design and development, and salary differences in the Japanese enterprise are less pronounced. On this count, Germany and Japan are indeed closer to each other, although of course there is nothing of the German sort of corporatist governance

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of industrial relations and training. Also there is a less complex system of career entry points than in France, with only two major openings, one for high school and one for college or university leavers, leaving temporary or subcontract labour aside. Thus despite the high regard for social status in Japanese society, and despite more status-dependent forms of social interaction, entry points are less stratified, there is less distinction between “cadres” and other employees, and the white collar-blue collar divide is also less pronounced. But on the other hand, the enterprise itself is much more of an entity carrying and delivering status, and it recruits according to school status and achievement en bloc in particular schools. Attachment of generalized social status to the whole enterprise is less important in both Germany and France. This comparison confirms, again, the extreme dependence of any societally comparative result on the precise area, dimension and level of aggregation under discussion. A salient difference in one field tends to be confronted with a difference in another field that has the opposite direction, but the two are meaningfully related, not just subject to a spurious difference. This is functional dialectics at work. It tends to come out more strongly as we add another society to a comparison, and it tends to accentuate the qualitative side of a comparison, although any qualitative comparison can of course be decomposed into a larger set of quantitative differences along detailed sub-dimensions. The last example I would like to adduce arose from an analysis of work and organization in East Germany under socialism (Sorge 1997). East Germany had in one way been a haven of bureaucracy, because of a centrally coordinated economy, consisting of concentrated enterprises, of a large size, geared to provide fairly standardized products and services, often for large markets within COMECON. On closer inspection, however, the obeying of rules and directives was very haphazard. Labour control in particular was very unbureaucratic in the sense that, to comply with extensive status rights of workers and in the absence of efficient motivators, management adopted a very tolerant attitude which treated slack work performance and even violation of rules and decrees very leniently. High degrees of bureaucratic formality thus coincided with abundant neglect and contravention of bureaucracy. This was not merely a case of “informal” organization deviating from “formal” organization. East German observers and others argued, in unison, that the discrepancy was much more pronounced than in West Germany. This needed to be explained. One would not have expected this to occur, for the Prussian heritage was strong, much of East Germany being former Prussian territories or allies, under Prussian domination since the formation of the North German Confederation (1869), and socialism had built up bureaucracies wherever it occurred in Europe. Labour control in East Germany had come to be particularly tolerant, in the

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course of labour legislation and governmental policy after the uprising in 1953. This had grown out of a grievance of building workers after work norms had been tightened. The policy line put forward by the Party, to correct “mistakes” that were seen to have led to the uprising, consisted of a two-pronged approach: on the one hand, secret service and political control of the population was tightened and, on the other, toleration of labour slack and strong status rights of workers (not to be dismissed, transferred, demoted, except in the case of political deviance), and extensive co-determination rights in the work sphere were put in place. Thus a “contradiction” came about between political repression and leniency in the work sphere, probably the most distinctive contradiction in East Germany. According to Marxist thought it must have been an antagonistic contradiction because it sparked off one of the most radical changes in history in both the mode of production and the form of domination. Interestingly this was not a contradiction between classes but one between separate principles governing the social order. At the same time these distinct principles were also complementary, as other dialectical oppositions enumerated in this chapter were. The specific lesson of this case, therefore, is that dialectical and antagonistic oppositions are not restricted to capitalist societies, and they do not have to be particularly virulent between classes, not even in a moderate Weberian form of the term. They arose under socialism along fault lines of society which separate institutional spheres and provinces of meaning, thereby generating a singularly powerful contradiction. But in other respects this was societal dialectics at work as anywhere else.

Implications and conclusions The examples of dialectics presented here are rather deprived of the mystique which often clouds this notion. They may be associated with fundamental transformation, but they need not be, and in most cases they are not. They have interactionist rather than Marxist, in the sense of the “later” Marx, roots. But these roots can be traced well into the macro fabric of society. If there is one axiomatic statement that could be made to describe the dialectical essence of societal analysis, it is the following: if society is that universe, or space, in which all the references of human social life come together and are intertwined, then tying together such diverse references of necessity implies dialectical opposition. Every element of functional integration of society even has a conflictual side to it. The dialectical foundation of societal effects strongly goes against the notion that the identity of a society is rooted in similar institutions, or similar values, or any other similarity. The most striking differences between societies, following our approach, are certainly not to be found in any descriptors which characterize

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them, as having different, generally applied, institutions, values or ways of doing and seeing things. Societies, in our view, are differently constructed amalgamations of countervailing patterns, whether these are values, institutions or whatever. To be sure, the other side of this dialectic, its double dialectic as it were, is the basis on which the extension or generalization of specific features happens. To that extent, a common understanding or way of doing things may certainly become established across oppositions, and it does reinforce societal identity. But it is partial, and there is invariably another side to the coin, which immediately exposes rifts and tensions between countervailing types or patterns. We would argue that this interpretation of societal effects, which is a far cry indeed from “society” as a homogeneous entity having “an effect” on social arrangements within it, makes it possible to account for social and societal change in a much better way. It also helps to explain discrepant patterns in a given society, as a necessary constituent principle of societal effects rather than an aberration. This emerges from a comprehensive exegesis of the foundations of societal analysis. The implication is that an intelligent and exhaustive application of the approach cannot be construed following the canons of nomothetic theorybuilding and explanation. It has never claimed to be an axiomatic theory with propositions in the manner of “if — then” statements, which can be applied to cross-societal differences in a straightforward way. Or at least, the application of such statements, as examples show, can only be a first step in a more “understanding” explanatory venture. This understanding clearly is not to be confused with an intuitive empathy applied to tackle “holistic” entities. Instead the approach requires, at every instance, an interpretive upgrading through more ingenious design of comparisons, including other societies. But rather than grading a larger number of societies on universal scales, such comparisons add new dimensions or reveal more intricate relations between subdimensions. What in a previous comparison seemed like a straightforward contrast between societies, with differences on different spaces and their dimensions running parallel with each other, may in a subsequent comparison be revealed as requiring differentiation and bringing in dialectical effects. Both these things happen when we extend the number of countries covered and when we look at societal effects over time. All this makes an overall comparative design so complex that hard-and-fast rules become meaningless. Dialectics makes it difficult to cast societal analysis in the terms of nomothetic positivist theory-building. A nomothetic theory which allows both a statement and its logical opposite is problematical. However formulation of nomothetic statements is certainly not unproductive. Possibly in distinction to other societal analysis proponents, I consider them valuable stepping stones, which one should not leave behind at a certain stage but also revert to. But such statements are even more hypothetical and provisional than positivist thinkers themselves suggest. In

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societal analysis and other approaches which are “humanist perspectives” or “critical theory”, the dialectics involved makes more enduring retention of “if — then” statements even more problematic. The quest for qualification which follows provisional nomothetic theory does not make the approach “idiographic” by that token. It certainly makes us aware of the way in which a given society is indeed unique, and how this uniqueness arises. Yet how and why this uniqueness comes about can only be illuminated on the basis of a more complex comparison, and it is helpful at least to conjure up nomothetic theory as a stepping-stone. In this way societal analysis performs a sensitive act of reconciling perspectives which, from an epistemological point of view, are dialectically opposed. This reiterates the character of the approach as a technique of enquiry, research and formulation. I say “technique” because this, in comparison with “technology”, emphasizes tacit experience and pragmatic handling of tools and statements. Indeed it is an approach which is proud to claim legitimacy on the basis of research and interpretive craft rather than ephemeral epistemological unity. The analysis of East German bureaucracy would seem to be particularly helpful in showing that societal analysis can be applied even where the notion of “society” is precarious and not attached to a nation state. East Germany or DDR, in a way, was a society for fifty years. It had its own emerging linguistic codes, constitutionally rooted values, system of rule and domination, economic order, collective solidarity, cultural codes of meaning in interaction and ways of differentiating and articulating societal spaces. Yet on the other hand, despite all kinds of walls on all fronts, including the “border of peace” (Friedensgrenze) in the East and the South, it remained tied to West Germany. Even the bounds of an overall societal space itself may thus be dialectical, meaning that this is blurred and complicated through decomposition into dialectically opposed and intertwined sub-sets. Arguably most historical examples of societies have been like that. Therefore, by no means does the complexity of societal space signify that societal analysis is weakened, at a time when the clarity of societal demarcation between nation states may become more doubtful. Such a situation requires more intricate societal analysis, as I have tried to show. This is a task for the future.

Chapter 4 Societal or systems effects? Erhard Friedberg

At first sight the gap between “societal analysis” (Maurice, Sellier and Sylvestre 1982) and the organizational or “strategic” analysis of collective action developed by Michel Crozier and myself (Crozier 1964; Friedberg 1972; Crozier and Friedberg 1977; Friedberg 1993) seems to be unbridgeable. The former aims at the explanation of the social processes by which the actors are constructed in different societies, whereas the latter is interested in understanding the nature and the consequences of the relational constructs which individual and collective actors in any field of action have created in order to manage their interdependencies in a collective effort. As a consequence, the former is concerned with comparing societies and their institutional fabric relevant for its field of inquiry (i.e. industrial organization), while the latter is interested in the comparison of the functioning and modes of regulation of what we call concrete systems of action and the local, i.e. partial orders which sustain them. And as a further consequence, societal analysis is quite naturally led to emphasize national consistencies and regularities whereas the organizational analysis of collective action tends to underscore on the contrary the fragmentation of the social and institutional fabric of any society which it sees as made up of a multitude of partial regulations, the consistency, homogeneity and hierarchization of which are never complete. And last but not least, the two perspectives seem to rely on a different notion of the actor and his or her rationality. The emphasis in societal analysis being on socialisation processes, its “actors” could be seen as essentially identity-driven, i.e. drawing their rationality essentially from their past, whereas in the organizational analysis of collective action, actors could be seen as predominantly if not exclusively interest-driven, i.e. deriving their rationality from their present situation conceived of as a structure of constraints and opportunities. In short, the two approaches would seem incompatible, as they look at different levels of reality and have different research objects. These differences are all the more apparent as most of the discussion between the two research perspectives has been centered around them. Indeed, one

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could say that they might even have been magnified for the sake of academic discussion, as so frequently happens. For at a closer look, and if only one accepts to go beyond the evident difference in the level of inquiry and basic research question, another picture emerges where the similarities between the two perspectives are much more important than the differences. Indeed, as I have tried to argue in my last book (Friedberg 1993: 249ff.), when applied to the same research-problem, i.e. international comparative research, the organizational analysis of collective action is quite naturally led to follow a research path which is very similar if not identical to the one advocated by societal analysis. As C. Musselin shows in detail in her contribution to this book, in the comparative research programme which we developed together initially with the aim of comparing the functioning of universities in France and Germany, we had to deeply modify our research design if we were to account for the main results of our first research. In order to explain the differences in the functioning of the German and French universities which we had analyzed, we could not simply stick to the analysis of the internal workings of these universities. Just like Maurice, Sellier and Sylvestre had had to go beyond their initial comparison of the internal structures of the French and German firms they were studying, we had to considerably enlarge our scope of inquiry into two directions which seemed particularly relevant: the understanding of the system of interaction between universities and their “sponsor departments” on the one hand, and the functioning of the academic labour market, i.e. the social construction of the main actors in the universities, the “university professors”, on the other. We were thus led not only to study new constructs of relations and systems of action, but also to analyze the way in which they were interrelated and structured each other. As a result, we came up with the notion of “university system” (Friedberg and Musselin 1993 and 1996) which designated the existence of interdependencies, structural consistencies and regularities between three “poles” or collective actors:74 the individual university campuses, the central administrative body in charge of overall (public) policy for the sector and academic professions which can be assimilated to scientific markets. And these structural consistencies could be shown to be different from one country to the other and to form what could be called national configurations. Looked at from the angle of this comparative research experience clearly conducted in the perspective of the organizational or “strategic” analysis of collective action, the differences between the two research perspectives seem 74.

Each of these collective actors, when analyzed separately, would of course have to be decomposed into a number of actors whose different logics of action become relevant at that level of analysis. But at the level of an entire university system, these logics of action, without being identical, can nonetheless be grouped together.

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indeed secondary compared to what unites them. One could even argue that the proximity is such that both are fighting a “common battle” against culturalist explanations and are also vulnerable to a culturalist critique similar to the one voiced by Ph. d’Iribarne (1991) against societal analysis, as both limit their research effort to the demonstration of the existence hic et nunc of national configurations and structural consistencies between the selected dimensions, without really entering the diachronic or historic analysis of the emergence and progressive institutionalization of the different dimensions of these national configurations and of their articulation.75 This commonality points to deeper theoretical and methodological convergences which I should like to dwell on a little in this paper. For the conclusion to be drawn from all this seems obvious: societal analysis and the organizational or “strategic” analysis of collective action are two research-strategies which draw on very similar theoretical and methodological perspectives and which differ essentially in the scope of the comparisons they make: the organizational approach, to say the least, is less exclusively centered on international comparisons than societal analysis, which only works with such comparisons. That may well make a difference in the scope covered by the results of the research conducted under the premises of one or the other research strategy, but not in the scientific status of these results: “societal effects” brought forth by “societal analysis” would in that perspective have to be considered to be no different from the “systems effects” shown by organizational analysis of collective action. In the following pages I would like to substantiate a little more this reading of the two approaches, which may seem surprising. This will take up the first three sections, in which I shall discuss the three common grounds on which both approaches build: the general inductive posture which goes hand in hand with the methodological as opposed to substantive orientation of their theory; a similar conception of comparison and of the use of comparison in social research; and last, but not least, a dialectical conception of the relationship between actors and social structure and, closely related to that, the attempt and the tendency to endogenize explanations, i.e. link structure to the action of the (individual or collective) actors in their chosen field of inquiry. In a fourth and final section I shall then try to reflect a little more on the significance of such a reading and the validity of the conclusion I have just sketched out very roughly.

75.

For a first and sketchy attempt at filling in a little of the historical perspective in the field of university systems, see Musselin 1995.

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An inductive posture

An essential characteristic of the organizational approach to collective action is its methodological rather than substantive orientation. Its conceptualization of a local order as a construct of (regulated) power relations, the characteristics and patterns of which are contingent in the radical sense of the word,76 does not propose a substantive theory of the general nature and properties of such local orders. In fact it contains little more than the general hypothesis of interdependence between a set of actors in a given field of action and therefore of the necessary existence of some relational construct enabling them to manage these interdependencies and the power relations that come with it. And the theoretical framework it proposes has to be understood not as a body of substantive hypotheses, if not laws, to be verified through the research process. It only provides a heuristic in view of questioning reality and a mode of reasoning in view of discovering and reconstructing, “from the inside” so to say, the specific properties and logic of functioning of particular systems of action and the local, in the sense of partial, orders which sustain them. In other words, and in short, it is a theory which provides a questioning for empirical research, but which has yet to be contextualized in and by the research process. No pure empiricism, and no deductive reasoning or verification: discovery of structure, i. e. of regularities and patterns of relations is the aim. It seems to me that much the same argument can be made with regard to societal analysis, even if in the end some substantive hypotheses not only on the relevant dimensions, but also on the direction of the interrelations, have been proposed (Sorge 1995). It is hardly exaggerated to say that in the beginning there was just a refusal and a question. The refusal concerned the structuralist orientation taken on by organization theory in the seventies during the reign of “structural contingency theory” and the culture-free thesis developed by some of its most outspoken and dogmatic representatives (Hickson 1974; Hickson and Lammers (Eds.) 1979). What ultimately was to be called the “societal analysis” initially developed as an attempt to answer the challenge of accounting for the differences found in German and French firms of matched technology and size, differences which were clearly contradictory with the culture-free thesis. It is the result of the concrete and inductive reconstruction of a series of autonomous and yet interrelated systems of action in each country (education and adult training, collective bargaining, personnel management), the modes of functioning and the production of which feed back on one another and mutually contribute to their (re)production in a way which is specific to each society.77 76.

I. e. all at once conditioned by the different dimensions of its context and at the same time independent of it.

77.

A research process in short which closely resembles the one briefly sketched out above for our comparison of French and German universities.

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But just like the descriptive and interpretative models of the organizational approach, the results of past research conducted under the premises of “societal analysis”, as plausible and as illuminating as they may be, are contingent on the research process which has produced them, i. e. on the field of industrial organization.78 And the theory which sustains it is little more than a general hypothesis about the necessary construction of the actors in their relation with society (Maurice 1989: 182) and about the nationally patterned interrelatedness of institutional contexts participating in this construction. It is a method for the construction of an internationally founded substantive theory (Glaser and Strauss 1968) of the social production of the structure and institutional fabric characteristic of the field of industrial organization. As Maurice himself emphasizes (Maurice 1989: 186), such a “semi-inductive” method is not designed to test substantive hypotheses derived from a pre-existing theoretical model, but to provide guidelines for future empirical research and for the construction of other “substantive founded theories” as he has done himself on undertaking a study on the social foundations of innovation (Maurice 1995). To put it yet another way and in order to make myself quite clear: no more than the organizational approach to collective action, does societal analysis propose a theory in the traditional sense.79 It merely provides a question or, better yet, something which in French is called a problématique, meaning both a way of formulating a research question and providing a cognitive framework and research methodology enabling one to find the answer to the question. The questions asked by either problématique are of course different. The organizational approach to collective action is interested in the social construction of cooperation in a given field of action as well as in the constraints which the relational constructs, invented to manage the interdependencies underlying this cooperation, impose on the rationality and the capacity of action both of the actors involved and of the collectivity they form. Societal analysis, for its part, is concerned with the exploration of the institutional structures and processes which account for the social construction of the identities of the actors in the field of industrial organization, and the impact of this construction both on the production of hierarchy in the firms and on their ways of functioning. This difference naturally is not without consequence both on the research design which will seem appropriate, and on the results which will be produced. But this difference should not let us forget the basic similarity in the research philosophy of both approaches, which is best expressed in both of them adopting 78.

This contingence means that the validity of these results is restricted to the empirical field which has been studied. Extrapolation is of course possible and very often useful, but should be recognized as such.

79.

In order to avoid any misunderstanding, this fact is in my eyes an essential and positive quality of the societal analysis, and not a characteristic I am emphasizing with a critical or polemical aim.

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an inductive and clinical research-methodology. In such a methodology, priority is given to the empirical discovery of the particular field of action under study as well as of its always specific and contingent structuration, on the ground of which it will be possible to progressively construct descriptive and interpretative models capable of accounting for that structuration and accounting for the configurations of facts which can be observed. For both, description in this perspective is at least as important as interpretation, because only “thick” description will enable the researcher not only to penetrate the particular contexts of meaning, significance and relevance which the different dimensions of the situation have in the eyes of the actors in the field of action under study, but also to integrate this meaning into his or her interpretations and theorizing.

2.

A shared conception of comparative research

Given this reliance on clinical and inductive research, it is not surprising that both approaches share a common philosophy for the use of comparisons and for the implementation of comparative research designs. Such an affirmation may seem surprising, given that societal analysis is known for, if not entirely subsumed in, its approach for intersocietal comparison, whereas the organizational approach to collective action is known for its monographic clinical approach. This appearance, however, should not deceive us: the methodological convergence is indeed real, rooted as it is in the common methodological ground of both approaches, i.e. in the inductive and clinical orientation of which comparison is the indispensable complement and counterpart. As M. Maurice (1989) has shown very convincingly, societal analysis radically distinguishes itself from traditional comparative methodologies, which he calls the “cross-national” and “cross-cultural” perspectives. Without restating in detail the arguments of this article, let us say that in his eyes the first ends up ranging societies according to the scores obtained on dimensions which are postulated to apply universally, whereas the latter emphasizes on the contrary the striking continuity which exists in each society between the phenomena under study and what will be called a “national culture”, and thus emphasizes the incomparability of each society. Societal analysis, Maurice argues, is certainly closer to the second strand of comparative methodology, but still has a different orientation. Rejecting the universalist premise of the former as well as the particularist premise of the latter, it sees the objective of comparison in the overcoming of the apparently in comparable characteristics which any sound international comparison will bring to the fore if only it refrains (unlike the “cross-national” methodology) from desocializing or decontextualizing the phenomena under study by postulating their continuity from one society to the other.

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In Maurice’s own words (Maurice 1989: 182), comparison in societal analysis is seeking “to compare the incomparable”. It is a method for the construction80 of interpretative models of the processes and institutional configurations which in any given sector of activity may explain the differences in the construction of the actors and their fields of action in their relationship to each society. In other words still, societal analysis shifts the emphasis from the separate comparison of different dimensions to a higher level of abstraction which concerns the interrelatedness of these dimensions and their articulation in national configurations. And it uses the specificity of each societal case to construct inductively the general, i. e. a common point of reference81 which in return will give sense and significance to the comparison of what at first appeared to be incomparable. Mutatits mutandis, very much the same could be said about the use of comparison in the organizational approach to collective action, even if most of its research has not been internationally comparative. Comparison is nonetheless at the heart of its methodology, because it is the only way to counterbalance its clinical and monographic orientation and to distinguish among the results brought to light by monographic analysis between those which are purely contingent and those which indicate more general patterns and can therefore be used to attain a higher level of generalization. The organizational analysis of collective action is rooted in the methodological premise of the radical discontinuity of social space, be it national or international. Of course this does not mean that it denies the substantive existence of continuities, but it demands that the existence of such continuities be demonstrated empirically instead of being taken for granted. This is where comparison comes in: it is the instrument of the inductive construction of the level where radically specific and therefore incomparable phenomena (the local orders characteristic of a particular field of action) can again be fitted into a common interpretative framework which draws attention to the interrelatedness and systemic dimension of the structures and processes brought to light in each monography and links them to more general patterns of interdependencies and institutional processes. What we are dealing with here is a research process which has at least two stages. The first stage leads up to the construction of monographies, i. e. the characterization of the structure and modes of regulation of a particular local order in a given field of action. Such a monography, it should always be borne in 80.

This model is of course contingent on the research process which produces it, i. e. its validity is local and partial, a fact which Maurice fails to indicate, but which he would probably easily recognize.

81.

Which does not have to be — and should never pretend to be — of universal value, because it is contingent on the research question and the research design and process which has been generated by and for this question.

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mind, is already the product of intensive comparison and thus represents a first level of theorizing since it is generated through the systematic confrontation and comparison of individual subjective viewpoints (the interviews) and other observations in order to inductively reconstruct (1) the behavioural regularities they express, (2) the interrelatedness of these regularities and their articulation in a concrete action system and the local order which sustains it. As such, it is based on “thick” description, and sticks closely to the specificities of the context of action and meaning which it has explored. The comparison of several monographies represents the second stage of the research process. Its objective is to attain a higher level of abstraction and theorizing which will enable the researcher to weight the significance of the different results contained in each monography and put them in perspective. It should be clear by now that theoretically and practically such a comparison poses the same problems as comparing societies in societal analysis. What is dominant is the apparent incomparability of monographies which have each been produced independently of one another and which therefore stress the specificities of each context. And just like societal analysis has deconstructed the apparent incomparability of French and German industrial organization by inductively reconstructing a higher level perspective in which the individually observed phenomena again started to fit a common pattern, the organizational analysis of collective action will use the comparison between monographies to deconstruct the evidences of each case and select those dimensions which fit into a larger pattern and thus enable the researcher to attain a higher level of generalization. In both approaches, then, the results of such comparisons are generalizations, but generalizations not about society (even in the case of societal analysis), but about bits and pieces of social structure of given fields of action, and as such are local in the sense of partial, and therefore contingent on the very research process which has produced them. In short, monographies do not have to be situated in different societies in order to pose problems of comparison very similar to, if not identical with, the ones discussed by societal analysis. And comparison does not have to be international in order to become the instrument of inductively attaining higher levels of abstraction and validity of the research results. This is of course not to say that the fact that monographs are located in different countries makes no difference at all. To mention just this dimension, it considerably increases the degree of discontinuity of the social space, and with it the difficulties of comparison. But it would seem to me that these are only differences of degree, not of nature: comparison in the two approaches is used in a similar theoretical and methodological frame work stressing the discontinuities of social space and the necessity of thick description in order not to decontextualize analyses, and therefore poses similar problems which are dealt with by similar methods.

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The same “dialectical” conception of the actor/structure relationship

The common grounds of the two approaches, however, are not only methodological, but include also their theoretical underpinnings. The critical discussion between them and the distinctive claims of each notwithstanding, both seem to me to share the same perspective of “soft” methodological individualism. By this expression I try to designate a special blend of methodological individualism which simultaneously refuses holistic approaches considered to be intrinsically deterministic and to lead to a sociologistic “oversocialized” conception of man as the passive bearer of social norms and social structure, and rejects as well the “hard”, decontextualized and “undersocialized” conception of intentional, utilitymaximising man characteristic of standard economic theory. Between these two extremes, societal analysis as well as the organizational analysis of collective action try to follow a middle road. Both recognize the relative autonomy of the individual in his or her relationship to social structure, and thus his or her capacity as actors, i.e. generators of the very structures which constrain them. As a consequence, both conceive of social structure as at the same time producing the actors and their action82 and being (re)produced by them and their action: in other words, both consider that actors and structure, while being analytically distinct categories, are reciprocally related in mutual non-identical (re)production very much like the hen and the egg metaphor used by Sorge (1995: 112).83 Actors and their spaces mutually construct each other, says societal analysis (Maurice 1995: 654): they are co-constitutive just like the actors and their concrete systems of action of the organizational analysis of collective action (Crozier/Friedberg 1977; Friedberg 1993). Two considerations follow from there. The first is that if actors and structure are dialectically linked, then the only valid sociological explanation of structure is to “endogenize” it, i. e. to link it to the action of the actors it “contains” and it constrains. And this is indeed what both approaches attempt to do. This is clearly recognized by Friedberg (1993: 245ff), who underscores the methodological priority accorded to the demonstration of the “endogenous dynamics” which characterize a system of action and explain the non-identical reproduction of its structure and modes of regulation. It is also recognized by Maurice (1995: 655– 657) when he speaks of the “endogenization of the external”, an expression which seems to me to refer to the modification of the initial research design whereby the limits of the relevant actor system were progressively enlarged in such a way as to 82.

Which therefore always have to be concrete and contextualized (Maurice 1995: 654, Friedberg 1993: chap. 8).

83.

Both societal analysis and the organizational analysis of collective action used structuration theory (Giddens 1986) before the fact, just like the Bourgeois gentilhomme of Molière was reciting prose without knowing it.

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include the institutional dynamics accounting for the production of the differences in firms’ structures and in what Maurice et al. call the “employment relation” in France and Germany. The second consideration has to do with the construction of the social actors’ identities. Indeed, if actors and structures are dialectically linked, then social structure at all levels of society contributes to forge the identities of social actors, and these socialization processes, moreover, are never-ending processes, which go on at all levels of social action and naturally feed back on each other. Anyone of us constructs his or her identity through action using or opposing the structural constraints characteristic of his or her situation, and does so all life long. If this is so, however, then of two things only one is possible. Either one implicitely postulates a strong hierachization of these different socialization processes where one level of socialization strictly determines the next, a postulate which Maurice explicitely rejects (Maurice 1995: 654): then one could deduce behaviour in a given context from socialization received in a more encompassing system (like for instance the processes underscored by societal analysis). Or one has a more indeterminate view of these processes and of their impact one on the other. Then, identities of social actors must be understood as an unknown continent of latencies or potentials of which an empirical research process can only unveil a part, the one which is relevant to, and drawn on by, the system of action under study. Moreover, the (partial) identities of actors brought forth on one level of analysis do not authorize predictions about what parts of those identities will be mobilized in action on other levels of analysis, and what new dimensions of these identities these other levels of analysis will bring to the fore. In other words, the identities of the German Meister or the German Ordinarius are certainly forged in the education, training and qualification systems of their society and their institutional sector. For this reason, these Meister or Ordinarii certainly have a number of things in common which stem from their socialization in the same institutional framework. But this does not mean that they will behave identically in their workplace, nor that this workplace (a particular factory in a particular firm, or a particular Fachbereich in a particular university, each with its own long tradition and institutional history) does not in turn contribute to the non-identical reproduction of their identities. Looking at how the cooperative games inside that workplace are structured and regulated, as aims to do the organizational analysis of collective action, is therefore just as much research about the production of the actors’ identities as the societal analysis attempt at exploring the structuring and functioning of the institutional fabric which produces the professional socialization of individuals in a given society. So it seems to me that it does not really make much sense to follow Maurice (1995: 654) when he opposes the organizational analysis of collective action as being interested only in action, and the societal analysis as interested in the social relationships which contribute to the production of the actors’ identities. Both are

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interested in the identities of their actors, because these identities (i.e. their contingent rationality) are an essential part of the systems they are exploring: the difference only lies in the level where they locate the production of these identities. Trying to explore and understand the local order which sustains the structure and modes of functioning of a specific system of action always also implies the reconstruction of the dialectic between action and structure in that particular system and thus the unveiling of parts of actors’ contingent rationalities i.e. identities. But neither societal analysis nor the organizational analysis of collective action can ever pretend to have seen the end of the social actors’ identities,84 because there is no end to the unveiling. Actors are always more than any research can construct them to be, and it is in my eyes fortunate that this be so.

4.

Some final considerations

To sum up my argument so far, I would be tempted to say that the main difference between societal analysis and the organizational analysis of collective action is located neither in their respective theoretical underpinning, nor in the methodology used. It lies in the history of each, i. e. the empirical data out of which and for the interpretation of which it was developed initially, as well as in the estimation of the validity of the results obtained. Societal analysis has from the start been developed out of international comparison. It has been based on the results of a Franco-German comparison and it has been developed as a theory and method for explaining differences that comparison had brought to the fore in the structure and organization of matched samples of industrial firms in two countries. The organizational analysis of collective action, on the contrary, has been developed out of basically intranational comparative research, as an attempt to formalize and make explicit the theoretical premises of the mode of reasoning used in that research as well as an effort to reconstruct the patterns which could account for the many convergences/ divergences that this intra-national comparison had brought to the fore.85 So it is 84.

In that respect it is amazing that no-one has ever criticized societal analysis for overgeneralization. After all, the family could be considered one central institution in each society which would have to be seen responsible for at least part of the differences which Maurice, Sellier and Sylvestre ascribe to the educational, training and qualification spaces. However, societal analysis does not include the family as one of the essential spaces where the identities of actors are formed.

85.

In this respect, the empirical studies of French administrative action, which cover many policy areas and which constitute the historical foundation of the organizational analysis of collective action, add up to something which with Glaser and Strauss (1968) could be called a “founded substantive theory of administrative action in France”, a theory which proposes a high degree of generalization based on thick description and comparison of many different policy areas.

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no real surprise that the former deals more with what it calls the societal level, whereas the latter, rarely deals with the societal level, even though it too is trying through comparison to attain the institutional level (the local order with its rationality, its “rules of the game”, its regime of legitimacy, in short its social structure) underlying empirically observed patterns of interaction. This difference however is due mainly to the predominant research domain: international comparison on one side, intra-national comparison on the other. As C. Musselin’s contribution to this book shows very clearly, as soon as the organizational approach to collective action is used in an internationally comparative research design and if the empirical results make it seem necessary,86 it quite naturally turns to a research strategy similar to that of societal analysis, one which will seek to progressively enlarge the limits of the relevant actor system in order to reconstruct and analyse those institutional structures and dynamics (with their endogenous feed-back loops) which can be shown to produce (and therefore account for) the differences (or similitudes) in the empirically observed patterns of interaction. So what is the quarrel all about? My first answer would be that there is no real quarrel, as agreement is much stronger than disagreement. The organizational analysis of collective action is not as institution-blind as calculated misreadings or unintended misunderstandings of its theoretical underpinning would have it. It is not interested in action alone. Its aim is the exploration and analysis of the institutional arrangements which make up the local order socially constructed by human beings in a given field of action in order to manage their interdependence and which must always be understood as being at the same time the product of social action and the constraints canalizing it through the creation of cognitive frames, of routines, of rules and power relations sustaining them. It does consider, however, that such institutional arrangements can be looked for and found at all levels of society and that international comparison is not the unique way of getting hold of them. In some way, one could say that the organisational analysis of collective action is interested in institutions at the grass-roots: it could also be defined as a sort of “grass-roots institutionalism”. And symmetrically, societal analysis, polemical criticism notwithstanding, has always rejected any top-down vision of social action, where the institutional fabric of a society on which it is focused would determine actors in any given way. It thus leaves room for the 86.

In a comparison of the day-to-day management of subcontracting by French and Italian car manufacturers, J.Ph. Neuville, for example, did not find any significant differences of the French and Italian patterns, but strong and recurrent convergences which he tried to explain by reconstructing the local contingencies characteristic of the concrete system of action liable to account for the observed patterns of interaction between production line managers and the representatives of subcontractors. His effort of theorizing was thus not very different from the one he could have developed around his first results from the plants of the French car manufacturer. And these results are valid, although the actors in the Italian and the French context had certainly passed through different institutional frameworks.

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relative autonomy of institutional arrangements at all levels of society, and legitimizes the organizational problématique. My second answer to the question above would be that what differences there are, are only differences of degree, and can best be understood in relation to the respective research practice. For instance, both societal analysis and the organizational analysis of collective action conceive of social space as discontinuous: the comparative method is for both the very instrument to come to grips with these discontinuities. Societal analysis, however, would see these discontinuities more between societies whereas I would be tempted to locate them just as much within societies. But then, is it really amazing that a research perspective preoccupied with international comparison comes to focus its analyses on the discontinuities between societies, and thus to make social space inside a given society appear to be more coherent and consistent than it really is? And have not the authors of societal analysis conceded repeatedly that in their seminal work (Maurice, Sellier and Sylvestre 1982), they have probably overestimated the degree of continuity and coherence of national settings. I therefore do not think that they would find quarrel with the affirmation that the demonstration of “societal effects” does not preclude the existence of “organizational or systems effects” on other levels of society, differentiating for instance the actual modes of functioning of firms in each country within the framework of the common constraints defined by the institutional fabric emphasized and brought to the fore by societal analysis. That then leaves us with a last question: what is the real significance of “societal effects” ? The problematic word here is societal. Its use is justified as the comparison is international and bears on different societies. The patterns and systems effects that societal analysis shows to exist in each society in the interaction between of the collective actors in the educational, vocational training and the qualification spaces, are societal in this sense. However, seen from the perspective of the research process which has brought them to light, they can be said to be just another kind of systems effect, namely the result of the endogenous dynamics and feedback loops of a highly complex system of collective actors whose interaction continuously (re)produces the institutional arrangements which in turn construct the actors with whom concrete firms in a society have to structure their functioning. Such systems of collective actors are highly complex, and they are certainly more encompassing than comparative analyses at the firm level. But here again, the difference is one of degree, not of nature. And there is no reason whatsoever to grant epistemological priority to one level of analysis over the other. The apparent unity and cohesion of “societal systems” and of “national institutional frameworks” shown by societal analysis should not have us forget that there also exist other levels of action and structuration which are partially autonomous from “societal regulation” and produce other “systems

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effects”, i.e. other retroactive feedback loops and “local”, in the sense of “partial”, orders. The actor systems studied by societal analysis may well be more encompassing and therefore also much more complex than those normally studied by the organizational analysis of collective action. In each case we are dealing nonetheless with actor systems, i.e. a part of society and not society as a whole or a totality. Both research perspectives are interested in the social construction of local orders at different levels of society, i.e. of partial institutional arrangements which make social action possible by stabilizing relations through the creation of cognitive frames, rules of legitimacy and structure. And both are interested in the systems effects of these partial institutional arrangements, i.e. in their endogenous dynamic and retroactive feedback loops which may account for their (unidentical) reproduction. Therefore the limits of validity which characterise the results of organizational analysis of collective action (Friedberg 1993: 253ff) seem to me to apply also to the results of societal analysis.

Chapter 5 Towards a relational approach to the study of the variety in situated creativity of economic actors87 Olav Korsnes

Introduction In the final chapter of Politique d’éducation et organisation industrielle en France et en Allemagne (PO–Maurice et al. 1982) the authors position their “approche sociétale” in relation to a series of academic disciplines and fields of research, by way of critical assessment of major contributions and perspectives within these disciplines and fields. Besides the fact that such a strategy is bound to drastically increase the number of potential hostile responses, it may also make it too easy for critics to set the premises of critical evaluations. By picking up one aspect of the approach that is of particular relevance to the evaluator’s own discipline, perspective or field of research, s/he may get away with arguments that do not take the wholeness of the approach seriously into consideration. A framework which pays due and serious attention to its wholeness is, however, not readily available, and the aim of this article is to propose such a framework. This proposal is one in which the methodological profile of the approach is focused. This may seem to invite yet another partial and/or partisan assessment, but I shall argue that this focus is both close to the self-declared core of the

87.

This paper is based on my preoccupation with the approche sociétale as an important source of inspiration for my own work and research on Norwegian working life, and many of the arguments are based on my D.Ph. thesis (Korsnes 1997) which deals extensively with the approach. I take the opportunity to express my gratitude to LEST and to Marc Maurice in particular for hosting me during my sabbatical in 1989–90, and to my close colleagues in Bergen with whom I have had the opportunity over many years to discuss the issues dealt with in the paper.

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approach, and that other crucial aspects of the approach are both explicable and assessible for critical-constructive evaluations when this focus is chosen.

Comparing comparative approaches — what kind of comparative approach is the approche sociétale? The “approche sociétale” may be characterized as a self-conscious attempt to deal with the apparent paradox that comparisons across nations such as in PO, which spring from ideas about things being “comparable”, actually imply “comparing the un-comparable”. This paradox, and different ways of relating to it, is a recurring theme in debates over comparative research, and is the vantage point for Marc Maurice’s attempt to differentiate the “approche sociétale” from other approaches to international comparisons (Maurice 1989). According to Maurice the defining characteristic of the approche sociétale in this context, is that it opposes a traditional opposition between “functionalist” and “culturalist” approaches. The “funtionalist” approach assumes that the entities compared are “the same” across nations, whereas the “culturalist” approach assumes that they belong to “cultures” that are un-comparable. According to the first, the second approach must be rejected as it effectively blocks any ambitions to develop general theories. According to the last, the first approach must be rejected because it is “meaningless” — it effectively blocks any possibilities of developing explanations that pay serious attention to the context that makes the observed realities meaningful to the actors involved. The suggested opposition between the “functionalist” and the “culturalist” approaches is reminiscent of the traditional opposition and Methodenstreit between nomothetic and idiographic ideals of social science, and the approche sociétale may be seen as an attempt to develop an alternative ideal of theory construction and development in the social sciences, in line with, e.g. Weber’s ideas about “ideal types”: Our observations have allowed us to demonstrate a “model” for the structuration of domains and actors that is peculiar to each society — the structuration of domains and of actors being mutually interdependent. If one in each case recognizes the same basic elements of structuration (general education, occupational training, seniority, hierarchical position …), differences between them spring from the relations that these elements have with each other; not in a isomorphic (or homologous) sense as is the case in systemic or functionalist models — in our approach it is not a question of functional equivalents that may be substituted with each other. In each “model”, the principle of structuration seems to be associated with some elements rather than others, thus giving them a certain legitimity and relative autonomy.88 88.

Maurice 1986–own translation.

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It is, however, highly debatable whether these “models” conform to the classical Weberian Idealtypus: … an ideational picture that is not historical reality, and absolutely not the “real” reality, and that is even less suited to serve as a form into which the reality qua Exemplar can be classified, but rather is meaningful as a purely idealistic boundary-concept that reality is measured by in order to clarify certain significant components of its empirical substantiality, which it is compared with. Such concepts are images, consisting of interrelationships that are constructed by application of the category of the objective possibility, that by our reality-oriented and trained imagination are judged as adequate.”89

The quotation marks used in the first of the above citations indicate that the “models” we are talking about here bear some resemblance to “proper” models (e.g. neo-classical economic models), but are much more provisional conceptual constructs that should be primarily considered to be heuristics in the search for more general theoretical constructions. Whether these more general constructions should be conceived of in terms of models, or ideal-types, is not settled90 — in a way this question is what the approche sociétale is all about. What is settled, however, is that The analysis that flows from the scientific current originating in the works of K. Marx, as well as the neo-classical theory and its prolongations, may certainly offer an explication of our results. However, we do not think it capable of either giving rise to the questions that we think are indispensable, or granting them a proper theoretical status: the question of the theoretical analysis of the enterprise and organizational phenomena more generally; the question of a satisfactory conceptualization of the coherences that are established between the different dimensions of the wage-nexus (the structure of the educational apparatus and collective orientations of action) that we both emphasize as central in themselves, and in their interdependence with the concrete labour process. We certainly do not pretend that one single empirical investigation, no matter how systematic it is, in itself can refute a theory. The questions we are posing can only reveal their utility when they are integrated in a process of investigating the proper limits of the theory itself and the conditions for its transgression, like the one we are submitting the neo-classical theory to.91

89.

Weber (1904) 1988: 194–own translation, italics in original; cf. also:”What significance do then such ideal-typical concepts have for an experience-based science, as we intend to practice it? At the outset it must be stressed that one must here be very careful in keeping thoughts about what things should be, the “exemplary”, far away from the images of thought that we have in mind, which are “ideal” only in a purely logical sense. What we are concerned with here, is the construction of interrelationships that appear as sufficiently motivated and therefore “objectively possible” to our imagination, and as adequate to our nomological knowledge.” (ibid.: 192).

90.

and Norbert Elias’ “figurational sociology” may be a more relevant source of inspiration than Weber in this connection (see Maurice et al. 1992).

91.

Maurice et al. 1982: 311–312, own translation.

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The approche sociétale thus represents both an instrument for empirical research in search of a theory, and a theoretical orientation in search of a methodology, and I judge this dialectics to be its fundamental distinguishing characteristic and strength. The character of the “models” that are associated with the approach is closely related to their particular function is this dialectic: The “national coherences” are thus nothing but the particularistic expressions of a “model” to which construction they are simultaneously contributing. The term “virtual” model (analogue with the term “virtual” image in optics) comes to mind for conveying the logic of this analytical procedure; emphasizing the paradoxical meaning that the term “model” is given in this connection, and also indicating its relative and limited character.

A term like “virtual model” may also bring Weber’s “ideal types” back to mind, but primarily this reminds us of the approach’s positioning in-opposition-to the nomothetic-idiographic-opposition,92 and that there is no “one best way” of overcoming this opposition. According to Sorge (1983) this positioning does not mean that the approche sociétale is in any way “abnormal”. Rather it makes us acutely aware of a “normal” dilemma in all scientific enquiry of society and culture: nomothetic and idiographic approaches are both logically interdependent, and they contradict each other. This dilemma cannot be resolved by decisions about which and how many countries should be compared, and it does not restrict the development of general theories. According to Charles Peirce, scientific inquiry is a social, self-corrective process which has no absolute beginning or end points (Bernstein 1971: 175), and new ideas and discoveries do not arise from deduction or induction, but from what he calls “abduction” (Blaikie 1993) — an ability to, e.g. connect known facts with known points of views,93 and yet produce something new, and perhaps “virtual models” can be seen as heuristics to this end. The positioning of the approche sociétale, in relation to more general ideas and ideals of social science that have been suggested so far, may also be helpful in relating Maurice’s explicit typology of approaches to international comparisons to other prevalent typologies of comparative approaches. According to Ragin (1987) these can be classified as either case-oriented or variable-oriented approaches. In contrast to Maurice, Ragin uses only one basic criterion of differentiation — the aim of the research, to construct his typology, which can be summarized as in Table 1. 92.

Commentators may overlook — or disapprove of — this positioning. E.g. Rose (1985) claims that the approche sociétale has a “…schizoid response to the Malinowskian Dilemma” (ibid.: 80) — trying to handle the “comparison of the un-comparable”-dilemma by constructing ideal types, but still having universalistic-theoretical pretensions — implying that there is ultimately only one viable ideal for scientific enquiry; the nomothetic one. See also Maurice’s comment that Rose’s suggestion about replacing the names of countries with sets of variables (ibid.: 77) is incompatible with the logic of the approche sociétale (Maurice 1989: 188) and the following discussion of his typology of comparative approaches.

93.

Cf. Weber’s praise of Ranke as having this “genuine gift” (Weber (1904) 1988: 214).

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Table 1. Case-oriented approaches

Variable-oriented approaches

aim at combining causal analysis, interpretive analysis and concept formation complexity has precedence over generality examine cases as wholes few units of comparison great specificity in causal arguments assess causes in relation to context

aim at testing general theories

high flexibility in identification and examination of evidence * volume of comparisons explodes and becomes unwieldy as the number of cases increases

good opportunities for maintaining meaningful connections between research, the historical specificity and complexity of the social context, and the theoretical, substantive and political concerns that motivate it

generality has precedence over complexity examine cases as combinations of variables many units of comparison low specificity in causal arguments assess causes’ average influence across contexts low flexibility in identification and examination of evidence * intractable methodological problems are introduced and it is hard to produce sufficient cases to permit statistical manipulation when the complexity of the causal argument increases tend to strain the connection between research, the historical specificity and complexity of the social context, and the theoretical, substantive and political concerns that motivate it

What Maurice calls “functionalist” approaches obviously have much in common with Ragin’s “variable-oriented” approaches, as they tend to de-contextualize the object of research and de-compose the cases into combinations of a set of predefined variables. The “culturalist” approach seems to fall clearly within Ragin’s category of “case-oriented” approaches, as it assesses causes in relation to context and examine cases as wholes. It has, however, a predefined concept of what these “wholes” are all about (”culture”), and one may therefore question whether it does not also give generality precedence over complexity. Also, it may rather restrict than open up the search for specificity in causal arguments and the flexibility in identification and examination of evidence. And last, but not least, its openness to causal analysis, interpretative analysis and concept formation is very much restricted by its macro-level based explanatory mode. This shows that although there are affinities between Maurice’s and Ragin’s typologies of comparative approaches, they are far from being identical. While Ragin’s typology is primarily based on one criteria — the aim of the research,

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Maurice’s is based on two criterions that both point to basic theoretical assumptions or presuppositions. While Ragin’s typology is formally exhaustive, Maurice’s typology is not, and does not pretend to be. The purpose of Maurice’s classification is clearly to highlight the particular character and advantages of his own approach — not in comparison with all hypothetically possible alternatives, but compared with what he considers to be two existing dominant alternative approaches in the field. By doing so, he may be in danger of both simplifying the range of approaches and glorifying his own. Ragin’s classification may, on the other hand, be so rough that important distinctions and nuances are underestimated. E.g. both the “culturalist” and the “societal” approach must be classified as “case-oriented” approaches although they are — according to Maurice at least — defined in opposition to each other. Or, more precisely: the “culturalist” approach is defined in direct opposition to the “functionalist” approach, and vice versa, whereas the “societal” approach is defined in opposition to this opposition. In spite of these differences I think Ragin’s typology may be very helpful in explicating and clarifying possible (and possibly problematic) connections (or lack of such) in the “approche sociétale” between meta-theoretical and general methodological traits on the one hand, and strategies of research and concept formation on the other. My general argument in this connection is that although the aim of the approach is not exhaustively or adequately described by Ragin’s delineation of the aim of case-oriented approaches, a critical condition for the approach’s ability to reach its potential is that it is able to develop the unique strengths of case-oriented approaches.94 One of these strengths is its insistence upon constructing the object of research in terms of reciprocal relationships between entities that are defined by these relationships, and not by some pre-defined set of variables based on assumptions about the entities which imply that their character is taken for granted. Interestingly enough, this insistence upon interrelationships is a key feature of Weber’s “ideal types” (see above), and the (second) defining feature of the approche sociétale in Maurice’s typology is its reciprocal conception of the micro-macro relationship.

The methodological relationism of the approche sociétale Also in this respect it may be clarifying to situate the approach within a general discussion of sociological perspectives — this time in relation to another ritualized opposition between methodological individualism and collectivism/holism. Based 94.

Cf. the main goal of Ragin’s analysis “…identify the unique strengths of case-oriented methods and to formalize them as a general method of qualitative comparison using Boolean algebra.” (Ragin 1987: x).

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on the discussion so far, it would be very tempting to position the approach clearly as belonging to the collectivism/holism-camp — and the many critical comments in e.g. PO about theoretical arguments clearly associated with a methodological individualism indeed makes this plausible. It should be kept in mind, however, that the primary research object of the approach from the beginning on, was a relationship — the wage nexus (le rapport salarial), and that it aimed at reconstructing this (supposedly universalistic/uniform) relationship in terms of a set of (societal-specific/multiform) relationships (le rapport éducatif, le rapport organisationnel, le rapport industriel) in which firms and their actors are embedded — relationships that produce and are produced by the firms and its actors, and that constitute their social identities as well as their relationships of cooperation and conflict. This obviously represents a choice of empirical focus, but it is not primarily this focus which distinguishes the approach from other approaches. The underlying principle of this analysis is neither the “rationality”, nor the “national culture”; it is rather the postulation of “the construction of the actors in their relations to society”. … The analysis of the processes of interdependence (macro/micro) and the mediations they imply are at the heart of this approach. According to our terminology the “actors and spaces” that are associated with these processes, are simultaneously constructed in their relations to society. Society is here no longer limited to a simple context or local environment, or a vague set of values or cultural traits, but rather represents the matrix of the set of social relations that constitute it.95

This may sound utterly “holistic”, but I think it mainly indicates a strong orientation towards a “relational sociology” (Emirbayer 1997) and a “methodological relationism”.96 Emirbayer uses the term “relational sociology” to characterize both old and new strands in sociology that implicitly or explicitly try to break away from and substitute conceptions of the social world as “…consisting primarily in substances” with conceptions that “…depict social reality instead in dynamic, continuous, and processual terms” (ibid.: 281). Defined in such broad terms it includes sociologists and sociological analysis that may otherwise have little in common,97 but it may nevertheless be useful as a “regulative idea” that 95.

Maurice 1989: 182–own translation.

96.

Cf. G. Ritzer and P. Gindoff 1994–perhaps the most ardent and self-conscious proponent of a methodological relationism is Pierre Bourdieu (see e.g. Bourdieu and Wacquant 1992: 15– 19), but other important sociologists, like e.g. Norbert Elias, obviously share this (broad) orientation, and perhaps this is (another) reason for the “tacit connection” Maurice et al. suggests between Elias’ sociology and the approche sociétale (Maurice et al. 1992: 84)? The quite different “actor network”-approach, especially associated with the work of Bruno Latour, can also be seen as proponent of a “methodological relationism”.

97.

E.g. both J.C. Alexander, P. Bourdieu, A. Giddens and B. Latour must be included in this category — these sociologists may (and indeed do) disagree over very fundamental questions, but this should not prevent others from gaining constructive insights from their works about how a relational approach can be developed in their own research and field of research.

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can guide our understanding of and bring out some main trends in an otherwise seemingly chaotic reality. The term “methodological relationism” does not necessarily connote the same orientation, but for some adherents (e.g. Bourdieu) it is explicitly grounded in a break with essentialist notions about the object of knowledge, and attempts to construct it consciously and systematically in relational terms. The approche sociétale not only “fits into” these categories, but is firmly based on empirical research that demonstrate how a “relational sociology” and a “methodological relationism” may look like in practice. This is, I think, one of its basic strengths, but also one of its potentials which is far from being exhausted yet — e.g. when it comes to developing further the spacial concepts that are so central to the approach (see the discussion at the end). An explication and further development of this aspect of the approach is also highly relevant for clarifying the particular “embeddedness”-perspective of the approach.

What kind of “embeddedness”-perspective? The approche sociétale may seem to have much in common with the “embeddedness”-perspective on economic action associated in particular with the American sociologist Mark Granovetter,98 and the “new economic sociology” he is associated with.99 There are, however, important differences between the two, and pointing out these differences may serve both to further clarify the particular character of the approche sociétale and its critical potential. Programmatically, Granovetter presents his work and perspective this way: Locating my own work squarely within this “new sociology of economic life”, I argue that orthodox neoclassical theory, and its recent work on economic and social institutions, are flawed in ways that a sociological perspective can highlight and help remedy. The brilliant achievements of neoclassical arguments in illuminating the efficient pursuit of well-defined preferences, must be accompanied by an appreciation of the extent to which such pursuit is intertwined with noneconomic goals, and deeply embedded in structures of social interaction that extend backward in time and outward in space.” (Granovetter 1990: 95)

What Granovetter calls “the embeddedness problem” is firstly the consequence of two basic sociological axioms of his approach: that action is always socially situated, and cannot be explained with reference to individual motives only. The “problem” is thus about “…to what extent economic activity is mediated by — or as I say, “embedded in” — networks of personal relations.” (ibid.: 96). Secondly,

98.

Cf. Granovetter 1985, 1992 and Maurice et al. 1992.

99.

Cf. Swedberg 1987; Granovetter 1990; Granovetter and Swedberg 1992.

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his approach builds on the basic axiom that social institutions do not arise automatically in some inevitable form, but are “socially constructed”.100 As far as these presuppositions and Granovetter’s more general critique of “oversocialized” and “undersocialized” conceptions of economic actions and actors are concerned (Granovetter 1985), his approach seems close to the approche sociétale and vice versa. This probably also holds for the following statement: By “embeddedness” I mean that economic action, outcomes, and institutions are affected by actors’ personal relations, and by the structure of the overall network of relations. I refer to these respectively as the relational and the structural aspects of embeddedness.” (Granovetter 1990: 98)

An example of how Granovetter conceives of using his perspective in explaining more specific “economic outcomes” demonstrates, however, strong contrasts with the approche sociétale. The example is taken from a study of wage differences between skilled and unskilled workers, trying to explain why this difference declined during a period of prosperity (Reder 1965). According to standard economic theory one would expect an increase in the demand for both types of labour in these circumstances, and it is difficult to predict the exact effect on the wage gap between the two. Reder proposed a different explanation. In such a situation the employers will not raise the wages of the skilled, but rather promote unskilled workers to the ranks of the skilled. This will increase the demand for workers at lower skill levels, and eventually the employer will have to demand new workers from the external market. The end result is that the wages for the less skilled will increase substantially, while the skilled workers’ wages will only rise moderately. Granovetter suggests a generalization of this argument: In sets of jobs where this type of substitution-chains is possible, wage differentials will be reduced. The substitution does not, however, occur automatically, and people are not promoted at random: But I argue that in practice, which workers appear available to employers for upgrading into a particular job actually depends on the history and structure of employers’ and workers’ communications networks.” (ibid.: 101)

This may seem perfectly plausible, but Granovetter is here doing what Maurice et al. try avoid doing: postulating a uniform principle of explanation that either ignores or does not give rise to pertinent (methodological and theoretical) questions about the specific spatial and temporal dimensions in the construction of the involved actors. Substituting workers the way Granovetter suggests is of course imaginable, and Maurice et al.’s France-German comparisons show that it may perhaps be possible to do so in France, but far less probable in German factories. 100. Interestingly enough both Granovetter and Maurice et al. refer to Berger and Luckmann (1966) as a source of inspiration, although they would not (I think) subscribe to the rather idealistic constructivism of the source.

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Besides, one can hardly imagine that the unions in either country would watch such a policy passively or approve of it, and even though one could imagine that French workers were more likely than German workers to be promoted on the basis of vague personal qualities and relationships, the “grille” and its system of coefficients would maintain the wage differentials. Finally — the wage differences, independent of economic conditions, are smaller in German than French industry — i.e. they are smallest where the kind of substitution Granovetter is talking about is less probable. Of course, this does not “refute” Granovetter’s approach, but it demonstrates a basic difference in orientation when compared with the approche sociétale. Both relate to neoclassical economic theory, but in quite different ways. The approche sociétale develops its analytical perspective through a critique of the inner logic of the theory — a critique which does not deny the theory as such, but its capacity for developing an analysis of the differentiated spatial and temporal dimensions in the construction of economic actors and institutions across nations (Maurice et al. 1982: 295ff). Granovetter also sees a problem with the theory, but his diagnosis of the problem seems to be such that his embeddedness perspective can remedy it: economic actions are not only influenced by rational calculations of transaction costs but also by interpersonal relationships (Granovetter 1985: 505). His perspective thus seems to have clear nomothetic ambitions — the construction of a universal axiomatic theory. Of course, there is nothing wrong with this ambition, and it does not exclude specific spatial and temporal dimensions in the construction of actors and institutions from specific analysis. It is, however, more than likely that these dimensions will be included in the analysis as residual categories — as “contingencies”. Neither does the approach differentiate clearly between the macro social logic related to the construction of the space of qualification, the industrial space etc., and the micro social logic at the level of (inter)action. An analytical thematization of the relationship between the macro social institutional configurations associated with the construction of the actors, and the networks of interpersonal relations in which the actors are engaged, presupposes that these levels of analysis and their separate problematics are considered as relatively autonomous. Whereas the approche sociétale in principle (at least) allows the levels of analysis such an autonomy, Granovetter’s approach hardly does. Nevertheless, in more specific analysis Granovetter must allow this autonomy, as e.g. in his reanalysis of the electric appliances industry in the US which he concludes this way: What has happened here, as with Chinese firms in Southeast Asia, is that institutions that arise and stabilize begin as accretions of activity patterns around personal networks. Their structure reflects that of the networks, and even when those networks are no longer in place, the institutions take on a life of their own that limits the forms future institutional development can take. (Granovetter 1990: 105)

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Both this analysis and the analysis of wage differences (see above) illustrate some general methodological problems. These are not primarily about what social relations, structures and processes Granovetter or representatives of the approche sociétale actually include in their specific empirical analysis,101 but about how the relationships between these dimensions of social reality are conceived and explained, when (and if) they are included. Insisting on the strategic importance of studying interpersonal networks does not solve the problem of “smuggling in” the macro level in the shape of “constraints” or residual categories like “national culture”, “history” etc., normally associated with methodological individualism. This does not necessarily imply that Granovetter should be classified as methodological individualist, but it demonstrates the contrast between his embeddedness perspective and that of the approche sociétale. Considering the nomothetic ambitions of Granovetter’s approach it is no wonder that he gets frustrated by all the “contingencies” he must struggle with in his attempt to arrive at general, universal explanations (ibid.: 106), and this suggests clearly that if his approach was to be applied in international comparative studies, it would probably be closer to the variable-oriented than the case-oriented approaches. What can be concluded from this discussion is that the development of the strengths of the case-oriented approaches in international comparative studies of economic action and actors is better served by the embeddedness-perspective of the approche sociétale than Granovetter’s, for mainly two reasons. The first one is that it explicitly aims at identifying the specific spatial and temporal dimensions in the construction of the actors, and thus both allows and demands greater specificity in causal arguments, as well as greater flexibility in identification and examination of evidence. The second reason is that it is closer to the kind of methodological relationism that an analysis of these dimensions and their interrelationships demands. A consequent methodological relationism would not only demand a systematic construction of the object in terms of micro-macro relations, but a more general search and argumentation for “micro” and “macro” levels that are of empirical relevance in each case in order to avoid essentialist notions about the related entities.102 Granovetter’s insistence on the ultimate (“last instance”) importance of (the study of) interpersonal relations is not easily compatible with this demand. Whether the approche sociétale is more conducive in this respect, is the subject of the following section.

101. For a critique of Granovetter along these lines, see Barber 1995. 102. This “radicalization” of a methodological relationism should not be interpreted as a call for a radical social constructivism — as shown by e.g. Bourdieu (Bourdieu and Wacquant 1992) and Archer (1995) it is perfectly compatible with a realist position.

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Strategy of research and theory construction My argument so far is that the approche sociétale shares the aim of case-oriented approaches of combining causal analysis, interpretive analysis and concept formation, and that it aims at a “relational” construction of the social embeddedness of economic action and actors. This means that the study of this embeddedness is not approached with concepts that are predefined in terms of sets of variables. Typical for e.g. PO is that central spatial concepts (espace professionnel, industriel, de qualification, d’action collective, du travail) are introduced in the middle of empirical analysis as attempts to synthetize the results of the comparisons, and to do so in terms of contrasts between relational configurations of actors and institutions. The fact that these concepts are not defined in such a way that they allow the examination of cases (countries) as combinations of variables, is bound to annoy more variable- and nomothetically-oriented researchers who tend to ignore the fact that this is actually a logically consistent aspect of the approach: It can be seen that the theoretical framework offered by the Aix group remains somewhat vague and ambiguous. There is, in fact, no theory in the conventional sense, i.e. the explanatory variables are never specified nor is the exact relation between culture as institutionalized patterns of action and the business organization ever explicated. (Lane 1989: 34)

If this is meant to be a critique of the approach, it is so obviously based on wrong premises that it cannot be taken seriously. On the other hand, the very fact that such “critical” comments are put forward at all, may be taken as an invitation to explicate further the particular strategy of theory construction that characterizes the approach. First of all, one must then keep in mind the qualities that the approach has in common with case-oriented approaches in general. Indeed, the approach can be regarded as a case-oriented approach that explicitly dissociates itself from assumptions which imply that the social character of the entities that are compared is taken for granted. This dissociation permeates both the methodology and formation of concepts associated with the approach. Three concepts are central in the construction of the object of research: social space, actors and relations. None of the concepts are pre-defined as specific combinations of variables. In this sense the concepts are “open” — their specification demands empirical investigations. An explication of this strategy of theory construction is that it is grounded in the view that research should be more concerned with the Bestimmung of concepts as an ongoing (social) process, than with “definitions”, as “definitions” constitute but one element in this process.103 In this respect the concepts are very similar to 103. Thus being in accordance with a realist position which sees all knowledge about reality as dependent upon, but not determined by our concepts of reality — and eo ipso “definitions” as influencing, but not determining what the object of research “is” at any time (i.e. its actual “definition”).

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the key concepts that permeate e.g. Pierre Bourdieu’s sociology — the concepts of “habitus”, “field” and his concepts of capital. These concepts should be considered as instruments of research; as condensed programmes of research (Broady 1990: 169). At this general level there is an affinity between Bourdieu’s sociology and the approche sociétale — an affinity that can also be found at the more specific conceptual level, e.g. concerning the concept of “habitus”.104 For Bourdieu this is a concept that relates the productive, mental, intellectual and even ethical and esthetical dispositions, capabilities and competences of agents and classes of agents to their social background, trajectories and biographies, in order to explain their practice in different social fields. Analogically, the approche sociétale aims at showing how e.g. the capacities of firms — themselves conceived of as economic and social actors — relate to the organization and interaction of occupational groups that constitute the firm, and the way that the capabilities and competences of these productive agents are socially produced and formed through socialization processes in different fields in society (the family, the school and the workplace obviously being the most relevant fields in this context). In sharp contrast to Bourdieu though, the approche sociétale has chosen international comparisons as the main research instrument in order to study these processes of socialization and interaction, and to specify the contents of its key concepts. The “societal-creative” (and not only field-relevant) capacities of the actors thus gains a more crucial, and critical importance — both as a theoretical and empirical issue.105 The approche sociétale is thus an approach that can help us to better understand and appreciate the variety in the situated creativity of the people we are studying, and what causes this variety. Indeed, if this is used as an alternative or supplementary criterion of differentiation between comparative approaches, the contrast between the approche sociétale and variable-oriented approaches becomes even clearer. Whereas this variety for the latter approaches is a necessary condition for testing the relative importance of independent variables, it necessarily presents itself as the most crucial object of knowledge to the approche sociétale. As argued above, an adequate approach to the construction of this research object cannot be based on assumptions which imply that the character of the entities we are comparing is taken for granted, and one way of avoiding this is to let our research be guided by concepts that can serve as programmes for empirical investigations into the complexity and diversity of the relations between agents/actors and their fields of interaction. Both conceptually and methodologically this demands a relational approach, and the strength of the approche sociétale is that it has this quality. 104. Cf. PO, p. 344–348. 105. Also giving the problem of democracy a prominent, and critical position (cf. Joas 1996).

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As suggested above, this does not mean that the approach is “flawless”, or that its potential is fully realized. In particular, the capacity of the approach to grasp the processual-dynamic aspects of the reality it studies, and to connect these aspects to the central spatial constructions of the approach, may be questioned.106 I cannot go into the details of how these issues have been dealt with in the design and analysis of all the specific research projects that are relevant in this context. Rather, I shall again concentrate on some general characteristics of the approach, and I shall illustrate my argument with special reference to the analysis of one particular research project (EM, Maurice et al. 1986). The main reason for doing so is that this analysis not only identifies and suggests how the approach could deal with this problematic, but also — in my analysis — illustrates how this may in turn invite a critical reflection upon the spatial concepts and ideas about levels of analysis discussed above.

A critical problem — The connection between analysis of temporal dimensions and levels of analysis relating to the spatial dimensions in the construction of the research object In my analysis I shall concentrate on what I think is one of the basic problems that not only the approche sociétale, but any sort of “relational sociology” and “methodological relationism” is confronted with. This is the problem of connecting spatial (structural, systemic) dimensions in the construction of the object of knowledge to temporal dimensions in such a way that both the reproduction of and changes in these dimensions are satisfactorily accounted for — perhaps the relational problem par excellence.107 The awareness of this theoretical and methodological complex runs through both the preparation for and the analysis of the results from the EM-study. E.g. Eyraud and Rychener (1982) in a preliminary methodological note relating to the study comment on the approach that Another dimension is the relative static character which, by first glance, impregnates this type of approach. Somehow the national particularities are making the societies rigid. This seems unacceptable as societies obviously actually develop. However the approach which is applied here does not at all presuppose such a rigidity — it has simply not yet integrated a theoretization of social change of its own.108 106. The rather static character of the analysis in PO has thus been both critized and admitted, and later studies, in particular “Des Entreprises en Mutation dans la Crise. Apprentissage des technologies flexibles et émergence de nouveaux acteurs” (EM, see Maurice et al. 1986 and Eyraud et al. 1988), more explicitly takes up the issue of stability and change. 107. A discussion of social temporalities is conspicuously lacking in Emirbayer 1997–probably because of his preoccupation with network analysis. 108. Eyraud and Rychener 1982: 25–own translation.

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Elements of such a theoretization can be found throughout Maurice et al. 1986, and are explicitly discussed in the introduction. Explaining the strategy of research, it is stressed that it aims at integrating problematics relating to “technicaleconomic” and “socio-organizational” dimensions: In other words, neither the dynamics of investments, nor the technical logic have in themselves explanatory power (or causal force). … On the other hand, an analysis of the development of work, qualifications and the organization of the enterprise which overlooks the dynamics of investments, the development of technology and the “product and market strategies” of the firm, runs the risk of reducing the firm to an organization or a social system without productive goals, centered on its own reproduction (formally equating it with a “bureaucratic” organization). In both cases (autonomous analysis of “technical-economic” phenomena or a reduction of the enterprise to its “socio-organizational” dimensions) the understanding of the firm is impoverished, and an analysis of the interdependence between the different “logics” (or rationalities) attached to this ensemble of phenomena becomes illusory, because it has no object. On the one hand one is facing an enterprise without actors, reduced to a technological logic of development or economic laws; on the other hand one is faced with a social system which is self-enclosed, robbed of “productive forces” that enable it to obtain its economic goals.”109

The problematization of the relationship between these different “logics” (or rationalities) is well-known from the study of the different espaces in PO, but now the temporalities associated with the differentiation between them, and the requirement of a “differential analysis of temporalities” is more explicitly thematized, and it is suggested that the study may indicate how such an analysis may be developed. Of course, when the explicit aim of the study is to say something about the “relative reproduction” (ibid.: 22) of basic traits of the French “model” in a process of industrial readjustment — a process marked by tensions between “innovative changes” and “reproductive changes” (ibid.: 24) — this thematization seems unavoidable. In the analysis different temporalities are explicitly or implicitly associated with – – – – – – –

more or less global and more or less general economic business cycles general processes of technological development and innovation demographic processes specific product markets (national/international) political processes at macro level (economic, industrial, educational, technological, research and development policies) political processes at sector/branch level as well as psychological, cognitive and political processes at micro level (e.g. transformations of experiences and knowledge into legitimate “motives” for investments, organizational development etc.)

109. Maurice et al. 1986: 16–own translation.

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social evaluations and prestige relating to different types of education, work and occupations more or less global discourses on technological, economic and other development trends

and these are related to specific temporalities associated with the histories of the enterprises, their internal “collective memories”, their geographical location and local community relations.110 Of course, such a listing of dimensions and temporalities is of restricted interest in itself, and no single analysis can exhaustively deal with them all, but I will argue that it indicates both the exploratory potential and potential weaknesses of the approach. A closer look at one “micro”-issue may illustrate the last point. In the analysis of temporalities in processes of investment decisions (ibid.: 93–116) it is suggested that the “motives” of the decisions may depend on the relations of the enterprise to other enterprises, internal relations between positions and departments, interpersonal relations — they may be only “emergent”, and they may be transformed over time. This raises questions about whose and what experiences and knowledge is transformed into “motives” of decisions, and how this happens — i.e. about relations between cognitive and political processes. How are such relations to be understood and analysed, what temporalities and what levels of analysis are pertinent in this case? To complicate this question even more, it should be taken into consideration that the analysis shows that there are conspicuous discrepancies between the “real” motives of past investments and the “official” motives — the latter typically reflecting contemporary fashionable ideas about business strategies. This does not mean that the latter are uninteresting or unimportant. On the contrary, they may be very important for present and future decisions — if not directly, then because of the weight of their status as “acknowledged knowledge” in discussions over decisions. Analytically, relations between the above complex of relations and more global processes of social constructions of realities are here at stake — processes that agencies as e.g. enterprises, politicians, interest organizations and sociological and organizational analysts are deeply involved in. What temporalities and connections between temporalities are involved here and what levels of analysis are relevant? Several other examples could be used to illustrate the same point;111 that a further elaboration of the analysis of the temporalities associated with main spatial dimensions in the construction of the object of knowledge demands a continuous process of identifying the most pertinent levels of analysis, and that preconstructions in terms of interrelationships between “micro” and “macro” may be too restrictive for this purpose. Logically, I see this as fully consistent with the 110. Korsnes 1997: ch. 5–this “inventory” is not exhaustive. 111. Cf. Korsnes 1997.

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caution against taking some spatial preconstructions of the object of knowledge for granted, which is the basic for the approche sociétale. Moreover, I think that an elaboration of the approach in the suggested direction also would add to its capacity to identify and specify spatial dimensions, as it relates directly to the problem of identifying the qualities of such dimensions that can explain their relative autonomy as well as their dynamic interaction. More generally it could thus strengthen the “case-oriented” quality and capacity of the approach to specify causal arguments and causal mechanisms, assessing causes in relation to context, as well as enhancing its flexibility in identification and examination of evidence.

Conclusions Hopefully, this brief assessment of the approche sociétale has not only been in the spirit of case-oriented approaches to comparative research, but has also demonstrated the strength of such approaches when it comes to analysing the wholeness of the case. Of course, this is not the only, and to the practioneers of the approach perhaps not the most interesting way of demonstrating its potential, and I could have chosen a different way of doing it, more based on my own research on Norwegian working life inspired by the approach.112 This would also have allowed a demonstration of an additional strength of the approach which I have only suggested above: its incitement to integrate and combine various sociological “traditions” and “perspectives” and its capacity for doing so in a way that supports and contributes to recent attempts to overcome some of the sterile and false oppositions that have plagued the discipline.113 That would, however, demand a different format and style. In this context my primary aim has been to convey my conviction about the potential of the approche sociétale for developing a relational approach to the study of the situated creativity of the people we are studying, that may enhance our understanding and appreciation, as well as our ability to explain its variety.

112. Research I have been involved in together with other researchers associated with AHS — Multidisciplinary Group for the Study of Work and Society, at the University of Bergen, Norway. Many of the results of this research are only available in Norwegian publications (e.g. my own D.Ph. thesis, Korsnes 1997), but some publications in English are included in the list of references (Korsnes 1990, 1996; Halvorsen et al. 1996; Sakslind 1990). 113. Basically, this is what “relational sociology” and “methodological relationism” is all about.

Chapter 6 The implications of “societal analysis” for a programme of research Jean-Michel Berthelot

The term “societal” seems to be a vague, marginal presence in sociology. Although it was used by the father of structural functionalism, Parsons, it has been largely ignored elsewhere, at least in any specific sense. There is no reference to it in French dictionaries of sociology, and the excellent Dictionary of Sociology by Abercrombie, Hill and Turner devotes precisely one and a half lines to it: “this term refers to the characteristic of a society as a whole”. Paradoxically, it re-emerges in some French works of the 1980s as a tool in the break with functionalism. Maurice, Sellier and Silvestre (1982) were the main driving forces in this change of ideas. At about the same time, the present author, who had no connection at all with the above-mentioned authors, gave his doctoral thesis the subtitle Towards a societal theory of the schooling process. What epistemological purposes were being served by the use of this term? The question becomes even more intriguing and stimulating if we recall that, a few years later, the Revue française de Sociologie published a sarcastic article entitled Pour en finir avec “sociétal” (Heran 1991) which denounced the linguistic nonsense of the term’s construction and the magical nature of its use, without citing any of the offending sociological works. However let us leave such anecdotes to one side and turn to the central issue. The great merit of the pioneering work of Maurice, Sellier and Silvestre is not that it makes occasional use of the term but that it opens up a new perspective. Basing their approach on detailed comparative studies carried out over many years, they sought to formulate a new analytical point of view. While that point of view is now well known in the sphere of international comparisons and the sociology and economics of work, our purpose here -both broader and more fundamental — is to identify its logical scope: what is the significance of societal analysis as a method of analysis? What programme of research, in the precise sense attributed to the term in the philosophy of science, does it imply?

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1. The starting point for our enquiry will be the 1982 book, Politique d’éducation et organisation industrielle en France et en Allemagne (published in English as The social foundations of industrial power. A comparison of France and Germany). The context in which the book was produced is familiar: a comparative survey between France and Germany that focused on the construction of the wage-employment relationship from the dual perspective of the training of workers and their integration into the workplace. The analytical model can be represented in Schema 1. Schema 1 Wageemployment relationship

→

Socialisation space (training of workforce)

and

Occupational space (integration of the workforce

Societies S 1, 2 … n

→

Socialisation space S 1, 2 … n

and

Occupational space S 1, 2 … n

In standard theories, the first line defines the abstract model representing the determination of the spaces in which the labour force is produced and utilised. Concrete differences between actual countries (second line S1, 2…n) play a part that is usually sufficiently marginal for them to be conceptualised as an effect of unequal development. According to Maurice, Sellier and Silvestre, this global model is invalidated by reality. Systematic empirical comparison between France and Germany reveals that each of the two spaces (socialisation space and occupational space), far from being subsumed into a common abstract law, displays a different type of coherence that links it to the specific society under consideration. Thus the very principle underpinning the model is reversed: it is no longer the first line that determines the second, but the converse. The same abstract relationship which, logically, exists prior to its development into concrete forms, is no longer conceived of as unfolding within different societal contexts; rather, these societal contexts are now seen as producing specific types of organisation and forms of generality. In other words, there is a shift from a model-building to a constructionist perspective. This shift of perspective is explained and systematised in the last chapter of the book. What the authors suggest should be called societal analysis is set against various other economic and sociological theories of the labour market (in the broad sense).

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Neo-classical and Marxist economic theories are criticised for their abstract universalism, which leads to the negation of the social aspects of the phenomena under investigation. Sociological theories (Friedman’s theory of work, the sociology of organisations, the sociology of occupational mobility patterns, the sociology of industrial relations, etc.) are condemned for the unilateral nature of the reference paradigms (methodological individualism or holism, structural functionalism, symbolic interactionism…). As far as the model depicted below is concerned, in which the abbreviations WER stand for wage-employment relationship, Ss for socialisation space and Os for occupational space, the authors’ criticism consists of drawing the inferences from the reversal of thinking suggested by their empirical observations: economic theories construct a model of determination that can be expressed by the formula in Schema 2. Schema 2 C (Capital)

→ WER → (wage-employment relationship)

(Ss, OS)

Here, it is capital as the basic structural relationship that defines the wageemployment relationship and the spaces in which it is put into effect. Societal analysis, conversely, suggests that the starting point for analysis should be the actual interactions between the spaces (symbolised below by the sign ↔) as they develop within a given society in order to infer from them the ways in which the general is integrated into the specific (Schema 3). Schema 3 Si (specific society)

→

(Ssi ↔ Osi)

→

Wer

Here, the wage-employment relationship is no longer the shadow projected by capital on to two particular social spaces, but rather the product of the interactions between those spaces. Thus two things emerge clearly from this second formula: 1.

2.

the support or fulcrum around which it revolves is the empirically identifiable relations, the forms of “societal coherence” constructed in any given society by the spaces in which the workforce is trained and utilised; the problem that it raises is that of the status to be attributed to the “general”, in this case the flow of capital, which disappears from the formula.

The authors’ response to this problem is both resolute and problematic: “In each society, this specificity serves as a vehicle for a form of generality that is diffused from it and is crystallised in it” (p. 314). This response is resolute in that it comes

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down clearly in favour of combining the general and the specific in a dialectic unity; however, it is also problematic in that the terms used (“vehicle”, “diffusion”, “crystallisation”) are metaphorical. Identifying this as problematic does not in itself mean that the use of metaphors is illegitimate: if the various sciences were to be stripped of all terms that were initially or continue to be metaphorical, not only their heuristic capacity would be impaired but their basic vocabulary as well! However, while a theoretical conundrum can be made more evident by a process of illustration, it is nevertheless the case that additional tools are required if it is to be clarified. We will return to this point at a later stage. Firstly, we need similarly to identify the nature of the criticism directed at sociological theories. In the same way as that directed at economic theories, it both brings about a change of perspective and opens up a potential programme of research: 1.

2.

Sociologists have focused essentially on the structuring of the spaces in which the labour force is trained and utilised, i.e. on the (Ss, Os) segment of the formula. The change of perspective leads necessarily to the introduction of a third term, namely the firm conceived of as an organisation. The main criticism the authors make of the various schools of sociology that have addressed these issues is that they tend to give undue prominence to one of the three terms to the detriment of the interactions between them. This restricted perspective operates simultaneously along the dividing lines between approaches that emphasis either the actors (industrial relations theory, symbolic interactionism, Crozerian model) or on structures (Friedman’s technological determinism, structural functionalism), thereby creating the major distinctions between methodological holism and individualism.

The point of view advocated by Maurice, Sellier and Silvestre, on the other hand, takes as its starting point the actual interactions between each term, which are then used as a means of understanding the construction of specific social relations and contexts and thus to conceptualise the interpenetration of the general and the particular: “Our approach tends, on the contrary, to construct the general on the basis of the particular without giving up the latter, since it is the particular that is itself the vehicle of “generality”, just as the general is rich in “specificity”” (1992: 348). Clearly, the difference of perspective between economic and sociological approaches does not alter the central problem by which societal analysis is defined. As an instrument for effecting a break with earlier schools of thought, therefore, societal analysis is defined firstly in opposition to the various modes of reduction from the particular to the general that run through the social sciences. The term societal, which appeared in the works of various authors in the post-

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structuralist and post-positivist period of the 1980s, clearly has a common methodological power. However, it is necessary to go further and attempt to understand the logical core of the analysis. The fact that it was developed in a specific methodological context, namely international comparisons, and within a particular sphere, namely an investigation of the wage-employment relationship, does not in any way diminish its scope. On the other hand, if it is to be applied to other spheres then its foundations need to be strengthened.

