Reconsidering the Frames of Reference

Reconsidering the frames of reference: expanding Fox’s theory beyond unitarism,

pluralism and radicalism

Conor Cradden

University of Lausanne

[email protected]

Introduction

In this paper we argue that the much-observed and much-lamented decline of industrial relations

(IR) as a discipline could be reversed by a renewed focus on basic theoretical issues and in

particular by a renewed engagement with the work of Alan Fox. Between the 1950s and the

1970s, pluralist assumptions gradually assumed a theoretically foundational status within the

Anglo-American IR tradition. IR theory became the theory of pluralism. The discipline has since

come to be defined by the concomitant focus on the resolution of conflicting interests via the

institutions and processes of job regulation. It has recently become almost commonplace,

however, to argue that IR needs to widen its disciplinary ambitions if it is to have a future (see for

example Ackers 2002; Kaufman 2008; Piore & Safford 2006; Piore 2011). What has yet to be

established is where it might go, but what we will suggest here is that the first step in getting

there has to be backwards, theoretically ‘upstream’ from the adoption of a pluralist analysis.

Pluralist assumptions may well be appropriate in a wide range of contexts, but they need not and

should not be foundational. We cannot agree with Katz, Kochan and Colvin, who in the most

recent edition of their well-known textbook (Katz et al. 2007) state that “A critical assumption

underlying analysis of industrial relations is that there is an inherent conflict of interest between

employees and employers” (p.4).

Unlike the majority of his IR contemporaries, Alan Fox did not build his work on exclusively

pluralist theoretical foundations. While his frames of reference approach accommodates pluralist

forms of analysis it is not pre-committed to them, leaving room for unitarist and radical analyses

should the empirical circumstances warrant it. This absence of analytical sectarianism is perhaps

the main reason why Fox’s typology of frames of reference still structures much teaching not

only in industrial and employment relations but also in human resources management (see, for

example, recent HRM and employment relations textbooks: Wilton 2010; Rose 2008; Redman &

Wilkinson 2008). At the same time, however, Fox’s work could hardly be said to remain

influential as a framework for academic research, still less for public policy development and

organizational practice. Although it inspired a two-decades long debate about the possibilities of

and range of variation of different ‘styles’ of managing the employment relationship (for an

account see Legge 1995, chapter 2), there is little trace today of any significant research into the

behavioural implications of different ways of conceptualizing or thinking about employment,

whether among managers, employees or both at the same time.

In order to realise the full potential of Fox’s work as an overarching theory of IR we need to

address two problems. First of all, we must distinguish between two aspects of the structural

context of work that Fox conflates: the external market environment and the social organization

of work within the enterprise. Second, we need to recognize the existence of frames of reference

from the perspective of which social and economic incentives and constraints appear to be norm-

free, neutral or meaningless rather than legitimate or illegitimate. Once we have made these two

modifications, we can construct a theory of IR that proposes a typology of frames of reference

covering a greater and more nuanced range of conceptual possibilities than simply unitarism,

pluralism and radicalism and which permits us to generate testable propositions about behaviour

at work. In this way we can also see how industrial relations as a discipline can expand its focus

beyond its established concern with the institutions of job regulation by demonstrating that that

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particular analytic focus is appropriate only in the context of certain frames of reference and may

have little purchase in others.

Fundamental and contingent pluralism

Kaufman (2008) has drawn a distinction between what he calls the ‘original’ and ‘modern’

paradigms in industrial relations, the former encompassing an earlier tradition concerned with the

employment relationship in its broadest sense and the latter more narrowly focused on unions and

labour-management relations. Kaufman argues that the modern paradigm emerged as ‘a

pragmatic accommodation’ to the union-dominated reality of the 1950s and 1960s (2008, p.367).

While we agree that there are two paradigms or traditions in IR research and scholarship and that

the distinction between the two is more or less where Kaufman draws it – although Fox is an

exception, as we will see – we want to suggest that the most important difference between the

two paradigms is theoretical. The modern paradigm could be called fundamentally pluralist in the

sense that its assumptions about industrial groups and group interests are foundational, forming

the deepest level of social scientific explanation. These approaches date essentially from the

1950s, and in particular from the publication of Dunlop’s Industrial Relations Systems (1958).