2. A few terminological distinctions will prove necessary if progress is to be made. On several occasions, the authors make a distinction between societal analysis and theory. They would seem to be less concerned with conceptual distinctions than with deontological reserve and epistemological modesty. For our part, we would seek to make a distinction between four terms: point of view, programme, analysis and theory. By point of view we understand the definition of a broad perspective from which the subject in question is perceived; the conflicts between, for example, synchrony and diachrony, clinical and experimental approaches, holism and individualism etc. function at this level. We take the notion of programme from Lakatos (1970): the term refers to a broadly based but specific research endeavour, characterised by guiding principles, additional hypotheses and precise methodological approaches. Causal analysis, for example, as defined in sociology by the school established by Durkheim, Lazarsfeld, Blalock, Sevin, Boudon etc., constitutes a programme. Thus if this example is pursued, the term analysis is close in meaning to programme, and may in reality be confused with it. Nevertheless, it is possible to make a distinction between the two terms by confining analysis (when it is specified as causal analysis, functional analysis, etc.) to the methodological sphere. To be more precise, analysis can be defined as a programme in actuality and programme as an analysis whose axioms have been made explicit. Finally, a theory has its origins in a different space: it necessary involves the definition of a sphere of reality to which it is to be applied, i.e. the definition of relevant entities and of the basic relationships between them. Thus there is a logical relationship between these four terms that it is possible to clarify. On the historical level, however, they may be unequally developed and out of step with each other; the methodological or theoretical aspect may be developed as a new point of view without the programme that constitutes its logical framework being clearly explained, while the procedures used may merely involve the “recycling” of existing techniques. For Maurice, Sellier and Silvestre, societal analysis as a perspective from which to investigate the wageemployment relationship can be extended theoretically (to encompass a societal theory of the wage-employment relationship) and logically (to encompass the

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programme on which the specificity of the approach is based). It is this second direction that concerns us here, since the first falls within the domain of the socioeconomics of work. The inversion, already outlined above, that is a basic characteristic of the authors’ approach belongs to a long-established tradition. Setting the abstraction of models against the specificity of characteristics observed in particular contexts is one in a series of antitheses that the social sciences have devised since the end of the last century and continue to devise today: nomothetic approach/idiographic approach; modelling/narrative; structure/history; structure/event… However, while in each instance the binary logic pushes societal analysis towards the second element in the antithesis, the point of view propounded by Maurice, Sellier and Silvestre has one particularity: their investigation focuses on structures and structured entities, i.e. on a sphere of inquiry that actually falls within the scope of the first element. Adopting neither the narrative viewpoint nor that of events or historical reconstructions, they seek nevertheless to reproduce the generic point of view of the second term in the antithesis on a subject specific to the first term. This marks out the relationship between the general and the particular as the locus for the logical difficulty in constructing a basis for analysis: since any structure is an arrangement of elements that can by definition be modelled, how can the relationship between the general and the particular be constructed without reproducing the dichotomy between abstract model and concrete reality? It was around this decisive question that the metaphors mentioned above “gravitated”, and it is because it is decisive that an attempt has to be made to effect the transition from image to concept. Three problems are raised: the status of the general in the analysis, the historical emergence of forms of generalities and the procedures of societal analysis (Schema 4). Schema 4 1 C 2 Si

→ →

WER (Ssi ↔ Osi)

→ →

(Ss, Os) WER

The first problem is, in a way, the simplest. It was posed and resolved, at least at this level of generality, by Weber (1904). The two formulae presented above are specifications of the antithetical points of view inherent in the modelling approach and the historical approach. The modelling approach defines a form of abstract generality (the content of which, in this case, is formula 1, i.e. the relationships of determination that link the movement of capital, the wageemployment relationship and its two associated spaces) and compares it with empirical realities S1, S2 … Sn. Since it focuses not on the specificity of events but, as in the social sciences, on concrete “causal connections”, the historical approach pays particular attention to the singularity of the historical occurrences

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of the phenomena under investigation. However, by way of “preparatory work” (Weber, p. 158) or “heuristic instruments” (id. p. 159), it makes use of generalities produced by other methods. Whereas, in Weber’s view, modelling as a method in the social sciences has its origins in a nomeothetic prejudice, or a deductivist fiction, it is nonetheless true that it is impossible to study an individual situation without using general models as a guide. The status of these models changes, however: they are no longer the essence of the phenomenon being targeted — or, in different terms, its theory — but simple ideal types. Thus the inversion formalised above cannot be as clear-cut: it does not contrast deduction from the model with inductive construction from facts (in which case formula 2 could be extended as follows: Si → (Ssi → Osi) → Wer → C), but rather with an exercise in complexification and particularisation that can be formalised provisionally as in Schema 5. Schema 5 (S 1, 2 … n) (actual societies)

→ (C → WER) → (Ssi ↔ Osi) → Si (ideal type) (complexification/singularisation (identification through study of concrete of the phenomenon historical situations) in its specificity)

In the text cited, Weber declares the fundamental purpose of the social sciences to be the reconstruction of unique configurations (Si); however other authors, as well as Weber’s own enquiries into the sociology of religions, established a sort of two-way interaction between ideal types (e.g. of rationality) and historical occurrences. At this first level, “generality” is an abstract cognitive construction. The interpenetration of the general and the particular denotes only logical processes of abstraction, deduction and complexification. However, there is more than this to the position put forward by Maurice, Sellier and Silvestre. To speak of the particular as a “vehicle of generality” and of the general as “rich in specificity” has undeniable Hegelian connotations. And although they neither explicitly nor implicitly go down that route, they do open up another dimension, signs of which can be seen in the text in the recurrence of the term construction. If we can be granted a new conceptual distinction, we would propose that, in order to avoid frequent confusions, a distinction be made between constructivism and constructionism. The first is a general logico-cognitive point of view according to which the objects of knowledge are constructed by the subject of that knowledge. This goes back to the “Copernican” revolution that Kant claimed to have brought about in philosophy. The second could denote a point of view that gives prominence to the ways in which forms of generality are constructed or emerge over time. Far from viewing them as inherent to the phenomenon, such as the stages of

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evolution that would be the focus of attention in an Hegelian perspective, the aim here is to investigate the processes that led to their emergence, their stabilisation and their diffusion as specific structures. The metaphors noted above (“vehicle of generality”, “diffusion”, “crystallisation”) undeniably point in this direction. In consequence, they seem to open up a clear methodological perspective, namely the reconstitution of the historical process by which the forms of generality that define the modes of societal coherence identified at any given moment were produced and stabilised. However, since Maurice, Sellier and Silvestre do not go down that path, the problem is raised of the articulation between societal analysis, which they define, and the constructionist point of view, to which they refer.

3. Our solution to this apparent discordance would be the following: if, as we indicated earlier, the four logical terms identified (point of view, programme, analysis and theory) do not develop at the same pace in the actual evolution of research, it is because they are given differing degrees of relevance (Schutz 1963; Berthelot 1996). Any attempt to test a new point of view on an object, whatever the theoretical or empirical reasons for so doing, necessarily forces authors to specify analytical tools and to create a suitable terminology for describing what is being constructed by this new point of view. Thus the centre of gravity of such an attempt, that to which it gives greatest relevance, is located between analysis and theory. On the other hand, any attempt to define the more general programme implied by this analysis shifts the focus of attention towards its logical foundations. It is the separation between these two orders of relevance that is revealed by the discordance identified above: the fact that the authors take the perfectly legitimate view that, within the framework of the phenomena they are investigating, identification of structural specificities that can be analysed in terms of societal coherence constitutes an adequate approach for laying the foundations of a theory appropriate to the sphere in question, should not prevent them from simultaneously taking this analysis to its logical conclusion in order to reveal its programmatic principles. If we continue to draw inspiration from the research programme methodology developed by Lakatos and seek to express these principles in terms of axioms, previous developments make the following propositions justifiable: A1: In examining social structures that, in different societal contexts, fall within the domain of the same system or the same relationship, the programme of societal analysis contrasts the reduction of empirical differences in a generic model with the reconstruction of these differences in their various forms of internal coherence. A2: The programme of societal analysis considers that the structures under investigation constitute forms of generality that can be referred not to a prior

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logical model but to an internal process of construction, based on the interaction between the spheres of activity and types of actors covered by those structures. A3: Society, which is one of the various forms of generality, i.e. the various concrete structures, is a specific historical form taken by the coexistence of the spheres of activity and the various actors involved and is the space in which the interactions and relations specific to any given moment are constructed. This third axiom gives the term societal its specification: it postulates that from the infinite diversity of concrete social connections that characterise historical societies, a particular form of generality emerges that is, like any other, the product of an historical process of construction but that has the ability, at any given moment, to pass by diffusion into a network of relationships and forms that are subordinate to it and constructed in dialectical interdependence with it. This form, the contours of which are both variable and identifiable on each occasion, would be what is called a society. The societal approach is characterised by this view of society as a sort of structure that is both shaped and shaping, giving meaning and coherence to the phenomena that lie within its context of action. However this third axiom, without which societal analysis loses all its specificity, is also the locus of all its risks. How can it be prevented from lapsing into the holism that solves problems merely by not posing them? For, while it is true that the notion of a total social phenomenon or of modes of societal coherence has an heuristic effect by revealing the various forms of correspondence and solidarity produced by phenomena occurring at various levels and in various forms, it all too frequently gives rise at the same time to an ad hoc explanation, the culturalist excesses of which have shown it to be a blind alley. It is imperative, therefore, to take the constructionist point of view from which societal analysis claims to draw its inspiration to its logical conclusion by giving it its programmatic form. A4: In its endeavour to reconstruct the forms of generality of which it has identified the relevant modes, societal analysis falls within the domain of a genealogical programme However this axiom, which raises awareness of the need to reconstruct the process whereby the structures under investigation were constituted in order to understand in concreto the actual interplay between the particular and the general and the gradual emergence of forms of generality, leaves the principle underlying that reconstruction indeterminate and suffers from the absence of any logical specification of what is covered by the term genealogical programme. The difficulty stems from the fact that each of the major interpretative frameworks, or schemes in the social sciences (Berthelot 1990) is likely to construct a genealogi-

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cal programme based on its own set of animating principles. With reference to his causal schema, Durkheim spoke of the genetic method as a means of conceptualising the various successive historical forms of institutions as effects of the social milieu from which they emerged. Bourdieu describes what is essentially a functionalist endeavour as “genetic structuralism”, since the power relations that structure the various spheres and characterise the issues at stake within them are the expression and outcome of the power relations that set the various social classes against each other in the social space and are also intended to reproduce these specific relations (i.e. those specific to each sphere) and the generic relations that constitute the social space. In Nietzsche, the term “genealogy” falls within the domain of a hermeneutic scheme, and in Foucault it forms part of structuralist scheme. In Capital, Marx examined the construction of the form “money” from a dialectic point of view by seeking to understand the contradiction within the phenomenon that gives rise to the successive forms of its historical construction as a generality. And finally, using a scheme based on the notion of agency, the analysis may tend to reduce the societal specificities identified to specific historic contexts of action that gave rise to sets of animating principles that are both specific in content and general in form and which subsequently crystallise in structures that act as constraints on the actors’ subsequent behaviour. However, the difficulty, in the light of this indeterminacy, of assigning societal analysis to any such scheme may be attenuated if the axioms outlined above are taken into account, since they locate the analysis neither in a causal framework that gives prominence to external causes nor in a functionalist, hermeneutic or structuralist framework. The interpenetration of the general and the particular, on the one hand, and structured spheres of activity and actors, on the other, is an encouragement to allocate it either to the dialectical scheme or to the agency-based scheme. The final two axioms can now be stated: A5: Societal analysis may fall within the domain of a genealogical programme of the agency or dialectical type depending on the ultimate explanatory principle adopted. It will belong to the dialectic type if the emphasis is placed on the dynamic of the contradictions inherent in the relationships between spheres of activity and actors as the means whereby particular forms of equilibrium are created within a specific social space which tends to construct itself as a society. It will belong to an agency-based programme if the emphasis is placed on the actors’ initiative and the structuring effects of their actions. Moreover, this latter programme will itself take a different direction depending on whether the actors are regarded as reducible to individuals or seen as collective actors. A6: Since, in the final analysis, the choice of scheme (dialectical or agencybased) depends solely on the researcher’s preference, the only rule that can

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be imposed on it at this level is that the explanatory principle adopted be consistent with the various analytical operations carried out.

4. This logical reconstruction is only a preparatory exercise and requires further investigation and refinement. This cannot be done in abstracto and requires societal analysis to be developed in both practical and reflexive terms. It seems to us that four problems will have to be confronted in the process of development, which will involve both generalisation and more intensive investigation. 1.

2.

3.

4.

The first is that of the application of societal analysis to objects other than those of the comparative analysis of the wage-employment relationship. Having been developed in this particular sphere, the analysis would be enriched by being tested in other spheres, since it would become possible to distinguish more clearly between that which is a product of the field (i.e. of a societal theory) and that which is a product of the point of view (i.e. of the analysis as such). The second is that of its specific procedures: how will it be possible to move from the techniques used to identify societal differences, such as those used by Maurice, Sellier and Silvestre in submitting the administrative and statistical data available to them to an original interpretation, to the techniques required in order to reconstitute the origin of those data, and in particular the processes whereby specific structures are produced and generalised in a given context? The third is that of the variation in the relevant levels at which society as a form of structuring generality is to be defined: as Touraine (1984) notes, it is clearly necessary to go beyond the definition of society and the nation state that national statistical data sets merely reproduce for reasons of convenience, and to do so by going both upstream and downstream of the current definitions. Is Europe, for example, not increasingly faced with three levels at which forms of generality are stabilised (regions, states and the Community itself), which suggests not only that changes of level are required but also that the likely future of societal specificities needs to be investigated. As part of an historical dynamic, are they not also likely to disappear at some levels and to become more firmly entrenched at others? Finally, there is the problem of the interpretative framework of last resort and the possible comparison between the explanatory power and descriptive relevance of a programme of societal analysis of the dialectical type and one of the agency type.

Chapter 7 Theoretical problems in international comparisons Towards a reciprocal improvement of societal analysis and régulation theory by methodic structuralism Bruno Théret

French societal and régulation approaches are based, to a great extent, on international comparisons. As a result, they are confronted with the kind of problems facing international comparative literature which has developed outside France. They find on their way the same difficulty articulating the development of empirical studies to the progress of theoretical thinking. Indeed, although carefully constructing their research on a theoretical basis, both approaches still elaborate their generalities and stylised facts by following an essentially inductive process. The purpose of this chapter is, however, to show that, benefiting each other, they have endogenously at their disposal the necessary resources to get out of this situation. To achieve this they only need to mobilise more systematically and explicitly the genetical structuralism on which they are based, the methodology of structural analysis making it possible to produce intermediary concepts which, like Max Weber’s ideal types, “inject a theoretical dimension into the historico-comparative process” (Kalberg 1994: 141). The context of that contribution is the recent reflections on the comparative methodology (Théret 1997) to reach a synthesis between two methodological traditions in general sociology, i.e. Durkheim’s and Weber’s. This synthesis should combine inductive and in-depth historical analyses and, in order to study the degree of their generality, extensive geographical (international) confrontations of these analyses by means of theory and statistical methods. That perspective will allow more precise the evaluation of specific contributions of SA and RA. In this perspective, the first section of the paper deals with the specific contributions, as well as the present limits in this matter, of the societal and

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régulation approaches (from now on SA and RA respectively). The second section explains what could be drawn, on the methodological and theoretical levels, from their articulation, and in this perspective, goes back to the structural method of inter-societal comparisons used by Claude Lévi-Strauss in his research on the systems of kinship in the so-called “cold” societies, obviously adapting it to the context of contemporary societies.

1.

The contributions of SA and RA to comparative methodology

In France, most of the comparatists who favour a synthesis of the statistical and historical methodologies recognise themselves either in SA or in RA. These paradigms aim, indeed, at keeping together both levels of universality and diversity, by using an empirical approach whose theoretical command is sought after. Moreover, compared to comparative international literature, they have an added value, and this is what is of particular interest here: SA and RA ask explicitly what the comparable objects of research should be, and give some theoretical and empirical answers to this question. The societal effect approach Marc Maurice introduced the “societal” or “inter-national” approach, as a “structural approach” which aims at going beyond what opposes the “cross national” universalist and “cross cultural” particularistic approaches.114 SA “does not consists in making an impossible integration of paradigms which oppose each other, but rather in shifting the logics of analysis which characterise them”, as the only way to define a “comparability principle of the incomparable” (Maurice 1989: 183). According to SA, one can compare “sets of phenomena which constitute, through their inter-dependence, national ‘coherences’ which are each country’s own”, i.e. “the (macro/micro) process of interdependence” and the “mediations they necessarily imply” (Maurice 1989: 182). “The pregnance of micro/macro interdependences which contribute to the construction of actors and which constitute each national coherence is such that it 114. The categories used by Marc Maurice fully illustrate the problems of translation which come not only between national languages but also, in this case, between disciplinary idioms. In anthropology, indeed, the “cross-cultural” logic of analysis has been rather to establish general or even universal laws drawn from relations of causality observed and tested on the biggest possible sample of cultures (Köbben 1968: 17). On the contrary, the functionalist analysis assimilated by Maurice to the universalist “cross-national” processes are more of the particularist type as they look for laws of the global functioning of particular societies by emphasizing the differences between cultures (Leach 1970: 7).

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excludes all comparisons on a term to term basis, each element which constitutes these coherences having some sociological significance only if it is related to the whole which they are part of. We are then in a case where a discontinuity (excluding a comparison on a term to term basis) and a continuity based on the comparability of the totalities which constitute each particular societal set coexist” (Maurice 1989: 183).

Thus, applying SA to comparisons of family policies, Jean-Claude Barbier asks that one “refrains from making global comparisons on the basis of misleading lexical equivalences” and rather “look for a use of basic categories that should be detailed and pragmatical as well as inserted within the global logic and the context via a constant ‘to and fro’ move” (Barbier 1990: 345). For Barbier, indeed, the comparison of social policies of a given kind in various countries is “impossible without the comparison of the whole systems of social protection” of these countries. This task implies that these systems “be replaced in their current logic of operation, as well as in their historical genesis, their cultural context, and the explanation of the values and norms which rule the implementation of various policies within the national boundaries” (Barbier 1990: 355). SA is therefore based on the explicit definition of a comparability criterion: only systemic sets of relations defined by restricted interplays are comparable. In other words, only totalities which are definable by their internal rather than their external context — that is by systems of relations whose coherence does not depend on their environment but only on their composition — are comparable. Such a “principle of comparability”, which solves the problem posed by the contextual effects by pushing as far as possible a “logic of endogenisation” (Maurice 1994: 657), obviously provides a first class justification for comparative methodology. However, the SA, at least in the way it has been developed until now, implies that the societal coherence comes under the national and therefore State level exclusively. This leads to two hypotheses which are debatable, especially nowadays: – –

There are no internal discontinuities within the Nation States; The international environment (the relations between States and the multinational scope of capital) does not affect the national coherences.

Indeed, for the supporters of the SA, it seems that the various “systems” (productive, educative, family, etc.) composing a national society must fit together in a holistic way. Society is considered as a real community constructed by social actors (which are, at the same time, defined by it in turn) and not as resulting from a blind interplay and partial coherences.115 This consideration of the national 115. This position is maintained (Maurice et al. 1979b) when criticism is made of SA in the name of “the theory of joint regulation” by Reynaud 1979.

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space as the unique place of societal closure makes the SA partly incoherent with its own epistemological presuppositions. The problem is not that the “national” cannot be the level of societal coherence where the contextual effects on the construction of social actors and of institutions close upon themselves. What is of concern here is that it must be established and located historically, and not stated as an apriorism. The nation itself is a category which does not necessarily have the same meaning in each country, and there is no certainty as to whether all the actors construct themselves and are definable in its framework.116 Besides, one cannot skip a theoretical elaboration on the State and the territory within which it fits, and act as if they were natural data from which one could obviously start so as to carry out intersocietal comparisons. Moreover, the notion of societal coherence thus restricted to the national frame creates risks of functionalism. If the social actors, in the process of their very construction, build the societal totality, the national space of coherence, is there any room for any disfunctioning outside the anomie of the individuals which cannot reach the status of social actors ? If the actor only exists through the coherence of the social system which he builds while building himself, can one reasonably postulate that such a coherence only exists on the national scale, and that, as a consequence, the national social space is not divided by contradictory logics of action? Lastly, carrying out “inter-national” comparisons by choosing as a starting point the categories of the productive and educative systems (Maurice et al. 1979a) or labour markets or family structures (Benoit Guilbot 1987 and 1989) as it has been done, represents a real contradiction. Are not these categories decontextualised and therefore assimilated to invariants in proceeding that way? In order to create them as general categories, should one not consider them as coherences which — even if they can be of value at the national scale — are only infra-societal matters as they are only elements (among others) of the process of societalisation? This problem was recently illustrated by Barbier, who tried to reconstruct from the notion of “family impact” a concept of family policy which would make it possible to go beyond the incomparability of the administrative definitions of these policies and of the datas which go with them. Indeed, one wonders why this author, who himself highlights the socially created character — and by different means in each country — of the notion of family, eventually treats this notion as a “universal” by simply defining the field of family policies more widely than in the administrative way. The limits thus established to the 116. “It is equally clear that national boundaries cannot, in many cases, be used as social-system boundaries. Many nations include large numbers of specific social systems within their boundaries” (Grimshaw 1973: 13). “Whether the Nation-State as a relatively recent form of political aggregation did in fact succeed in integrating social structures and neutralizing older mediating levels differs by country and also by domain” (Scheuch 1990: 28). See also Teune 1990: 48–51.

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“family impact” policies seem as arbitrary as ever. One could expect, on the contrary, either a construction of the concept of family as a system which would be general enough to incorporate all the national domestic structures found in the countries compared (Hilliard 1994), or a radical deconstruction of the notion of family policies (Hantrais & Letablier 1994) accompanied by a reconstruction, at the level of the social protection system where there is systemic coherence, of the concepts suitable for the empirical capture of “family policies” such as they are officially displayed. In short, on the one hand, the SA has the advantage of explicitly theorising the question of international comparisons by defining a credible “comparability principle” and by emphasising the historical interplay of social actors and institutions as well as the micro/macro dialectic through which these actors and institutions are built. On the other hand, this approach is not completely satisfactory because it pre-supposes the exclusive pertinence of the national frame for the construction of coherences, and at the same time re-introduces universalist categories at an infra-societal level. The régulation approach The régulation approach (RA) has many features in common with the societal effect approach. Like SA, RA is a neo-structuralist theory which calls for interdisciplinarity and which gives a primary role to history, to institutions and to strategies of social actors in the analysis of growth regimes and of national development modes. RA objects to the abstract normative universalism of the standard economic model and of some types of sociology, but no more endorses culturalist relativism. It concentrates on constructing theoretical categories which will make it possible to grasp simultaneously what is and what is not comparable between different historical periods and different politico-economic spaces. RA, from this point of view, considers that the reproduction of societies goes through the construction of macro-economic and macro-social coherences which can be caught thanks to the institutional forms taken by the basic structures of society. The whole set of these forms constitutes the mode of regulation which, consequently, “represents the connection” between the micro-economic level — the “industrial paradigm” of a given era — and the macro-economic level represented by the “regime of accumulation”; the interwoven set of the three levels constituting the “mode of development” (Delorme 1991). The mode of regulation thus defined is obviously the equivalent of the societal effect insuring the coherence of a given society (of its mode of development). Despite this kinship, RA is different from SA on several points. Its orientation is more economic than sociological; unlike the SA, it is less interested in societal coherences and social interactions than in macro-economic loops and interdependences between some institutional forms selected from an economic

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point of view.117 The conceptualised regularities — accumulation regimes for example — belong to the infra-societal level according to the SA criteria. Moreover, the basic categories put in relation are conceptually further constructed in RA than in SA; at least three of the “canonical” structural forms of RA — the wage-labour nexus, competition and money — which are characterised and articulated at the national level are not the outcome of an inductive partitioning of institutional systems, but a theoretical inheritance of the marxist approach to the capitalist system. What’s more, the RA has positioned itself from the beginning in a perspective which is more historical than comparatist, more in the diachrony that in the synchrony, and its recent comparatist developments in terms of compared national trajectories have not been thought out on the theoretical side as much as those of SA. Until now the point for RA was more to juxtapose national studies by using the canonical categories of the approach, following a perspective whose aim was essentially to assess the diversity of institutional forms and social arrangements which could lead to similar economic results or to comparative advantages for some national configurations (Boyer & Saillard (ed.) 1995; Boyer et al. (ed.) forthcoming). However, the RA’s concern is more and more to go further than just juxtapose the institutional forms considered and to take into consideration the contextual effects linked to their interdependences. This can be seen in the various works of C. André, R. Delorme and Y. Saillard on the “State-economy” relations, indirect wages and social protection. These authors have adopted an essentially inductive and cautious approach which is very close to the way followed by supporters of SA who, like Barbier, work in the same field.118 Unfortunately, this explains also that these works register the same deficit of theorisation of the systems of social protection as systems of societal coherence as in SA. Comparative advantages of the two approaches It follows that the differences between SA and RA which are the source of their respective advantages and disadvantages should be better defined and evaluated. In order to do this, let us consider a few elements. In favour of RA one can consider the usage it makes of categories resulting from a synthesis between the analytical concepts inherited from Marx and the teachings of the “total” and long-range history promoted by the École des

117. For instance, it is only recently that RA started being interested in the relation between growth and education (Boyer & Caroli 1993 and 1994; Caroli 1993). And in fact, the approach adopted is very close to that of SA. 118. See André & Delorme 1989 and 1990; Delorme 1991; André & Saillard 1992; Saillard 1993.

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Annales. On the one hand, these categories are the constructed totalities such as the regime of accumulation (the “mechanical mode” of closure of the productive system) and the mode of regulation (the coherent set of institutional forms surrounding and stabilising the regime of accumulation). On the other hand, they are the “sub-systems”, interdependent but partially autoregulated by specific “regimes”, which structure the canonical forms (wage-labour nexus, competition, money, government, modalities of international insertion). At this level, the advantage of RA as opposed to SA is not only that the universalism of the selected national “sub-systems” in interaction is more solidly founded on the theoretical side, which makes the structural forms comparable in a more legitimate way.119 It is also that the totalities and the coherences which are liable to be compared are not necessarily defined, whatever the historical period, at the national level. The RA is then capable of accounting for the fact that for some national actors, there can be infra-national and supra-national coherences. In the RA framework, there is a place for competition and even contradictions between different “societalisation” modes within the national space, a place for a heterogeneity between the various logics of collective action and for a plurality of forms of articulation of the institutions which regulate them. In this prospect, only the State logic, the institutional system which materialises it, and the social actors which embody it, are immediately situated at the national level. On the contrary, the national definition of the reproduction regimes of the other structural forms must be seen as the result of struggles and “institutionalised compromises” (Delorme & André 1983) between actors constructed in spaces and driven by logics of action which are a priori different, heterogenous and hierarchised: local or regional space for the wage-labour nexus, supranational zones for the currency and world space for competition and international relations. Nevertheless, this theoretical advantage of RA makes all the more unsatisfactory the sparse attention given until very recently to the analysis of the State as a proper system of rationalisation and therefore playing a role in the mode of regulation and societal coherence far beyond the only forms of its relations to economy. This lack of polity in RA has hindered, indeed, any genuine capture of the mode of regulation at a societal level (Boismenu & Drache (ed.) 1990; Théret 1990 and 1992).120 Another disadvantage of RA is the fact that it does not go further than a descriptive institutionalism, and that the interdependences between the various institutional forms are not theoretically based, but only stated. Indeed, 119. For Delorme 1991, they form a “common framework” for the comparison. 120. And let us not forget the other disadvantage of RA which has to do with the narrow selection which it carries out in the whole set of structural forms liable to participate in the societal regulation (a selection in which the absence of the family and the law is to be pointed at). For a proposition of widening the framework of RA to State, law and family, see Theret 1992 and 1994.

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even if the problem of complementarity and of the hierarchy of these forms is now put forward, the mode of regulation still appears somehow like a constellation of juxtaposed institutions rather than like a genuine configuration of interdependences which could be conceptually organised into a hierarchy. However, one can think that this is a postulate stating the autonomy of each institutional form towards its environment constituted by all the others; this autonomy, in coherence with the principle of comparability of the SA, would assure the pertinence of their inter-national comparisons. If this is the case, we should then see in the mode of regulation a result which is essentially random, and not a “social construct” as is the societal coherence for the supporters of SA, who consider this coherence according to a systemic model where the interactions are causal and fully built. On the contrary, RA would implicitly adopt a conception of the social cohesion founded on a communicational or informational model in which the interdependences between the structural forms go through communicational interferences treated in a strictly endogenous manner within each of these structures following their own autopoietical logics (Jessop 1990: 307–337). Nonetheless the absence of theorisation of such communicational forms of interdependence121 results in the mode of regulation appearing to be either, at best, the result of a coevolution process with no principle of composition and determination of the trajectory of the societal whole or, at worst, as a simple name given to an empirical gathering whose mode of composition is impossible to conceive. In both cases, there is no statement of the mediations which are necessary to think, in the same movement, the diachronic autonomy and the synchronic heteronomy of the various structural forms, i.e. their own regimes and the regulation of the whole. In short, SA and RA do not differ in regard to their theoretical objectives. They also adopt similar systemic and relational principles of comparability. However, they are opposed as far as their way of considering the context of the institutional forms and the national cultural entities is concerned. SA is in favour of a global conception of the context where the national culture is considered as the analytical basic unity, whereas RA considers “the context as a set of variables” and culture as a set of conditions for the elements submitted to analysis (Scheuch 1968: 200). In other words, SA is rather a Durkheimian and holistic approach which rests an a priori solidarity of the social body assimilated to an “emerging totality” (Piaget 1968). RA, on the other hand, is rather a Weberian and “holindividualist” approach; its starting point is a set of structures of social action orientated by various types of rationality, given that a priori the very existence of a society is the problem. This is why RA has the advantage, compared to SA, of proposing forms of societal coherence liable to be compared from one country to another at a meso or infra-national level. However, it has the disadvantage of not taking as much 121. See however Théret 1999.

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consideration of the interactions and mediations between the various social relationships as it does of the institutional forms and the dynamics of these relations. This can be interpreted as the hallmark of a representation of societal coherence which is communicational and symbolic rather than determinist, but this interpretation is not assumed. Indeed, RA has gone no further than to try and describe constellations of institutions without genuinely analysing the modes of correlation or compatibility between them (Peaucelle & Petit 1991; Amable et al. 1995). Therefore regulation, in its French meaning, is more the designation of a set of recurring observations historically situated than a well established concept. Hence the paradoxical result that, contrary to SA, RA cannot indeed theoretically base international comparisons at the macro-social level, its processes being in fact meso-economic. Lastly RA and SA have nearly symmetrical advantages and disadvantages.

2.

Towards a structural analysis of the institutional forms of societal regulation

It is interesting to try and use this symmetrical deficit in order to bring out what these approaches can contribute to one another, the deficiencies of one filling a gap in the other and vice versa. Do they not reveal two paradigms which respectively attest to two forms of societal coherence which are simultaneously in action? And even if each approach favours one paradigm, they can both have their relevance as long as different levels of analysis are distinguished and if they are then combined together. Giving RA a societal dimension makes it possible to make better founded international comparisons Indeed, by combining the functional model to the communicational model, by articulating societal and regulationist approaches, one can make out the existence of structural forms which make sense whatever their national context, and then reach a regulationist-societal conception where macro and meso comparisons are simultaneously relevant. To achieve this, let us consider that, because of the differentiation of the contemporary societies, there are discontinuities, internal to the national social space, between different orders of practices governed by heterogenous logics of action (see Théret 1992 and 1994):122 the economic order governed by the logic of capital accumulation, the political order governed by the logic of power accumulation, and the domestic order governed by the logic of

122. These reflections are shared by various analysts like Mishra (1986: 25) and Øyen (1986: 3).

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“human resource” reproduction and which is the source of economic as well as of political accumulation. The kind of functional coherence which is put forward by SA refers to these immanent logics of orders which, like language according to Saussure, “only know their own order”, as they are logics of social action orientated by a specific rationality and channelled by institutions insuring the functional reproduction of each order. The coherence which is implicitly favoured by RA, on the contrary, refers to regulatory relations between the various orders in the national space. This space is the “order of orders” where the mode of regulation becomes meaningful, an order which is essentially communicational, due to the discontinuities which make impossible the interplay of functional relations of systemic integration between the various basic orders. This distinction between two kind of coherences, one functional, the other communicational, explains the paradox mentioned above. The conception of SA is not valid at the societal level where it has been carried out — at this level the functionalism of SA is inadequate. It is only valid at the infra-societal level of the structural forms which are brought forward by RA. On the other hand, the conception of RA is not valid, either, at the economic level where it has until now been carried out — at this level the empirism of RA is liable to criticism. It is only valid at the societal level as it is envisaged by SA. There is no mode of regulation of the economic order which would be detectable in a purely economic way, but only regimes of regulation of the various orders and a mode of regulation (or social integration) of the society articulating all these regimes within a historically situated territorial space. Naturally such an articulation of the two paradigms of SA and RA has important general implications for the possible development of both. We will only examine here what the consideration of the two kinds of coherences which we have just mentioned implies as far as international comparisons are concerned: the functional coherence which is linked to the self-closure of orders of social practices and which can be captured “dynamically” through the notion of “regime” (of functioning); the communicational coherence assured by regulatory mediations between the various orders and which makes possible a coevolution of these orders so that the contradictions between their respective logics do not lead to the destruction of society. In this theoretical framework, international comparisons of systems of infrasocietal relations (meso) are possible as soon as their functional independence vis-à-vis all the others is founded within the boundaries of national societies. Macro systems can also be compared, taken into account that the structural forms which compose them are heterogenous: several of them are structures of order which develop diachronically, others are specific synchronic relations between these structures of order and articulate their heterogenous logics. These relations of mediation which are structured in autonomous fields insure the conversion-

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translation of the values from one order to another, and thus allow contradictory orders of practices to hold together in a societal coherence. Even if they adjust from day to day the dynamic evolutions of the various orders, these regulatory structural forms cannot be analysed only through the logics of the orders they link. They must be analysed through their proper way of operation corresponding to their communicational function. This strategic “function of regulation” (held, among others, by the professional mediators like jurists, bankers and intellectuals of various kinds) consists in reducing the noise which each order produces in the environment of all the others by translating this noise into assimilated information, or by fixing limits and rules for the practices of interference between the orders by the construction of specifically adapted organisations. In short, according to the proposed synthesis of SA and RA in a societal regulation approach, in order to compare societies of sub-systems, we have first to establish that they have reached a similar degree of differentiation and that they have similar structures. Only then can one look for the regimes of order and the regimes of mediation between the orders whose configuration form the mode of societal regulation. These various regimes are internationally comparable and they can even be grouped in typologies. Finally, on the methodological side, SA and RA lead to formulation of three hierarchised principles: – –

–

One must not compare elements but relations between these elements and the autonomous systems of these relations; One must not carry out the comparison of these systems at the surface of the institutional forms but at a level of abstraction which makes it possible to clarify underlying structures common to these multiple forms; One must not only compare these structures according to the modalities of their own historical development but also their synchronic assembly in communicational systems producing societal coherences.

Structuralism as a comparative method On this basis, we now would like to try and finally demonstrate that the analyses made previously tend to revive structuralism, from the theoretical point of view as well as in terms of comparative methodology, however unfashionable it has become. Indeed, structuralism originally and above all (that is before it became the basis for various philosophies) is “nothing but a comparative method” (Descombes 1979: 105). It is this method, developed first by linguists and then by historians like Georges Dumézil and an anthropologist like Claude Lévi-Strauss, which constitutes “the most innovative and essential contribution” of structuralism (Marc-Lipiansky 1973: 78). The fact that such a tool has been practically completely forgotten in the comparative literature is striking. This points to the

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hegemony of Anglo-Saxon positivism in this literature.123 However, structuralism has had some implicit influence at least on authors whose concern was to carry out methodological criticism, as well as with those who looked for general typologies.124 Besides, a kind of structuralism is claimed as their own by SA and by RA through its relation to Marxism. But what has been remembered of structuralism by these two approaches is not its methodological character (Piaget 1968), but what would be its holism in order to oppose it to the individualism of orthodox political economy and of behaviourism. In fact, contrary to this commonly held unfortunate idea, structuralism is not necessarily a holism. It considers of course that “what is preserved from one whole to another within a same cultural era, are the relations between the elements, the structures” and that, as a result, it is necessary to compare the “wholes rather than the elements, and the relations rather than the terms” (Descombes 1979: 105). But deciding that one must “favour the whole as opposed to its parts” (Marc-Lipiansky 1973: 89) does not imply in any way a holism as long as such a principle is only applied to partial wholes and not, as structural functionalism does, to the society as a whole. For Lévi-Strauss, for example, the totality called “French society, English society or any other” does not have a structure (in singular) but a “certain number of structures” that “one must try and find where they are and not anywhere else” and which are only partial expressions of the social whole (Lévi-Strauss 1958–1974: 103). More generally, for a methodic structuralism free from any functionalism, the society-totality does not have a general structure a priori, because it can only be approached as an “insecure” assembly of partial and various structures. The interpretation of this assembly comes under a communication theory, the structures (closed totalities which reproduce on the basis of a principle of immanence according to self-ruled transformations)125 being of different nature, and only forming systems through a communicational mode of regulated coevolution. Thus, there are only few differences between the so-called holism of the structural method and the methodologi123. Since the article published in 1971 by Swanson, it is indeed difficult to find a text of comparative sociology or of comparative politics which refers to it. Ashford 1978, which still calls explicitly for structural analysis, is not influenced in the slightest by the structural method in his research for functional equivalents and remains at the level of institutions. 124. Can it be a coincidence that most of the comparative studies and typologies are largely founded on the interplay of binary oppositions and of correlations which are characteristic of structural analysis? In fact, these studies use implicitly a structural method which is nonsystematical and most of the time at the inappropriate level of the institutional surface of the considered phenomena and relations, and not at the level of the structures undermining these relations. 125. “A structure is a system of transformations which as a system contains laws ( ) and which remains and develops thanks to the very interplay of these transformations, without these ending outside its boundaries and calling for external elements. A structure has three characteristics: totality, transformation and self-ruling” (Piaget 1968: 6–7).

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cal individualism of historically comparative sociology like that of Weber (see Kalberg 1994: Ch.1). In both cases, we have a “holindividualism” which is close to the societal regulation approach put forward above. Structuralism must not be reduced to a functionalist systemism. Rather, as a comparative method it allows us not only to go beyond the limits of inductivism thanks to its theoretical aim, but also, by bringing forward the idea of a structure to discover, to give relevance to generalisations whose scope goes further than that of the Weberian modelling of ideal types. Indeed, in the method of structural analysis, theorisation goes the same way as the conceptual elaboration of the structure of the analysed objects. This conceptualisation starts by locating “what is preserved in an isomorphism between two wholes”, whose disparity is more striking at first (Descombes 1979: 105). Comparison, “essential process to structural research”, must “make it possible to discover the invariable structure common to objects whose concrete modes of realization can be so different that one would not even think at first of bringing them together. The comparison of such objects can only be carried out after the reduction of their specific character to ‘the only stable elements — and always partial — which make it possible to compare and classify’, that is to the relations of correlation and opposition expressing their common characteristics and differences” (Marc-Lipiansky 1973: 140). In other words, for methodic structuralism, “the comparison is not the base for generalisation, it is the other way round” (Lévi-Strauss 1958–1974). Thus, with its method “which makes it possible to demonstrate that the elements which are apparently disparate are not necessarily so, and that beyond the confusing diversity of the facts which are presented to empirical observation there can be invariable properties which can be differently combined” (LéviStrauss 1958–1974: 98), structuralism helps to construct general notions which found a comparison because they establish comparability. The method of generalisation consists of going up to that theoretical level of abstraction where the incomparable becomes comparable, where the objects which are being compared are constructed in such a way that there exists a general theory which, by fixing what is common to each of them, makes it possible at the same time to define precisely what their differences are. A structural analysis then allows a systematic clarification of these differences, because the forms or structures lying under the multiple institutional contents at the phenomenal level are far more restricted. But the structural method is more than just a method of construction of the comparability of the objects which it investigates, because it also carries out deductive processes whose heuristic scope goes beyond a Weberian theorisation by construction of ideal types. More precisely, what is important here is the distinction made by the structural method between three levels of analysis which are articulated and defined permanently, thanks to a round trip movement between the empirical and the theoretical: the level of the structure, that of the models, and that of the social relations as such. Indeed, as far as structuralism is

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concerned, even though structures are considered as real as the phenomenal forms through which they appear empirically, the notion of social structure does not relate to empirical reality but to the models constructed from this reality, ( ) the social relations ‘being nothing but the raw material used for the construction of these models which highlight the social structure itself’ (Lévi-Strauss 1958–1974: 331–332). The notion of structure is thus linked to the notion of model, the model constituting a necessary intermediary between empirical reality and the discovery of the structure” (Marc-Lipiansky 1973: 38–39).

However, the model of methodic structuralism, as an intermediary concept, that is as a symbolic system built from the empirical reality so as to explain its main aspects (Marc-Lipiansky 1973: 42), is not yet different at this level from the Weberian ideal type. Is not this model also a “mental construct for the measurement and characterisation of individual — that is, significant in their uniqueness — contexts”, a conceptualisation of “patterned orientation of meaningful action” (Kalberg 1994: 84)? It is only once the first stages of the “structural reduction” from which “one reaches the structure” through the mediation of the model that the latter proceeds in a deductive manner from the structure. From then on, “structuralism goes from the structure to the model” (Descombes 1979: 106). Considering now that what is structured is not the thing itself, but the whole from which this thing can be considered as a representation, compared to other wholes”, “it reconstructs or reproduces the given phenomena which it offers to analyse” (Descombes 1979: 106). Structure then is language, the common code which not only founds the comparability of objects put into relation but also fixes the rules (vocabulary and grammar) to which the models must conform in order to represent in a comprehensive and explicative manner the observed social relations and thus “to restitute their empirical content” (Marc-Lipiansky 1973: 132). Structure has become the starting point of analysis and the models are now deduced from it by logical operations of transformation. From now on, they are tools which must make it possible to capture the compared phenomena by isomorphism. Two logics are mobilised for this purpose: first the static binary logic which uses polar oppositions between some elements of the structure, and the dialectical logic in dynamics, which aims essentially at deducing the terms of integration or mediation within itself (Marc-Lipiansky 1973: 109–125). What separates the model of methodic structuralism from the Weberian ideal type, then, is the process of their respective genesis which, in one case, gives importance to logical deduction whereas, in the other, an empirical anchoring remains privileged.126 The heuristical superiority of structuralism over histori126. “After having examined a number of historical cases, the sociologist formulates ideal types from ‘historical judgements’ based upon ‘rules of experiences.’ While inductive procedures

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cally comparative sociology comes from the fact that the first includes the second by adding to it an “economical” method in order to derive different types of models from a simple structure, making it possible to explain the variety of historical and spatial forms of social relations. This superiority is also due to the fact that by looking for isomorphism, structural method helps find simple structures in various related fields. One last important point to make about structuralism (important because it predisposes it to be a useful method for the societal regulation approach) is that it concentrates to a great extent on communicational rationality starting with the idea that society is a set of symbolic systems. Methodic structuralism, in order to be a semiology of the “social”, emphasizes a kind of non-deterministic causality in a way which is particularly well adapted to capture the regulatory mediations between the “economic” and the “political” through which societal regulation happens. All these properties of the structural method fit perfectly well with the theoretical and methodological requirements which we have discussed in the first two parts of this paper. Unfortunately we do not have enough space here to demonstrate in a concrete way the productivity of this method, especially to grasp the various rational forms of the welfare state and its place in societal regulation. The added value of the structuralist comparative method, in this specific matter only, lies in two important new contributions. First of all, it allows the locating of an ideal type, which can be exemplified by the Japanese case. Second, it leads to the construction of a normed space of measurement in which it is possible to draw the historical trajectories of the various national configurations of the welfare state by relocating them, one against another. Moreover, the structural method seems to be applicable in the same way to every social sub-system distinctive for institutional mediations between the political and the economic order.127

from empirical observations are followed in the formation of the ideal type, deductive procedures guide the logical ordering of the essential patterns of action into a unified and precise construct. Nonetheless, the anchoring of ideal types empirically, as well as their historically relative nature and their capacity to be reformulated and improved upon in respect to empirical reality, precludes their understanding as `abstract’ or `reified’ concepts” (Kalberg 1994: 86). 127. The sceptic will have to read the French paper (Théret 1997) from which this chapter is extracted and where the structural method is effectively mobilised in a perspective of societal regulation for the comparison of national systems of social protection.

Chapter 8 Positivist, hermeneutical, and postmodern positions in the comparative management debate128 Niels G. Noorderhaven

Introduction While U.S.-based researchers dominate most fields in the area of management research, European scholars traditionally have a relatively strong position in the field of comparative management studies. A spurt of early research was initiated by the “Aston Programme” in the 1970s, with David Hickson as central investigator. This work, in the tradition of the contingency approach, posits a “culture-free hypothesis”: relationships between organization-level variables are expected to be relatively constant in direction as well as strength within different societies. Differences between organizations in different societies are generally explained by referring to differences in their task environment. Only a possible unexplained residual is ascribed to cultural differences. The approach of the Aston Programme has a strong universalistic flavour; differences between societies are assumed to become smaller and smaller as they converge to a postulated end-stage. As the context factors become more and more alike, organizations will also follow suit. A competing school of thought, the “Societal Effect” approach, starts from an institutional perspective. According to the proponents of this approach, rooted in early work at the Laboratoire d’Economie et de Sociologie du Travail at Aixen-Provence, organizations cannot be usefully analyzed in isolation from their institutional environment, since they are socially constituted by that environment. The leading scholars in this approach are Marc Maurice, Malcolm Warner and Arndt Sorge. The institutions focused on are organizational configurations, sys-

128. This paper profited greatly from the helpful comments given by Guido Berns, Arndt Sorge and Marc Maurice. The usual disclaimer applies.

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tems of work structuring and coordination (within organizations), and qualification and career systems (in the environment of organizations). A meticulous analysis of the interrelations between blocks of variables linked to these types of institutions uncovers patterns of reciprocal conditioning which differ from country to country. The aim of the Societal Effect approach is to explain these patterns of reciprocal conditioning, or, put differently, to reveal the institutional logic (or “manufacturing culture”) that is particular to a society. This chapter focuses on the epistemological and methodological perspectives assumed in both schools of thought described above. In other words, it centers on the issue of what the two schools consider valid knowledge of management systems in various countries and which methods are most appropriate for collecting this knowledge. A review of texts by leading researchers of the Aston group reveals that they take a logical positivist position. In contrast, the position assumed by the proponents of the Societal Effect closely resembles that of hermeneutics, a methodology and epistemology originally formulated by German philosophers like Schleiermacher, Dilthey, and Gadamer as an alternative to the logical positivism of the natural sciences. In itself, labeling certain approaches as “positivist” and others as “hermeneutical” is not very productive. However, it does enable us to reconstruct the AstonSocietal Effect debate as a specific example of the more general debate between logical positivism and hermeneutics. Furthermore, if the Societal Effect approach can indeed be characterized as a hermeneutical approach, recent criticism voiced by postmodern philosophers may also be relevant to the Societal Effect approach. This criticism goes to the heart of the fundamental tenet of hermeneutics, viz., that the context of a phenomenon can be circumscribed and used in the explanation of that phenomenon. Postmodern critics also express doubt about the claim that hermeneutics is really a way of understanding unfamiliar phenomena. The hermeneutical approach is seen as reductionist in two ways. Firstly, while acknowledging that no interpretation can be final, hermeneutics proceeds to reduce all a priori possible interpretations of a phenomenon into one single unitary web of meaning. Secondly, hermeneutics, while ostensibly trying to understand the unfamiliar phenomenon in its context, actually draws that phenomenon into the worldpicture of the interpreter. The discussion of postmodern criticism of hermeneutics, which is proposed to be also applicable to the work of the Societal Effect school, leads to an appeal for renewed attention to the epistemological basis of comparative management research.

The Aston Programme The Aston Programme (named after the university in Birmingham, UK) played an important role in the development of structural contingency theory. Research-

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ers associated with this group argued for the need to develop standard quantitative measures, and to collect data from a diversity of organizations. The Aston group focused on two main dimensions of organizations: structuring of activities and concentration of authority (Donaldson 1996). The main explanatory variables taken into consideration were contingency factors like size, dependence, and technology. The findings of the Aston research programme have been published in three books (Pugh and Hickson 1976; Pugh and Hinings 1976; Pugh and Payne 1977). A fourth book, Organization and Nation: The Aston Programme IV (Hickson and McMillan 1981a), focused on international comparisons. I will concentrate here on the first chapter of this book, a reprint of a paper originally published in 1974 (Hickson et al. 1981), on the concluding chapter of the book (Hickson and McMillan 1981b), and on a paper from 1979, in which the position assumed in the first chapter of Organization and Nation is reassessed (Hickson et al. 1979). I will not discuss the three papers in chronological order. This would not be very fruitful, since there has been hardly any change in the argumentation. Rather, I will discuss all three papers simultaneously in three steps: hypothesis development, hypothesis testing, and conclusions. The structure of these three steps clearly reflects my view that the Aston Programme can be characterized as a positivistic approach. However, they also reflect the structure of the papers themselves which are developed in this fashion, even though different headings are used.129 Hypothesis development The first chapter of Organization and Nation posits what has come to be called “the culture-free hypothesis”: Relationships between the structural characteristics of work organizations and variables of organization context will be stable across societies (Hickson et al. 1981)

From the point of view of structural contingency theory this is “the boldest hypothesis” since it assumes that there are “imperatives” or “”causal” relationships” that are the same all over the world.130 In spite of the phrasing, the assumption is not that culture has no influence on organizations. Rather, it is assumed that within every culture, the same law-like regularities in the relation-

129. The description of the Aston Programme is historical in the sense that I do not pretend to describe the current positions of the members of the group. For a recent formulation, see Hickson and Pugh (1995: 185ff), suggesting that these authors are now much more open to the influence of cultural and societal differences on management and management theory. But at the same time, the emphasis on the universal influence of contingency factors remains. 130. The word “causal” is between quotation marks in the original.

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ships between structural characteristics of organizations and context factors are to be found. The “culture-free hypothesis” is taken up again in Hickson et al. (1979). In this paper, two possible worlds are sketched. Either concepts and propositions from social science are universal, and can be applied cross-culturally, or we need a different social science for every region or perhaps even every country. This alternative is a “nightmare” for Hickson et al. who claim this nightmare can be avoided if a supra-national organization theory is developed. Three methodological conditions for the development of such a supra-national organization theory are formulated: the inclusion of relevant societal variables, the development of “world measures” of organizational variables, and the existence of stable relationships between organizational variables across societies. The inclusion of societal variables is seen as necessary, following Przeworski and Teune (1970), in order to be able to “substitute names of variables for the names of social systems such as Ghana, the United States, Africa, or Asia” (Przeworski and Teune 1970: 8). Hickson et al. (1979) give the example of the phenomenon of life-time employment in Japan. If that characteristic of organizations is to be studied internationally, it must be linked to organization-relevant societal variables, such as recruitment power, or worker inducement. The second condition, the use of “world measures” of organizational variables, means that the Aston measures, developed in Britain, cannot be universally applied to other societies. The scale of formalization of role definition, for example, scores the number of documents (from a pre-specified list) which can be found in a particular organization. However, the list is based on research in the U.K., and organizations in other countries may use other documents. A “world measure” of formalization of role-definition would sum up all the types of documents that can be found in organizations all over the world. The idea is that measures can be adapted by adding to the Aston instruments. The option of developing specific measures for specific countries is explicitly rejected, as an “attempt to gain meaning within a country sacrifices a larger meaning beyond it” (Hickson and McMillan 1981b: 190). The third condition is of an ontological rather than a methodological nature. The paper can be read as an attempt to prove that stable relationships between organizational variables across societies do indeed exist, based on a test using Aston measures as good approximations of “world measures”. The societal variables mentioned as the first methodological condition for the development of a supra-national organization theory are only hinted at in the paper, e.g., in the statement that “[it must be assumed that third variables are of major consequence: it is here that societal influences may be pursued” (Hickson et al. 1979: 38).

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Hypothesis testing In Hickson et al. (1981), the “culture-free hypothesis” is tested against data from 70 manufacturing units in the USA, Britain, and Canada. The method of testing is inspection of a matrix of simple correlations between measures of organizational structure and context factors. The size of the organization is significantly and positively correlated to formalization of role definition and functional specialization in all three countries. The size of the parent organization is significantly and positively correlated to the same two organizational variables in the USA and Britain, but not in Canada. Dependence of the organization on others is significantly and negatively correlated with autonomy in all three countries. The mode of automaticity is not systematically correlated to any of the organizational variables. In Hickson et al. (1979), the “culture-free hypothesis” is tested against a larger set of studies comprising Great Britain, the USA, Canada, Sweden, Japan, and Germany, basically focusing on the same organizational and contextual variables. Again, findings are presented in the form of a table of correlations between organizational variables and contextual factors. For some of the findings, no significance levels are reported because of the low number of organizational units involved. By and large, the same pattern of correlations can be distinguished. Drawing conclusions Hickson et al. (1981) conclude that the “bold” hypothesis is supported, and that links between various contextual variables and measures of organizational structure are of similar magnitude and in the same direction in all three countries. However, the authors point out various limitations of their study, most notably the fact that all three countries involved are Anglo-Saxon and at a comparable level of industrialization. Furthermore, the number of organizational units is small, and no non-manufacturing organizations are included. Nevertheless the concluding section of the paper states that a number of fundamental relationships have been identified, which are valid for work organizations in all societies. Hickson et al. (1979) observe a “remarkable” stability of the direction of relationships between context factors and organizational variables, and see in it the core of a supra-national paradigm of assumptions about the structure of organizations. They argue that cultural and behavioural diversity can more easily be explored “around” such assumptions (Hickson et al. 1979: 39). “But so far the “boldness” [of the culture-free hypothesis] is modified only slightly, in terms of magnitudes but not directions of relationships” (Hickson et al. 1979: 39). It is clearly important to the authors to convince the readers that the relationships

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between contextual factors and organizational variables identified by the Aston Programme are valid in all countries. A world in which this would not be true would be “terrifying” (page 29), because “frightening complexity if not confusion would reign” (page 30). Or, referring to the sleeping disorders mentioned earlier, researchers would be faced with a “nightmarish complexity” (page 39). On the basis of a larger set of studies including non-Western countries like Poland, Jordan, Egypt, and India, Hickson and McMillan (1981b) conclude that “crucially and incontrovertibly, differences between organizations within nations are greater than the differences between nations”. The authors connect this observation to the “late development” thesis, which brings them to the “fundamental” question of convergence. The generalizations concerning relationships between context factors and organizational variables, identified by studying samples from Western (Anglo-Saxon) countries, are modified only slightly. On the other hand, Hickson and McMillan (1981b: 192) do concede that similar scores on the Aston scales do not rule out international differences in how these scores are obtained. They also discuss possible effects of culture, referring to Hofstede (1980). However, structural contingency theory clearly remains the core of the “emerging paradigm” of supra-national organization theory, culture being relegated to the status of moderating variable (Hickson and McMillan 1981b: 195).

The societal effect approach There is a striking difference between the genesis of the cross-national research programme in the tradition of the Aston School and that of the Societal Effect approach. The Aston Programme started with studies within countries, and later added international comparisons to see if the regularities identified would prove to be robust. Differences between countries and cultures were thus primarily a source of additional complexity, a nuisance factor. The Societal Effect approach on the other hand was, right from the start, based on international comparison, and proponents of the approach stress the heuristic function of this kind of comparison (Maurice 1979: 47). The Societal Effect approach started with a serendipitous interpretation and extension of an early comparative study of wage differentials in France and Germany (Daubigny and Silvestre 1972). This study showed marked differences in wage differentials between the two countries, even though all the obvious contingency factors were controlled for. Marc Maurice and his coworkers at the Laboratoire d’Economie et de Sociologie du Travail at Aix-enProvence (in particular François Sellier and Jean-Jacques Silvestre), in trying to explain these differences, concluded that they were connected to social processes within the firms observed which could be traced back to differences in the social

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structures of the two countries (Maurice 1979). This conclusion marked the beginning of a research programme focusing on differences between organizations and societal institutions in France, Germany and Britain. From its early stages, the Societal Effect approach developed in a complex relationship of opposition to as well as correspondence with the Aston Programme.131 The Aston approach was seen as “reductionist”, as too many factors were left out (Sorge and Warner 1986: 4). The universalistic nature of the approach was also criticized (Brossard and Maurice 1976: 17), but at the same time Societal Effect did not radically break away from it. That was never the intention. Rather, by controlling for “well-known factors of explanation”, Societal Effect wanted to build on the Aston findings (Sorge and Warner 1986: 44). In addition, the ultimate goal was not to replace Aston’s universalism by theoretical particularism (different theories for different societies), but to construct a universalism of a higher order, which would better than the Aston research account for observed variances of organizations across national or cultural boundaries (Maurice et al. 1980: 60). As in the case of the Aston Programme, I will discuss the Societal Effect approach mainly on the basis of a selection of papers, focusing on epistemology and methodology rather than on substantive findings. The papers used to study the Societal Effect approach are Brossard and Maurice (1976), Maurice (1979), Maurice et al. (1980), and Sorge and Warner (1986). Occasionally, I will also refer to other papers elaborating certain aspects of the Societal Effect programme. Brossard and Maurice (1976) is the translation of a paper originally published in French (in 1974). It is an early formulation of the approach emphasizing the contrast with the Aston School. The same can be said of Maurice (1979), published in the same edited volume as Hickson et al. (1979), discussed above. Maurice et al. (1980) report on the findings of an early French-German-British comparison, and Sorge and Warner on the Anglo-German dimension of the same research, as well as a subsequent study. Sorge and Warner (1986) also provide a further (post hoc) theoretical elaboration of the Societal Effect approach. I will concentrate on their first and third chapters, focusing on research methods. Although there is a clearer development over time in the Societal Effect approach than was the case with the Aston Programme, for the sake of simplicity I will assume that it makes sense, at least within the temporal window contemplated, to consider all the papers to be representative for the Societal Effect approach. Two levels of analysis A distinctive characteristic of the Societal Effect approach is that its proponents refuse to look at organizations as functional entities which can be isolated from 131. For a pertinent discussion, see also Maurice (1989) and Rose (1985).

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their social environment (Maurice 1979: 51–52; Maurice et al. 1980: 60). The distinction between variables of organizational structure and context variables made in the Aston Programme is seen as rather arbitrary (Brossard and Maurice 1976: 23). Data are collected on the micro level (specific organizations) as well as on the macro level (institutions in the societies within which the focal organizations are embedded). The basic question is “to discover the processes by which the phenomena observed on these two levels are related” (Maurice 1979: 51). The organizational variables taken into consideration are not identical to those studied by the Aston School, although various dimensions are reminiscent of the Aston measures (cf. Maurice et al. 1980: 72). The data collected vary somewhat from study to study, but can be roughly divided into variables pertaining to the organizational dimension (formal and informal organizational structures, work structuring and coordination), the human resources dimension (typical career paths, education and qualification systems), the industrial-sectral dimension (the subdivision of the economy in sectors and enterprises of various types, and the interrelations between these enterprises), the labour market dimension (the system of labour relations and professional structures), and the technical dimension (structures of technical experience, hardware and software, and changes therein) (Sorge 1995). Quantitative data collected include statistics about vocational training, employment, and mobility, as well as about the age, seniority, wages, grading, qualifications, authority, education, and training of individuals working in the firms included in the sample. Qualitative data collected include organization charts, individual perceptions of tasks, careers, intra-organizational communication, industrial relations and work activities obtained in individual interviews and information about national systems of education and training, industrial relations and other relevant societal systems obtained from monographs or expert interviews (Maurice et al. 1980: 63). Measurement issues One could say that, empirically, the Societal Effect approach seeks to complement rather than to replace the Aston Programme, as the “well known” contingency factors identified by that programme were explicitly controlled for. However, the approach to data collection and the method of measurement is radically different. This difference stems from the deep fear that standardized measures as employed in the Aston Programme are not sensitive to the kind of variation the researchers are interested in (Maurice et al. 1980: 72), or that the scales actually measure different things in different societies (Brossard and Maurice 1976: 30–31). Two issues are relevant in this connection: the Societal Effect preference for indicators of dimensions rather than pre-defined variables, and the preference for qualitative versus quantitative measures.

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The proponents of Societal Effect see their approach as more “grounded”: since it is impossible to know in advance what variation exists, variables cannot be defined before the empirical investigation. Instead, the researchers identify a number of dimensions which appear to be connected to the phenomenon investigated, and try to register as many indicators of these dimensions as appear relevant (Maurice et al. 1980: 65). Since the dimensions on which the Aston Programme focused have a central position in organization theory, many of them also occur in the Societal Effect approach. However, that does not mean that they are identical. For instance, to Maurice et al. (1980: 65) the “decisive impression was that countries varied in the way rather than in the extent to which they centralized responsibilities”.132 For this reason, these authors want to add qualitative to quantitative measures, a point to which I will return below. Thus a dimension may consist of various “sub-dimensions”, which become clear only during the investigation. I will return to the issue of the identification of relevant dimensions later in the chapter, since it is an important element in the criticism of Societal Effect as a hermeneutics. The difficulty with predefining variables has to do with the fact that the Societal Effect approach wants to define dimensions in terms of what people actually do, rather than focus on formal structures like in the Aston Programme (Maurice 1979: 51). This makes it more difficult to decide ex ante on reasonably inclusive definitions of variables. But this practical problem does not really appear to be the heart of the matter. According to Maurice et al. (1980: 72), “organizational features have to be seen as socially constructed in different ways, rather than measured along a standardized dimension”. Although this statement appears to imply a non-sequitur (viz., that phenomena which are socially constructed cannot be measured along standardized dimensions), it is clear what the authors mean. If we see (organizational) reality as socially constructed, we should look at the meaning actors attribute to certain phenomena, like formalization of behaviour, which cannot be measured by counting the number of specific types of documents present in the organization. The point is that it is considered impossible to reduce the variability of phenomena to single scales or dimensions, for “[the variability of a variable may reside in the existence of different dimensions from one case to another. This makes a general definition very problematical, and in fact rather unwieldy, so that a more qualitative treatment is in order” (Sorge and Warner 1986: 12). This brings us to the issue of qualitative versus quantitative measures. The position of the proponents of the Societal Effect approach with regard to the use of qualitative and quantitative measures once again reveals their kinship to the Aston School, in spite of many important differences. The existence of a “di132. Emphasis in the original.

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lemma” between “qualitative” and “quantitative” analysis is denied (Brossard and Maurice 1976: 31).133 The use of qualitative measures in the Societal Effect approach is seen as an expedient for more detailed analysis. Once the differences identified by the Aston Programme have been controlled for, the remaining organizational differences can be studied, which are more of a qualitative than of a quantitative nature. In this way the Societal Effect approach can “improve upon” the Aston Programme (Maurice et al. 1980: 72). My interpretation of the measurement issue (which is not very clearly presented in the various papers) is that in the Societal Effect approach it is assumed that a concept (broadly defined, like “work structuring”) may give rise to various dimensions which cannot be defined ex ante simply because they are not yet known. Some of these dimensions can, at least in principle, be measured quantitatively on one or more ordinal or higher scales. An example is the concept of professionality, with the sub-dimensions of formal knowledge base, mastery of professional skills, membership in an association and formal recognition of qualifications (Maurice et al. 1980: 73). Other dimensions may be present or not, and thus can be measured on a nominal scale only. An example would be the presence of a certain type of vocational training. Although the concepts or fields of interest can to a certain extent be selected before data collection takes place, decisions on dimensions and measurement scales can only be taken post hoc. A more mundane methodological issue worth mentioning is the approach to data collection in the Societal Effect approach. As mentioned earlier, in selecting organizations contingency factors like size and technology are controlled for as much as possible. The technique used is that of “paired comparison”: “pairs of units, mostly enterprises or factories, are assembled for comparison in such a way that they are distinguished as little as possible with regard to wellknown factors of explanation. The social-organisational variance which still emerges can be investigated as to its relations with properties of the societal context” (Sorge and Warner 1986: 44). In the process of data collection, individual interviews have an important place. Interviewees are selected in each organization to form one or more “hierarchical strings”, i.e., within a hierarchical line from the top manager down to the shopfloor level. Across organizations these strings are selected to be as comparable as possible (e.g., strings within identical functional departments) (Maurice et al. 1980: 63). In accordance with the position with regard to the definition of variables described above, interviews are based on general guidelines rather than a more rigorous questionnaire, as response patterns are assumed to be insufficiently known so as to warrant detailed predetermined questions and response categories (Maurice et al. 1980: 63). 133. “qualitative” and “quantitative” appear in quotation marks in the original.

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The search for a societal effect The aim of the analysis in the Societal Effect approach, as stated earlier, is to find out in what way organizations and social environments influence each other (Maurice 1979: 52). The emphasis is on the influence of societal institutions on the focal firm, although it is not denied that firms (in the aggregate) can also influence the shape of these societal institutions (most clearly in the case of vocational training systems) (Brossard and Maurice 1976: 33). The perspective adopted is that of social constructivism. Actors and the social fields134 in which they function (qualification systems, organizational structures, etc.) are mutually constituent, for the perception of the actors is strongly influenced by the social systems through which they have been socialized, and these systems in turn are (re)constructed and enacted by the actors in a process of reciprocal conditioning (Maurice 1994). The organizational form chosen by a particular firm cannot be understood as a purely functional response to contingency factors like those studied by the Aston School. The principle of functional equivalence is stressed, according to which various organizational forms can function equally well under a given set of environmental conditions (Sorge 1995). If this is true, it is understandable why firms in different societies, but within comparable task environments, may have very different organizational forms. To this is added the notion that “organisation by itself is very weakly related to success”, which makes organizational variance more likely, even under the pressure of competition (Sorge and Warner 1986: 16).135 Although contingency differences are controlled for as much as possible, that does not mean that they can be assumed not to be relevant. Maurice et al. (1980: 69) stress that technical effects may interact with societal effects, in which case an analysis as if the two were additively related is pointless. As I read it, this means that if a relationship between a societal institution and an organizational form has been established under specific technical conditions, it may well be the case that the mechanism is different under other technical conditions, so findings cannot be generalized beyond the set of contingency factors under which they have been established. An example of reciprocal conditioning is the relation between systems of acquisition of competence (e.g., vocational training) and division of labour (e.g., differentiation and career mobility within organizations): To some extent, initial vocational training by rotation, in the typical form of apprenticeship in the place of work, is the functional equivalent of the gradual progression from one particular job to another. But these “ideal types” of acquir-

134. ”field” used as translation of the French “espace”. 135. Emphasis in the original.

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NIELS G. NOORDERHAVEN ing competence are linked with different kinds of organization. Where gradual progression is more pronounced, the organization is by necessity more differentiated, and career mobility internal to the factory is accentuated. Where initial vocational training according to the apprenticeship principle is strong, both tasks and the organization are less differentiated, and internal career mobility deemphasized (Maurice et al. 1980: 80–81).

Sorge and Warner refine the analysis by pointing out that a societal effect can be expressed in two different ways (1986: 43). They distinguish between homomorphical and dialectical reciprocal conditioning between societal institutions and elements of organizations. In the case of homomorphical linkage, the functioning of an institution within one particular sphere (e.g., an institute for vocational training) parallels the functioning of an institution within another sphere (e.g., a firm). Sorge and Warner refer to Crozier’s (1963) analysis of French society, in which problems with face-to-face relations and the mechanisms by which these problems are neutralized are similar in such widely differing societal spheres as farming communities, public administration, and industry. Such homomorphy appears to reveal (one would conjecture) profound and possibly unconscious shared preferences (or cultural characteristics). In the case of dialectical links, the functioning of a particular institution is counterbalanced by the very different functioning of another institution. Again Crozier’s work is referred to, in this case, the analysis in which the spontaneous and eruptive character of social protest in France is posited as the reciprocal of the “firm, relatively bureaucratic and centralised, domination” which is typical for the day-to-day functioning of French organizations (Sorge and Warner 1986: 43– 44). Both homomorphical linkages (creating coherence) and dialectical linkages (providing a safety valve) help to maintain the integrity and stability of a society.

Characterization of the Aston programme and the societal effect approach The way to proceed in comparative management research according to the authors associated with the Aston Programme is through a coherent and cumulative research programme (Hickson and McMillan 1981: 188). In the past, different concepts, samples and methods have been used in different places and at different times. It is hoped that the use of gradually improved Aston measures in more and more countries will lead to a body of knowledge which can form the core of a supra-national organization theory. However, first of all, more data is needed from larger samples (Hickson et al. 1981: 15). Standardization of measures is important because it enables this gradual cumulation of evidence. At the same time, it is conceded that standard measures may lack conceptual equivalence if used in different countries. The ideal is to develop standard measures that are also conceptually equivalent (Hickson and

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McMillan 1981: 190), by building on (adding to) the existing Aston scales. The trade-off between local meaningfulness and international comparability is identified by the Aston researchers, and their choice is clear: “an attempt to gain meaning within a country sacrifices a larger meaning beyond it” (Hickson and McMillan 1981: 190).136 The characteristic phenomena of a given society are its positions on variables, not the variables themselves (Hickson et al. 1979: 27). This is consistent with the focus on “objective characteristics” in the Aston Programme (Hickson et al. 1981: 3). This focus contrasts with that on attitudinal and normative systems of employees in other studies, e.g., Hofstede’s (1980) analysis of questionnaire data on employees in 40 countries. In short, the Aston approach is based on the assumption that standardized instruments can be used for international comparisons of organizational characteristics, and that given large enough sample sizes, general statements concerning the single objective reality of the world can be made. The Societal Effect approach “breaks away, on essential points, from the [Aston Approach] without rejecting, however, the need for universality that any theoretical process implies” (Maurice 1979: 47). The differences between the Aston Programme and the Societal Effect approach which are emphasized are the refusal of the latter to rely on predefined variables, the inclusion of environmental variables not normally taken into consideration in contingency theory, and the use of both qualitative and quantitative data. At the same time, however, Societal Effect also explicitly builds on Aston, by controlling for “well known” contingency factors. The attention to societal institutions, however, and the sharper focus on actual work processes within firms, makes the proponents of the Societal Effect approach much more reticent to generalize (cf. Maurice et al. 1980: 64). The Aston School, in advocating the use of the same measures worldwide, is considered “nomothetic” by Sorge and Warner (1986: 8), though they refuse to go to the other extreme of idiographic explanations. According to a recent formulation, the particular (the world view of a respondent) is carrier of a generality transcending the contingencies of the situation, because the respondent is socially constituted by his environment (Maurice 1994). Or, to quote Sorge: “the ‘systems’ properties tend to load the individual ‘choices’ that actors make in a specific way” (Sorge 1995: 116).137 Through this process of generalization, conclusions drawn with regard to societal effects can be formulated in a quite universalistic way, e.g., the three “interactive effects” described by Maurice et al. (1980). Thus, the Societal Effect approach appears to have a different idea of how to collect valid and relevant data about management and organization in different 136. Emphasis added. 137. ”Systems” and “choices” between parentheses in the original.

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countries than the Aston School, though there is no complete breach. The contingency factors identified by Aston are used as the basis for selecting and coupling the organizations to be investigated, and the conclusions are (at least in my reading) formulated as general regularities within particular sets of these factors.

Hermeneutics and societal effect Hermeneutics as an alternative to logical positivism Hermeneutics, as a philosophical reflection on the preconditions for understanding products (in the broadest sense of the word) of the human mind, has been developed by the German philosophers Friedrich Schleiermacher and Wilhelm Dilthey as an alternative to the logical positivist model of the natural sciences. In logical positivism, valid knowledge is generated by the derivation of a theory in accordance with the rules of logical inference: a framework of refutable hypotheses based on assumptions accepted as true. The predictions implied by the hypotheses are tested against relevant empirical data. If the hypotheses yield predictions which correspond to the data, the theory is provisionally accepted; if the predictions are not accurate, the theory is adapted and tested again. This is the empirical cycle. Many versions of logical positivism have strong universalistic overtones: explanations are supposed to be based on confirmed general regularities. This model of scientific inquiry is also known as the “covering law model” (Widdershoven 1988). However if products of the human mind, such as historical events, works of art, or regularities of behaviour in another culture are studied, what is sought is not so much a general law which can be proven experimentally, but rather the meaning of the phenomena observed. Hermeneutics (from the Greek hermeneuein, to explain, put in words, or translate) refers to the interpretation of phenomena as signs. In a hermeneutical interpretation, the aim is to understand the phenomena to be explained, or to use the German word, it is an act of “verstehen”. Hermeneutics pertains to the practice of “verstehen” as well as to a theoretical reflection on the act of “verstehen”. We will discuss the second kind of hermeneutics.138 An important difference between logical positivism and hermeneutics is their approach to subjectivity. Logical positivism acknowledges the a priori nature of knowledge, and thus subjectivism. But this is a Cartesian subjectivism, i.e., strictly rational. In hermeneutics, the subjectivity of the interpreter is viewed as more historical, and considered a necessary condition to understanding. Interpreting and understanding a social phenomenon is only possible if the world view 138. A third meaning of “hermeneutics” is the philosophy of the relationship between man and the world, as an ontological foundation for the second kind of hermeneutics.

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of the interpreter is somehow related to that of the phenomenon to be understood. In contrast to the hypotheses generated by a logical positivist approach, hermeneutics formulates a way of looking at the world which is eo ipso not susceptible to falsification (Ankersmit 1988: 140). The hermeneutical counterpart of the empirical cycle is the hermeneutical circle. In the hermeneutical circle, the interpreter moves from the meaning of single elements to the meaning of the phenomenon as a whole. In the interpretation of texts, the elements are the individual words which have a general meaning, but also a specific meaning within the text. The meaning within the text can only be determined by looking at the context, but the meaning of the context, of course, can only be understood with reference to the general meaning of the words out of which it is built. The phrase hermeneutical circle is well chosen, for there is an obvious circularity between the whole and parts in hermeneutics. In the hermeneutical circle, the whole outweighs the parts: in a conflict of interpretations, the larger context decides the issue of which is correct (Shusterman 1989). This emphasis on the whole is also reflected in the idea that hermeneutics has to do with the understanding of a relatively coherent field of meaning (How 1995: 47). Only phenomena which constitute a unity of meaning are intelligible (Shusterman 1989). Understanding in the hermeneutical circle always has to start somewhere, a prior position which is based on insufficient knowledge of the phenomenon studied. Gadamer uses the word “prejudice”, but not in the conventional pejorative sense. A prejudice for Gadamer is nothing more or less than a judgement made before all the elements of a situation have been ascertained. Prejudices in this sense are indeed a precondition for understanding, a starting point for the search for meaning. If our prejudices are confronted with the phenomenon in its entirety, we can see which of them are misguided and have to be altered (How 1995: 47–48). The ideas of the necessity of starting from prejudices and the inevitability of subjectivity of the interpreter for Gadamer point to the crucial importance of tradition. The tradition of which the interpreter is a part determines the prejudices from which the interpretation will start: the knowledge we have of the world and ourselves, the issues we find significant, the things we find acceptable or unacceptable, rational or irrational, those that seem desirable and those that raise our ire, are all generated from within the changing historical field of our tradition (How 1995: 37)

We cannot simply step out of the tradition of which we are a part; “our traditions lie deeper than we can say” (Caputo 1989). In that sense tradition defines what we can and what we cannot see, our horizon. Interpreting a product of the human mind implies a fusion of horizons: the horizon of the interpreter and the horizon(s) of the individual(s) whose product we try to understand. This fusion is possible only if,

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from the start, there is some overlap, some common ground. The possibility that different horizons can be fused lies in the fact that they are already implicitly joined “in the depths of tradition” (Gadamer, quoted in Shusterman 1989: 217). Fusion of horizons is the ultimate result of a dialogue between interpreter and the interpreted phenomenon, and can only be reached on the basis of good faith, honesty, and openness (Michelfelder and Palmer 1989). According to Gadamer the success of an interpretation can be determined on the basis of two criteria. Most important is the unity of interpretation: the dialogical process has led to an interpretation in which all the elements of the phenomenon form a coherent whole. Elements which previously were unclear, left out of the explanation or contradictory, are accounted for (Mercier 1994). The second criterion is that of “Bewährung”: does the interpretation survive the permanent onslaught of alternative interpretations (Vasterling 1990)? Interpretations that succeed in doing so are not only by definition successful, they may also be assumed to be “more true”. Hermeneutics was originally developed as a method for Biblical interpretation, and was later applied to literature and to the social sciences, starting with history. In the field of organization theory it has been applied mainly to study issues of organizational culture (references and an application can be found in Mercier 1994). Is the societal effect approach a Hermeneutics? The preceding discussion of hermeneutics and the discussion of postmodern criticism of hermeneutics which follows, are relevant only if the Societal Effect approach can be characterized as hermeneutical. The fact that Societal Effect is to be seen as a method of analysis rather than a substantive theory (cf. Maurice et al. 1982: 328) facilitates this operation. In this section I will try to demonstrate that in the method of analysis propagated by Societal Effect the researcher tries to “read” the system of management in a foreign country by ascertaining the meaning of single elements by means of their relationship to the system of a coherent whole. In the first place the Societal Effect approach fits in with the hermeneutical idea that understanding involves a fusion of previously distinctive, but party overlapping horizons. The horizons of the researcher from country A and the management system in country B are different, for Societal Effect assumes “an institutional logic that is particular to a society” (Maurice et al. 1980: 59). Thus, if the various national management systems are to be understood from a comparative perspective, one has to transcend the logic (in a metaphorical sense) inherent in one’s own society. The fusion of horizons in the methodology of Societal Effect is also fusion of the horizons of researchers from different countries. All studies in this tradition involve one or more researchers from each country investigated. Of course, this has to do with pragmatic concerns of research

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economy. But there is more to it than this. According to Sorge and Warner (1986: 4), this approach has the virtue “of enabling at least one of the researchers to understand the societal factors at work in sufficient detail not only to carry out a study of institutionalized patterns, but also to bring to bear a detailed understanding of what makes the institutions tick”. This does not altogether solve the problem of fusion, though, but rather deplaces it to the level of the fusion of the world views of the cooperating researchers. Secondly Societal Effect, like hermeneutics, emphasizes the relationships between whole and parts in the object of study. Whereas the distinction between elements of management and organization and elements of the task environment is a cornerstone of the Aston approach, according to proponents of Societal Effect this distinction “can only be maintained at the cost of great artificiality and implausible abstraction” (Maurice et al. 1980: 60). Related to this is the relationship between the specific and the universal. Societal Effect focuses on the specifics of a national system, but ultimately tries to uncover universal mechanisms, like the “three interactive effects” discussed by Maurice et al. 1980: 81), which are assumed to be valid for all three societies included in the study. “General and specific statements are logically dependent on each other in an unending circle” (Sorge and Warner 1986: 19). Transcending the conceptual gap between society and organization, and between the specific and the universal, is the gist of the Societal Effect approach. Thirdly, the notion of the importance of a shared tradition is clearly present in Societal Effect. The nearest explicit encounter between Societal Effect and hermeneutics that I have been able to identify relates to this issue of tradition. In their theoretical exposé, Sorge and Warner (1986: 19) approvingly quote Raymond Aron quoting Wilhelm Dilthey: “understanding requires the identity of human nature”. Sorge and Warner (1986: 20) assimilate to this viewpoint when they state that “human action is based on accumulated intuitive experience”. If that is true, human action can also only be understood by an observer who, to some extent, shares this accumulated intuitive experience. The practice of research in the Societal Effect tradition also reveals that, the different logics of national systems notwithstanding, researchers are assumed to be able to have some a priori knowledge of the other system, e.g., in selecting strings of interviewees which “assure maximal comparability” (Maurice et al. 1980: 63), or in selecting indicators which “appear relevant to a phenomenon” (Maurice et al. 1980: 65). Knowing what is relevant, or how to achieve maximal comparability, presupposes some knowledge of the alien system. The conclusion is that Societal Effect bears enough resemblance to hermeneutics for a discussion of postmodern criticism of this philosophy to be apposite.

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The postmodern challenge Characterizing Societal Effect as a form of hermeneutics has the advantage of providing a point of departure for a critical reflection on the methodology of this tradition of inquiry. Hermeneutics as a philosophy of the understanding of social reality has always evoked criticism. Some of this criticism emanates from logical positivism. Focusing on this criticism would lead to a repetition of the discussion between the Aston School and Societal Effect, but this time from the perspective of Aston. Instead of doing this, I will focus on postmodern criticism of hermeneutics, because this avenue seems to promise new perspectives. I will not try to define the concept of “postmodernity”, either in general or in the context of management and organization theory (for definitions see, e.g., Boje et al. 1996). Rather, the postmodern perspective in this chapter is largely identified with the perspective of the French philosopher Jacques Derrida, meaning epistemological postmodernism, associated with the method of deconstruction. From this epistemological perspective, I will focus on three areas of criticism on hermeneutics: criticism with regard to the demarcation of the context within which the object of interpretation is to be understood, criticism with regard to the assumed possibility of arriving at a more or less definite, coherent interpretation, and criticism pertaining to the “good will” of the interpreter which is of vital importance according to hermeneutics. Demarcation of the context As we have seen, hermeneutical interpretation proceeds through a circular movement between the meaning of single elements and the phenomenon as a whole. The elements derive meaning from the whole and vice versa. For this to be possible, the context to be taken into consideration has to be demarcated. This gesture of demarcating a context, within which the interpretation is to take place, is central to hermeneutics (Vasterling 1990). But the potential context is infinite, and in demarcating a context, a decision is taken on something which in principle is undecidable (IJsseling 1990). Every boundary put to the context is artificial, hence can be “deconstructed”. The point is not that the act of demarcation is illegitimate, but that a demarcation can never be treated as “natural” or a matterof-course: the author retains full responsibility. If hermeneutics searches for coherent wholes, it may be at the price of excluding those elements which do not fit the interpretation. According to Derrida, a hermeneutical interpretation is always rhetorical in the sense that certain aspects take a front position while others are kept in the shadows (Widdershoven 1990). The accusation of being rhetorical is inevitable because hermeneutics is unable to formulate a principle guiding the selection of

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what is and what is not to be included in the interpretation. The aporia hampering hermeneutics is that it finds it necessary to pose the question of a principle of selection while at the same time it is unable to respond to it (Forget 1989). The criticism with regard to the demarcation of the context may also be applicable to the Societal Effect approach in comparative management research. The choice of societal institutions to be included in the analysis is critical, but there do not seem to be clear guidelines. In this respect the direction of the research is governed by pragmatic considerations (Sorge 1995: 115). But if there is no a priori selection criterion for deciding which institutions should be included, Societal Effect is exposed to the accusation of selecting precisely those institutions which fit in the coherent explanation being fabricated. The choice of societal institutions to be included in the analysis could be seen as following from the course of the research project, as being determined by the social constructions of the actors in the system investigated (Maurice 1994). But this view does not seem to do complete justice to the inevitability of the decisions to be made in complex international comparative research projects. Polysemy versus dissemination Gadamer’s hermeneutics departs from the idea that, although it is never possible to arrive at a final meaning, it is always possible to find coherent interpretations. Because the potentiality of interpretations is inexhaustible there will always be several meanings (polysemy), and the search for truth assumes the form of a comparison of coherent meaningful wholes. At first sight, polysemy seems to be closely related to Derrida’s concept of dissemination. Dissemination points at the ultimate uncontrollability of the production of meaning. New meanings are produced at every turn, and it is not possible to bring this process to a halt. Contrary to hermeneutics, postmodern philosophy assumes undecidability: meaning is always incoherent, and opposition and chaos persist within meanings/interpretations, under the smooth surface of apparent order and harmony (Blans 1988; IJsseling 1990, 1992; Madison 1991). While this line of criticism may have validity for earlier work in the Societal Effect tradition, at first sight it might be seen as not applicable to the later work of, e.g., Sorge and Warner (1986), who explicitly point at dialectical, in addition to homomorphical links. In the case of an interpretation in terms of dialectical linkages, however, a phenomenon is also caught in a single unitary web of meaning. The crucial difference with homomorphical linkage is that here institutionalized patterns in a societal field are not internalized and learned to be seen as legitimate by an actor, but are opposed, evaded or only outwardly complied with (Sorge 1995: 116). But all the same, the behaviour of a focal actor is explained in terms of a particular slice of the societal context. In a way, explanation in terms of

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dialectical linkages is the most audacious attempt to create order out of chaos: observations which appear to take the edge off the argument are made into pillars of the framework of the interpretation. Deconstruction of the “good will” The “good will” to understand the other (a person or an object) is vitally important to Gadamer’s hermeneutics. The interpreter always starts from prejudice, and must be willing to alter his world view in order to achieve the desired “fusion of horizons”. Postmodern philosophers, however, are disinclined to take such good will at face value, for it may very well be a delusion, possibly a self-delusion. According to Derrida, hermeneutical interpretation amounts to an act of appropriation notwithstanding its ostensible good will. “Understanding is… imagining the other into one’s own world picture, reconstructing a world-picture whose coherence has been disturbed by the other” (Simon 1989: 165). Appropriation of meaning establishes a hierarchical relationship between the interpreter and the interpreted, and reduces that which is different to that which is the same (Blans 1988). It goes without saying that “tradition” has a very different ring to postmodern philosophy than to hermeneutics. In hermeneutics, tradition is what unites interpreter and interpreted, the shared substratum which is a condition of the possibility of “verstehen”. Postmodern philosophy, in contrast, through the act of deconstruction, seeks to make visible what is suppressed by tradition. For deconstructionists, “tradition is largely the story of the winners while the dissenters have been excommunicated, torched, castrated, exiled, or imprisoned” (Caputo 1989: 264). This goes beyond mere doubt concerning the possibility of real understanding and fusion of horizons, as proclaimed by hermeneutics. The suspicion raised by deconstruction is that interpretation, in whatever imperfect form it can be achieved, tends to emasculate what is different to a variation on what is familiar. Applied to Societal Effect, this criticism draws our attention to unexpected universalist ambitions cropping up in this approach. Compared to the Aston School, work in the Societal Effect tradition is decidedly particularistic, and shows susceptibility to the particular “logic” at work within a specific society. As discussed above, however, Societal Effect ultimately appears to aim to uncover universal mechanisms, like the “three interactive effects” in Maurice et al. (1980) (see also Sorge 1991). Does that mean that there are no distinctive societal logics after all? Or can these logics be subordinated to a theoretical overarching logic? Would that mean that, as in the case of hermeneutics, interpretation is an act of appropriation?