The pluralism of the older ‘original’ paradigm, on the other hand, is contingent. The choice of

pluralism as a tool for analysis and policy prescription is made on the basis of empirical

observation interpreted in the light of overarching theoretical frameworks which are not in

themselves pre-committed to any particular view about how actors perceive their roles, identities

and interests. In a different place or time these theoretical frameworks might equally well indicate

that pluralism is not a useful way of thinking about organizational life.

Discussions of the need for IR to reinvent itself tend to assume that the discipline can be

characterized as fundamentally pluralist. Writing from a US perspective, Piore and Safford

(2006) suggest that ‘existing industrial relations theory’ proposes a model in which a fixed set of

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institutional participants (workers, employers and governments) interact in a systematic way on

the basis of predictable motivations in the context of technological, economic and political

constraints which, while relatively stable, may be subject to change over time. Variations in job

regulation regimes can be traced to variations in these constraints across industrial and national

contexts, and the evolution of regimes to autonomous changes in these different aspects of the

system environment. Piore and Safford argue that this framing of the issue, derived from

Dunlop’s systems approach (1958), has been overtaken by the blurring of the boundaries between

work and wider society and between workplace identities and other forms of self-identification.

The effect of this blurring has been to significantly increase the effect on behaviour of normative

factors like social recognition, symbolic value, ethics and morality, eroding the instrumentally

rational types of behaviour upon which the accuracy of the systems model depends.

Although researchers in the British institutionalist tradition are less inclined than their US

colleagues overtly to present their pluralist assumptions as theoretically fundamental, the self-

conscious pragmatism of the 1960s and 1970s seems to have solidified into a rarely-questioned

set of propositions that for most purposes are taken as foundational. This is reflected in Ackers’

(2002) analysis of the British tradition in which, like Piore and Safford, he argues that social and

cultural developments since the 1970s have undermined the foundations of IR. Ackers suggests

that while traditional IR “abstracts both substantive and procedural workplace ‘rule-making’ from

the wider economic and social dynamics of society” (2002, p.5), the frontier between the

systemic domain of work and industry and the more normatively-structured domain of family and

community is crumbling, rendering the analyses of traditional IR increasingly irrelevant and its

policy prescriptions increasingly ineffective. “IR by its continuing economistic emphasis on

internal workplace relations and its exclusion of explicit ethical considerations, has become

stranded by the shifting tide of social change and cut off from the major public policy debates

about the future of Western society” (2002, p.3).

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The criticisms that have been directed at fundamental pluralism seem to be derived from the loose

set of theoretical commitments that underpin the older tradition that gave rise to contingent

pluralism. Although it could hardly be said to be a single approach, this tradition does derive a

certain basic coherence from the idea that the immediate socio-cultural context of work and the

social and institutional aspects of workplace relations are at least as important in explaining

behaviour in organizations as individual, instrumentally-oriented responses to systems of

incentives and constraints like the market economy. John Commons, the founder of academic

industrial relations in the USA, was heavily influenced by the German historical school of

economics, which privileged the analysis of the empirical and historical context of economic

decision-making over abstract logical or mathematical modelling of behaviour (Kaufman 2004).

In the UK, at least up until the 1970s, the explanation of industrial behaviour was typically based

on detailed observation of workplace interactions in which the sociocultural context was also a

prime focus of interest (see, for example, Goldthorpe et al. 1968; Beynon 1973; Flanders 1964;

Batstone et al. 1979). More recently, Budd (2011) has identified 10 cultural meanings of work

that affect how work and workplace relationships are conceived and understood. Kaufman (2008)

has characterized industrial relations as ‘the labor economics of positive transaction cost’, arguing

that rather than the frictionless, zero-cost transactions of the Chicago-school world of competitive

price labour economics, real workplace interactions are characterized by uncertainty and bounded

rationality and cannot be resolved without reference to conventions, values and principles.