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Concluding remarks This chapter is by necessity open-ended, as its purpose is to call for renewed attention to the epistemological basis of international comparative management research. In this sense, it is a response to Maurice’s (1989) summon for more reflection in the domain of international comparative research. The Societal Effect approach has yielded rich and deep comparative studies of management and organization in different countries but much of its epistemology is largely implicit and may suffer from the same weaknesses identified in hermeneutics by postmodern critics. Most of the theory “underlying” Societal Effect is developed post hoc, in publications (co-)authored by Arndt Sorge (Sorge 1991; Sorge and Warner 1986) and by Marc Maurice (1984; 1989). There is nothing inherently wrong with this procedure, but I am not sure that as yet we have exerted enough effort to learn as much as possible from the lessons of previous research. This chapter is written from the perspective that critical reflection on previous studies as exemplified by Derrida’s work can be as important as new theoretical and empirical work, though they may be viewed by some as parasitical. It is also based on the conviction that postmodern thought, although critical of much of the “storytelling” which constitutes received organizational theory, can also play an “affirmative” role in further research. As an epistemological perspective, it is not incompatible with any of the methodologies favoured by contemporary organizational research (Kilduff and Mehra 1997). However, it forcefully drives home the idea that we must remain critical of ourselves and of our strategies of interpretation, particularly in a complex field like comparative management.

PART II THE ECONOMY

Introduction Societal analysis was conceived as an approach with mainly sociological and socio-economic roots. Some time in the past it was difficult in some countries to tell apart sociological and economic university posts. The university department mainly used at Aix for teaching and examination activities of LEST research staff involved in developing and practising the approach is the Faculty of Applied Economics. Sellier, as founder of LEST, and the late Silvestre were both economists by training and research practice, and Sellier has above all been concerned with the industrial relations aspects of societal analysis but very much as a crossdisciplinary subject that includes economics. However the economical substance of research was very much one of systems of remuneration, labour markets and clearly socio-economic theories and research. Thus, whilst economics and the economy have been present for a long time, their involvement has been partial. Authors in this Part contribute to extending the profile that societal analysis has or may have as an approach that is also meant to be interesting for economists and for studying the economy. Both of the authors make the point that although the formalization and theoretical self-sufficiency of economics has very much increased, inter-relations with societal analysis continue to be fruitful and have potential for the future. They make the point in different ways. Sellier discusses recent economic theories of management and organization. Whilst these appear very much self-contained, he makes it clear that the realization of managerial and organizational policies following such theories requires particular institutional pre-conditions in addition to the factors mentioned by the theories themselves. Such conditions are societal constructions, they do not readily emerge on the basis of utilitarian behaviour of infinitely elastic actors, and societal analysis has shown how and why they tend to become prevalent in an economy and society. The inter-relations between societal analysis and modern micro-economic theory are stressed. This is in line with how the late Jean-Jacques Silvestre conceived of the development of economic theory within societal analysis: a ‘relational’ approach which, without shedding the utilitarian heritage of economics, sees maximization of utility or optimization as inter-related with the relational capacities of actors and markets, and the construction of actors and markets (see his contributions in Gazier, Marsden and Silvestre 1998). Soskice’s contribution extends the range of economic dimensions that societal analysis would have to take account of. This suggests a broadening of the

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initial concern, as far as economics is concerned, with industrial relations and labour markets, into the financial system, international economic relations, accountancy and productivity and profitability issues. He conceptually meets Silvestre and Sellier, all across this broader terrain, where the reciprocal constitution and construction of economic and social arrangements and actors is concerned. This is more than an ‘economics of institutions’, and by the same token more than an ‘institutional theory of economic behaviour’, for societal analysis implies a reciprocal linkage of both.

Chapter 9 The contribution of societal analysis to the economic theory of the firm François Sellier

Theorists of the firm are concerned with four basic questions. Firstly they seek to resolve the problem of providing incentives for the employees who make up the firm to produce the work effort required. How can the tendency for individuals to minimise their own input into a collective undertaking be prevented from neutralising the advantages of such an enterprise? We will seek to shed light on this question by analysing the article by Alchian-Demetz (1972). The second basic question is that of coordination, of the incentives for workers to cooperate and, more precisely, of the linkage between the two incentives: on the one hand, to produce the work effort required and, on the other, to cooperate. This is the main thrust of the work of Williamson, Aoki and Leibenstein. We will attempt to show that these authors underestimate the fact that hierarchical systems are constructed on the basis of qualificational spaces and that, in consequence, it is the construction of these spaces that is the essential explanatory factor. Leibenstein and Williamson are content to explain the construction of hierarchies in terms of environmental conditions: history and circumstances in the former’s case and atmosphere in the case of Williamson; Aoki, for his part, deals with the hierarchy as a universal dimension in which the important element to be examined is the division between the motivating and coordinating functions. After the questions of incentive and coordination, the third and fourth basic questions relate to the conditions created by the interaction between firms and their environment in so far as they affect firms’ operations and productivity. There are two perspectives here: on the one hand, there is the question of firms’ tendencies towards specialisation or diversification, which is linked to size of firm and group structure and, on the other, that of the relationship of firms to technological progress and their ability to appropriate new technologies.

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We will attempt to show that what authors call “the institutional context of each country” can be analysed with the aid of the notions of industrial space, qualificational space and organisational space used in societal analysis (M. Maurice, F. Sellier, J.J. Silvestre 1982).

1.

The effort function

In his celebrated article, R.H. Coase (1937) made this provocative observation: “… the distinguishing mark of the firm is the supersession of the price mechanism. It is, of course, related to an outside network of relative prices and costs, but it is important to discover the exact nature of this relationship… It is true that contracts are not eliminated when there is a firm but they are greatly reduced… The contract is one whereby the factor, for a certain remuneration (which may be fixed or fluctuating), agrees to obey the directions of an entrepreneur within certain limits… When the direction of resources (within the limits of the contract) becomes dependent on the buyer in this way, that relationship which I term a ‘firm’ may be obtained” (1937: 389–392). It is through this subordinate relationship that the disadvantages of the firm, i.e. the costs of permanent renegotiation between employer and employee, can be overcome. The advantage of the firm lies in the elimination of the costs associated with short-term individual transactions, price information and bargaining, although the entrepreneur can still choose to resort to the market in cases in which coordination through the firm would be more costly, in accordance with the marginalist principle. Alchian and Demetz (1972) are not wholly opposed to this view: We do not disagree with the proposition that, ceteris paribus, the higher is the cost of transacting across markets the greater will be the comparative advantage of organizing resources within the firm; …surely it is true that, ceteris paribus, the lower is the cost of managing the greater will be the comparative advantage of organising resources within the firm. To move the theory forward, it is necessary to know what is meant by a firm and to explain the circumstances under which the cost of ‘managing’ resources is low relative to the cost of allocating resources through market transaction. We propose taking a step down the path pointed out by COASE toward that goal. (1972: 783–784)

The advantage of the firm is the profit derived from team production. The disadvantage, however, is the difficulty of assessing individual productivity. The only way of measuring is to observe the behaviour of individual agents in order to meter the “shirking” practices individuals employ in order to minimise their own effort and to profit from that of others. It is the entrepreneur who carries out this metering, and his rates of pay are based in part on the residual gain obtained from the reduction in shirking — i.e. the gap between the marginal cost and the marginal gain of the detection of the fraud associated with team production. Any

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team member who does not spare his efforts has an interest in the action taken by the monitor, since it enables him to receive the just reward for his efforts. Hence the definition of the classic capitalist firm, which is characterised by (a) a joint input production, (b) several input owners, (c) one party who is common to all the contracts of the joint inputs (d) who has rights to renegotiate any input’s contract independently of contracts with other input owners (e) who holds the residual claim, and (f) who has the right to sell his central contractual residual status.

Alluding to the importance of loyalty in a team Alchian and Demetz write: “obviously the team is better, with team spirit and loyalty, because of the reduced shirking — not because of some other feature inherent in loyalty or spirit as such” (1972: 790). The interpretation of the “essence” of the firm places the emphasis on the fact that it is a locus of permanent negotiation: “to speak of managing, directing or assigning workers to various tasks is a deceptive way of noting that the employer continually is involved in renegotiation of contracts on terms that must be acceptable to both parties… neither the employer nor the employee is bound by any contractual obligations to continue their relationship” (p. 777). Hence the analogy with the relationship between a grocer and his customer: “Wherein lies the difference: in a team use of inputs and a centralised position of some party in the contractual arrangements of all other inputs” (p. 778). Thus there is a permanent process of bargaining between the owners of inputs and the employer, whose aim is to coordinate the production process efficiently and thereby to extract maximum advantage from group production by minimising shirking. Thus a firm’s productivity depends on the efficiency with which individual behaviour is metered. This metering process defines the essence of the relationship between employer and employee. However, it also implies all the complexity and variety that can characterise that relationship. It is here that societal analysis may be of value: there are as many different ways of metering behaviour as there are different forms of work organisation. This can be clearly demonstrated in an analysis of polyvalence, or functional flexibility. One of the problems firms have to resolve is that of organising the work process in order to cope with absenteeism and technical difficulties and thereby ensure the continuity of the technical process and the maintenance thereof. This need for functional flexibility conflicts with the tendency towards specialisation, which encourages individual productivity and also facilitates the metering of individual performance. The reluctance of manual workers to accept the imposition of functional flexibility is not difficult to understand: it represents a “unilateral modification of the contract”, the alienation of his right of ownership over his own speciality. This is an attitude found among manual workers in French firms, and is perhaps even more marked in American and British firms

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(job demarcation). In France, a manual worker is the “owner” of a job to which he has been assigned in accordance with the system of job classification, for which there is a corresponding “coefficient” on the pay scale. Any temporary change of job may give rise to a pay claim: unless the new post carries a higher coefficient, the transfer may tend to reduce productivity. Similarly, any change in job content that can be interpreted as an addition to the workload may give rise to a dispute if it is not linked to a change of coefficient. Managers tend to avoid such changes unless there are very good technical reasons for them, and it is quite out of the question for supervisors and foremen to make such changes, which would threaten to undermine the whole payment system. In Germany, on the other hand, work organisation is based on functional flexibility. Rotation between jobs in a particular area of a plant or establishment is a way of covering for absent workers, of providing continuing on-the-job training and of evaluating workers’ abilities. All of these functions are the responsibility of the supervisor of foreman, who plays an essential role as trainer within the group of workers under his control; it is his duty to ensure the group’s collective ability to carry out a particular work process. “… (polyvalence) is an effect of organisation produced by the firm, which contributes directly to shaping the collective identity of workers and the social relations on which that identity is based” (M. Maurice et al. 1986: 173). These relations include, on the one hand, cooperation and competition between workers seeking to perform a collective task and, on the other, the relationship between each individual and the foreman, whose role is to organise and train rather than to supervise. The interaction between technical management (work organisation) and social management (allocation, training, supervision and promotion of individuals) reflects that between organisational facts and form of skill. The example of the petrochemical industry, where polyvalence (or functional flexibility) is a technical necessity, is particularly interesting. In the French firm studied (ibid. p. 74–75), “those chosen were among the best workers, those most capable of adapting. Because of their special working conditions… these workers receive a ‘stress bonus’ and thus make more money than other workers, although their coefficient has not changed. …gradually the polyvalent workers came to form a higher-status category; conscious of the fact that they represented a sort of worker elite, they demand a coefficient higher than that of the skilled workers, indeed high enough to place them among the top foremen ranks. But this demand met with opposition from supervisory personnel and management: ‘A polyvalent worker is someone who is familiar with a number of jobs, but still all that’s involved is repeated procedures, handiwork, nothing more!’”. Here, functional flexibility is conceptualised in “quantitative” terms. The trade union representatives also opposed the workers’ demand, on the grounds that “it would destroy team solidarity” (cf. the factionalism referred to by Leibenstein). Since functional flexibility is not, as it is in the German system, an element in vocational

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training and a factor in the development of collective professionality, it remains simply an element in the social management of workers (the accumulation of tasks is recognised simply through the payment of a bonus) and has no connection with the technical management of the work process (i.e. work organisation). How, on the basis of these observations, are we to interpret those theories in which the contract is a necessary and sufficient condition for the analysis of relations within the firm? The German system of work organisation makes the team a means of both evaluation and training, rather than an obstacle to evaluation. However, the notion of team sometimes proves to be misleading, since it conceals a number of different realities. In Germany, the incentive for workers to cooperate and demonstrate their capacity for functional flexibility is an integral part of the system of work organisation, since participation in the group is, for workers, a means of acquiring training and, for supervisors, a means of evaluating their workers. The sharp distinction between “work” (cost) and “leisure” (utility) becomes blurred, because work itself has a specific utility for workers: cooperation is part of his “utility function”. It is through work that they increase their “capital”. The group is organised in such a way that individual members both compete and cooperate with each other. In Japan (Maurice et al. 1988), the principle of relative job security (at least in large firms), firm-specific classification systems (which place particular value on experience), overlapping tasks and the practice of job rotation mean that particularly high value is attached to a certain type of on-the-job training based on mutual motivation between teacher and pupil. The transfer of “local” skills and knowledge between actors gives rise to an internal process of skill development that is particularly important during the introduction of new technologies. At such times, French companies tend to adapt by creating new occupational strata (technicians, programmers) that look directly to the external labour market; such an approach is unlikely either to improve the quality of work relations or to ensure the continuity of the qualificational space. Thus the particular contribution of societal analysis in this respect is to reveal that contractual structures are determined by organisational effects and by socialisation effects. The socialisation effects that characterise the German case have their roots in the professional homogeneity of the Facharbeiter and Meister categories, or even of non-graduate engineers (who have themselves been through the German apprenticeship system). Tasks are organised in a way that takes full account of the high level and homogeneity of vocational skills: instead of the firm developing its own criteria in order to define jobs to which workers have to adapt (but of which they become, as it were, “owners”), jobs are defined as sets of complementary tasks in a work process organised by the Meister in accordance with workers’ (formally validated) skills. Their allocation to a succession of

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different task groups, combined with the training programme delivered by the Meister himself, produces a collective professional ability that in turn takes on the character of socialisation. Organisational effects and socialisation effects are interdependent. What is distinctive about Japan is the system of on-the-job socialisation (Lanciano et al. 1992) which homogenises the work group, whether its members be university graduates, engaged in the early stages of their career in direct production work before achieving engineer status at some time in the future, or “instructor-worker” pairs that form the basis of the internal training system. Here again, the socialisation of individuals and the organisation of work are interdependent. It is this interdependence that gives form to “contractual exchanges” and fills the void at the heart of the notion of “ownership right”. While it is fairly clear that these theories have their roots in an interpretation of particular systems of work organisation inherited from Taylorism, it is also fairly clear where they are going: towards a general interpretation of society based on methodological individualism that conceals the complexity of social phenomena.

2.

The function of incentives to perform and to cooperate

Theorists of agency and ownership rights, for whom relations within the firm have to be analysed as market relations, are contradicted by theorists of hierarchies, for whom, like Coase, “it is important to discover the exact nature of the relation” (between the market and the firm (Coase 1937: 389). It is based, for each new transaction, on a comparison between the costs of market allocation and institutional allocation; hence these costs have to be analysed. The difficulty always lies in optimising the dual incentive for workers to produce the desired level of effort and to cooperate, a problem generally referred to as the conflict between incentive and coordination. Like all other theories of the firm, that of M. Aoki sets out to resolve this problem. Putting the accent on horizontal coordination by establishing autonomous work groups and mobility between tasks means sacrificing the advantage of specialisation and the incentive produced by “ownership” of a particular job. This is why the advantage of this method, the so-called “informational rent” that it produces, does not become apparent unless frequent changes in customer requirements make it necessary to have a rapid and constant flow of information. On the other hand, the autonomy granted to small work groups brings with it the risk of “factionalism”, with the interests of the group taking precedence over those of the firm. In Aoki’s theory, this risk is offset, in firm J, by the excellence of the vertical relations, which creates confidence in the “compensation”. The notion of compensation reintroduces exchange into the equation: the firm becomes a “nexus of

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treaties”, but these treaties are inserted into a “context” that explains everything. That context is the authority of the firm, which produces skill, motivation and coordination. And in essence, it is values, contexts and culture that provide the explanation for everything: “The comparative efficiencies of the two modes are therefore likely to depend on various structural values defining each mode as well as on parameter values characterising environments of firms, institutional framework for job assignments and learning capacities of workers” (Aoki et al. 1990: 31–2). Without of course denying the importance of context, cultures and history, societal analysis seeks to go beyond contingent explanations by highlighting a general phenomenon that takes specific forms in each society: the construction of actors through socialisation processes and organisational structures. It is true that societal analysis has some elements in common with Aoki’s theory, but those elements are interpreted in such a way as to explain how, at a given moment and setting aside values and history, the organisation of society and that of the firm are based on a mutual interdependence and how changes cannot be made unless the various elements in the organisation of society and of the firm change together. One of the interdependencies identified by research carried out at LEST is that between the education (and training) system, the mode of work organisation and the productive system (the relations between firms, between firms and the State and relations with domestic and international markets). These elements, which are brought together in the notion of (occupational, occupational and industrial) spaces, are the source of the forms of socialisation that produce “structural values”. They also make it possible to relativise the notion of a firm’s “environment”, since the firm is analysed in terms of effects produced by socialisation processes and organisational structures that both permeate the firm and are, in part, produced by the firm: “the autonomy of the firm as an actor is never more than a relative autonomy. Autonomy depends on how open or closed the firm is to influence by other organization and institutional actors. It also depends on how far it can influence those actors in turn — for example, by producing effects of organization and socialization in its own right” (Maurice et al. 1986: 172). The “environment” is no longer treated as a contingent external circumstance through which differences can be explained. The firm helps to shape the society of which it is a part, just as society helps to shape the firm. In the case of Japanese firms, societal analysis identifies the determinants of actors’ behaviour (particularly “motivation”) as a combination of certain characteristics of the mode of work organisation (overlapping of tasks), elements in the process of socialisation (on-the-job training at all levels) and certain organisational characteristics of the productive system (dependency on foreign trade, making it essential for firms to adapt quickly to the market, to seek State assistance to do so and to establish a product diversification strategy), all of which drive firms to create networks of specialist subsidiaries and subcontractors in order to offset the

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disadvantages of diversification, which also opens up opportunities for reallocating personnel and maintaining long-term employment relationships. It is the interdependence between these various elements that make it possible to understand the specificities of the firm, and this interdependence is reflected in the reciprocal relationships (market and non-market) between firm and society (e.g. influence of the educational system on the firm and that of the firm on the system) (Mobus and Verdier 1996). The notion of environment, which implies a one-way external influence shaping the firm, is replaced by the notion of interdependence, which implies a reciprocal relationship between firm and society. Instead of distinguishing between firm H and firm J in terms of the degree and distribution of hierarchical methods between the incentive function and the motivation function, societal theorists focus on the differences in the socialisation of the actors during the process of skill construction, in the firm in Japan and in the external education and training system in the “West”, albeit with differences sidestepped by the Japan-West dichotomy. In Aoki’s model, rather than market and hierarchy (organisation), there are two types of organisation, hierarchical or vertically structured ones and technical or horizontally coordinated ones. It is that latter dichotomy that underpins Williamson’s model: Supplying a satisfying exchange relation is made part of the economic problem, broadly construed… alternative modes of organisation sometimes differ in nontrivial atmospheric respects. …. Internal organisation, by contrast (with market exchange) is often better able to make allowance for quasi-moral involvements among the parties… Recognition that alternative modes of economic organisation give rise to differing exchange relations, and that these relations themselves are valued, requires that organisational effectiveness be viewed more broadly than the usual efficiency calculus would dictate (pp. 38–39)…. Transactional attitudes are greatly influenced by the socio-political system in which exchange takes place” (note 22, p. 39).

Referring to the work of Alchian and Demetz, Williamson writes: My analysis differs in that transaction costs are expressly traced to the human and environmental factors that appear in the organisational failures framework”.

Such failures come from adverse selection bounded rationality, moral hazard, information impactedness, opportunism, small number, all factors which are analysed by Williamson in an illuminating way. “Quasimoral involvements, nearly quasimoral codes (p. 44) …performance programs, that provide for assured coordination between the parties” (p. 100) might counterbalance such failures: “the organisational failures framework consists of a set of human factors on the one hand, and a related set of environmental factors on the other, which together explain the efficacy of contracting” (p. 254) “Atmosphere” is one of these environmental factors: “what are the prevailing attitudes, how are these influenced by the nature of the transactions, and with what spillover consequences” (p. 256).

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What seems to us to be missing in this model is an analysis of the sources of these forms and norms, which can be revealed by societal analysis. A similar gap seems to us to exist in Leibenstein’s work. Taking as his starting point the Coase-Williamson notion that the firm (the hierarchy) reduces transaction costs, Leibenstein (1987) asks how and under what conditions the hierarchical organisation increases efficiency — or sustains inefficiency. For Leibenstein, the function of hierarchies is to exert pressure on the members of the firm in order to transmit to them the external pressure originating in the market. The firm is in equilibrium when the (internal) pressure exerted by the hierarchy is stable; in this case, the performance produced by the initial internal pressure is considered satisfactory enough for the pressure to be neither increased nor diminished. The firm is then in an “inert area”. However, the performance thus produced is not generally the best possible: it depends on the level of mutual commitment among the members of the organisation — the chain of commitments, or (to put it another way), the frequently implicit convention on which the cooperation between them is based. The need for such a treaty stems from the ambiguity of the effects produced by the hierarchy: it is intended to coordinate the efforts of individuals, but at the same it makes distinctions between them: “at the very least, these distinctions are functional, but very frequently there are likely to be non-functional spillovers to other aspects of life in the organisation, and even outside it (sense of status, class, caste) (1987: 160)”. For Leibenstein, it is through a high degree of mutual vertical commitment, which creates a feeling of shared objectives, and a concern with overall results, that horizontal cooperation around production goals can develop. “A high level of mutual commitment, if spread fairly uniformly throughout the enterprise, also helps to create a sense of identity and a sense of common objectives” (p. 230). Thus the fundamental condition lies in the actual reciprocity of the commitments, and their level. However, Leibenstein does not touch on the origin of the conventions: “A convention is basically an agreed-upon regularity of behavior appropriate within a certain set of contexts. It is quite immaterial how the agreement has been achieved. All that matters is that as a result of history such agreement exists” (p.70). The level at which the treaty becomes established, i.e. the line of equivalence between effort and earnings (p. 78) beyond the minimum equilibrium point, depends on “history”. “It does not come naturally to individuals to behave in the way that would most benefit the enterprise. The enterprise has to create an environment in which people identify with it” (p. 159). Once again, therefore, context, history and the environment are used as a decisive mode of explanation. What happens when it comes to explaining international differences? When the author compares the Japanese model with the “Western model”, he makes direct reference to organisational variables: The deep-seated, non-contingent characteristic that distinguishes Western models from the Japanese model is job demarcation, the “right of ownership”

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over jobs; this contrasts with a form of work organisation that is based on job rotation and is the vehicle through which skill is acquired. In the Japanese model, it is the firm that provides individuals with their skill or qualification and the opportunity to progress, in time, through the grading system. This system has a basic inner coherence. Its various elements are interconnected and have a certain underlying logic. It is not additive but organic… “The essence of the core is that it works as a motivational engine” (p. 200). It is noteworthy that comparative observation causes Leibenstein to highlight the “organic” aspect of internal coherence on which societal analysis places so much emphasis. For Leibenstein, however, the organisational characteristics that distinguish the various models reflect the conventions on which the firm is based: “individuals adhere to convention in order to coordinate their activities with others as opposed to following their own interests” (p. 130), and these conventions are givens. The content of those conventions (i.e. the commitments) can be analysed, but not their origin. Here, history is decisive, hence the exaggerated contrast between the “Western model” and the “Japanese model”. In societal analysis, the origin of conventions (on motivation and incentives) is the very object of enquiry. In the German model the training of the actors in the qualificational space links the firm to the wider society in a different way from in Japan. “Horizontal coordination” within the firm is not produced by a technical system of work organisation. It is the system of social relations among actors who have all been through the same dual apprenticeship system that forms the basis of a cooperative form of work organisation. Here too, of course, the incentive to cooperate is not independent of the general incentive system: there may even be a similarity between Germany and Japan in the importance of the personnel department and its link with the works councils in German firms and the company union in Japanese firms. However the incentive to cooperate has its roots mainly in the type of social relations created in the qualificational space; the category thus produced extends beyond the individual firm in Germany, while the qualificational space and the relations it creates are produced by the firm itself in Japan, which has consequences for the role of the labour market, pay determination and the system of adaptation to fluctuations in demand (through unemployment in Germany, through pay cuts and inter-establishment mobility in Japan). Societal analysis also provides a better understanding of the difference between France and Japan in respect of the employees’ dependence on the firm. In both countries, that dependence has its origins in the role of seniority in the promotion system. In Japan, however, it is based on the construction of a combination of qualificational space and organisational space, both of them specific to the firm; employees are well integrated into this composite space and seniority functions not as a virtually automatic right of enforcement but as the

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outcome of the company’s recognition of that integration. In French firms seniority functions as a means of avoiding conflicts of access to better paid jobs. This is different again from the Anglo-Saxon system of job demarcation or job ownership, the purpose of which is to eliminate functional flexibility and thereby encourage firms to recruit; the French system, rather, is a conflict avoidance system which complements the qualificational space in French firms, in which the authority of supervisory staff is derived from bureaucratically determined status rather than professionality. Thus it is analysis of the nature of the qualificational space that makes it possible to determine the level of the “commitments” or “conventions” from which firms in fact derive their efficiency. However, the nature of the qualificational space and its relationship to the organisational space cannot be analysed in isolation from what, in the wider society, determines those spaces: primarily the training system but also everything that might constitute resources or constraints for firms, i.e. their articulation to the industrial space.

3.

The articulation of firms to their environment and the notion of industrial space

All firms are part of a greater whole. The size, structure and functioning of firms are not independent variables. The first analyses of these links between firms and their environment are the famous internal and external economies of Alfred Marshall, the basis of the increasing returns to scale in an industry, which are themselves derived from Adam Smith’s principle that the division of labour is limited by market size. The division of labour operates both within the firm and in the industry, where it manifests itself in the tendency towards specialisation. For G. Stigler (1968), vertical and horizontal integration, which run counter to the trend towards specialisation, can be explained either directly by inadequate market size or by attacks on competition in the market. In place of an analysis of the firm based on the production function alone, he advances a notion of the firm as a combination of separate functions, each of which has its own law of return. In this way, Stigler seeks to demonstrate the tendency towards integration in new industries, towards the splitting up of firms in mature industries and towards renewed integration in declining industries. In the first chapter of Markets and Hierarchies, Williamson (1975) discusses the tendency towards integration that Stigler explains in terms of the inadequacy of the volume of production in a given industry (“at a given time, these functions may be too small to support a specialized firm or firms”) (Williamson, p. 16, Stigler, p. 133). For Williamson, the obstacle to this rational solution comes from transaction cost problems, namely the concentration of information in the firm

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producing the good and uncertainty about the future: “given opportunism, incomplete long term contracts predictably pose interest conflicts between the parties… Without present or prospective transactions costs… specialisation by one of the firms… to the benefit of all, would presumably occur… Technology is no bar to contracting, it is transactional considerations that are decisive” (Williamson, 1975: 17). Taking as our starting point the surveys conducted in the machine tool industries in France, Germany and Japan, we would like to show that specialisation and diversity of activity depend on the type of articulation between firms and organisations in what we have called their industrial space, which might be defined as the whole set of complementary and therefore interdependent relationships between firms and these organisations, including factor and product markets. 3.1 The firm-client linkage The most obvious of these links is that created by the market itself, the relationship with customers. In a market analysis it is given theoretical expression in the firm’s demand curve, the relationship between price and quantity for a differentiated product. In the case of the machine tool industry studied in the abovementioned surveys, this demand comes from the needs and requirements of industrial users. The French machine tool industry adapted to this demand and oriented its output towards, on the one hand, African and Eastern countries, where low skill levels in the labour force made it necessary to produce machines that were easy to operate and, on the other, towards protected national markets, such as the aeronautics, motor and defence industries. This is why French machine tool manufacturers specialise in both simple and top-of-the-range machines, albeit with small production runs in both cases. This adaptation to the needs of particular users also reflected the low market share of the French mechanical engineering industry compared with Germany. In this latter country, the machine tool industry, by virtue of the size of the mechanical engineering industry as a whole, not only had a market that was twice as big but also exported throughout the world. The expansion of the market gave rise to both diversity (presence in all markets, selling all types of machines) and to specialisation: each producer specialises in certain types of machines (lathes, milling machines, drilling machines etc.), while most French firms produced smaller quantities, often of several different types of machines adapted to the needs of each customer (Maurice and Sorge 1989).

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3.2 The linkage between craft production and industrialisation One characteristic of the machine tool industry in all countries is its strong artisanal tradition, certain elements of which are still evident. They include a high share of skilled workers and engineers, the importance of the relationship between design and production, the small size of firms, many of which are family owned (few have more than 1,000 employees), small or medium-sized production runs and a gradualist approach to the introduction of new technologies (hydraulic, pneumatic, electrical, electronic) based on internal adaptation rather than onceand-for-all breaks with the past. This approach to new technologies is not unconnected with the generally high skill levels. How, from its artisanal base, did the industry evolve in each country? In Germany, production runs are larger (Perrin and Real 1976) and the industrialisation of both product and production process is more pronounced. This accords with the principles of economic theory on the relationship between size of market, specialisation and industrialisation. However what is revealed by societal analysis is that the size of the market (the external market was, after all, open to French producers as well) was determined in France by the national industrial space, by the demand for a core of large and, in particular, state-owned firms, operating in a protected market with welldefined characteristics (aeronautics, defence, cars); as a result, the machine-tool industry tended to become entrapped in the manufacture of specialist machines, produced in small runs and compatible, if not with artisanal structures, then at least with small firms. This characteristically French form of articulation between artisanal production and industrialisation popularised the notion of filière (literally “web”) which, in its accepted meaning, refers to the privileged exchanges between industries or groups of industries and to the technological complementarities that reflect the constraints of a particular production process: “The notion of filière emerged as an economic category supplementing that of industry”. One might talk, for example, of the electrotechnical filière (Toledano 1978). It clearly reveals the nature of the industrial space in which French machine tool manufacturers operate. The French machine tool industry functions in a manner close to monopolistic competition, with each firm surviving by producing a differentiated product, adapted to meet a specific demand, and depending for its very existence on the user firm not finding more advantageous substitutes. The situation is completely different when the producer firm is confronted with a large, diversified market of user firms, like that in which German mechanical engineering firms operate. In this case, specialisation and economies of scale combine to enhance firms’ performance. True, these differences between the industrial spaces can be explained by historical contingencies (in France, for example, the emphasis placed by the State on the development of the aeronautics and defence industries, and in Germany the conquest of a large export market),

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but the essential thing is to understand how industrial spaces, qualificational spaces and organisational spaces are articulated. 3.3 The linkage between specialisation and diversification One characteristic common to both the French and German machine tool industries is specialisation, although it takes different forms in the two countries; one characteristic of Japanese firms, or at least the larger ones, is diversification. This characteristic poses a problem for economists: although diversification reduces risks for a firm in the long term, it increases them considerably in the short term, since it eliminates the advantages of specialisation. Over a more or less long period, diversification is costly and tends to reduce profitability. It makes it necessary to modify a firm’s internal operations, and possibly even to restructure the whole organisation: failure occurs if the organisation does not adapt to the new policy. Chandler in “Stratégie et Structure” stresses this point: the organisation of the firm must be adapted when it starts to produce several products: decentralisation of decision-making powers and the substitution of an operational structure (based on product lines) for a functional structure (Parent 1975). Under these conditions, a firm can reap the benefits of diversification (economies of scope). The problem then is how to understand what determines the choice between the two strategies. While it is true that machine tool production is nowhere confined to specialist firms (in France, car makers, aeronautics companies and telecommunications firms produce some of their own machines), it is much more common for Japanese firms in this sphere to be involved in a range of different activities. More than half of the firms engaged in the manufacture of metal machine tools are involved in other activities. On the other hand — and this is a specifically Japanese characteristic — subcontracting in this area is much more widespread than it is in France. It involves a considerable number of very small firms (more than 1000 of them have fewer than 30 employees, classified as “establishments” in Japanese statistics) (Nohara 1987; Maurice et al. 1988). This is further compounded by the practice of creating networks of subsidiaries around large parent companies, with the largest ones actually consisting of groups of autonomous but interconnected companies. This diversification of production and of the sources of production creates a particular kind of industrial space, characterised by proximity or even intermingling between producers and users. This blurring of the distinction between specialisation and diversification explains one of the characteristics of the Japanese machine tool industry. Unlike their French counterparts, Japanese machine tool manufacturers tend not to design special machines adapted precisely to meet customers’ needs; rather, they take standard, relatively unsophisticated machines as a basis for designing related equipment or peripherals intended to make the

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machines easier to use or more efficient. These modifications are implemented on the customer’s premises not, as might be imagined from knowledge of French firms, under the supervision of engineers and technicians working in a technical department or methods office, but on the shop floor, where engineers and machine operators work closely together. Thus the diversification of Japanese firms seems to be a choice linked to their type of “qualificational space” (high capacity for cooperation produced by firm-based cooperative training). 3.4 The linkage between research and production Finally, account has to be taken of the linkage between research and development and production. This linkage takes a particular form in each country: predominantly publicly-funded research in France, university-industry links in Germany, predominantly firm-based research in Japan, where most firms with more than 1,000 employees in the electronics industry devote almost 5% of turnover and 12.5% of their workforce (permanent and temporary researchers) to R&D. However, it is not simply a question of a volume effect. H. Nohara (1987) points to the following characteristics of large Japanese electronics firms: 1.

2.

3.

the close links between R&D and production, which impart technical continuity and coherence to the innovation process and find concrete expression in the job stability and internal mobility that characterise engineers’ careers (p. 41); the type of diversification strategy adopted, involving the creation of a network of subsidiaries around the parent company which provide a basis for mobilising the firm’s or group’s internal resources (p. 47); the interaction between this form of diversification and competition in the industry as a whole: since all firms operate in virtually all areas of the electronics industry, “catch-up” innovation, as opposed to “clean-break” innovation, is encouraged by the transmission of knowledge (p. 59).

Thus the capacity for innovation associated with the wide range of activities undertaken by Japanese firms seems to be based on the link between the mode of human resource mobilisation and the form of company organisation and activity, which constitutes a distinctive combination of structure and strategy in which it is difficult to state, as Chandler does, which determines the other: the strategies of the various actors (workers, engineers and managers) develop through the creation of efficient qualificational and organisational spaces (at the firm, group and industry level). In this model, large firms play a decisive role by virtue of their R&D capacity. However, this is not to say that there is “one best way”. Other forms of linkage between production and R&D can also be effective.

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In this connection, it is worth recalling Alfred Marshall’s observations on the small entrepreneur: “And though he must always remain at a disadvantage in getting information and in making experiments, yet in this matter the general course of progress is on his side. For External economies are constantly growing relatively to Internal in all matters of Trade-knowledge…” (Marshall 1891: 343); in other words, “public goods” outmatch private goods (Dosi 1988). From this point of view, the separation between universities and industry in the French model has the advantage of producing an abundant supply of high-level engineers who are made available to firms through the market, with zero transaction costs: since the supply is not organised (except in so far as pay determination may be influenced by the differentiation between university engineers and those produced by the grandes écoles), the suppliers have no incentive to develop an opportunistic attitude of desertion. The problem in French firms is not so much the separation between research and industry in the wider society but rather the failure to link the research and production functions at firm level. In Japanese firms, at least the larger ones, this problem is resolved by socialising engineers by putting them to work on the shop floor, that is by using organisation to construct a qualificational space. French engineers trained at the Arts et Métiers engineering school undergo the same kind of socialisation, but it takes place in the school and at a lower technical level than that of the grandes écoles. This example again reveals the importance of the construction of the qualificational space, which determines not only the propensity to cooperate but also the ability of the organisation to outperform its rivals in the market and to reduce its transaction costs.

4.

The innovation function

The central issue here is the appropriation of new technologies, a fundamental question in comparisons of the efficiency of firms and for the theory of firms’ development. It is a central question in theories of the “evolutionary firm”, whose proponents (Nelson-Winter 1982; Dosi 1988) stress the notion of “routine”, which provides the basis for the more or less dynamic patterns of behaviour resulting from a set of learning processes. It is the nature of the competences accumulated within the firm that determines, in conjunction with the “environment”, the available “technological opportunities”, the market, financial resources etc., the behaviour of individuals and the paths they are going to follow (”path dependency”). This set of internal and external characteristics form the foundation on which a typology of firms can be constructed (Coriat, Weinstein 1995: 131). The description of the characteristic elements of the firm in evolutionary theory sheds little if any light on the source of these elements: where do “rou-

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tines” come from? How do learning processes develop? Here again, the qualificational space is the key explanatory notion in societal analysis. We will demonstrate this by referring once again to the LEST surveys on the evolution of the machine tool industry in France, Germany and Japan following the emergence of the electronic technologies. True, this is a particular case, since the machine tool industry is representative of only one of the various types of industry, whose relationship to technological innovation can vary considerably. However, the changes stemming from the electronics industry that have impacted on the machine tool industry have created links between what G. Dosi calls “specialized suppliers” (machine tool manufacturers) and a “science-based” industry (the electronics industry) that are now so highly developed that the two industries have merged into one, a development recognised by the term “mechatronics”, coined by the Japanese. Incidentally the problem concerns not only the producers of machines, but their users as well. Moreover it makes it possible to highlight the importance of the industrial space in which firms function and evolve: the relationships between mechanical engineering and electronics firms in that space will largely determine the appropriating capacities of those firms. Many factors come into play in the gradual process of harnessing new technologies: technological bottlenecks, scarcity of essential inputs (or conversely, an abundance of particular inputs, e.g. energy, raw materials), the characteristics of the price systems and the types of industrial conflict. “Where the critical stimuli come from, depends on the nature of the technologies and the economic institutions and context of each country, but patterns of innovation tend to follow rather irreversible trajectories defined by specific sets of knowledge and expertise” (Dosi: 1144, 1145). The object of societal analysis is to analyse the content of these national contexts and sets of knowledge and expertise through the characteristics of the “qualificational and industrial spaces”. We will examine the influence of these spaces on adaptation to technical change in France and Germany, and then in France and Japan. 4.1 The case of France and Germany The history of the integration of numerical controls into the machine tool industry is very different in France and in Germany. In the German industry, at least in larger firms, the internalisation of electronic and computer-based control technologies and of computer-assisted design and manufacturing (CAD/CAM) is significantly more pronounced and lasting than in the French industry. In many cases this advance was made in order better to adapt the basic innovations in electronics and information technology to the established trades in the machine tool industry without disrupting the organisation of the factory floor too much. Thus a growing network of CAD/CAM departments began to emerge in machine tool companies, as well as computerised

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networks linking manufacturers with electronics suppliers and specialist intermediate companies. The scale and durability of this advance cannot be explained solely by the availability of finance or by size of firm, which is higher on average in the German industry and is by no means a negligible factor. The explanation lies rather in the particular organisational structure of German firms, in which the “qualificational space” is based on skilled workers, in complete control of “their” machines, and on technically competent shop-floor supervisory staff. The technological and economic strategies adopted by firms, as well as their success, depend on a particular concept of industrial work in the mechanical engineering and related industries. It is true that, with the introduction of NC machine tools, the division between “technical” functions and shop-floor functions became less rigid in both countries (Maurice et al. 1989, Sorge 1991). However, this blurring of distinctions took place in very different ways and to the benefit of different categories of actors. In France it would seem that production and control functions were technicised from the top down. For example, a new breed of foremen and supervisors emerged, better trained technically but no longer necessarily recruited from the manual categories; similarly workers in occupational categories requiring a more technically advanced level of initial training began to be recruited for production supervision and machine setters’ jobs. Skilled manual workers seem to have found it more difficult to take advantage of the programming functions associated with the CNC system in order to retain their occupational autonomy. Thus the beneficiaries of the introduction of numerical control in France tend to be “shop-floor technicians” and the new breed of supervisory staff with a higher level of technical training; however, this latter group is increasingly unlikely to have been recruited from the skilled manual categories (Maurice et al. 1986). To overstate the case a little, it might be said that in Germany a CNC machine is considered to be properly used if it performs well under the control of a skilled worker (Facharbeiter); in France, on the other hand, it would seem that, in order to adapt to higher-performance machines, it is necessary to replace shopfloor manual workers with people with a higher level of technical training. French firms tend to recruit specialised and advanced technicians, which does not help to improve communication on the shop floor. These different sets of principles determining the use of new technologies were transmitted from the users of NC machines to the producers. Thus the principles determining their use in German firms led machine tool manufacturers to internalise the new electronic technologies in order to produce manipulable control systems. In France, on the other hand, the greater inequality of participation in the more technical functions seems rather to have led manufacturers to

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accept undoubtedly high-performance NC systems designed to be operated by technicians. Users, manufacturers and suppliers in each country operate in accordance with different sets of underlying principles that influence their technical and socio-organisational “choices”. It is the greater degree of separation between manual and technical functions and careers in France that explains the current trend towards the top-down technicization of the shop floor through the addition of successive new categories. In Germany, the inherent technicity of the construction of skilled workers seems, conversely, to have provided the impetus for the predictable development of the technicity of the shop floor. This helps to explain why that technicity developed in different ways in the two countries: through structural stability and changes within the existing occupational categories in Germany and through discontinuity and restructuring in France. Thus the design of NC machines and systems goes hand in hand with the construction of the actors. In order to explain the technical strategies adopted by the actors in the machine tool industry, the interdependencies between the structure and evolution of occupational categories and the division of labour among users must be taken into account. Machine tool manufacturers highlight this interaction all the more since they are both producers and users of machines. 4.2 The case of France and Japan The question already addressed in 3.4 above will be examined here from the human resources perspective. The introduction and development of flexible technologies have raised a number of similar questions for French and Japanese firms. Who should take charge of programming? What type of manual worker should be chosen as machine operators and how should they be trained? How should shop-floor supervisory staff adapt to this new production system? How should the work being done on NC machine tools and that still being carried out on conventional machines be jointly managed? How should the maintenance department be structured? How should the relationships between the tooling and methods departments be organised? Should programming be incorporated into the methods department? In Japan the question of creating closer links between the technical departments and the shop floor does not seem to have been raised, at least not in the terms in which it was raised in France as part of a wide-ranging debate on the effects of the new technologies on the organisational structure of the firm and skill content. (Cf. Sociologie du Travail, no. 4, 1984, “Nouvelles technologies dans l’industrie, l’enjeu des qualifications”). Firms’ practices tend to eliminate the “boundaries” between departments and categories of actors, both through the mobility of the actors themselves and their interrelationships and through the presence on the shop floor of “contacts” or “outposts” of the technical and

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organisational departments (e.g. methods). In French firms, the compartmentalisation of departments and functions is based more on administrative and sectional considerations that tend to create individualised and specialised productive capacities and to produce work places that are closed in on themselves. Undoubtedly, as we have seen, new actors are emerging, with new technical professionalities that may well bring the competences and productive capacities of engineers and those of manual workers and shop-floor supervisory workers closer together. Usually, however, what takes place in Japanese firms through internal development processes and the transfer of local knowledge and skills between actors tends to happen in French firms through the creation of new occupational groups that make it necessary to recruit directly in the external labour market. This has had adverse effects on the quality of work relations and the continuity of the qualificational space. In the Japanese system the various categories undergo a firm-based learning process that constitutes the basic professional socialisation common to all the actors. In French firms formal qualifications serve rather to reinforce stratification, and firms have not yet proved themselves able to develop internal training programmes as extensive and systematic as those in which Japanese firms invest so heavily, even though they often make use of a form of on-the-job training which does not correspond fully to the French notion of such training. Finally the ways in which the actors in the firm appropriate the productive potential of “new technologies” seem to be closely related in both countries to both the construction of their professionality and to the constitution of the work and organisational spaces within which their productive capacities are formed and developed.

Conclusion The societal effect is constituted by the interaction between industrial space, qualificational space and organisational space: the contribution to the theory of the firm. Comparison of the French situation with that in Germany and Japan reveals the importance of the degree of homogeneity in the professionality of the various actors who contribute to productive efficiency and innovation in a given industry; this is what is denoted by the notion of “qualificational space”. This notion is linked to that of “organisational space”, since the degree of homogeneity in the actors’ professionality is linked in turn to the methods of training and work organisation. It is also very closely associated with the notion of “industrial space”, to the extent that it forms part of the basis for the whole set of articulations and cooperative relationships between categories of actors, both within and between firms (producers and users of machine tools, for example) and between firms and the private and public agencies that contribute to the development and

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diffusion of technological innovation (professional bodies, research centres, universities, engineering schools etc.). These interdependencies produce a certain degree of coherence that may give rise to rigidities and obstacles to transfers of technology. However, such rigidities are never absolute. Thus in the societal approach the firm is analysed in terms of the spaces (qualificational, organisational and industrial) in which it evolves and in which the actors operate. These spaces extend beyond the confines of the firm: the qualificational space stretches from the school system — or even from the social origins of individual workers in their families — to the entire education and training system inside and outside the firm. Undoubtedly this can be regarded as a simple transposition of the notion of human capital. However the difference is fundamental: the formation of human capital, determined in essence by calculation of the rate of return on investment, is analysed as a programme of investment by or in individuals, in spheres such as education, health and mobility. A firm’s human capital is the sum of the capital accumulated by the individuals that constitute the firm. What analysis of the qualificational space makes it possible to integrate into the analysis is the fact that the social relations between actors exert their own influence. The accumulated volume of expenditure on training in German, French and Japanese firms can be compared, as can be done with comparisons over time, in order to explain differences in productivity (“why growth rates differ”, as Denison puts it). However, neither the number of years’ schooling nor the volume of expenditure on training can provide a satisfactory basis for comparing productive capacities, since differences between countries in this respect are the result of differences in vocational training systems. In one country, manual workers, supervisors and engineers cooperate with each other more easily because they have all been through the same training process, while in another the training received by the different categories tends to separate them, particularly since this differentiation in training also gives rise to a clear demarcation between executant and planning functions. Nor can differences in training costs or in job allocation be used to compare, on the one hand, a situation in which workers with a given level of training are integrated into the firm by being allocated to an executant, organisational or supervisory job corresponding to that level of training and, on the other, one in which workers are integrated by being allocated successively to jobs in all the various phases of the production process, irrespective of their level of training. In both cases the form of training is linked to the organisational space. These examples also show where societal analysis locates the source of the “commitments” which are, for Leibenstein, the essence of the firm: in the construction of the actors and the type of socialisation they undergo. When Stigler argues that the firm can be viewed “as engaging in a series of distinct operations: purchasing and storing materials; transforming materials into semifinished products and semifinished products into finished products; storing

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and selling the outputs; extending credit to buyers etc. That is, we partition the firm not among the markets in which it buys inputs but among the functions or processes which constitute the scope of its activity,” he observes that “the cost of one function may depend upon whether the preceding function took place immediately before or in the immediate vicinity, as when hot ingots are processed with a saving of heat” (Stigler: 121–122) The costs of the various functions interact with each other. Is this not, in essence, what the societal approach highlights by observing, through analysis of qualificational and organisational spaces, that each of the various functions that constitute the system of work organisation (design, execution, maintenance, etc.) has an efficiency (or cost) related to the type and method of work organisation. The numerous remarks made to researchers in French, German and Japanese mechanical engineering firms on the appropriation of new technologies through the compartmentalisation of the various functions and actors in France and the lack of boundaries between them elsewhere are not without analogy with Stigler’s example of the link between the production process and the rolling of ingots. Over and above this analogy, however, societal analysis highlights the origin of the interrelationship between functions, namely the differences in the process of socialisation through which the actors in the firm are constructed in the various countries. The principles determining the combination of functions are a product of the particular type of socialisation: the relations between engineers, technicians, machine setters, skilled workers and unskilled workers differ because they are not produced in the same way: “usually, what takes place in Japanese firms through internal development processes and the transfer of local knowledge and skills between actors tends to happen in French firms through the creation of new occupational groups that make it necessary to recruit directly in the external labour market” (Maurice et al. 1988: 371, 478). The organisational space adapts to the new technologies in accordance with the characteristics of the qualificational space. Furthermore, the characteristics of the qualificational space may influence firms’ actual technological choices. This is especially evident in firms in which skill levels are low. In one of the French mechanical engineering subcontracting firms surveyed by the LEST team, “the director took the view that inadequate skill levels ruled out investment in training as a means of adapting to the new technologies. He had decided to go down the route of introducing further automation into the production process by installing a flexible workshop. The engineer saw this new installation as a means of “getting manual workers off the machines: we could just retain a core of skilled manual workers in charge of maintenance and tools” (Maurice et al. 1988: 358, 478). In the corresponding Japanese firm (where the level of training and supervision is relatively low in comparison with

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the other Japanese firms surveyed, but higher than in the French firm), the practice of using more experienced operators to train young operators has led to a gradual increase in overall skill levels. By encouraging mobility between the various functions and the inclusion of programming among routine machine shop tasks, the training system has made it possible to develop competences. In comparison, “the French firm seems to be more attracted to technological changes, which it sees as the solution to its labour problems” ((Maurice et al. 1998: 358–9, 478), as if such changes were a means of eliminating the internal transaction costs associated with the low quality of the qualificational space. For Williamson, “the prohibitive cost of contracting is what explains the decision to integrate; transaction costs explain both the decision to switch from the market to the firm and, within the firm, they also explain the form of organisation that will be chosen” (p. 84). Under the conditions required for perfect competition, one of which is the existence of a “large number” of traders, it is impossible permanently to deceive rivals (when a new contract is concluded). However, when there is only a small number of traders, i.e. when the choice of cocontractors is limited, then it is in the interest of each party to seek better trading conditions, the most effective of which is to monopolise certain information (information impactedness). Transaction costs then rise, giving firms an incentive to withdraw from market exchanges in order to integrate into one organisation operations previously the subject of transactions in the market. In the example cited — the ways in which firms adapt to new technologies — the tendency indeed is to replace exchange with an organisation that removes the need for it, or at least completely changes trading conditions. However Williamson’s explanation in terms of transaction costs forces him to make the emergence and intensity of the underlying factors (bounded rationality, uncertainty-complexity, opportunism, small number of traders) dependent on a general phenomenon he calls “atmosphere” (p. 37–40): “the reference to atmosphere has the advantage of expressly raising system considerations: what attitudes prevail, how are they influenced by the nature of the transactions and with what spillover consequences?”. In societal analysis it is the construction of the qualificational and organisational spaces, which takes place in a specific way in each society, that makes it possible to identify and understand the conditions under which transactions take place, cooperative behaviour develops and the level of commitments and conventions is determined. One characteristic common to modern theories of the firm is that the firm is conceptualised as a nexus, a network, a chain of contracts or of commitments (a nexus of treaties), whether it be Leibenstein’s “commitments”, Williamson’s “transaction costs” (of contrasts) or Aoki’s “horizontal coordination”. However, these authors clearly realise that the systems they have constructed can function

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only under certain conditions: a feeling of shared objectives (Leibenstein), atmosphere (Williamson), a vertical hierarchy that engenders confidence and authority (Aoki). As for agency theories or theories of ownership rights, everything depends on the organisational structure of ownership rights. In all cases, the firm consists of a set of contracts, but the efficiency of the whole depends on what the firm is and what happens within it, which for economists is influenced by the environment or national cultures — in other words, exogenous factors. In the societal approach the firm tends to be analysed not, or not solely, as a set of contracts or a production function but as a collective actor whose efficiency depends on a number of determinants that can be analysed separately but work in interaction with each other. The action of the individuals and groups that make up the firm depends on the quality of the social relationships that bind them together, and it is on analysis of the nature of these social relations that the societal approach concentrates. These social relations, through which individual and collective actors and the relationships between them are constructed, find expression in the notion of (occupational, organisational and industrial) spaces. The actors are constructed by the training they receive and the way in which they are integrated and shaped within the organisation, which constructs relationships between the actors based on cooperation, competition or negotiation. The relations are constructed by the firm, but the construction process is based on the social relations it inherits when it hires individuals constructed in the wider society, notably in the education system, which itself depends on demand from firms and the social structure (60% of German skilled manual workers are of working-class origin, compare with 40% of their French counterparts). The construction of both individual and collective actors — the firm being one of these actors — takes place through a process made up of a sequence of interdependent operations: the organisation depends on the education and training system and on the social structure and helps in turn to determine them. In this way, spaces, processes and actors are constructed which determine the quality of social relations in the firm. Thus it can be said that the firm is conceived as an element in society — hence its specificity —, but that the nature of that specificity can be analysed on the basis of fundamental principles, namely the types of social relations, spaces and processes that comparative societal analysis has helped to identify.

Chapter 10 Explaining changes in institutional frameworks Societal patterns of business coordination David Soskice

1.

Introduction

This chapter looks at how research on which I have been engaged may be useful in extending the approach of the Societal Effects school in a number of directions. My work is outside the organisation theory literature, and is heavily influenced by both political economy and the economics of organisation. Nonetheless the importance of the Societal Effects approach for work such as mine cannot be underestimated. In the 1970s and 1980s comparative political economy concerned itself almost exclusively with institutional factors outside the company — the company was a “black box”. The focus of interest was (and to a lesser degree still is) on the effects of institutions on macroeconomic variables, mainly unemployment and inflation. And the developing theories of the economics of organisation were (and to a lesser degree still are) almost completely unconcerned with the external institutional environment in which the company operates. In showing how companies organise themselves within their national institutional context, the Societal Effects approach provides the bridge between a political economic analysis of institutions and an economics of organisation analysis of company behaviour. In terms of extending the Societal Effects approach, comparative political economy permits an understanding of how and why institutions change. This is discussed in Section 3. The potential contribution of the new economics of organisation is less straightforward. Two general points can be made. First, it is of great importance that economists understand that societal effects on company organisation matter. But economists are notoriously resistant to arguments that are not put in the language of economics. In fact many of the most important

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arguments made by industrial sociologists can be translated into the language of the new economics of organisation. Second, while some aspects of company behaviour are missed by an economics analysis (it cannot account for the chaos, the trial and error, and the irrationality which characterises the life of most companies), it brings into centre-stage phenomena which other approaches play down. One example is the role of the financing of companies and the problems which asymmetric information poses. Thus, although I focus in this chapter on the dynamics of institutional change, the new economics of organisation has something to offer. My research has sought to model different so-called “varieties of capitalism” or more accurately “production regimes”. To what extent can — at least at a very broad level — the way in which companies organise their activities in different advanced economies be explained in terms of the national institutional frameworks in which they are (or choose to be) embedded? If an equilibrium — again speaking very loosely — can be established between company organisational structures and national institutional frameworks, to what extent are there groupings of economies with broadly similar or comparable company/institutional-framework equilibria? If so, what explains why a particular economy belongs to a particular grouping? And what explains how institutional frameworks have changed over time? The Societal Effects school first showed that there can be equilibria relating company behaviour to institutional frameworks on a national level. This owes much to the pioneering work of the Aix-en-Provence approach, initially comparing the French and German cases, (Maurice, Sellier and Sylvestre 1986). Subsequent work then brought the UK into the comparative picture, and Sorge showed how a broader approach could be developed (Sorge and Warner 1987; Sorge 1991). Sorge and Streeck mapped out quite precisely in the German case the links between the incentives and constraints imposed by the industrial relations framework and the vocational training system on the one hand, and the choice by companies of diversified quality production as a market strategy which met the requirement of secure employment of a skilled and cooperative workforce on the other (Sorge and Streeck 1988; Streeck 1991). Comparative Political Economy: Closer understanding of differences between national institutional frameworks across economies, and how institutional frameworks can be analysed from a conjoint institutional and policy perspective came from the work of a number of American scholars writing in the 1980s (Zysman 1983; Katzenstein 1985; Hall 1986). While the work of all three scholars has been of great importance, Hall showed the methodological importance of the analysis of institutions as bearers of history: his “historical institutional” methodology has informed much subsequent work. A closer reading of Hall also reveals a preoccupation with bridge-building between historical institutionalism and rational choice. Hall’s widely cited work has thus provided a

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methodological foundation of much that has followed; and it has acted, with the work of Zysman and Katzenstein, as a bridge from the macro-economic and wage-bargaining preoccupations of the Corporatist literature to a world in which micro-economic institutions have become of importance. In this perspective the more recent work of Regini and Thelen should also be mentioned (Thelen 1991; Regini 1995). New Economics of Organisation: How is a company to be conceptualised, and how precisely is it to be seen as responding to the incentives and constraints of the institutional frameworks in which it finds itself? The new economics of organisation represents a theorised synthesis of insights from transactions cost analysis, principal-agency theory, and property rights approaches, embedded in game theory and micro market analysis. Clearly and accessibly presented by Milgrom and Roberts (Milgrom and Roberts 1992), it sees the company in terms of top management: top management seeks to pursue product development, production and marketing strategies. In so doing it faces problematic relations with employees, with other companies and with its owners and financiers. These problems stem from incomplete contracts, asymmetric information and generally non-aligned incentives. Their solution may require the building of appropriate long-term career incentive structures (how skills are acquired, promotions gained, etc), or short-term performance related incentives. As Kreps has shown this can be closely related to the idea of “company culture” (Kreps 1993). Aoki develops many of these concepts in analysing Japanese companies within their institutional framework (Aoki 1994).

2.

Groupings of advanced economies

Production regimes of most advanced economies at the end of the 1980s and in the first half of the 1990s fall into one of two main patterns.139, 140 The first main pattern, referred to as Business-Coordinated Market Economies, or CMEs, includes most Northern European economies (such as Germany, Sweden, Switzerland)141 and in a different variant Japan and South Korea. In these economies there is considerable non-market coordination directly and indirectly between 139. The chapter does not consider either newly industrialising countries, or the transformational economies of Eastern Europe, or the less developed European economies, Spain, Portugal, Greece and Turkey. 140. This division of production regimes appears in Soskice (1990) and Albert (1991). A fuller version of the argument of the chapter is available in Soskice (1999a). 141. Italy is a complex case, northern and central Italy having many similarities with the CME pattern. The Italian case is analysed most persuasively by Regini (1994, 1995); its complexities are well brought out by Locke (1996). In this chapter, it will be treated as a Northern European type CME.

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companies, with the state playing a framework setting role; and in all these economies, in one form or another, labour remains “incorporated”. This pattern involves close coordination between companies, with the state being able to negotiate with companies collectively the framework in which individual companies operate. The second main pattern, which will be referred to as Uncoordinated or Liberal Market Economies (LMEs), consists of the Anglo-Saxon economies and Ireland. Here, there is little non-market coordination between companies; labour has been progressively excluded; and the state plays an arm’s length role.142 2.1 Coordinated market economies The CME pattern has two variants, one relating to Northern Europe and the other to Japan and South Korea. Again the distinguishing feature of each variant lies in the different underlying ways in which coordination between businesses takes place. In the Northern European variety (which Albert (1991) refers to as Rhennish) the most fundamental patterns of business coordination take place within the industrial sector or branch. This variety will be called Industry Coordinated Economies. Such economies permit industry-defined unions, technology transfer and diffusion with the industry, technical norm-setting within the industry, as well as training of engineers and other high level specialists within an industry technology framework, and industry-based development of vocational training standards. In the other variety (Albert’s “Nippon” capitalism) the more intense coordination between companies is within the group of companies, within vertical and horizontal Keiretsu in Japan and Chaebols in Korea: in these economies coordination between large companies in the same industry is more restrained, reflecting in fact strong industry-based competition particularly between large companies. Thus in these Group Coordinated Economies we find: company-based unions, technology diffusion and development within the group of companies, technical standard-setting with the group, and vocational training being a company-based and not an industry-based phenomenon. 142. A third, quite different pattern is that of France; this is only discussed briefly in this chapter. France has a pattern of its own which we will call a State-business-elite Coordinated Market Economy: This third pattern is more in the course of transition and uncertainty than the other two. Again according to our general approach, this pattern is differentiated from the others by the nature of business coordination. Here much of business coordination takes place through the networks of the elite of business leaders whose careers have interpenetrated public and private sectors and which includes senior civil servants. Thus in this type of coordination the state may be directly involved with individual companies. Companies can coordinate their activities, that is to say, but not independently of the state: the state is not at arm’s length from individual companies. Here, as in LMEs, labour has been progressively excluded. Much of this argument has been developed by Hancké (1997a, 1997b); a synthesis is in Hancké and Soskice (1996).

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The institutional frameworks in the CMEs (both industry- and group-coordinated) tend to encourage the development of long-term cooperative relations, between one company and another, between companies and employees, and between companies and their owners. Their institutional frameworks share the following characteristics: a. financial systems which allow long-term financing of companies; b. industrial relations systems in which unions play an important part and which allow cooperative industrial relations within the company and coordinated wage bargaining across companies; c. education and training systems which encourage serious initial vocational training of young people and in which organised business and/or individual companies are closely involved; d. inter-company systems which enable substantial technology and standardsetting cooperation to take place between companies. Focussing just on the industry-coordinated market economies of Northern Europe, the importance of industry coordination can be seen as follows. Training and technology transfer (and the related standard-setting of training requirements and of technical product standards) take place within primarily industry-based organisations. The same is true of industrial relations. Monitoring in the system of corporate governance uses suppliers, customers, associations and research institutes with close industry links. Business and employer associations and industry unions (and in some cases chambers of industry, commerce, handwork and/or labour) are key actors. Employee representative bodies in companies have close links with industry unions; top managers have close links with business and employer associations. This is not, however, a purely industrial system of coordination. In each industry-coordinated economy, the industrial coordination is tied to a greater or lesser degree into a national framework. Vocational training and employee representation are normally the objects of framework legislation, with the aim of cross-sectoral uniformity of practices, and are supported by labour courts and expert standing committees, with strong associational activity in both.143 In most economies (not Italy) the government plays a role in setting a framework for technology transfer, through research institutes and higher education; again the business associations at national level are involved with sectoral organisations in policy-making (though nowadays the unions play a much less significant part). Wage-setting is coordinated by unions and employer associations across sectors (in each country, including Italy and also Sweden and Denmark — despite the break-up of national bargains). There is a great deal of exchange of information across sectors through the corporate governance system, with banks playing a key 143. Italy is an exception on vocational training.

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role. And the neo-corporatist recent past of these economies is far from dead: there is within limits representational monopoly of interest groups and a framework in policy-making to allow for that role. Finally, there are strong interlocking complementarities between different parts of the institutional framework. Each system depends upon the other systems to function effectively. A starting point is the conditions for an effective system of initial vocational training in company-specific and industry technology skills and in which companies make serious investments. This requires: long-run finance, since the return on the investment is a long-term one; coordinated wage-setting, to minimise the risk of poaching, and cooperative company-level industrial relations to ensure cooperation from highly skilled and hence powerful employees; and cooperation between companies in technology transfer and standard-setting, to develop agreed industry technologies which form the basis for skill development and certification. Long-run finance requires the ability on the part of owners (or their delegated monitors) to have good information about the potential performance of companies and their competences; in a world of substantial industry technology skills banks do not have the expertise to monitor companies directly; instead close relations between companies, business associations and research institutions are needed.144 Cooperative industrial relations within companies require that companies can credibly commit to long-run relations with employees, which in turn requires long-term finance; it also requires highly skilled employees so that companies will be concerned not to lose them. Each element of the institutional framework thus reinforces the others. Note that this is neither a functionalist argument (different frameworks coexist), nor does it rule out change (Section 3). But it gives a partial reason for there being only a limited number of possible constellations of institutional frameworks. 2.2 Uncoordinated market economies The second main pattern which consists of the Anglo-Saxon economies and Ireland will be referred to as Uncoordinated or Liberal Market Economies (LMEs). Here companies have little capacity to coordinate their activities collectively. Their inability to act collectively means that they cannot combine to negotiate discretionary framework solutions with the state. The state, with all its panoply of actions from legislation to quasi-public agencies, is seldom able to change the institutional framework in which companies operate in ways which cannot be enforced in the courts. Thus the Liberal Market Economy state — like the Coordinated Market Economy state — is at arm’s length from the individual 144. Industry coordinated economies differ in this respect from group coordinated economies. In group coordinated economies banks have greater expertise and assume more direct monitoring functions.

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company; but, unlike the CME state, it cannot work out frameworks with business collectively. The institutional framework, emphasising market deregulation, favours shorter-term and more competitive relations: a. financial systems which impose relatively short-term time horizons on companies, but at the same time allow high risk-taking; b. industrial relations systems in deregulated labour markets which discourage effective employee representation within companies — hence weak unions, but which facilitate unilateral control by top management; c. education and training systems which emphasise general education, discourage long-term initial vocational training but encourage subsequent bit-by-bit skill acquisition, especially for those with sufficient general education; d. inter-company systems which impose strong competition requirements and hence limits on possible cooperation between companies. As with CMEs, the institutional framework is national. The main features of the framework are underpinned by national legislation. Also, as with the CME framework, there are strong complementarities between different components: shorter term finance requires companies to be able to move quickly out of old and into new activities, hence requiring low cost hiring and firing; and also the capacity to attract in those with appropriate skills, requiring no constraint on wage setting. Because of the need to be prepared to move more frequently, young people are less prepared to engage in deep vocational training but want instead more general academic education — to be able to acquire skills when necessary. The need for companies to move quickly also makes the constraints of effective employee representation on decision-making costly. And quick movement reduces the ability to commit to cooperative relations with other companies in technology transfer.

3.

Explaining changes and evolutions in institutional frameworks

There are important elements of continuity in institutional frameworks when the 1960s/1970s are compared with the present. That is to say, the American, Japanese or German institutional frameworks of the earlier period are clear enough ancestors of the current corresponding institutional frameworks. Despite that, both institutional frameworks and the strategic choices of micro-agents have changed greatly over the period. Most obviously, all advanced economies have accepted or embraced a high measure of openness in international markets for goods, services and capital. In consequence, institutional frameworks have increased considerably in the flexibility they allow individual micro-agents, in particular companies and owners of capital, in the organisation of their affairs. The chapter will not seek to explain these changes, but rather take them as given.

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3.1 Changes and evolutions The explicanda of the chapter are fourfold: a. Why is there more than one pattern of advanced capitalism? This is the remarkable feature of advanced capitalism in the 1990s: despite liberalisation of international markets, the predicted convergence to a single institutional framework has not taken place. Even those who argue that convergence is happening, only very slowly, must explain why convergence is so slow. Why then have different patterns of capitalism persisted — albeit with many changes — over the past two decades? Of particular importance among the changes in the institutional frameworks have been changes in industrial relations systems. Far from the predicted uniform convergence to a single (deregulated) framework with marginalisation of unions, the changes in industrial relations systems have contributed to a bifurcated convergence of most institutional frameworks on one or other of the two models of advanced capitalism set out in Section 2, the LME-type model or the CMEtype model. Two different shifts have taken place, one relating to those economies which have become LMEs, the other to some of those which have become CMEs: b. Most economies in which business was weakly organised at the start of the period (i.e. those which have become LMEs) had had up to the 1980s more or less extensively regulated industrial relations systems, relatively powerful union movements, and functioning apprenticeship systems — at least for a minority of young males in the private sector; by the early 1990s labour markets in these economies have become substantially deregulated outside the public sector, with weak unions, particularly inside companies, and decimated apprenticeship systems. The main force behind change was government (both of right in the UK and of left in NZ). Quite different evolutions have taken place in economies in which business was strongly organised at the start of the period. c. In almost all economies in which business was strongly organised (i.e. those economies which have become CMEs), unions have remained of importance, particularly as concerns participation in decision-making inside companies; wage-setting has remained coordinated; and initial vocational training, with links to companies, has remained strong. However, within this group of economies there were initially two models, the Scandinavian Social Democratic and the Germanic, of the way in which wagesetting and related macro-economic policy-making worked. The Scandinavian “centralised egalitarian” (or CE) model, was characterised by egalitarian, centralised wage-setting procedures; this had the effect of compressing wage differen-

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tials and hence gave limited freedom to companies to develop internal pay-based career incentives. This contrasts with Germanic or “flexibly coordinated” model, in which average wage increases are coordinated across industries but in which companies retain considerable room for manoeuvre; and in which there is a hard currency monetary regime. d. Within economies in which Business was initially well organised, there has been a convergence on the flexibly coordinated CME model. This reflected major and conflictual episodes in the 1980s over change in institutional frameworks. On the one hand, Sweden and Denmark (and also Italy) switched from Centralised Egalitarian (CE) to Flexibly Coordinated (CME) systems over this period. And on the other hand, the German government attempted unsuccessfully to push the German institutional framework in a deregulated direction in the early 1980s. The main force behind change in the former and resistance to change in the latter was organised business. (There are partial exceptions to the above: Ireland has redeveloped a system of centralised wage-bargaining since 1987 — though unions remain weak and excluded from companies; Australia has moved more slowly towards deregulation than NZ or the UK, and the union leadership has been strategically involved in, rather than marginalised from, this evolution; the Netherlands has deregulated part-time work, though in a controlled way; and vocational training is still much more limited in North and Central Italy than in Northern Europe. In most respects these four countries conform to the general arguments of the chapter, but further work is needed to understand the respects in which they do not.) 3.2 Explaining the changes This sub-section attempts a unified explanation of these changes. It asks first what the critical exogenous shifts were which precipitated the need for changing institutional frameworks. Then it goes into the coordinating capacity of business needed for different institutional frameworks. And finally, the political bargaining game between business, unions and government over the development of institutional frameworks are discussed. 3.2.1 Exogenous shifts This chapter takes as exogenous, first, the liberalisation of external markets. More or less common to all advanced economies, tariffs have been reduced to very low levels and other forms of protectionism and subsidy have become much harder; companies are free to locate where they wish; and financial and exchange markets are open. (The uniform liberalisation of these markets contrasts — as the description in Section 2 of CME and LME institutional frameworks implies —

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with de facto lack of liberalisation and openness in labour markets, in training markets, in the market for corporate control and in R&D markets.) The effect on governments of this “external” liberalisation has been to increase their dependence on the private sector to deliver good economic performance: this is both because governments can no longer protect domestic companies and because Keynesian policies have been made less easy by the openness of financial markets. The effect on companies has been to require them to compete in export markets without government assistance, and to relocate if they wish to. The second exogenous change has been the technological paradigmatic shift as a result of the microprocessor. This technological change, comparable to the development of steam and of electricity, has led since the 1970s to a new and wide set of different production and development strategies for companies. Some key strategies here include differentiated quality production, complex systems, financial Fordism and radical innovation. Of central importance to the argument of this chapter, hierarchical Fordist-type production of goods and services became as a result uncompetitive as a possible product market strategy — short of access to subsidies or other protectionist measures. Different strategies have been facilitated by different institutional frameworks: thus, while DQP strategies have needed a CME-type framework, the others have been facilitated by an LME-type framework. The joint effect of these factors common to advanced economies — external liberalisation and technological paradigm shift — has been: at the level of the company, to adopt product market strategies which are profitable in world markets without government assistance — frequently renouncing classical Fordist methods in consequence; these product market strategies have had to be consistent with the institutional frameworks of the countries in which they located the activity. And at the level of collective actors in each economy (government, business, unions) to bargain out, with a greater or lesser degree of conflict, the reshaping of institutional frameworks. 3.2.2 Feasibility of institutional frameworks and business coordinating capacity The way in which business is organised — its coordinating capacity — plays a central role in the operation of institutional frameworks. Strong coordinating capacity is necessary for the CME-type framework; without business coordinating capacity government attempts to create such a framework will not succeed. That is the topic here. The argument in 3.2.3 is that government cannot create business coordinating capacity (though it may be able to destroy it); typically it takes decades to grow. In 3.2.4 it is suggested that the underlying interests of business negotiators and those of the businesses they represent are in part determined by the pre-existing pattern and degree of business coordinating capacity.

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The meta-game of bargaining out the reshaping of institutional frameworks 3.2.5 thus depends critically upon prior business coordinating capacity. CME-type frameworks: CME-type frameworks permit actors to engage in long-term relationships in which two or more parties behave cooperatively together in the absence of strong monitoring systems. To be effective, companies have to accept three conditions, each of which they will be reluctant to do in the absence of a sufficiently powerful system of business organisation, which they can trust to represent their collective and individual interests: a. Companies have to be prepared to engage in the transfer of information about their technological and skill requirements and competences, if technology transfer and vocational training are to function effectively. In practical terms companies cannot easily pin down contractually or otherwise how information is used. They are unlikely to trust public agencies with potentially sensitive information, and public agencies have limited means of acquiring it without consent. Strong business associations, with a reputation for defending the interests of their members, are necessary for this system to work. b. The institutional framework has to protect companies from the adverse consequences (some form of “hold-up”) of making investments in co-specific assets. The two most obvious examples are relations between a supplier and a final producer — especially of uneven size — and those between a company and its employee representation body. In both cases the development and deepening of a relationship puts power into the hands of the other partner. This is particularly so with the industrial relations field: companies will only be prepared to give unions or works councils an effective position with access to internal company information, and hence a real position of potential power within the company, if the company is quite convinced that in the last resort — in the case of serious problems with the union or works council — there exists an employer association strong enough and prepared to resolve the problem.145 Companies are not prepared to trust governments or public agencies to do this because their interests are different. Again transactions costs typically rule out explicit contractual arrangements governing such relationships. c. The institutional framework is engaged continuously in complex standardsetting, rule-setting and sanctioning behaviour. The individual company, if it is to take advantage of a CME-type framework, will have to make locationspecific investments; thus it cannot costlessly move in response to new rules which affect it adversely. Moreover companies need to be sure that these rules and standards are generally acceptable and imposable: otherwise in145. Note that companies cannot be forced ex-ante into accepting powerful works councils against their wishes, since they can always relocate abroad.

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vestments contingent on them may be unprofitable. Thus the company needs to feel it is effectively represented in these discussions and that other companies are engaged in a similar way. This again shows the need for powerful business and employer bodies and close relations with companies which permit company involvement in rule-setting and company acceptance and understanding of rules which get adopted. In addition, d: Engagement in the research, development and negotiating involved in standard and rule setting, in giving advice to and acquiring information from companies, requires a shared body of expertise linking experts in companies to those in research institutions and those in business associations. The shared (common knowledge) expertise is procedural and precedent-based as much as substantive. It is through this “expert community” that information flows and changes are coordinated (Soskice 1997). LME-type frameworks: These problems do not arise in the same degree in LME-type frameworks, so that extra-market business coordinating capacity is not required. 3.2.3 The difficulty of building coordinating capacity By contrast to the work of political or institutional constructionists, such as Sabel (1993, 1995a,b,c), it is argued here that effective business coordinating capacity cannot generally be built “spontaneously” to service an institutional framework in the ways required in the previous paragraphs. There are three reasons.146 First, effective business coordinating capacity requires that companies have confidence in its ability to solve the problems discussed in 3.2, .i.e. above (inside information transfer, hold-up and fairness). For companies to have confidence in an effective system of representation, negotiation, and development and diffusion of expertise in a complex issue area requires that the system has already built up a reputation with individual companies for carrying out these functions effectively. This takes long periods of time because companies have to see how it works, or they have to accept from other companies who have experienced it that it works effectively. Second, effective business coordinating capacity requires the ability to sanction companies. This in turn requires that companies are engaged in long-term relational contracts with other companies, from which they derive benefit and from which they can be excluded. This therefore presupposes the existence of long-run close ties between companies. Third, the building up of the common shared understandings of procedures, built on precedents, committees, decision rules, and of shared bodies of technical knowledge and procedures concerning research, development, information transfer, and diffusion — the creation in sum of expert communities across associations, research institutions and companies — can only 146. This argument is set out in more detail in Soskice (1999b).

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take place over long periods. For these reasons, then, the capacity to engage in business coordination of any complexity may take a considerable period of time to develop. It is taken as exogenously given in the discussion in 3.2.5. (To this there is one qualification. While business coordinating capacity may take years to build up, it can be destroyed or self-destruct over much shorter periods. It relies integrally on the desire and need of companies to continue: the example of the exDDR part of Germany shows how an institutional framework without company involvement may have little effect. And it is possible that it could be run down by strong anti-cooperation competition legislation forbidding certain types of contacts between companies.) 3.2.4 The interests of business Neither rational choice nor historical institutionalism can justify the view that business has been uniformly in favour of deregulation along LME-type lines in the post-1970s world.147 Where business has functioned as an effective collective actor, the “interests” of business need to be sought in the interests of policymakers within the business community potentially constrained by their ability to carry member companies with them. Leading policy-makers in business associations are normally senior members of companies; their interest is therefore to create or maintain an institutional environment in which they can pursue their careers, utilising their existing technical and business expertise and reinforcing their existing networks — so long as world market conditions permit them to do so. In the Northern European business world the interests of business policymakers will normally be to promote a long-run cooperative institutional framework for companies: this maintains their high status, their security and their networks, and uses their expertise, which is often a combination of high technical competence and the ability to develop consensus solutions. (By contrast, this would not be in the interest of a business community run by finance people whose expertise lay in hostile takeovers.) Thus rational choice reinforces an historical institutionalist approach. What order of preference do business associations with industry-coordinating capacity have over a CME framework (with flexibly coordinated wagebargaining), a centralised egalitarian (or CE) framework and an LME deregulated framework? In Section 3 it was argued that both CME and LME frameworks were consistent with international competitiveness, though in different types of market and with differently organised companies. Thus it is clear that in organised industry-coordinated business communities, a CME framework will be preferred to an LME framework, since both are “world-market” compatible, and 147. This view drives the argument in Kurzer (1993) that business has been in a powerful position in the 1980s in Belgium and the Netherlands and has used this power to push through a deregulationist agenda.

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the CME framework maximises the utility of senior business people. In an industry-coordinated world, a CME framework will be preferred to a CE framework, since the former gives companies more potential control over incompany wage structures and hence enables companies to develop company loyalty. The critical question is the choice between a CE and an LME framework. It is assumed in this chapter that in the post-Fordist world a deregulated LME framework is preferred to the CE framework. This is because a CE framework is not seen as consistent with success in world markets for companies wishing to pursue high quality incremental innovation or DQP type strategies; these strategies demand company loyalty and the preparedness to invest in company-specific skills.148 3.2.5 The politics of changing institutional frameworks How institutional frameworks have actually evolved between the 1970s and 1980s is a matter of politics, varying across countries and time — of sharp conflict, of explicit governmental intervention, of bargaining between collective actors, and so on. The two, quite different, outcomes — in (Anglo-Saxon) economies in which business was uncoordinated a more or less uniform shift to deregulated LME-type institutional frameworks, and in economies in which business was coordinated along industrial lines to CME-type frameworks with flexibly coordinated rather than centralised egalitarian wage-setting systems — have been the consequence of two quite different political processes, reflecting different power balances between business and government and different sets of business interests. The theorisation owes much to the work of Casper,149 Hancké,150 Iversen, King, Mares,151 Pontusson, Swenson, Thelen152 and Wood. LMEs:153 In economies in which business was unorganised the move towards relatively deregulated labour, R&D, corporate governance markets and product markets has been fundamentally driven by two factors: the infeasibility of other institutional frameworks (see 3.2.2 and 3.2.3 above); and the need of governments of all political colours for a well-functioning private economy. 148. Iversen (1996) and Pontusson and Swenson (1996). 149. Casper (1996) has developed a compelling micro-analysis of the role of business associations in institutional framework change. 150. Hancké shows the leading role of large companies in France, and the pattern of coordination between them and the state, in the restructuring of industry, finance, company-supplier relations and industrial relations. His ideas are summarised in Hancké and Soskice (1996). 151. Mares has worked on the role of business in the development of unemployment benefits in the 1920s in Germany (Mares 1997). 152. Thelen (1991, 1994). 153. The account here owes much to King and Wood (1999).

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Among collective actors, governments have led this process, while individual companies have reinforced it at the micro level. Because of its weak organisation, business has not acted collectively in a decisive way; while business has been generally strongly supportive of the move to deregulation, governments have been able to ignore attempted opposition such as that of the CBI in the UK in the early 1980s. In each of the Anglo-Saxon economies the pre-existing institutional framework gave unions a strong position, at least in important parts of industry. The critical conflict has thus been between governments and unions. In simplified form this can be thought of as a game in which the government moves first, “choosing” an institutional framework, which unions can then accept or attempt to reject. The most important constraint on governments has been the infeasibility of developing a CME-type framework — on account of the lack of business coordinating capacity. Thus the government chooses between a deregulated LME framework and maintaining the status quo. The unions then accept or attempt to reject the choice. The critical point is that unions will not be able to reject successfully a deregulated framework. Unions cannot take successful action against companies because, if companies are to remain competitive in the absence of protection, they will only accept unions who in effect make no demands upon them. They can reject union demands because they have the option of relocating elsewhere. Nor can unions take successful action against governments, because governments of right and left have to rely on the private sector for economic performance: in the UK and the US deregulation was promoted primarily by right wing governments, but in NZ the driving force was a Labour government; and in both the UK and the US, the Labour Party and the Democrats respectively have come round to accept strongly deregulated frameworks. CMEs: Why in economies in which business was well organised at the start of the period has a CME-type framework prevailed, with employee representatives (almost always close to unions) playing an important role within the company, and with unions actively engaged with employer associations outside? Why has centralised egalitarian wage bargaining given way to a more flexible but coordinated form? Why has organised business played an important and sometimes central role in promoting these processes, successfully opposing in Sweden a Social Democratic government and much of the union movement which wished to preserve centralised egalitarianism,154 and successfully opposing in Germany a Christian Democratic government which wanted greater deregulation of labour markets?155 154. See Pontusson and Swenson (1996). 155. See Wood (1996).

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Two separate games have been played in these economies.156 In the “Swedish” game, organised business in the advanced sector allied with skilled workers unions in the same sector against the government and the rest of the union movement. Pontusson and Swenson (1996) argue in their seminal article that the overturning of the centralised egalitarian system of wage-bargaining in Sweden and its replacement by coordinated bargaining which gave more flexibility to employers was the result of a cross-class alliance. By this they meant that the skilled unions shared the preference ordering of the advanced sector employers and that their joint support of change was necessary. By contrast, it is argued here that — while there was indeed such an alliance — the powerful, key actors were the employers, and skilled unions would have gone along with employers even had they preferred a CE to a CME framework. The reasoning can be summarised in the following game: Move 1: Suppose that employers propose a CME framework and that, move 2, unions can respond either by cooperating with such a framework or by refusing to cooperate and insisting on the maintenance of the CE system. If unions refuse to cooperate, then, move 3, employers either back down or they choose a deregulated system. Employers can always de facto impose a deregulated system by refusing to cooperate with a CE (or a CME) framework — since both CE and CME frameworks depend on company cooperation. Thus so long as business as a collective actor prefers the deregulated LME system to a CE system, as is assumed in 3.2.4 above, employers will respond to sustained refusal to cooperate with a CME framework by moving to a deregulated system and unions will be powerless to prevent this; therefore, to come to move 2, unions will cooperate with a CME framework. In the “German” game, the German government attempted partial deregulation of labour markets in the mid 1980s. Here the work of Wood (1996) is central empirically and analytically. As discussed in 3.2.4, in an industrycoordinated system business prefers a CME framework to an LME framework. Business as a collective actor has been strongly placed to resist governmental attempts to deregulate in ways it has not wanted. This is because collective business is necessary for the effective operation of technology transfer and vocational training; hence it can threaten to withdraw cooperation from key institutions. Note that this is a qualified power of resistance to deregulation: if a government wanted to move fully to an LME-

156. The analytic approach of Mares, albeit on German employers in the 1920s, has been of great help in this section, both because of the parallels which were afforded by her insights into the leading role of employers in the development of aspects of the German welfare state and because of her theoretical analysis of strategic behaviour, see Mares (1996). Discussions with Mares, Iversen and Wood have been important in developing the argument here.

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type deregulated framework, it would be impervious to such threats since it would accept that under deregulation vocational training and technology transfer would function through markets. Collective business might still be able to resist government desires for full deregulation — but that would then depend upon a potential blocking role of collective business in the operation of the executive and legislative system.157

157. Wood’s general argument therefore goes against Streeck’s view that the German system operates because unions are powerful enough to impose labour market regulation, in particular high costs of dismissal, see Streeck (1991).

PART III THE ENTERPRISE

Introduction Concerning enterprises, previous studies in societal analysis have mostly been involved with the construction of enterprises as subject to ‘societal effects’ within societies that approximated the ideal of the ‘nation state’. More recently, discussion and research in organization studies has become focused on the operation of enterprises in an international context. To some extent there has been criticism of societal analysis for stressing the societal horizon of enterprises and neglecting the emerging international horizon. It has also been suggested that enterprisespecific policies and the spreading of ‘international best practice’ may tend to override societal effects. Three authors in this Part take up this discussion and critique (Lane, Mueller, and Smith and Elger), in which they were involved for some time. Making use of their own research, these authors develop what they see as more or less nuanced counter-points to societal analysis. The central question that their chapters address is in which way enterprise behaviour and organization is affected by new horizons of international activity, by internationalization strategies of companies, transfer of managerial experience and concepts from one country to another, and related issues. Lane focuses on internationalization strategies of German multi-national companies, which have been internationally active very much at the same time as retaining strongly German top management composition and practices, and she examines how this may change and what it may imply. Smith and Elger focus on a radically different setting: Japanese subsidiaries in Britain, as a country in which nearly the whole motor industry has come under foreign control. Mueller makes a very broad comparison of group work in Europe and ends with a more detailed study of group work in Rover, recently an enterprise under German control, in Britain. In conjunction, these chapters afford a rounded examination of internationalization issues from different angles, although in a more restricted part of Europe and the world. Whereas such authors look at recent and emerging tendencies, another (Lorenz) looks into the past. Internationalization and transfer of concepts are indeed not entirely new phenomena. Lorenz examines what happened several decades ago, when the managerial, organizational and training concepts of the time emerged and were transferred across borders of societies and continents. What ‘lean production’ stands for today, a universally proclaimed model of management, was represented by Taylorism and Fordism in the past. Arguably,

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such concepts were then discussed and examined internationally with the same intensity as ‘lean production’ today. Not only is it useful to extend the inter-temporal dimension of societal analysis but also its geographical spread. Warner has visited China on numerous occasions and in the past published many papers and articles on China, after having been involved in earlier comparisons in Europe. His cautious treatment of China, which avoids quick generalization and typification of this country’s society, shows that at the earlier stages of comparing societies it is necessary to relate differentiated domains of society to each other in an effort to establish parallels and interactions across spaces and domains. That this should be more hypothetical and tentative at this stage is inevitable. All the chapters in this Part combined reinforce the point that societal analysis requires a long time horizon and succession of studies. Societal identities and specificities can only be established credibly in a longitudinal dimension, and this means that we do not learn anything definitive on the basis of an individual study alone. As change happens, this not only changes the scene and gives rise to a modification of comparative diagnoses and explanations. It also makes our view of societal interdependencies more precise and valid. The inter-temporal dimension is here very much linked to the issue of internationalization of enterprise activities, and this issue provides a particularly significant challenge for examining the durability and pertinence of explanations that the societal analysis literature has come up with.

Chapter 11 Understanding the globalization strategies of German and British multinational companies Is a ‘societal effects’ approach still useful? Christel Lane

1.

Introduction

The multinational company (MNC) has been widely theorised as the very embodiment of disembedded society, and its structure and strategy have been mainly explained in universalist terms. More recently, the greatly intensified process of globalization has led analysts to go one step further and make explicit claims about the global integration of MNCs and their cutting loose from any dependencies on social and political institutions in their home base (Ohmae 1990; Reich 1992). Even such theoretically sophisticated analysts of MNCs as Goshal and Bartlett (1993) posit the widespread emergence of a transnational type of corporation (TNC) where global dispersion and integration of activities necessarily leads to detachment from the company’s home base. The “societal effects” (SE) approach, in contrast, first and foremost offers an understanding of economic structures and processes as being situated in their national and sectoral social and political environment. MNCs are seen as being socially constructed in the same way as national companies and are thus presented as the very opposite of the “footloose company”. Hence an attempt to explain recent developments in European MNCs from the perspective of the SE approach would constitute both a formidable challenge and, if viable, a strong vindication of this theoretical approach. In taking up this challenge, this chapter will show that MNCs with different home bases have adopted divergent structures and strategies and have responded to intensified global challenges in distinctive ways. It will demonstrate that national home base still exerts a powerful influence on MNCs and will therefore

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claim that the SE approach has not lost its explanatory power. Degree of embeddedness into national industrial and policy networks or the degree of reciprocal conditioning between social institutional complexes and MNCs is held to influence both the structure and strategy of such companies: the amount of foreign direct investment (FDI) undertaken; the kind of competitive advantage companies seek to derive from it; the way in which they combine nationally based and globally focused activities; and the structural features adopted to achieve these ends. Given the striking differences between Britain and Germany in the way certain institutional complexes and organizational practices and structures interact (Maurice et al. 1980; Lane 1992, 1995a and 1997) — a low versus a high degree of social embeddedness and implantation of companies — we can expect different responses in the ways companies have managed the tensions between pressures for globalization and established national ways of conducting their international business. But it will also be argued in this chapter that the SE approach needs some refinement and even revision of its theoretical suppositions. It will be suggested that powerful social actors, such as MNCs, have a degree of strategic choice and that the scope for such choice has become enlarged in recent years, due to the intensified pace and extended scope of globalization processes. Last, the paper will focus on a larger set of societal dimensions or subsystems than have been singled out by the “societal effects “ authors, as well as introducing additional concepts, held to be useful in the analysis of the activities of MNCs. In the empirical part of the argument the chapter will utilise a number of case studies of MNCs, using Annual Reports, company strategy statements and other information provided. The companies have been selected according to industry and degree of globalization. (For a list of companies, see Appendix.) In both instances companies provide critical cases for testing globalization claims, i.e. companies which are either in highly internationalised industries or among the most advanced within their industry or both. Although the study is based only on a small number of cases one may assume that the demonstration effect of these key companies will be far greater than their small number might indicate. Because of differences between the UK and Germany in highly internationalised industries, these companies are not matched by industry. Company primary data will be supplemented by statistical data of various kinds, newspaper reports and other secondary sources on both individual firms and industries.

2.

The “societal effects” approach: A critical appreciation

The SE approach may be viewed as constituting a variant of sociological Institutionalism. Due to the striking findings produced in a series of carefully conducted comparisons of European business organizations from the mid-1970s onwards,

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which demolished then popular universalist explanations of organizational structures and behaviour, the SE approach has become influential in European organization studies and beyond. Over time the SE framework has evolved from mainly descriptive theory to a more elaborated and general theoretical approach, albeit one which still eschews any nomothetic claims (Sorge 1995). This framework has not only helped to understand the continued reproduction of national diversity in the face of supposedly strong homogenizing influences, such as rapid technological change and much increased international competition, but has also illuminated the nature of incremental societal change. By positing the notion of strategic fit between certain technological contingencies and certain societal syndromes (Sorge 1991) the approach also explains industrial specialization between societies and, in the absence of specialization, differing degrees of competitiveness in the same market segment. My critical observations on SE theory relate mainly to the way in which the relationship between social actors and structures is conceptualized and, following from this, how social change is seen to come about. In his latest work, Sorge (1996) understands this relationship in terms of Giddens’ (1984) structure-action duality. The notion of reciprocal conditioning interprets the duality in such a way that boundaries between actor and structure/system become blurred. But, at the same time, actors are said to enjoy relative autonomy, due to “the inchoate rationality of actors, the tenuous relations between formal and informal rules and the extreme ambiguity of rules and behaviour” (Sorge 1996). The only example of actor autonomy cited to illustrate the theoretical approach (Sorge 1995) is of actors sometimes trying to circumvent structural constraints through the adoption of informal activities. The somewhat ambiguous view of actors and their role becomes more evident when we turn to the analysis of social change in the SE approach. To move beyond a static conception of society, the SE approach has developed a notion of social change which views the four societal dimensions in terms of structure and flows and conceptualizes social change in terms of the reproduction of structures in a non-identical fashion (Sorge 1996: 73). Given sets of actors, systems and their interrelations are reproduced according to existing societal patterns, albeit with some modifications. This notion of non-identical reproduction has a high degree of “common sense” plausibility but also a certain vagueness about criteria with which to assess whether or not any specific instance of change adheres to or departs from basic structural characteristics. This understanding of social change leaves vague the role that actors play in bringing about significant change. A weakness here is that actors are viewed as only affected by structural features internal to the sub-system under review, and extraneous sources of influence, emanating from a different society or from a global system, are given no consideration. This is the case both in the theoretical

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exposition and in the empirical studies carried out by SE authors. Hence despite the greater stress in recent theoretical elaboration of actors, what stands out in practice is still a focus on “relatively permanent systemic features, specific to named historical societies” (Rose 1985: 65). A second and related weakness is that any change in structural patterns is attributed mainly to unforeseen consequences of actions, rather than being a result of conscious strategic choice. These omissions account for the sole focus on incremental change and for the certainty with which systemic reproduction, even if only non-identical, is predicted. Thus, although the SE is not a determinist approach and does assign a role to actors, this role is too weak to explain societal change in its various possible sources and forms. Globalization of firms and markets, in Sorge’s view (1995; 1996), does not warrant any change in theoretical focus and can be explained from within the existing approach. Convergence is categorically ruled out, and further intensification of societal specificity is predicted. This chapter largely endorses Sorge’s contention that societal effects have not, so far, been cancelled out in the case of MNCs and that their distinctive national properties have been reproduced in a modified way. They may even have become intensified as mainly those activities have become internationalized which are not dependent on the home country’s specific societal effects. In contrast to Sorge, however, this chapter views intensifying globalization processes as having more problematic consequences for the SE approach. In particular, this work does not view globalization as just another external environmental effect but as a process which will force us to revise existing theoretical conceptualizations and question empirical generalizations about distinctive national systems. Any understanding of the impact of globalization will have to recognise that actors are now exposed to multiple and conflicting systemic constraints and opportunities, with no guarantee that societal effects of the home base will always prevail. In other words, the possible consequences of globalization, were it to become fully developed in the form predicted by Goshal and Bartlett (1993), are not of the same order as say, the impact of a new technology which is adopted by one distinctive set of actors in one pre-existing social system. A related point to consider is the contention that the choice of the particular four societal dimensions in the empirical studies of the Aix group is not significant. This claim, in my view, is not totally convincing. The only marginal and indirect focus on influential/powerful institutional actors, such as the state, would explain the lack of consideration of deliberate institutional reconstruction or deinstitutionalisation, prompted by real and/or fabricated external threats to key companies or whole national competitive regimes. Furthermore the strong focus in the SE approach on labour and the neglect of capital serves as an impediment to

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an understanding of the internationalization processes now impinging on national industrial systems. A last critical observation is that the notion of reciprocal conditioning implies that mutual shaping is of the same intensity in any actor-within system constellation and that the general process occurs in the same manner in all such constellations. Such an understanding obscures important structural differences between societies. These are better captured by the notion of more or less deep social embeddedness of action (Granovetter 1985), or by the idea of tight vs. loose coupling between organizations and social institutions (Whitley 1994). The critical analysis of the SE approach has made it clear that it combines impressive strengths with some weak points. It has gone a long way to bridge the gulf between structural determinism and cultural voluntarism. Together with its conceptualization of change, the approach provides comparative scholars with an extremely helpful and empirically illuminating perspective for understanding the distinctiveness of different national industrial systems and their reproduction over time. This perspective has been particularly useful to understand national industrial systems which, until very recently, have remained more or less clearly bounded systems. Even during the last decade, with its occurrence of a quantum leap in internationalization if not globalization, this perspective, as the subsequent substantive sections of this chapter will show, has by and large retained its utility. But the weaknesses of the theoretical approach regarding the role of actors and change, it will be argued in the final section of this paper, will become more apparent when applied to emergent globalization tendencies.

3.

Societal effects, networks and production strategies

The SE approach, it was pointed out above, connects different types of production organization with divergent competitive regimes or industry strategic fit, and this insight is utilized in this chapter. It is held that different societally produced paradigms of production organization and market orientation of British and German firms feed into and shape their internationalization strategies and structures. The institutional complexes or societal subsystems seen as shaping these differing competitive regimes encompass a larger number than those selected by SE scholars, and reciprocal conditioning will be explored through network analysis. The focus will be on the degree and the manner in which firms are inserted into networks of various kinds and on how this provides access to resources but also creates dependencies. As both the institutional complexes and production paradigms have been covered extensively in the author’s previous publications (Lane 1992; 1995a and b; 1996), only condensed versions are offered here. Among domestic industrial networks of lasting importance to German firms,

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both supplier and capital networks retain their importance for German companies in most industries. Thus, in the car industry in the late 1980s, sourcing was still overwhelmingly domestic, with VW sourcing 85 per cent, MB 90 per cent, BMW 84 per cent and Porsche 95 per cent domestically (Jürgens 1994). By 1995, the proportion of Mercedes Benz had gone down to 80 per cent (Mercedes Benz 1996). A similar finding was obtained by a study of Ruhr region firms in three of Germany’s more international industries (Heiduk and Hodges 1992: 185). Industrial networking of this kind is often institutionalized in cross-holding of shares and interlocking directorships. This is, however, no longer true for all industries. It applies particularly for industries where high skill and know-how are important and where price is not the predominant criterion in selling. Thus in the clothing industry, where international competition from lower-wage countries is intense, foreign sourcing is at a very high level (Jungnickel 1995: 99). As far as the sketchy information allows one to judge, use of domestic suppliers is not nearly as strongly entrenched among British companies (ICI 1996) which is consistent with the product strategy of British firms in most of the highly internationalised industries. A comparative study of capital networks by Windolf and Beyer (1996) has shown that whereas German large companies remain strongly interconnected in both ownership terms and through related interlocking directorships, British companies show a very low degree of connectedness in these terms. Many of the large German companies are widely owned and have their boards dominated by banks. Thus in the early 1990s the proportions of major bank voting shares were 63.48, 51.68, 54.50, 61.66 and 32.52 per cent for Hoechst, BASF, Bayer, Daimler-Benz and Siemens respectively (Smyser 1992: 86). But this is not necessarily a one-sided control relationship, as inferred by Ruigrok and van Tulder (1995), but an interdependent one. Most German companies remain committed to the maintenance of a close relationship with banks (BDI 1994: 20). British companies’ greater reliance on the stock market, in contrast, and the more distant relations with banks makes quotation on foreign markets, particularly on the NYSE, more likely. Implantation in policy networks is particularly noteworthy with regard to widespread membership and participation by German firms in both trade associations and institutes for technical standards. Thus a comparison of internationalization strategies by German and British MNCs in the chemical industry made it clear that even in this highly internationalized and oligopolistically organized industry German companies have maintained their allegiance to their national trade association, the VCI. “A major feature of the Federal Republic of Germany has been the amount of policy attention the giants pay to their national trade association” (Grant and Paterson 1994: 141). British companies, with a lesser degree of allegiance to their trade associations, have instead opted for the development of a company-internal government relations capability (ibid). Recent

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work by the author (Lane 1997) has shown that this contrasting pattern is present in other industries and extends also to membership of standard-setting institutions. Involvement in the BDI and the BDA, the peak organisations of trade and employers’ associations respectively, by even large German MNCs is evidenced by the fact that 50 per cent of leading officers of these associations were also present among the “big linkers” on corporate supervisory boards (Windolf and Bayer 1996: 225). The most problematic of the many networks in both countries is that involving various industrial relations actors where extensive change is beginning to undermine basic structural characteristics. The more corporatist character of industrial relations in Germany than Britain has been connected by Ruigrok and van Tulder (1995) with the greater restraint on MNCs in their FDI activities. Some large German MNCs (Siemens and Daimler Benz among them), as well as several minor ones, have recently striven to free themselves from these dependencies, by using their expansion of FDI to blackmail domestic industrial relations partners into making unprecedented concessions (Müller 1996; Dörre et al 1997). These and related anti-union activities are beginning to force some significant changes in modes of regulation in German industrial relations. Whether this development should be viewed as non-identical reproduction of a vital institutional complex or as a reconstruction destroying established structural principles must remain a matter of debate (Dörre 1996; Dörre et al 1997). The traditionally much less regulated and unified British industrial relations system has been more vulnerable to the undermining influence of the activities of both domestic and foreign MNCs, and these global effects have had more diverse consequences in different sectors and firms (Marginson and Sisson 1994). But in the British case, too, it is problematic whether non-identical reproduction remains a more apt description of transformation processes than evolution of a new or hybrid system (ibid). To sum up, the German industrial economy is of a highly integrated nature, where associational and industrial networking is constantly reinforced by a common set of values and norms, derived both from the craft and the bureaucratic tradition in Germany’s industrial legacy. The much lesser degree of institutional embeddedness of British firms and their only weak exposure to a consistent and widely obligatory system of institutionalized rule systems, endows firms with greater autonomy but also leaves them far less supported by and implanted in various kinds of networks. In both societies, however, there are signs of change in hitherto stable societal subsystems. Networks are in a process of change, partially stimulated by real or fictitious globalization processes, but it is too early to draw definite conclusions about structural consequences. These differing modes and degrees of embeddednes of German and British firms have, in turn, shaped production paradigms in the two countries and have produced divergent “strategic fits”. Given their deep implantation in domestic

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networks of various kinds, German firms, from the end of the 19th century, have put prime emphasis on low-volume/high value-added segments and niches (Porter 1990; Dornseifer 1993), as well as on customer service and more recently, the provision of system solutions. Cost control has traditionally had to cede place to technological perfection. Mass production methods did not by-pass German firms in the post-war period, nor has diversified quality production been embraced by all industrial sectors. But production of standardised price-oriented goods has been far less dominant than in Britain. Britain’s competitive advantage has, ever since 1870, rested in labour intensive, capital-neutral and human-capital-scarce commodities (Craft and Thomas 1986). Although a small number of manufacturing industries are exempt from this generalization it is true to say that this strategy has not changed fundamentally to the present day. Firms in a large range of industries continue to be more concerned with the production of low-cost standardized goods than with highquality, technology-intensive niche products (Porter 1990), and the employment pattern developed on this basis may have become further entrenched during the last decade or so (Nolan and Harvie 1995: 135). Although British firms have become more quality-conscious during the last decade and German firms have striven to attain more cost-effective quality the above differences have not been eliminated. The following sections will link these enduring differences in product strategy and production regime to divergent company internationalization strategies, either relying on social embeddedness or disembedding to varying degrees.

4.

The FDI strategies of British and German companies

Internationalization activities of UK and German MNCs have differed significantly from each other all through the post-war period. British companies have preferred the FDI route to the exporting route, and investment sites have been less focused, in geographical terms, on the home region. German MNCs’ greater reliance on their home base has been expressed both in their continued preference for exporting over FDI, as well as in the strong concentration of investment sites in the home region — Western Europe. Although German outward FDI has been increasingly strong during the 1990s a relative underdevelopment remains pronounced if investment and activity in foreign affiliates are compared with domestic investment and activities. Whereas for Germany, in 1993, the ratio of FDI outflow to Gross Fixed Capital Formation stood at 5.1 that for Britain was 18.4 (United Nations 1995: 421, extract from Table 6). The accompanying differences in degree and manner of company foreign direct investment activities could be read simply as differences of degree, to be explained in terms of backwardness of German firms in the globalization race.

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Instead it will be argued that these patterns demonstrate the existence of different corporate strategies, to be explained in terms of differential degrees of national embeddedness and implantation into local networks. Put in terms of the SE approach, strategic fit between specialization in certain industries and market segments, on the one side, and societal syndromes, on the other, has been much tighter in Germany than in Britain. This, in turn, has made dependence on the home base the preferred strategy in a number of the key industries in Germany, whereas the preferences have been the reverse for British firms in a large number of industries. Although the SE approach does not rule out FDI in certain production activities by even deeply embedded firms, globalization of core industrial activities would be difficult to reconcile with its theoretical presuppositions. In section 4.1, a detailed analysis of patterns of FDI will examine company profiles in the two countries in terms of deployment of assets and activities and in the distribution of ownership and control between home and foreign sites. In section 4.2, these findings will then be linked to aspects of companies’ revealed strategy. The first will serve to pinpoint both degree of domestic embeddedness and degree of geographical dispersion of activities in the value chain (Porter 1986; Bartlett 1986). An analysis of revealed strategy will provide some clues about the degree of national responsiveness connected with dispersion and about the nature and degree of coordination attained. 4.1 Location of assets and activities An examination of the location of assets and activities, indicating degree of reliance on resources provided by the home and host country, must look at the distribution between domestic and foreign sites of assets, sales/turnover, employment, finance, and R&D. Additionally the ownership structure of firms and the national origins of top managers and board members give important clues about the degree to which these structures remain domestically concentrated or are being surrendered to foreign influence. Enduring dependence on the home country for a number of key resources and activities will be interpreted as indicative of the dominance of societal effects. A study by Hirst and Thompson (1996) of the distribution of assets, sales, subsidiaries and profits between home base and other sites during two recent periods found that, although both British and German companies still rely on their home base as the centre for economic activities, this reliance, on several indicators, was found to be stronger in Germany than in the UK (ibid. 95). The much stronger reliance by German firms on the home base in these respects is amplified by Ruigrok and van Tulder (1995: 156f.). It also finds strong support from more recent industry and case study material presented in this chapter which additionally covers the distribution of employment.

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Among the most internationalized German industries, such as chemicals, leather goods, rubber products, tobacco and electrical engineering, domestic employment is now between 65 and 70 per cent (Jungnickel 1995: 96). In the German car industry in 1990, the proportion of the labour force employed in Germany was 64, 78, 85 and 100 per cent for VW, MB, BMW and Porsche respectively (Jürgens 1996: 66, Table 1). A study of the various activities of individual large firms puts these employment figures into perspective. Thus, in the case of Siemens, 40 per cent of sales are now made in Germany, but, in contrast, two thirds of value-adding work is still undertaken in the home base and 57 per cent of employment remains concentrated here (Siemens 1995: 6, 15). Mercedes-Benz, in 1995, achieved 39 per cent of sales and placed around 30 per cent of new investment in Germany, but still retained 76 per cent of its employment in its home base (Mercedes Benz 1995 and 1996). BASF, in 1995, achieved 27 per cent of its turnover in Germany, but, in that same year, still placed 53 per cent of all investment and 60 per cent of employment there (BASF 1995a: 11, 14). Trumpf, the largest German machine tool company, still employed twothirds of its labour force in German sites and placed 50 per cent of its investment there during the mid 1990s although 55 per cent of turnover was being achieved outside Germany (Leibinger, no date; Trumpf Geschäftsbericht 1994/5: 16). These data make it clear that in Germany’s key industries companies still rely on a labour force produced by a societal syndrome peculiar to Germany and difficult to reproduce in most host countries. Among the large UK MNCs, in contrast, a significantly smaller proportion of assets and activities remains concentrated in the home country. A look at figures on sales, investment and employment for some of the largest MNCs can readily illustrate the contrast. Thus in 1995, ICI had about 33 per cent of net operating assets located in Britain, realised just under 50 per cent of its turnover in the UK but employed only around 35 per cent of its work force at home (ICI 1995: 13), and for Glaxo UK sales amounted to 8 per cent of the total, employment to around 33 per cent and capital expenditure was lower at home than abroad (Glaxo 1995: 81). BTR, a manufacturing conglomerate, had left only 21 per cent of sales, 14 per cent of investment and just over a third of employment in the UK (BTR: 30), and Grand Metropolitan, the foods and drinks company, has a much stronger focus on the US than the UK in terms of turnover, profits and net assets (Grand Metroplitan 1996). These data demonstrate a much lesser reliance on the home base and lead one to expect weaker societal effects in UK MNCs. The finding of Ruigrok and van Tulder (1995) that R&D remains relatively lowly internationalized receives support from my German data. By 1992, 15 per cent of German R&D capacity was placed outside Germany (Beckmann and Fischer 1994, quoted by Jungnickel 1995), but this was unevenly distributed between industries and companies. Thus Daimler Benz kept 90 per cent of its

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R&D in Germany (Reuter 1994: 45), and the same is true for Trumpf (Jürgens and Klingel 1996: 31), and even highly internationalised companies like Siemens and BASF still had 75 per cent in Germany in the early and mid-1990s (Von Pierer 1996: 12; Grant and Paterson 1994: 136). The British firm Glaxo, in contrast, has dispersed its R&D activities among nine different countries (Glaxo Wellcome 1995: 12), and a similar development has occurred in ICI (Grant and Paterson 1994: 138). Again, national differences in institutions and networks around R&D activity go a long way towards explaining patterns uncovered. These divergent pictures of British and German companies’ location of assets and activities also find expression in their Transnationality Indices (TI) — calculated as the average of foreign assets, sales and employment to total assets, sales and employment. The TI of UK companies generally puts them well above the position suggested by their ranking in terms of foreign assets alone. For German companies, in contrast, with the exception of the three chemicals giants, the opposite is the case and the disparity is appreciably higher. Thus for Siemens and Daimler rankings in terms of foreign assets of 20 and 38 can be contrasted with TIs of 73 and 65 respectively (United Nations 1995: 20–23). Even for the relatively highly internationalised German chemical giants, ranking in terms of foreign assets put them only slightly below their ranking in terms of their TI, whereas for the British pharmaceutical company Glaxo there was a difference between 59th and 13th place (ibid: 23–25). (ICI was not included in the table, but other information (ICI 1995; Grant and Paterson 1994) indicates that ICI would show a similar disparity.) An even stronger impression of home-centredness of MNCs emerges from an examination of ownership, control and more general recruitment of higher managers. Although detailed information on the nationality of ownership of nationally registered MNCs is not readily available general information on share ownership suggests that foreign participations, although growing, have remained in the minority in both countries in the early 1990s — 6.5 per cent in Britain and 14.0 per cent in Germany (Prowse 1994: 24). The tendency not to surrender control to foreign investors is also evident in the data on quotation on foreign stock markets. Contrary to popular perception, Ruigrok and van Tulder (1995) find that, although listing on foreign stock markets has increased, the proportion of shares listed remains low. The effort to retain control in the hands of nationals is even more evident from an examination of the composition of boards and top management teams. The finding by Ruigrok and van Tulder (1995) that the internationalization of board composition is still in its infancy finds full confirmation from my case studies which also show some difference between the UK and Germany in this respect. Even Siemens and Mercedes Benz (MB) have only one and BASF two foreigner(s) on their supervisory boards, and the top management (Vorstand) of Siemens,

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Mercedes and BASF have remained solidly German (Siemens 1995: 68–69; Mercedes Benz 1995: 5; BASF 1995a: 4, 54). Trumpf, the largest German machine tool manufacturer, still recruits its board representatives predominantly from the local region, as well as relying on family members for both board membership and top management positions (Trumpf 1995). Moreover in this and many other companies the typical German pattern of strong bank representation on the supervisory board has remained intact. In the chemical industry 95 per cent of top and higher managers have the typically German doctoral and professorial titles (e.g. BASF 1995a: 4, 55). With the exception of the chemical giants, higher managers, heading the various geographical cum business areas (Bereiche), also remain overwhelmingly German, as do managers heading foreign affiliates. Among British companies in general, internationalisation of boards is also low, but, in contrast to the German situation, a significant number of individual companies are now moving in the direction of a greater non-British membership. Among these, Unilever, ICI, Shell, BTR, Glaxo and, to a lesser extent, GEC stand out (Annual Reports of BTR, GEC, Glaxo for 1995/1996; Ruigrok and van Tulder 1995: 158; Grant and Patterson 1994). This general picture of a top management in MNCs as being recruited, trained and generally socialized in their home country, with only infrequent and short postings to foreign affiliates, is confirmed for both countries by a recent comparative study (Roland Berger 1993). Again Germany comes across as slightly more “parochial” than the UK. These findings, indicating that patterns of ownership and control are part of distinctive societal syndromes and hence difficult for companies to jettison, again lend support to the SE approach. 4.2 Revealed internationalization strategy The above analysis has made clear that the degree of national embeddednes is very high in Germany and, although still considerable in Britain, is less pronounced. Given the lesser degree of embeddedness and the ensuing higher degree of British managerial autonomy, one would expect both more movement towards globalization and a higher extent of internal diversity in the UK multinational sector. This section examines the evidence on revealed strategy, i.e. currently existing structures and implemented strategies, and demonstrates support for important country differences in structure-strategy patterns. A typology of different patterns is presented in Table 1. The focus on strategy indicates that MNCs are viewed as actors with strategic choices which, however, are limited by their nationally shaped factor-input markets (See Table 1).

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Table 1. Typology of multinational companies Multinational

International

Global

Transnational

Many assets decentralised

Many assets decentralised

Most strategic assets centralised

Most assets decentralised

Some activities/functions decentralised but controlled by HQ

Many activities and functions decentralised

Most activities and functions centralised

Most activities and functions decentralised

Strategic and financial control centralised

Only financial control centralised

Strategic and financial control centralised

Strategic and financial control centralized

Overseas operations seen as appendages to a central domestic corporation

Overseas operations seen as portfolio of relatively independent businesses

Overseas operations seen as a delivery pipeline to a unified global market

Overseas operations seen as loosely coordinated network of rel. independent businesses, serving a segmented market

Source: Adapted from Dicken et al. (1995) and Bartlett (1986).

The results presented in section 4.1 suggest that the various core and support activities of German companies are not sufficiently dispersed to indicate that a transnational strategy is being followed. This conclusion is also supported by the fact that global dispersion and reintegration of stages of the value chain, in most companies, is still in its infancy (e.g. von Pierer 1996: 10). (A partial exception to this rule may be constituted by recent dispersion activities of the large chemical/ pharmaceutical companies.) A simple global strategy, which would be consistent with a high degree of concentration of activities at the level of the parent company, is, however, ruled out both by the predominant German product strategy and by the limited degree of global coordination pursued. Mercedes-Benz implicitly reject a global strategy: “the needs of customers are becoming more disparate. In a global environment it becomes increasingly important to offer customized products tailored to customer needs” (Mercedes Benz 1995: 43). The production of global, standardised products would appear to be in conflict with the pronounced multi-domestic orientation of most companies. Similar conclusions apply to many British companies although some examples of global or even transnational companies can now be found. This indicates both the greater diversity of product strategy and the greater variability of managerial response in the UK. Among the more globalized firms, those in the chemical/pharmaceutical industries — companies with a strong reliance on ac-

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cess to scientific knowledge — stand out for their adoption of a transnational strategy in at least some of their value chain activities. Thus ICI and Glaxo have probably made the biggest advances along the global route (ICI 1996; Financial Times, 9.11. 1995: 25; Glaxo 1995; Grant and Paterson 1994; Howells and Wood 1993), and the two British-Dutch companies also have adopted pronounced global features. Other companies, however, which produce fairly standardised products, remain held back from globalization activities by their conglomerate structure and not by their reliance on domestic support networks. Thus, for example, in 1995, BTR had 32 lowly related product groups in 124 subsidiaries “which were virtually autonomous and not organised to maximise synergies across logical business structures” (BTR 1996: 7). Until its recent demerger, the picture had been similar for Hanson (Hanson 1995). A simple global strategy is also ruled out by the locational pattern of European MNCs which does not, generally, indicate a global reach. The lack of a global presence is particularly evident from an analysis of German FDI data. These show that the bulk of FDI is still being placed in Western European countries which, in many cases, are geographically contiguous and culturally related. Thus, in the mid-1990s, Siemens still realised 68 per cent of sales in the home region — Western Europe — and kept 77 per cent of its employment there (Siemens 1995: 15). The chemical giants have moved more of their FDI to the USA, but even for these companies the European presence remains very strong (BASF 1995). British companies, although also Euro-centred, are nevertheless more globally dispersed over all continents (Case Studies 1995/6). But their generally low current representation in the crucial South East Asian location (with the exception of ICI which has 25 per cent of its business in Asia (Financial Times, 3. Nov. 1995: 4)) makes it inadvisable to identify a realised global strategy even for most British MNCs. While widespread adoption of either global or transnational strategies has thus been excluded, data presented so far do not permit a distinction between the remaining two strategies. To judge whether a multinational or an international strategy is dominant it is necessary to link the findings of a relatively low dispersion of many activities with information revealing the degree of national responsiveness and the patterns of control exerted by the parent company. The strategy of both large and medium-sized German MNCs seems to remain overwhelmingly the traditional multi-domestic strategy, where FDI is placed to be close to customers and products are adapted locally to fit their exact needs (Heiduk and Hodges 1992: 179; Dörre 1996). This fits the German paradigm of diversified quality production. It also corresponds to the growing trend in some industries — machine tools and some sectors of electrical engineering — to provide system solutions or participation in project development which demand close cooperation with customers. Such a multi-domestic strategy is confirmed

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for Mercedes Benz (Reuter 1994: 42), for the largest tool-making companies (Marsh 1996: 17; Leibinger, no date), Siemens (von Pierer 1996: 7) and for BASF (BASF 1995). Among British companies examined, only Glaxo stressed that “operating companies are responsive to customers’ unique local markets” (Glaxo Wellcome 1995). Available data on the degree of company centralization suggest that German companies tend towards the multinational and UK companies towards an international strategy. A variety of sources identify strong and somewhat rigid central control in German MNCs — particularly in operational matters. “Coordination and control by the parent company remains strong” (Jürgens and Klingel 1996: 47). In contrast, loose central control or even benign neglect in operational terms is detected in their British counterparts, but often combined with tight financial control (e.g. Ebster-Grosz and Pugh 1996: 182, 189; Goshal and Bartlett 1993). Multinational status of German companies is indicated also by the fact that their foreign affiliates are more likely to be modelled on the parent company — the transplant model — than being left to operate in a highly autonomous manner. This is indicated by the attempts of many German firms to recreate the model which combines a high-skill work force with a matching organisation of technology also in other countries, by undertaking a systematic effort to transform the labour force (Tödter 1995: 34, on BASF; Jürgens 1996: 75–76, on the car industry; Jürgens and Klingel 1996: 47, on the toolmaker Trumpf). “The foreign sites mirror the features of their parent company rather than having host country features” (Jürgens and Klingel 1996: 47). In those instances where no attempt has been made to recreate the German environment, e.g. in VW’s American West Moreland and BMW’s US Spartanburg plants, the ventures either have proved unsuccessful or have caused concerns about an insufficient skill base (Jürgens 1994; Financial Times, 16 Nov. 1996). A multinational strategy on the part of German MNCs would also be promoted by the high degree of FDI on green field sites, rather than via acquisition, which is seen to be connected with a more intensive interlinking with the parent company (Jungnickel 1995: 105). Additionally German companies are prone to locate in geographically contiguous and culturally related countries where the German production model can be reproduced with relative ease (Jürgens and Klingel 1996: 1996: 53, on the toolmaker Trumpf; Siemens 1995). Among many British MNCs, in contrast, the conglomerate legacy leads them to retain an international strategy, and adoption of this strategy is also promoted by the fact that foreign subsidiaries have resulted more often from merger and acquisition activity (Case study data 1995/96). Thus, the conglomerate BTR has 22 product groups, ranging from packaging and furnishings, via building products to electrical systems and aerospace (BTR 1995), and there is no evidence that the 124 subsidiaries/divisions are closely modelled on or coordinated by the

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British parent company. A similar analysis applies to Hanson, Grand Metropolitan, GEC (GEC 1996a and b) and Unilever (Goshal and Bartlett 1993). Complaints by some subsidiaries of British companies about “a lack of interest in subsidiary affairs” on the part of the parent company (Ebster-Grosz and Pugh 1996: 193) would confirm that parent companies view subsidiaries as merely one among a portfolio of independent companies. In sum, the data on “revealed strategy” lend support to the claim that “societal effects” even shape the activities of internationally-oriented companies.

5.

Changing internationalization strategies — Growing tensions between societal and global effects

Examination of evidence on realized globalization strategies has shown that there are, as yet, very few transnational companies in the two European countries. But very recent developments reveal that greater movement may be expected in future years. Globalization is thus not a distant vision or complete myth, as inferred by Hirst and Thompson (1996), but more “the framework for the strategic direction” of companies (BASF 1994: 4). For these reasons, it has become problematic to understand the impact of emerging new patterns of FDI in terms of non-identical reproduction, as suggested by Sorge (1996) and, in slightly different terms, also by Ruigrok and van Tulder (1995). Although societal effects are still evident in the different national routes to globalization, they will be more difficult to discern in fully globalized companies. Changed competitive conditions, requiring the mobilisation of new capabilities and the mounting compulsion to locate close to the expanding markets of Asia-Pacific, are causing many managements in both countries to reconsider their strategies. These emerging changes mean that corporate actors will no longer be interacting with, and be constructed by, mainly domestic social institutional complexes. Instead, they will be placed in multiple social environments, and ensuing unavoidable embeddedness in foreign societies will provide them with different and competing social templates to structure their activities and goals. The many-faceted nature of globalization often makes it difficult to assess the reality and/or magnitude of any effects and therefore permits some industrial actors, particularly key companies, to use the rhetoric of globalization to lever concessions from either governments or their industrial relations partners (Hirst and Thompson 1996; Dörre 1997). Hence statements on future strategy by company top managers, considered in this paper, are, wherever possible, verified by examining data on emergent trends. Given the different starting conditions of UK and German MNCs, their top managers are subject to slightly different pressures. German companies are

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responding to the new competitive pressures exerted by the changed global environment, and some now are complaining about domestic locational disadvantages. Whether these have become more evident in the current phase of internationalization, or whether managements are simply using the rhetoric of globalization to assert their will, the consequences of this disenchantment with the domestic production site are real and not to be dismissed. Thus growing efforts to become disembedded can now be observed. Having long traded mainly on quality and technological excellence, they are currently being faced with the need to supply more price-sensitive quality. As low-cost production is very difficult to attain in the German high-cost environment foreign sourcing and FDI in lower-cost countries are increasingly being adopted for the less skill-intensive parts of the production chain. Thus the 1990s have seen an increase in this trend towards de-localisation. But this has not entailed a rush into real low-wage countries of the developing world or Eastern Europe but mainly a shift of production to lesser-cost neighbouring West and East European countries (Leibinger, no date; von Pierer 1996; Marsh 1996: 17; Dörre 1996). The impact of these new strategies on established institutional structures of the system of industrial relations, although not yet fatal, is nevertheless giving cause for concern. Another locational disadvantage of Germany, mainly of concern to the chemical companies, has been the extremely difficult process of getting government permission for sensitive research in bio-technology. This has led companies to transfer their R&D in this area to the USA (Tödter 1995: 34, on BASF; Paterson and Grant 1994: 149). If this development were to proceed unchecked negative consequences for German Verbund research cannot be ruled out. But a greater transfer of R&D activities to foreign sites is also an emergent trend for German companies without this locational disadvantage, particularly in the chemical and information technology industries (Dörre et al 1997: 51). It is simply part of the growing effort to benefit from technological spill-over, best utilised in proximity to foreign customers, competitors and research centres (Dörrenbächer and Wortmann 1991). Knowledge has become the new competitive resource. The necessity to combine different bodies of knowledge in the quest for innovation pulls MNCs away from interaction with domestic institutions and organizations and forces interpenetration with host country societal complexes (Goshal and Bartlet 1993). Indicative of this trend is the significant growth in R&D investment in host countries by such firms as Siemens and Hoechst (Dörre 1997: 52). Siemens achieved a 75 per cent increase in the proportion of R&D staff employed abroad during the last few years (Meyer-Kramer and Reger 1997). A similar development is indicated in some research-intensive British companies although these developments appear neither as pronounced nor are they as well documented as in Germany. Glaxo, for example, intends to place much more future investment into developing external ties with research insti-

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tutes and smaller bio-technology companies, particularly in the USA (Financial Times, 9.11. 1995: 25). The growing trend in both countries to enter strategic alliances must be viewed in the same light. Eurocentrism of German and British MNCs may not endure in the longer run. Pressures to disembed, exerted by the changed competitive environment, are now pushing German companies into extending their global reach and aiming for greater global integration of activities. These plans are not only voiced by previously relatively highly internationalised companies, such as BASF (Tödter 1995: 34), but also by hitherto quintessentially German companies, such as Mercedes Benz and Siemens. The much increased importance of the emerging markets in Asia Pacific cannot easily be served from a European base but requires local presence (Siemens 1995: 10), and governments in these countries also insist more strongly on local content as a condition for entry. Local embeddedness increasingly means more than simply tailoring products to foreign markets. It also demands some political involvement, local design and R&D facilities, more regional headquarters and the appointment of more indigenous managers (Goshal and Bartlett 1993). The threefold increase by Siemens in turnover in Asia-Pacific between 1990–95 (Siemens, no date) shows that this push into Asia is not simply globalization rhetoric or merely wishful thinking. Given the entrenched German strategy of local responsiveness, including the reliance on local content, this will necessitate a much greater transfer than previously of various activities in the value chain (Siemens, no date: 2). “Those who want to share in these future markets must be there” (von Pierer 1996: 11). “The firm which wants to maintain a leading role in global competition must be heard to play in the Asian orchestra” ( BASF 1996c: 10). (See also Mercedes Benz 1995: 42; Leibinger, no date: 156 on toolmaking. “As a transnational enterprise we not only undertake marketing, sales and service in our main markets but we have also stepped up production and development. In this way people will regard us as an enterprise of their region” (BASF 1994: 11). “We have complex and advice-intensive products, and service and technical competency must be offered locally” (Leibinger, no date: 156). It is notable that for Mercedes-Benz, Siemens and BASF the contemplation of a more global role has entailed a conscious distancing from their German home base and image. Both Reuter and von Pierer have maintained that reliance on the quality seal “Made in Germany” is no longer necessary and that their own company names are sufficient for signalling quality and technological ingenuity (Büchtemann and Kuhlmann 1996: 76; Die Zeit, 3.5. 1996: 29). When the BASF chief executive indicated that the new Asian division would be managed from Singapore he made it clear that “Germany will have to seek its place within this new global division of labour” (BASF 1996a). Both increased foreign sourcing and FDI are now occurring at the expense of the German labour force (Marsh

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1996: 17, on the engineering industry; Siemens 1995: 15; Dörre 1996). In the case of Mercedes-Benz, its recent merger with Chrysler has driven this disengagement strategy to an extreme point and elevated its global pretensions above its still deep embeddedness in the German industrial order. Thus leading German firms, in the words of Doz and Prahalad (1993: 26), have shifted their source of competitiveness from location-specific to firm-specific factors. Sorge’s (1995, 1996) inclination to view this development as resulting in a further intensification of societal specificity for those parts of the production process remaining in Germany does not capture the full complexity of this process of change. It ignores the impact of this process on domestic institutional structures and the danger that it might blow apart the whole societal syndrome and thus undermine the social coherence of current German models of production organization and industrial relations. Many British companies — ICI, BTR, GEC — also wish to move into Asia on a bigger scale (Financial Times, 3.11.195: 4; 7.10. 1996: 22 and 16.5. 1995), and in some industries, such as chemicals, regional markets are no longer perceived as providing sufficient economies of scale (Financial Times, 26 Feb., 1993: 22). ICI, an already relatively highly globalized company, see further scope both for specialization and for expanding their global reach (Financial Times, 26 Feb. 1993: 22; ICI 1996). By 2005 ICI intends to have 33 per cent of its business in each of the triad regions (ICI 1996), and emergent expansion indicates that this is not merely wishful managerial thinking. Highly diversified UK companies, which up to now have adhered predominantly to an international strategy, are indicating that more global orientations are being adopted. This is evident in the recent spate of radical divestments and attempts to turn conglomerates into focused businesses on the part of BTR and Hanson (Financial Times, 1.2. 1996: 24), as well as in the greater focus on core business by many of the diversified companies in more related areas (e.g. GEC). Such attempts to shed conglomerate structure and to concentrate on product lines where they can compete on a global scale is clearly motivated by pretensions to a global strategy. Thus BTR (BTR 1995: 6), which has recently reorganised itself into four major and three smaller regional groups, state a greater global reach is being pursued through attempted penetration of the ASEAN markets (ibid) and that global coordination, “paying attention to critical linkages across the whole portfolio” (BTR 1996), is being envisaged. Similar plans have been voiced by Hanson: “Conglomeration is out, focus is in” (Financial Times, 3.2. 1996: 8). “The Hanson Group is pursuing …..novel concepts, such as global expansion and expansionary capital expenditure” (Financial Times, 17.5. 1996). For a company without global brands and a very limited international spread of investment this would constitute a very radical departure. These global pretensions by both German and British MNCs, to become

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realized strategy, would require tremendous organisational transformations which are not likely to occur either in the short run or in a dramatic fashion. But by the end of the first decade of the 21st century a process of incremental change may no longer leave the transnational European company a distant vision, let alone a mere myth. What the current efforts of large MNCs demonstrate is the attempt, by extremely powerful actors, to partially withdraw from the reciprocal conditioning and the interdependence with domestic societal complexes. By doing so they will become involved in new and multiple interdependencies and experience a variety of different societal effects. At the same time, their disembedding from domestic institutional contexts will effect some institutional reconstruction or even deinstitutionalisation in the home base. It is doubtful that the ensuing transformations in structures and strategy can still be described as a process of non-identical reproduction, and it is more likely that cumulative hybridization will lead eventually to completely new forms. It is already clear, however, that pre-existing differences between German and British companies will mean different routes to transnational status, travelled at differing speeds. Thus British MNCs, because of their lesser embeddedness and greater autonomy, may manage the transformation more quickly than German ones. On the other hand, however, the predominant form of price-competitive weakly-coupled conglomerate will require more drastic restructuring and reorientation than most German MNCs, as well as receiving far fewer societal resources to aid transformation. Although the SE approach is still partially useful in illuminating the very different routes taken by British and German firms in this interaction process with a new phase of internationalization it is not currently equipped to explain the emerging new actors and structures.

Appendix German companies: BASF Mercedes-Benz Siemens Trumpf

— — — —

one of the three chemical giants. cars and lorries electrical and electronic goods machine tools

— — — — — —

conglomerate electrical and electronic goods foods and drinks pharmaceuticals conglomerate chemicals

British companies: BTR GEC Grand Metropolitan Glaxo-Wellcome Hanson ICI

Chapter 12 The evolution of teamwork at Rover Societal, sectoral and organisational explanations Frank U. Mueller

Introduction A critical question that has arisen in the debate on corporate restructuring and societal effects concerns the extent to which corporate change and restructuring has proceeded along a path largely determined by the inertia of national institutions; or, alternatively, whether restructuring has increasingly been guided by ideas, concepts, recipes characteristic of a globalising sector and the multinationals’ strategic rationales within that sector. This is not to suggest that these two (or three) perspectives are necessarily incompatible, but simply that they might place the emphasis in different ways. The paper’s point of departure is therefore a critical but constructive appraisal of the societal effects framework. One of the problems identified is a lack of systematic attention to industrial dynamics driven by corporate strategic considerations as well as the impact of sectoral models. This paper posits that in order to account for organisational change it is necessary to look at dynamic processes of contestation and domination and pay close attention to a host of meso-level and even micro-level units around which collective action in a country can be organised. The present paper posits that actions in organisation can draw on societal, sectoral or corporate linkages in order to guide, legitimate and finance action. This posits the existence of knowledge, cultural (legitimacy) and resource linkages (the concept of the “organizational field” posits similar ideas (eg Westney 1993)). Each of these will have to be discussed in turn. Just like a society will preserve (some of) its routines from one generation to the next so will an organization. This theme was first discussed in Alfred Schutz’s phenomenological theory of society. Taking a different angle, organizational learning theory explains why employees need to economise on the amount of

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information that they are prepared to consider for any particular issue (Levitt and March 1990: 19). Haunschild (1993) argues that organizations copy other organizations — in their country and/or in their sector — after the latter have had to absorb the costs of uncertainty, discovery and experimentation. Furthermore inter-organizational networks can function as a mechanism for the diffusion of innovative practices. For example, director interlocks function as important conduits of information about business practices. Adding to the legitimacy argument, Haveman (1993) argues that organizations viewed as important competitors will be monitored more closely, and the role of so-called “cognitive strategic maps” is such that actions of organizations in other industries will be downplayed or even ignored” (ibid. pp. 596–7). In particular, actions of organizations which possess high visibility and prestige will exert influence, and the most profitable organizations often serve as models for the rest. According to one version of institutional sociology, institutional linkages confer both resources and legitimacy upon organizations (e.g. Baum and Oliver 1992). In the societal context, diffusion of rules, expectations and practices will typically happen through governmental agencies, trade associations, professional associations, unions; by consultants and the movement of employees; through formal and informal educational institutions, experts and trade publications. Generally speaking, when considerations of legitimacy are involved, diffusion of experience has positive consequences for organizations that are copied, insofar as sharing leads to greater legitimacy for all concerned (Levitt and March 1990: 26).158 This can partly be explained in terms of March’s (1981) idea of “obligatory action” which describes the process that once enough social actors do things a certain way that course of action becomes taken for granted (= “institutionalised”). Subsequently other social actors will undertake that course of action without much thinking. There is obvious agreement here with the SE approach. Let us quote the example of the recruitment of engineers into positions in the German manufacturing industry — as for example in personnel functions — where they can rarely be found in other countries. The concept of obligatory action seems to be at least as promising in accounting for this difference than either objective task requirements or labour supply arguments. However OL theory suggests that obligatory action can also become established in a sector: for example, the team working template started to spread across the automotive sector from the late 1980s onwards even though its exact role and impact was far from clear. 158. This, however, could be seen as an unjustifiable simplification. Indeed, the willingness of many senior management teams to share their experience with other companies — both outside but also inside the industry boundaries — casts doubt on this. Arguably the management team themselves will benefit from enhanced reputation in any case, and might be well prepared to disregard medium-term competitive implications.

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Society, sector and firm Imitating an existing template clearly helps organizational decision-makers to reduce the amount of information that otherwise would have to be absorbed and considered. Perhaps more importantly, by relying on sectoral templates management teams can demonstrate to their “relevant audiences” that they are taking (effective) action to tackle competitive challenges. Templates are also shared within a firm; for example, between divisions or subsidiaries. Thus, organizational change at a particular firm can be analysed along at least three modes of interpretation: the society, the sector, and the firm. Let us go through each of these in turn. A central stream of “societal effect” research during the 1980s focused on the mechanical engineering and chemical industries in Britain, France and Germany. Some earlier studies had established that British firms were more “suited” for large-batch and mass or process production, given that there were weak links between worker and technician careers, much less use of shopfloor and operator programming compared with Germany, and a substantial communications gap between engineering and planning functions and the shopfloor (Maurice et al. 1980; Sorge 1983; Hartmann et al. 1983). The later machine tool industry studies (Sorge and Maurice 1990) found that there is a correspondence between the institutional structure of society on the one hand, organizational forms and human resource practices on the other hand. Organizational forms and human resource practices in turn correspond to product market strategies and product market segments where a country shows particular strength. By implication, similar industrial goals in similar task environments can be achieved in ways which differ substantially in terms of work organization, organization structure, skill and knowledge requirements (Sorge and Maurice 1990). On the basis of these results Sorge (1991) put forward the “neo-contingency framework” (NCF) which retains the core ideas of the SE approach, but places more emphasis on the sectorallyspecific effects of the institutional structure of society. Organizational forms and human resource practices become an intervening variable, and can explain why a certain country shows particular strength in certain product market segments by pursuing certain product market strategies. It is a further step, perhaps logical, to posit an “organizational effect” (OE), and to concede the possibility that under certain conditions, which will need to be the subject of further research, the OE can override the SE (Mueller 1994a). Indeed, although societal analysis authors may disagree, conceding such a possibility of override is probably necessary in order to explain individual cases of deviance within a national business system (Mueller & Loveridge 1995). Societal patterns are related to the prevalence and success of specific sectors in the respective economy. Warner (1987), for example, pointed out that the

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absorption of prestigious higher schools of engineering into Germany’s system of higher education is the historical background for the present strong link between managerial and technical competence in German companies. Arguably this institutional feature can provide the basis for an explanation as to why, between 1950 and 1990, French machine tool producers gradually lost market share to both Japanese and German firms and were increasingly forced to focus on specialized markets (Sorge and Maurice 1990). While Germany does indeed enjoy strength in the mechanical engineering sector the argument would imply a more substantial comparative competitive advantage than is actually the case — a fact acknowledged by Sorge (1991). More seriously, the loss in market share and comparative competitive advantage by some German firms after 1990, even though the actual extent of any loss can be debated, is not easily accounted for, unless one reintroduces the sectoral and firm level into a societal effect analysis. But let us take a step back again and put things into context. Arguably, both “Industrial Order” and “National Business System” theorizing place more emphasis on the role of state regulatory activity and different national financial systems than has been done in the context of SE theorising where the focus was more on the impact of different national industrial relations and education and training systems. A problem shared by all three approaches is clearly the preoccupation with existing structures and the relative neglect of (often firm-level) processes which challenge existing (for example, industry) structures. A relative neglect of the dynamic aspects was acknowledged in a 1990 working paper by Maurice & Sorge where they proposed to develop the “LEST” approach by looking more at the dynamics and the development of societal structures over time. Thus there is clearly awareness of the need to include dynamic aspects in a Societal Effect approach (e.g. Sorge 1995). In a “trivial” sense all organizations are embedded in a society and influenced by its norms, values and practices. In a management context, however, it is important to move beyond the trivial sense and identify “interesting” — in the Weberian sense — cases, for example, where management has actively and consciously shaken off constraints, which they perceived as unduly restrictive. Admittedly research interests will typically differ between sociological scholars, who might be more interested in the typical case, and management scholars, who might be more interested in management’s strategic choice. At Unipart, for example, the British industrial relations system — or, more specifically, TGWU shop stewards’ resistance to teamworking and multi-skilling — was seen as constituting a major obstacle to building a “world class” company. In 1992 senior management decided, therefore, to end union recognition altogether, and has since established forms of direct communication with the workforce. Corporate action can initiate change: cases like Unipart have somewhat modified the TGWU’s stance towards new working practices, in particular in the case of greenfield sites,

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where the TGWU has to compete in so-called “beauty contests”. This might influence the stance of T&G shop stewards in future cases of workplace change. A sectorally modified societal perspective is adopted in Kenney & Florida’s (1993) research which describes in great detail the largely successful adoption of Japanese production and working practices in Japanese transplant operations in the U.S. Kenney & Florida emphasise the important differences in diffusion between the automotive, rubber, steel and electronics sectors. By implication their work suggests that it is necessary to consider the sectoral specificity of societal influences during the adoption process. For example, when they discuss the role of U.S. managers in the electronics industry who, still trained in the old attitudes, were found to be injecting Fordist practices and thus partially “polluting” the transfer process. This meant that Japanese electronics transplants in the U.S. were much more deficient compared with Japan’s home factories than was the case in the auto industry. Kenney & Florida (1993) concluded that even though there was an underlying cross-sectoral trend towards the Japanese “model of innovation-mediated production” (p. 26) there were, at the same time, significant sectoral differences. In the steel industry, for example “Technology transfer was accomplished by watching and learning about the production process and by working closely with Japanese trainers.” (Ibid. p. 181)

Only in the Japanese electronic transplants studied was labour turnover considered a serious problem (ibid. 235). Also based on research in U.S. transplants, Milkman (1992) concluded that outside motor manufacturing, in sectors like electronics, Japanese transplants tended to conform much more closely to the behavioural pattern of local firms in terms of pay, work organization, absence of unionisation, and forms of employee involvement. We suggest looking at teamworking in order to study the interaction of the three analytical dimensions identified earlier.

Teamworking: The ‘societal effect’ account Participative teams have held great promise for those interested in pushing forward the boundaries of industrial democracy, but these ambitions have come and gone in waves and with substantial variation across countries. Up to the 1980s the greater Fordist inheritance in the UK and the US found its correlation in less interest in semi-autonomous teams whilst, broadly speaking, in Germany and Sweden the reverse was true (Grootings, Gustavsen & Hethy 1989). In Germany the “humanisation-of-work” (HoW) inspired initiatives begun in the 1970s had some impact in certain sectors including automobiles, iron and steel (Gebbert 1985), but they did not lead to widespread introduction of semi-autonomous teamwork across German industry (Altmann, Binkelmann, Düll 1982: 40). In fact

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the number of people affected by these humanisation experiments was no more than a few thousand. Especially with the onset of the 1981/82 recession, the remaining dynamism for positive change fizzled out (Dey 1985). Nevertheless normative societal pressures meant that teams, in order to be considered a legitimate workplace innovation, needed to have at least a certain humanisation element. However in the late 1980s, under a different “umbrella”, the discussion of teamwork among German trade unionists, politicians, academics and management was re-kindled, mainly because of the Japanese challenge. Whilst the link to company objectives was now made more strongly, there was no significant attempt to negate the role of works councils — and thus, by implication, trade unions — in becoming part of a consultation process on changes in work organization. This was a general feature that applied to all the significantly different variants of teamwork, which were in operation in German industry by the early 1990s (Gerst et al. 1995). This fact can perhaps explain the current ambivalence in the debate: in support of the link between trade unions’ facilitating role and teamworking one can forward the evidence that by the early 1990s teamwork in German industry was more widespread than in Italy, France or Britain (Heidenreich 1994). By 1993, according to an estimate by the IG Metall, 9.5% of the employees in the automobile industry were working in teams (Neue Westfälische, 30.10.1993). Still, when applying a Japanese yardstick this appears as insufficient and in this light one can see the work reorganization efforts of German industry during the 1980s as a “lost decade” (Jürgens & Naschold 1994). Casting doubt on the link between strong trade unions and teamworking one can say that the introduction of teamwork since the mid eighties has clearly been driven by production and work rationales, which is demonstrated by the fact that widespread introduction of teams into assembly operations, where they are typically less `useful’ than in capital-intensive machining operations, has only entered the agenda once the (production) conditions were “right” (Schumann et al. 1994; Kuhn 1996). Generally speaking, in the Swedish teamwork discourse the emphasis has been placed upon job-enrichment-oriented teamwork. Typically, a dominant intention is the achievement of beneficial effects in terms of the ergonomical arrangement of work and a much higher sovereignty over time, which can substantially reduce the strains which workers experience. This was clearly one of the main motives underlying teamwork at Volvo’s Uddevalla plant. The unions demanded that assembly should take place on stationary objects only, with job cycles of at least twenty minutes. With no machine pacing, workers were expected to do both direct and indirect tasks (Pontusson 1990: 325). Although under the 1976 Swedish Co-determination Act management is only required to consult the unions on changes in the workplace, but not to reach agreement with them, management adapted its original plans and accommodated all of the union demands.

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Finally turning to Britain, it is clear that during the 1980s there was significant institutional change, much of it due to two factors: a barrage of new trade union and employment legislation and significant Japanese inward investment. The adoption of Japanese personnel and production practices from the late 1980s onwards at Rover was typical of wider developments in Britain at that time (Oliver and Wilkinson 1988/94). In the 1980s union shop steward antagonism at BL/Rover was aroused by their perception of foremen’s efforts as one-way communication. For a long time, societal factors represented, in management’s view, a major burden for the modernisation of Rover. In particular during the 1970s and early 1980s, bad industrial relations in Britain were generally even worse in what was then British Leyland. In particular the role of the shop steward was seen by management as an obstacle to change towards direct communication with the workforce. But also senior management failure in building a promising product profile in an attractive market niche — a strategy which Rover only pursued successfully from the mid-eighties onwards — was a mirror image of British manufacturing industry more generally. According to “neo-contingency theory” (e.g. Sorge 1991), Britain’s knowledge infrastructure is highly developed in some sectors (pharmaceuticals, high-tech electronics) where up-market product strategies are therefore likely to be very successful. However Britain’s knowledge infrastructure is not so favourable in mature, traditionally Fordist industries, including automobiles, chemicals and steel, where mass market strategies are therefore more appropriate. According to Tylecote’s (1987) version of neo-contingency theory, British industry is most successful where it is not faced with complex problems of cross-divisional co-ordination, e.g. design, production and marketing: this, supposedly, explains at least in part the good performance of the British pharmaceutical industry. The weakness in cross-divisional co-ordination has been explained in terms of the over-representation of finance and accounting and under-representation of production and engineering among senior management.

The sectoral account The auto industry has seen a relatively large number of experiments with teamwork. It is convenient to take a look at both Sweden and Germany, where teamwork has been on the agenda of trade unions for decades (e.g. Roth & Kohl 1988; Hammarström and Lansbury 1991). The German IG Metall, for example, views teamwork as one of the most important avenues for achieving its longstanding goal of helping to create economically viable companies that simultaneously act in the interest of all their stakeholders. By way of illustration, at VW management’s intention was to involve unskilled workers in active participation

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over improving working conditions, assembling a whole engine, reducing excessive job strain and developing scope for personnel planning decisions. Indeed at VW there have been various experiments with small group work since 1979; a works agreement was reached in August 1986 on VW circles (“VW Zirkel”). Originally, these circles were based on voluntary, creative participation without involvement of the formal hierarchy (Briam 1988). The teamwork design at General Motors Aspern in Austria was similarly designed in close co-operation with trade union representatives and turned out to be very popular with the workforce. This was partly due to the skill-based payment system which was put in place and which led to higher wages more or less across the board. The design also meant a relatively high degree of autonomy for the production teams (Mueller 1994b). In Germany and Austria, changes in work organization have typically been used by trade union representatives and works councils in order to press for the elimination of the lower wage grades. VW has gathered experience with the implications of teamwork for the grading structure: when in the middle of the seventies teamwork was introduced into the engine assembly area, the distribution of wage grades underwent substantial changes and by the end of the experiment in February 1978 both the second and third lowest wage grades were eliminated (Granel et al. 1980: 35). Thus different groups in the U.K. automotive sector can use different aspects of the “sectoral discourse” from another country: U.K. unions have to some degree alluded to the strong link between teamwork and enhanced participation in the German manufacturing industry. Management, however, can point to the fact that the participative version of teams has to a large extent become replaced by the productivity version of teams even in Germany. In addition, management can point to the considerable difficulties that the “Uddevalla Model” encountered in Sweden. What is true in both cases, however, is that the discourse is conducted largely within sectoral boundaries: i.e. a British retail bank will not allude to the experience of a German or British car company.

The corporate agency account: The case of the Rover group This section is based on a longitudinal case study of the Rover Group’s attempt to introduce forms of employee involvement and team working starting with the Ryder report in 1975 and spanning more than twenty years. Generally speaking, societal variables — just like sectoral variables — can be analysed in terms of their effect on organizational change, in terms of them obstructing or facilitating change. For example in the early 1980s union demarcations inhibiting flexibility were one of the major reasons that Rover management perceived a need for drastic change. By 1995 it is fair to say that demarcations no longer played a

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significant role and in this respect change appears to have been drastic indeed. In an attempt to address problems of co-operation and involvement, Rover159 established foremen’s zones to build up a “combination of control and commitment” in the mid-1980s. This might be considered as the onset of continuous improvement activities. There were zone briefings and zone circles, both being part of the corporate-wide initiative to increase communication, involvement and skills. Zone briefings were characterised by a systematic exchange of information between managers, supervisors and operators and a discussion of both companywide and zone issues. Zone circles can be defined as “A group of employees with the same work interests voluntarily meeting regularly in order to identify, analyse and solve work-related problems recommending solutions to management and whenever possible implementing those solutions.”160

Between February 1986 and May 1987, despite the opposition of the manual workers’ union, the T&G, 27 zone circles were set up at Rover’s Longbridge operation. The main managerial objectives driving the introduction of these circles were the desire to teach people to work as a team, reduce waste, and improve quality. The zones centered teamwork around a foreman who was expected to supervise closely, whilst trying to elicit worker co-operation. In these zones, the foremen’s span of control was reduced to 25 workers, while at the same time their position was enhanced with training, improvement in salaries and status designations. Focussing teams around foremen was a decision against a participative design in the sense of semi-autonomous teamwork, and meant that the foreman would retain significant disciplinary powers. Thus zones were not a significant step from a control towards a commitment-based corporate culture, insofar as they maximised labour flexibility, without granting autonomy, or for that matter, reducing hierarchy. In Gerst et al.’s terminology, they were a ‘structurally-conservative’ rather than ‘structurally-innovative’ design. The difficult position for foremen consisted in the fact that they had to secure high production output and high commitment at the same time, which practically precluded any reasonable union co-operation for achieving commitment. Thus, with hindsight perhaps not surprisingly, zone circles failed mainly because the unions opposed them on the grounds that they might undermine the role of the shop steward: a problem not untypical of UK industry in general. However whilst in the mid-1980s teamworking died a slow death due to a lack of 159. Until 1986, Austin Rover Group was the volume car division of British Leyland (BL) plc, which also produced trucks, vans, buses and four-wheel drives. Austin and Rover cars were assembled in two plants at Longbridge and Cowley which received components from satellite factories. In 1986 BL was renamed the Rover Group. The Rover Group became a subsidiary of British Aerospace in 1991 when it was acquired from the British Government. It was sold to the German car producer BMW in early 1994. 160. Rover Company Document “Manager’s Guide”.

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trust between both unions and management, it was revived from 1990 onwards in a different form. In September 1990 “Rover Tomorrow — The New Deal” was proposed to all employees: a document which proposed discarding all remaining `inefficient’ working practices in return for a commitment to no compulsory redundancies by management. Its main features included for everyone to be involved in teamworking to continuously improve working practices and operating processes, and full flexibility as the norm in return for enhanced job security. Management was aware that in order to make “Continuous Improvement” (CI) a reality, rather than mere rhetoric, organizational design changes were required, in order to institutionalise and reward CI-oriented behavior by all employees. One way to achieve institutionalisation of CI is setting up “Discussion Groups” (DGs), which from the late 1980s were introduced into some Rover operations such as powertrain. Where they were introduced, Rover also adopted the group spokesman concept, who is elected by the group members, and subsequently agreed in joint consultation between management and union representatives. DGs were to be based on a specific production area, working on problems identified by the members themselves. They were semi-permanent configurations overseen by a facilitator with an advisory rather than disciplinary role. DGs were structured around production employees who work together on a permanent basis, with guests (e.g. maintenance engineers) being invited to join on specific occasions. They could be called semi-permanent, insofar as both their composition and their frequency could change and vary within certain limits. A main managerial objective underlying the introduction of DGs was the strengthening of prevention, thus ensuring that “small problems” would not turn into “big problems”, by discussing them in time. In DGs, shopfloor workers, technicians and supervisors could discuss quality or technical problems, but the agenda was also open for other issues. Quality Action Teams (QATs), in contrast, worked on problems identified as such by managers. By early 1991 there were 180 quality action teams in operation, distributed evenly across the company. Respondents pointed out that a very positive factor in their relative success was senior management’s unambiguous commitment to quality. Management retained a veto power as they wanted to make progress towards commitment without giving up management control, given that the latter had been regained under such difficult circumstances and with immense managerial effort. The discussion groups were practised on the K-series engine project and, during the initial rate of output increase, discussion group meetings took place on a regular basis and with union approval. Partly financial constraints, but more importantly emerging output pressures in the K-area, made it necessary to reduce the number of discussion groups and let them take place in employees’ own time. At the beginning of 1991 there were 95 discussion groups company-wide — this figure needs to be seen in the context that DGs were not introduced across all of

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Rover’s operations — but the number declined thereafter rather steeply. This can be seen as reflecting a perhaps typical lack of patience and persistence. In 1991 Rover’s group spokesman (now: facilitator in SWG) was elected by the group but subsequently appointed on the basis of an agreement between management and trade unions. However by 1995 this no longer applied, as Rover was keen to ensure that management hierarchy and managerial control would not be compromised. Both corporate history and national industrial relations factors were reflected in these fears. The idea was that if QCs or DGs were organised as a parallel structure outside the formal line organization, creativity could be utilised whilst minimising the repercussions for managerial prerogatives. Rover management expected that a group spokesman:161 – – – – – – – – – – – – – –

‘owns’ the group, organises, holds and controls meetings, formulates plans, prioritises problems, identifies assistance required, prepares room materials aids, trains team members on the job, is responsible for the operation of the group, maintains records, reports progress, creates an effective team, generates team spirit and co-operation, shares experience with peers, identifies potential (Company documents).

This shows that although the group spokesman was expected to fulfil quite an important role, (s)he is situated outside the managerial hierarchy. However maximising spontaneity of the group without compromising hierarchy has remained an ongoing challenge for job design efforts. At some point, Rover management found the distinction between the two — DGs and QATs — no longer plausible and by 1995 had replaced both of them with Small Work Groups (SWGs). SWGs are set up on a temporary basis in order to discuss and solve a specific work problem, which can be of any nature (including quality), and whether set by management or shopfloor employees. Managers will normally participate in these SWGs, which are typically chaired by an operator. Members can elect their own facilitator, who should facilitate problem-solving in SWGs. The facilitators do not require confirmation by production management because it is not a job title nor is there any additional pay. The responsibilities are narrower than in the case of the GS. The SWGs are a 161. Rover Company Document “Discussion Group”.

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parallel structure and thus do not question the managerial prerogative — in the terminology of a prominent German research team one could call it a “structurally-conservative” solution to job design (Gerst et al. 1995). The participation in SWGs is regarded as a job responsibility like others, even if management acknowledges that extra creativity and interest is expected from participants. In contrast to DGs, employees in SWGs only meet in order to discuss and solve a very specific work problem. Essentially the SWGs’ role is to tackle work problems and their causes, including the implementation of their suggestions, whilst not dealing either with issues that belong to the realm of the formal hierarchy or with more general questions. It is expected from the SWGs that within their remit they look after the implementation of their suggestions. Only if necessary will manufacturing managers take the lead and ensure realisation of suggestions and decisions made by SWGs. “Production Teams” (PTs) are different from SWGs in that they are based around production workers at a specific operation (eg cylinder head machining line). They can be called “team” only in the sense of greater co-operation, perhaps rotation of tasks or helping a colleague; there are no specific, regular meetings by PTs. SWGs take place in members’ working time, and there is no extra financial reward. Training for operators is provided on a very selective basis, in order to prepare some selected operators for a DG spokesman position. Everybody completing this training successfully will move to the highest possible grade and will receive an additional 20% of the basic salary. In order to be selected for team leader training, interested volunteers have to undergo a psychological, technical test as well as a practical test. Success in this test means being selected for a thirteen-week training course of which ten weeks are in the classroom and three weeks are on the job. Both experience and skill are important to qualify for this position. The agenda for SWGs is such that they should not only discuss problems — which can be seen as symptoms — but also the underlying, often faulty, processes that have produced these problems. Overall it would be fair to say that the spreading of these new forms of work organization throughout the worldwide automotive sector created substantial pressure for Rover management to undertake reform. In this respect, institutional theory can be applied to sectoral development. This is not to deny that there may be significant differences between companies in different countries. Rover installed its Rover Employee Assisted Learning (“REAL”) programme in May 1990 to facilitate learning among its whole workforce. The Rover Learning Business is an independent unit with its own managing director and board of governors. Originally, Rover planned to spend around £100 on every employee who decided to enrol on an outside further education course, offered by an accredited institution. They are typically not work-related and could range from a language course to a computer literacy course. The main objective was to

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raise the general competence of the workforce and make them used to an environment of continuous learning. Employees can choose to have a personal development file, which provides each employee with his / her career development. It has been a long-running policy at Rover to aim for an increase in interfunctional communication and integration of tasks, both at managerial and shopfloor level. As far as maintenance is concerned, for example, two trades maintenance was introduced in the early eighties to replace maintenance craftsmen being divided into six different trades. This change was intended to facilitate the introduction of teamworking by increasing functional flexibility. Rover had introduced Block Management in the middle of the eighties, an organizational arrangement under which middle managers are given sole accountability for a block of work, for example the Rover 800, the Maestro or the Metro. This design was meant to replace a predominantly functional structure with a product-based structure which can better integrate functional specialisms. Both the quality function and production material control were to report to the block manager. Block Management has been taken a step further in Cell Management which was introduced around 1990. It was inspired by Rover’s then Managing Director’s visit to Honda’s Ohio plant. Under cell management a production manager would be responsible for a unit of 60 to 90 production associates including quality functions. In the mid-1980s Rover took out all inspectors and removed inspection as a separate department under the quality manager. Before that, the inspectors had decided on whether products where good or scrap. Now there are still some quality engineers but they will advise production people only if called upon by them. While earlier inspection often took place in a reactive way, with the undesired result that work was often shuffled forwards and backwards, it was now linked more closely with prevention efforts. Ideally the inspector in a team should immediately raise it with the appropriate production worker if and when scrap levels increase.

Corporate solutions to national “problems”: How Rover tackled demarcations and inflexibility Teamwork was already on the agenda at Rover in the late 1970s, early 1980s, during the installation of the new Metro line. Originally the introduction of teamworking at Rover happened primarily as an exercise in achieving more flexibility, in particular at shopfloor level. It is relatively easy to find companyspecific historical reasons for this in the form of Rover’s enormous productivity problems in the 1970s, which were partly due to inefficient working practices at shopfloor level. Of course, one can also cite institutional reasons in that the

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elimination of demarcations was a dominant managerial policy aim across British industry during the 1980s and into the 1990s. In order to understand issues of managerial legitimacy one needs to look at Rover’s history over the past three decades or so. With Edwardes as the new CEO from 1979 came a policy aimed at re-establishing management’s right to manage. In his autobiography Edwardes elaborated that “from the start, everything we did in employee relations was tested against the broad strategy of regaining management control.” (1983: 181) The period in the early/ mid-1980s was sometimes described as “macho management”. Since the late 1980s it has become clear, however, that Rover top management aims at combining assertive management with some employee involvement and moderate consultation with trade unions. Nevertheless there was a clear intention on the company’s side that the enhanced role of the supervisor should partly replace the influence of the unions at the workplace. Not surprisingly, the discussions with the unions, and here in particular with the T&G, originally broke down over the unresolved issue of team leaders. However team leaders have since been agreed upon and been introduced. According to interview respondents, there is now a much greater readiness among management to engage in extensive information-sharing both with union representatives and the workforce as a whole. But there is still nervousness — rooted in historical experience — about moving towards more participative forms of decision-making and compromising the formal managerial pregorative. The implementation of central management policies has been tightly controlled by senior managers.

Conclusions and implications In summary, the paper has attempted to show that a satisfactory account of organizational change needs to draw on three lines of argument. What we should accept from organizational learning theory is that management have a limited information processing capability and will select certain problems and certain solutions from their cognitive environments. From (European) institutional theory we accept that what management selects both as a problem and as solutions will often vary significantly between countries. The societal line of argument has highlighted typical national issues that were constructed by BL/Rover management as “problems”: lack of functional flexibility in manual employees’ working practices, demarcation issues, the obstructive role of shop stewards. We depart from (European) institutional theory in acknowledging that certain problems (and solutions) will travel along sectoral — and in the case of the automotive sector this means global — lines of communication. Typical sectoral issues were the design of team working to be adopted, a design that was to

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combine the enhancement of creativity without diminishing managerial control over production and quality control targets. Retention of such control was a near universal goal in the automotive sector. The organizational trajectory of explanation tells us that because of firmspecific factors — CEO, company history, culture — certain problems are perceived as particularly serious — demarcation in Rover’s case — while certain solutions are ruled out — namely challenging the shop stewards’ role as far as communication with the workforce is concerned.