Fox’s theory of behaviour at work

Although Kaufman counts Fox among those working within the modern IR paradigm, we would

argue that, unlike that of most of his contemporaries, Fox’s pluralism was at root contingent

rather than fundamental. In his well-known background paper written for a UK government

commission of inquiry into industrial relations (Fox 1966) Fox argued that it is always possible to

conceive the employment relationship in either one of two ways. Either it is a relationship of

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social membership which exists to satisfy common interests (the unitary frame of reference), or it

is a negotiated, contractual relationship which exists to satisfy the interests of separate but

interdependent groups (the pluralist frame of reference). In his later work Beyond Contract

(1974a) he added a third conceptual possibility, the radical perspective, from which employment

appears as an entirely and incorrigibly illegitimate relationship characterized by domination and

existing solely to satisfy the interests of the dominant party.

For Fox, the core problematic of industrial relations is how to ensure that the relationships of

subordination that characterize organizations are legitimized by workers. Organizations demand

social relations in which there are those who command and those who comply; that certain

members of the organization “hold in abeyance [their] own critical faculties for choosing between

alternatives and use the formal criterion of the receipt of a command or signal as [their] basis for

choice” (Fox 1971p.35, citing Herbert Simon). Fox suggests that where subordination is

legitimized by workers we can talk of ‘authority relations’. Where it is not, and where compliance

is the result of a wish to pursue an incentive or avoid a sanction and nothing more we can talk

instead of ‘power relations’. He believed that, regardless of any specific goals or processes,

organizations can never operate as effectively as possible on the basis of mere power relations,

that is, where workers believe their subordination to management to be morally or ethically

ungrounded and comply only from economic necessity. Not only will workers’ individual

performance be affected (there is an obvious difference in quality of compliance between willing

cooperation and ‘forced obedience under duress’), but the likelihood of organized collective

resistance to management is also increased. In the eyes of the employee, subordination based only

on power relations legitimizes “whatever action he may be disposed to take to oppose

management power with counter-power if he can mobilize it” (Fox 1971, p.38).

In considering the conditions under which legitimization might be possible, Fox begins by

distinguishing between the individual and the immediate context of their work, arguing that the

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behaviour of and relationships between individuals at work are shaped “not only by their being

the sort of people they are, but also by the technology with which they work, the structure of

authority, communications and status within which they are located, the system of punishments,

rewards and other management controls to which they are subjected and various other aspects of

‘the structures of the situation’” (Fox 1966, para.60).

But the ‘structures of the situation’ cannot simply be taken as given; as being somehow objective

or susceptible to only one possible interpretation and hence giving rise to only one possible type

of response. As Fox put it, “bound up with the question of so-called ‘structural determinants of

behaviour’… is the question of how people perceive these structural features, since how they

perceive them decides how they behave in response” (1974b, p.77). People’s perceptions of the

structures of the situation – their evaluations of the normative legitimacy of their subordination –

depend in turn on their frames of reference.

Fox defines frames of reference as distillations “of the observer’s background, experience, values

and purposes” (1974b, p.77). More specifically, frames of reference arise on the basis of the

norms, conventions and values held to be valid in actors’ immediate social environments, whether

within the workplace or outside it; beliefs about the state of power relations in industry and the

balance of interests in the economy; general socio-cultural attitudes arising from normal

socialization processes; and lived experience in the workplace. Obviously then, unitarism,

pluralism and radicalism are not precisely the same for all who believe in them, but represent

three groups of frames of reference united by conceptualizations of work, industry and the

employment relationship that are similar in certain significant ways.

Not every possible frame of reference will permit the legitimization of any given mode of social

organization of work. From the perspective of certain frames of reference, subordination may be

interpreted as a manifestation of an unjust power structure in wider society. From others, it may

appear to be the rational consequence of a technical division of labour. From others still, it might

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be understood as an institutional structure that exists to help employees to comply with normative

obligations they have freely accepted. Each of these different frames of reference implies

different expectations about management behaviour and the social structure of the organization.