Chapter 13 The societal effects school and transnational transfer The case of Japanese investment in Britain Chris Smith and Tony Elger

Introduction We have two purposes in this chapter. Firstly, to critically evaluate the theory of ‘societal effects’, especially in relation to the issue of multinational companies, specifically Japanese MNCs. Secondly, to suggest an alternative approach to the shaping of work organisation in the current period which moves beyond the generalities of convergence arguments and the specificities of the societal effects approach. The societal effects approach has tended to ignore the issue of foreign firms, treating national business environments as insulated societal spaces. When MNCs are discussed it is assumed that their subsidiaries will be obliged to conform to the particular “rules of the game” operating within the host society (Sorge 1995: 122). There is, in contrast, a ‘transfer’ literature which argues that firms from dominant economies, such as the US or Japan, will transfer part or all of their working practices onto foreign soil through diffusion agencies, such as MNCs. In the case of Japanese firms, it is suggested that the “best practices” of JIT, TQM, cooperative supply relations, team working, and many other techniques and activities identified with Japanese firms, create productivity or cost efficiencies which other firms will apply through the competitive operation of the market. It follows from this literature that Japanese MNCs, when they locate in the US or Europe, will need, for reasons of competitive advantage, to retain their home country efficiencies, and therefore seek to find ways of transferring these practices through the network of their subsidiary operations (Abo et al. 1994). Indeed, there has been an explosion of writing on the theme of transfer and transplantation in relation to the spread of Japanese overseas manufacturing investment, although the evidence

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of such transfer is far from clear cut. Elsewhere we have criticised the standard transfer literature, in both the ‘innovation mediated production’ version of Kenney and Florida (1993) and the ‘lean production’ version of Womack et al. (1989). In summary, our major criticisms relate to the overdrawn nature of the contrasts between Fordist and post-Fordist or mass and lean production ideal types; to the significance of varied organisational media of transfer; and to the influence of different social and economic contexts on the character of innovation and adaptation (Elger and Smith 1994; 1996). At the same time, as we discuss below, we have also engaged with the contrasting literature on societally embedded forms of economic difference, and found much of this literature wanting (Smith and Elger 1997a). In this chapter we will examine the counterclaims of these two approaches, and see how far the societal effects approach stands up to the more universalist or diffussionist managerial literature. Our analytical framework addresses the complex network of social relations within which transplants operate by distinguishing between system imperatives and societal and dominance effects on the formation of work organisation practices (Smith and Meiksins 1995). Through these distinctions we seek to move beyond both universalistic paradigms of organisational innovation and the contrasting emphasis on the predominance of societal effects grounded in persistent national distinctiveness. Capitalist competition, technological dynamism and capitallabour conflict underpin and exert common pressures on all specific manifestations of capitalist social relations, within enterprises, sectors or national economies. It is this underlying dynamic, that is crucially characterised by conflicts and uncertainties, which we refer to under the heading of system imperatives. But in practice the systemic features of capitalist development are not simply expressed in a uniform fashion across the global economy. Most notably, they are in key respects both mediated and crystallised in a distinctive fashion within specific national states. Furthermore, national institutional patterns are not confined to the environments of corporate enterprises, but penetrate powerfully into their internal operations. It is such features which have been highlighted, but in turn overstated, by the contemporary family of theories of societal effects, institutional settlements and national business systems, for each of these approaches tends to reify societal influences as a configuration of dominant and self-contained determinants of organisational arrangements within the ambit of each specific nation state (Maurice et al. 1986; Sorge and Warner 1986; Lane 1989; Whitley 1992). In so doing they not only tend towards functionalist accounts of national “institutional systems” which neglect sources of heterogeneity, instability and conflict (Smith and Elger 1997a). They also risk abstracting national states and their associated institutional forms from the global system within which they are embedded. Thus, whilst the theorists of societal effects have begun to develop

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valuable accounts of the sources of diversity in national trajectories of capitalist development and class relations, these accounts have concentrated upon the internal logics of institutional development which are held to explain persistent distinctiveness, while giving little attention to the ways in which evolving relations among states alter the terrain upon which national ‘systems’ operate. In turn it has been the theorists of the ‘world system’ and of international political economy who have highlighted the ways in which fundamental systemic imperatives are not merely contained and expressed within national state forms, but also through a wider set of international relations in which specific national states are inserted (Gill and Law 1988; Burnham 1991; Sklair 1995). In part this involves specific hierarchies of economic, military/political and cultural dominance and subordination among national states, and this is clearly signalled by our use of the label ‘dominance effect’. However the global processes of uneven development, interdependence, conflict and crisis, within which nation state institutions are embedded and qualified, do not simply sustain coherent or stable patterns of hegemonic and subordinate nation states but involve a problematical recasting of trans-state and supra-state institutions, often associated with contested realignments of regional and other alliances, and we also wish to embrace these features under the heading of ‘dominance effects’. Thus this framework provides a set of categories which avoids embracing either the essentialism of universalistic theories or the particularism of analyses of national distinctiveness. Furthermore, it not only directs attention to the interplay between these different influences upon corporate organisation and work relations, but also highlights persistent sources of tension, contestation and change within and between them. Finally, then, it is important to locate the capitalist firm more explicitly within this framework. Such enterprises clearly represent pivotal condensations of the fundamental social relations of capitalist society, between capital and labour and between units of capital, but they do so always within a wider matrix of social relations. As the economic sociologists have emphasised, neither labour markets nor commodity markets are free-standing but are rather embedded within wider social networks (Granovetter 1985). Thus both markets and firms are social mechanisms which operate within specific constellations of institutional provision and regulation, many of which are primarily constituted through national state practices. This also means that the very constitution of enterprise activities, from the organisation of labour discipline and the labour process through the organisation and control of a management cadre to inter-enterprise relations and corporate financing, bears the imprint of specific national and regional institutional histories. Students of Japanese and other East Asian ‘business systems’ have given particular emphasis to such features in cautioning against treating US or Anglo-American forms of corporate organisation as generic, though in so doing they have tended to overstate the stability and coherence of each distinctive business system (Whitley 1992).

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We do not, however, have to assume that firms operating within different national frameworks represent smoothly functioning ‘systems’ to recognise that the shared imperatives and dilemmas of capitalist production are expressed and addressed in somewhat different ways in different national settings. At the same time, the internationalisation of manufacturing production has underlined what was already true by virtue of international trade and monetary flows, namely that the operations of such firms also transcend and cross-cut national boundaries to operate on a global terrain. This does not mean that even MNCs are simply disengaged from societal effects, which may flow from the concentration of ownership, production or sales in specific national markets or from the hegemony of specific national states on the international stage. But it does mean that they operate within a structure of constraints and opportunities which is not merely the sum of various societal effects but is rather constituted at this global level. One of the concerns of this chapter is to explore the implications of this for an understanding of the role of MNCs as agencies of transmission of production paradigms around the globe.

Societal effects analysis: National institutional patterns as contingencies We wish to turn the focus, before going on to our own empirical investigation, on a critical feature of societal analysis which addresses our theme: the interface between national institutional patterns and transnational social processes of rivalry and competition. The real focus of interest of the societal effects school is not social actors but rather the linkages between societal contexts, institutional structures and economic activity. One way in which Sorge (1991) has developed this argument is by drawing parallels between the societal effects analysis of the relationships between vocational training and industrial relations systems and organisational forms and neo-contingency thinking: The development of societally specific, institutionalized populations of organisational forms and practices, was intimately linked with the pre-eminence of particular economic niches (types of markets and overall sector specific tasks). From the Aix study therefore, an idea emerges which is reminiscent of neocontingency thinking i.e. that the espace d’organisation (organisation forms and practices); espace de qualification (human resources) and espace industriel (industrial structures and organisation) of a society are interdependent (Sorge 1991: 162–3).

Sorge’s recent writing with Maurice also returned to this theme, linking firm or industry performance to a ‘fit’ between firms and performance niches which successfully capitalise on societal contingencies: Our major thesis, therefore, is that societal context constitutes competitive advantages and disadvantages in specific industries. Such an approach links the societal

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effect framework of the Aix Group and the neo-contingency framework, which maintains that organisational structures and processes are interdependent with the firm’s business strategy and market segment (Miles and Snow 1978). (Sorge and Maurice 1993: 76)

Such a combination of societal effects and neo-contingency theorising does, however, create major ambiguities. In particular what relative weight is to be assigned to societal contingencies as against sector or wider market contingencies? This ambiguity points to an underlying tension in this development of the societal effects approach, between the implication that societies should specialise in those activities where their societal effects constitute a comparative advantage and the idea that even where different societies are working in the same sectors they produce in distinctive but “functionally equivalent” ways of working (compare Rose 1985). Thus on the one hand there are statements in favour of this latter, pluralist, emphasis, arguing that ‘there was no indication that units in one country, as part of the matched pairs of enterprises compared across societies, were more successful by any criterion’ (Sorge and Maurice 1993: 75). On the other hand, however, the argument that societies are good at different things underpins the importance of societal specialisation, in a form close to the standard comparative advantage thesis. Indeed, the latter is given a dynamic emphasis in terms of trajectories of development: Firms will survive and grow when there is a relatively good fit between societal and sectoral or market segment characteristics. Hence, there is, for instance, a large and successful population of medium-size investment goods engineering firms in Germany. In Britain and France, large batch-producers or defence, electronics, and specialised high-tech manufacturers are more competitive. (Sorge and Maurice 1993: 76)

Ultimately Sorge and Maurice reject the idea of treating society as a ‘contingency’, in part because any simple ‘fit’ is subverted by the evolving and differentiated character of both social institutions and markets. Thus they argue that while organisations and human resources are the outcome of different societal institutions, such institutions ‘are essentially ambiguous with regard to strategies and contingencies’ (p. 93). In other words, while a strong feature of Sorge and Maurice’s approach is to see linkages between particular organisations, industrial configurations and specific societal differences, in the end, and with some ambiguity in argument, they opt for a more open position, such that organisations are not fixed to societal patterns but are relatively open to make choices of strategic action with some degree of freedom from societal determinants. Nevertheless Sorge and Maurice seem to continue to strongly affirm the role of national institutional arrangements in determining the distinctive economic pathways of different national states. Thus, when he addresses the fate of competing models of work organisation which may be operating across national boundaries, Sorge (1995) argues that national specificity is ‘relatively stable’, suggesting

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that whatever is learnt from other firms or countries can only ever become a national ‘variant’ of a best practice, and not a ‘standard’ variant, and in this way can only ever reinforce established national specificities. Indeed, this qualified claim is developed into the much stronger argument that any trend will be towards greater national specificity: The societal effect approach argues that internationalisation and universal technical change lead to different outcomes in each society, within an intensification of the international division of labour. How this division of labour develops can only be explained by reference to societal characteristics that are relatively stable, even in the midst of change. This change triggers development of societal specificity, rather than bringing about convergence between societies…This approach rests on the assumption that societies will grow increasingly different in their industrial and activity portfolio, because institutionalized construction of their various systems already differed… But the approach also suggests that, to the extent that societies and firms try to achieve similar direct outcomes, the international learning which takes place precludes transfer of institutionlized practice. (Sorge 1995: 122–123)

Now we would not wish to contest the underlying insight of these authors that national institutional complexes constitute important constraints and facilitators in shaping the organisation of work and employment relations within enterprises. Furthermore, we share their scepticism about claims for single, hegemonic ‘best ways’ of organising work, and recognise that cross-national research has clearly documented the persistence of distinctive institutional arrangements and patterns of industrial relations in different nation states, even over periods marked by changing economic conditions. However, we are much more sceptical about the stronger argument that the societal effects arising from national institutional complexes will always override transnationally transmitted models and practices, in ways which will reinforce national distinctiveness. One source of our scepticism is our recognition that national institutional complexes are themselves characterised by significant tensions and incoherences. While different nation states clearly vary in this regard, this is a matter of degree rather than kind. For these features are to be found not only in relatively fragmented and decentralised socio-economic formations such as the UK but also in much more strongly “organised” societies, as discussions of the problematical character of neo-corporatist forms of regulation of employment and industrial relations underline (Fulcher 1991; Crouch 1993). Furthermore, the national ‘rules of the game’ are often related to class-based conflicts of interest which are not only channelled by established institutions but also give them an internally contested, contradictory and to some extent open-ended character — potentially parallelling the negotiated and emergent features of organisational arrangements within enterprises discussed in the previous section. Finally societal effects do not always correspond with national boundaries but may result from regional institutions covering either a smaller or larger area than national states.

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Another basis for our scepticism is that we cannot assume that foreign models will always be assimilated into national forms, because there are real pressures on enterprises to draw upon such models to develop fresh ways of working, mediated both through direct market competition across national boundaries and through organisational practices of monitoring and bench marking pursued by MNCs. In this context the relative leverage of national institutions and innovating enterprises, such as foreign companies, may vary. From the French or German perspective it may seem that institutional rules will always ‘embed’ the practices of such firms in local conditions, although Mueller (1996) marshals some compelling evidence to qualify such expectations. But from a British perspective the durability of national institutional patterns faced with a powerful foreign entrant may be less robust. Once both the strength of established institutional frameworks and the leverage and commitment of the innovating enterprises are seen to vary, this opens the possibility of some form of ‘hybridisation’ of corporate practices in a way which moves closer to an alternative model, rather than merely assimilation to an entrenched national form. In any case we would argue against assuming the unproblematical reproduction of national specificities regardless of the quality of the institutional arrangements within different states and the power balances between countries and the firms operating from those countries (Smith and Elger 1997a). This directs attention particularly to the role of foreign MNCs, and especially to circumstances where a whole sector or geographical locality becomes dominated by such firms. It also directs attention to circumstances in which established national ‘rules of the game’ are more generally under challenge or being recast. In important respects such circumstances pertain in relation to the operations of Japanese MNCs in Britain, against a backcloth of major political and economic change. It is therefore appropriate to explore these arguments by examining more closely the operations of such Japanese firms in Britain.

The transnational firm as an active agency of transmission between the national and the global Regarding the issue of transfer of Japanese practices through the mechanism of the MNC we suggest that there were 3 processes involved: 1. the capability of transfer; 2. the propensity to transfer; and 3. what we call negotiated appropriateness Capability relates to the important issue of the resources the MNC has to draw upon, both financial and human. The standard contingencies of size, power resources, technology, and international experience provide the basis for differing

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capabilities within firms. Clearly position in the supply chain influences these resources, and therefore places limitations on what is achievable, even if desirable. Installing working methods on foreign soil is not costless, and requires trainers, visits to Japan, and small firms or sub-contractors may not have the resources to fund these capabilities. Our evidence also suggests that even some larger firms may not have a developed/trained cadre of managers prepared for international operations, though whether this leads to an incapacity to transfer or rather to crude and often ineffective attempts at transfer is not so clear. Propensity relates to the strategic intentions of the MNC in building homestandard or more differentiated manufacturing facilities and methods of work organisation in its overseas subsidiaries. It should not be assumed that ‘transfer’ of home patterns will be the automatic choice of the MNC. This remains an empirical question, though one grounded in much modern theorising about the complex character of MNCs (see Dicken 1998, for a useful review of different strategic options and current practices as they are influenced by different industrial and national propensities). Some sectors may be more internationalised or standardised than others, and in order to remain competitive in these sectors MNCs may have to transfer technology and working methods to subsidiaries. However, in other contexts MNCs may have other options: Botti’s (1995) study of a Japanese firm in Italy showed that for a substantial period the firm was content to adopt Italian management techniques, though it later decided it needed to ‘Japanize’ because of changes in the competitive environment. The third concept in our analysis is that of negotiated appropriateness. This suggests that it is on the ground within the workplace (embedded within the locality, especially the local labour market) that there is a working out of transfer, or a ‘fit’ between, in our case, particular Japanese practices, and what local managers and workers consider achievable or do-able. Thus on the one hand Japanese management-applied solutions are vulnerable to conditions within the local labour market and labour process. As we will show later, both some of the local state officials and some Japanese managers arriving in Telford (our research site in the English Midlands) assumed that it would be straightforward to transfer certain personnel and production practices from Japan, but this proved difficult not because of any organised resistance to these moves but rather because significant numbers of workers sought to redefine the employment relationship through absenteeism or quitting. On the other hand, however, the outcomes are not entirely circumscribed by existing institutional arrangements, and novel mixes of employment relations and forms of work organisation may result. Again, our Telford case study shows that work within the Japanese transplants gave a fresh twist to existing patterns of work and employment in the town (and in the UK more generally), by entrenching union exclusion and developing variants of single status employment and team-based work organisation within the dominant framework of low-wage, low-skill assembly production.

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The concept of negotiated appropriateness highlights the need to use appropriate research methods to examine what is actually taking place within the workplace, something which is difficult via questionnaires or surveys. It also points to the uncertainties involved in transfer activity, the unpredictability of outcomes, which cannot be read off from inputs, national institutional environments, the ownership of capital, or indeed either the propensity or capability of MNCs themselves. The forms of adaptation to the new environment are more likely to evolve incrementally, and through cross pressures from HQ and Japanese management, from indigenous managers with a mixture of enthusiasm and reservations about new approaches and their appropriateness, and from workers, attracted by certain aspects of innovation but resistant to others. Looking more particularly at Japanese firms, there are several features which are likely to give a distinctive inflection to their global operations and transfer of innovations. These include the role of “Keiretsu” groupings in concerting relations between clusters of Japanese enterprises; the close organisational and financial relations between assemblers and many of their sub-contractor firms; and the greater emphasis on general management skills and on collaboration among specialisms in management decision-making and career advancement. Such variations in the institutional character of the firm represent important contingencies affecting the propensity to retain home country advantages or conform to host society institutions when internationalising (Aoki and Dore 1994; Fruin 1994). Furthermore, Dicken (1998: 260–61) notes that American and Japanese companies operate more centralised labour relations policies than British and other European companies, suggesting that the former are less likely to be characterised by conformity to local industrial relations practices. In these ways societal effects can colour the operation of the global firm and influence the transfer process from both ends of the process. It is not just a question of assimilation to the host environment.

Japanese firms in Britain One way in which the societal effects approach can be assessed in the light of the above discussion is through examining the influence of a ‘dominant’ economic player through its foreign direct investment. Japanese FDI has not been evenly distributed in Europe, but concentrated in four countries — Britain, which stands out as the top investment site, France, Germany and Spain. We will focus on Britain, partly because it has received five time more Japanese investment by value than its nearest rival, Germany, but also because as a relatively open economy, with a decentralised industrial relations tradition and deregulated labour market, it is here that the firm has greatest institutional autonomy, and where we might expect to see more divergence between powerful entrants, such

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as the Japanese, and “typical” British companies. It is therefore a good environment in which to test the claims of the societal effects model, which would predict that Japanese firms will look British as they operate within British institutional structures. Foreign firm share of British manufacturing industry continues to grow: it increased from 17 per cent in 1986 to 24 per cent in 1992 (OECD 1996: 55). Between 1987 and 1992 48 per cent of Japanese European FDI went to Britain, while for the same period, 61 per cent of all US FDI for Europe went to Britain. It offered an unmatched combination of cheap labour, fiscal incentives and state sponsorship. With the arrival of Japanese firms came an extensive debate about the nature of Japanese subsidiaries. We have critically reviewed this debate elsewhere (Elger and Smith 1994). For the purposes of this chapter, we are primarily interested in exploring the relationship between the claims of the societal effects school and the experience of work and employment relations in Japanese “transplants” in the UK. In particular we wish to probe the process and character of the adaptation of the Japanese firm to prevailing institutional frameworks and ‘rules of the game’ as they operate in British society. How far does such adaptation support the emphasis on the normalising power of societal effects, and how far does it highlight active processes of selective corporate innovation and negotiated appropriateness? To pursue these issues our approach focuses on the interaction between external labour market conditions and internal processes of labour regulation in the construction of Japanese ‘transplant’ capital-labour regimes, while also exploring how such features as sector, size and commodity chain position further condition the way the ‘transplant’ work and employment relations are fabricated (Elger and Smith 1997; Smith and Elger 1997b). We do not assume the intended transfer of pre-existing functional totalities, such as ‘lean production’ or the ‘Japanese firm’, but rather examine the context in which and the processes by which Japanese firms are attracted to a locality, how they influence the labourmanagement regulation of their milieu, and how forces, such as labour supply and turnover, impact upon the decision-making around work organisation and employment relations in the firms. In other words, it is a ‘context-driven’ rather than ‘techniques driven’ agenda of research. This agenda converges with aspects of the societal effects approach in that we are not imposing an ideal type view of the Japanese firm as an embodiment of global ‘best practice’, but rather examining the practices of the firms in their actual social institutional context. At the same time it diverges from the societal effects school, firstly in anticipating crosspressures arising from both the plans of the inward investing firm and, potentially, different aspects of the local institutional environment; and secondly in highlighting the uncertain evolution of organisational arrangements within the locality. In this context we would acknowledge that our choice of this approach and level of

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analysis may partly reflect our preoccupation with the British experience, where one cannot read off the specifics of firm behaviour from the institutional context, partly because this environment is not so regulated and densely institutionalised as in the French or German situations and partly because both rapid deindustrialisation and Thatcherism have provided a warrant for managerial innovation. Nevertheless we believe that our arguments do have a broader relevance even in rather different national settings (Smith and Elger 1997a). Before discussing the interaction of Japanese corporate policies with particular contexts, we should first acknowledge that much of the UK literature portrays the workplace policies of Japanese transplants in terms of the following agenda: – employment security guarantees; – desire for task flexibility; – quality consciousness higher than British standards; – single status (in respect to canteens, uniforms etc.) – hostility towards multiple and confrontational trade unionism; – respect for shopfloor production workers; – hostility towards clerical or unproductive functions; – distinctively co-operative contractual relations with suppliers. In particular Oliver and Wilkinson (1992) were influential in suggesting that Japanese firms in Japan had a highly dependent relationship with their workforces, whose jobs were secure, and their suppliers, whose contracts were stable. Such dependency relations were embedded within the Japanese institutional environment, characterised by high trust and mutual interests, but made these firms vulnerable when they moved into ‘hostile environments’ where contracting with suppliers and between employers and workers was more calculating, shortterm and market-based. The solution to this problem was for Japanese firms to develop or find ‘functionally equivalent’ structures to those which regulated their dependency relations at home, which would therefore allow them to replicate their system overseas. The authors suggested that by locating in areas of abundant labour supply (unemployment black spots), by recruiting young inexperienced workers, by using HRM techniques to carefully select and attach workers to firms, and by setting up greenfield sites with their own supply chain from Japan, it would be possible to replicate their work relations and production organisation. From our perspective, however, it should not be assumed that all Japanese firms are similar in their home-based employment practices and forms of work organisation, or that they all have equivalent capabilities or propensities to “transfer” their practices, or finally that their overseas (UK) environment can so readily be managed to deliver ‘functional equivalence’.

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Our findings in summary In order to critically examine this orthodox account of the Japanese transplants in Britain we conducted in-depth case studies within six Japanese manufacturing firms in the West Midlands. Here we report on our findings regarding four of these firms, all of which were located in Telford, a new town in the West Midlands (see Elger and Smith 1998a, 1998b and Smith and Elger 1998). We were concerned to see whether the supposedly very favourable conditions for capital offered by Telford New Town actually allowed the development of employment relations and forms of work organisation which conformed to stereotypes of Japanese working methods. Our research involved two-week site interviews with a cross-section of between seven and twenty per cent of employees, which generated 130 interviews. We also engaged in workplace observation, collected additional background documentation on various personnel and employment indicators such as labour turnover and absenteeism rates, and interviewed other key informants from the locality. Our four case-study firms formed part of a cluster of 22 Japanese firms in Telford, constituting the highest concentration of such firms in Britain. In 1997 there were 65,000 people employed in Telford, and two in ten were working for Japanese firms. Telford offered Japanese employers location advantages which, following the arguments of Oliver and Wilkinson, should have facilitated a direct transfer of working practices. It provided greenfield sites, a weakly unionised town, with high unemployment and a large pool of young unemployed people. Grants and other financial incentives were also present. The first Japanese firm to arrive in the town, Maxel, appeared to operate according to the textbook accounts: it carefully selected a young, inexperienced workforce, on the basis of their attitudes and willingness to work flexibly according to company-specific rules. It subsequently offered a recipe for other Japanese firms to follow; a paradigm of employment security, non-unionism, low wages, task flexibility, single status and the recruitment of young workers on the basis of their attitudes, not skills or qualifications. Table 1 summarises our research findings with regard to the application of Japanese-type production and personnel practices. What is apparent is that in none of our cases did the factories manifest the full and coherent package of management techniques suggested in the ideal-type portrayals. Thus some features of the ideal-type production model, such as operator responsibility for quality, were found in all four factories, though they were implemented in different ways. However, in other respects, such as the extent of job rotation, there was no uniformity. In personnel matters there were again some common policies. But while some, such as ‘single status’, broke with the dominant British pattern, others, such as simple selection procedures, seemed far removed from the Japanese ideal-type. Furthermore there were again signifi-

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Table 1. Production and personnel practices in our case-study plants Practice Continuous Improvement Operator responsibility for Quality Total Quality Control Design for manufacture Quality Circles SPC Team Working JIT Production Japanese in line roles Use of Japanese advisors Job rotation Operator maintenance

Copy Co

PCB Co

Assembly Co Car-part Co

P +

– +

– +

+ +

+ NA + P + P + + P P

+ NA + – – P + + P P

? NA – – – P – P – –

+ NA + P + P – + + P

Visual Displays: Workers= Skills Suggestions Volume achieved Quality defects Absenteeism Comparative Factory Performance

– + + + –

– – + + +

+ – + + +

– + + + –

+

+

–

–

Team Briefings Performance Appraisal Single Status facilities Formal Consultation Use of temporary workers Performance-related pay Employment Security Systematic hiring policy

+ + + – + + + –

+ P + D + + – –

P – + – – – – –

+ + + + + + + P

Source:Case-study interviews and observations. Format modified from Oliver and Wilkinson (1992: 254) and Abo (1994: 33–35). + = Practice exists; – = Practice does not exist; ? = Desire to adopt; P = Partial application; D = Defunct; NA = Does not apply

cant variations between the firms, for example in their use of temporary labour. Our analysis of this pattern, developed in more detail elsewhere (Smith and Elger 1998; Elger and Smith 1998a, 1998b), highlights the following features. Firstly, managers have been involved in a process of learning and adaptation in establishing and running these greenfield transplants. This meant discovering both the scope and the limitations of Japanese personnel and production practices in this locality. The result has been an opportunistic and piecemeal recasting of work and employment policies centred upon low paid, semi-skilled, routine assembly work.

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Secondly, this was not simply a process of adaptation to existing British institutional constraints. The social and economic context also provided significant opportunities for these firms to engage in the remaking of work and employment relations. In particular they broke with past British practice in avoiding unionisation, implementing single status arrangements and often pursuing more stringent quality and productivity targets. Finally, this remaking has not simply achieved a “hybridised” equilibrium, and the future shape of personnel and production regimes in these firms remains open. In particular, their success in holding down wages while expanding production has exacerbated problems of worker recruitment, retention and commitment, forms of ‘disorganised’ worker discontent which have not been circumvented by avoiding union organisation and implementing single status.

Conclusion Our case studies certainly provide some support for the importance of societal effects, as it is clear that the operations of these companies are both exploiting and reproducing important features of the distinctive societal repertoire of UK institutions and firms — for example, they are exploiting the decentralised and thus permeable features of British industrial and employment relations, and reproducing the piecemeal and non-strategic character of management/personnel decisionmaking (Rubery and Wilkinson 1994). Furthermore they are also reproducing and even reinforcing a distinctive local variant of the British pattern, in terms of low wage, low skill employment. At the same time our case studies suggest that these firms are not simply accommodating to existing institutional parameters, but are adding significant new ingredients to the pattern of work and employment in the district and thus in the UK. At the very least they represent new twists in terms of the British and local features noted above, in relation to non-unionism, single status, tighter production regimes and perhaps subordination within the labour process. Such features are neither unproblematical for management nor entirely uncontested by workers, but they have become quite well established within these workplaces. Of course, these Japanese transplants are not the only enterprises that have pursued this broad mixture of policies — for example, non-unionism has become increasingly common among new firm starts in Britain in recent years (Millward et al. 1992) — but they have been significant pioneers. In these respects, then, these firms have found scope for significant innovation in work and employment policies within the British context, though this does not mean that they have simply reproduced some standard set of Japanese practices nor does it mean that management have established a problem-free policy repertoire.

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One way of interpreting this pattern would be to see it in terms of the selective transference of features associated with the peripheral and substantially female areas of the Japanese labour market and employment regime rather than those associated with core male employment within the large final assemblers (Dedoussis and Littler 1994). However while these firms sought collectively to sustain a low wage assembly regime this does not adequately capture the range of variations in personnel and production policies which were pursued within this framework. What this underlines is the importance of seeing transfer as a selective and creative process mediated by firms (and potentially other agencies) with different propensities and capabilities and inevitably engaged in formal and informal processes of negotiation over appropriateness. It is this process, rather than any simple process of generalisation, which actually challenges an entirely nationally bounded conception of societal effects.

Chapter 14 The transfer of business practices to Britain and France Edward Lorenz

1.

Introduction

The central question I address in this essay is: How can the notion of societal differences in work administration be reconciled with a body of literature documenting how competitive pressures have led national producers to emulate the organising principles of other nations that are perceived as providing a basis for superior economic performance? During the interwar period and the two to three decades immediately following the Second World War, the dominant model was defined by American business practice in the form of Taylorism and the assemblyline techniques associated with Henry Ford’s car plants. The adoption of these methods by European producers was sufficiently important to make plausible the recent claim of Bruce Kogut (1993: 179) that the dynamic of international competition during this period can be understood in terms of the development and exploitation of these methods in the US and their progressive diffusion abroad. For the 1980s and 1990s, there is considerable evidence to show that US and European producers are questioning the value of the traditional ‘American principles’ of production. Inspired largely by Japanese practice, industrialists in these countries are seeking to introduce more flexible methods of production and to decentralise operational decision-making to lower levels of the organisational hierarchy.162 The argument I develop is in keeping with the spirit of recent work by the LEST group, who responding to criticisms concerning the overly static quality of their original model have sought to develop a more dynamic approach, especially in their analysis of the process of innovation.163 In my view, the notion of a 162. The literature on this subject is vast. See, for example, Abo (1994); Cole (1994); Florida, (1995); Oliver and Wilkinson (1992); Sako (1994); and Womack et al. (1990). 163. See notably Lanciano et al. (1993); and Maurice (1996).

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societal effect in enterprise organisation can be reconciled with the considerable evidence of emulation and change under the following two conditions. First, as the LEST researchers have stressed, one needs to bring the actors and their choices centrally into the problematic. The vast literature on the diffusion of Taylorism and mass production methods clearly refutes the idea of a wholesale transfer of US organising principles to Europe. It indicates that industrials selectively adopted elements of the US system, thus giving rise to ‘hybrid’ or mixed forms of work administration that varied from country to country.164 This implies that the emphasis should be on accounting for the nationally distinctive nature of the responses of industrialists to the perceived advantages of adopting alternative organising principles. Second, one needs to qualify the idea that societal effects are necessarily manifested in a ‘coherence’ among the three basic elements that make up the LEST model : the methods of production, the organisation of vocational training and careers, and the associated forms of collective action and dispute resolution.165 As Tolliday and Zeitlin (1991: 276–77) have observed in a discussion of the literature on national models of labour management, one should allow for the possibility that the ways in which the actors respond to unanticipated events will lead to inconsistencies rather than reinforce the coherence among the elements of the system. To the extent that their responses serve to reinforce the existing properties of the system, this is something that should be explained rather than taken for granted. Assuming that a national system will necessarily evolve in a way that maintains a coherence among its industrial relations, enterprise organisation and vocational training sub-systems implies that one of two unsatisfactory theoretical positions is being adopted.166 One possibility is to adopt a version of structural holism and then to give the argument a strong teleological cast. In this approach the system is seen as progressing inevitably from more primitive to more advanced stages, while the actors, in accordance with their socialisation, fulfil their 164. Fujimoto and Tidd (1994) argue that the Japanese organising principles that are now finding favour among US and European producers were developed by Japanese industrialists with a concern to selectively introduce Taylorism and mass production technology in a way that preserved organisational flexibility. A similar point has been made by Zeitlin (1996) as regards British industrialists’ selective introduction of mass production technology during the interwar period and the immediate post-war years. 165. For the purposes of this discussion I take the notion of ‘system coherence’ to mean that the nature of choice and behaviour in one sphere of the system (e.g. the production sphere) acts to reinforce choice and behaviour in another sphere (e.g. the vocational training sphere), rather than creating pressures for its modification or reform. 166. I am not suggesting that the LEST team adheres to either of these theoretical positions. Their recent methodological work (see, notably, Lanciano et al. 1993) shows an appreciation of the theoretical issues I am raising.

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assigned roles in the system, thus maintaining its ‘nice’ properties. This approach has the unsatisfactory feature of eliminating any element of choice from the explanation for change. Another possibility is to adopt a functional form of explanation, where the behavioural patterns which underlie systemic coherence are explained not in terms of the actors’ intentions, but rather in terms of the beneficial consequences of this coherence for the actors who make up the national system. As critics of the use of functional explanation in the social sciences have argued, for the explanation to be valid one must identify a feedback mechanism, running from the positive effects back to the underlying behaviour patterns, which serves to sustain them independently of the actors’ intentions.167 In my view, no such plausible feedback mechanism exists for the problem addressed here. It might be tempting to argue that firms emulating production methods that are incompatible in some sense with the national training system or national system of industrial relations will see their fortunes decline and will be progressively eliminated from the market place. This ignores the obvious point that for the problem of the international transfer of business practices competitive selection pressures operate on an international scale, and that it is precisely such international competitive pressure that is pushing national producers to introduce innovations that may prove to be incompatible with the national vocational or industrial relations system. In the following section I propose to develop a few concepts that are useful for analysing the nationally specific nature of employers’ responses to pressures to emulate other nation’s production principles. The ideas I develop draw their inspiration from recent work in evolutionary and institutional economics. They are consistent with the notion that employers’ responses may contribute to generating a certain incoherence among the elements of the national system. While choice is central to the argument, it does allow for the impact of institutional constraint and it does not preclude that the consequences of choice may in an unintended manner impact negatively on performance. In the third and fourth sections I demonstrate the empirical relevance of the argument by reference to the 20th-century development of such British and French industries as shipbuilding, mechanical and electrical engineering and cars. My objective is not to give a detailed account of developments in these industries. This goes considerably beyond the scope of this essay. Rather, by drawing selectively on my own and others’ more detailed empirical investigations, I propose to present some evidence that supports my view.

167. See, notably, Elster (1979, 1983).

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An evolutionary approach to the transfer of business practices

The first idea guiding the following discussion is that employers’ responses display a ‘path dependent’ quality in the sense that their current choices are not independent of the past evolution of the system. Critical to this hypothesis is the idea that it is comparatively difficult for firms to emulate techniques that are in some sense ‘distant’ from their existing methods. This can be partially explained by human cognitive limitations which restrict the range of techniques in which the members of an organisation can achieve proficiency.168 It can also be accounted for by the fact that any technique of production combines knowledge which is easily codified with tacit knowledge that is difficult, or even impossible, to fully codify. The transfer of tacit knowledge will depend on such methods as direct observation of the practices of the originating firms and on on-the-job training supervised by personnel from the originating firms. These considerations imply that when industrialists are confronted with pressures to adopt organising principles that originated in another nation, the more distant the knowledge base upon which the new principles rest from those underlying existing principles, the more time-consuming will be the learning processes needed to establish proficiency in their use. Local learning is unlikely to result in an exact replica of the parent template. Rather, as industrialists seek to come to grips with the meaning of the new technique, they will interpret its codified representation in ways that reflect nationally specific conditions, including the existing distribution of decision-making power within the firm. As they develop proficiency in the new technique, they will subtly modify it, giving rise to a unique hybrid incorporating a locally specific body of tacit knowledge. Nothing precludes, of course, that as conditions evolve the hybrid solution may prove equal or superior to the original template. A second concept illustrated in the historical discussion below is that producers using common standards of training and qualification tend to become ‘locked in’ to a particular way of organising vocational training. The use of common standards of training allows producers operating on the same labour market to benefit from network externalities in the form of sharing the costs of investing in skills, thus creating positive incentives to conform to prevailing methods. Any effort to break away from the industry standard shifts the full burden of training costs onto the individual firm and limits to the firm’s ability to use periodic layoffs to reduce costs for fear of a permanent loss of workers with firm-specific skills.

168. This idea is developed in Nelson and Winter (1982 ). The idea is also present in the notion that enterprise have ‘core’ competencies and that it is relatively difficult for them to build-up capability in technologies distant from this core. See Dosi, Teece and Winter (1993).

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When employers are embedded in systems that are rich in positive network externalities, there will be a strong tendency for them to introduce new techniques and methods of work organisation in a manner that respects established standards. This provides a second explanation for the emergence of hybrid models in countries faced with the pressure to adopt another nation’s organising principles. The third idea developed below is that innovation in methods of work organisation poses a problem of trust, since embedded within any system of work administration is a set of established claims on the firm’s net earnings. These claims amount to a set of property rights grounded in jobs, in the sense that job title establishes a more or less explicit right to a share of returns from joint productive activity. As a rule, any change in the administration of work will alter property rights, so defined, and so the distribution of organisational quasi rents. One basic reason for this is that a change in the administration of work affects the promotion and career opportunities of different members of the organisation in different ways. More generally, changes in work administration shift around decision-making authority, and the right to make a decision can determine who receives profits (Stinchcombe 1986: 221–30). For these reasons, the introduction of novel methods of work organisation may well provoke conflict among the members of the enterprise. In the absence of mutual trust, even changes which promise mutual advantage are likely to arouse suspicions and provoke resistance, due to the fear that one side is trying opportunistically to shift the longer term distribution of returns to their favour. In such a context, administrative innovation tends to involve processes of discussion and negotiation among the members, who seek various formal or informal contractual guarantees concerning their share of organisational quasi rents. The compromises which emerge from such a negotiated process of administrative innovation constitute a third factor leading to the emergence of hybrid models of enterprise organisation specific to a nation.

3.

The diffusion of American manufacturing principles to the UK and France

To illustrate the way in which a nation’s distinctive path of industrial development can impact on employers’ responses to the challenge of adopting new method of work administration, I shall briefly refer to some of the literature on the introduction of scientific management methods in Britain and France. Although the literature on this subject makes clear the limited extent to which such techniques as job evaluation and time and motion studies were applied in either Britain or France prior to the 1950s and 1960s, it also makes clear that industrialists in France were considerably more receptive to Taylor’s methods during the

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first half of the 20th century than were industrialists in Britain (Boyer 1983; Friedenson 1978; Heron 1975; Kogut 1993; Levine 1967; Littler 1979; Moutet 1975). Detailed historical work on the British car industry uncovered one attempt by an enterprise to experiment with scientific management methods prior to the First World War, and describes the dominant system of labour management during the interwar period as craft in conception with control of production on the shop floor depending on the expertise and judgement of the work force (Lewchuck 1987; Tolliday 1986). Similar observations about work methods apply to much of the British engineering industry (Zeitlin 1985, 1991) and to the cotton industry (Lazonic 1979, 1986). The case of the British shipbuilding shows that craft administration of production continued to have a hold on British industrialists well into the post-World War II period (Lorenz 1983, 1987). As late as 1973, the influential Department of Trade and Industry Report (1973: 143–44) on shipbuilding observed: Except in yards building warships, control of quality and dimensional accuracy is provided by the workforce … informal scheduling and planning, depending on the skills and experience at foreman level, is often the only detailed planning available once original plans have been bypassed and due dates have been missed.

The limited interest expressed by British industrialists in adopting scientific management methods contrasts sharply with the case of France, where Taylor’s works were widely read with the 1907 translation on Shop Management and the 1911 translation of The Principle of Scientific Management sponsored by Le Chatelier. Attempts to apply Taylor’s methods prior to 1914 were mainly confined to the auto industry (Abaut 1913; De Ram 1909; Laux 1972; Friedenson 1978). The war years then saw a considerable increase in the number of applications, especially in the state controlled munitions sectors.169 In the case of the shipbuilding sector, Charles de Freminville, former director of the Penhard and Levassor works, was commissioned in 1916 to introduce scientific management methods to the yards of Nantes and St. Nazaire (Barbance 1948: 539–41; Devinat 1927: 235–36; Levalée 1991). In my comparative historical research focusing mainly on the development of the shipbuilding industry, I argued that the greater receptivity of French industrialists to scientific management methods can be explained in part by the fact that they had begun the process of organising production so as to separate the work of conception from that of execution prior to the diffusion of Taylor’s ideas. This, in turn, I linked to the difficulties French industrialists experienced in building up the stable regional pools of skilled labour needed for the successful 169. See the series of reports on wartime applications in the Bulletin de la Société d’Encouragement pour l’Industrie Nationale by Nusbaumer (1919), Campagnon (1919) Lavalée (1919) Lecler (1919) and Charpy (1919).

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use of craft methods as in Britain. These labour supply differences between the two countries derived from quite different patterns of industrialisation, with slower growth of the domestic market in France and its greater geographical segmentation encouraging a later transition to the mechanised factory system of production. The persistence of small-scale skill intensive methods in France, as well as the viability of small-scale agricultural production, provided viable employment alternatives and made it difficult for French industrialist to recruit and retain a large number of skilled workers (Lorenz 1987). The French iron and steel shipbuilding industry provides a good illustration of the argument. During the early phase of the industry’s development, producers operating in the region of Nantes and St. Nazaire were obliged to recruit manual workers who retained a partial attachment to the land.170 L.E. Bertin, a French naval engineer who undertook an investigatory mission to Britain in 1884, remarked on the relatively poor development of labour market for skilled labour in France: “Our general installation, our different manner of working … and our equipment are relatively rich; what we do not possess to the same degree perhaps is a workforce raised at the doors of the workshops, seeing work in iron since their youth, instructed by tradition, trained by competition.” (Bertin 1884 [my translation]). Lacking comparable concentrations of skilled labour, French shipbuilders were encouraged to economise on its use. Roux-Freissineng (1929: 34), for example, has described how employers in the Marseilles region during the interwar years maintained shipyard factories (usines navales) in other but related branches of industry such as locomotive and boiler production. Skilled workers were transferred to these sites during periodic recessions. Another solution was to adopt more bureaucratic methods of work administration which separated out the more technical and skilled work and allowed the producers to concentrate these tasks in the hands of a small cadre of technicians and supervisors who enjoyed relatively permanent employment.171 The apparent unwillingness of the British to abandon craft organisation of production in such sectors as shipbuilding, engineering, and cars should not be attributed to some irrational conservatism, born of their industrial leadership. 170. See the testimony of John Scott to the 1886 Royal Commission on Depression of Trade. Scott, a Scottish engineer, played an important role in the transfer of iron and steel shipbuilding capabilities to France by overseeing the creation of the Chantier Penhoët in St. Nazaire in the early 1860s. In his testimony, he recalled that the yard drew on peasant workers, who would absent themselves form the yard three times year; in the sowing and reaping periods and in the summer to cut peat.(Royal Commission on Depression of Trade 1886: 3rd report, qn. 12,013). 171. This tendency was perhaps most evident in the early French adoption of the pattern templating system which conferred the responsibility for such technical tasks as determining the dimensions of components or the positioning of rivet holes on draughtsmen working in the design offices. In Britain, where the transferring template system was in use, skilled manual workers had the responsibility for these tasks on the shopfloor (Lorenz 1983).

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Prior to the Second World War, Britain retained strong or even dominant competitive positions in these industries on the basis of craft methods.172 An explanation for the competitive viability of the craft system during this period can be derived from an argument developed by A.L. Stinchcombe (1959–60) on the use of the craft system in the US construction industry in the 1950s. Stinchcombe argues that the success of bureaucratisation of work administration depends on the long-term stability of work flows. Only under this condition will the overheads associated with irreversibly investing in firm-specific information processing channels’ needed to operate bureaucratic systems be sufficiently productive to be profitable. The implication of Stinchcombe’s argument is that while craft administration is not inherently superior to bureaucratic administration, it may prove more economical in unstable economic environments due to some combination of fluctuating levels of demand and continuous change in product design. Consistent with this hypothesis, it is quite easy to find examples of bureaucratically organised firms finding the rigidities and overheads associated with such methods to be an obstacle to their performance during the turbulent interwar period.173 This was not to be the case during the three decades of relatively stable growth following World War II. The rapid expansion of mass markets during this period created favourable conditions for the introduction of increasingly capital intensive and bureaucratically organised methods of production. Progressive loss of domestic and export market shares after 1960 in such sectors as cars, shipbuilding and many branches of mechanical engineering encouraged many British producers belatedly to undertake serious-minded reform of their methods of work administration in search of productivity gains. However, the changes that were introduced tended to modify the craft system rather than fundamentally alter it in the direction of greater bureaucratisation. While this tendency may be explained in part by British employers’ lack of expertise in applying systematic production planning,174 it is also consistent with the idea that producers who are embedded in coordinated systems of vocational training rich in positive externalities will be reluctant to break away from the established standards (see above, p. 244). British producers tended to adapt to changes in technology by widening the range of 172. See Lorenz (1994) for the evidence. 173. Perhaps the most striking example of this is Ford’s (UK) dramatic loss of British market share between 1913 and 1929, from 24 to 4%. Ford (UK) adopted the mass production method of its American parent and stuck to a policy of only producing the Model T while market demand turned toward smaller and lighter vehicles (Tolliday 1991: 82). Boyer (1983: 22) has interpreted the dramatic failure of Citroën in 1934 in the same terms and more generally argues that the slow growth of mass demand during the 1930s made the extension of Taylorism difficult to achieve. 174. See, notably, the Patten Report (1962: 75) and the 1972 Department of Trade and Industry Report (1973: 143–44).

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tasks undertaken by craft workers, thus allowing them to continue to benefit from the transferability of skills on local labour markets. This tendency was observed by David Marsden and his colleagues in their study of post-1970 labour relations in the car industry (Marsden et. al. 1985: 78–9):175 A number of tests indicate that British companies have not been reinforcing their internal labour markets, but maintaining their links with local skilled labour markets … One of the chief reasons for the high degree of transferability [of skills] is that existing skills have been extended to cater for new technology so that many craft skills, and the craft/semi-skilled divide, far from being displaced are in fact being enhanced … A second indication that they have not reinforced their internal labour markets to the extent of other countries lies in the limited changes in the organisation of skilled work in British industry.

While the advantages of adopting common vocational training standards help account for British producers’ concern to modify, rather than fundamentally transform, the organisation of skilled work in the 1960s and 1970s, the slow pace of reform can only be explained by taking into account the resistance skilled workers and their unions offered to employers’ proposed changes. My own historical work on the car, shipbuilding and cotton industries indicates that many of the concerns of workers and unions over the impact of change were heightened by the nature of employers’ response to initial loss of export market share during the 1930s.176 The widespread use of strategies of wage cutting, work intensification and layoffs to lower costs engendered numerous industrial disputes and promoted the view on the side of labour that management was more concerned to shift the distribution of profits in its favour rather than to undertake serious organisational reform. The legacy of distrust engendered by such zero-sum conflicts proved inimical to the performance of these industries when their continued success depended on organisational reform. Change only came about, however, following more protracted decline, which persuaded workers and their organisations of the need to negotiate modifications in existing methods. My discussion of the British and French responses to competitive pressures based on the diffusion of US principles of production demonstrates how those responses is conditioned by country-specific factors associated with a distinctive pattern of industrial development. There is an element of historical irony in the story I have told. French industrialists sought from as early as World War I to emulate American industrial practice in order to compensate for their underdeveloped market for skilled labour. What constituted ‘best practice’ in the US, however, proved unworkable in the European inter-war context of slow growth in domestic market demand. British producers using ‘traditional’ craft methods

175. For similar tendencies in the shipbuilding industry in the 1960s and 1970s, see Lorenz (1991). 176. See Lorenz (1991, 1994) for a variety of evidence in support of this interpretation.

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continued to outperform the French. In the post-World War II context of expanding mass demand for relatively standard products, however, bureaucratic administration of production provided a competitive edge. In a manner that was far from anticipated in the 1930s, the French benefited from their prior experience with scientific management while the British saw their fortunes decline. In what follows, I shall suggest that a parallel story can be told about the transfer of Japanese principles of production in the 1980s and 1990s.

4.

The diffusion of Japanese manufacturing principles to the UK and France

The transfer of Japanese manufacturing principles to Europe and the US is a story that is currently unfolding. Not only is the balance sheet far from being settled, but there is considerable debate over the sources of Japanese competitive advantage in such sectors as cars and electronics. The ideas developed in the discussion below amount to tentative hypotheses based on a reading of the secondary literature as well as interviews undertaken at three Japanese affiliates located in France.177 The literature on the organisation and performance of Japanese manufacturing affiliates located in Britain is more extensive than that on the affiliates located in France. A probable explanation for this is that within the EU Britain has been the location for the largest proportion of Japanese foreign direct investment. Between 1951 and 1988 Britain accounted for $10.7 billion or approximately one third of total Japanese direct investment within the EU (Oliver and Wilkinson 1992: 242). Another likely reason for the voluminous literature on the Britishbased transplants is the perception that significant numbers of British companies have been striving since the early 1980s to imitate Japanese manufacturing practice. This imitative process has been sufficiently visible to have generated a debate over the supposed ‘Japanisation’ of the British economy. There is nothing comparable to this sort of debate in France, where the business practices of the approximately 100 Japanese manufacturing transplants have attracted relatively little attention and remain largely undocumented. Most of the literature on Japanese companies producing in Britain has focused on the extent to which they use a core set of business practices which are believed to account for the competitive strength of Japanese manufacturers in general. A key concern of this literature is to assess the extent to which local 177. These visits were undertaken in the context of a collective project I have initiated with N. Lazaric, M. Sako and H. Tordjman comparing organisational learning in Japanese transplants located in France and Britain. Two of the affiliates visited were in the electronics sector and the other was in the automotive sector. For a description of the project, see Lorenz, Lazaric and Tordjman (1996). Research assistance from Robby Judes and Christophe Le Guéhennec is gratefully acknowledged.

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context conditions, and in particular British industrial relations practices, have led Japanese multinationals to modify their practices compared to those used in their plants located in Japan. Most of this literature is based on case studies of a small number of transplants, with questionnaires or semi-structured interviews having been conducted on-site by the researcher.178 A notable exception is provided by the postal questionnaire surveys conducted by Oliver and Wilkinson (1992) in 1987 and in 1991. As their work is most closely associated with the thesis of a progressive ‘Japanisation’ of the British economy, it is worthwhile to briefly summarise their results. Oliver and Wilkinson aim to demonstrate that Japanese multinationals are contributing to the diffusion of innovative work and manufacturing practices in Britain, either by providing a model for local firms to imitate or through the direct transfer of innovative methods to their local suppliers. Their research methodology consisted in posting questionnaires in both 1987 and 1991 to the entire known population of Japanese manufacturing companies producing in the UK. Comparable questionnaires were sent to a sample of large British companies. The authors explicitly identify those manufacturing and work practices which they see as accounting for superior Japanese performance. These include self-directed teams, job rotation, quality circles, shop-level responsibility for quality control and just-in-time materials supplies. The successful use of these practices is seen as requiring the use of a set of human resource and personnel policies which reduce ‘goal heterogeneity’ and increase management’s and labour’s sense of mutual dependence. The key personnel practices include single status facilities, long-term employment guarantees, a reduced number of job classifications, regular performance assessments and company councils to represent employee interests (Oliver and Wilkinson 1992: CHs. 2 and 3). The results obtained by Oliver and Wilkinson not only indicate a high capacity of Japanese multinationals to transfer their methods and philosophy to their affiliates located in Britain, but also provide evidence of a remarkable capacity on the part of British manufactures to transform their working practices in the pursuit of superior performance.179 The results are suspect, however, not only because of low response rates for the sample of British companies180 but also 178. The principal case studies are: Crowther and Garaham (1988); Munday (1990); Pegge (1986); Trevor (1988); White and Trevor (1983); and Wickens (1987). 179. The results for both 1987 and 1990 show not only a high rate of implementation (over 50 %) of many of the production and work practices among the Japanese transplants, but also show comparable or higher rates of utilisation among large British firms. They shows a somewhat lower rate of utilisation among the UK companies of the Japanese-style personnel polices. The historical data indicates that significant numbers of UK companies began introducing the various production practices in significant numbers between 1978 and 1980. 180. For both the 1987 and 1991 surveys only 66 UK companies completed the questionnaire giving response rates of 18 and 14 percent respectively.

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because, while the authors ask whether the firm in question used a particular practice, they neglect to enquire what proportion of the firm’s employees were implicated in the practice. One cannot preclude that a firm had introduced a particular practice on an experimental basis only, and had only implicated a small proportion of its personnel.181 An arguably more fundamental problem is that the use of a common business semantics to describe practices across nations does not necessarily mean that the content of those practices is the same in every country. Quality circles or semiautonomous groups, for example, may display country specific features, and the use of a common language may disguise a significant degree of national specificity. That such national effects are likely to be present is supported by the case study work of M. Sako (1994), which examines the links between work organisation and the training provided by Japanese companies located in Britain and Germany to their non-Japanese employees. After identifying some of the key features of the national training systems in Britain and Germany, Sako offers a number of hypotheses concerning the ways in which these different national institutional arrangements can be anticipated to impact on the training policies of the Japanese affiliates. She suggests that one can anticipate the training policies of Japanese companies to conform more to the German mode when located in Germany than to the British mode when located in Britain because of the greater degree of regulation and co-ordination among the ‘social partners’ in Germany (Sako 1994: 93). In particular, she argues that Germany’s ‘Dual Apprenticeship System’, which is linked to a qualificationcentred job grading system at the firm level with clear career tracking determined by-entry-level qualification, is likely to limit the upward mobility of operators lacking apprenticeship qualifications, and is an obstacle to the use of senioritylinked pay. Sako (1994: 92–3) suggests, however, that conforming to the German system may not prove especially difficult for Japanese companies, since the training principles of the German system are not so different from those of the Japanese system. In particular, jobs in German firms as in Japanese are defined around qualifications and competencies, which allows for a flexible deployment of labour. This contrasts with the traditional set-up in Britain, at any rate, where jobs have tended to be defined around particular tasks or the use of particular equipment. The results of Sako’s field research comparing eight British-based with six German-based Japanese plants largely confirm her hypotheses. A number of the plants are owned by the same multinational companies, which allows her to 181. This may well be a serious limitation. The results of a comparable 1993 survey undertaken in the US by Lawler (1995) of Fortune 1000 firms indicate that the majority of larger US firms that use innovative practices, such as quality circles or semi-autonomous teams, involve less than 20% of their work force in them.

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control in some measure for variations due to different company strategies or management philosophies. Sako (1994: 96–7) gives a description of typical Japanese job-grading around three criteria : First, because opportunities for internal promotion are used as a means to motivate workers, many finely-graded ranks are created for workers to climb up from the shopfloor to lower and middle management. Second, opportunities for horizontal job transfers are also abundant, facilitated partly by a relative absence of occupational consciousness guarding task demarcations. Third, a combination of vertical and horizontal movements facilitates good communication among workers, engineers, and management on the shopfloor. Here a pivotal role is played by the supervisor, who takes on a dual role: on the one hand a human relations manager who motivates, oversees and trains subordinates; on the other a technical trouble-shooter…

The organisation of jobs and careers more nearly approximated these criteria in Britain than in Germany, in the sense that the British-based affiliates generally had systems of internal promotion up to higher levels of technical competence than did the German based affiliates. In Germany initial semi-skilled entry status of many of the operators precluded their rising up to the level of assembly-line leader. This position was generally reserved for employees with a Meister qualification, which requires prior technical and dual apprenticeship qualification. In one interesting respect, however, the German set-up more nearly approximated Japanese practice than the British. In the British-based plants employees with formal technical qualifications were reluctant to fill supervisory posts involving direct interaction with manual operators on the shop floor, while in the Germanbased plants employees with technical skills, mainly Meister but also technicians, did become shop-level supervisors. This, as Sako observes is what makes technical qualified people more directly involved in shopfloor production in Germany as compared to Britain (Sako: 1994: 97–105). The research which has been conducted to date on French-based Japanese manufacturing affiliates is less informative than that on the British-based ones.182 The most substantial study, that of da Costa and Garanto (1993), is primarily concerned with the industrial relations practices of Japanese companies, and draws partially on a postal survey administered by the Japanese External Trade Organisation (JETRO) to form conclusions concerning the way work is organised. The results obtained by da Costa and Garanto emphasise the limited degree to which the affiliates have introduced such typically Japanese production principles as quality circles or ‘just-in-time’ materials supply. The authors observed a considerable investment by Japanese affiliates in the provision of on-the-job training and the promotion of rich communication among personnel in different sections of the plant and across levels of the firm’s hierarchy. 182. See Lazaric (1997) for a survey of the literature.

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These conclusions need to be confirmed on the basis of a more representative sample of Japanese companies.183 What my colleagues and I have learned on the basis of our initial visits to three Japanese-owned manufacturing plants located in France, however, tends to confirm the judgement that work organisation in French-based Japanese affiliates retains many of the features associated with traditional French business practice. In the case of one of the electronics plants we visited, for example, while the firm had introduced semi-autonomous team organisation for assembly work, this was not linked to any effort to involve operators in the process of quality improvement and process innovation. The managing director, a French trained engineer, had over the 7 years of the plant’s operation eliminated the quality circles that had been initially been set-up at the request of the parent firm in Japan, while simultaneously building up an autonomous R&D capacity. One year prior to our visit, he had relocated the R&D facility to an urban setting, some 30 kilometres distant from the production facility. There was little regular interaction between the design and engineering personnel and the production services. When asked about the origins of a number of innovations in working methods that had been introduced, he responded that these had been proposed by technicians from the planning services (service de méthodes) without any contribution from manual operators. In this plant, at any rate, the traditional separation between technical work and manual work has been reproduced. While the lack of detailed comparisons of matched Japanese plants in Britain and France precludes drawing firm conclusions, the literature suggests that Britain has proven a more receptive environment than France for the transfer of Japanese business practices. One permissive factor in this, as Sako suggests, is that the deregulation of the labour market in Britain during the 1980s has eliminated a possible obstacle to the introduction of Japanese-style job-grading and internal promotion. The abolition of the Industrial Training Boards has contributed to a rapid decline in the number of apprenticeships,184 while the development of Youth Training (YT) and the Youth Training Scheme (YTS) have not provided viable alternatives. As a result, the majority of school-leavers going into employment received no training or training lasting less than a year (Sako 1994: 90). Declining apprenticeships combined with the inadequacies of the new regulatory framework have reduced the benefits firms can expect to reap by attempting to conform to industry-wide standards on training. One consequence of this is the evolution of the British labour market towards more internal 183. It is worth noting that Bourguignon (1993: 100), who undertook case studies of three Japanese plants in France, observed one case where employees were organised in semiautonomous groups that exercised considerable discretion in the organisation of their work. 184. The number of apprenticeships provided in Britain declined from 150,000 in 1979 to 55,000 in 1988 (Sako 1994: 90).

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forms that are arguably compatible with Japanese practice.185 Despite the rapid growth in the number of external providers of further training in France (Méhaut 1995), skills are acquired mostly internally according to firm-specific criteria. It would be difficult to argue that French manufacturers are at a disadvantage compared to the British in terms of their compatibility with Japanese training practices. In concluding this section, I would like to suggest that the critical difference between Britain and France may be the greater “proximity’ of British methods of work administration to typical Japanese practice. My own research, as well as the literature cited in the historical section above, demonstrates that British manufacturers never made a full transition to the bureaucratic methods of work administration associated with Taylorism. Despite significant changes in technology including the introduction of mass assembly methods into the automobile and other branches of mechanical engineering from the mid1960s,186 supervisors and skilled production workers continued to exercise considerable autonomy over the details of shop organisation. A critical change brought about by the numerous conflicts and negotiations of the late 1960s and the 1970s over changes in working practice, would appear to have been the partial breakdown of traditional demarcations among the skilled occupations, and in general the acceptance on the part of labour of the need for greater flexibility in the allocation of effort. This arguably removed an obstacle to the introduction of Japanese manufacturing principles while the tradition of shop-level autonomy in production-related decision-making may be providing a basis in employee competency for the current development of Japanese-style employee involvement practices. Ironically, then, what appeared to be a source of competitive disadvantage in the 1960s and the 1970s in Britain, may well have turned out to be a source of competitive strength in the 1980s and 1990s.

Conclusion In view of the considerable evidence of a continuous process of emulation on the part of national producers, one might well pose the question: What remains of the notion of nationally specific production models? If we look closely at the evidence, though, we can see that while producers in all industrialised nations seek to 185. Marsden and Ryan (1990) have developed the view that there has been a progressive evolution towards internal forms of training as a response to the inadequacies of apprenticeship training in Britain. 186. See the very interesting work by Zeitlin (1996) on the engineering and car industries, which demonstrates that British manufacturers in the 1950s adapted US mass production technology in a manner designed to preserve flexibility that has much in common with contemporary Japanese practice. Zeitlin argues that from the mid-1960s there was an effort to move away from this distinctive flexible solution to the adoption of more rigid mass production methods.

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adopt other nations’ organising principle which are perceived as providing a basis for superior performance, the ways in which they do this are nationally specific. In this chapter I have pointed to three sources of this ‘societal effect’ in the international transfer of business practices. Firstly, I have argued that the distinctive knowledge base of a nation’s manufacturing principles means that adopting another nations’ methods will require a local learning process. Starting points matter. The more ‘distant’ the borrowed technology is from the local one, the more time-consuming will be the learning process. At the local level the transfer process will tend to have a trial and error quality as certain procedures are introduced and then modified in accordance with observed results. The result will be the development of distinctive national ‘hybrids’ which may differ in significant respects from the parent template. The account I gave of the development the French electronics producer (above, pp. 254) which experimented with quality circles and other forms of institutionalised employee involvement, only to abandon them while retaining individual employee responsibility for quality, provides a good example of this process. Second, while the idea that strong interdependencies among the elements of an internally coherent system preclude incremental modifications of business practices is clearly not correct, this does not mean that national arrangements in the vocational training or industrial relations spheres are divorced from the process of change in the production sphere. In particular, when a nation’s training system is rich in positive network externalities there will be a strong tendency to adopt new business practices in a way that is compatible with the established qualification and training standards. M. Sako’s (1994) discussion of the introduction of Japanese production methods in German electronics plants illustrates this general point admirably. Japanese producers found it advantageous to graft their system of flexible work allocation onto a careers and internal promotion structure consistent with the constraints of Germany’s dual apprenticeship system. This allowed them to benefit from the ample supplies of skilled labour available on the local market. Thirdly, national systems have distinctive industrial relations legacies and distinctive procedural arrangements for negotiating and resolving industrial conflict. The level of trust between labour and management and the nature of the procedures in place for resolving conflict will have a significant impact on how new practices are introduced and modified. The history of the introduction of Taylorism in UK manufacturing that was discussed briefly above provides ample evidence of the way conflict and negotiation can contribute to the production of distinctive hybrid arrangements. The conclusion to draw from this chapter is not that we should stop talking about nationally specific models. Rather, the inference to draw is that we should be spending more time examining the dynamic processes of creative imitation that are continuously making and remaking them.

Chapter 15 Society, organization and work in China Malcolm Warner

Introduction Like other societies, China has its own distinct character not only in its culture, but also in its organization and work. Such a coherence may be described as the “societal effect”, as exemplified in other cases referred to in the literature on organizations (see Maurice, Sorge and Warner 1980). In previous investigations, referred to at length elsewhere in this volume, great emphasis was placed on linking key variables which might explain why organization and work were differentiated in one national context as compared with another. For example, Britain, France and Germany were examined with respect to their specific industrial characteristics (1980: 59–86). An argument was made that there were typically “British”, “French” or “German” organizational models. Similarly, we would expect there to be typically “Chinese” ones. In spite of having borrowed foreign organizational practices, these would have been adapted to Chinese circumstances. In this chapter, we will argue that there are cross-segmental and macro-micro interactions characterizing Chinese society. We aim to show how organization of work, management, training, and the like are interrelated and interdependent and that there are patterns which are stable over time. We argue that a Confucian-based societal “logic” holds the component structures together, makes them recognizably whole and guides their functioning. This societal “logic”, we will argue, persists over time and has absorbed modernism, whether in its earlier or later Chinese Marxist phases, as exemplified in the People’s Republic of China, as well as the contemporary era of market socialism “with Chinese characteristics”. In an earlier work, we (Maurice et al. 1980) noted that: Cultural and national variety provides sources of variance in organizational forms which have been somewhat played down or covered up. Their study need not serve as an end in itself, but it can also provide important clues for the study of organizations within a given society; it is not an attempt to establish theoretical

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As an attack on “convergence” theorists, such as Kerr, Dunlop, Harbison and Myers (1973), our critique attempted to show that “societal factors make a difference of a qualitative kind” (Maurice et al. 1980: 61). Although touching on the theory of organizations, the approach had implications for social stratification, industrial relations, labour economics, amongst other topics. Such an analysis pointed to the need to study the following: – organizational structures – characteristics of jobs – recruitment and selection – education and training – reward systems, and – industrial relations What is interesting about the “societal effect”, according to this view, is that it is constantly evolving and re-inventing itself. There is therefore no fixed set of structures, whether economic, industrial, organizational or social. As the society changes, there is functional adaptation and development. There are not only internally generated changes but also externally driven ones. There are, however, long-term “deep structures” which help to maintain the stability of the system and provide its continuity (Maurice, Sellier and Silvestre 1986). These “deep structures” are defined as “overarching” within which “other structures (social structures, industrial organizations and so forth can interact with each other, while retaining a considerable degree of autonomy” (1986: 209). All the above occurs in the “social space” which arises from the interaction of institutions in the society, such as the production, education systems and the like (Maurice 1995: 30). This “complex tangle of interrelated factors” has been a daunting challenge to a more systematic conceptualization (Sorge 1995). In applying the approach to China, we examine attempts at modernization against the backdrop of its “deep structures”, most of which derived from its Confucian legacy (see Laaksonen 1988). This chapter may very well be the first attempt to apply the “societal effect” approach to China.

Looking at China pre-1949 Vast historical changes have characterized the British, French and German systems amongst others this century, particularly during two World Wars. The German system, for example, had more than its fair share of upheavals, as it went through its Imperial, Weimar, National Socialist, Occupation and Federal Repub-

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lic incarnations, not only at the political level but also in terms of economic and social upheavals. In applying the societal approach to the case of the People’s Republic of China (PRC), we also have to look at the successive waves of change it experienced. The Chinese case may have been more turbulent than the European illustration previously considered, or even the Japanese. External organizational models were on offer from both East and West before the Second World War and then especially from its “fraternal” ally (the Soviet Union) after the Liberation in 1949, as we shall soon see. In spite of “foreign” influences however, recognizably national characteristics have prevailed (see Harris 1997). Chinese society today is thus the result of a long process of adaptation to changes in its environment. Laaksonen (1988) has set out many of the overarching structures which have forged its organizations. These are based on deeprooted characteristics which not only guide behaviour in the PRC but also in Greater China (namely the wider Chinese Diaspora). Redding (1990) has analyzed these and linked them to the development of Overseas Chinese social structures. The core structures have perhaps remained the “bedrock” of the Chinese system on the Mainland but had been arguably submerged for many decades by newer layers of institutional change (see Boisot and Child 1996). Such a core of cross-segmental characteristics was actively suppressed for a while but was, we would argue, so strong it prevailed in many important ways and reappeared in recent years as the system became more “open” under the post-Mao reforms. A good example here is “relational networking” based on interpersonal connections (known in Chinese as guanxi) as a co-ordination mechanism which is found in both socialist and capitalist Chinese organizations (see Luo 1997). This relationship is very much ascriptive, communitarian, and particularistic, quite different from the Gesellschaft type of social integration in the West. It illustrates the persistence of Chinese societal patterns, notwithstanding changes from Imperial rule to Republican, from Revolutionary to Reformist. Indeed, such is the continuity that one acute observer dubbed the PRC as “Confucian Leninism” (cited in Warner 1995: 147). “Networking”, for example, still remains de rigueur in Chinese society (as well as in Greater China). As Luo (1997) defines it: The Chinese word guanxi refers to the concept of drawing on connections in order to secure favours in personal relationships. It is an intricate and pervasive network which Chinese cultivate energetically, subtly, and imaginatively. It contains mutual obligations, assurance and understanding, and governs Chinese attitudes towards long-term social and business relationships (1997: 44).

Its roots have been deep-rooted in the Chinese system over the longue durée. Indeed, ever since Confucius codified the societal rules over 2000 years ago which shaped the hierarchical structures holding national Chinese (and Overseas Chinese) social structures together, clan-like networks have been the main links

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in the societal chain. Together with guanxi (relationships), li (rite), mianzi (face) and renqing (obligations) reinforce the social bonds which make the Chinese system work (Lu 1996: 12–13). In terms of organization theory, we have here the elements of a reciprocal informal system which is “neither market nor hierarchy and formal organizational alliance” (Luo 1997: 46) that acts reciprocally with bureaucratic structures existing at the time. Such mechanisms work cross-segmentally and act as cross-dimensional interaction. Continuity has thus long permeated Chinese societal structures, exemplifying such cross-segmental characteristics. The role of Confucian structures and how they developed has, for example, been widely discussed elsewhere (see Hamilton 1984; Zhao 1994; Brown 1996). The land economy was predominantly run by feudal landlords. There was a well-developed merchant class in the cities; on the social ladder of Confucian society, they formed the lower stratum after bureaucrats, peasants and craftsmen. They were normally constrained by officialdom and if they made money they used it to buy land or high office. There was no sizable accumulation of capital funds to “kick-start” the industrialization process on the lines seen in the West. Craft production was traditionally in the hands of masters, who passed on their skills to apprentices (Chesneaux 1969). The craft model has nonetheless survived in China in, for example, the rural and urban collective sectors. The development of crafts led, as in the West, to the formation of guilds. Prices, wages, quality, and so on were fixed by their rules. Only members could trade with each other. The Chinese term hang for guilds appeared as early as the late sixth century AD, during the Sui dynasty (581–618 AD). There was no visible line drawn between crafts and guilds. Apprenticeship training was also intended as a means of controlling access to the guilds. The number of approved apprenticeships was limited to the number of trained workers subsequently required within the guild. In this way, the guilds could prevent the guild secrets from being “spread abroad” by a trained apprentice. (Münch and Risler 1987: 25)

In the Qing Dynasty (1644–1911), there were many diverse intermediate social organizations, bridging state and society, including traditional trade organizations (hangbang, hanghui, huigan, huisui) and complex kinship lodges based on clan or lineage (zongzu). In the late Qing period, up to 1911, these diversified, new chambers of commerce (shanghui) appeared, with eventually trade unions (gonghui) as well as other modern associations. Older ones like the trade guilds also grew in importance (see White et al. 1996: 16–17). It was from these economic intermediate institutions that many of China’s work practices emerged. Early modernization saw both Western and Japanese capitalist influences on those parts of Chinese society which experienced industrialization at the margins, especially in major ports like Canton (now Guangzhou) and Shanghai, as well as in Dalian (in Manchuria). At the end of the 19th century, factories were set up by

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foreign capital to take advantage of cheap labour and raw materials in the cities, as well as inland (see Feuerwerker 1958). By 1903, public education had been set up on Japanese lines, followed by a vogue for French and Prussian models, but always with a Chinese imprint. Although a primary to university-level system was introduced after 1911, most adults remained illiterate, a challenge which persisted for another fifty years or more. By the interwar years, the seeds of industrialization and modernization had been planted. By this time, a “critical mass” of Chinese workers and technicians was emerging. During the First World War, 140,000 Chinese workers had gained experience in munitions factories in France; many had come in contact with Communist Party cadres and trade union militants, with several returning to become the leaders of the emergent Chinese Communist Party (CCP) and All-China Federation of Trade Unions (ACFTU). By the end of the Second World War in 1945, there were more craftsmen (over 60 million) than factory workers (less than 4 million). Self-employed craftsmen, family businesses and co-operatives still persist in fair numbers to the present day in the urban collective sector, as well as in rural industries, although not predominant. Continuity, in spite of innovation, links past with present. Such stylized economic and work institutions follow a discernable “Chinese” pattern to a recognizable degree. Whilst the smaller enterprises were overshadowed by the larger state enterprises in the period of centralized economic planning, under the economic reforms the older, more flexible structures have come to the fore.

The People’s Republic of China, post-1949 The ‘Liberation’ in 1949 was a major step in the transformation of China (for a chronology, see Figure 1). Not only did a Communist government take power over the whole of the Mainland, but it also attempted to change a predominantly peasant economy eventually into an increasingly industrial one. Schools were set up to train skilled workers and technicians together with engineering universities: “the fight against illiteracy and the training of technical cadres were the prime objective” (Münch and Risler 1987: 31). Soviet influence on the new regime was apparent but in the end mostly superficial. “Let’s be Soviet and Modern” became the slogan of the day. The Chinese tried to copy what they thought was their mentor’s “best practice” but were, in fact, misled (Kaple 1994). They also had considerable Soviet economic and technical aid, with expatriate experts at hand. It led to what may be described as “Leninism with Chinese characteristics”. “Modernism” was tempered by “particularism”. From the early 1960s to the early 1970s, China was in turmoil. Schools and factories alike were often closed, although the economy still grew in spite of the

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Figure 1. Chronology of selected background events in China, 1949–99 1949 1951 1953 1955–56 1958 1960 1966 1976 1976–77 1978–80 1978 1979 1980 1981 1982 1983 1984 1985 1986 1986–87 1988 1989 1990 1992 1993 1994–95 1996 1997 1998–99 1999

The ‘Liberation’: CCP takes power Outbreak of Korean War First Five-Year Plan announced (1953–1957) Nationalization of industry and commerce The ‘Great Leap Forward’ begins Sino-Soviet split: Moscow recalls technicians The Cultural Revolution: years of strife follow Deaths of Premier Zhou En-Lai and later of Chairman Mao Zedong Launch of the ‘Four Modernizations’ ‘Open Door’ policy initiated by Deng Xiaoping Economic reforms launched in Sichuan Province Enterprise reforms extended to other areas Trial of the ‘Gang of Four’ Sixth Five-Year Plan (1981–85) Workers’ Congresses set up in 95 percent of large state firms Substitution of taxation for profit remittance New Law on enterprise management in urban factories Enterprise Responsibility Contract System approved Seventh Five-Year Plan (1986–90) Labour contract and wage reform set out Zhao Ziyang approved as Party General Secretary: Li Peng as Premier Tiananmen Square demonstrations and repression: fall of Zhao Ziyang Eighth Five-Year Plan (1990–94) Deng Xiaoping’s speech on renewal of Economic Reforms Comprehensive ‘three systems’ enterprise reforms Approval and Implementation of Labour Law Ninth Five Year Plan (1996–2000) Death of Deng Xiaoping; Hand-over of Hong Kong Down-sizing of state firms: rise in unemployment Fiftieth anniversary of the Liberation

disorder. Whatever Mao Zedong tried to impose on the society in terms of egalitarian experimentation was short-lived. Even so, the criterion of “better red than expert” was both regressive and inefficient. Most technical training had ground to a halt and young school-leavers were sent to work in rural areas. It was not until the mid-1980s that apprenticeships were mostly restored, using the traditional master (shifu) and apprentice (tudi) model (Warner 1986: 364). The Cultural Revolution, however, constituted only a temporary hiatus in China’s development. Deng Xiaoping’s economic reforms thus launched a new phase in China’s development. After 1979, China embarked on a new road involving the “OpenDoor” strategy and “Four Modernizations” policy. The former promised greater trade with the outside world, whilst leading to the latter which stressed the reform of agriculture, industry, science and technology and defence. In order to implement these “strategic choices” (see Child 1996, on this concept) enterprise and management decentralization was introduced in the mid-1980s. The economy

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changed from one based on central planning to one based on market socialism (Naughton 1996). Over the same period, Chinese industry and its management has, on the face of it, been transformed. State-owned enterprises (“owned by the whole people” in the official jargon) had been the mainstay of Chinese industry since the 1950s (see Warner 1995; Lu and Perry 1997). They were and are still mainly found in large industrial cities like Beijing, Dalian, Guangzhou, Shanghai, Shenyang, Wuhan, and so on. Large and medium-sized state-owned enterprises (SOEs) in this sector once produced the bulk of total gross value of industrial output, nearly 80 percent in 1978 but now down to around 25 percent of this total, although still growing in absolute terms. Beyond the year 2000, it may fall to 20 percent if present trends continue, the same level as in the 1950s. Employing over 70 million workers in all by the end of the decade, state enterprises are generally seen as inefficient and over-manned. At least 40 percent or possibly more are said to be “in the red” and many are now to be sold off or made bankrupt. Such firms have the full stereotypical apparatus of Chinese labour-management relations, although the “iron rice-bowl” (tie fan wan) system — providing jobs for life and “cradle-to-the-grave” welfare — is now in question. If China is to develop a competitive and mobile labor market, change is urgently needed. After taking power in 1949, the Communists struck a Faustian bargain with the urban work force: the huge industrial conglomerates created by the new government would provide womb-to-tomb security and, in return, workers would be bound for life to their employers. (Stevenson-Yang 1996: 8)

China’s patterns of continuity with its pre-1949 past are now re-emerging; the non-state-owned sector (comprising urban collectives, town and village industries, joint ventures, wholly foreign-funded firms and privately-owned enterprises) now accounts for the largest part of China’s industrial output and employs more workers than the SOEs (The Economist, 13 September, 1996: 23–26). The share of collectively-owned enterprises (that is, locally-owned firms, many of which are family businesses in all but name) in this output rose from 22 percent in 1978 to over 35 percent by 1997. The officially private sector of very small firms grew to over five percent; with foreign-funded firms (many joint ventures) producing over a quarter of exports. Since the late 1970s, over 300,000 joint venture and similar agreements have been signed, of which under half have been implemented; foreign capital is now once again a motor of change.

Organizational structures Organizations in the PRC tend to be strongly hierarchically based (another example of the cross-segmental characteristics) in spite of the allegedly egalitarian practices of the Maoist period. Empirical evidence such as found in Laaksonen’s

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(1988) work, one of the pioneering Western pieces of management research in the field, suggests that Chinese enterprises score comparably on organizational variables with many European ones as far as hierarchy is concerned (see IDE 1981, for example) but may be more centralized in many decision-making areas. Top managers in China for example kept more decisions in their hands than their counterparts in Europe and even Japan (1988: 300). He found clear evidence of ‘one-man management’, at the time. Interest groups in the Chinese enterprises had less influence than elsewhere. In the late 1980s, managers in Chinese state-owned enterprises gained additional autonomy in investment, personnel and marketing decisions. Hierarchical determinants were later blended with greater market influences (Child 1994: 103–105). Even so, hierarchical characteristics arguably do still prevail related to the older, Confucian structures on to which the model copied from the Soviet Union in the 1950s was grafted, albeit with varying degrees of adaptation. The percentage of administrative and technical cadres in the resultant hierarchies in Chinese industrial enterprises may be broadly compared to Western firms (cf. Maurice et al. 1980). In one empirical study carried out in China by the present writer, it ranged from 6 percent in machine tools to 16 percent in handcrafts (Warner 1986: 358). In a later study, these percentages varied from 8 percent in transformers to 18 percent in steel (see Warner 1995: 93).

Characteristics of jobs Bureaucratic values prevail in the workplace, in spite of ideological “ups and downs”. China had adopted a modified Taylorist division of labour when it copied much of the Soviet industrial system and set up its own state enterprises with Russian technical assistance (Kaple 1994). Lenin had coined the slogan “Scientific Management plus Socialism Equals Communism”. Empirical work carried out in the mid-1980s and since, indicates that with the management reforms there has been a return to the earlier division of the labour model of the 1950s and early 1960s; little trace is now left of the Cultural Revolution, when an attempt was made to downgrade specialist training and job specification (see Warner 1992). Whilst work experiments then took place, where managers were allegedly displaced by ordinary workers, bureaucratic work structures were said to have persisted (see Whyte 1973). If anything, such structures persist to varying degrees under the economic reforms. In a number of field studies of Chinese state-owned enterprises, the present writer found that work roles had become relatively more clearly defined, say compared with the so-called egalitarian period and especially with what happened during the Cultural Revolution (see Warner 1986, 1993, 1995, Warner 2000). Similarly Child (1994) noted that “Rule enforcement in terms of adherence to administrative regulations remains a real force in the governance of Chinese

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state enterprises …” (1994: 175).These, however, are often used as protective devices by workers to avoid being overworked. The main conclusion from the above is that job descriptions may have become more specific but may not necessarily be motivational. In addition, the number of administrative and clerical support staff has been increasing as formalization and standardization have grown (1994: 164).

Recruitment and selection At the onset of industrialization in the 1950s, the PRC had a predominantly peasant labour force, with a very small industrial working class, as already noted. Out of a total population then of around 500 million, the latter constituted only a small minority. Selection and recruitment was not systematic and workers were trained on the job. Eventually, the personnel system was expanded under Soviet guidance and key workers and technicians were sent to the Soviet Union for training. During the Cultural Revolution, “red” rather than “expert” became the decisive criterion but this was not to persist. As Riskin notes: The ideal worker was a generalist, interested in and good at many things, ready to volunteer to go where needed. Even the principle of “payment according to work” was difficult to implement when “work” was so broadly defined (Riskin 1995: 327).

After 1979 greater professionalization was introduced. After this date economists discussed proposals to create a “labour market” although they did not all accept that labour was a “commodity” under socialism. Currently, the official view employs euphemisms like “labour-service-market”, or “labour-force market” as the notion of a “market” for labour presented problems for Marxist theory (see Warner 1995). The Maoist proposition that “distribution according to labour”, conditional on “each according to his labour” has, however, been largely jettisoned. In addition, Chinese economists began to support the notion that the total wage-fund of the enterprise ought to be a reflection of its performance. There had been a hereditary inheritance of jobs (dingti) in state-owned firms up to the late 1980s. This practice was, however, largely phased out under the personnel management reforms at the end of the decade (see Warner 1995). Vocational training expanded as China moved to an apparently more meritocratic education and training system, starting at middle-school level and continuing into the initial work period. Adult education with an emphasis on self-study was given prominence. Under the post-1992 reforms, firms no longer have to accept allocation by the local labour bureaus but can recruit more openly: there is now in effect a nascent labour market. Many firms, particularly those outside the state sector, select and recruit their labour force with a freedom unthinkable in the almost half

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a century preceding the economic reforms but, with the pervasive influence of guanxi, a degree of particularism prevails in many instances.

Education and training From a negligible base, a substantial education and training edifice has been built up, but a long-standing elitist influence persists. The PRC has a relatively high enrolment in primary schools (69 percent) and middle schools (54 percent) but is weaker in higher education, only 1.6 percent, compared with 4.1 percent in other developing nations (Beijing Review, 4 March 1996: 23). Technical and vocational education (TVE) was given particular emphasis but Chinese education and training remains relatively confined in its scope. As a recent observer noted: The typical graduate of a college-level institution is trained very narrowly. China adopted the Soviet method of higher education in 1952 and began the national movement of readjusting the priorities of colleges and departments. The aims of the movement were to give prominence to the training of personnel with specialist know-how most needed in industrial enterprises, to develop specialized institutes and, accordingly, to readjust the comprehensive universities. Many students go to colleges or institutes designed to serve particular government ministries. (Zhao 1994: 4)

TVE at the secondary level includes Specialized Secondary Schools (SSSs), Skilled Workers Schools (SWSs) and Vocational Senior Secondary Schools (VSSSs) (see Figure 2). These together constitute just over half of all of those secondary school pupils eligible compared with a fifth at the beginning of the reform period. Indeed, many state-owned enterprises have not only their own primary and secondary schools but also training colleges and institutes, in some case even specialized “universities”. The VSSSs were set up to produce middle-level and skilled workers in agriculture, industry and commerce; most courses last three years. They have a general element in their curriculum (45 percent), specialized theory (30–35 percent) and specialized practical work (20–25 percent). Many industrial specializations are offered (such as electrical and mechanical equipment) although most are in commercial and service fields (such as bookkeeping, catering, design, nursing and so on). The VSSSs have less formal links with employing firms than the SWSs or SSSs. The State Education Commission oversees the whole system of TVE but the Ministry of Labour supervises the overall policy of the SWSs. There are now over 400,000 vocational training institutions. Most of the system has been directly financed and run by provincial departments and large stateowned enterprises but most VSSSs are run by local authorities (at city and county levels) (Yang 1993: 8).

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SOCIETY, ORGANIZATION AND WORK IN CHINA Figure 2. Overview of technical and vocational education in China Year 22 21 20 19 18 17 16 15 14 13 12 11 10 9 8 7 6 5 4 3 2 1

Educational grade-level

Course-level

Post-graduate

University and college General senior secondary school

STVU

SSS

General junior secondary school

SWS

VSSS

VJSS

Primary School

Source: Adapted from Yang (1993). Key: SSS = Specialized Secondary Schools SWS = Skilled Workers Schools VSSS = Vocational Senior Secondary Schools STVU = Short-Term Vocational Universities

Rewards systems Rewards in Imperial China were mainly linked to hierarchical roles. The Communists took over the Soviet industrial model grosso modo as noted earlier and, except for limited periods of Maoist egalitarian influence, it was basically unchanged until quite recently (Takahara 1994; Warner 1995). There was for example a hierarchical legacy of eight grades at worker level, and twenty-four for administrative and technical staff (Takahara 1994: 171) as was the case in the USSR. However piece-rates (which at their peak covered 42 percent of industrial workers) never encompassed as many as they did in the USSR, where they attained 74 percent coverage, principally because of worker resistance and Mao’s influence (see Riskin 1995: 323). Since the post-1979 Dengist reforms were introduced, the rewards system has become increasingly based on material incentives, as in past days (see Warner 2000).

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In the Maoist period, as has been said of other Communist economies, “they (the cadres) pretended to pay us and we (the workers) pretended to work” (anon), under the “iron rice-bowl” system which pervaded for most of the time. Under the economic reforms there has been as noted above a move towards performancerelated rewards systems. Chinese enterprises thus abandoned their relatively flat reward structures. Workers were “essentially disenfranchised in return for economic benefits and security” (Riskin 1995: 324). Previously: In every day life, … at the enterprise level state workers did not usually confront factory authorities with demands for pay rises, knowing that the factory’s Party secretary was in no position to adjust the nationwide wages scales set by the government. The most acrimonious issue with regard to their immediate superiors had always tended to be one of fairness in redistribution. (Chan 1995: 39)

Since the mid-1980s, material rewards have become even more predominant. In 1978, time wages constituted around 85 percent of total wages and piecework and bonuses were minuscule, but by 1992 the former had fallen to 45 percent and piecework had risen to 9.9 percent, with bonuses up to 20 percent (Warner 1995: 136). With the 1992 enterprise reforms, a new performance-based payments system was initially implemented in selected SOEs and by 1995 extended to most large and medium-sized ones (together with individual labour contracts) (see Warner 1996). Increasingly, wages are scheduled to be linked to performance over the Ninth Five Year Plan (1996–2000) according to Vice-Minister of Labour, Zu Jiazhen (China Daily, 18 April 1996: 1); the rewards system may however remain particularistic in its application.

Industrial relations and labour-management Continuities with the past tend to dominate another important aspect of work. Industrial relations in China have followed a fairly consistent model since its early development, in effect often resembling traditional patron-client relations (Walder 1986; Riskin 1995) although with aberrations during the Cultural Revolution. The All China Federation of Trade Unions (ACFTU) (see Lee 1986) has its since its inception been based on the Leninist transmission-belt (chuansong dai) mechanism and has tended to mainly stress production values at the expense of representational ones (see Ng and Warner 1998). Trade unions have not been seen as normally bargaining freely in negotiating wage levels, as is the case in Western economies, although “collective contracts” (jiti hetong) have now been introduced mainly through the 1994 Labour Law (see Warner and Ng 1998). In this context: “The ACFTU was assigned two functions; by top-down transmission, mobilization of workers for labour production on behalf of the State; and by bottom-up transmission, protection of workers’ rights and interests”

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(Chan 1995: 37). Formally at least, trade unions were supposed to implement resolutions passed by enterprise-level Workers Congresses. In the everyday work of the enterprise, union officials were expected to look after the welfare needs of their members. They were, for example, concerned with the allocation of housing. The average level of unionization in the SOEs in recent years was in many cases over 90 percent of eligible workers but was very much lower in joint ventures and foreign-funded enterprises. According to Chan (1995) there was, however, on the one hand great cynicism on the workers’ side about the role of the Workers’ Congresses but also, on the other, some ambivalence: for example, a recent ACFTU survey argued that 90.5 percent of workers thought the major issues proposed by management should be endorsed by the Congress (1995: 43). However in a study carried out by White et al. (1996) 80 percent of workers believed their Congress was not in fact consulted or did not offer a judgment on major issues. Since the late 1980s, with the introduction of a more market-driven system, the non-state sector has flourished and hence a greater degree of variety of labourmanagement relations more reminiscent of earlier times, pre-1949, has been introduced ranging from many smaller and medium-sized foreign-funded firms with no trade union representation at all, to larger joint ventures with sometimes as developed a representative system as in state-owned enterprises (see Warner 1997). As the distinctive post-1949 “iron rice-bowl” system is now being phased out as part and parcel of official policies to reform Chinese industry, industrial conflict has been growing. There is no constitutional “right to strike” (it was in the 1975 Constitution but removed by amendment in 1982) and it does not feature in the new Labour Law of 1994. Redundancies, differential material rewards and the greater social insurance burdens for individual workers have been a feature of the reforms of the early 1990s. These are being extended to the whole state-owned sector, if perhaps with growing resistance by those workers who stand to lose most from them. As other workers are seen as receiving higher wages, feelings of “relative deprivation” may further lead to worker discontent in this domain. The return to insecurity and uncertainty in the domain of work is seen by some as turning back the clock to the pre-communist era and therefore remains a sensitive issue (see Ng and Warner 1998; Warner 2000).

Discussion and evaluation In terms of the original theoretical point of departure, we can see that the description of the social system set out above very much resembles the “societal effect” as schematized by Maurice et al. (1980). We have accordingly emphasized “the interconnections between different social spheres such as manufactur-

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ing, industrial relations, education, training; (which) recognizes that constellations of such interconnections can only be explored by considering historical and ecological factors” (1980: 61). The extension of the schema to an additional country has set out “to enrich our systematic grasp of events” (1980: 61). We have seen that as there are typically “British”, “French”, or “German” organizational models (1986: 59) as there are “American” ones (see Kogut 1992: 290) we may find a recognizably “Chinese” one. Although we have mainly provided an overview of the “societal effect” in its Chinese context, we feel that sufficient convincing empirical specifics have been presented in this country case study. The reader, we hope, will recognise that “the differences in organization configurations arising because of the joint emergence of different work structuring and co-ordination, and qualification and career systems” constitute the “societal effect” in operation (1980: 65). In this chapter we have therefore tried to argue that the various elements in the Chinese context are intrinsically interconnected, such that they form a whole (or gestalt). The six elements of the “societal effect” cited earlier (namely, organizational structure, characteristics of jobs, recruitment and selection, education and training, reward systems and industrial relations) we would argue, all have systemic relationships, shaped as they have been by the ecological and historical (as well as the immediate political) setting in which they are embedded. What we are arguing in this analysis is that there are cross-segmental and micro-macro interactions in the Chinese organizational and work context as described above. Several factors tied the gestalt together in the past and many of these elements persist to this day in spite of a substantial degree of industrialisation and modernisation in contemporary China. One was a high level of linguistic unity in terms of nationwide Mandarin (or putonghua) spoken by the educated. Second, was a state-wide elite culture, perpetuated through a nationwide examination system. Third, there was an overall “design” involving top-down values being superimposed on local ones. What in the past characterized the Imperial state continued to persist and was replaced in more modern forms and symbols by the post-Liberation elites. For a period, under the Cultural Revolution, there was a strong anti-traditionalist streak, but at other times and at the present time, there has been a robust attempt by the Party and linked elites to appropriate the Confucian past (see Harris 1997 for a discussion on this them). China is understandably a complex society to comprehend, let along analyze because: … of its deeply embedded and multi-layered cultural heritage, the vicissitudes of its socio-political development (especially during this century), its rapid rate of recent modernization and its vast scale … This complexity, combined with the present rate at which the country is changing, makes it extremely difficult to reach anything like an adequate understanding of contemporary developments, even in a specific field of activity such as industrial management. The foreigner finds it a

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difficult enough challenge to secure valid descriptions; comprehension is yet more elusive. (Child 1994: 285)

Most recently, the twin pillars of the post-Mao, Dengist reforms, namely, the “Open Door” and the “Four Modernizations” represent a “strategic choice”. Such policies, based on “principles of decentralization, recognition of market forces, and the use of economic incentives” (1994: 48), we would argue, have possibly redirected the “societal effect” back a fair degree to its point of continuity with earlier norms and values, as well as looking forward to a newer symbiosis. The past societal “logic” still prevails in contemporary China. As Laaksonen (1988: 95) pointed out a decade ago, business enterprises were still perceived as “extensions of the family system”. Subordinates were expected to be “unquestionably loyal, obedient and subservient in executing the orders and instructions of their superiors” (1988: 95); such traits are still de rigueur in many ways. Collectivities generally remain more important than the individual, although a “new individualism” beckons (Ci 1994: 200). Such older societal features are seen as compatible with contemporary structures (see Lu 1996: 13), although one must recognize the extensive degree of institutional change which has occurred since 1949 and which has been assimilated. We would therefore not argue for a “back-to-the-future” scenario. Indeed, Boisot and Child (1996: 614) after debating whether “we are now seeing in Chinese economic organizations the re-emergence of traditional social structures or, rather, the establishment of new forms” (1996: 614) conclude that “(there) is some reason to expect a degree of continuity with pre-communist society because it is recognized that social institutions and traditions are deeply embedded and extremely persistent” (1996: 614). It is not “the state and the nation” which dominated but “the state or the nation” during the main years of Maoist rule (1996: 618). Boisot and Child believe that Western-style modernization, where the government codifies the rules and monitors from outside the transactional arena, has not yet characterized Chinese economic development in China: it operates from inside (1996: 620). Western conceptual language does not always neatly fit non-Western cases however. The Chinese system has its own “underlying logic and its gestalt” (1996: 621). We can generalize this point to identify national logics, which may be akin to the “societal effect”. These may be found across national and continental divides whether Western or non-Western. Underlying logics may be cumulative in that their complexity grows over time and hence their embeddedness. Ignoring this complexity built up over time may imperil understanding of their distinctiveness. Analyses based on apparent universalistic characteristics at the expense of particularistic detail may end up being superficial and facile. A great deal of social science ignores such detail and contributes little to understanding.

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Concluding remarks The heterogeneity of nations, we may conclude, greatly assists international comparative analysis. As Maurice notes “national spaces, and the actors associated with them have been formed historically” (1995: 28). There is thus no “universal logic of development “: we must stress the “social embeddedness” involved (1996: 30). To tie together national specificities within a conceptual frame has been the task of this essay. China is a particularly interesting case as it exemplifies the longest continuous history of any nation state and yet it is also more than just that, the national and societal entity are co-terminous: some even invoke the term “culture” (particularly if we take the Overseas Chinese into account). Individual “national cultures” (such as China proper or the PRC as a political entity) may have distinctive enough cross-segmental characteristics to be recognizable as gestalts, which have emerged over historical time and which have persisted, in spite of on the surface fast-changing times, and regardless of apparent modernization.

PART IV GOVERNMENT, PUBLIC POLICY AND PUBLIC SERVICES

Introduction All four contributions in this part deal with phenomena in the domain of politics and of public actors. Societal analysis has at times been accused of not explicitly taking the role of the state into sufficient account. Almond and Rubery enter into the issue of deregulation in the United Kingdom, showing the limits of a societal analysis that does not consider social and economic changes associated with, not only deregulation but the evolution of the nation state in a wider sense, within the context of a globalizing economy and the formation of European governance and social and economic identity. The contributions by Musselin, Hage and Verdier are located in a different subject area, addressing educational systems which are more or less controlled by the state in each of the countries discussed. Following on from a comparison of French and German universities, Musselin poses a question which is fundamental and theoretically not only concerns university systems: Do we compare societies when we compare national university systems? In other words, does this kind of international comparison need ‘societal analysis’? Not necessarily, in the opinion of the author, who puts the conceptual tools of ‘strategic analysis’ of organized action to efficient use and tackles the problem of gauging the relative importance of public action against individual action, and the local against higher levels. Hage attacks the topic in a different way. He is thematically focused on ‘path dependencies’ of educational systems related to those with regard to forms in the division of labour, on the basis of comparing Britain, France, Germany and Italy. This author puts forward and links in his analysis the concepts of ‘national cognitive style’ and — the more classical ones — of ‘national character’ and ‘elite power’. These are used to found an interpretation of institutional transformation in the societies covered, which allows a link of the conceptual achievements of societal analysis and contingency theories. Whilst societal analysis had been pitted against contingency theories of organizing, this author aims at an integration by casting constructions of actors as contingencies. In this respect Verdier proposes a different conceptualization, integrating public action directly into societal analysis, enlarging its field of application and analytical capacity. This is facilitated by conceiving of ‘societal conventions’ to reflect the ‘social public order’, which also serves to relate micro- and macrolevels in modes of social coordination and regulation to each other. The author has already proven these points in a Franco-German comparison of the construction of vocational education and training itineraries and diplomas.

Chapter 16 Deregulation and societal systems Philip Almond and Jill Rubery

Introduction This chapter addresses the question: to what extent does the societal system approach retain relevance in an economic and political context where national regulations and institutions are dismantled, the coordination of economic and social objectives is apparently left to the market and a diverse and fragmented economic and social structure replaces the more cohesive formulation of class and business interests found in the post-war era. Through an examination of the usefulness of the societal approach in explaining the deregulation process within the UK, we will reveal the extent to which deregulation in the British labour market has interacted with the societal logics of the system. The later sections of the chapter attempt to move towards an approach which retains the central tenets of the societal approach, while tackling the weaknesses that may reduce its practical adequacy as a comparative approach in dynamic or unstable situations. The problems encountered in incorporating a radical process of deregulation within the standard societal systems approach are significant. A key feature of the approach is the identification of the interlocking nature of the various societal spheres, leading to different societal formations. Deregulation, as implemented in the UK, challenges the notion of a societal system, if only because the rhetoric surrounding the policy denies the validity of the concept of social construction except as a barrier to the operation of market forces. Thus the first section of this chapter describes this process, identifying both the specificities of the British societal system and the various strategies adopted by the state to advance deregulation.187 The second part underlines the continued presence of societal effects 187. This chapter was written in 1997, and thus does not take full account of changes under the current Labour government. Positions of the “Government” referred to here should thus be attributed to the conservative governments of 1979–1997.

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within a free market economy, with particular regard to the nature of human resource management in the UK. The final section tackles some of the theoretical problems of incorporating deregulation into the standard societal approach.

The deregulation process in the UK The degree, and unstructured nature, of institutional change in the UK has undoubtedly contributed to the more limited acceptance of societal analysis in the UK than in other countries. However, as we illustrate below, the form which deregulation has taken in Britain has been heavily informed by societal logics. Additionally the central role of the state in the deregulation process requires more active consideration. In particular we need to consider how the state as a strategic actor has acted within societal logics and formations at the same time as trying to alter them. The UK: A weak societal system? It is certainly plausible to argue that, in the British case, the connections between societal spheres have, throughout the post-war era, been less apparent than in many continental European countries. The British system, as inherited by Margaret Thatcher, was the result of a triumph of adhocracy over planned strategy to a greater extent than perhaps any of its close neighbours. Even at the risk of accusations of post-hoc rationalisation, it seems reasonable to point out that the institutionalisation of the British societal system has traditionally been rather weak, and to argue that this favoured the possibility of such apparently radical change in economic and social policy as has been witnessed since 1979. It is necessary to examine, if only briefly, the sources of weakness, or informality, of the British societal system. These derive from several related specificities of the system of governance. The form that deregulation has taken in the UK has been favoured by a centralised system of government (Lane 1992: 67), and the nature of the electoral system,188 which make the power of a political party, once elected, much greater than in many other countries. This has led to an approach to politics which has seen consensus building as unnecessary. Lane (ibid.) argues that this has contributed to an unstable economic framework and — in some cases — frequently changing institutional structures and procedures; the frequent changes to the system of training can be used as an example of this. 188. For example, in the recent general election, the widespread use of tactical voting, where many electors voted for the party most likely to beat the incumbent Government in the particular constituency they lived in, ensured that the Labour Party gained an absolute majority of 179 seats in the 650 seat House of Commons, based on around 43 per cent of the popular vote.

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With regard to the employment system, Crouch (1995) argues that the lack of coherence in the British system also results from the lack of a strategically minded post-war consensus agreement between the state, capital and labour; “..it was not a real consensus in the sense of a true agreement, oriented to widely discussed, chosen goals. Rather, it was the kind of consensus that arises when various groups put the avoidance of struggle beyond the search for agreement” (ibid., 236). Additionally, the legitimacy accorded to the labour movement in other countries, for reasons varying between defeat in the war and the fear of organised labour unrest, was never so present in Britain (ibid.). While acknowledging these factors, we must avoid any consequent temptation to regard the United Kingdom as a ‘peculiarity’. This would both limit severely the explanatory power of our approach, and would also involve making dangerous assumptions as to the robustness of societal systems in other countries. Equally, while the weak institutionalisation of the British system aided deregulation, the process was not an inevitable one; it was dependent on the ideology and power of significant actors. Strategies of deregulation Before attempting a societal analysis of the impact of the deregulation process, we need to understand how the process occured. Specifically, it is necessary to move away from seeing Thatcherist deregulation as an inevitability, or even as the natural extension of a prevailing ideology. We must understand how the ideology, power and strategies of Thatcher reacted with the realities of the British societal system. An analysis of the deregulation process shows clearly that the strategies pursued in the search for deregulation were both variegated, and in many senses apparently contradictory. Two of the principle strategies used in order to achieve ‘deregulation’ were in fact increased regulation, on the one hand, and centralisation on the other. We will now illustrate these processes. Deregulation through increased regulation: The system of industrial relations An analysis of changes to the industrial relations system in the UK clearly demonstrates that the adoption of a free market philosophy does not result in a simple, coherent process of deregulation. Rather, the changes have to be analysed in terms of the power and strategies of the actors involved, with reference to the system in place. In fact, while the labour market may have become less regulated, it is almost certainly a misnomer to talk of deregulation in British industrial relations. Moreover in many areas, such as the absence of a national minimum wage or restrictions on working time, the lack of regulation is the result of the historical

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strategies of the state, employers and the trade union movement, rather than the result of Thatcherite deregulation. While it is true that some regulation has been removed since 1979 — in particular the demise of Industrial Training Boards, the anti-employee changes in unfair dismissal legislation, and the abolition of wages councils — the primary reason for the lack of legal regulation of the employment relationship remains the societal value that social progress in the workforce should be the result of battles fought within a pluralist arrangement rather than as a result of specific legislation. This system was strongly backed by the trade union movement, partly because of its understandable mistrust of the courts (cf. Hyman 1995). This voluntarist system, based on collective self-regulation, which was actively supported by every government from the 1890s to 1979 (Hyman, ibid.), led to several particularities of the British industrial relations system. For example, there was, in a strict legal sense, no right to strike, and no obligation on employers to accept workers’ right to unionise, or to bargain in good faith. Such employee rights were largely present, but on an ad hoc basis. The most important aspect of labour market deregulation was thus not the removal of elements of employee-supportive legislation, but rather the implementation of a very considerable degree of regulation aimed at preventing the effective operation of trade unions.189 These reforms have been largely effective in removing the trade unions from political prominence, or from operating in workplaces where the employer does not wish to cooperate. Yet any balance sheet of industrial relations change since 1979 has to reflect a large degree of continuity as well as change. As Hyman (1995) argues, the 189. It is perhaps necessary to underline the extent of the changes in the laws governing collective industrial relations in the UK between 1979 and 1993. Laws passed in this period had the following effects: – restrictions on, then making unlawful, the closed shop whereby only union members could be employed in certain workplaces. – secondary picketing outlawed – secondary industrial action restricted, then outlawed – union liability for unlawful industrial action – statutory definition of a trade dispute narrowed, reducing the scope for lawful action – more selective dismissal of strikers permitted – industrial action without secret ballots made unlawful – union political funds subjected to secret ballots – industrial action to enforce union membership outlawed – disciplinary action by unions against members refusing to take part in industrial action outlawed – requirement for unions to provide employers with at least seven days’ notice of industrial action – citizens’ right to seek court orders restraining unlawful industrial action – ‘check off’, whereby union dues paid directly from salary, subject to three-yearly written consent. (Source: Dickens and Hall 1995: Table 9.1)

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adversarial nature of the industrial relations system in the UK reflects distinctive features of society, many of which were in evidence before the rise of trade unionism. It can also be argued that many of these features remain in place despite the weakening of trade union influence that has occured during the process of deregulation. In other areas, elements of the ad hoc system of regulation have disintegrated without any direct governmental interference, as a result of employers withdrawing support, sometimes with the collaboration of trade unions. The best example of this is the decline of collective bargaining above the level of the firm, which was not opposed by trade unions, many of which clung to the belief that bargaining was somehow freer, and more active, if it took place at the most local level. Taken as a whole, the reforms have been so successful, at least in reducing the power of trade unions that the labour movement has had to make significant adjustments to its overall strategy. For example, the TUC, finally conceding that collective bargaining cannot be expected to extend to the lowest paid, has been active in campaigning for a national minimum wage, as well as adoption of the Working Time Directive and the Social Chapter of the Maastricht Treaty. In other words, the Conservative attack on trade unions has caused a realisation on the left of the necessity for individual employment rights (Dickens 1989: 49). Thus an unintended consequence of the strategy pursued by the Government since 1979 may be increased pressure for individual employee rights. Deregulation through centralisation In other areas of society, deregulation has been attempted through moves towards centralisation. Changes in the control of regulatory forces have very often consisted of transfers of authority from pluralist, or democratically elected bodies to more direct state control. The espoused rejection of state control has arguably been superseded by a desire to ensure that regulation is not carried out by bodies outside the control of the national government. This objective has been met by two principle means; firstly, there has been a considerable reduction in the powers, and particularly in the revenue-raising capabilities, of local and regional government (Marr 1996). Secondly, in many areas, including health provision, education and housing, non-elected bodies, operating under central government guidelines, replaced structures with various degrees of democratic accountability; again, ‘the market’ was used as the justification behind these moves. Hence, not only is ‘deregulation’ a process set in motion by the national government, but, in the case of the United Kingdom, it has also led to a hitherto unknown level of centralisation of government. The paradox is that the government has increased control over the economic and social system, only to pursue an active policy of leaving social and economic reproduction to the private sector. The move towards the market has frequently entailed increased regulation in certain areas, particularly where the market has entered into the provision of public goods.

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Societal effects in the free market economy? The preceding sections have emphasised the need for some form of societal approach to the process of deregulation itself. However, another test that the approach needs to pass is whether it can be seen as relevant in a deregulated society. If deregulation is perceived as the stripping away of institutional influences on decisions made within the employment and industrial spheres, then societal analysis may be argued to be of less relevance in an increasingly deregulated world. If, on the contrary, it is more appropriate to see deregulation of the labour market as a greater opportunity for social divisions and deeply embedded societal logics to influence practices which might be otherwise expected to be determined according to market principles, then it is necessary to be able to analyse this deregulated market through a societal perspective. The British societal system and the adoption of “Hard Human Resource Management” As has been extensively reviewed elsewhere, the past two decades have been a time of considerable pressures for change in labour management. While this is not the place to review such literature it is noticeable that both the British human resource management literature, and that with roots in the regulation school emphasize opposing models for the nature of employment relations in the new paradigm that is argued to have appeared; thus, we see references to “hard” and “soft” HRM, and “constructive” and “competitive” flexibility (cf. Storey 1989, Boyer 1988). It is not difficult to perceive why the comparatively under-regulated market system in the United Kingdom is likely to result in a national pattern of human resource management more inclined towards the “hard” than the “soft”. In effect, the lack of restraints pushes firms towards a low pay, low quality axis. For a societal approach, however, it is more important to underline that this “free” market reflects underlying social values and arrangements. Insofar as national models of labour regulation are moving towards a paradigm of flexibility (Boyer 1988), the means by which flexibility is achieved reflect long-standing underlying social arrangements. Britain combines a long-hours culture for “core”, full-time workers, with very short hours for many part-time workers. A reliance on labour cost minimisation implies continual reliance on “flexible” or insecure forms of employment; workers in these jobs — predominantly women — are often paid very low wages, while being employed on contracts which offer maximum flexibility to the employer and little to the employee. This particular form of flexibility relates not only to the lack of regulation of the labour market but also to the prevailing system of gender relations. The importance of interlockage between different societal spheres in ex-

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plaining the particular form of labour market organization in the UK can be further illustrated with respect to two labour market phenomena: the use of parttime labour, and the problems encountered in developing youth training programmes in the UK. Diagram 1a shows five societal spheres: the industrial system; the regulatory system; the labour market system; the social reproduction system and the education and training system.

REGULATORY SYSTEM

INDUSTRIAL SYSTEM

National insurance exemptions Limited legal employment rights

SOCIAL REPRODUCTION SYSTEM

Male breadwinner family Long male working hours Lack of childcare facilities

Concentration of ownership in services leading to sophisticated planning of staff levels HIGH PART-TIME WORK

based on women returners plus young people ; low skill and low paid work.

EDUCATION AND TRAINING SYSTEM

Increased supply of students for part-time work. Limited credentials system for vocational training results in occupational downgrading of women returners. Diagram 1a. Societal spheres and their influence on part-time work.

LABOUR MARKET SYSTEM

Segmented job and pay structures leading to low level of integration between full and part-timers

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The high use of part-time work in the UK and its association with low-paid, low-skilled jobs can be identified as arising out of the interrelations of these five spheres. The high ownership concentration in the service sector in the UK is associated with the early development of sophisticated techniques for estimating labour demand in areas such as retailing and catering, resulting in the use of parttime work to provide the flexibility of cover required. The labour supply for this work has been generated by the system of gender relations and the system of social reproduction; women in Britain still tend to quit the labour market to have children and when they return they seek part-time work to fit with the very long hours of work of their husbands (a product in itself of the lack of working-time regulation) and with the lack of available childcare. The incentive to use parttimers is further fuelled by the fiscal system which provides incentives for parttime work for both employees and employers, and by the absence of legal provisions to require employers to provide basic benefits to all employees. For example, there is no legal right to paid holiday in the UK and although most fulltimers receive paid holiday as the result of both custom and practice and the requirement to provide a legal written individual employment contract, the same cannot be said of part-timers, where the force of custom is less strong and the provision of written employment contracts less common. The education and training system feeds the high use of low-paid part-timers in two ways: first of all increasing numbers of students are seeking part-time work as the funding for higher education is withdrawn. Secondly, the absence of a well developed credentialised training system in the UK leaves women returners vulnerable to taking low-paid jobs as they find it difficult to re-enter at their previous occupational level (Maier 1995; Dex et al. 1993). Finally the labour market system is based on fragmented and segmented job structures, such that part-timers tend to be occupied on different tasks and in different firms than full-timers, and parttimers thus face limited opportunities for moving back into full-time work and are often subject to very different terms and conditions of employment. The decrease in the relative pay of part-timers underlines the fact that the impact of deregulation may be to exacerbate existing levels of disadvantage in the labour market and to reinforce the role of social values in structuring labour market outcomes. The same five spheres can be used for analysing the obstacles to developing strong vocational training programmes for young people in the UK (Diagram 1b). The lack of interest in vocational training systems stems from an industrial structure geared to relatively low-skilled work, and a labour market system where employers are relatively suspicious of the value of training unless it is linked to a narrow range of traditional apprenticeships. Work experience and competence on the job are often regarded as better signals than training by UK employers. This emphasis on work experience in a “proper job” is reinforced by a family system which expects young people to make a financial contribution to the costs of the

DEREGULATION AND SOCIETAL SYSTEMS

REGULATORY SYSTEM

INDUSTRIAL SYSTEM

No incentives or requirements to train

SOCIAL REPRODUCTION SYSTEM

Young people expected to contribute to family income/ family expenditure or to form separate household

285

Geared to low skill work

WEAK SYSTEM OF VOCATIONAL TRAINING FOR YOUNG PEOPLE

Preference for job over training position

LABOUR MARKET SYSTEM

Work experience more important than training in recruitment/ promotion

EDUCATION AND TRAINING SYSTEM

Elitist education system Separation of education and vocational training

Diagram 1b. Societal spheres and their influence on the vocational training system

family at a relatively young age, or otherwise establish an independent household. The low status accorded to training is related to the elitist educational system in the UK, where those who are able enter university, and those who are not find a job, or even worse take a traineeship. Attempts are being made to break down this apartheid between education and training through the development of vocational educational qualifications, but so far with limited success. Finally there are very limited regulatory or fiscal incentives for training, such as requirements for firms to spend a share of their budget on training.

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Thus a training culture is unlikely to emerge while the returns on training, both to employers and the workforce, are minimised by the lack of an effective industrial policy (Rubery 1994). Individual organizations alone cannot solve the problem of low skill in the UK economy. The removal of “constraints” on individual employers will not in fact increase the range of choices available to most firms, but merely change the range of choices towards the low-skills, lowwages end of the spectrum (cf. Cappelli 1995). It has frequently been argued, particularly in relation to human resources, that the operation of the free market requires regulation, in order that firms make choices conducive to the long-run competitiveness of the firm and the nation (Morishima 1995; Purcell 1993; Dore 1989). This argument is reinforced the more a particular labour market problem does not arise solely from a failure of a labour market institution, but from the interlockage of a range of institutions within the society. The adoption of a “hard” HRM approach to labour market organization can thus be seen as a response to a situation in which organizations are free to make more rather than less use of pre-existing social divisions, and where pre-existing prejudicies against the value of investments in training are no longer challenged by labour market regulations designed to overcome the short-term instincts of many UK employers. The continued importance of societal effects There are strong temptations to characterise the changes that have taken place in the UK over the past eighteen years as a descent from a structured and regulated system of social and employment relations into a fragmented, disorderly and fundamentally unstructured social and economic system. Some of the recent changes can be characterised as tending in this direction; one of the present authors (Rubery 1997) has argued that there can no longer be assumptions that the prevailing structure of wages reflects any logic or social and economic meaning as the norms, values and institutions upon which wage structures have been built have disintegrated, to be replaced in many sectors by a more open struggle over the distribution of resources, not mediated by notions of fair and just pay. However, even in this area, the trends described are a tendency and not a fully realised outcome, as individual organizations and sectors maintain notions of customary differentials and customary expectations of the workforce. Organizations still matter in the setting of wage structures, the iron law of the impersonal market has not taken over, and organizations’ decisions are still embedded in specific societal structures, both those inside and those external to the organization. It may be more appropriate to see managers’ new found discretion over pay as a weakening rather than a disintegration of internal and external constraints. Perhaps even more importantly, some of the apparently discretionary decisions made by employers in their pay systems reflect not a weakening of social

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influences on pay but an increased opportunity for employers to use social divisions in the external labour market to structure internal pay systems independently of the contribution of workers to the organization. Thus low wages for part-timers or for youth labour reflect an increasing exploitation of social divisions and not the reassertion of market vales reflecting solely economic differences between labour force groups. The above examples show that deregulation can in fact increase the interlockage between different societal spheres. The paradox of the UK example is that despite the rhetoric of deregulation, and the dismantling and weakening of overt labour market regulations and organizations, the actual process of change within the UK has relied upon institutional and regulatory control of organizations themselves. At the same time as labour market regulations and institutions have been dismantled, the employment system has become increasingly shaped and influenced by underlying social, class, race and gender differences. Moreover what may be really interesting for a comparative analysis is not what has been deregulated and subject to apparently arbitrary decisions, no longer governed by norms and values or institutional arrangements prevailing in the various societal spheres, but what areas have been resistant to deregulation and the associated destabilisation of rules and procedures. An analysis of deregulation in the UK reveals that the choice of areas to deregulate has been profoundly related to the previous path of development of the UK political economy, particularly to the weak institutionalisation of many of the regulations of the labour market in the first place. Yet while certain areas have been possible to deregulate, other areas have proved more resistant, in spite of the lack of institutionlisation. While privatisation, harsh trade union legislation and the withdrawal or reduction of social welfare benefits in many areas all broke with what had previously been seen as the post-war consensus, the Conservative success in establishing these policies was related to the fragility of the consensus as well as the weakness of institutionalisation. Conservative success in embedding monetarism, not only as economic policy, as in other countries, but also as a societal value, as represented by the new Labour Government’s unwavering commitment to Conservative spending limits, can thus be seen as a result of the fragility of the British consensus behind paying taxes in the name of social protection and progress. Within this context, the universality of free health care therefore appears as somewhat contradictory within the individualistic nature of the British societal system as altered by Thatcherism. In effect the preservation of a National Health Service, which remains largely free at the point of access, represents a sphere of society in which Thatcherism could only operate at the margins, as the noncharging nature of the NHS has, at least so far, been perceived by politicians as an area in which the public is likely to resist change.

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Incorporating deregulation into the societal approach Developing a more general societal systems approach While previous sections have demonstrated the need for a societal approach to deregulation, it is also clear that the approach needs to be adapted if it is to deal adequately with countries whose institutions are less strongly established and are thus prone to rapid change. One of the problems in defining the features of the societal effect school is that some of the identified characteristics of the approach, within secondary and critical analyses, may overstate the predominance afforded to a strong national state and institutions by the original protagonists. Users of this approach have often assumed the following characteristics to be critical to applicability of the approach: first, strong, national institutions based on shared norms and values as well as regulations, social and economic institutions and organizations; second, coherent as well as interlocking relationships between the various elements of the societal system so that a distinctive national societal system can be identified and, third, differences between countries which are at least as great or certainly at least as significant for economic and social analysis as differences found within countries (Michon 1992). Consequently applications of the societal approach have tended to overstress cohesion, continuity and conformity to a national system, with too little attention paid to tensions, inconsistencies and diversity; particularly, change has been portrayed as a relatively harmonious process, as emphasised by the biological metaphor of “non-identical reproduction” (Sorge 1995). Yet the British example illustrates the point that changes in elements of systems will tend to result from tension rather than a “harmonious interaction” between social and economic change (Rubery 1992;1994). Additionally, a focus on alternative business systems can lead to a false equivalence being drawn between countries and to dangerous assumptions of stability; for example, there exists a common argument that change against the grain of the wider institutional fabric will be difficult to sustain in the long run (Lane 1992; Sorge 1995). Problems in applying some of the above assumptions to a rapidly changing, and particularly a deregulating economy, can be illustrated by the case of the UK over the past two decades where not only have regulations and institutions been dismantled, but also social and community norms and values have been destabilised. Moreover the role of the state as a coordinator of policies to achieve coherent economic and social objectives has been rejected. The government no longer accepts responsibility for outcomes, with even failures of explicit public institutions such as the prison service or schools attributed to poor management at the level of the individual institutions (Marr 1995: 261). The Government thus

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rejects the linkage between events and national structures in claiming that institutions are best managed locally, preferably in private ownership (in the case of many prisons) or at least through an approximation of market structures (schools and hospitals in the public sector). Further, Conservative policy explicitly rejected a role for the state in the coordinating of the national economy; its sole function was seen as freeing the operation of national economy and society to the market. A diverse and fragmented social and economic system can be said to be both the likely and, in the government’s view, the desirable outcome of this process of deregulation. Arguments that the UK is falling behind in competitiveness were countered by isolated examples of excellence, with individual organizations tailoring their employment and production system to meet their own needs unhampered by the trappings of a national system. Individuals, and individual firms, were thus deemed responsible for their own destiny within a globalising economy. Growing economic and social inequality created both winners and losers, the winners being used to provide examples of how self help could solve the problems of social exclusion and economic need. This helped prevent the emergence of any shared understanding of the impact of restructuring, further undermining notions of national interest or identity.190 From this example it is clear that any application of the societal effect approach must be adjusted to allow for the diversity and lack of coherence in national institutions on the one hand, and the possibility that societies fail to attempt to develop a strategic national comparative advantage on the other. Coherence, in the sense of some kind of fit between the different spheres, is not necessarily central for establishing the prime proposition of societal analysis, namely that societal spheres are interlocking. What may have changed in the UK over recent years may be more the undermining of coherence between, for example, the economic and the social, rather than the removal of interrelationships between one sphere and the other. Similarly national institutions may take on diverse forms, for example differentiated by class, region or gender, but the nature and extent of this diversity may still be shaped by the interlocking logics of the various societal spheres. Under this more general approach it cannot necessarily be assumed that societal differences are greater than within-country differences; societal differences rely either on notions of averages or on notions of the typical plant or organization, but within diverse systems such notions of average or typicality

190. The claim that Britain lacks national identity may seem surprising, given the Europhobic patriotism that characterised the later years of Conservative government, which at least apparently reflected the views of a large proportion of society. However, British Conservative Euro-scepticism is unique in its rejection of the European project in favour, not of a national government reflecting national social needs, but of the unmitigated promotion of global capitalism.

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take on only an artificial or statistical relevance. Moreover as has been argued frequently within the societal effects school, it is difficult to determine whether these differences between or within societies are greater or smaller, simply because the meaning or significance attached to the same social phenomena vary between societies. For example, there may be widespread overlap between societies in the shares of part-time workers employed, but this type of employment takes different forms and has different consequences, according to the societal system (O’Reilly and Fagan 1998). Furthermore the absence of an explicit strategic policy towards a national competitive strategy does not necessarily prevent the emergence of a fit between the societal system and certain specific modes of competition — for example in the UK case, low-quality low-cost products. Thus even in the areas of greatest apparent difficulty in applying the societal system logic we may be able to find a suitable modification and adjustment, to widen the general application of the approach from strong to weaker national systems. However these adjustments to the standard assumed characteristics of the model provide weak justification for applying the approach to the case of the UK. The basis for adopting and developing the societal systems approach must depend upon it offering strong comparative advantages as a method for analysing recent changes within the UK. This advantage arises out of the methodology which denies the dominance of universal forces and instead emphasises the social context in which social phenomena take place. Thus instead of regarding deregulation, decentralisation or free market policies as universal phenomena or forces, leading to convergence and universal effects, it may be more appropriate to see them as taking a socially constructed form within different societal systems. Towards a more dynamic societal systems approach While we have argued that the deregulation process can and should be analysed through a societal perspective, it is necessary to incorporate in a more satisfactory manner the process of change within a societal systems framework. In developing a framework for the analysis of change it is important to appreciate that alterations in a given sphere of the societal system are not made in complete knowledge of their effects. This reduces the possibility of harmonious change; alterations in one sphere are likely to lead to tensions in others; while the success of a change is generally measured in terms of its direct effects, the interlockage between different elements of the system will lead, inevitably, to changes in other spheres, which policy-makers may or may not have perceived or seen as significant. As Sorge (1996) argues with regard to firms, the outcomes of a given system configuration can be sub-divided into two major types — the direct outcome refers to the success in achieving explicit targets while indirect outcomes refer to

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structural and processual properties within society. However we need to go further than understanding the societal effects of a given process of change; it is also crucial, if the societal systems approach is to have adequacy in explaining cross-national differences, to attempt to understand the nature of system change itself. In short, we need to seek explanations of why change occurs, and how the new arrangement becomes institutionalised and thus gains a degree of stability. If the societal systems approach is to escape the assumption that systems are inherently coherent, we must assume that change neither follows a deterministic pattern or is a mere process of “reproduction”. Rather, changes to institutions reflect a reaction between the relative power and strategies of different actors and the existing institutional formation, as informed by history. This assertion, if isolated, could be taken as accepting conventional wisdom with regard to notions of strategy and structure, as the terms are widely interpreted in a wide range of analyses in both industrial relations and the sociology of organizations (Crozier and Friedberg 1977; Hyman 1987). However, a societal analysis of change, while recognising the importance of the concepts of power and strategy, must go beyond this, using the critical notion of interlockages. Changes in one sphere of society cannot be explained merely through analysis of strategy and structure within that sphere, but require analysis of the continually evolving reaction between spheres, with actions in one sphere affecting others. Justification for assumptions of stability and coherence within the societal approach has arisen empirically; in general post-war European terms, changes to national systems have tended to be relatively minor and incremental; we have tended to see “non-identical reproduction” rather than radical change. Stability in national systems should not, however, be an assumption of the approach; stability only occurs when power relationships between significant actors remain relatively unchanged over an extended period of time, or the strategic aims of the “opposing” actors converge, not just in one societal sphere but in all spheres that are relevant to the object of study. This occurred to some extent in many European countries in the post-war era with the concept of consensus governance. Attempts to develop stable societal and productive systems are made in order to institutionalise the conflicts inherent between the different interest groups in society with the aim of achieving a form of governance that is conducive to the success of the national system of capitalism. To the actors, institutions establish social space; they do not have a totally determinant effect on actions; “institutions are shaped by the interests and values of actors and… the latter may engage in more or less conscious attempts to adapt or change them” (Lane 1989: 33). We must also appreciate that current systems are the result not only of the interests and values of current actors, in a context of limited rationality, but also of previously held contests of power between such actors, in a context of socialised rationality. While it may be a mistake to exaggerate the stability of this rationality

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— see for instance the changes, albeit partial and gradual, in the strategies of the British trade union movement — it is nonetheless valid to regard socialised rationalities as relatively slow to change, being based as they are on underlying social values. Thus groups within society develop strategies which are logical within the context of the historically constructed societal formation, and within societally and historically constructed goals. Additionally institutionalised systems stabilise the relationship between actors, and thus develop their own strength as risk-averse powerful actors seek stability. Systems therefore tend to develop a powerful inertia; it is thus likely that the results of changes of power and strategy are constrained by the currently existing system. The problem for social scientists is that the range of potential outcomes is extremely difficult to perceive. The societal effects school attempts to resolve this problem by emphasizing the continuities in systems (cf. Sorge 1996). This is not intended as a denial that change occurs, but rather postulates that change to societal systems is bounded within embedded logics. It thus follows that societal research must analyse system development from a historical perspective, although in doing this it is vital that we search for socio-economic explanations, rather than retreating to a simple historicism (Maurice 1995). It should be acknowledged that the formulation of institutions reflects power structures and strategic choices at a point in history, and while subsequent change is at least partly the result of a national interpretation of changed externalities, this interpretation cannot be assumed to be a harmonious one, shared between different actors. The strategic choices made by actors will also reflect perceptions of power between capital and labour, as well as perceptions of the role of the state.

Conclusion This chapter shows the difficulties encountered by societal analysis within a fragmenting societal system. Yet we have shown that societal effects do not become any less significant when the societal system is fragmented, even if such effects may become less immediately apparent. A weakening of relatively cohesive national formations does not challenge the basic premise of societal analysis. Indeed, it makes societal analysis, particularly that situated at the level of the organization, all the more important as the micro-macro linkages become camouflaged. An important role for societal analysts is to challenge deterministic theories of development. Thus while the message of the UK government has to some extent been echoed by that of other governments in arguing that competitiveness in the global market requires markets which are as free and ‘flexible’ as possible, it is erroneous to believe that the state is powerless in response to international

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forces, and that the only valid response by Western European economies to the new challenges that exist is deregulation. Marketisation is an ideologically informed response rather than the only possible solution to these external pressures. While arguing in favour of the existence of societal effects, we must also verify that the state remains the appropriate level of analysis. At the present time, the answer remains positive, as the state remains both the economic rule-maker and retains the power to shape the institutional framework of important institutions such as the financial system, education and training and the industrial relations system (Lane 1994). It remains appropriate to attempt to examine the societal system in its entirety, rather than restraining ourselves to limited areas of practice, as different elements of national systems continue to assume importance for given areas of policy-making (cf. Whitley 1996); for instance, the balance between collective and legal regulation of industrial relations varies widely between countries. The significance of the state in shaping the economic and social system is likely to remain as long as nation states retain primary legislative and fiscal powers. These powers are not challenged by the argument that nation states are disabled by global market forces. However, if the societal systems approach is to be reformulated in such a way as to be generally valid, we are likely to need to analyse how the influence of the nation state meshes with the influence of the pannational and sub-national forces for change. Rather than emphasizing stability, we need to reformulate societal analysis in such a way as to place change at the centre of our analysis. In fact the societal approach, with its recognition of interlockages between spheres containing actors working within socialised rationalities, becomes more rather than less important during periods of widespread change. When change occurs in one sphere of society, we need to understand its effect on others. We must be able to identify the incoherent nature of many of the change processes currently in place, and the mismatches which prevent changes from achieving their desired socio-economic objectives. In this sense, the degree and pace of current change affords the possibility for the development of a more critical societal approach, using the notion of interlockages to explain the very lack of societal coherence that appears to challenge the validity of a more static societal approach.

Chapter 17 Do we compare societies when we compare national university systems? Christine Musselin

Exchanges have been very numerous and dense between the supporters of societal analysis on the one hand, and the supporters of the sociology of organized action on the other, each of them developing their own positions, putting forward their arguments, but always with openness to others’ arguments, so that a real dialogue took place (cf. especially, Maurice et al. 1982; Maurice 1989; Friedberg 1993; Maurice 1994a and 1994b). In these writings two themes are always coming back and forth. The first one deals with the status of international comparison, to which M. Maurice and his colleagues attach a central place while E. Friedberg (1994: 143) considers it only as a variant of the principle of systematic comparison, which is the heart of the approach he developed with M. Crozier: “Comparison does not need to be international. It is only lately that the research led by the ‘Centre de sociologie des organisations’ included this dimension. But from the beginning they were comparative. From this point of view, international comparison makes no difference.” The second theme deals with the question of generalization, a point which is constitutive of the societal analysis while local orders (Friedberg 1993) are the principal object of the sociology of organized action. These two themes are generally discussed outside of any reference to their implications for the field work, especially when each of these schools is conducting comparative studies on two or more countries. Thus I would like to come back to these points and present the case of the France-Germany comparison I have been conducting (with Erhard Friedberg) on higher education for more than fifteen years, and which has been prolonged with a Ph.D study of the public university system of the State University of New York (Brisset-Sillion 1994a, 1994b, 1996 and 1997). This will allow me to explain, more precisely than I ever did, how the comparative approach shaped this research programme, then to discuss the effective contributions of international studies, and finally to explicit the level and degree of generalization we reached.

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What I would like to show is that both approaches can achieve the reconstruction of national models and that comparative studies are especially good at this. But I will also state that the kind of generalization aimed at by the sociology of organized action is not of the same type as that sought by societal analysis: for the former the links between micro and macro phenomena and regulations remain loose and the national models are always in competition/interaction with (and not embedded in) local orders.

Compare, analyse and then construct other objects to be compared This research led to describe different national models, the structure of which is revealed and made understandable through the nature and the content of the interactions between the state and, especially, the state agencies in charge of higher education (Friedberg and Musselin 1992 and 1993; Berrivin and Musselin 1996); disciplines191 engaged in the allocation of scientific reward and in the management of carriers (Friedberg and Musselin 1989b; Musselin 1996); and finally universities, understood as institutions within which more or less coherent forms of collective action emerge (Musselin 1987; Friedberg and Musselin 1989a; Musselin 1997b). Such interactions shape a general framework, which determines constraints as well as generating resources, but that is no more than a framework: as a matter of fact it admits diversity from one university to another, from one discipline to another and from one state agency to another. Thus we described national modes of regulation that never totally determine the behaviours of the actors within them but are pregnant enough to exercise a certain influence beyond the differences among the disciplines and beyond the heterogeneity of the characteristics each institution owns. They are also stable enough not to be automatically modified when persons, rules, status or policy orientations change. In other words, each national configuration can be understood and qualified through the specific combination that occurs between institutional logics (those of the universities), the academic logics (those of the disciplines) and the public logics (those of the state agencies). The articulation between these logics is proper to each system studied as the latter is the product of the interdependences that arise among these logics and that form what we called a “national university system”. Through this notion we have thus developed an approach that, on the one hand, does not allow us to propose a universal model for higher education but, on the other hand, is convenient to point out divergences and convergences 191. By the term “disciplines” I mean what is related to “disciplines’ specialities” as well as to structures involved in the defence of interests, in the management of carriers, in the attribution of scientific reward.

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among different countries through the analysis of dimensions whose relevance has been experienced in the various empirical studies conducted in France, Germany and the United States. Those dimensions have not been defined a priori, but emerged progressively and have been revealed out of the results of the first comparative work conducted in France and in Germany. That is the reason why I would like to come back to the foundations of this international comparison, the questions it raised and the answers we tried to give.

Comparing specific organizations Of course it is somewhat artificial to reconstruct the beginnings of a research strategy launched more than a decade ago. The principles and choices adopted at that time are certainly clearer and more evident to me now than when they were taken, because it is also the practice that helps you discover the benefits (and the dead ends) of the options you have defined or that you have been obliged to accept in order to start. In this first part I will describe how we developed this research on the basis of a first comparative work on France and Germany. This study aimed at examining universities as organizations, and thus reflected a certain break with the greater part of previous comparative research on higher education that most of the time can be related to what M. Maurice (1989) called the functionalist perspective. As a matter of fact universities and academic work have frequently been understood as universal categories whose common denominator was their “exceptionalism”: they are presented as irreducible to any other forms of human activity or organization. Thus the academic is a peculiar figure, whose specific character is first of all defined by his belonging to a discipline, by his relation to knowledge, by his mission in society etc. So in many studies, the national, cultural or historical features are ignored or regarded as insignificant while, on the contrary, the social, cognitive, epistemological or normative traits that differentiate disciplines from one another are put forward, beyond the geographical or institutional boundaries (see for instance: Kuhn 1962; Polanyi 1962 or Becher 1989). The other way round, little attention is given to the institutions’ way of functioning whereas scientific (and pedagogical) work occurs within them. This reflects three different attitudes towards those institutions. Either universities are ignored in favour of the intangible concept of University. Or they are regarded as quasi-transparent and thus having no effect on behaviours (this position is very frequent in the sociology or anthropology of science).192 Or it is assumed that they 192. This seems to me particularly true in Latour and Callon’s works (See for instance, Latour and Woolgard 1979 and Callon 1989): the spokespersons in the socio-technical networks can translate and enrol as if they were free of any institutional constraint and weight.

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are just the reflection of the activities and of the actors involved within them: then the point is to stress their “a-normal” character, to show their difference. In this case, the particularity of academic activities is a good reason to treat universities as singular organizations that develop (and ought to develop) specific relations with both the political and economic spheres and with society as a whole. So because being an academic is not considered an activity like any other, universities are all supposed to possess the same characteristics that distinguish them clearly from other organizations and other productive places. That is the reason why, in such a perspective, it is admitted that there are more convergences between two universities in two different countries than between a university and a firm in the same country. The fact of describing them as “organized anarchies” (Cohen et al. 1972), “professional bureaucracies” (Mintzberg 1979) or “loosely coupled systems” (Weick 1976), belongs to the same process: it puts universities into categories that stress their similarities and distinguish them from other organizations. The idea of a university “nature” that transcends cultures and societies seems all the more evident in that there seems to exist some “institutional isomorphism through mimetic process” (DiMaggio and Powell 1983) between universities from one country to another: they all have discipline-based units (departments) grouped into intermediary structures (the UFR — Unités de Formation et de Recherche — in France, the Fachbereiche in Germany, the colleges in the United States), a president and some vice-presidents, some administrative staff parallel to this professional structure, and some deliberative bodies. This formal similarity, the increasing relationships between academics from different countries, plurinational research programmes, are all features demonstrating the internationalization of scientific exchanges and the rising convergences between structures that produce and deliver knowledge (see for instance Rhoades 1990 or Crawford et al. 1992). Nevertheless some research, most of it American, introduced a different perspective and contributed to the “desingularization” of universities by trying to analyse them as it would have done for any other kind of organizations: P. Blau (1973) in a book, debatable in other respects, he described universities as bureaucracies; J. Baldridge (1971) used them as field studies to develop his political model of decision-making; Pfeffer and Salancik (Pfeffer and Salancik 1974; Salancik and Pfeffer 1974) found in universities an example for their resourcedependence theory. For these authors, the way universities function that cannot be reduced to the ways by which they produce and transmit knowledge.193 They show that it is also pertinent to wonder how actors socialized in and by different disciplines, and poorly engaged in working together, will manage the minimum 193. Even if they also take into account such dimensions in their work, see Pfeffer and Moore 1980.

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of cooperation imposed by their belonging to the same institution and make decisions on budget, seminar allocation, the drawing up of new curricula, the management of space, the recruitment of new faculty members etc. It is with such a perspective that I started a first research project in 1984, seeking to compare how different institutions manage this minimum of cooperation. Let me be honest: hazard and chance explained why I conducted this comparison in two different countries.194 For the research design I had at the time, fieldwork in two countries was not a necessity. But for various reasons, the opportunity was given to me and, moreover it seemed relevant to take it. As a matter of fact French and German universities looked rather “similar” as, in both countries, higher education relies on convergent principles: it belongs to the public sector, faculty members are civil servants, the fees are very low, and every person who has the baccalaureate in France or the Abitur in Germany can enter the university. Moreover the recent past of the universities in both countries also tended to make them closer: they suffered the same increase in student numbers in the sixties, the same student riots by the end of the sixties, some new framework laws (the loi d’orientation of 1968 in France and the Hochschulrahmengesetz of 1976 in Germany) that modified the universities’ status in order to set up more democratic decision-making processes by introducing representatives of nonprofessorial staff (assistants, students, administrative staff…) in the deliberative bodies. For that reason the formal structure as well as the missions of French and German universities looked very similar and comparable. Thus we adopted an approach that compared objects that, at first, were not too different, so that the possible divergences that would be noticed would be all the more questionable.

Analysing divergences and similarities The comparison drawn in the four monographs written at that time195 stressed on the one hand some clear convergences in both countries: functional interdependency among faculty members is weak; this feature is reinforced and encouraged by the institutional environments (ministries, research funds, etc.) that directly allocate material and symbolic scientific reward; the administrative staff is not 194. I could speak German and was interested in comparative work about these two countries, but the real opportunity arose during a conference on higher education, among academics who launched the idea of a research project on this subject. 195. These studies occurred between February 1984 and June 1986. The main material consisted in semi-directive interviews lasting from one and half to two hours. It has been completed by work on documents (reports on the universities, catalogues of courses, budgets, hearings of the deliberative bodies, etc.). 342 interviews have been conducted, 187 of them in Germany.

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strong enough to promote collective action; the academic leaders do not act as managers but as representatives (or primus inter pares). On the other hand, French and German universities could be opposed on two other points: first on the behaviour and the discourse of professors towards their institution and their deliberative bodies; second, on the way the latter function, that is their course of action and the type of decisions they make. Putting forward those divergences/convergences was a first crucial step. Then started a second step that raised even more questions: the interpretation of these first results. As a matter of fact, the analysis of the divergences quickly appeared to be more difficult but also more informative than that of the convergences. In fact, the latter are deeply related to the very nature of scientific and pedagogical activities for which strong cooperation and collaboration are not necessary among faculty members, even if nuances are to be observed that have more to do with the characteristics of each discipline than with national patterns. These convergences rely on the same strategies aiming at maintaining as much autonomy as possible. Thus the weakness of the functional interdependence among faculty members is not only constitutive of this type of activity but is also a social product: actors identify themselves with autonomy and adopt behaviours that seek to increase it as much as possible. The exceptionalism of this kind of activity appears to be reinforced by the academics themselves! Nevertheless, because of these similarities, the observed differences became even more surprising: on the one hand we could identify a great convergence in the way academics manage their teaching duties, create new curricula, develop research activities etc., but, on the other hand, we found they had different relations to the collectivity and to the institution as a whole from one country to the other. Because distinction line is national, it questioned the relevance of any endogenized explanation of the observed divergences, that is to say an explanation that would seek interpretative elements in the local adjustments and in the local orders of each German university on the one hand and of each French university on the other. In other words, the divergences we met implied redesigning the boundaries of our research object: it was necessary to leave the university’s limits in order to explain the variations we observed in the relation to the collectivity between both countries. But for methodological reasons we decided that, at least to begin with, we would introduce neither cultural explanations, nor historical interpretations (stressing for instance that German universities belong to a 150-year-old tradition — the Humboldtian — whereas French universities obtained their institutional autonomy only in 1968). On the contrary, we focused on mechanisms that are exogenous to the universities and that define a different context for action in both countries. That is the reason why we tackled the effects of the management of academics because it is very different from one country to another. In Germany, we

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observed two “curious”196 characteristics: the recruitment of professors (especially full professors) induce negotiations on the resources they will be accorded — Berufungsverhandlung — and the university is very active in this process; most of the assistants do not have tenure and work on contracts that can be renewed only once. These mechanisms happened to become central to understanding197 how German academics can, on the one hand, behave with great autonomy and try to limit interdependences among them and can, on the other hand, be more committed and loyal to their institution (whereas they generally experience more mobility than their French counterparts), and also be able to make collective choices into the deliberative bodies. For these reasons, we analysed the Berufungsverhandlung not simply as personalized funding dedicated to the improvement of some academics’ work conditions but, more symbolically, as the product of compromises that are inherent to each recruitment situation and that combine the discipline-based logic to that of the institution: allocating resources to improve work conditions does not only mean that scientific reward is translated into material values (“a price”), but also imply that the university has to set and show its priorities and to find supplementary resources.198

Defining new comparisons to be studied The influence of these recruitment and carrier mechanisms on the relation to the collectivity and on behaviour in the deliberative bodies thus led us to depart from the micro-level (academics at work) as well as from the meso-level (university governments) and to pay more attention to the macro-level of analysis (more precisely the national level), as academic carriers in France and in Germany do occur in a national (or federal) market place199 governed by national (or federal) rules and procedures (and even a national committee in the case of France). A second element also spoke in favour of exogenous explanations: the state agency role. The relationships between the minister of Land and the German academics were more dense, developed and frequent than the relationships be196. Curious for a French observer. For the Germans, these negotiations are so “natural” that they never present it as a distinctive trait of their higher education system and that they generally forget to mention it or to analyse its specific effects on the budgets allocation (see for instance U. Schimank’s paper (1994) which is exemplary of this!). This type of negotiation for civil servants (Beamter auf dauer) seems very unusual to the French. 197. For more details, see Musselin (1987) and Friedberg and Musselin (1989a and 1989b). 198. Either by internal redistribution or by arguing for supplementary resources from the ministry. 199. Thus if the publication of vacant positions occurs through different means in France and in Germany, it nevertheless always concerns the whole country.

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tween the French academics and their Parisian state agencies. Moreover, while the ministries of Land (a federal state) take part in the recruitment decisions,200 the French national ministry does not intervene in this matter, whereas it is very active in the definition and modification of the rules and procedures that structure the carrier paths. For all these reasons, it also seemed accurate to pay more attention to the state agencies and to their influence on the university government. The research was thus centred on the relationships between the ministry and the universities on the one hand, and between the ministry and the academics on the other. In other words, we wanted to understand how state agencies work and how they interact with the universities and with the academic profession. This led us to describe two different national models that can be opposed on these three dimensions (see Table 1). So the different types of articulations we found between the academic profession and the institutions had to be related to the different types of articulations we observed between the ministry and the universities and between the ministry and the academic profession. These various mechanisms exercise reinforcing effects on governance and on collective action within the universities of both countries. In France the dominance of discipline-based logics of action201 weakens local university government and is in opposition to the emergence of institutional autonomy (Musselin 1995). In Germany, on the contrary, because the Table 1. French and German national model France corporatism

Germany rare except for recruitment

State agencies/universities’ relationships

incentives and synoptical steering

step-by-step negotiation

Academics/universities’ relationships

low commitment

loyalty and implicit contract in exchange of recruitment resources

State agencies/academics’ relationships

Adapted from Friedberg and Musselin (1993: 165).

200. They take part in two ways. First, through monitoring process conformity which deals with respect of the procedures but also with the “normality” of the choice: a candidate with a weak dossier should not be preferred to candidates with great reputation. Second, the ministry can intervene and have a more active role, if the university asks him supplementary resources in order to recruit a very interesting candidate. 201. They have been weaker since the beginning of the nineties especially since the State agencies sign four-year contracts with each university (Frémont 1991; Berrivin and Musselin 1996 and Musselin 1997b).

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university is recognized as a pertinent intermediary structure for negotiation and steering, this institution beneficits from more leeway in exercising its autonomy.202

From comparison to generalization While reconstructing the research work carried out on the French and German higher education systems, I tried to describe the way I have been using international comparison and to show that it has been a process of result production, formulation of questions and definition of new fieldwork. Relying on this particular example, I would like to show that different levels of comparison were central in the generalization process I engaged in. Then I would also like to define the status attached to comparison and to the effects an international perspective induces.

Going from specificity to generalization through a comparative process The research project I described above did not in fact involve only international comparison but different types of comparative processes to go progressively from singularity to general, from individual data to more global modes of regulation. One reason for this is that the data collected during the fieldwork were of different kinds: in this case, I principally worked with interviews describing activities and interactions and including advice, opinions, explanations, anecdots etc., but also documents and observations. All those data are never completely comparable one with another. It means that I had to sort out the multiplicy and the diversity of facts and elements. To this end, I first confronted data about the actors by qualifying their relationships (nature, content, intensity). It was then possible to compare these relationships and to analyse the divergences and convergences that were to be seen. A third level of comparison dealt with the logics of action that structure these relationships and with the coherence between these logics, in order to discover the more general modes of regulation which structure the relationships within the university. Confronting the results of each monograph represented a fourth level of comparison. Thus it was only at this moment that the comparison between France and Germany occurred and, as a consequence, on already rather aggregated data, for the actors concerned as well as for the compared phenomena (deliberative bodies, decision-making process…). Finally, the interest in the universities/state/academic profession relationships led me a step forward towards generalization, as I tried to compare and 202. Cécile Brisset-Sillion confirms the importance of these relationships in her study on an American public system of higher education (the State University of New York).

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understand modes of regulations and logics of action between these corporate actors.

Comparison as an heuristic tool As pointed out above, chance pushed me into international comparison and my research question as stated at the beginning had not been defined203 in terms specific to international work. My point was not to compare France and Germany by studying their higher education systems but, more “simply”, to compare organizations that have the same vocation, and that happen to be located in two different countries. What may be regarded as “methodological unawareness” by specialists of international comparison, was (and still is from my point of view) legitimated by the place accorded to the comparative approach in our research — would it be carried out on different countries or not — and by our way of using comparison, that is as a tool for discovery serving an inductive research strategy. As a matter of fact, comparison has a double aim in the studies I carried out: pointing out convergences and divergences, but also finding the explanatory system that will give sense to the latter. In other words, comparison is embedded in an inductive approach and in a heuristic process that do not forecast the convergence/divergence elements to be found, nor can they set a priori the kind of explanation systems (for instance universal hypothesis, cultural specificity, societal effects…) that would have to be mobilized to interpret the results obtained. Thus, in a first step, we were simply trying to discover differences or convergences we did not previously know and, through this process, to deconstruct and reconstruct “natural” categories, notions, object, collective actors. The fact that comparison may be international had no impact on this step. In the same country, categories or objects that seem identical may hide very different practices, representations, etc. On the contrary, an international comparison may not lead to the observation of divergences (Neuville 1996) and then the question to be raised is why the national context does not make any difference. After the description of convergences or divergences, it is then time for interpretation. The latter has to be coherent with the results obtained and cannot exist prior to the study. In the fieldwork on French and German universities we did not make a hypothesis about the dividing lines we would find, nor about the explanatory models we would use, as they depend on the type of convergences/ divergences encountered: would each monograph be a particular case that cannot be reduced to the three others (which would have favoured endogenous explana203. All the more as it was one of the first studies performed in different countries at the Centre de Sociologie des Organisations.

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tion)? Or, on the contrary, would the convergences be so strong that it would be possible to propose a single university model (universalist model of explanation)? Or would we have to distinguish France and Germany (national model or societal effect)?, etc. One of the difficulties inherent in this approach is that, whether international or not, comparison can be a heuristic tool only if it deals with a priori comparable objects. Because it should deal with the apparent similarities, the latter have to be the starting point of the comparison in order to be questioned afterwards. The way I used comparison thus admits contrasts (a new university and an old one, for instance) but does not allow much heterogeneity (for instance, comparing a university to a firm or even to a French Grande Ecole seems to me weakly pertinent), because differences as well as convergences then lose their significance and their explanatory strength: it is then much more difficult to distinguish what can be understood thanks to statutory or to structural differences and what is related to the games in which actors are engaged and which they contribute to produce and to maintain.

International comparison makes a difference Shall we nevertheless come to the conclusion that international comparison does not make any difference and that it makes no difference whether one remains at the infra-national level or pursues an international study? I do not think so. From my point of view, the comparison between France and Germany had at least three effects: enlightenment, validation and deletion. Of course, it is not possible to know what I would have found if the study had been carried out only on French universities. Nevertheless it seems obvious to me that international comparison modifies the glance at the French results. For instance, the impact of the discipline experts in the French central administration would in any case have been an important point in the study of the French state agencies, but I would have found it rather trivial. On the contrary, it becomes “extraordinary”204 in respect of the absence of such experts in German ministries. Thus international comparison sheds a different light and obliges to reconsider what is too easily taken to be “natural”, brings the evident into question and reveals our partial knowledge. International comparison also has an enlightening effect because it allows a better identification of what is specific to the object studied and what is related to its integration in a larger frame. Thus having comparative elements that are 204. Whereas it is a part of the ordinary knowledge of all French academics, who are used to submitting research or pedagogical projects to their peers and never to the administrative staff.

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exterior to France and that point out differences between the two countries helps me in distinguishing what refers to national variables and what does not (for instance the weak functional interdependency among academics). For that reason international comparison possesses a validating effect, as the general explanations found for one country can be validated (or not) for another country. But international comparison also introduces bias, because of hierarchical differences. Let me take an example. In Germany, higher education is in charge of the Länder, and we compared the functions and the styles of intervention of three ministries of Land. For each of them we were able to identify a specific higher education policy and a specific way of functioning.205 If this work were limited to Germany, we would certainly have stressed these differences. But compared to the French state agencies, there was then no ambiguity about the conclusion: the French ministry is very different from the German and this distance became the principal fact. But of course it obliged us to delete the infra-national differences and to treat them as nuances in a more general pattern: it minimized infra-national differences and tended to neglect the impact of mechanisms that are neither national nor societal. The positive aspect of this is that it helps generalization. But what kind of a generalization? That will be my last point.

Systemic coherences or societal effects? How far can we generalize what we learn from our France/Germany comparison? I see two possible ways. First, this research proposes an analytic framework that can be transferred to countries other than France and Germany as it suggests that the degree of autonomy of universities should always be understood in interaction with the academic profession and the state agencies. The research carried out by Cécile Brisset-Sillion at the State University of New York (SUNY) gives an example of such a transfer. Second, this work offers a possibility for generalization because in the study of the modes of regulation and the logics of action between the universities, the state and the academic profession, we also tried to understand how the three of them are articulated, constructed and institutionalized. From this point of view, and using the vocabulary of societal analysis, this work reveals consistencies between discipline-based public (or political) and organizational intercourse. It also allows the reconstruction of collective actors who have different identities in both countries: as a matter of fact the figure of the German professor does not bear the same representation, the same leeway for action, the same relation to the 205. We distinguished three models: bureaucratic, hierarchical and political (Friedberg and Musselin 1993).

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university collectivity and to the society, as the French; nor does the German university have the same place, the same functions, etc. Thanks to a more longitudinal approach, I was able to show how those identities have been structured in relation to the process of institutionalization of relationships between the universities, the state and the academic profession in each country (Musselin 1995). Beyond the divergences I have pointed out in this text, the sociology of organized action applied to international comparative work finds many resonances with societal analysis. Nevertheless it remains a crucial difference that is related to the explanatory scope attributed to such national models. In the sociology of organized action, I went from specificity to generalization but it does not mean that the micro-level is closely related to the macro. Through the comparative process I have described above, we progressively went from one level to another, from the interpersonal relationships to more global and more generic modes of regulation. This led us to the identification of national models that describe the frames that structure collective action. These frames limit the actors’ behaviour in orienting the allocation of resources and constraints. They are at the same time constructed through the interactions between the actors and are the product of the exchanges, adjustments, arrangements that have developed and have been institutionalised, but that can be renegotiated and modified. But these general modes of regulation are not inscribed in the actors. They are just one of the elements of the actors’ social construct. We have been able to qualify in a generic manner the content and the nature of the relationships that arise between the ministry and the universities, the ministry and the academic profession, and between the universities and the academic profession. We have been able to explicate the stakes behind those relationships and thus to identify the modes of regulation that structure them. We have been able to show that these modes of regulation are not independent of one another. Nevertheless this tells us nothing about the way, each time different and original, in which each individual actor (in our case an academic) will articulate his belonging to a discipline, his belonging to a single institution, and his belonging to a national system. So it says nothing about the way he will construct his own identity. The more we generalize, the looser the links between general regulations and local interaction. For these reasons the explanatory scope of the national systems we described in France and in Germany has to be relativised. In the first part of this text I mentioned the limits of research into universities and disciplines that does not pay attention to the national variables. Conversely it would be as excessive to say that national models can either account for or give sense to all that happens in universities and disciplines. As a consequence, the notion of societal effect seems too global to me. Societal analysts recognize that societal effects do not determine the actors but they nevertheless add that the latter are “caught and conceived through the social intercourses (educative, productive, organizational, of coop-

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eration or negotiation) that contribute to produce them (Maurice 1994 a: 654)”. Within such a perspective, and in the specific case of higher education, this would mean that the discipline-effect and the university-effect are subordinated to the national modes of regulation. But it is not so: these different effects are in interdependence and in competition one with another, at the local level. That is why the identification of national models should not be assimilated to the reconstruction of a societal order or the unfolding of a meta-structure, and why we only partially compare societies when we compare national university systems. It is precisely on this point that I see most of the divergences between myself and the societal analysts who, it seems to me, use societal effects as if they were metastructures. From this point of view, and even if such a statement needed longer explanations, they are very close to other streams with which they had less exchange than with the sociology of organized action. For instance: the American neo-institutionalist sociologists206 for which actors share beliefs, norms, values or common representations that constitute what they call “institutions” or “institutional environments”. These latter construct their cognitive perception of the situation in which they are engaged, and “determine” or, ad minima, circumscribe their actions (cf. for instance Berger and Luckman 1966; Meyer and Rowan 1977; Powell and DiMaggio 1985). I also refer to some works, in political science this time, and more precisely to B. Jobert and P. Muller (Jobert and Muller 1987; Faure et al. 1997; Muller and Surel 1998) who use the notion of global referential to integrate all the different systems of action into a common representation of the world which is embedded in the individual/society relationship. Societal analysts, neo-institutionalists and supporters of referential analysis all propose a well-ordered conception of the social world that hangs over and embodies the individual actor, even if these three streams admit that in return this macro-structure is (at least partially) constructed by the actors. But this subordination of the local orders to a more global one is, it seems to me, debatable. Saying that, I do not mean that there exist no macro-mechanisms, no national model, no societal effects. I just state that they do not take the place of the others. They are just one of the “frames” that circumscribe individual actions, one of the “institutions” that participate in the cognitive perception of situations, one of the effects that structure the actors’ identity, one of the referentials by which individuals can act and think their relation to the world. For that reason local orders can simultaneously be quite different on one territory (or within a society): they always account for the contingent articulation the actors produced at the local level among various “frames of action”. Of course, situations may arise in which individual behaviours are strongly connected to some societal effects, to an 206. Sociologists, political scientists and economists use the notion of “neo-institutionalism” but in relatively different ways. For a synthetic but rich presentation of each of these theses and for a confrontation on their different contributions, see Hall and Taylor (1996).

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institutional environment or to a specific referential.207 But such closures are not the rule: they are the exception.

207. See for instance the book of H. Bergeron (1999) on the health care system for toxicomaniacs in France.

Chapter 18 Path dependencies of education systems and the division of labour within organizations Formalizing the societal effects perspective208 Jerald Hage

The general assumption implied in much of the literature on globalization is that there is a strong convergence of institutional patterns, whether this be a kind of business model such as the multi-divisional corporation (for a review see Donaldson 1996 and Chandler 1990) or the diffusion of cultural artifacts such as Mickey Mouse, McDonalds (Ritzer 1992), and American movies. Within the sociology of education similar arguments have been advanced. Ramirez and Boli (1987) have contended that the primary school curricula are basically the same and have diffused throughout the world. Tolbert and Zucker (1983) make a similar case for civil service regulations in the United States while DiMaggio and Powell (1983) have developed a theory about the mechanisms for the diffusion of institutional patterns at least within national boundaries. Gradually a new literature (Hollingsworth, Schmitter and Streeck 1994; Hollingsworth and Boyer 1997; Soskice, forthcoming) is emerging that it is taking exception to these ideas. Their argument is that many macro-institutional patterns, such as the education, legal and financial systems, do not change that readily and if they do so, they tend to move in path-dependent ways (Soskice, forthcoming; Zysman 1994). Essentially this alternative position argues that the global forces of change are filtered through various institutional patterns. 208. Revision of a paper prepared for the annual conference of the Southern Sociological Society in New Orleans, Louisiana on April 5, 1997. The paper represents the beginning of the development of a theory about institutional stability and change. The ideas in it have benefited greatly from participation in a project on institutional arrangements and the choice of business systems organized by J. Rogers Hollingsworth and involving Christel Lane, Carlo Trigilia, Frans van Waarden, and Richard Whitley. I want to thank them for stimulating my ideas in this area as can be appreciated from references to their work.

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This essay attempts to contribute to the debate in three ways. First, I propose a contingency theory that syntheses these two positions by suggesting that simple micro-institutional patterns diffuse quickly across national boundaries but that complex macro patterns do not. The particular example of a complex institutional pattern is elite education. Second, I want to continue in the vein of Sorge (1996), Whitley (1992) and others and suggest how some of the properties of elite education systems impact on the nature of the division of labour within the firm. The focus is on four Western European countries — Britain, France, Germany and Italy — that vary considerably in the nature of their elite education. Third, I want to suggest that when change occurs in a complex institutional pattern, it is likely to follow a pattern of path-dependency. Several examples are provided within the context of the paper. Together these three objectives are attempts to formalize the societal effects literature and integrate it with an older organizational literature, called contingency theory (see Lawrence and Lorsch 1967; Perrow 1967; and Hage 1980). What is a complex macro-institutional pattern? Institution patterns involve norms or laws, their incentives and also enforcement procedures. Their complexity is a function of the number of different social roles, the depth or range of issues involved, and their integration. For example, elite education involves several different kinds of organizations — secondary schools and universities at a minimum but sometimes even elite primary education and special classes that bridge between secondary and higher education — in which there is a wide variety of social actors including teachers with distinct specialized training, administrators and others. The depth of the institutional pattern is represented by the amount of the time spent on each subject, which for the most central ones can span many years; and these elements are typically integrated into a single or multiple degree programmes. Another good example is the industrial relationships system, on which a large amount of good research exists (among other references, see Lane 1994 a and b; Streeck 1987; Whitley 1993). Other examples of complex macroinstitutional patterns are the judicial process or court system, the civil service system, the financial system (i.e. the way in which money is borrowed, see Zysman 1983), etc. What makes these systems macro is that they apply to the entire society and typically have been institutionalized for long time periods. A very common element is that there are multiple organizations involved, in which a variety of complex social roles are enacted. In contrast, simple micro-institutional patterns such as amusement parks, fast food chains and the like represent relative simple patterns of norms and/or laws, involving few actors with relatively simple and frequently repetitive social roles, and these patterns have been relatively recent. Why should we be interested in complex macro-institutional patterns? Certainly, relative to the societal effects theory which is the focus of this volume,

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these complex institutional patterns provide a strategic site for understanding the thesis of why there are differences in the nature of the internal stratification system of the firm (Maurice, Sellier, and Silvestre 1986) as well as other organizational characteristics. Simple institutional patterns such as management by objectives or quality work circles may diffuse throughout the advanced industrialized countries but complex patterns will not. Beyond this, my argument is that complex institutional patterns are strategic for two central problems current in social theory today. First, they systematically relate macro-institutional analysis to the meso-level of organizational analysis. Second, they explicate why there are path-dependencies in some aspects of society and not in others. And why should we be concerned with elite education in particular? Although there are a variety of complex institutional patterns in society, some of which have received much more attention, e.g. the industrial relations system, elite education has a profound influence on the shaping of other institutional patterns within society because it determines access to elite positions and the stratification system more generally. It becomes a strategic site for examining the basic theoretical question of convergence or divergence of institutional patterns and the problem of path-dependency in particular.

1.