In any given case, these expectations may amount to a more or less accurate depiction of the real

situation. The militant trade unionist’s default interpretation of any and all management initiatives

may be that they are attempts to defraud workers of the fruits of their labour, regardless of how

they are intended and of any potential they contain for actually improving the lot of employees.

The manager who has worked successfully with union representatives over the length of her

career will at first sight see workers’ grievances as pointing to serious problems in need of

mutually acceptable solutions, perhaps realising only later that they are (to give one unlikely but

possible example) actually vexatious complaints prompted by militant union organizers from

outside the company.

It is only the actual experience of social and organizational interaction that sheds any light on

whether frames of reference are adequate. In the abstract they are neither true nor false.

Discussing the concept of ‘worldviews’, very close to the idea of frames of reference (Cradden

2004; 2005), Habermas argues that while worldviews themselves may not be susceptible to

judgements of truth or falsity, they “make possible utterances that admit of truth” (Habermas

1984, p.58). Statements inferred on the basis of worldviews may be more or less coherent with

the lived experience of actors, hence more or less ‘cognitively adequate’.

The expectations of the militant trade unionist and the union-friendly manager therefore may or

not be cognitively adequate, which is to say they may or may not be borne out in practice. If they

are not, then those frames of reference themselves are put into question. Frames of reference are

not fixed. Fox argues that there is an ongoing feedback process that connects frames of reference

and the social organization of work because people will always seek interpretations of their

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situation that allow them to resolve cognitive dissonance and make sense of their lived

experience.

There are two points that Fox is particularly keen to emphasise. The first is that workers’ settled

frames of reference will reflect the workplace as they experience it rather than as their employers

want or imagine it to be. No amount of communication or exhortation will convince workers that

managers are behaving reasonably if the day-to-day evidence suggests that management action is

exploitative, dishonest or lacking in good faith. If managers want workers to believe the

workplace is different, then it has to be different.

The second point is about the need for coherence between frames of reference within the

workplace and outside it. Even where managers have the best of intentions and where their

actions are, to use Flanders’ expression, ‘intelligent and far-sighted’ (1975, p.23), they still

cannot expect workers to legitimize their own subordination if the structures of the situation are

such that the only values that can support legitimization are in conflict with socio-culturally

dominant beliefs, interpretations and expectations about work. The normative rationalizations of

managerial rule that are possible are limited by what is accepted in wider society. This in turn

means that management action itself is limited by the values and ideas that characterize the place

and time in which an organization is operating. Commenting on the contemporary situation, Fox

wrote:

“Of all the values that can legitimize managerial rule, those which appear to be coming to

predominate in these [Western] societies are those which related to substantive aspirations

for a continuously rising material standard of life, and to procedural aspirations for

participative decision-making machinery through which substantive gains can be made and

protected” (Fox 1971, p.45).

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Fox and pluralism

Fox’s theoretical commitments do not in themselves point to an endorsement of any particular

means of understanding organizations or, as a consequence, to any particular framework of norms

for governing them. He repeatedly recognises that no frame of reference has any inherent

objective or normative primacy over the others and that even where an organization is run on the

basis on wholly unilateral, self-interested management action, workers may nevertheless accept

and legitimize this.

“To the extent that employees are totally committed to the same values as management,

they may accept that management must be the judge of priorities. In terms of procedural

aspirations, they may define for themselves a role of submission to managerial rule and

therefore to the substantive norms that management decrees” (1971, p.69).

On the other hand, having made this clear, Fox suggests with more than a hint of irony that in

practice such legitimization will be unusual:

“Such value consensus may not, however, exist. Employees may well dispute the value

placed by managers on minimizing labour costs, upon pleasing consumers or shareholders

in preference to themselves, upon seeking new technology to replace old skills, upon

developing new products or new markets whatever the threat to the expectations of lower

participants. It is for these reasons that the adherence of employees to management's norms

must be considered problematical” (1971, p.69).

Fox could not see how the organizational structures of the 1960s could be legitimized by workers.

Inherited from Britain’s industrial past, they were based on a frame of reference that assumed a

unity of interest at the level of a stratified class society in which the majority of individuals knew

and accepted their place. However the deference, poverty of aspiration and powerlessness that

characterized the working classes in that society had disappeared. The roles that employees were

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required to take on as a consequence of the existing modes of work organization, rules and

practices were therefore in conflict with social reality. The dominance of the capital owning

classes (and their agents in management), as well as their right to claim the fruits of collective

labour for themselves was being openly and consciously challenged by organized workers. Fox

saw little or no possibility that managers could simply persuade employees to accept their

authority without demur. Nevertheless, this was a judgement which was specific to the time and

place in which it was made. Fox would not have claimed that unitarism was ‘cognitively

inadequate’ in all possible circumstances.

Despite his empirically-based view that unitarist approaches were a dead end, he also ultimately

rejected pluralist approaches to IR because he did not believe that they provided an effective

alternative basis for the establishment of legitimizable forms of industrial organization. As a

consequence of an engagement with the arguments of the radical left (Fox 2004) he became

concerned about the values that were built into pluralist industrial relations and about the political

purposes that it might thereby serve. The problem was that from a normative perspective,

pluralist industrial relations only makes sense if the power of organised workers in practice is

such as to balance the inherent advantage of the employer within the employment relationship.

But even where there is a rough balance of industrial firepower around the negotiating table, the

situation is still not equal:

“Management and the employee interests do not jointly build their collaborative structure

from the ground floor up. Power and social conditioning cause the employee interests to

accept management’s shaping of the main structure long before they reach the negotiating

table” (Fox 1974a, p.286).

Fox came to believe that pluralist industrial relations actually makes it more difficult to get past

‘power and social conditioning’ because it ties employees and unions into accepting a

conventional interpretation of what it is and is not reasonable for managers to demand. The

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baseline for discussion is what each side brings to the table, but the inherent or absolute validity

of those demands is not part of that discussion. Rather, negotiation is about finding an empirically

acceptable balance of claims and counter-claims. While in principle there is no limit to what can

be put on the table, in practice pluralism’s own ethic of compromise prevents the major

underlying issues of inequality of power and status from getting onto the agenda.

The intellectual development that led to the writing of Beyond Contract and the identification of

the radical frame of reference left Fox in a dilemma. His analysis of power relations in industry

and society was strikingly similar to that of many contemporary Marxists, but he was wholly

unwilling to accept that revolutionary change was a viable or acceptable solution. As he put it, his

reading simply confirmed “a long-standing belief that the generality of Marxists offered no

convincing procedures of defence against abuses of power and no convincing institutions of

political accountability” (2004, p.259). At the same time, his misgivings were sufficiently serious

to call into question carrying on with “an active interest in the practical reform of industrial

relations” (2004, p.260). The result of his dilemma was that he effectively withdrew from

engagement with the industrial relations policy debate, devoting the rest of his career to teaching

and to the writing of his book on the social and cultural roots of the British IR system (Fox 1986).

Resolving Fox’s dilemma

The failure of Fox’s theoretical framework to point to any viable policy solutions is a

consequence of two inherent problems. First of all, Fox conflates what are arguably two separate

systems of structural incentives and constraints – the market and the internal social organization

of work – by assuming that managers have little choice in the design of the social organization of

work. The second problem is Fox’s failure to recognize that from the perspective of certain

frames of reference, the structures of the situation may be understood in such a way that their

normative validity or lack of validity makes little or no difference to outcomes. As we will see,

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addressing these two problems opens up a series of conceptual possibilities that are otherwise

difficult to grasp. This in turn suggests that the range of legitimizable organizational structures

and role behaviours, and as a consequence the range of viable IR policy options, might be wider

than Fox believed.

Distinguishing market and managerial relations

Fox assumed that managers have very little room for manoeuvre in designing work roles. He

believed that the major elements of the social organization of work were determined by the socio-

economic structures of industrial society, arguing that low-discretion work roles were a

consequence of a society “structurally geared… to a complex set of interdependent institutions,

expectations, and values shaped predominantly by the principles of low-trust economic

exchange” (Fox 1974a, p.355). For Fox, managers had little choice but to organize work on the

basis of low-discretion roles because trying to establish work and economic relations on a high-

discretion, high-trust basis would have had a catastrophic effect on living standards (1974a,

p.354).