A general theory of institutional path-dependencies: The specific case of elite education

A careful reading of the several reviews of institutional analysis in organizational sociology (see Meyer and Scott 1983; Scott 1987; Zucker 1987) indicates that little distinction is made between what here have been defined as complex vs. simple institutional patterns. Primary education is an example of a simple institutional pattern because it has few elements — the subjects of reading, writing, and arithmetic — pursued for five years, and usually not well integrated. By way of contrast, the vertically integrated multi-national business would be an example of a complex institutional pattern. And while Chandler (1990) has argued that it is widely diffused (also see Donaldson 1996), there is much evidence that it is not as widely diffused as he claims. The Japanese vertical kieretsu (Whitley 1992), the French holding company (Hage 1994), and the network of small Italian companies (Lazeron 1988) are clear exceptions and some would also argue that the German firm is smaller and more specialized that its American counterparts (Lane 1994). Elite education is defined as a complex institutional pattern, as we have seen, because it involves several different kinds of organizations in which a wide variety of subjects are taught over many years (depth) and integrated into particular programmes. At the same time, the words “elite education” also carry a variety

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of connotations that need to be discussed at least briefly. Typically elite education is defined by the following characteristics: (1) small numbers; (2) social class background (e.g., Ringer 1979); (3) access to elite political and economic positions; and sometimes (4) a preferred diploma or subject matter. All of these characteristics are important but of these the most important, is number 4, as we shall see. The central thesis of this paper is that the more complex the macro-institutional pattern, the more impervious it is to external change and thus to diffusion of beliefs in the efficacy of certain normative patterns from elsewhere (Meyer and Rowan 1977). But to demonstrate why a particular complex macro-institutional pattern is unlikely to change, given globalization and mass communication, one has to explicate a theory of institutional change and stability which delineates the nature of the charter, that is the thinking involved in the establishment of the institutional pattern or the initial rules of the game, the nature of national cognitive styles or preferences about what is important when thinking, and finally the power bases of the elite, that is how secure they are. Conceptually these three perspectives represent a historical or traditional one, a cognitive and a material basis for explaining why there is stability and lack of institutional change or more correctly the predominance for path-dependency. 1.1 The nature of the charter There is a remarkable similarity in the definition of the charter for elite education across the four countries of Britain, France, Germany and Italy, although in some details there is divergence. The first critical element is that all of them had as part of their national charter the idea that there had to be a separate education for the elite that was distinctive in content from that for the masses (Hage, Hanneman, and Gargan 1989; Ringer 1979). This normative pattern has never changed even though gradually over time access to elite education has broadened (Ringer 1979). The second critical element in this charter is that access to elite higher education required a rigorous training in secondary schools, lasting from six to nine years depending upon the particular country. Although gradually, with the expansion of secondary education during this century, separate and generally unequal systems have been built, first for middle class women, second for the working class, they have been allowed access to “the fast track” for elite positions (Barbagli 1982; Kandel 1936; Peterson 1942; Prost 1968; Ringer 1979) much more slowly. Usually the elite systems have not only been housed in separate facilities but they have had their own distinct curriculums, which typically covered a much broader range of subject material. In addition the more critical material was covered in considerable depth, that is for many years. For example,

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studying Latin for five or six years was a very common element and one that would clearly distinguish the elite from the masses (Ringer 1979). A third standard element is that entrance, process and exit was measured by exams with relatively high failure rates, thus ensuring the smallness of the elite. The educational systems varied as to which hurdle was the more difficult passage — whether into secondary or from secondary into higher or equally arduous at the end of each year — but everywhere exams were the essential ingredient of selection. And although in some countries in recent years the 11+ exams have been eliminated, the exit exams for the secondary diploma have remained and approximately the same failure rates prevail. A fourth common element is that these elite secondary schools had until recently and in some instances even today a disproportionate number of resources in the form of private endowments, generous state aid, as well as large fees paid by the small group of parents that could afford them. To summarize, the national charters of elite education had four common elements across a number of European countries. A separate secondary education in specific schools, followed by some three to five years of higher education. Normally, the programmes of study are quite rigorous with quite difficult exams in which passage is not guaranteed. Given the highly selective quality of the passage, the status of these positions is protected. Typically the elites are trained by carefully selected teachers in the society, who themselves have been socialized via a series of exhaustive and rigorous tests. Despite these many common characteristics there are also a number of institutional differences. Both Britain and France became nation-states before the creation of elite education, that is in the fifteenth century. Therefore, we find that they tend to have the smaller elite, trained in only a few secondary schools, and with the greatest discrepancy in resources. By way of contrast, Germany and Italy, which became nation states relatively late in the nineteenth century, and therefore did not have as much time to differentiate a system of elite education, have a larger elite size. There are also obvious differences in the length of secondary education, the length of higher education, the frequency and rigour of the exams etc. But these are simply family variations on the same basic theme of the common aspects of elite education. The more critical differences in the content of what is taught, that is the preferred ways of thinking about problems, are our next topic. 1.2 The national cognitive styles of thought Although the four countries have a number of common elements in their definition of the institutional pattern of elite education, the integration of the curriculum into degree programmes and, more concretely, the kinds of skills taught vary

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enormously. These differences reflect the national cognitive styles of these countries. This concept can be defined as the preferred patterns of problem-solving or thinking. A good example is Armstrong’s analysis (1973) of civil service requirements in Western Europe. He observes that in England the preference was for history and literary criticism, in France for mathematics and applied science, in Germany for Roman law and in Russia for engineering. These examples indicate how in the same arena — namely elite public administration — the preferred problems reflect quite disparate ways of solving problems. Implied in this example are the analytical tools that are brought to bear on problems as well, whether this be case studies, (England), mathematics (France), legal precedent (Germany), or applied research (Russia). Clearly the preferred analytical tools will impact on which problems are defined or perceived as important and how they will be solved even in a limited area such as public administration. One might assume that there can be only one cognitive style in science because of the scientific method of research including experimentation. BenDavid (1971), who was one of the first to describe the differences in the cognitive styles of scientific and medical research across countries in Western Europe, has characterized elite higher education in France, Germany and Britain in the following ways. In France, the emphasis is on a general education at both the secondary and higher levels. Hence the continued importance of mathematics in the selection of higher civil servants. In Germany the emphasis is on a general education at the secondary and a specialized education at the higher level. Hence the emphasis on Roman law as a specialty for the civil service. By way of contrast, there is a different strategy altogether in Britain, where secondary education is used to create a general spirit of the mind by going into depth in some specialized areas in the sixth form. Higher education thus is also specialized. Hence the greater importance of history and literary criticism which are highly specialized areas involving important critical skills. This observation relates nicely to a recent article by Sorge (1996); he observes that when there are career differences between line managers and experts then these functions are separated in the firm. The explanation for this, I would argue, lies in the emphasis on specialized education in England and, by extension, most Anglo-Saxon countries. In an interesting discussion of the career patterns of French, German and Japanese engineers, he observes that the former are eager to escape their specialist training into generalist management (Sorge 1996: 82) when provided with the opportunities to do so. Given the heavy emphasis on generalist education in France, and therefore the greater value given to it, this should be expected. Maurice (1995) has shown that what it means to be an engineer is different in France and in Japan. As an example of how the national cognitive style affects what kinds of problems are deemed worthy of solving, Harwood (1993) has argued that even

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within particular disciplines there are distinctive ways of deciding what is important and how the problem should be solved. In his comparison of German and American genetics in the inter-war period, he indicates that the Germans preferred more complex and dynamic problems whereas the American were more content with simply describing the mechanisms, and then statistically. The national cognitive style also impacts on what are considered to be the most prestigious occupations at the top of the hierarchy.209 The high prestige of an engineer in France, particularly when a graduate of a grande école, is quite different from the much lower prestige level accorded to an engineer in Britain, who historically has been looked down upon as a member of what are called the black coat trades, which says it all! The former country puts little emphasis on practical training while the latter emphasizes it so much that engineering students frequently study part-time while taking their further education courses, which are generally not located in universities but in a quite differentiated system of secondary and higher education (Hage and Garnier 1993). This helps explain the finding of Maurice, Sellier and Silvestre (1986) about the level of education of the average businessman in their contrast between France and Germany. But these differences are even greater when the comparison is extended to Britain, which has the lowest percentage of college-trained managers. Italy, as far as large industry is concerned, probably corresponds more to the French pattern, while middle Italy is more similar to the German pattern. When a particular occupation, such as that of manager, is not subject to elite school training, (as they are most distinctively in France) then individuals tend to invest less in education itself. Therefore the national cognitive style determines which track is preferred for access to elite positions — whether economic or political — in society. The problem of path-dependency can be demonstrated by observing that although all European universities have added on more disciplines, especially in the postSecond World War period, the essential prestige hierarchy of thinking has remained undisturbed. The recruitment patterns in the civil service have not changed nor has the relative prestige of particular occupations. Another way of testing the importance of path-dependency and of observing the impact of national cognitive styles on the definition of a curriculum is to study what happens when a particular degree programme diffuses. A good test case is the diffusion of the MBA (Masters of Business Administration), an American degree that has been in various ways adopted in Western European business schools. But when one examines the content of the courses, the rigour of the entrance exams, the requirements to pass these exams etc., one sees little real 209. Although comparative studies of stratification have generally found considerable similarity in the overall prestige hierarchy of occupations, when one examines the very top there is also variability across countries.

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change. The name has diffused but not the American content, standards or ways of thinking. In France, for example, one still must study mathematics for two years before taking the entrance example to the French equivalent to a business school (H.E.C.). Similarly the content of the programme at a business school in England is equally different, reflecting the national cognitive style of that country. Here one finds a greater interest in the case study method. 1.3 The basis of elite power Although there can be both internal (demands of particular interest groups, Archer 1979) and external forces (growth in knowledge) that impact in various ways on the definition of elite education, the elites occupy a number of power positions that allow them to resist these forces. Among the most critical power bases are those associated with the state and especially in the context of Western Europe where the state looms large (Hage, Hanneman and Gargan 1989). Elite control of the civil service within the state, the national legislature, and various professional bodies provides them with considerable control over the national cognitive style within education — since this is an affair of the state and again especially in Western Europe — and thus whether or not any change occurs. It is difficult to change a public system of education and especially the curriculum without the cooperation of one or more of these bodies. Furthermore in many Western European countries the preferred elite positions and thus the measure of success within society are not economic but political, i.e. the most desired positions are in the elected assemblies or the higher civil service of the national government. Another characteristic of Western Europe nation states (Hage, Hanneman, and Gargan 1989: chapter three) is that their states are relatively quite strong in comparison to the central government in the United States. This strength makes them more capable of resisting pressures for change in education in general and in elite education in particular. Thus given an attack on elite education, the elite unite in their opposition to change. A good example was Margaret Thatcher’s attack on Oxford and Cambridge as well as certain disciplines such as sociology. Given this power position where strong states are controlled by well trained elites, it is obvious they can effectively resist institutional change, that is, a change in the normative patterns. The motivation to resist is equally obvious. Since elite education defines who can gain access to major positions of power and wealth, the elite’s interests are to maintain limited access and the same selection processes. It is precisely for this reason that the shift from Greco-Latin definitions of preferred curriculum was such a long and quite distinctive battle within each of the Western European societies (Ringer 1979). It should be clear from this theoretical argument that I am not saying that there is no possibility of change in the definition of a complex institutional pattern

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including elite education. Clearly if the elites become discredited, that is they are perceived to be unable to handle the problems of society, then institutional change becomes much more likely. Whether or not the change would be similar to some pattern found in another country seems more unlikely, however, given the differences in national cognitive styles of thought. In summary, the national charters stipulate the rules for access to elite education. The rules are fairly similar in Western Europe. The major external source for institutional change in education is the growth in knowledge, but while this is a common stimulus it is filtered via national cognitive styles of thought that give preferences to one way of thinking as opposed to another. Furthermore because elite education is usually public education and controlled by the state, and thus political elites, it is highly resistant to any pressure for altering the essential rules of the game. Since the present elite succeeded with these rules, it highly motivated to retain them. It is probably obvious but worth stating that strong states and strong elites are found together and almost by definition. The elites have the power to deny demands for institutional change because of their control of the state and their general credibility.

2.

Elite education and the organizational division of labour

One of the central insights in societal analysis is that the nature of the educational system impacts on the stratification system within the organization (and of course outside as well). My objective is to build upon their work by suggesting that if we can describe these basic differences in cognitive styles, we can postulate how they will influence the organizational division of labour. The division of labour within the firm can be conceptualized in a variety of ways. One of the key factors is the relative emphasis on a generalist vs. specialist education at the elite levels, a dimension suggested by Ben-David (1971). People who are trained as generalists are more likely to have broad scope jobs and power is more likely to be concentrated as a consequence. By way of contrast, specialists will tend to have more narrowly defined jobs and be more likely to share decision-making, that is employ a consensual approach. Following the logic of Ben-David’s (1971) characterization of the differences between British, French and German education one would expect that the French have the most generalist and therefore the broadest scope elite position within the business firm and the British the least. A second key factor in defining how the nature of education affects the division of labour is the relative emphasis on technical education, especially at the higher or elite levels. German and British higher education are both specialized but in quite different ways. The Germans emphasize scientific and technical knowledge relevant to the business firm, the British do not. The more technical the education, the more likely the firm is to be more specialized, therefore

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smaller, and positioned within a particular niche of the market (Streeck et al. 1987). The absence of technical training leads to a greater emphasis on large firms attempting to gain a monopoly position within the market place by emphasizing high volume production at low cost. Britain, France, Germany and Northern and Middle Italy (again especially Third Italy) vary enormously on these dimensions. The role of technical education and especially at the higher levels has been an important part of Sorge’s (1996) recent work. He suggests (1996: 79) that the higher the practical professionalization of workers, technical employees and managers, the less likely technical training will be split off and made part of a specialist function. This then becomes an important dimension for describing the differences between the division of labour within business firms, the topic that we now consider. 2.1 The French business organization Of all four countries, the French education system at the elite level is the most generalist, (Maurice, Sellier, and Silvestre 1986) that is, there are broad scope positions (Ben-David 1971; 1986; Hage 1994). This reflects the large variety of courses that are part of elite education in France. There is also a technical component but not anywhere near the same extent as in the German business education, in which managers frequently have considerable practical training as engineers. Although the title of engineer is used in France, the prestige and content of the training is quite dissimilar from its counterparts in Britain, Germany and Italy as we have seen. French engineers (even the graduates of the business schools are called this!) are trained to be generalists and do not have as much practical training as their German counterparts although they have more prestige because of the greater degree of selectivity (Ben-David 1971). The consequence of this kind of educational preparation is that French firms are quite centralized, bureaucratic, and moderately large (Crozier 1967; Maurice, Sellier, and Silvestre 1986; Hage 1994). The emphasis on a generalist education means that those in control believe that they are knowledgeable about all aspects of the business. Individuals from one grande école will tend to recruit from the same school. Thus over time each grande école tends to control a particular sector of the economy (Suleiman 1978). This encourages a kind of group mind set within particular sectors of the economy, explaining the slowness with which French business firms react to changes in the global economy. The diffusion of vertical and horizontal integration — two important kinds of institutional patterns — was resisted for a long time in France. Instead the French business firms tended to remain as holding companies while the United States and Britain moved towards larger aggregations such as the multi-divisional firm (Chandler 1977). However

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the cohesion of this small elite also explains that when the elite does decide to change business strategy, a considerable amount of institutional and organizational change is possible because of this cohesion. Thus when the state decided French firms should move in the direction of what de Gaulle called “national champions”, this occurred relatively quickly. However consistent with the thesis about path-dependency, Hancké (1996) has recently demonstrated that the large French firms have created a hierarchy of small firms that is a close approximation to vertical integration but maintains the specific character of centralized control without ownership favoured in France. In other words, a pattern quite different from the vertical kieretsu in Japan that depends upon cooperation and mutual ownership rather than centralization of decision-making. The presence of some technical training in the backgrounds of graduates of the grandes écoles has meant that French firms have invested greatly in new technologies. But the productivity gains from this have not always been realized because of the lower level of technical training in the labour force. Thus some matched plant studies (Steedman, Mason and Wagner 1991) have indicated that it has been necessary to use highly trained technologists (individuals trained in what are called I.U.T.s in two- to three-year post-secondary programmes) to operate these highly sophisticated machines whereas in Germany the workers who have been trained in the dual system at the secondary level would have these skills. 2.2 The German Business Organization In contrast to the French model, German firms with some notable exceptions (e.g. Siemens) tend to be more highly specialized and managed by individuals who have more technical training, especially of a practical kind. As Ben-David (1971) observes, the Germans not only favour science more but are more likely to demand individual creativity in higher education. As a consequence, the elites, including business managers, are more specialized, smaller, and consensual in decision-making (Lane 1994b). The depth of the hierarchy and therefore the stratification system is also lower because of this (Maurice, Sellier, and Silvestre 1986). The much higher levels of technical and especially practical training in German firms has meant the rapid adoption of new technologies. Furthermore these have been effectively used given the technical training of the labour force within these firms. This has given the German firms a much higher level of productivity and flexibility than is found in either the British or French firms (see Daly, Hitchens and Wagner 1985). But this is not to say that German firms are not bureaucratic. They are. This reflects the emphasis on legal training, part of the German intellectual tradition that influences how civil servants are selected. But it

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also flows from the history of the Prussian state and its impact on contemporary German institutions. 2.3 British business firms British education is more disconnected from the British firm than it is in either France or Germany because most people who are trained in elite schools do not enter the business world (Lane 1994a). If there is specialized training it is in finance. Thus paradoxically British managers are also specialists but much more frequently not trained in elite higher education. Typically they have moved up via the organizational chain of command and have started with various diplomas in engineering. At the very top level there may be someone who has been trained in the universities but not necessarily in business. When there are managers from Oxbridge and thus an elite background, then claims to leadership are based on elite status rather than technical competence. Consistent with this, there is little technical training relevant to the business of the firm. Thus British firms tend to be very slow to adopt new technologies and when they do they are poorly implemented, as the studies of matched plants have demonstrated. Specifically, British plants have been slow to adopt numerical control machines and new materials. Generally the potential in both productivity and flexibility for these machines has not been realized (Zammuto and O’Connor 1992). The down-time of the machines is also much greater. In contrast, British firms have been quicker to borrow American business institutional patterns such as vertical and horizontal integration. In addition to the obvious benefit of the English language and the many connections between the U.S. and Britain, it is the disconnectedness of British firms from elite education that has facilitated the diffusion of American business practices. In other words, consistent with our argument that complex institutional patterns filter the diffusion process, if the filter does not exist or is weak then the new institutional pattern can diffuse more readily. 2.4 Italian business firms The most different from either the French or German or British firms are the Italian business firms especially in Third Italy (Trigilia 1994). As in Britain, the managers are less likely to have come from the elite universities. Instead many are graduates of Italy’s technical institutes. But as in Germany this means the managers are much more likely to have a substantial amount of formal technical training although not necessarily practical experience. Here there has been a high degree of technical training of both the workers and the managers. For a variety of reasons including this one the firms have remained small and as a consequence

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have banded together into networks of organizations that have proved highly adaptable to shifts in market tastes (Lazeron 1988). The combination of disconnectedness from elite education with the specialized training in the technical institutes makes the Italian small firm the most consensual and the least bureaucratic of the four countries. Furthermore, these patterns are facilitated by the overlapping kinship relationships and the medium to small size cities in which these networks are located. Thus there has been a strong sense of civil society (Putnam 1993). This particular section of Italy, in contrast to Northern Italy, has also resisted a variety of institutional patterns such as vertical and horizontal integration because of the institutional framework. But, there is great acceptance of new machines and their effective exploitation. Again, as in Germany, the presence of technical and scientific education in the managers of the small businesses has meant continuous upgrading of their production systems. As is clear from these examples, the nature of elite education is obviously not the only educational output that impacts on the division of labour within a firm. Another critical factor is the relative importance of technical and vocational education in secondary and the first few years of higher education, which has been demonstrated in a series of matched plant comparisons (Daly, Hitchens and Wagner 1985; Prais and Steedman 1986 and 1989; Steedman and Wagner 1987 and 1989). Because of this both German and Italian companies (particularly in what is called Third Italy) tend to be smaller than the French or British companies. In addition, the higher average level of education in the labour force affects the business strategy in both of these countries. Another issue that we cannot address is how the cognitive style of the educational system influences in which sectors the economy tends to be strong. This is an important issue that needs to be addressed in later work. However, since our main concern is with elite education and because there are clearly limitations in the amount of space, our main focus is on the impact of elite education on the division of labour within the large firms. Broad scope elite education appears to favour a different kind of stratification system within the business firm. Similarly, the relative emphasis on technical or scientific education also has an impact.

Conclusions and discussion The central argument is that simple institutional patterns such as theme parks, fast foods and new machines diffuse relatively quickly, while more complex macroinstitutional patterns such as vertical and horizontal integration, elite education, the industrial relations or the judiciary system are highly resistant to change. Once one shifts the focus to complex macro-institutional patterns then there are three questions that need to be raised. First, what was the national charter or the

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essential normative pattern when established? The earlier the creation of the national charter, the more institutionalized this pattern is likely to be. This is the characteristic for elite education within Western Europe and especially Britain and France, whose national charters were established early on. Second, even though there is some stimulus for change, in the instance of education, the growth of knowledge, what are the directions of the trajectory? The argument is that cultures vary in their preferred modes of thought or national cognitive styles. While this is a relatively new concept, I think it has a lot to say about pathdependency, at least within elite education. Third, what is the power base of the elite? As has been suggested, elite education is a particularly interesting case because it is generally controlled by the state in Western Europe and the state is relatively strong. These cognitive styles help define what is perceived to be the appropriate kind of education or way of thinking, especially for elite positions, and thus impact on the division of labour within business firms. I have looked at how many different subjects are contained in an elite education and what is the preferred skill or method of thinking. When these questions are raised, one finds considerable differences across forms of elite education in the scope of training. The major dimension is the relative emphasis on general vs. specialist education. This impacts on the scope of the job, the centralization as well as stratification of the work force and the relative reliance on bureaucratic procedures. Equally important is the relative amount of practical and technical training that is perceived to be part of the formation process and especially at elite levels. This has a countervailing impact on the division of labour. Technical and scientific education is likely to be more specialized, leading to shorter hierarchies, more consensual decision-making and less bureaucracy. The complex relationships covered here need to be detailed in future work. But the central argument remains. Complex institutional patterns are highly resistant to change and when they do change, they evolve in path-dependent ways. Specifically, the elite business positions and their division of labour in the business firm are unlikely to change much in the foreseeable future. The concepts of national charter, national cognitive style, and elite power base are perceived to be three critical variables for understanding the process of institutional transformation at least in education and more critically why it is so slow to adapt, despite the globalization of competition, mass communication, and rapid diffusion of tools, techniques, and simple institutional patterns. By focusing on formal properties of elite higher education and their consequences for the division of labour, I have not only integrated these two perspectives but the societal effects school can now be combined with contingency theory. Institutional properties become important contingencies for explaining differences in organizations.

Chapter 19 Reintroducing public action into societal analysis Eric Verdier

The construction of vocational qualifications in France and Germany Recurring social and economic difficulties across Europe have made the “reform” of regulatory modes and, beyond that, of economic and social structures, a central and persistent item on the political agenda. The aim of such reform has been to improve the relative and absolute competitiveness of the different “varieties” of European capitalism, while at the same time preserving a degree of social cohesion. One of the main benefits of a more explicit integration of public action into societal effect theory would be to reduce the static character for which the approach, fairly or unfairly, has been criticised and thereby enhance its capacity to analyse the changes societal configurations are undergoing. An approach in terms of public action, rather than public policy, makes it possible to avoid imprisonment in categories and formal institutional divisions and, therefore, to investigate the foundations and coherence of such categories. In particular it allows the analysis to go beyond the simplistic distinction between public intervention and the workings of the market in order to emphasise the redefinition of the boundary and links between the public and private spheres, which vary considerably from one society to another. Since it cuts across the various fields in question (the political/administrative, social, economic, legal etc.), the notion of public action refers to the modes of coordination linking rules and actors for the purpose of collective action intended to produce economic efficiency and, to a greater or lesser extent, social cohesion. As far as collective action is concerned, one of the specific characteristics of the notion is that it involves political authorities whose legitimacy is derived from the fact that they are elected; as a result, it brings into play the relations that exist between citizens (and, beyond the individual, society as a whole) and the State. In the present case, the emphasis placed on issues of coordination leads us to enquire into the position

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and evolution of the respective places accorded to the market, to bargaining (particularly institutionalised bargaining) and to public intervention, as well as to organisations, particularly firms. But even beyond the construction of the coordination between actors, the notion of public action brings into play the definition of the social contract and the way it is implemented in such and such a society. Thus Albert (1991) has analysed the manner in which, in the different varieties of contemporary capitalism, public action seeks to construct a “general interest” through which efficient and legitimised responses to the enduring “crisis” can be mediated. Symbolic and cultural issues cannot, therefore, be isolated from this construction of the general interest, which operates within a public space in which the actors are brought face to face. In its initial desire to highlight the structural coherence of the various forms of contemporary capitalism, societal analysis (Maurice, Sellier, Silvestre 1982) focused on the specificities of the wage-employment relationship within firms. With the reconstruction of the educational, organisational and industrial relationships, and in particular of the actors animating them, advocates of the societal approach have been forced “to endogenise the external”, i.e. the processes through which firms enter into relationship with the wider society. Even though this has led to the incorporation into the analysis of many processes of social mediation, public action per se was not a focus of attention in the seminal work of 1982. In one way or another it makes its presence felt in each of the three relationships listed above. Firstly, the supply of formal qualifications, which belongs to the realm of public action, helps to define the educational relationship. Secondly, the modes of labour market regulation in France and Germany reveal the dominant role played in the definition of skill and, more broadly, of the employment contract by firms’ internal practices in France and by the decisions taken by intermediate actors at industry level in Germany. Thirdly, the industrial relationship is shaped in France by bargaining at the inter-industry level, on which the key influence is that of the State, and in Germany by the interaction of the social partners at industry level. However, public action has no specific place in this analysis. Later studies (the France-Japan comparisons) of the introduction of mechatronics (Maurice et al. 1988) and the construction of the innovation space revealed more clearly the structuring role of the state and its agencies (Lanciano et al. 1992). However, the approach continued to “endogenise the external within the internal” (i.e. the firm: Maurice 1994). In consequence, public action is analysed as a provider of resources, in the same way as private suppliers of goods and services. Nevertheless, the studies of innovation highlight two dimensions of particular importance for an understanding of public action. Firstly, at the macroeconomic level, there is what might, by analogy with dynamics of innovation, be termed “path-dependency”. Societal trajectories in the area of public action

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depend both on past experiences and the structures which actors (firms) inherit; any attempt to change structures is necessarily filtered through the lessons of the part, through a learning process, at it were, although the cost of such change will depend on whether the adjustments are organic (i.e. evolutionary) or structural (i.e. radical), as Silvestre (1986) revealed in his study of changes in mobility systems in France, Germany and Japan. Secondly, at the micro-economic level, it emerges that dynamic analysis cannot ignore the abilities and competences of the private and public actors engaged in the construction of the innovation space (Lanciano et al. 1993); in consequence, learning processes are a decisive factor in any understanding of the interaction between these actors and of the quality of what they produce together. The construction of qualifications is a major coordinating mechanism linking social and economic actors. In a period of a persistent employment crisis and of rapid and often chaotic changes in productive systems, the question that this public action has to face can be expressed in the following terms: is the certification of vocational training still able to provide effective reference points for the protagonists in the training-employment relationship, whether at the inter-industrial, industrial or micro-economic (firms and individuals) levels? The debate is a topical one, since it concerns the effectiveness of institutional modes of regulation relative to the predominantly market mode of regulation that prevails in AngloSaxon countries. In this regard, the Franco-German comparison is revealing, as it illustrates two very different conceptions of vocational training as a public good: in Germany, the intervention of private-sector partners is crucial, while in France, national (and now regional) authorities play a dominant role. In investigating this particular sphere of public action, we will also attempt to make use of the elements of societal analysis identified previously, even if they have to be supplemented. In order to clarify the societal foundations of public action, we will focus on two dimensions in particular: the configuration of institutional and individual actors specific to each country and their modes of coordination, and the purpose and significance of the public good that the actors construct. Both of these dimensions vary considerably between the two countries. Firstly, however, it is necessary to situate this social construction within a wider field, namely the position of the educational relationship within the respective national social contracts.

1.

Societal convention and public reference points in vocational training

In discussing the way in which young people in France enter the labour market, we have noted the existence of a “societal convention” in the field of education. It has two dimensions. The first is academic competition between individuals, the

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equity of which has to be guaranteed by the State. The second is the legitimacy conferred on that equity by the State guarantee, which is further reinforced by the fact that it is based on an objective criterion, academic performance, which in principle is both independent of and unaffected by local and market influences. Thus the selection mechanism sets in train an encounter between the State and each person being assessed before that individual is confronted with the (labour) market. This provides a “civic” justification for the theoretical independence between education and the economy, which in France makes the situation of young people in the labour market a permanent “affair of state”. In particular, the state underwrites the labour market entry of young people leaving the vocational training system, to which most of them have been consigned by a selection mechanism that punishes academic failure. In any event, the French selection mechanism establishes a very powerful societal convention, the legitimacy of which is scarcely contested. It governs individual and collective educational decisions and, in particular, the way in which the entire education and training system operates. The same filtering system, based on academic performance, exists in Germany, although the filtering process takes place at an earlier stage than in France. However, as Silvestre (1987) very clearly demonstrated, the primary purpose of this competition is not to classify individuals but rather to create “poles around which professional identities can crystallise”, primarily within industries. In this way, vocational training can become a matter for the social partners at this intermediate level. The federal State does have responsibility for young people, but only as an agency of last resort that can be called on to correct the failures of the intermediate organisations, i.e. the employers’ associations and trade unions at industry level that bear the primary responsibility for young people, whose training in the firm they define. 1.1 Public points of reference at work: Unemployment rates/access to a recognised vocational qualification We thus have an example of the perspective opened by Favereau (1995), who notes the existence of “public reference points” that provide the linkage between various individual decisions: the constant references to the rate of youth unemployment not only help to determine individual choices but are used by the Ministry of Education, in this case its central unit responsible for evaluating the education system, as a justification for ever-increasing volumes of public and private investment in qualifications of an ever higher level (rhetoric of qualifications as “protection”) (DEP 1996). The youth unemployment rate is obviously not absent from the debates in Germany, but the primary public reference point is constructed in a more positive way, which is also the case with the filtering process for the later stages of secondary education. What is highlighted is the

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ability of the dual system and its various recognised occupations to allow each individual access to a vocational qualification by completing an apprenticeship. In the course of this discussion on public action, it is necessary to emphasise the links between these public reference points and the basic societal convention. It is precisely these links that make it possible to describe the reference points as “societal”, since they vary considerably from one country to another. Our analysis of this linkage between the macro-economic level and the choices made by microeconomic actors has sought to explain how, in a certain situation, individual and collective actors will activate existing principles in making their choices, even though, in aggregate, such choices may ultimately backfire, thwarting the actors’ original intentions. The rush to obtain higher-level qualifications, driven by the government’s publicly declared objective that 80% of any one age cohort should be attaining the baccalaureate by the year 2000, is an example of such sophistry: investment in human capital, and particularly vocational training, is sidelined in the rush to accumulate marks of distinction that will enable individuals to position themselves more advantageously in the queue for employment. 1.2 Coordination and “super-rules” As Bernoux (1994) suggests, these public reference points, which contribute to the coordination of micro and macro-economic decisions, can be likened to “superrules”. These are not to be confused with the values with which individuals are imbued.210 Such rules are part of a tradition whose influence varies from space to 210. Two points need to be highlighted: – a “super-rule” does not imply definite causal determination. For example, the primacy of the highest possible level of qualification as a reference point in France, and the consequent pre-eminence of general education, does not prevent certain courses of technical training in specialist areas from being recognized by employers in ways similar to those prevailing in the German model (cf. for example, the case of plastics technology or certain areas of training in construction and public works). This diversity reflects the influence exerted at local or industry level by principles of public action different from those generally at work in the wider society; it may also be symptomatic of processes of institutional and organizational innovation aimed, for example, at upgrading the status of vocational training at the regional level through formalized commitments on the part of employers. – the possibility that individual and collective choices may have the effect of undermining, possibly very rapidly, the most firmly established modes of coordination makes it possible to avoid adopting the notion of reproduction as a guiding principle. The process of destabilising, or, conversely, reinforcing linked modes of regulation is then placed at the heart of the analysis. To some extent, the same applies to qualifications as to a currency. The reference point does not function unless it is based on confidence shared by the various protagonists. The current tensions within the German dual system (certain categories of young people seem to be turning away from it, while the largest firms, the emblematic figures within this institutional construct, are considerably reducing the number of apprenticeships they are willing to offer) show how quickly devaluation can occur (cf Buechtemann and Verdier 1998).

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space and allows individuals room to reinterpret them in accordance with the precise context in which actors’ decisions are taken and on which public action is seeking to act, through incentives and/or prescriptions. One of the advantages of making this “detour” is to show the extent to which analysis of the impact of the changes introduced by public action brings into play the interrelationships between, on the one hand, the choices made by actors at micro-economic level, and on the other, the institutional mechanisms or societal conventions at work. This interaction between actors and the mechanisms for action at their disposal lies at the heart of societal analysis. In France, the responsibilities borne by the central (and now regional) authorities force the State to keep the question of labour market entry permanently on its agenda. The extent of these responsibilities reinforces the instability of French public action, which is constantly rushing from one emergency to another without ever succeeding in constructing a regulatory apparatus in the German style, which to date has proved very stable. Thus the instability of the reforms is evidence of the difficulties of constructing a coherent programme of public action. It can be seen, therefore, that taking account of societal conventions and thereby highlighting the macro and micro-economic modes of coordination between actors is a means of enhancing our understanding of the structuring of the educational relationship. Furthermore, it may shed light on its dynamic of change, provided that we make societal conventions a resource open to interpretation by the actors and not a constraint or a coercive force imposed upon them.

2.

Configurations of actors and social relations211

The construction of qualifications in the two countries is based on a social process constituting a public mechanism that plays a major role in the coordination of economic and social actors. These actors, moreover, are participants in the relationships at work in the labour market. This coordination not only involves highly organised institutional actors at the national level but also brings into play the coordination with and between actors at the micro-economic level. It is precisely in this linkage of the macro and the micro levels that some of the main differences in public action between the two countries lie. In formal terms, the construction of vocational qualifications involves three principal partners, namely the public authorities, employers’ organisations and trade unions. In both countries the construction of qualifications can be likened to 211. This section is directly based on a paper written jointly with Martine Möbus: “La construction des diplômes professionnels en Allemagne et en France: des dispositifs institutionnels de coordination” in Möbus and Verdier (eds.).

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a rule produced by an agreement governing the functioning of the labour market. However, the meaning of that rule, and hence its impact, differ considerably in accordance with the commitments that underlie it and are produced by it. In France, the actors confront each other within a hierarchical model in which the social partners are consulted without being given decision-making power; in Germany, the search for a “shared set of rules”, specific to each occupation, involves the social partners in the process as negotiators. 2.1 Germany: Negotiated tripartism with mutual commitments According to the interpretation advanced by Hilbert and Weber (1997), public action in the sphere of vocational training in Germany operates in accordance with a mode of regulation based on the “private governments” formed by employers, trade unions and the chambers of commerce, to which the federal State delegates management of this public good. This constitutes a middle way between statist and market management or, to be more precise, it links up with both modes to form a subtle compromise: the social partners in each industry develop a “mode of joint regulation” (Reynaud and Reynaud 1994) by defining, as part of the same process, the content of in-firm training and the type of skill produced while at the same time acting within the framework of federal legislation and leaving the supply of apprenticeships to a market mode of regulation. As a result, the production of a public good is in this case the responsibility of a private actor, the firm, which is also the main user of that good. The term “private government” clearly expresses the ambivalence of the German situation, characterised as it is by a dual linkage between the public and private spheres and between collective choices (industry) and individual wishes (firm). However, it must be clearly understood that the federal State is far from being a non-participant in this process. In the case of failure on the part of private actors, the State would not only have a legitimate reason to intervene directly but would actually be obliged to do so, since it would otherwise leave itself open to accusations that it had not carried out its basic duties. Thus the collaboration between public and private actors structures the linkage between the three basic spaces of societal analysis: the qualificational, educational and industrial relations spaces, in which the actors are both constituted and interact with each other. Thus in Germany, discussion of the content of vocational training is strictly dependent on the expression of collective and individual interests: trade unions prefer more broadly based training that would increase the occupational autonomy of trained apprentices, while employers seek more directly operational, and therefore more narrowly based training. Thus the regulation of training emerges from the frequently lengthy process of constructing a social compromise.

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The construction of this negotiated compromise may emerge from confrontations that are all the more serious since they revolve around not only the content of training but also issues of pay within firms (e.g., training costs, the remuneration of apprentices, the definition of a “good professional”). Moreover, this dual concern, which impacts on both the sectoral and micro-economic level, is the basis of the subtle articulation between institutional regulation and the working of the market, with the latter appearing clearly as a social construct (Albert 1991: 191). The regulations governing training must respect the “will” and “capacity” of firms to train. The “will” to train depends in particular on the firm’s civic commitment to training young people, which varies considerably from industry to industry and from firm to firm (Lutz 1992). This occupational mode of regulation must not be seen as a rigid framework, still less as a constraint. Rather, it is a convention, because it can and must be susceptible of different interpretations when applied in different spaces and competitive conditions. The flexibility of the linkage between the specific and the general can even go so far as to allow a firm to have recourse to the “flexibility clause” in order to depart from the outline training plan, provided it can justify so doing. The German case reveals the extent to which the coherence of public action is dependent on the capacity to define norms which, in their very conception, incorporate not only the central but also the micro-economic and social levels. Thus the German institutional mechanism is best described as a network, and it is this characteristic that gives it its ability to adapt to specific contexts while at the same time maintaining, at least until now, a balance between a highly institutionalised mode of regulation and the workings of the market. 2.2 France: Consultative tripartism Conversely, French institutional mechanisms have great difficulty in dealing with questions that are central to the coherence of public action in the area of vocational training and the structuring of the qualificational space: – how can training programmes be put in place that take sufficient account of the needs of firms in general but do not simply shadow the changes currently taking place in productive organisations? – how is possible to articulate choices that have both a quantitative (firms’ will and capacity to train) and qualitative (what norms are to be satisfied in training a “good professional”?) dimension, which in the French system remain separate for lack of any real linkage between the macro-, meso- and microeconomic levels? (As we shall see, the French system is based on the dissociation of the normative dimension, the construction of which is centralised and attested, from the managerial dimension, particularly pupil flows). In France, the processes whereby vocational training is managed are more unilat-

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eral, initiated either by the state or by powerful professional federations. The role of trade unions is less evident. The restructuring in the early 1980s of the procedure for producing qualifications, which strengthened the role of the occupational consultative committees (commissions professionnelles consultatives, or CPCs), was a response to the perceived need to improve the status of vocational education, in particular by making increased use of combined in-firm and school-based training. This issue provided the impetus for the government to unblock the channels for dialogue with the social partners: there is, within the French conception of tripartism, a growing concern on the part of governments to share the increasingly heavy burden of policy formulation, particularly in the light of the rise in unemployment in general and of youth unemployment in particular, and at the same time to make its policies more effective. This approach necessarily gives the key role not to “private governments” but to the state, which is responsible for the creation of new national qualifications. In consequence, the actual if not the formal role of consultation will diminish, at least in comparison with stated ambitions. In short, it would be tempting to suggest that the government is regularly forced to tread a fine line between, on the one hand, the need for genuine consultation in order to involve the social partners in responsibilities whose gravity makes it advisable for them to be shared and, on the other, a form of voluntarism that calls for rapid decision-making in order to deal with a political “emergency” but reduces the consultation procedures to even more of a formality. This sort of “crisis” management achieves rapid results, since the “will and capacity to train”, which is so important in Germany, as we have already seen, is in theory provided by an educational system in which private actors play only a secondary role and are regarded mainly as providers of the training places required to put in place the system of combined in-firm and school-based training. It is this separation of state intervention and micro-economic decisions that has enabled successive French governments, to a much greater extent than those of any other OECD country, to develop general and vocational training in tandem with each other, as happened during the 1980s. The “incomplete” nature of the system of actors and the dissociation of the construction of qualifications from the functioning of the labour market has, paradoxically, made the voluntaristic production of new training courses more efficient. The labour-market value of such training is generally, though not exclusively, fixed by market mechanisms, with all the subsequent risks of devaluation and downgrading inherent in this mode of determination. As in Germany, the intervention of the social partners is formally structured, mainly at industry level. In reality, however, that intervention is directed towards influencing government decisions rather than towards the direct construction of rules, as is the case in Germany. Thus a regime based on constraint tends to prevail over one

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based on the interpretation of negotiated agreements. The continuing State monopoly over the definition of the “general interest” in the sphere of education means that the modes of articulation between the education system and the qualificational space remain undefined. Furthermore, that monopoly reflects the formalism that often characterises the mode of regulation governing the industrial space. Unlike in Germany, the expression of “social demand”, and thus of individual choice, weighs heavily on the French system of constructing and reforming qualifications, in which the State is the key player. Clearly, this dimension links up explicitly with the hierarchies based on levels and types of knowledge around which the French education system is structured. It manifests itself in two ways: on the one hand, in the pursuit of a general education within a given academic pathway and, on the other, in the tendency to opt for specialist, occupation-related courses provided within the general education system. As a result, the regulation of those specialist courses remains in the hands of the State, outside the sphere of influence of firms or employers’ associations and divorced from any real pursuit of professionalisation.

3.

Vocational diplomas: The content and scope of the common principle

The fact that vocational qualifications in the two countries are nationally recognised and standardised constitutes an essential dimension in the comparison of public action. However to base any relationship between the two systems solely on this common principle, without first analysing its content and scope, would be to jump to conclusions. Indeed, these latter two dimensions impart a specific form to the national principle produced in the two countries, which is more constraining in France, but very much focused on the process of certification, and more pliable in Germany, while at the same time covering an entire process ranging from training to the definition of skills. 3.1 Level of diploma or skill? The reference concept The first fundamental difference relates to the nature of the qualification acquired. The terms used speak for themselves: while the French refer to a “diploma” or “certificate”, the Germans speak of a recognised trade or occupation (Ausbildungsberuf). In France, the reference concept (diploma/certificate) defines an occupational and pedagogic optimum and tends to constitute a closed system, while the regulatory apparatus in Germany lays down minimum norms that leave room for greater flexibility in the actual content of training programmes. Several factors may account for these differences:

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Firstly, the principal actor charged with implementing training in Germany is the firm, a private agent. In consequence, the reference system must of necessity accommodate a considerable diversity of situations depending on the type and size of firm providing the training. The vocational lycée, in comparison, which is the major public actor in the French training system, provides a more homogeneous form of training. Secondly, the greater emphasis given to theoretical teaching in France, which reflects the specificity of the societal convention in the educational sphere (selection on the basis of academic performance means that the critical hurdle in the reference system is placed at a very high level, particularly since the qualification acquired provides a pathway to higher-level studies). Finally, the French referents are based on a relatively abstract and homogenous definition of the objectives pursued. In comparison, the description of training objectives in Germany refers to more concrete knowledge and aptitudes, both at the general (“training profile”) and more detailed (“the framework schedule”) levels.

The distinctly more normative character of certification in France is linked to the mode of regulation in the industrial relations space, which is much more hierarchised around the State and forms the framework within which vocational training qualifications are discussed. Conversely, the nature of the “non-human” players (Callon 1991) in the configuration of actors, in this case diplomas or certificates, exerts considerable influence over the dynamics of the institutional process and the interactions between the actors. 3.2 The reforms: The scope of the rules produced by public action The rate at which the contents of training programmes are reformed is clearly much faster in France than in Germany. Each year, around one hundred dossiers are examined by the statutory bodies established to advise on the updating of diplomas (the CPCs). These bodies can be mobilised at any time in order to assist in voluntarist public action programmes. In Germany, the task of updating training programmes is entrusted to ad hoc bodies, which, because of the principle of delegating the production of a public good (i.e. youth training) to the social partners, cannot be set up without their prior agreement. The extent of the delays seen in certain cases — for example, the modernisation of training in the metal industry — has led the federal authorities to recommend a maximum twoyear period for taking a case to its conclusion. The pace of reform specific to each of the two countries reveals a different order of priorities in the necessary trade-off between two opposing objectives: on the one hand, preventing training programmes from falling into obsolescence

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and, on the other, maintaining sufficient stability in the reference system for the actors in the training-employment relationship. Additionally, there is the issue of the relative capacities of the two systems to deal with growing economic instability, which tends to devalue institutional mechanisms, which are by their very nature long-lasting. From this perspective, the structural capacity of the German system to incorporate new service jobs, e.g. in personal services, is weaker than that of the French system. 3.3 Public action and societal dynamics in the qualificational spaces in Germany and France Surprisingly, fairly similar diagnoses have been made in the two countries as to the main trends in the evolution of work impacting on both the qualificational space and the production of new reference concepts for qualifications: economic uncertainty and the variability of demand are perceived as affecting production and organisation processes in firms, in the sense that “flexible” technologies are being diffused ever more quickly and the barriers between the various functions (e.g. between production and maintenance in manufacturing) are breaking down. In both Germany and France, whatever the occupational sphere in question, attention is now being focused on the development of transferable problemsolving skills and the ability to participate in increasingly complex organisational systems, particularly in order to meet the constantly growing need for functionally flexible workers. The translation of these objectives into reference systems takes different forms, not unconnected with the respective importance placed on expertise in the two processes. In France, the resolutely voluntarist nature of public action means that training is regarded as a direct lever to change both work and work organisation. This contrasts with the more procedural and gradual process prevailing in Germany. What emerges from this is, firstly, that disjunctions between the contents of training and the requirements of certain categories of firms, particularly small and medium-sized firms, have been less marked in Germany212 than in France. It is characteristic of the French system that the means used to boost levels of attainment in vocational education was to create new certificates, of which the vocational baccalaureate is now the symbol. In Germany, the response to the new requirements emanating from the productive system has, to date, been generated within the existing system through changes to the basic points of reference on 212. For example, Eva Kuda (1997) points out that “through the opposition voiced by employers’ organizations (in the metal industry) during negotiations on reference points (…), it emerged that small and medium-sized firms were either unwilling or unable to put into place in-firm training based on the new directives”.

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which the apprenticeship system is constructed. The reduction in the number of recognised occupations is one well-known manifestation of this response. These changes in basic vocational training (endogenous in Germany and exogenous in France) clearly reflect the principal modes of adjustment in each country. German-style “organic” adjustment (Silvestre 1986) makes it easier to preserve the overall coherence of the mechanism, and therefore the quality of economic and social coordination, even though it may mean bypassing radical reform. Frenchstyle structural adjustment may, it is true, result very quickly in major changes, but it is by no means certain that those changes will be effective. In both cases, strong tensions emerge which reveal the specific difficulties of the two institutional processes in adjusting to the changes taking place while at the same time preserving their internal coherence. In France, these difficulties seem to be linked more to the relatively abstract and inflexible nature of the reference points relative to the reality and diversity of firms. Since they have little involvement in the implementation of training programmes leading to the award of formal qualifications, French firms prefer to delegate responsibility for “basic training” to experts, even though it means they have to supplement it by providing firm-specific training. However, the risk inherent in this strategy is that French vocational qualifications may be deprived of some of their immediate operationality and will therefore be considered as only part of the skill in question. In Germany, the “functional pragmatism” (Kutscha 1997) that is said to have characterised the adjustments that have taken place to date is being called into question by the more rapid rates of change that structural reform might require. Will it be possible to retain the slow process of mobilising and involving the actors in the face of increasing fluctuations in the labour market? Finally, will it remain possible for the referents to remain as strongly centred on the twin notions of “relevant vocational training-competitiveness”? “Social demand”, of which the German system takes relatively little account, is emerging as an increasingly decisive factor in the evolution of the dual training system, since young people are increasingly opting to turn their back on vocational training in order to pursue courses of general education. How will the mode of institutional regulation be able to accommodate this trend, should it continue and strengthen, without introducing the hierarchical principle (i.e. different levels) into the training system? Thus what is at stake in both countries is the ability of a public, institutional mode of regulation to construct not only an efficient system of vocational training but also the modes of coordination between the actors at micro-economic level and the systems that represent and construct the “general interest” at the macroeconomic level.

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Conclusion Our proposal here is that explicit consideration of the capacities of these actors to construct, interpret and modify rules should be incorporated into the analysis, in order to take issues of coordination into account. To this end, it seems to us essential to introduce into the analysis of societal conventions, i.e. those concepts specific to a given society that contribute to the construction of the social contract, or what legal experts would call the “social public order”. This is not to say, however, that a strictly “culturalist” approach is being adopted. Far from it: the aim rather is to identify the public reference points that serve as a basis for the coordination between the actors. From this perspective, these reference points are seen not as intangible but rather as susceptible of differential interpretation within the same society, depending on particular economic circumstances and configurations. They can be modified, if only through frequently unexpected composition effects caused by the accumulated impact of numerous micro-economic decisions. In short, the value of an analysis of public action in these terms is that it creates a linkage between the micro- and macro-levels in an examination of the modes of coordination (through the market, through organisations, through institutional bargaining or through state intervention) This approach has been applied here to the construction of vocational qualifications in Germany and France and to the ways in which the actors then work together in order to construct the public good that is vocational training. Building on the findings of societal analysis outlined above, it constitutes an attempt not only to improve the linkage between the dynamics of the educational, organisational and industrial relationships but also to explain the processes of micro- and macro-economic coordination at work in the various spaces under investigation (education, qualification, industrial relations and innovation).

PART V GENDER, THE FAMILY AND WORK ARRANGEMENTS

Introduction Although this topic has not been explicitly and separately addressed very much by societal analysis as yet, it is one of the exemplary fields in which the approach can prove its capability. Gender and the gendered division of labour typically transcend and link different domains and spaces of society. To this extent, societal analysis and gender theories have a number of commonalities. O’Reilly discusses such relations between them. Whilst the gendering of wage hierarchies in a comparison between France and Germany was present in societal analysis very early on, it has been less addressed subsequently as the general interest in gender issues broadened. In view of this discrepancy, O’Reilly rightly claims that the gap should be overcome and she sketches out how this can be done. Barrère-Maurisson then presents work she herself was involved in, about comparative regimes of the familial and societal division of paid and non-paid labour. This division of labour differs substantially between societies in Europe. What makes the phenomenon truly societal is that this division of labour is clearly related to specific regimes of social policy and, the author argues, fundamental doctrines and structures not only governing the place of gender in society but the larger economic, political and social order. Theoretically, the chapter by this author is distinctive for trying to link the ‘regulation school’ in economics in France, such as particularly represented by Boyer and others, and societal analysis in the Aix tradition. The third author, Nohara, has firmly worked in this Aix tradition, although not on gender in the past, but in Franco-Japanese comparisons of mechatronics and other industrial developments. In a way, he tries to meet the expectations developed by O’Reilly in her own chapter. Japan and France are of course radically opposite societies as far as the extent, duration, biographical location and insertion in the workplace, of female wage labour, are concerned. Again, we find striking interdependencies between familial patterns, socialization in the family and public institutions, enterprise hiring, staffing, working time and remuneration policies and social security arrangements that bring such differences about. This is a characteristically societal explanation, in that action within any space of social action presumes and helps to reproduce the constitution of other spaces.

Chapter 20 Is it time to gender the societal effect? Jacqueline O’Reilly

Introduction The societal effect represented a significant challenge to universal theories about the process of modernization and industrialization resulting in convergence. It challenged the assumptions that technological determinism, capitalism, or in its more recent form common pressures generated by international competition and globalization, would produce similar effects in modern industrial societies. Maurice, Sellier and Silvestre (1982) argued that the socialization process through historically embedded institutions produced a distinct societal effect in the organization of work in different countries. However the original formulation of this approach was very much a product of its time. It was developed in relation to postwar debates from the 1950s and 1960s and in a period of full employment. It concentrated mainly on male workers,213 based in the manufacturing sector, and the central focus of research was on factors shaping workplace organization. Since the first formulation of this approach over twenty years ago, the world of work and academia has experienced significant changes. This can be seen not only by: the declining importance of manufacturing and the growth of service sector employment; rising and persistent levels of unemployment; the claimed undermining of national boundaries through the process of globalization and the project of European integration; but also by the increasing growth in female labor force participation. The emergence of the feminist movement since the mid1970s has also challenged the parameters of academic discourse in many fields. Particularly in sociology and economics, researchers have been forced to pay 213. Although the earlier work of Bouteiller et al. (1972: 179) included data comparing male and female employment in the two countries, they argued that the companies they studied did not allow for a full comparison of female workers. This reflects the effects of occupational segregation and the traditions in the 1970s to concentrate on manufacturing firms using predominantly male shop floor workers.

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increasing attention to the difference in gender relations both in and outside the workplace. Does the societal effect approach continue to have any relevance in accounting for these changes, and, in particular, is it time for this approach to integrate a concept of gender? The aim of this chapter is to explore the issue of comparative studies of female employment in relations to debates in feminist theory and those concerned with the societal effect approach. It starts off by briefly discussing the context of comparative research from which the societal approach developed. It then goes on to look at feminist debates and the development of cross-national studies of women’s employment. It examines data on firms’ use of labour flexibility and the characteristics of the available labour supply in a number of European countries. On the basis of this work it is argued that the societal effect needs to be elaborated to include an analysis of the sphere of social reproduction and regulation. By broadening the approach to include a concept of gender the approach can be made more sensitive, not only to cross-national differences, but also to those between different types of men and women workers in different countries. It can also allow us to draw out commonalities as well as identify how the spheres of social reproduction and economic production are historically embedded in the process of industrialization in a given country.

The societal effect and the growth of cross-national case study research During the 1960s the popularity of approaches from a “grand theory” perspective, whether it be Marxism or Modernization theory in the form of Industrialism, predicted a tendency towards convergence, albeit from very different political starting points. Critiques of these approaches developed from a number of comparative case studies of work organization during the 1970s and 1980s. What many of these approaches had in common was to show how historically embedded institutions and social values continued to exercise an influence over workplace organization. For example, Dore (1973) argued that Japanese distinctiveness was not a product of industrial “backwardness”. Instead, the system had developed from the creation of new institutions to suit their cultural disposition; the selective adoption of foreign models; and an unconscious evolution and continuity of existing pre-industrial institutions. Gallie (1978), looking at Britain and France, showed that differences in managerial and trade union ideology, the structure of power in social institutions and the mode of action differentially shaped the character of social integration in the workplace. Later work by Whitley (1992 and 1992a) argued that the relationship between proximate and distant social institutions, for example between financial institutions and kinship relations, were important for understanding the difference in capital and credit arrangements

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between Asian as well as European Business Systems. What all these studies, and others, showed was that rather than a process of technological determinism or capitalist imperatives leading to convergence, distinctions persisted. These differences in the relationship between work organization and workers’ attitudes were embedded in the historical development of values, practices, rules and institutions of a particular society in the social organization of work in different countries. The societal approach developed by Maurice, Sellier and Silvestre (1982) has possibly received the most attention as it was at the forefront of these comparative case-study approaches. (Earlier formulations of this approach are elaborated in more detail in Bouteiller et al. (1972), Brossard and Maurice (1974) and Lutz (1976) and the introduction to this volume). One of the key characteristics of the societal effect is its holistic approach. This means that isolated institutions cannot be compared term for term between countries. Instead they need to be located within a distinctive societal configuration. By focusing on particular “domaines” they argue they can move towards a broader general picture, “the actors and domains enter into the construction of the general without losing any of their specificity” (Maurice et al. 1986: 233). This approach allows them to make links between the organization of work at the micro-level of the firm and national institutions at the macro-level. In their early study they examined the relationship between the educational system, the structure of business, and the sphere of industrial relations. The attributes of workers are shaped in the schools, in occupational training, and on the job. Skills acquired by a worker before entering the labour market give him an identity and a degree of autonomy in his work on which the firm can capitalize. In turn, the willingness of firms to do this influences the occupational structure that will develop in the society as a whole. The interaction between socialization and organization determines the nature of industrial relations in the society, that is, the relations between workers and management, unions, the economic system, and society in general. (Maurice et al. 1986: 239) (my emphasis italicised).

Actors’ behaviour takes place within the context of particular institutions in a given society, institutions which also modify the behaviour of these actors. This approach situates the particular features of a given domain in a broader social and economic context. The advantage of this for comparative research is to highlight the different types of constraints and opportunities facing a particular set of actors within these systems. Maurice et al. (1986) argue that by putting the education system at the centre of their analysis they can focus on the relations between skill attainment and the organization of workplace hierarchy. However Rubery (1994: 340) questions the dominance accorded to the educational system by the LEST approach. This “would not necessarily be found in other societal systems where educational divisions may be less related to the structuring of employment than in France.” (See also Marry 1993). Further, Kieffer and Marry (1996) have also pointed out the tendency, which Bouteiller et

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al. (1972: 180) acknowledged, in W. Germany women are more likely to have their qualifications devalued than in France. This is in sharp contrast to the employment model for men in each country. In France there is a greater polarization between low and high qualified male employees in contrast to a more integrated system found in W. Germany. In France there is also a wider wage dispersion than in W. Germany. The reverse is true for women. French women, especially those towards the lower end of the skills scale, get a better return for their qualifications than German women (Kieffer and Marry 1996: 8). Wage dispersion amongst women employees is higher in W. Germany than in France (Bouteiller et al. 1972: 181–3). The strength of the bourgeois family model and the presence of children in W. Germany is more likely to lead to discontinuous employment and a devaluation of their occupational status than in France, where continuous employment is more common (Kieffer and Marry 1996: 23; PfauEffinger 1988). Comparisons of women’s employment also highlights the difference in the economic structure of the two countries: service sector employment and the agricultural sector, where a large number of women are employed, are more significant in France than in W. Germany. The central emphasis on the impact of the education system has also attracted criticism in feminist circles amongst those who have examined the gendered construction of skill and status accorded to qualifications. Much of this critique has been directed at gender-blind studies in general, rather than at the societal effect in particular. This research has shown how skills for women’s jobs are often seen to require a “natural” quality, whether it be “nimble fingers”, flexibility or caring skills; male skills, on the other hand, tend to be achieved rather than ascribed, in the Weberian sense. The work of Cockburn (1983) is a particularly poignant study of the historical process of the male dominance of technological change and the exclusion of women from skilled jobs in the printing industry in the UK. Maurani and Nicole (1989) in a smaller study bring out comparable findings in their study of technological change in the French newspaper industry. The development of feminist research in the organization of work has brought to light the differences between men and women, which was largely ignored by early studies in industrial sociology that usually concentrated exclusively on men’s jobs. Given the changes which have occurred in the last twenty years, if the societal approach is to continue to emphasize the importance of the education system it will need to take on how this has been stratified along gender lines. Additionally it is not only that women and men’s skills are organized differently, but that the incentives to acquire “human capital” or qualifications have also been structured in contrasting ways. It is not only the education and training system that socializes workers, but also a range of institutions and the ideology shaping the organization of the domestic division of labour that affects who is available for work and under what conditions, for example part-time or full-time employ-

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ment (Fagan and O’Reilly 1998: 2–6). Bearing these critiques in mind we turn now to look at feminist debates and empirical comparative research to see what they have contributed and how a dialogue with them affects the conceptualization of the “societal”.

Feminist debates and frameworks for comparative research Feminist debates concerned with accounting for the position of women in society and the economy have been largely divided around the conceptualization of patriarchy, which Acker (1989: 235) argues “has been both essential and problematic in the development of feminist thought”. Debates have focused on whether women’s exploitation is a product of capitalist or patriarchal structures, or both. In brief, it is disagreement about the analytic value of patriarchy and its specification in “dual systems” theory214 which largely accounts for the division between feminists who focus on the concept of “patriarchy” and “patriarchal systems”, and those who mainly refer to “gender relations” and “gender systems” (see Walters 1989; Pollert 1996; Fagan and O’Reilly 1998; O’Reilly 1996 for a review of these debates). An approach emphasizing patriarchal systems of employment can be seen in the work of Walby who has sought to developed her earlier conception of patriarchy and apply it to comparative research (1986, 1989, 1990, and 1994). She advocates the conceptualization of patriarchy in terms of six structures: paid work, the household, the state, male violence, sexuality, and culture. She argues that in the last century there has been a move from private to public forms of patriarchy. In comparative research she further tries to differentiate between the degree and form of public or private patriarchy that can be observed in each of these six structures. One of the advantages, and in some ways disadvantages, of Walby’s approach is that she sets out to address the issue of comparative research with a theoretical concept about gender inequality, largely developed from earlier studies in the UK. However several problems arise when her framework of patriarchal structures is applied to comparative research and cross-national data (Walby 1994). What we find, like the air we breathe, is that patriarchy is all around us — to a greater or lesser degree, in a stronger or weaker form. Once we try to examine these forms across countries, empirical indicators that could be used to measure these concepts only highlight that they are open to a plethora of contradictory interpretations; part-time work is a particularly good case in point (Walby 1994: 1346–7). The reason Walby’s approach generates more confusion than clarity is, first, because the aspects she calls structures are not really structures at all: paid 214. See Walby (1988) for a more indepth discussion of these debates in feminist theory.

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employment, the household and the state are sites of action which take different structural forms over time and space; moreover, male violence and sexuality are processes that occur at these particular sites. A further problem is that the relationship between these “structures” is not systematically specified: sometimes they coincide with each other, to a greater or lesser extent, and sometimes they are not relevant at all, but we have no consistent explanation for why this variation occurs, other than that they are a product of patriarchal relations. Finally, culture becomes little more than an add-on extra because the relationship between culture and other institutions, values and practices is not fully and systematically specified. This is similar to some of the problems raised by comparative work of the contingency school in organizational sociology (O’Reilly 1996) Second, it is claimed that these “structures” are held together by the concepts of public and private patriarchy. However it is not clear if the public-private dimension represents polar opposites or a continuum. If they are polar opposites then we are faced with the problem of deciding where the public ends and where the private starts.215 If it is a continuum model we are then left asking what is the nature of the categories between the two poles. A dialectical method of analysis as advocated by Sorge (1995 and this volume) could have the possible benefit of synthesizing some of the contradictory findings that emerge. A further problem with her approach is a neglect of individuals and institutions. She argues that patriarchy refers “to a system of social relations rather than individuals, since it is presumed that it is at the level of a social system that gender relations may be explained, not that of individual men, nor that of discrete social institutions” (Walby 1986: 51). This systemic approach ignores individuals. Both men and women on a daily basis interact and create around them the very institutions that shape the particular system that Walby is interested in studying. Significant differences exist between countries in men and women’s attitudes to appropriate gender roles and the extent to which these change over time (Alwin et al. 1992; Pfau-Effinger 1998). Duncan (1995) also points out that her approach underestimates women’s capacity to act. Although in later work she argues that women’s political activity is essential, there is little systematic analysis of women’s behaviour and attitudes that does not include strikes or open political action. Acker (1989: 238–9) argues against Walby’s explicit commitment to the dualist approach of posing capitalism and patriarchy as separate systems and then 215. The case of single parents on income support in the UK is a particularly good example of the problems such categorisation creates. The state directly intervenes in the private sphere, through the Child Support Agency, to take resources from men (the fathers), directly out of their wages, and redistribute these to women (the mothers of their children), with the aim of moving these women off the publicly funded income support system. Although Walby claims that in the last century the UK has moved from a system of private to public patriarchy, this case suggests that the British state is trying to reverse this trend. It also illustrates that the distinction between the public and the private is empirically less easy to sustain.

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looking for linkages between them. Instead she suggests that a more appropriate focus for feminist theory is on the question of how gender is implicated in all social processes and ongoing practices. Within feminism alternative approaches which put the concept of gender at the centre of their theoretical analysis, as opposed to the concept of patriarchy, can be seen for example from the work of Connell (1987) Pfau-Effinger (1998) and Hirdmann (1988). The alternative focus on theorizing “gender systems” and “gender relations” provides some resolution to the limitations of the “patriarchal systems” approach, for it provides a greater theoretical role for women’s social action and for cultural issues, while retaining a historical and material basis. A central premise found in this work, similar to that held by Walby (1989: 220–221) but developed more explicitly, is that actors are both affected by the structural relations in which they live, whilst at the same time they have a capacity to act to change these relations. Connell argues that gender relations are produced through the inter-relationship of the “gender order” and different “gender regimes”. The “gender order” refers to the way power relations, and definitions of femininity and masculinity, have been historically constructed in societies through three interrelated structures of gender relations. These are the division of labour; power relations and the connection of authority with masculinity; and cathexis, which refers to emotionally charged social relations, particularly between the sexes. Each of these constituent structures can have independent effects and may conflict with each other. The concept of “gender regime” describes the way these power relations and identities are shaped in specific practices at the institutional level. Thus the “gender order” is institutionalized through social practices ranging, for example, from state regulation at the national level, down through institutions such as welfare provision and training and education, to the effects of localized peer group pressures in daily encounters. Tensions and struggles for change emerge in the existing gender regime when social actors develop interests which diverge from, rather than reproduce, routine practices (Connell 1987: 141), in response to changes elsewhere within the gender order. These changes can arise from the behaviour of firms, regulatory and social policy, as well as from a change in social values and attitudes. There is not necessarily a functional fit between the practices in different institutional regimes. Connell’s model therefore identifies the way in which social action can bring about change in gender relations. It also allow us to compare the particular gender orders found in different societies, and to begin to locate the emergence of divergent practices in different national contexts. Although Connell’s work largely remains at an abstract level there have been attempts to empirically apply his ideas in the growing number of comparative empirical studies of cross-national differences in male and female employment discussed in more detail below. In sum this research has led us to ask how we account for the similarities and differences in the way women are employed in different societies. From a

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feminist perspective we can turn to concepts of patriarchy or a gender order, but there is disagreement amongst feminists when these concepts are applied to comparative empirical studies. Alternatively, the societal effect approach can help with the comparative aspect but gives us little leverage on the gender dimension. Cross-national comparisons of gendered employment highlight these gaps; they also indicate potential bridges which could be built to gender the societal approach for future research. In the following section I propose to illustrate how this could be achieved by drawing on a selection of comparative studies conducted over the last twenty years.

Empirical applications and theoretical implications During the 1980s and 1990s there was a dramatic increase in the number of comparative studies examining the cross-national similarities and differences in women’s employment. Some of these studies focused on the historical integration of women into paid employment (Tilly and Scott 1987) or on how labour market restructuring created job opportunities and losses for women in Europe (Rubery 1988). Other studies addressed the conditions under which women were available to work either on a full- or part-time basis (Garnsey 1984; Dex and Shaw 1986; Gregory 1987; Beechey 1989; Dex and Walters 1989; Dale and Glover 1990; O’Reilly 1994). Further, differences amongst professional women and qualification attainment were also examined (Crompton et al. 1990; Hantrais 1990; Dale and Egerton 1995; Crompton and LeFeuvre 1996; Kieffer and Marry 1996), while others focused on the divergent effects of welfare states and family policy on forms of maternal employment (Esping-Andersen 1990; Ellingsaeter 1992; Pfau-Effinger 1998; Daune-Richard 1998). Despite common patterns of increasing levels of female employment, these studies highlighted a number of variables which could account for observed differences between countries. Differences in the education and training system, as the societal effect approach argued, were not the major or sole explanatory factor. Other factors related to the systems of welfare and social security for example in the use of child care or to the effect of tax structures (Sundström 1987); or to the types of regulation governing the use firms could make of particular forms of labour flexibility (O’Reilly 1994). These findings led a number of researchers to look for theoretical frameworks and concepts which could be used to summarize and explain these differences. Attempts to apply the societal effect and the gender order approach to the comparative study of gender relations at work can be seen in a number of these studies (Daune-Richard 1995 and 1998; Lane 1993; Rubery 1988 and 1994; O’Reilly 1994; Gregory and O’Reilly 1996; Kieffer and Marry 1996). These

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studies are an important contribution not only to gender research but also to the development of theoretical frameworks to account for work organization in different countries. Attempts to use the societal approach to explain the differences and similarities observed has led some researchers to recommend an adaptation of the original formulation to incorporate a gender dimension. Other researchers, albeit those who have used the societal approach for comparative industrial organization, have gone on to make use of frameworks where the concept of gender is given a more central role from the outset. Debate over appropriate theoretical frameworks for comparative research is likely to become a major issue of debate in the years to come. This point is illustrated in the following section by looking at a selection of these studies and to identify the future implications for the societal approach when confronted with gender research. A direct application and adaptation of the societal approach can be seen in the work of Daune-Richard (1995 and 1998). She argues that the societal effect provides an alternative to the long overused biological/naturalistic approach for cross-national comparisons of women’s employment. She examines the relationship between high levels of female participation and the role of part-time work in integrating women into paid employment in France, Sweden and the UK. Whereas French women have tended to have a full-time pattern of employment, British and Swedish women are more likely to work part-time, albeit associated with very different employment conditions. Part-timers in Sweden work longer hours with preferential conditions to those in the UK. Daune-Richard (1998: 214) argues that a “societal effect” framework enables us to go beyond a universalist account of social trends in different societies, which ignores country and actor specificities within particular institutional arrangements. Additionally, it also goes beyond a culturalist approach which reduces differences to an ill-defined sets of residual cultural values and characteristics. Therefore, an institutionally informed, relativist approach can still shed a great deal of light on the sociology of women’s work.

She concludes that “the societal configurations which give shape and meaning to women’s employment are rooted as much in specific historical constructions of the relationship between the public and private spheres and of individuality and citizenship as in the relationship between men and women.” (Daune-Richard 1998: 227). Both Hirdman (1988) and Jenson (1991) have also pointed out that the extension of the concept of equality as part of citizenship rights to the private domain has been more extensive in Scandinavian societies than for example in France. In the tradition of company case studies used by the societal approach the work of Gregory (1987) O’Reilly (1994), and Gregory and O’Reilly (1996) illustrate some of the advantages and problems encountered in trying to apply this

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approach to examining differences in gender relations at work across nations and between sectors. These studies focused on women’s employment in the growing service sector of banking and grocery retailing, breaking away from the traditional focus on male manufacturing employment. These sectors also presented a particularly good place to examine issues around new forms of “atypical” employment that has been occurring in the past twenty years. Moves to develop flexibility are also related to the fact that these sectors were undergoing considerable restructuring and change in relation to the introduction of new technology and competitive challenges in their product markets which was leading to a restructuring of employment. Further, given the difference in the quality and complexity of the products being offered in the two sectors, we might expect that they would be developing very different flexible labour strategies in terms of integrating or decomposing job tasks. We might also have expected that the contrasting levels of qualifications required in these two sectors would indicate common sectoral rather than societal or national patterns of employment. The main findings of this research was that similar tasks were organized in different ways in the two countries, regardless of sectoral differences. In France jobs were organized to include a wider range of tasks than in the UK where these tasks were more often split between different types of employees. Labour flexibility in the banks was being achieved by the use of “polyvalence” and fixed-term contracts in France, whereas in the UK more use was made of part-timers and oncall staff than in France. This comparison of contrasting sectors indicated that there were significant differences in the use of part-time employees: in the UK there was a tendency to shorten contract hours, in both sectors; in France parttimers tended to work longer hours and this was combined with employees having higher qualifications and a broader skill and task mix in their jobs than was the case in the UK, for both sectors. Employers attitudes to part-timers in both sectors in France was more hostile than in the UK and amongst employees we found that there were higher levels of dissatisfaction than in the UK. The societal approach was useful in helping think about categorizing these factors into three main areas to explain employers’ labour choices in terms of the societal context of the education and training system, the role of industrial relations and the organization of business. The competitive strategies used by firms also affects their labour use. As Sorge and Maurice (1990: 149–150) have pointed out despite apparently working in similar markets, firms may be organized to cater to a particular niche in this market. We found that employers can decide to combine a range of tasks in the same job or introduce greater job specialization depending on the relationship between quality, complexity and the cost of providing a particular good or service (O’Reilly 1992; Quack et al. 1995). French banks had less complex products and a higher level of task integration; in Britain there was a wider range of products and more task differentiation. In

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retailing, competition in Britain has focused on quality while in France there has been a growing trend in discounting. However this research also highlighted some of the limitations of the societal effect when it came to accounting for the differential behaviour and attitudes found among female employees and their employers. One of the key arguments made in our work was that in order to understand how employers were able to make use of different forms of labour flexibility, be it part-time and temporary work, or polyvalence, depended very much on the characteristics of the available labour force. These characteristics were clearly affected by a broad range of institutions which included not only the education and training system but also the extent and provision of public welfare in the form of child care, and the regulation of precarious employment such as part-time work. To overcome some of these difficulties O’Reilly (1994) advocated a gendered societal approach which combined some of the insights gained from the LEST school with the gender order approach of Connell. A direct application of the gender order approach can be found in the work of Lane (1993) who compares differences in women’s employment in Britain, W. Germany and France. She argues that the advantage of using this approach is that Connell tries to transcend the categoricalism of structural accounts of gender relations that sweep all women into one category and all men into another and, instead, focuses on how social categories become constructed in the first place. …. Connell highlights the fact that structures are constituted by practice and that practice is constrained by the circumstances these structures represent. Because structures are historically constructed, they can also be reconstructed. (Lane 1995: 9)

Using this framework she shows how in all three countries women have increasingly taken up paid employment which is related to a growing demand from firms for female workers as well as a general trend for women to attain higher qualifications. Nevertheless, her analysis at the level of the state brings out striking differences in how women’s employment opportunities been affected by the laissez-faire or interventionist ideology of the state towards family and employment policy. She shows how these differences are historically embedded in each society. As well as bringing out common trends across the societies, she also indicates how these entrenched historical differences continue to exercise an influence, despite change within these systems. Pfau-Effinger (1998) takes the work of Connell further to develop the idea of “gender arrangements” by looking at the effect of cultural attitudes to childrearing and the domestic division of labour, as well as institutional structures in the differing use of part-time employment. She argues that the traditional breadwinner family model plays a central role affecting the desirability of part-time employment and the cultural construction of maternal employment in West Germany and the Netherlands, whereas in a more modern egalitarian model as

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found in Finland, part-time employment is negligible. The difference in these societies is very closely embedded in the process of industrialization and the type of family forms which emerged. Tilly and Scott’s historical work (1987) reinforce this argument. They show that the type of jobs employers offer is affected by the structure of the economy, the mode of production, the scale of organization and the technology employed. Historically British women were brought into paid employment via the factory system, compared to France where small-scale domestic production predominated and women were more likely to work continuously on a full-time basis. Mósesdóttir (1995) has also emphasized the ideological basis of welfare regimes underlying family models which support or hinder women’s participation in paid employment. In sum, what these studies show is that the societal approach can be applied to examining gender relations to allow us to identify national specificities in women’s employment that are materially rooted in institutional arrangements. It also gives us leverage in examining the differential organization of work within the firm and the sphere of economic production. However the societal approach was effectively blind to the socialization institutions related to the sphere of social reproduction which could identify differences in the availability of female labour and the ideology of gender roles. It was also less successful at picking up on the effect of constraints and opportunities coming from the sphere of labour regulation and welfare provision. These socialization institutions have differentially shaped the characteristics of the available labour force, particularly for women.

Conclusions and implications for future research The influence of the societal approach can be seen in the growing popularity of holistic approaches to comparative research. It has become increasingly common to discuss varieties of capitalism (Soskice 1997 and this volume), production regimes (Rubery 1994) or employment systems (Fagan and O’Reilly 1998). However the changing terms of the debate also reflect the limitations of the early formulation of the approach, that need to be improved upon. In particular the relationship between the sphere of social reproduction and economic production. Rubery (1988: 253) argues that to apply a societal perspective to women’s employment means that we need to understand the way in which the system of industrial, labour market and family organization interrelate and the role of the society’s political and social values in maintaining these relationships before we could expect to make sense of the differences between countries in the position of women.

In order to examine employers’ strategies and the comparative organization of work a wider perspective is required which not only takes account of business

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needs and developments, such as product market competition and new technology, but which also looks at the social and regulatory factors which affect the terms in which different labour arrangements can be used by employers in different countries. Rubery (1994: 340–1) further argues that the interdependency between the production, consumption and social reproduction system is crucial. It is not possible, for example, to look at the high share of women who work parttime in the UK without analyzing the full set of reinforcing factors that have led to this outcome: favourable social security systems, the dominance of large firms in the service sector which have developed sophisticated working-time planning systems, the lack of child care facilities and the establishment of standards of living based on a norm of a male breadwinner on long hours and a female parttime worker.

Furthermore, these national variations in the position of women are not simply of interest to those studying gender relations. Gender-blind studies miss the crucial point that the characteristics and organization of employment in the production system are influenced by the structure of the sphere of social reproduction. The argument in favour of including a broader range of socialization institutions in the societal approach is also relevant to studying men. For example, Sorge (1995: 104) cites the case of an Austrian working in W. Germany who finished work early in order to go home for the weekend. Although the manager interviewed claimed that the firm had fixed rather than variable hours, the exception for this worker was seen by management as a matter of common sense. Comparative research on women’s employment highlights that what is common sense in one country is not the same in another. For example in the absence of child care in the UK it may make sense for women to withdraw from work when they have young children, or take up short hour part-time jobs. In France it may not. Women are more likely to work full-time and more continuously. The main point is that the identity and availability of the worker is shaped by institutions outside the firm and these affect the way their work is organized within the firm. What is also clear is that these institutions vary between countries and there is little evidence that they are likely to converge. The case of the foreign Austrian worker also illustrates that we cannot assume firms have a homogenous, native male workforce. Even if a sector has a predominantly male workforce, it could be Algerian car workers at Renault, Polish or Turkish Gastarbeiter in VW, or Asian workers in the Nissen plant in the UK,216 the identity they bring with them into the workplace will be accommodated in different ways. Even within national societal models considerable differentiation may exist as Dale and Holdsworth (1998) clearly show in their comparison of 216. A Sikh student I once taught at London University told me about the experience of some of his relatives and other Asians working at a Japanese plant in Sunderland. The firm was planning to make redundancies. They took a group of Indian workers aside and reassured them that their “Asian” work attitudes were highly valued and shared by the firm, in contrast to the management’s perception of a “rather lazy” British workforce.

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working time patterns and continuity of employment between ethnic groups in the UK. Twenty years since its formulation the societal approach needs to be opened up to recognizing this workforce diversity within national employment regimes. At a conceptual level this could be done by bringing in a clearer acknowledgment of the links between social reproduction and regulation on the sphere of economic production. Rubery and Fagan (1995) have argued for the inclusion of a set of institutional structures which are pertinent components of a holistic and systemic framework for cross-national comparisons. These include the organization and industrial structure of the production system; labour market conditions and regulations; the training and education system; and dominant social attitudes and values, including those concerned with gender roles. One could add to this the terms in which citizenship rights are accorded (Daune-Richard 1998). The implications of this when studying a particular aspect of an employment system is to bear in mind is how these particular elements relate to a larger societal picture as indicated from the work cited earlier in this chapter. This chapter set out to examine whether the societal effect could take on the concept of gender. We have argued that the traditional gender-blind analysis of the societal effect needs to be reformulated to incorporate the relationship between the sphere of production, reproduction and regulation. Broadening the approach to include the sexual, as well as the international division of labour and its influence on the organization of work in firms is essential if it is going to be able to pick up the reality and dynamics of a more differentiated workforce. We would argue that it is time for a gendered societal approach, although some feminists and others may not agree.

Acknowledgments This chapter has benefited immensely from collaborative work with Dr. Colette Fagan, Manchester University, UK in discussing the differences in comparative approaches to gender relations.

Chapter 21 Societal comparison and social change of the family division of labour Marie-Agnès Barrère-Maurisson

Introduction Recent years have seen a considerable expansion, a burgeoning even of comparative analyses. There is a great deal to be learnt from these studies, but they are not without epistemological problems. Our objectives in this chapter are, first, to demonstrate the specific use we have made of societal analysis as developed and implemented by the LEST school (Maurice, Sellier, Silvestre) in order to examine, from an already clearly marked position, both sides of the relationship between work and the family, i.e. production and reproduction. Secondly, we will seek to establish what conditions are, in our view, required for such analysis. In the first instance this is a methodological problem, since it is necessary to construct a specific methodology for societal comparison of the forms of relationship between work and the family. We will then seek to establish the principles on which a methodology for societal comparison can and must be based, and how this methodology can be accommodated within a specific theoretical framework. Finally, we will examine what research opportunities are available and what projects are possible. This raises the question of the theoretical framework to be used (Schulteis 1994: 101). More particularly, since different societies are being compared with each other, it is essential, before discussing their possible divergence or convergence, to ascertain the theory of social change they are based on, since the question of a ‘general’ theory, in this case of social change, will inevitably come up. This approach will lead to what amounts to a ‘revisiting’, or re-examination of societal analysis. Ultimately, what we are going to investigate is the transition from a specific to a general theory by testing the validity of a paradigm, namely

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that of the various modes of societal regulation.217 The fruit of our labours may well be a more global, more dynamic framework that will provide the basis for an approach to research of more general heuristic value.

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Societal comparison of the forms of the family division of labour

1.1 The family division of labour:218 The problematics of comparison The work-family relationship: Different forms in time and in space The principles of the relationship between work and the family operate in both time and space. Examination of developments in France over the past century or more shows how change has taken place over time by revealing a succession of different periods (and phases within each period), each one dominated by a particular form of relationship to work and type of family. Periodisation of this kind reveals the time-lags between the process of adaptation in the two spheres (productive and reproductive) and the processes of transition from one model to another. The variation in space relates to two different entities. The first is social space, at all levels, from the particular (the individual and each social category) to the general (the sector and society as a whole), with the intermediate levels in between (groups, firms, organisations). Each level of social space (a social category, for example) has particular forms of relationship between work and the family. Finally, by combining the two dimensions of time and space, it becomes possible to observe differences in the forms taken by that relationship at the societal level (i.e. between different societies). In this way we have been able to compare two or more states (France and the United Kingdom, then Europe) by outlining the configurations that typify each country. This in turn reveals the internal coherence of each system, i.e. the way in which, in each system, the interaction between those elements relating to employment and those involving the family is regulated at the macro-social level. Epistemological, empirical and theoretical effects Let us begin by looking at the question of the boundaries between spheres and disciplines. To investigate the relationship between work and the family is to conceive of individuals, of actors, as functioning in both spheres at one and the same time, i.e. to regard them as part of both spheres at the same time. The fundamental aim here is to abandon the separate approaches that lead only to 217. J.D. Reynaud (1991) attempts to construct a sociology of societal regulation in a similar way, by showing how issues surrounding work can help to define a new form of action sociology. 218. La division familiale du travail (Barrère-Maurisson 1992).

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fragmentation in order to adopt an holistic view of the individual actor. In other words, the reconstruction of the categories of everyday reality (with the individual actor located in a family and in a job) leads to a reconstruction of epistemological categories. This is bringing us close to the debate being conducted between two schools, one emphasising the freedom of the actor and the other focusing on the influence of structures. Taking the notion of dynamic as a starting point, we have sought rather to show how, in each society, there is a high level of overall coherence but, at the same time, evolution, twists and turns and moves between categories. Such moves show how the actor (not only individuals, but also groups or even countries) can shift position, how his or her situation can change (by moving from one category to another, from one sector of the economy to another, or from one type of family to another). At the macrosocial level, this is the preliminary step in an approach to the process of social change. Empirically, there are two elements to be taken into account (BarrèreMaurisson 1992). Firstly, the assertion that ‘each job is allocated to an individual with specific family characteristics’ indicates not only that there is a correspondence between types of family and types of career but also that, just as employers manage their workforces, so the family is ‘managed’ in some way. This management of the family is in fact the manifestation of the conjunction of employers’ and employees’ strategies, which in the latter case constitute their aspirations in terms both of the labour market and of family life. Secondly, the assertion that ‘there cannot be any economic change without a concomitant change in the family, and vice versa’ reflects the correspondence between the dominant family form and the economic characteristics of any given society. This provides the basis for comparison of the various societal forms of the relationship between work and the family, with each form constituting a historical and local specification of the relationship. Thus there is a correspondence between, for example, an ‘historical’ state of the regulatory processes at work in the labour market and a particular configuration of family structures. On the theoretical level, two redefinitions and one conceptual development are to be noted. The definition of work as a combination of two spheres, the world of work and that of the family, makes it possible to incorporate the family into the notion of work and thus of production. Furthermore, it enables us to make a real comparison of the situation of women at work (and not only in the family) with that of men, who are now regarded as belonging to the sphere of the family and not just to the world of work. On the other hand, the definition of the family ‘as a space in which work is regulated’ allows us to respond to certain theoretical concerns, particularly those relating to the question of family forms and their relationship to economic life. Firstly, it makes it possible to include all forms of family, including modern,

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reconstituted families, irrespective of ties of kinship or marriage (single-parent families, unmarried people, etc.). As far as the notion of family division of labour itself is concerned, it is well suited to analysis of the dynamic aspect of the relationship between work and the family because it relates to a real social process, namely the process whereby work is distributed in accordance with the family situation. This process was particularly clear in the case of the agricultural family, in other words in situations where there is a blurring of the distinction between work and the family, where indeed work is allocated in accordance with status within the family. In this respect, we are indeed close to Durkheim’s notion of the division of labour. But we locate the process of allocating work within the family in both the domestic sphere and the world of work, and at all levels of the social sphere (individuals, organisations, sectors of the economy) and, moreover, in both time and space. 1.2 Methodology: The question of the national/international and micro/macro levels From a purely methodological perspective The micro method can be chosen in order to analyse the situation in a given society if the aim is to capture the behaviour patterns of individuals or of families, for example. However, there is nothing to prevent the use of a macro approach in order to shed light on the behaviour of different groups and how that behaviour is evolving in view of the role of particular institutions, for example, or in order to illuminate the structural and cultural context. Either approach can also be used at the national level; furthermore, they can be combined. At the international level, i.e. when the objective is international analysis or comparison, a global (i.e. macro) approach, focusing on structural elements, might be considered the best way of gaining insight into the differences between societies. However it is also possible to adopt a micro perspective in order to focus, for example, on the behaviour of individuals, families or even organisations (Iribarne 1989). The question is being discussed here from a strictly methodological point of view, as if the sole concern were to develop an investigative method and to establish the ‘level’ at which the investigation were to be conducted. However examination of the underlying theories puts the question in an altogether different light. From a theoretical point of view There is no reason why the investigations, i.e. the micro and macro methodologies, should not be combined, whether at the national or international level. But what is the theoretical framework that enables us to choose one or other of these approaches, or indeed to combine them? Ultimately, the fundamental question is not that of the choice between micro and macro methodologies. On the contrary,

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it is perhaps to discover how to effect the transition from the micro to the macro level, or vice versa, from the macro to the micro level. We have already indicated some possible routes which, within the framework of what we have called a ‘specific theory’ (Barrère-Maurisson 1992 and 1995), make it possible to shift from the micro to the macro, and vice versa. How is this possible, and why does it need to be done? The reason is that it is the same phenomenon, in this case the family division of labour, that is at work at all levels of the social sphere. This makes it possible to move from one level to another. In so doing, we are, in a way, tackling the question of the relationship between the particularity and the generality of the phenomena observed. The relations that help the social sphere to function involve actors operating at various levels. These various levels are linked to each other, making it possible to investigate the way in which an individual belonging to such and such a group is positioned within a firm or in the labour market. If the various levels are located in what we call the social sphere and the whole constitutes what we call the societal sphere, then the shift from the social to the societal arises out of the articulation of these various levels. There is in effect a move away from the different sets of principles underlying each social space towards an overall coherence. It is necessary to examine the way in which the various elements, whose animating principles may be contradictory but which nevertheless contribute to the overall coherence, are put together. Thus the objective is, as it were, to apprehend an outcome, one produced by sometimes contradictory impulses. Thus the societal form of the relationship between work and the family is an expression, at a general level, of what is produced when the various elements that make up the two spheres come together, although it must be stressed that they come together in a variety of way at the various intermediate levels. At any point in time, however, it is possible to move from one of these forms to another, from a general to a particular form, and vice versa.219 They are congruous with each other since they form part of the same overall coherence and contribute to the same mode of regulation. Thus at each level the general is integrated into the specific. Ultimately, it might be said that each individual reveals some aspect of social history, and just as social history is nurtured by individual life histories, so the general is ‘rich in specificity’ (Maurice, Sellier and Silvestre 1982: 384). It is in this way that the societal form of the relationship between work and the family retranscribes the specificities of the various modes that can be observed in the individual social spaces. In this sense, it contributes to the articulation of the micro and macro levels of analysis. 219. In describing their approach as the “societal effect”, in which the firm is taken as a basis for studying society, Maurice, Sellier, Silvestre (1979) explain that “this research strategy most certainly does not involve extrapolating from analysis of the firm to that of society (or vice versa). On the contrary, it opens up the prospect of integrating the “macro” and “micro” levels of sociological analysis”, (note 59, p.363).