To all intents and purposes, then, Fox treats management and the market as a single phenomenon.

He assumes that the social structure of rules, roles, incentives and constraints constructed by

managers is inseparable from and reflects the economic incentives and constraints of the market.

Nevertheless, the alternative view, that markets and management should be thought of as

separate, is widely held. Fox’s colleague Flanders, for example (1975, p.88), argues that there are

two aspects to the ‘structures of the situation’: an external market/exchange aspect (market

relations) and an internal organizational or institutional aspect (managerial relations). Habermas,

following Parsons, distinguishes clearly between the economic and organizational (‘bureaucratic-

administrative’) systems of society and between the money and power media which animate them

(Habermas 1984; 1987).

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The conceptual distinction between market and organizational systems is even implied at certain

points within Fox’s own work. The pluralist and radical frames of reference share the belief that

there are distinct and competing sets of values and interests at play within the enterprise.

However, whereas pluralism supposes that the employment relationship, together with the

institutional IR structures that support it, can be such as to compensate for the radically uneven

capacity of workers and employers to pursue their own legitimate economic interests, radicalism

supposes that only a fundamental restructuring of social relations can correct the imbalance. So

there are in fact two conceptual dimensions to the adoption of the radical and the pluralist frames

of reference. First of all, there is the question of whether the values of capitalism and the market

economy are or are not universal; whether or not capitalism involves the pursuit of the aims and

interests of the few rather than of the many. This is the dimension on which pluralism and

radicalism share a location. Second, there is the question of whether the institutional structures of

employment and IR do or do not permit a reasonable balance to be struck between the interests of

workers and those of employers/owners. On this dimension, radicalism and pluralism are placed

well apart.

Arguably, then, frames of reference ought to be characterized not as global evaluations of the

legitimacy of the structures of the situation, but, to use Flanders’ terminology, as reflecting the

interaction of views about the legitimacy of market relations and views about the legitimacy of

managerial relations.

Legitimate, illegitimate or meaningless?

The second problem with Fox’s work is to do with the nature of legitimacy. Whether or not the

normative legitimization of social structures matters for the social scientific explanation of

collective behaviour is a question that has preoccupied researchers for well over a century (Joas

& Knöbl 2009). Fox certainly does not seem to have considered the possibility that as well as

accepting or rejecting the normative legitimacy of structurally required role behaviour – and thus

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being either happy and engaged or angry and demotivated – workers and managers may in some

circumstances also see the social organization of work as being effectively non-normative; as

representing a kind of economic or organizational necessity comparable to the physical necessity

of the need to eat or shelter from bad weather.

Fox’s belief that the presence or absence of legitimization always makes a significant difference

to outcomes is in contrast to the arguments of sociologists such as Parsons, Habermas and

Luhmann, who believe that social systems – in the case of IR, the structures of the workplace

situation – are or can be effectively free of norms (for a discussion see Joas & Knöbl 2009). For

them there are certain contexts of action in which value judgements are of little or no

consequence in the final analysis because of the purely empirical motivation supplied by

sanctions and incentives. Habermas, for example, (1984; 1987) argues that behaviour in

economic and organizational contexts is ultimately determined by what he calls ‘steering

imperatives’ – the term ‘steering’ is taken from Parsons’ system theory – that reach ‘through and

beyond’ the action orientations of participants in social action, i.e. the things they want to do and

the ways of living and behaving they believe to be right. Actors recognise that their choices in

these action contexts are constrained by forces external to them, but are either unable to assess the

legitimacy of these forces, or are so constrained in their range of possible responses that their

normative evaluations cannot change their actions. In the end, they may become so habituated to

conformity with structural imperatives that they lose any consciousness that there may be

alternatives to that conformity.

We want to suggest that neither Fox nor systems theorists like Parsons and Luhmann are entirely

correct. Following Cradden (2005) we will argue that it is in fact possible to evaluate the

normative status of social systems as either positive (legitimizable), negative (not legitimizable)

or as effectively meaningless; as insusceptible in practice to evaluations of legitimacy. As we will

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see below, each of these evaluations has very different implications for actors’ subsequent

behaviour.

Updating the frames of reference approach

We have argued that there are two changes that need to be made to Fox’s frames of reference

approach. The first is that in considering the normative evaluation of the structures of the

situation that gives rise to judgements of legitimacy, we treat market relations (the economy) and

managerial relations (the organization) separately. Frames of reference are the result of a

combination of separate evaluations of the value-status of each of these social systems. The

second change is that we accept the possibility that actors can deem structures to be normatively

neutral or meaningless as well as either legitimate/positive or illegitimate/negative.

Positively-evaluated structures and systems

Understanding a system of structurally-required role behaviour as normatively positive implies

that conformity is a valid end in itself rather than simply a means for instrumentally-motivated

individuals to avoid sanctions or seek rewards. The behaviour mandated by the structures of the

situation embodies goals and values that are legitimate within the community of participants and

needs no further justification. Working ‘with the grain’ of the system in this way is the right thing

to do because there is no difference between means and ends; conformity is in the individual and

collective interest of participants not just because of its outcomes but because the social action

which emerges from that conformity is itself legitimizable. The legitimacy of a system implies in

turn that resisting the role behaviour it requires is a culpable failure. To challenge the authority of

an office-holder in an organization, for example, is to put oneself in opposition to the

organizational community as a whole; to oppose a community to which one owes a duty of

loyalty.

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The idea that the market economy can give politically and ethically legitimate direction to

decisions about action may seem difficult to sustain. On the other hand, however, the idea that a

single exchange or price can be fair – that it reflects a reasonable balance between the interests of

each party – is perfectly commonplace and comprehensible. If all exchanges were substantively

fair, then since the market is no more than an aggregation of historical information about

exchanges that have already taken place, market imperatives would represent a guide to socially

useful economic action. By complying with market imperatives, overall utility would be

increased in a manner that did not produce sustained unfair advantage for particular individuals or

groups.

It is also commonplace, of course, to recognise that a market price is not necessarily a fair price.

Not all participants are oriented towards fairness and even if they were, economic institutions are

imperfect and may introduce distortions and biases into the process of aggregating information.

However, the fact that we can recognise that an exchange is not fair even if it appears to comply

with market criteria means we are not tied to the dictates of an imperfect economic system.

According the market a positive value status involves accepting that exchange ought to be

substantively fair, and that since fair exchanges are always possible in principle, it is the duty of

market actors to interpret market imperatives through the lens of fairness, filtering out those

possibilities for action that do not meet the appropriate normative criteria. This is the principle

underpinning the fair trade movement, for example.

Deeming managerial relations to have a positive value status implies understanding the enterprise

as a community founded on substantive aims and values. The relationships that exist within

enterprises, for all that they would not exist in the absence of the corporate context, have an

intrinsic value. They are the analogue in the economic sphere of legitimate political institutions

and there is a presumption that decision-making procedures will conform to the same standards

not only of substantive but also of procedural legitimacy that apply in political contexts.

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Depending on how the market is conceived, this implies democratic-participative, consultative or

bargained decision-making.

Negatively-evaluated structures and systems

Systems can also be accorded a negative value status. From this perspective, the structural

requirement for particular kinds of role behaviour can only be coercive because the aims and

values built into that system are not those of the majority of participants. Actors will comply only

for the empirical reasons of material necessity or the avoidance of sanctions. Since role

requirements arise because of the actions of other actors – those who design and manage the

structures of the situation – giving a system a negative value status necessarily implies the

existence of a ‘them’ whose interests conflict with those of ‘us’, and who have the social power

to pursue those interests at the expense of other groups. There are two possible rational responses

to negatively-evaluated systems. First, participants may engage in conflict, whether via

‘cheating’, sabotage, public protest or some other means of direct or indirect opposition to ‘them’.

Second, participants may attempt to organize themselves so as to form a countervailing social

power with the aim of reaching a bargained accommodation with ‘them’, thereby defusing the

coercive aspects of the system.