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The analysis: From the social to the societal

Different units of reference, but the same principle In societal comparison, the primary aim is to analyse society as a whole and its overall coherence.220 Hence we have adopted here a comparative approach based on the variation in the societal forms of the family division of labour, which leads, ultimately, to a comparative approach to macro-social modes of regulation. This analysis is governed by two principles, derived from the conceptualisation of society as an all-inclusive system. The first is that the relationship between work and the family is regarded as an expression of that system and that the purpose of analysis is to illuminate the overall coherence of the system and its mode of regulation. The second is to highlight the singularity of each societal form as an historical and local specification of that relationship, i.e. as existing in a given society and at a given time. It is this that makes it possible to compare different systems. Societal form and overall mode of regulation The societal form of the relationship between work and the family is the manifestation of the articulation of the various social entities to each other; this is, as it were, the ‘horizontal’ component, as opposed to the ‘vertical’ articulation, which relates to the various levels. In this case, the focus of attention is, for example, the way in which policies relating to work and the family are linked to each other. Thus in any given society, employment and family policies as well as fiscal and social policies (housing, health, care of the elderly, etc.) help to produce the conditions in which a particular relationship to work and employment develops and certain modes of family life can flourish. Thus it is through the articulation of these various elements that a model tends to emerge at the level of society as a whole, giving concrete expression to the conjunction of a particular relationship to work and a specific form of family life. This is the ‘societal form of the relationship’. These interactions, and hence the overall coherence and mode of regulation arising out of them, are specific to each society since they are based on a particular social fabric and particular institutions. However this specificity, which is reflected in the societal form of the relationship, is also due to the fact that it relates to a given society and a given point in time. It is both a historical and a local specification. The elements of the comparison Our efforts are concentrated, therefore, on capturing the national characteristics of the phenomenon. Despite their specificity, those characteristics reveal the 220. Cf. the article “Système” in Boudon, Bourricaud (1982: 555).

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general nature of the relationship, i.e. the oneness of its underlying principle. For each country, a certain number of economic, social and institutional elements have to be taken into account in order to construct the societal comparison of the forms of family division of labour. The most important of these are: (1) the dominant type of economic sector (agriculture, manufacturing, market services, non-market or public services); (2) the dominant family type (patriarchal, conjugal, single-breadwinner, two-breadwinner); (3) the male and female mode of participation in paid work, and (4) the agency that takes main responsibility for household duties (extended or nuclear family, market or non-market service organisations). Thus it becomes possible to analyse the correlation between the dominant family forms and those of the relationship to work (paid and unpaid). Such analysis reveals the existence of four types of family division of labour that constitute, in any group of developed countries, four different modes of adjustment between the characteristics of the family and those of the economy (BarrèreMaurisson and Marchand 1990). In order to identify the processes of regulation at work in each country, it is necessary to analyse the role of the institutions and organisations that work to preserve the overall coherence of each national system. In concrete terms, therefore, what is being investigated here is the role played by, and the relationships between, the various societal actors, including families, firms, organisations, the market and the state. The purpose here is to identify the actor that, at the societal level, plays a pre-eminent role in linking the two spheres (paid and unpaid, private and public) and, in so doing, to reveal the process of regulation at work in each situation. This is the method already used to identify three main modes of regulation, in which the family, firms or the market play the predominant role; we have termed these modes the familial, market and political modes of regulation (Barrère-Maurisson 1995: 81, cf. Table 1). In France, for example, the familial mode of regulation prevailed in the period when the country was predominantly agricultural and the patriarchal family was the basic unit of production. The lack of boundaries between work and the family enabled the family to be a locus of both business and domestic work. The family was the agent of social regulation: as the basic social unit it reproduced a private order at the level of the wider society. And the structure of authority in the family reflected that in the wider society. The market mode of regulation encompasses two situations in which a liberal mode dominates: the industrial model, in which private enterprise prevails, and the tertiary or service-based model. The former model prevailed in France during the period of industrial paternalism, while the latter predominates today in a country like the United Kingdom. In the first case, the process of industrialisation was based on the conjugal family, in which the man was the principal breadwinner. And it was the firm, impelled by the paternalist doctrine, that managed the

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Table 1. Work — family and modes of societal regulation Variable economic sector work

Trend agriculture

industry

family

men industry conjugal family nuclear family no sharing firm

type of family patriarchal family domestic extended work family division of selfwork regulation regulatory family agent mode of familial regulation social order private order

market services women market services 1 main breadwinner family market services unequal sharing market

public services women public services 2 breadwinner family collective services equal sharing State

market

political

liberal order

public order

tertiarisation indivualisation break-up externalisation greater equality socialisation family → politics private → public

Source: M.A. Barrère-Maurisson (1995: 81) (amended version of the original table)

family, as it managed work. Later, as the service sector expanded, increasing numbers of women began to join the wage-earning class, often in order to supplement the family income. Thus emerged the family with two unequal breadwinners. In both these cases, regulation takes place through the market, which is where both the relationship to work and responsibility for the domestic sphere are regulated. The relationships between organisations in the labour market are governed by competition and, in the absence of any real family policy, childcare and domestic work are a private matter. Finally, the political mode of regulation develops in economies dominated by public services, such as in France or Sweden today. These are societies in which women are well integrated into the labour market and in which families have two breadwinners and domestic work is shared, when it is not entrusted to public agencies. The State is the key actor in the mode of social regulation, which is therefore public in character. The State is an active player in a number of different spheres, including private ones; it manages and codifies both work and the family through a whole range of measures that govern integration and exclusion. Institutions, particularly social ones, have a dominant role. This is the welfare state model. These modes of societal regulation enable us to locate societies relative to each other in their current ‘stylised’ state. In this respect, the three modes of regulation are ideal types. They are reductive, like any pure model; since reality is

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more complex, only intermediate or mixed forms actually exist, if only because situations are never fixed but always subject to change. Nevertheless, these three models have the merit of capturing change and highlighting the internal coherence or key concerns of the sets of principles driving the various modes of regulation. This makes societal comparison possible. Analysis of countries provides a starting point for comparing systems. In this way, attempts can be made not only to locate countries in relation to each other but also to examine the possible direction of change in the future. Change of regulatory mode and social change The existence of three major modes of regulation and their location on the basis of the relationship between work and the family make it possible to advance hypotheses as to the direction of future change. Setting to one side changes in the various sectors of the economy and the relationship to employment, our theoretical framework reveals changes affecting family structures and the domestic sphere. Furthermore it becomes possible to discern changes in the processes of societal regulation as the private (familial) mode gives way first to a liberal (firm- and market-based) mode and then to a public (State) mode. Even though these changes are not ineluctable in all countries, they reveal a link between the changes in regulatory processes and changes in the wider society.

2.

Modes of societal regulation and social change

Of the paradigm of societal regulation The objective now is to see in what respects the analyses derived from the theoretical framework of the ‘familial division of labour’ can acquire a wider significance. More particularly, we are going to examine the conditions under which the paradigm of societal regulation can be transposed or even extended to a wider sphere, in this case social change. Thus taking the results obtained from our analysis of the work-family relationship as a starting point, we are going to make this paradigm of societal regulation operate at a general level; in this sense we are following the principle applied by others to ‘social regulation’ (Reynaud 1989 and 1991: 20). We are going to start by examining the typologies in order to ascertain what they can contribute to the analysis of comparisons and of social change. This is why the question of the generality or, conversely, specificity of the phenomena observed is important. And in the light of the emergence, in a new context, of new modes of societal regulation, we will also have to specify some of the principles on which an approach to change and the conditions of change might be based.

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2.1 The contribution of typologies to the analysis of comparisons and social change A distinction needs to be made between two sorts of typologies, one of which we will call concrete and the other abstract.221 The first typology (e.g. BarrèreMaurisson and Marchand 1990: 21) is drawn up on the basis of statistics. To the extent that it constitutes an attempt to provide an exhaustive representation of the phenomenon, it expresses its generality. Nevertheless investigation at the micro level is also required in order to give the classification its full meaning, to impart qualitative richness to each situation and to arrange reality in relation to each group. In this respect, it constitutes one methodology in the comparison. And in any case, it reveals states at a given moment in time and not ‘stylised facts’ or models. We will call it: ‘international’ comparison. In contrast, the abstract typology, (e.g. Barrère-Maurisson 1995) reveals typical situations which do not necessarily have any systematic, real-world counterpart. It is the product, therefore, of a theoretical construct, based on the dominant forms of phenomena as revealed through analysis. The abstract typology is based on ‘dominant’ forms, each representing a different state of the same phenomenon and, in reality, a multiplicity of different forms always coexisting at any given point in time. As a result, there is no systematic correlation between any one country and a particular model; each country may contain elements of two different models. The abstract typology expresses the specificity (or specificities) of the phenomenon in question, i.e. its ‘discontinuity’ from one country to another (cf. Maurice 1989), the dominant forms of work, the family etc. being located in a

Table 2. Typologies and comparison of societies concrete typology

abstract typology

figurative - descriptive average values - variables statistical map - positions country generality understand methodology hybrid models a state at a given moment international comparison

constructed dominant forms, pre-eminent actor different states principles specificities explain theory pure models ideal types societal comparison

221. Table 2 lists the main characteristics of and differences between the two categories of typologies.

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specific historical and local context. The abstract typology makes it possible to take the analysis further (in order to explain rather than simply understand), since what is being revealed are the principles underlying the structures observed. This is a true societal comparison, since it relates to systems and not to countries as the concrete typology does. The typologies have to be incorporated into a theoretical framework. Moreover, it must be possible to link them to an explanatory model, a paradigm, which is the only means of rendering the principles at work intelligible. The typologies must account not only for the diversity of situations but also, and above all, for the way in which those situations illustrate the process of change. In other words, it is necessary to retain both the specific and the general. 2.2 The specificity and generality of phenomena Societal forms are historical and local specifications Societal comparison, i.e. between social systems, is based on the fact that each form of the family division of labour specifies the relation that reflects both the social context and history particular to each society. Thus each societal form constitutes ‘a configuration that is specific to a given country and period of history’ (Boyer 1986). In this sense, a comparative approach is nothing more than analysis of the process of spatial and temporal differentiation. Each country has its own social groups, categories and decision-making bodies, and therefore a particular set of social relations specific to each national space, and it also has its own history. It is the accumulated weight of that history that forges the current economic and social environment. Thus, for example, the shift away from agriculture took place at different rates and in different ways in France and in Great Britain, which may explain the different position occupied by women’s work in the two countries (Tilly and Scott 1978). This is why it is necessary to illuminate the process by which each society has developed historically. The combination of all these elements constitutes the singularity of each state. The specific forms of the relationship to work and of the family for which they serve as a vehicle reveal the way in which, over the course of a country’s history, the various levels and decision-making bodies in the social sphere are articulated. Thus the process of articulation, which is itself rooted in the process of constructing a national entity, explains the specificity of the modes of regulation in each society. The context It is necessary to highlight national specificities, despite the apparent uniqueness of the phenomenon — for some, the wage-employment relationship (rapport salarial) (Maurice, Sellier and Silvestre 1982: 10), for us, the family division of labour. Since relationships with the external environment are one of the factors

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that help to shape each of the social spaces, it is essential to define the context of which they are a part. In our view, therefore, the cultural aspect (i.e. the fact of being embedded in a specific context) explains the changing forms of phenomena observed in different places. It is only under these conditions that specificity can be said to contain an element of generality that goes beyond mere contingency (Maurice 1994). In other words, all systems are local, but their level of generality can be raised by systematic comparison (Friedberg 1993: 21). Conceptualising the supranational It is one thing to observe the development of a European entity, but quite another to conceptualise it. Nevertheless, the two must be conceived of in tandem (Kuhn 1972: 75), since only through a process of conceptualisation can the notion become a tool for the analysis of change. In earlier studies (Barrère-Maurisson 1995: 83) we advanced the hypothesis that it is through investigation of modes of regulation and their evolution that the various forms of social cohesion, described variously as communalist, associative and administrative, are brought to light. This in turn, we suggested, reflected specific relationships to nationality, namely union, association and delegation, and opened the way for a further phase in which a relationship to supranationality would emerge. Supranationality has to be accompanied by a process of conceptualisation, or reconstruction, since it represents a new relationship to the nation state. Quite apart from the economic, institutional and social effects it will have (and which are an indication of new social practices), the emergence of a supranational entity in Europe raises the question of how to redefine the social actors and social spaces, and the relationships between them (Maurice 1995) In this respect, the task we face is the sociological one of reconstructing categories of ‘knowledge’. In social analysis, where the point of reference is a particular society (cf. infra), the actors are marked out, the highest one in the hierarchy being the State; in societal analysis, on the other hand, society, considered as the nation, becomes an actor in its own right (Abélès 1996). Government policies in the various European countries, particularly in those in which the State plays a dominant role, have widened considerably in scope in recent years, with the State intervening in a very broad range of areas, including employment, taxation, the family, domestic services etc. At the same time, and partly in consequence, those policies have become more complex, while constituting the basic instruments for regulating the way in which societies operate. However, the regulations and directives issued by the European Commission, for example, have decisively changed the behaviour of the traditional actors at national level (Muller 1994). This has undoubtedly led to a reconstitution of the traditional actors in the public sphere (firms, trade unions, even the State, whose role has been redefined) and to the emergence of new groupings. Out of these new groupings have emerged actors operating at different levels, notably the meso level. These are the so-called

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intermediate actors, operating either at the local level or in different kinds of organisation, such as associations (Smith 1995). It is also within this framework that the resurgence of domestic or private arrangements in areas which previously were the responsibility of public or State agencies can be understood. In other words, what we have become accustomed to call the crisis of the welfare state is part of a wider crisis of the State itself, and can be seen as an indication of a move towards a general reconstitution that will bring into play new spaces and levels, new actors and new relations and create a new form of social cohesion and relationship to nationality. Is it also a harbinger of a new mode of regulation and of social change? 2.3 Modes of regulation and social change Are we witnessing, at least in some countries, particularly European, a transition from regulation by the State (i.e. national regulation) to a more complex mode of regulation, which might best be described as multipartite, in the sense that it involves not only the traditional actors involved in earlier modes of regulation (the family, the firm, trade unions, the market and the State) but also the new supranational actor? In what ways can the notion of modes of societal regulation help us to evaluate these changes? Modes and processes of regulation The general framework for interpreting change on the basis of modes of societal regulation must fulfil certain conditions. It should make it possible to uphold several principles: 1. The analytical framework must be dynamic, i.e. it can be used to investigate processes and strategies over time rather than in one particular period (a diachronic rather than a synchronic approach); 2. It allows for comparability (and the two essential sub-principles of generality and specificity), and for 3. multidimensionality (i.e. different levels of analysis — micro-meso-macro —, different actors, different referents). Such analysis in terms of regulatory processes has its roots in genetic structuralism (Piaget 1968); the régulation school of macro-economic theory is based on some of its principles (Boyer 1986). In this approach, the term régulation denotes the ways in which the economic system reproduces itself, and the mode of regulation denotes the series of historical (particularly institutional) procedures through which that reproduction is achieved. For our part, we have sought to highlight the modes of regulation that have dominated in particular historical periods, or in separate states, by investigating the matching of dominant family forms with a particular relationship to paid work.

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Transitions and change While a change of mode of regulation is an indication of social change, that change does not of course follow a uniform path. In other words, each society has its own characteristics and history and therefore develops in its own particular way. Thus, on the one hand, there are different timetables of change and, on the other, possible feedback effects (Piaget 1968: 88, speaks of imprecise retrospective and anticipatory effects similar to feedback). This is perhaps the key that opens up the way to an understanding of the changes recently undergone by certain Eastern European countries. These countries have experienced a thoroughgoing industrial restructuring and radical changes in the cultural and family spheres in conjunction with the collapse of centrally controlled regimes. However, the primacy often given to economic factors in the analysis of change has led to the belief that these countries are ‘retreating into the past’, as if they were rediscovering the market. On the contrary, the principal characteristic of these countries was not their economic system (dominated by manufacturing industry) but their mode of regulation, mediated as it was through the State. In this sense, they were close to the political mode of regulation already outlined above (dualbreadwinner families, public services, etc.). Thus these changes can be interpreted as an indication of a shift in the mode of regulation, and in particular of a transition from a State-based to a marketbased mode; this in turn accounts for the current characteristics of these countries, including the ‘retreat’ towards the conjugal family, etc. These characteristics also provide a clear illustration of one of the principles of the family division of labour, which is that there cannot be any economic change without a concomitant change in the family, and vice versa. In other words, it is the mode of regulation that characterises a society, not its economic or other structures, even though they, along with other elements, such as social change, help to shape it.

Societal comparison and modes of regulation So in what sense does this approach constitute a ‘revisiting’ of societal analysis, and why does it provide a basis for extending the scope of the analysis to encompass social change? A number of factors can be mentioned. Firstly, with regard to the early stages of the development of societal analysis, it has to be observed that in order to extend the scope of the analysis, it had to be opened up and applied to areas other than those in which it had its origins (the firm, manufacturing industry, the labour market, skills). Our contribution was to extend the analysis to the nonmarket service sector and public services (Barrère-Maurisson and Robert 1994). Furthermore, the notion of dynamic had to be introduced through the development of a diachronic rather than synchronic approach. This was the only way of

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gaining insight into mechanisms of development and transformation, particularly in the field of comparative development. It is here that the approaches of the regulationist economists can be put to good use, since they bring history and conflict into the equation. However, over and above the emphasis on institutions that is a particular characteristic of this school, account also had to be taken of the various levels. To that end, it was necessary to articulate actors and institutions, particularly since the national and supranational context was changing. Finally societal analysis had to be rendered all-inclusive, not only from a multi-disciplinary point of view but also through the incorporation of two further spheres: production and reproduction. And since our societies are going through a period of fundamental change and restructuring, these approaches have to be extended in order to make these new circumstances intelligible. Our aim, therefore, is to contribute to the extension of societal analysis by developing the paradigm of modes of regulation. In this way, societal analysis becomes more generally applicable and can be extended to encompass social change.

Chapter 22 Male and female patterns of labour force participation A comparison between France and Japan Hiroatsu Nohara

This article seeks to examine the differences in the way in which male and female patterns of labour force participation in France and Japan are articulated over the life cycle. To this end, our analysis will focus on the modes of societal regulation of gender relations, and in particular on a comparison of the forms of female labour force participation that seem to constitute a practicable indicator of the interdependencies between work, family and society. A great deal of research into female labour force participation has been carried out in France in recent years, particularly from a European comparative perspective (Benoit-Guilbot 1987: Hantrais and Letablier eds. 1995). This research has revealed the wide diversity of national situations, despite the existence of certain universal basic trends, such as the increase in female participation rates over time, the occupational distribution of women’s jobs, etc. This finding provides support for our basic hypothesis that female labour force participation is a “social construct” specific to each society and involving interaction between a multiplicity of different dimensions, including education, occupational structures, the family and the state (public policies). Thus female labour force participation, particularly viewed from the perspective of its interdependence with male patterns of work, is a useful tool for analysing the way in which a society conceives of social justice and organises the articulation between the economic and social spheres. Having thoroughly surveyed the existing literature, we will take these earlier studies as our starting point while at the same time extending the scope of our analysis to include Japan, a country comparable in economic terms to France but outside the European cultural and historical sphere. Unlike most of these earlier studies, however, we will not confine ourselves to comparison of patterns of female labour force participation but will take into account a more general analysis of the (social and occupational) forms of gender relations. Only by

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adopting such a perspective, it seems to us, can the way to a full understanding of the interrelated systems that produce the various forms of “societal coherence” be truly opened up. In other words, by constructing a few simple indicators and comparing them systematically, we are seeking to reveal the multiplicity of differences between the two countries in the way in which men and women are integrated into society and the labour market. However the differences revealed by a term-for-term comparison will have no significance beyond their mere factuality. They will not have any real meaning, or provide any real interpretative clues, unless they are relocated in the context and logic of the internally consistent national systems in which they find their legitimacy (Maurice, Sellier, Silvestre 1986). This concept of social phenomena leads us to adopt an interpretative framework that aims to link several levels of analysis simultaneously: individual/family strategy, firms’ HRM practices and public policy measures. The interaction between these three levels in each country produces the nationally dominant form of labour supply. Our working hypothesis is that “national models of female labour force participation” are not simply the result of choices based on cost-benefit analyses carried out by individual households as if they were firms operating in the capitalist economy (Becker 1964) or of an omnipotent national culture, but that they are constructed through the interaction between the strategic actions of actors and the notion of the family that crystallises around the public policies. Thus the settlements made at household level (family division of labour), which in no way exclude cost-benefit analyses, are concluded in a space that is highly structured not only by cultural traditions (family model) but also by state mechanisms which, forged over time, differ by definition from one country to another. In order to put our statements to the test, we will carry out a number of descriptive statistical analyses. Since we have adopted a methodology of the macro-statistical type, the quality of our analyses will be determined by the reliability of the various bodies of statistical data. Statistical data are available for both of the countries of interest to us here, in particular those gathered during the national employment surveys conducted among households.222 This article will deal, firstly, with the characteristic features of female labour force participation; in particular, part-time work will be used as the indicator best suited to revealing the societal nature of the settlements made in individual households. This analysis will make it possible to identify two forms of “family convention” established in France and Japan. In the second section, we will identify two forms of “wage-labour convention” by analysing men’s and women’s 222. In the case of France, the data are derived from the “employment survey” carried out annually by INSEE among 70,000 households and, in the case of Japan, from the “Employment Status Survey” carried out every 5 years among 42,000 households by the Prime Minister’s statistical office.

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career trajectories and the differentiation of their wage curves from phase to phase of the life cycle. By way of conclusion, we will return to the interdependent relationships between these two conventions in order to examine the societal approach.

1.

The construction of the labour supply over the life cycle in France and Japan

We will now examine the ways in which the male and female labour supply is constructed over the life cycle. This analysis will seek to find how the various life events exert a differential influence on the commitment of men and women to economic activity. Our main analytical tool is participation rate, an indicator often used in international comparisons. Our attention here is to focus on the hard core of the economically active population between the ages of 25 and 60. The comparison of male and female patterns of labour force participation reveals some significant differences. In general terms, the various differences between men and women are considerably less marked in France than in Japan, whether in terms of unemployment or the evolution of participation rates by age. As in all countries, of course, male participation rates are very close to the maximum (more than 90%) in both countries. Despite this similarity, however, levels of male unemployment differ considerably from one country to the other; Japanese men are very highly integrated into the productive system, while a segment (nearly 10%) of the French male population aged 25–60 seems to be in a permanently precarious position in the labour market. On the contrary, the position of women in the two countries diverges considerably. The evolution of participation rates among French women is relatively stable. Despite a high unemployment rate, three-quarters of them remain permanently in the labour market, a pattern of behaviour that is growing ever closer to the dominant male pattern. Participation rates for Japanese women, on the other hand, fluctuate considerably, falling to a low of 60% in the child-bearing years between the two peaks of 80% in the 20–24 age range and 78% among 40– 49 age group. These fluctuations reflect the cycle of withdrawal from and return to the labour market that is not unrelated to family events. From the point of view of societal analysis, the following points seem to be most significant: The pattern of female economic activity in Japan is characterised by the discontinuity dictated by family events, whereas the pattern of female economic activity in France is very close to — though not identical to — the male pattern, which in both Japan and France is virtually unaffected by domestic events. Thus family strategy in Japan, which is played out in a strictly private

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space, crystallises around a clearly defined distribution of tasks between men and women. In France, various forms of state intervention tend to support women’s labour market participation, while at the same time giving rise to complex strategic behaviour at household level. In the next two sections we shall subject these hypotheses to greater scrutiny by examining, firstly, female participation rates in the light of responsibility for dependent children and, secondly, the problem of part-time work. 1.1 Participation rates among women with children by mode of childcare It is already widely acknowledged that family circumstances, and in particular the number and age of children, have a greater or lesser influence on women’s economic activity. However these links between the family and female labour force participation are far from being the same in all countries; rather, they seem to be mediated by a whole range of institutional factors, which clearly reveal, moreover, the nature of the “family convention” within which the place of the family in society is defined (Table 1). In France, women’s labour force participation remains relatively constant, irrespective of their family responsibilities, until the arrival of the third child precipitates their withdrawal from the labour market. This event, which is closely connected with a long-established government policy that seeks to encourage a rising birth rate, marks a very definite break. On the other hand, the vast majority of French women with children remain economically active after having a second child, whatever the age of their youngest child. This pattern of behaviour, which varies, it is true, according to educational level, is not unconnected with the existence of institutional support mechanisms put in place in order to help women remain in the labour market. In particular, public day nurseries are now widely available, and free places in nursery schools are now offered to all children from

Table 1. Employment rates among married women (aged 15–49) by number and age of children (under 18 years of age)

No. of children

Age of youngest child

No children 1 child 2 children More than 3 children 0–2 years of age 3–5 years of age 6–17 years of age

France (%)

Japan (%)

71.4 69.7 65.7 35.7 51.0 59.6 66.0

66.3 53.3 60.7 62.3 28.2 47.3 69.1

Sources: 1992 Employment Survey, INSEE, France; 1992 Employment status survey, Management and Coordination Agency, Japan.

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age 3 onwards, with the result that 94% of children aged between 3 and 6 now attend nursery school (Daune-Richard 1993). In Japan, the number of children plays little part in determining participation rates among women with children, or rather exerts a paradoxical influence. Unlike in most European countries, an increase in the number of children seems to encourage women to work outside the home. In conjunction with the absence of any explicit family policy, this phenomenon would seem to reflect the “private economic cost” of a child, which is very high, especially since the contribution made by the community is inadequate, particularly in respect of education costs. Thus one of the main factors in women’s decisions to return to the labour market after a period of economic inactivity is a desire to obtain the resources needed to pay for children’s education. On the other hand, the age of the youngest child is a determining factor for the Japanese women in the cessation of economic activity, since only slightly more than one quarter of them with a very young child continue to work. The vast majority of Japanese women with a child under 3 years of age give up paid work. This systematic withdrawal from the labour market following the birth of the child is the cause of the fall in female participation rates in the 25–34 age group. However, they re-enter the labour market as the child grows up. According to an estimate by the Ministry of National Education, fewer than 10% of young children aged between 0 and 2 are cared for in day nurseries, which are scarce and, above all, very expensive. At age 3, 22.6% of children go to nursery school, most of which are private and expensive and close at 2.00 p.m., and 28.9% to municipal day nurseries, which are open until 5.00 p.m. but accessible only to children from households below a certain income threshold. At age 4, 56.4% go to nursery schools and 32.3% to day nurseries; at age 5, 63.8% go to nursery schools and 31.4% to day nurseries. Compulsory schooling starts at age 6. However, unlike in France, where children remain in school until at least 4.30 p.m., school finishes very early, at 1.20 p.m. until age 8 and at 3.00 p.m. for older children. In other words, mothers’ “social times” are subordinated to the schedules of the childcare infrastructure. These great differences in institutional childcare arrangements between the two countries undoubtedly reflect their respective histories and even different ethnological concepts of the child. In this sense, they represent a sort of social convention that crystallises in a very specific way in each society and strongly influences the way in which women construct their labour market participation. 1.2 Part-time work as a tool for analysing the relationship between family and labour market Again according to the same statistical sources, France has 2,390,000 part-time workers (12.8% of wage-earners), of whom 2,034,000 are women, whereas Japan has 5,967,000 part-timers (11.3% of wage-earners), of whom 5,639,000 are

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women. In both countries, therefore, part-time work is an overwhelmingly female phenomenon, with women accounting for 85.1% of part-timers in France and for 94.5% in Japan. Similarly, female part-timers account for 24.4% of all female wage-earners in France and for 27.5% in Japan. However, these general quantitative similarities conceal significant differences between the two countries in the actuality of part-time work. In France, where working mothers are supported by various publicly funded arrangements, part-time work seems to be neither a norm for women nor their preferred form of paid work. Once they have entered the labour market, French women tend to adopt the male pattern of labour market behaviour, irrespective of family events. However, the expansion of part-time work since the 1980s, in response to firms’ flexibility requirements, mainly concerns unskilled women seeking work against a background of high unemployment. For the most vulnerable segment of the female labour supply, part-time work has become one of the means of getting into the labour market and, once in, of staying in. In Japan, as in France, part-time work tends to be associated with a status “inferior” status to that of the “normal” full-time worker on a permanent contract. Nevertheless this “inferiority” operates according to different principles in the two countries. The rate of female part-timers in Japan, which is low up to the age of 29 (less than 5%), rises rapidly between the ages of 30 and 39 and stabilises after 40 at around 40%. This contrasts with the French situation, where age is not a differentiating factor in the choice of part-time employment (around 25% for every age group), and indicates that part-time work in Japan is the employment form favoured by married women returning to the labour market after a longer or shorter period of absence. Here part-time work is clearly associated with the status of working women as “wives and mothers”. This connection between the status of women in the family and their place in the labour market, which is undoubtedly of cultural origin, is formalised and even consolidated by a range of incentive mechanisms. In addition to the arrangements for the care of young children, which encourage women to work shorter hours, various elements of social and fiscal policy have the effect of pushing women into part-time work. The basis for the calculation of income tax liability is the household; a wife’s earnings are considered as a secondary income and are completely exempt from tax up to a limit of 1.03 million yen. This threshold, which is quite high in view of the fact that median gross household income per annum was 5 million yen in 1992, encourages wives to keep their earnings — i.e. their labour supply — within this limit. Under the terms of most collective agreements, couples receive a “housewife’s allowance”, which is a sort of family allowance paid by employers; it is worth on average between £60 and £100 per month, provided the wife’s income does not exceed one million yen.

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Wives and mothers whose annual earnings are lower than 1.3 million yen are exempted from social security contributions (health, retirement, unemployment etc.). Nevertheless, their status as “dependents” allows them to benefit from the social protection enjoyed by their husbands without making any specific contributions themselves, even though the cover ratio is slightly lower. Thus these social and fiscal arrangements buttress the Japanese model of the “housewife” whose labour market participation is subordinate to that of her spouse; in France, by way of contrast, women wishing to remain in continuous employment are actively supported in so doing. Paradoxically these Japanese public policies, originally intended to provide protection for families, have helped to reinforce the segregation of wives and mothers from other groups of employees in the labour market and to marginalize the part-time jobs that serve as their points of re-entry into the labour market. 1.3 Two types of family convention These analyses of childcare arrangements and part-time work provide a basis for defining the nature of the “family convention” that has become established in each society. In Japan, this “family convention” is characterised by the relative autonomy of the family as a reproductive sphere and therefore as a producer of domestic services. This characteristic reinforces the gender division of labour within the private space of the family; men have the responsibility of providing for their families financially, while women’s main tasks are domestic work. Women’s labour market activity can only be understood by reference to this concept of the family. The Japanese state underpins the autonomy of the family and the role of “housewives” in three ways. The first is the absence of state intervention in the family, which is symbolised not only by the low level of spending on social security benefits (14.0% of national income in Japan, compared with 33.7% in France in 1989) but also by the virtual absence of family allowances, which account for only 0.9% of social security benefits in Japan, compared with 8.2% in France. The second is the concept of the household, which is used by the state as a fiscal and social unit, which further reinforces the “dependent” status of wives. The third is the low level of state support for working mothers, which considerably reduces their chances of continuing their careers. In contrast to the relative withdrawal of the state from the family sphere in Japan, the “family convention” in France, which would be inconceivable without the intervention of the state, is based on active interaction between government policies, the family and women (Pitrou 1995). The family is still a quintessentially private space and still produces most domestic services, which gives women prime responsibility for the management of domestic tasks. At the same time, however, it is the object of a great deal of state intervention. Using social transfers

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as its instrument, the state has put in place policies intended to encourage or support certain patterns of behaviour. Thus, in exchange for this state interference in the private sphere, women receive assistance in their capacity as mothers and protection in their capacity as workers (Hantrais and Letablier 1995). Nevertheless these two forms of “family convention” are not immutable over time, despite the relative internal coherence of each one. They now face the general and specific tensions that affect every society. The Japanese “family convention”, which is suffering particularly from demographic problems such as a declining birth rate and an ageing population, will see a gradual increase in the role of the state in promoting the autonomy of women both as mothers and as workers; the generalisation of “parental leave” and the attempt, in the name of gender equality, to abolish the “dependent” status that gives women who stay at home favourable treatment in the tax and social security regimes are only the first signs of change. Likewise, the French “family convention” has to confront the weakening of the traditional family223 and the crisis in the financing of the welfare state. In this general context of change, it is the capacity of the “family space” to create new rules that will be placed under increasing pressure.

2.

Differences in male and female career trajectories

Having analysed the links between the labour supply and the family, we will now turn to another analysis of the structuring of the occupational space, which will be approached in terms of the labour market. Obviously, these two dimensions of the analysis constitute the two, inseparable sides of the same coin. We will see how the careers of male and female employees diverge (if at all) over time in accordance with the nature of the “wage-labour convention” at work. 2.1 The stabilisation of male and female employees in the internal labour market We will attempt to examine the role played by the internal labour market in the differentiation of male and female career trajectories by measuring the extent to which men and women are integrated into the firm. To this end, and using our samples of wage-earners as a basis, we will first devise an indicator of mobility by calculating the share of mobile employees in a given age cohort and then construct an indicator of integration based on the share of non-mobile employees in a given age cohort (Table 2). 223. For example, 8.4% (1.29 million out of 15.27 million women aged between 20 and 60) of French women are living in single-parent families, compared with only 1.5% (534,000 women aged between 20 and 60) of Japanese women (sources op. cit.).

34 % 43 % 50 % 33 % 22 % 17 % 26 %

% of employees integrated into ILM

25 % 33 % 60 % 53 % 45 % 36 % 40 %

% of employees integrated into ILM

66 % 36 % 35 % 35 % 31 % 22 % 16 %

% of mobile employees (row %)

75 % 43 % 27 % 21 % 17 % 15 % 10 %

% of mobile employees (row %) 0.87 1.60 1.62 1.58 1.60 1.27 1.50 100 % 100 % 100 % 100 % 100 % 100 % 100 %

79 % 97 % 98 % 98 % 98 % 98 % 97 %

3.40 3.72 3.46 3.52 4.44 3.61 6.09

100 % 100 % 100 % 100 % 100 % 100 % 100 %

Participation No. of male employees rate (in millions)

JAPANESE MEN

63 % 95 % 97 % 97 % 97 % 96 % 80 %

Participation No. of male employees rate (in millions)

FRENCH MEN

40 % 51 % 77 % 69 % 67 % 64 % 66 %

% of employees integrated into ILM (row%)

25 % 32 % 59 % 55 % 51 % 45 % 55 %

% of employees integrated into ILM (row%)

60 % 25 % 13 % 10 % 7% 6% 8%

% of mobile employees (row %)

75 % 44 % 26 % 19 % 15 % 13 % 8%

% of mobile employees (row %)

Note 1: Mobile employees (indicator of mobility) are those with less than 3 years’ seniority in the firm. Note 2: The definitions for integrated employees (indicator of integration in the firm) are as follows: 20–24 years — > more than 3 years’ seniority 45–49 years — > more than 20 years’ seniority 35–39 years — > more than 10 years’ seniority 25–29 years — > more than 5 years’ seniority 50–59 years — > more than 20 years’ seniority 40–44 years — > more than 15 years’ seniority 30–34 years — > more than 5 years’ seniority

Sources: op. cit.

100 % 100 % 100 % 100 % 100 % 100 % 100 %

80 % 69 % 60 % 71 % 78 % 77 % 67 %

20–24 25–29 30–34 35–39 40–44 45–49 50–59

3.35 2.34 1.69 2.02 2.98 2.46 3.56

Participation No. of female rate employees (in millions)

JAPANESE WOMEN

Age

Japan

100 % 100 % 100 % 100 % 100 % 100 % 100 %

54 % 81 % 78 % 78 % 77 % 76 % 56 %

20-24 25-29 30-34 35-39 40-44 45-49 50-59

0.82 1.34 1.27 1.28 1.29 1.00 1.07

Participation No. of female rate employees (in millions)

FRENCH WOMEN

Age

France

Table 2. Internal labour market (ilm) — external labour market MALE AND FEMALE PATTERNS OF LABOUR FORCE PARTICIPATION 381

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In France each firm organises its internal labour market by gradually integrating a significant proportion of its workforce. The vehicle for this integration is a fairly lengthy selection process that aims to match job profiles with the profiles of employees holding certain qualifications. What is interesting from the point of view of comparisons between men and women in the French case is the relative similarity of their career trajectories, even though women here, as elsewhere, are characterised by a lower degree of “employability” than men. They are in fact more likely to become unemployed and to be in low-skill jobs or low-productivity sectors, which has a serious impact on their pay levels. Despite this, women do not seem to be significantly more disadvantaged than men when it comes to advancement in internal labour markets. Combined with a range of institutional support mechanisms, it is the position that a significant proportion of women attain in internal labour markets that gives them a certain degree of continuity in their economic activity. In Japan, male and female career trajectories diverge over time. Highly integrated into the company from the outset, many men build their entire careers within the internal labour market. Although it is far from being realised in practice, the “lifetime employment” model, based on a working life spent within the same company from completion of education until compulsory retirement, is a normative influence not only in large firms but also in many smaller companies: 67% of male employees aged between 40 and 44 have more than 15 years’ seniority (compared with 51% in France), and 64% of male employees aged between 45 and 49 have more than 20 years’ seniority (compared with 45% in France). On the other hand, women’s careers develop in a very different way. Although they are hired by firms when they complete their education, young women are often confined to simple routine tasks that do not require much investment in training. Despite the introduction since 1986 of equal opportunities legislation, many women with the same qualifications as their male counterparts are still victims of occupational segregation, which severely reduces their promotion opportunities. Coupled with this demotivating work environment, women also encounter difficulties within the family and the wider society in pursuing their careers when they marry. Although marriage is no longer the principal cause of their withdrawal from the labour market, many women finish by leaving their jobs in the child-bearing years, around the age of 30. For most women, therefore, the ages between 30 and 34 constitute a real turning point, a period of transition from fulltime employment to the life of a married women dividing her time between family responsibilities and temporary or part-time work. Between the ages of 35 and 44 in particular, they are forced back to the margins of the external labour market, where they can be mobilised to move in and out of atypical jobs in accordance

MALE AND FEMALE PATTERNS OF LABOUR FORCE PARTICIPATION 383

with cyclical fluctuations in the economy. Only a minority of them retain their jobs in the internal labour market: 22% of Japanese women aged between 40 and 44 have more than 15 years’ seniority compared with 67% of Japanese men of the same age and 45% of French women in the same age group. 2.2 Disparities in men’s and women’s pay over their life cycles Since wages in France and Japan have already been the subject of a thorough comparative investigation in our earlier econometric studies (Nohara 1995), we will limit ourselves here to outlining some of the differences between men’s and women’s pay. Although the trend is downwards, pay discrimination against women is still a general phenomenon in all countries. However many empirical studies show that the disparity in pay between men and women differs quite considerably from one country to another. As it happens, it is much more marked in Japan than in France; median female pay in France is 77% of median male pay, compared with only 58% in Japan. In France men’s and women’s pay evolves with age in fairly similar ways. As workers pass through the various phases of the life cycle, their pay increases, although the extent of such increases varies with sex, formal qualifications and skills. This general similarity seems to be supported by two mechanisms of pay determination: the first is linked with seniority, i.e. the position blue collar workers acquire over time within the internal labour market; the second is formal educational level and age that determine pay in white collar category. Once acquired, they afford women a certain degree of protection against the risks of downgrading. In essence these two mechanisms each constitute one element in the French “wage-labour convention”. In fact, they reflect the use of referential rules derived from the job classification system that characterises the “occupational space” in France. In this sense, the notion of “wage equity” is based on the match between a particular job or function located within the classification system and skill, indicated through seniority, formal qualifications or professional experience. A convention of this kind, based on the principle of “equal pay for equal work”, seems better able to contain the disparity in pay between the two sexes without for all that succeeding in neutralising the negative effects of the various handicaps that French women accumulate, relative to men, over the course of their life cycle. In the case of Japan, wage curves for men and women are completely different. Women’s pay is positively correlated with seniority, whereas it remains insensitive to age; women’s pay stagnates or even declines after the peak achieved around the age of 30. Men’s pay, in contrast, increases steadily over the life cycle. In order to understand this Japanese situation, we have already analysed in earlier studies the

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process through which “wage equity” in Japan, symbolised by the concept of “lifetime pay”, has, nevertheless, crystallised around the criterion of age. This analysis revealed a Japanese form of “wage-labour convention” that might be described as the “social management of age”; it is regulated by two main mechanisms. The first mechanism concerns the way in which the construction of skill and recognition of its worth are organised. Institutions in Japan have never succeeded either in putting a value on occupational skills or in producing a system of certification for such skills. Of course the range of qualifications produced in the school and university hierarchy classifies young people on the basis of general educational level and hence of their “potential”. Companies then put them through a lengthy on-the-job learning process. The vast majority of employees convert their “potential” into actual productive capacity by gradually taking on the various tasks to be performed in the companies. This accumulation of hybrid and tacit knowledge — which is difficult to transfer because it is not socially objectified — underpins the construction of professionality and career. The increase in wage with age is the means whereby this learning process is validated. The second mechanism relates to the legitimacy of the concept of “lifetime wage”, which has been championed by the unions for half a century and reflects the incorporation into direct wages of certain consumption needs acknowledged as essential. Given the low level of social transfers, labour force reproduction costs tend to be borne more directly by individual employees or households. The “lifetime wage”, which goes hand in hand with “lifetime employment”, is intended to meet the increased consumption needs (due to increased family responsibilities) that workers have to satisfy as they pass through the various phases of the life cycle. This “wage-labour convention”, which is embedded in the “occupational space” in Japan, determines the organisation of the wage-earning class through the positive and negative interactions that occur between age and seniority or age and sex, which creates a form of internal market considerably at variance with that found in France. In particular, one of Japanese specificity is to considerably intensify wage discrimination against women, especially married women. Thus pay differentials between men and women, which are narrow at the outset, widen consistently after the age at which women marry and have children. As we have seen, these differentials arise mainly from women’s loss of occupational status following their withdrawal from the labour market for family reasons. Women return to work either on atypical contracts or in the most vulnerable productive sphere. Thus the principle of the social management of age sanctions the sexual distribution of status between male “heads of household”, who are the main providers of financial resources, and “housewives”, whose financial contribution is regarded

MALE AND FEMALE PATTERNS OF LABOUR FORCE PARTICIPATION 385

as a supplementary income. Thus the “lifetime wage” for men goes hand in hand with the “secondary income” earned by married women. In the Japanese occupational space, where a job is not a yardstick by which pay is determined (unlike in France), the difference in social and family statuses tends to reinforce wage inequalities.

3.

Discussion

The approach developed here, which draws its inspiration from societal analysis, led us from the outset to locate women in their societal dimension, i.e. in their interdependence with men. In this way, the notion of society acquires a significance that it does not have in those studies that isolate gender and treat it as a simple variable, thereby failing to place it in a social context. As a result, we have been able to go beyond the mere listing of numerous factual differences to outline the overall configuration of the relationships between men and women, which differs considerably from one country to another. Combined with the theoretical stance of “non-comparability”, the societal contextualisation of observed phenomena makes it possible to integrate the macro and micro levels, to avoid a “functionalist” equivalence between the two and to go beyond a “universalising” vision. Similarly, the inductive methodology adopted is shown to possess considerable analytical strength even in areas not previously investigated in any depth by the societal school. The societal regulation of gender relations has not explicitly formed part of its sphere of analysis, except in a few statistical studies of wage inequality comparing France and Germany and France and Japan (Nohara and Silvestre 1987). The initial empirical research that formed the basis for the societal school was conducted in the 1970s and, given the historical context of that decade, it is hardly surprising that the research focused on the largely male workforce in large manufacturing firms that symbolised the national economy at the time. However, these historical contingencies do not negate the significance of the principal analytical categories thus revealed. Once adjusted (enriched even) to take account of the diversity of subjects or levels selected for analysis, they can be deployed to investigate a wide range of social phenomena. Likewise, the notion of societal coherence, which has often been hastily criticised as “static”, ahistorical and tending merely to reproduce social phenomena, retains its relevance if it is understood as the form in which social relationships (including conflicts, contradictions and “negative” legitimacy) crystallise at a given point in time and as the sole point of departure from which a society can begin to devise its own future. The notion then turns out to be very closely related to the dynamic notion of “routine”, which marks out the “path- dependency” in the evolutionary

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literature, or that of the “irreversibility” of mental configurations which, after each period of learning, restricts the field of possible choices because of the very nature of the knowledge internalised by the actor. This comparison of the articulation of male and female economic activity in France and Japan has revealed a form of coherence unique to each society in the way in which production and social reproduction are regulated. However, such societal specificity does not exclude the existence of general mechanisms. On the contrary, each societal mode of regulating gender relations seems to be based on the interaction between the “occupational space” and the “family space”. The former is linked directly to the “qualificational space”, which was used in the Franco-German comparison and denotes the sphere in which the process of socialisation spreads out to encompass a set of rules and practices. The “family space”, on the other hand, introduced here for the first time, denotes the sphere in which the familial division of labour is defined through interactions not only between individuals but also between those individuals, the wider society and the state. The actors are defined by, or emerge out of the strong interdependent relationships that these two spaces produce and maintain. The emphasis placed on interdependence reflects the urgent need to understand the intertwinement of the principles regulating the world of work and that of the family, particularly for the light such an understanding can throw on the production of the female labour supply. In emphasising this interdependence between work and family, we are rejecting one of the basic principles of neo-classical economics, namely that the functions of supply and demand do not interfere with each other. Rejection of this principle opens up fertile terrain for interdisciplinary research on the boundaries between economics and sociology. In order to move from the general to the specific, we have incorporated an intermediate category of analysis. This is reflected in the use of the notion of “convention”, which denotes a form of agreement or, in other words, a societal capacity to keep under control the various rules, positions and interests that are both complementary and conflictive. The strength and legitimacy of such a “convention” are of course all the stronger the longer the period over which it can be sustained: a firmly implanted convention may even lead to the building-up of social “routine”. However, this does not prevent the “convention” from being slowly reconstituted as the arrangements put in place by the various actors evolve. Thus the “convention” is a tool that makes it possible to conceptualise the gradual movement through time between immobility and versatility. Similarly, it is also a tool for interpreting the sets of principles that regulate the various social spaces. The “occupational space” produces the “wage-labour convention”, which governs the construction of the substantive or referential rules that regulate the recognition of skill, remuneration, mobility, etc. The “family space” produces the “family convention”, which governs the practices, behaviour and perceptions

MALE AND FEMALE PATTERNS OF LABOUR FORCE PARTICIPATION 387

surrounding the prevailing model of the family. The actual configuration of gender relations in a given society, such as those described in France and Japan, can only be analysed through serious examination of the complex but very real interlocking relationship between the “wage-labour convention” and the “family convention”. To conclude, let us list some of the benefits that may accrue to societal analysis through the introduction of an intermediate analytical category, such as the notion of “convention”. Firstly, it will make it possible explicitly to incorporate into our analyses the state, which is omnipresent behind the various education and family policies etc., as one of the actors that contribute to the construction of the convention, all of whom of course have their limited rationality. Secondly, the “convention”, understood as a cognitive device, can easily be made to incorporate the system of representations and values. It will enrich the cognitive dimension of societal analysis in such a way that concepts such as “dependence”, “equity”, “trust”, “commitment” etc. can be more closely linked to analysis of the actor and of the interactions between actors. Finally each “space”, endowed with a different kind of “convention”, incorporates its own temporality. In this case, societal coherence, based on the composition of “spaces”, faces a permanent risk of disequilibrium caused by differences in temporality. Ultimately it is this perpetual process of rebalancing that gives societal coherence its dynamic.

Chapter 23 Conclusions Marc Maurice and Arndt Sorge

This volume has served a useful purpose by bringing together contributions that re-state, criticize, complement, challenge and develop societal analysis further. Together, we should hope that the contributions not only clarify the state of the approach and its critique but also provide guidelines on how to proceed in the future, in research and theory-building, with regard to current and emerging topics. Authors and editors have provided a diverse range of perspectives and readings of societal analysis. Together these will undoubtedly permit a better understanding of the approach, the proponents of which themselves have underlined that it is a complex phenomenon, very much open to elaboration and improvement. But this does not mean that societal analysis is an ‘open house’ without limits which could receive all manner of other strands of theorizing. To that extent this book reflects different reactions, sympathy and criticism, and it allowed proponents and critics alike to show possibilities of conceptual innovation and limits of the approach. Is is useful to start our response to the range of supporting, constructive, critical and innovating comments provided with a reminder. Common research interests have greatly shifted over time. At the beginning of societal analysis, scholars were debating ‘industrial society’ and modern forms of organization (matrix, divisional; management by objectives, by participation etc.), wages and other inequalities were an issue and the French government wanted to know why wage distribution across hierarchical levels was more unequal than in Germany. Then came the time, after the end of the 1970s, when new technology, microelectronics and telecommunications technologies, became the issue of the day. Later on new techniques of organizing came to the fore, such as quality circles, lean production, outsourcing, just-in-time production, business process re-engineering etc. On top of that, most recently, we have seen a culmination of an interest in multinational companies and a ‘globalization’ of economic, political and social relations. Societal analysis has been implicated in all these debates. It has tended to spread an antidote against what we perceived to be a poison in the debate, namely,

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the idea that something radically new was coming and transforming previously known arrangements completely. We have argued that any innovation — technical, economic, political or socio-organizational — is demonstrably diffused, selected, enacted, adapted and applied in ways which at the same time as changing or even transforming existing arrangements, are necessarily internalized into existing interdependencies in society. This makes the ‘effect’ of any change unpredictable if it is not analyzed within a societal frame. One might suggest: the extent to which an innovation arises in or penetrates into society is related to the extent of its adaptation and re-contextualization. Whilst this point of view may have seemed conservative to some critics or proponents of other approaches, it has been useful. We have been as obstinate as Durkheim in defining a fait social: things are socially pertinent and relevant only by social attribution itself. Likewise we have taken the position that the precise nature of things that enter societal life can only be established by societal analysis, i.e. by looking at how it becomes internalized into the interdependencies that constitute society. This has meant an equal distance against universalist — or universalizing — and culturalist theories alike. Both appear one-sided in their own respective way. The fundamental paradox of societal analysis is that it ‘compares the incomparable’, and it similarly engages in other paradoxes mentioned: the reciprocal constitution of actors and spaces, of ‘macro’ and ‘micro’ phenomena, and of spaces of society. It is the articulation within and intermediation between such dual concepts that is at the heart of the analysis. This also puts it at an equal distance against ‘holism’ — as if society were one indissectable whole — and methodological individualism. We will first show how this theoretical disposition has helped to counteract universalism. There is a striking difference between what is often claimed when a phenomenon is relatively novel and what emerges after it has become more widely spread in different societies. When it is relatively new, claims about its innovatory impetus are usually more ambitious and, after a time, evidence bears out how what initially appeared as a singular and novel phenomenon is subject to an increasing range of differential adaptation and implementation. Although such cycles have been abundantly present for a long time, people have often tended to forget them, and the same thing happens time and again as public interest is focused on the new hot issues of the day. The earliest instance of this typical cycle was presented by Lorenz, on the basis of historical material and comparison. Indeed the structuring of post-war technology, work organization and competence generation patterns did not simply arise from the continuation of traditions which were mainly national. Instead they came about through the selective diffusion, absorption and modification of practices which were in the past considered a sort of ‘best practice’ of the day. In the earlier societal analysis comparisons, there were for instance three chemical industry sites

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compared in France, Britain and Germany, which had already compared their own practices between them, noticing before us that the plants were as similar as could be in terms of products, technology and size. In addition, they even belonged to the same international companies and subsidiary consortia, thus already being part of an international family. The result of the comparison conducted by managers with a view to establishing best international work organization, training and staffing practice was that this did not exist. Accordingly the differences we found were certainly no less substantial than in the small-batch and mass-production factories (Maurice et al. 1980). In this respect, our earlier results had already taken dominance and globalization effects into account. We find such results corroborated more recently, in the chapters by Mueller, Lane and Smith and Elger in this book. These authors question the relative viability of societal analysis on the basis of specific cases, recent statements of managers and in view of evidence for ‘foreign’ methods being imposed on ‘domestic’ firms. There is a tendency therefore to neglect the cycle posited above. For instance, if German companies are more prone to ‘internationalize’ economic activities in a way which keeps ‘national’ practices at headquarters intact and avoids ‘contamination’ of corporate control by foreign practices, this may indeed be a tendency that helps to maintain specific societal interdependencies. However, this is not the only mode of maintaining them. Localization or provincialization of practices, strategies and top management selection is not the same as reproducing societal interdependencies. The difference is analogous to that between identity and autarchy of society. Even if all German industrial groups were to form trans-national groups with foreign partners, the question would still be open as to how such groups allocate functions to societies and allow local agents to develop their own practice. As we suggest, societal effects may even be amplified by intensification of the international division of labour in an industrial group. Such effects may certainly persist at levels below trans-national control, and trans-national control may even draw sharper distinctions between activities allocated to different subsidiaries. This would be a case of qualitative shifts in the way societal effects are articulated with global strategies. The conclusions of Smith and Elger appear to point in this direction. At least, the issue is open and it requires more and detailed studies. We hope to have other authors of the book on our side in reiterating that the interaction of globalization with established societal interdependencies is in need of study because it does lead to local developments which are potentially divergent and highly interesting. In our own contributions, we have taken care to stress societal paradoxy and dialectics as characteristics which help to analyze how qualitative societal change comes about. Such a notion of qualitative change would seem to advance beyond the point where readers felt safe to oppose societal characteristics and effects emanating from dominance (of owning international groups) or diffusion of ‘best

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practice’ through organizational decree. Our point is that the approach was not intended to stand in opposition to such effects. We would again say that it has to be seen as operating in an interdependent relation with such developments. Great Britain is a very good example. That it has turned into the favourite location of Japanese groups in Europe, and that its motor industry has almost wholly drifted into foreign possession, thus founding a particularly strong ‘dominance effect’, is far from unrelated to a societal effect. Although it is a ‘thought experiment’ deprived of scientific proof, the answer to the following question is probably hardly controversial: What would dominance and dominated best practice in Britain have been like, had it not been for the profound influence that the result of established interdependencies brought about, at the beginning of the 1980s. Would it have turned into a haven for Japanese manufacturers, without the relatively remarkable leeway for corporate individualism and unregulated industrial relations, the cheap but experienced labour after the collapse of domestic industries, and the abolition of customs borders in Europe? It is a strong case of internationalization tendencies interacting with societal characteristics, we would say, and Smith and Elger also make this point. Some critics would answer that what attracted the Japanese to Britain was certainly different from ‘traditional’ working, management and industrial relations practices in Britain. But it was never intended to posture societal analysis as upholding unchanging continuity of society. Our insistence on paradoxy and dialectics helps to show that societal continuity asserts itself in radical change, too. Once unions are weakened at the plant level where they previously were particularly strong, in a regime that is characteristically deprived of statutory or industry bargaining regulation, the already existing enterprise individualism can be developed even further to introduce new working methods by doing away with previous job territory and union demarcation. The continuity that societal analysis is concerned with is well brought out by Almond and Rubery’s chapter, which addresses governmental policies rather than industrial relations and work organization. This is precisely the continuity that we have in mind, which does assert itself even where political actors to all intents and purposes try to effect far-reaching change. We find it significant that these authors made their point without much theoretical soul-searching about the essence of societal analysis. To us, it shows that the core of the approach may come rather naturally to researchers, possibly without the need for an intricate exegesis of theoretical refinements. The example also shows, as would an analysis of strategies expounded ex ante by managers when one looks at strategies in practice, that we have to be careful not to confuse the rhetoric of announcements with factual occurrences. The sphere of public policy-making has of course not been addressed by societal analysis to anything like the extent devoted to the world of work. Whereas

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the results of public policies have been present in the form of training, education, industrial relations and other arrangements, the process of generating them has not been studied under a framework close to societal analysis. We are all the more happy, for this reason, about the contributions from Verdier and Hage. They show that there is more useful gound to be broken by extending societal analysis to policy studies and the political domain. Policy does matter for societal interdependencies, and it is a dimension which cross-cuts the differentiation of spaces (or organizing, competence generation, industrial structuring etc.) which has been used up till now. Public policies also appear characteristically interdependent with non-public actors, and such interdependencies are sometimes articulated in highly visible corporatistic institutions and other institutionalized forms of interest intermediation. It is clear what societal analysis has to gain from such an extension. What it can contribute is equally clear: expertise on ‘policy output’ and input alike, the social construction of actors that policies confront, and a keen interest in the interrelationships between policy-making and the construction of fields, in every space and laterally across spaces. However one of the contributions under Government and Public Services, by Musselin, is not that open to societal analysis. She doubts whether structures and processes observed in the comparison of higher education systems are related to parallel differences in the world of work, and she therefore argues that we can explain differences in higher education without having to fall back on societal differences. There is a range of phenomena within which the strategic analysis used by Musselin, of constructions of fields of action and actors, strategic situations and games played, is quite self-sufficient. But we would also suggest that societal linkages emerge from the work of Musselin, which point towards affinities between our Franco-German comparisons in industrial work and hers in universities. These remain to be researched and conceptualized. The challenge to deal with such phenomena, which at first sight can be explained perfectly by an actor-systems, strategies and games analysis, remains. Friedberg, a colleague of Musselin from the same institute, goes into the parallels between strategy and societal analyses more than into what separates them. Indeed, the actor-systems, or actor-spaces interaction, and the interest in an interactive relation across levels of aggregation, is something which the approaches have in common between them and with other interactionist or structurationist approaches. This balance is well brought out in the chapter written by Korsnes. ‘Situated creativity’ expresses the balance held by creativeness of actors and external opportunities and limitations, which by being reciprocally constituted deprive external settings of their constraining character at the same time as guiding creativeness of action along certain paths. By highlighting affinities between the approaches, Friedberg also diplomatically asks what societal analysis has to offer in addition. We hope to have given

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an answer here: it conceptualizes, researches and explains the inter-relationships across spaces and institutionally differentiated domains, which are also present in the construction of actors, situations, strategies and games that Friedberg and Musselin, among others, are concerned with. This is the way we see societal analysis responding to a number of challenges posited by other approaches. It remains firm on the interactionist conception of reciprocal micro-macro constitution, and firm on similarly interactionist interdependencies, and we are grateful to Korsnes for elaborating this. We also have to be firm on the importance of societal space, which is even more distinctive for the approach. Society is not an accidental amalgamation of situational factors but a coherent space, and this coherence includes contradiction or inversion. Apart from that, the approach remains relatively open to links with other approaches, rather than being exclusive. As we said in the introduction, there has been no attempt to canonize a classification of spaces or dimensions, in the traditional manner of theories that put great stock by fundamental and fixed classificatory schemes. We very much welcome reminders by authors in this volume that societal analysis has not sufficiently taken account of some dimensions and spaces which contribute to the larger set of interdependencies making up societal space. Some contributions have addressed ‘the economy’ as something which deserves better consideration, which their own work has already made clear. Soskice is exemplary in this regard. Indeed, the interdependencies between spaces of organizing, competence, industrial structuring, industrial relations and engineering and technology, which societal analysis has covered to some extent, and those of finance (savings, credits, stocks, banking, investment etc.) have been neglected and deserve more attention. To some extent, this happened through work on ‘business systems’ inspired by Richard Whitley (see for instance Whitley 1992) and a related group in the EMOT (European Management and Organization in Transition) programme of the European Science Foundation, or in the work done and edited by Hollingsworth, Streeck, Schmitter and others. The work on business systems has to some extent advanced towards classification of institutional domains and linkages of differences across domains more than we present in this volume. The reason for this relative neglect, despite the use that such authors have made of societal analysis comparisons should also become clear: We have doubts about the possibility of capturing inter-relationships in a way which is non-dialectical or non-paradoxical, particularly when we felt we had to address criticism of the pervasiveness and durability of descriptions and explanations of differences between societies we had put forward. This was not a challenge to which we could safely respond by more elaborate classification, which would have gone against the interactionist grain of the approach. One of the authors of the Hollingsworth et al. group present in this volume is Hage. His chapter shows how results of societal analyses are used by authors

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whose schemes do without paradoxy and yield more clear-cut types. It is a nice example of societal analysis being used, fruitfully, outside the interactionist context in which it has been emplaced. However through the use of the concept of path dependency Hage addresses the phenomenon of societal interdependencies in his own way, since the path dependencies mentioned come about through interaction between education systems and work systems and systems of managing and organizing. This is very close to the conceptualization of interdependencies between spaces of organizing and competence generation. Whilst Hage does not exclude an interactionist interpretation, he is more focused on long-running continuity of the national differences he analyzes, which of course makes the need for dialectical perspectives less exigent. Differences will presumably remain with regard to the ‘regulation’ school of economic theory and research, although Théret and Barrère-Maurisson point in this direction. To the extent that the range of interdependencies has to be widened, this is a welcome reminder. But the regulation literature emphasizes the coherence of regulatory arrangements to the detriment of ambiguity and ‘contradiction’, it bypasses the paradoxies resulting from interactionist approaches, and it therefore does not help us that much in addressing the problem of change and diversity, which is about explaining why regulatory regimes change, why such regimes are different, and how one relates to the other. Barrère-Maurisson has, in her chapter, indubitably pointed the finger to important interrelations between public socio-economic and family regimes. The question remains whether the classification presented, of simultaneously inter-temporal and cross-societal regimes and the linkages they encapsulate, stands up to closer examination. Another challenge incorporated into the composition of the book is of course gender, which received three chapters. As O’Reilly mentions, whilst the gendering of wage inequality and careers was studied in the very first comparative publications from LEST, it was subsequently not developed further except by Marry after she had been involved in the Franco-German comparison. The reason was that in the plants investigated, there simply were no women in production, maintenance, engineering, planning and management functions. O’Reilly is quite right to alert us to the problem and propose a link with gender studies. We would argue that Nohara, in his chapter, proves that this can very well be done by turning the techniques and concepts of societal analysis to good use in a new domain. This may be the way to go forward: careful comparison of interdependencies between the construction of actors and spaces, and between distinct spaces (of production and reproduction, etc.). The topic of gender is marked, as few other issues, by ongoing transformation of societal characteristics, notably by a qualitative transformation of gendered differences. We would not accept the verdict that societal analysis is weakened if, for instance, wage differences are smaller for women than for men in France,

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whereas for men it is the other way round. It is precisely this contrast which constitutes a salient societal characteristic. The ‘more favourable’ wage situation for women in France is interdependent with the construction of careers and vocational socialization: more school-bound vocational socialization in France decouples occupational status more from the masculine guild, craft and workshop ties that dominate vocational socialization in Germany. And the public system of education in France derives its importance, of course, from the power of a central and laicistic state that ‘turned peasants into Frenchmen’ — and French women — through a system of schools which was in the last century pitted against traditional forces in society. Whilst we sketch such interdependencies, we take care not to let them crystallize into neat national types. In the more popular discussion it has become customary to use terms such as ‘the German’ or ‘the Japanese model’. We have neither followed this tendency, nor did we intend to promote it. As we tried to show, social history is full of examples of institutional linkages being de-coupled and inverted. This is why we reiterate the paradoxy of interdependencies which very much comes out in an analysis over time. ‘Models’ may be good for lumping together concrete institutions at a given moment. But through neglecting the more precise structuring of spaces and the paradoxy inherent to social action, they are shallow. The proclivity to stylize models has in part been due to the drive to isolate socio-economic foundations of ‘success’ or performance. This has applied to typifications of both ‘the’ German and ‘the’ Japanese ‘models’. Now, there are a large number of economic and other criteria of success. We have not been averse to pointing out why and in which way particular societies may perform better in particular industries, activities or with regard to specific criteria of performance. Our knowledge in such matters is however still rudimentary, and this applies to any research on whichever conceptual foundation. Societal analysis certainly is not geared up to deriving generally applicable theory about relations between performance and specific performance-enhancing factors. But this is not what Soskice, as an economist, is aiming at, either. With him, we share an interest in interdependencies which ‘socialize’ and ‘societalize’ notions of performance. Performance is a highly relative notion, and it is measured with different yardsticks not only in different societies but varies between sectors and other settings. Needless to say, there is naturally international or inter-societal competition between firms subject to different performance criteria. Some scholars then deduce that where there is competition, there must be identical yardsticks to measure performance. Societal analysis sees this as a fallacy. It underrates the capacity of human action to engage in pragmatic competition, without a clear set of criteria, just as it underrates the importance of pragmatics for any kind of human action. Pragmatics is one of the foundations of societal analysis, which

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paradoxically sees human behaviour as over-determined and under-determined at the same time, to come back to a phrase which was used in the first FrancoGerman research report. The dialogue with Soskice shows in which way our approach can be used in conjunction with economics which, even if expressed in an institutionalist form, has to retain a utilitarian orientation and does not dismiss a notion of performance. Sellier makes a related point in his chapter, showing that the most recent theories of the firm and industrial economics have much to gain from societal analysis. The central point is that economic and utilitarian behaviour in specific forms does not come about through the insight into its utilitarian value alone, and maybe not even in the first instance. Even if substantial subjective transparency of the relation between courses of action and outcomes were to exist, even then this transparency would arise through tacit knowledge and a concertation of behaviour which is founded on socialization into specific roles and wider relational patterns. This social constitution of transparency would therefore not be the same as a general insight that can be detached from specific actors and ‘knowers’. In addition, there is the problem of elasticity of behaviour which, if it exists, will be based on knowledge in whichever form. Whilst societal analysis does not of course deny that individuals are ‘elastic’ in their behaviour, it does reiterate that the extent of elasticity and the form it takes requires precisely the sort of actor-and-spaces discussion that we have tried to engage in. We would also think that such an interactionist concept is helpful for resolving the habitual economist spurious oppositions between elasticity and inelasticity, markets and hierarchy, rational and habitual or impulsive behaviour, and others. For us, the question is not whether behaviour is one way or the other, but which opposite forms are allocated to which situations, how they are distinguished and articulated. Such a socio-economic impetus has been present in societal analysis from the beginning. Societal analysis requires extension, not only with regard to neglected spaces and domains, but also to other societies. This is a particularly difficult task, since the kind of comparison it demands is not schematically and quickly done. It needs a succession of ‘micro’ and ‘macro’ investigations that need to be meaningfully related to information on other societies. Since this involves ‘comparing the incomparable’, the task is easier if the incomparability is reduced by different societies at least sharing some measure of comparability, such as enterprises which are comparable from the point of view of size, products and techniques used, and through sharing common conventions of gathering and classifying data. Native speakers are also crucial for the design and implementation of any kind of study, preferably presence of foreign nationals in the conduct of an investigation. Such principles were obeyed in our Franco-German, British-German and FrancoJapanese comparisons, and these countries have roughly comparable methods of collecting data.

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The Japanese-French comparison was to some extent more cumbersome, but it was able to overcome such restrictions. Warner has now added a chapter on China which did not rest on elaborate matched-case comparisons, comparison of macro-statistics or surveys and a Euro-Chinese comparison of the institutional fabrics of actors and spaces. Not only the socio-economic and political ‘distance’ of China makes its comparison particularly burdensome, but also its sheer size and potential heterogeneity. Warner shows how even a difficult society such as this can be ‘entered’ with a view to working out societal interdependencies. One last set of comments we have to make concerns the methodological chapters of the book. Both Noorderhaven and Berthelot provide a methodological analysis of the approach, which is much more extensive than the reasoning we have ever applied ourselves, to clarifying its epistemological foundations. We are happy to admit that our approach is difficult and ambiguous to characterize in the straightforward terms of the logic of scientific inquiry and of hermeneutics. We would also admit that this inspection and diagnosis is informative and inspiring. It is useful to articulate the logic of our comparisons in a more rigorous way, notably their capacity to make generalizable inferences. It is clear that our own reasoning is confirmed by that of Berthelot: we have followed his conclusion that the capacity of societal analysis in the methodological form it has achieved to generalize depends on the use of paradoxy, dialectics and human agency concepts. Whilst this is more of an escape for Berthelot than a lasting solution, we would also point to the practical problems involved in implementing a methodology to achieve a scientifically more rigorous theorization as conceived by this author. Insofar as analysis of interdependencies is decisive for us, Noorderhaven was to a certain extent right to examine the hermeneutics in the approach, which Korsnes qualified as ‘relational approach and methodology’. This principle would imply that there no ‘boundaries’ between phenomena, like actors, structures, organizations, institutions, technologies or processes of learning. It would appear to drive to the successive discovery — without exclusion a priori — of the totality of dimensions within which they are held together and become meaningful. From this point of view, it would appear that our approach has an affinity with postmodernism, Derrida in particular. Performing a break with paradigmatic and axiomatic approaches and basing itself on dialectical reasoning and conceptualization of paradoxies, it appears to extend pragmatically such reasoning across the methodological repertory. And this may also appear to constitute paradoxy against classical canons of being scientific. This is not theory in the classical sense, articulated in a sophisticated form by Berthelot, since contingency and empiricism are overcome by ‘dialectical generalization’. On the other hand it will also be clear that we are not proposing that ‘anything goes’. On that score we are not post-modernists. Instead, our argument and the research it has been based on reiterates that paradoxies and functional and historical

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dialectics encapsulate societal interdependencies, which very subtly but tenaciously guide and undermine any attempt at arbitrary or voluntaristic enactment. We do not want to end these conclusions on a note which one-sidedly upholds the approach as it was and is, or accepts all the critique and suggestions ventured. Whereas we did point out that some of the criticism in our view rests on an imperfect appreciation of the approach, we also acknowledge the need for extension and we tried to respond to the need for better clarification on a number of points, notably change, including the reconstruction of societal space itself. We gladly admit that without the dialogue in this book, societal analysis would be less articulate in a coherent way. We are therefore very grateful to all the authors for responding so willingly and freely to the invitation to contribute. It has given all of us the chance to elevate discussion and controversy to a more sophisticated level. We have not suspended controversy to finish up in an ecumenical harmony. A German wit had claimed, in a poem that does not rhyme after translation into English, that after a theatrical performance, ‘the spectator is concerned, for the curtain is closed and all the questions remain open’. We hope that this book has at least helped to sharpen perception of the approach, of both its limitations and past and future potential. And we also hope that it will serve to continue the dialogue.

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Authors Marie-Agnès Barrère-Maurisson is Docteur d’Etat in Literature and the Social Sciences and a Research Fellow at the CNRS (Centre National de la Recherche Scientifique), working in the MATISSE research group. She also teaches at the University of Paris I. Her research focuses on the relationship between labour markets, labour management and the family. Jean-Michel Berthelot is Professor of Sociology at the University of Paris V (La Sorbonne). A former graduate of Ecole Normale Supérieure, in philosophy, he has subsequently worked on the sociology of education and the history and methodology of the social sciences. He is at present general secretary of the Association Internationale des Sociologues de Langue Française and of the Cahiers Internationaux de Sociologie. Philip Almond is currently a doctoral student at the European Work and Employment Research Centre, Manchester School of Management, UMIST. His doctorate compares the concepts, meanings and practice of human resource management in France and the UK. Tony Elger is Senior Lecturer in Sociology and Co-Director of the Centre for Comparative Labour Studies at the University of Warwick. His current research interests focus on the transnational dissemination of management strategies, worker and union responses to work reorganisation, and the remaking of national and regional industrial relations and production regimes Erhard Friedberg is a Senior Researcher at the Centre National de la Recherche Scientifique (CNRS) and Director of the Centre for the Sociology of Organizations (CSO), a CNRS laboratory, in Paris. He is also Director of the PhD programme in sociology, at the Institute of Political Science in Paris. His current interests are in the history of organizational thought, and in the study of new modes of rationalization and reform in both private and public organizations. Jerald Hage is Professor of Sociology and Director of the Center of Innovation at the University of Maryland, College Park, MD. He has widely published in the sociology of organization and other sub-fields of sociology. In the year of 1998–99 he was a Fellow at the Netherlands Institute for Advanced Studies and in 1994 a Centennial Professor at the London School of Economics. Olav Korsnes is Professor in Sociology at the Department of Sociology, University of Bergen, Norway. He has taught and done research in the sociology of work and education, industrial relations, general sociological theory and methodology, and was a visiting scholar at LSE, London and visiting researcher at LEST, Aix-en-Provence. Empirical research has mainly been focused on the emergence and form of work communities and the industrial space of qualifications in Norway, and on recent changes in vocational education and training policies.

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Christel Lane is Reader in Economic Sociology at the Faculty of Social and Political Sciences, University of Cambridge, and a Fellow of St. John’s College. She has written standard reference works on comparative management, organization and industrial relations in Europe. Her recent work has been concerned with the comparative study of the German and British business systems, globalization of German and British companies, and on trust in inter-firm relations. Edward Lorenz received a B.S. in Economics from MIT and a Ph.D. in Economics from the University of Cambridge. He is currently Professeur des Universités at the University of Technology of Compiègne, France. He also holds the post of Research Associate at the Centre for Business Research at the University of Cambridge. His research focuses on the theory of the firm and on the economics of technical innovation. Marc Maurice is an Honorary Research Director at LEST (CNRS) and a sociologist of work. A main author of the LEST (Laboratoire d’économie et de sociologie du travail) comparison of France and Germany in the 1970s, he subsequently worked in many international comparisons, first on CNC machine tools and production innovation and then on innovation in research and development, in France and Japan. He has been a Board member of Sociologie du Travail for many years and is currently a member of the international programme of the Japanese Institute of Labour (Tokyo). Frank Mueller received his DPhil from Oxford University, subsequent to undergraduate studies in his native Germany. He is a Senior Lecturer at Royal Holloway, University of London. His research interests include changes in work organisation and working practices, the Human Resource Management debate and the ‘global-local dilemma’ of ‘local’ work systems under ‘globalization’ of economic activities. He has published on these topics in a variety of international journals. Christine Musselin is a sociologist and Research Fellow at the Centre de Sociologie des Organisations (CNRS) in Paris. In 1998–99 she is visiting the Center for European Studies (Harvard University). Her research has focused on contemporary shifts in higher education systems, in a comparative perspective. She is presently interested in the ‘academic market place’ and in the study of university recruitment practices in different countries. Hiroatsu Nohara obtained a Ph.D. from the University of Aix-Marseille III, after undergraduate studies in his native Japan. He has since been a Research Fellow at LEST, Aix-en-Provence, in labour economics. He has been involved in successive comparisons between France and Japan, on innovation in the enterprise and more recently the gendering of employment systems. Niels Noorderhaven is Professor of International Management and also Director of IRIC (Institute for Research on Intercultural Cooperation) at Tilburg University, the Netherlands. His research interests include the impact of cultural differences on management and methodological aspects of comparative management. Jacqueline O’Reilly is Senior Research Fellow at the Wissenschaftszentrum Berlin für Sozialforschung (The Science Centre Berlin). She has previously held teaching and research positions in Britain and had also done post-graduate studies at the CNRS Observatoire Sociologique du Changement, in Paris. Her research interests lie in the areas of comparative employment research, women’s employment, organisational change and industrial relations. Currently, she is comparing the development of women’s employment in East and West Germany.

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Jill Rubery is Professor of Comparative Employment Systems and Director of the European Work and Employment Research Centre at the Manchester School of Management, UMIST. She has particular interests in the institutional organisation of labour markets and has published extensively on issues of labour market segmentation, societal systems and women’s employment. François Sellier is Emeritus Professor in Industrial Relations at the University of Paris X at Nanterre. An economist by training, he developed a cross-disciplinary interest in industrial relations. He was the founding director of LEST (CNRS), Aix-en-Provence, and a main author in the larger LEST comparison of France and Germany in the 1970s. Chris Smith is Reed Professor of Organization Studies at the School of Management, Royal Holloway, University of London. He is also co-organizer of the International Labour Process Conference. Research interests have included the comparative analysis of professional engineers and Japanese companies in Britain. His current work deals with labour turnover in new manufacturing sites in Britain and Mexico. . Arndt Sorge is Professor of Organization Structuring at the Faculty of Management and Organization, University of Groningen, The Netherlands. He has taught and researched at several universities and institutes in Germany, the Netherlands and Britain, and he has worked with scholars at LEST, Aix-en-Provence, since 1975. His interests have focused on work and management organization, training, human resources, industrial relations and technical change in international comparisons. He was editor-in-chief of Organization Studies until the autumn of 1999. David Soskice has been Director of the Research Unit for Economic Change and Employment at the Wissenschaftszentrum für Sozialforschung, Berlin (WZB). His research unit is doing interdisciplinary work on comparative models of advanced capitalism, the impact of education and training, financial and industrial relations systems on company human resource policies and product market innovation and competitiveness. He is also an Emeritus Fellow in Economics at University College, Oxford, and currently a part-time member of the Prime Minister’s Policy Unit at 10 Downing Street, London. Bruno Théret is Directeur de Recherche at the CNRS and Director of the Institut Interdisciplinaire de Recherche en Socioéconomie (IRIS), Université Paris Dauphine. He has written extensively on Public Finance, French historical development, and State theory. His present topics of research are welfare states and federalism in comparative perspective, money, and régulation theory. His empirical fields are Northern and Latin-American countries and the European Union. He is currently co-editor of L’Année de la Régulation. Eric Verdier had worked as a labour economist at CEREQ, the official French research institute for vocational education and training. He then moved to LEST, Aix-en-Provence. Over the years he has been involved in international comparisons of vocational education and training systems and policies, notably between France and Germany. He is currently the Director of LEST. Malcolm Warner is Professor and Fellow, Wolfson College, Cambridge, and teaches and researches at the Judge Institute of Management Studies, University of Cambridge. He has written extensively on East Asian management and has carried out empirical fieldwork in enterprises in China, Hong Kong and Japan. His special fields are Industrial Relations, Human Resource Management and Organizational Behaviour. He is Editor-in-Chief of the IEBM International Encyclopedia of Business and Management team, based in London.

John Benjamins Publishing Company publishes Advances in Organization Studies as a reformulated continuation of the De Gruyter Studies in Organization. 1. ZEYTINOGLU, I¸sik Urla (ed.): Developments in Changing Work Relationships in Industrialized Economies. 1999. 2. HENKE, Holger and Ian BOXILL (eds.): The End of the ‘Asian Model’? 2000. 3. QUACK, Sigrid, Glenn MORGAN and Richard WHITLEY (eds.): National Capitalisms, Global Competition, and Economic Performance. 2000. 4. MAURICE, Marc and Arndt SORGE (eds.): Embedding Organizations. Societal analysis of actors, organizations and socio-economic context. 2000. 5. CHAN, Andrew: Critically Constituting Organization. 2000. 6. BOS, René ten: Fashion and Utopia in Management Thinking. 2000. 7. RHODES, Carl: Writing Organization. (Re)presentation and control in narratives at work. 2001. 8. HOSKING, Dian Marie and Sheila McNAMEE (eds.): Organization Behavior. Social constructionist approach. n.y.p.