That the market economy represents such a skewed interest structure is the foundational

supposition of what we have called ‘fundamentally pluralist’ approaches to industrial relations.

What Fox recognised was that resolving the problems to which this perception gives rise

demands a belief that the managerial relations system is or at least can in principle be positively

evaluated. What he feared was that this was not possible because in practice the ‘normative order’

of the enterprise and the institutions of IR privileged the aims and values of certain participants

over those of the others. He believed that the nature of the managerial relations system was such

that the level of trust and understanding between the different members of the enterprise required

to fulfil the promises of pluralist IR would not and could not develop.

18

So, negatively-evaluated managerial relations systems – those arising from what Fox called the

radical perspective – can exist only because of the material need of participants. From the

employee perspective, the sanction attached to non-compliance with management authority is

exclusion from the enterprise and hence from the material benefits of membership. From the

management perspective, failing to secure the compliance of employees with instructions will

mean the failure to achieve corporate objectives. Mutual dependence is thus the only reason the

employment relationship persists.

Meaningless structures and systems

Where social systems are deemed to be meaningless, compliance with required role behaviour is

simply a means to an end and is no more a capitulation to other participants than taking shelter

from the rain is a capitulation to the weather. The ‘ought’ of systemic action is entirely

hypothetical. The vendor of a commodity who is obliged to sell at a loss because the market has

moved to her disadvantage may not be happy, but her attitude is likely to be one of resignation

rather than resentment. She will not seek to blame another individual or group for her misfortune.

Similarly, actors in organizations will have a pragmatic attitude to working with the grain of the

system. At the political level, attitudes to systems are also likely to be pragmatic, stressing the

need to avoid the ‘politicization’ of economic, administrative or organizational action.

Where systems of managerial relations are interpreted as meaningless, they are understood as

having no legitimizable content beyond that borrowed from the goals they seek to realize. The

relationships that exist within these systems have no intrinsic value, but the absence of such value

is not experienced as a culpable failure. The managerial relations system is therefore a purely

pragmatic mode of action coordination that can be specified from a technical perspective. It is

assumed that the design of effective systems is a matter of the application of expert knowledge.

For this reason, democratic forms of organization are seen as inappropriate.

19

The 9 frames of reference

The interaction between the dimensions of market relations and the system of managerial

relations gives rise to the nine ideal-typical frames of reference that we want to propose, and

which are set out in the table below. Each of the frames of reference represents a possible way of

thinking about and understanding the enterprise and, by extension, the relationships that exist

within it.

Table 1 about here

Universalist unitarism

The first frame of reference represents the interaction of a positively-evaluated managerial

relations system with a positively-evaluated market economy. The ultimate market goals of

enterprise action, the intermediate plans and strategies of the enterprise and the social

relationships by which those plans are realized are all deemed to have a positive value status. We

call this way of thinking ‘universalist’ because the unitarist approach has been so consistently

identified with managerial interests that it needs to be qualified in order to make it clear that the

values and interests on which it is based are genuinely shared and are not simply those of

management ‘rubber-stamped’ by employees. Forms of organization designed in accordance with

this perspective are vanishingly rare, but certain types of cooperative enterprise or more radical

forms of social partnership may come close.

The universalist unitarist frame of reference is entirely focused on maintaining the legitimacy of

enterprise decision-making. In contemporary societies, the principal basis for the definition of

legitimate social action of any kind is the democratic process (Habermas 1984; 1987; 1996).

From this perspective, then, the role of management is one of political leadership and

representation. Managers will not seek whatever kind of legitimization is most easily available

for plans and strategies that are pre-determined on some supposedly technical basis, but will

20

ensure that the actions of the organization are and remain substantively legitimate by using

participative-democratic decision-making procedures in all areas and at all levels. Strategic and

operational choices are consciously viewed through a normative as much as a technical lens. As

we suggested above, with respect to market relations, the valid normative choice is that which

preserves or improves the fairness of the market as a whole. When viewed from the perspective

of universalist unitarism, to pretend that some kind of purely technical approach to management

could uncover this normative knowledge of the market system in such a way that it would be

beyond dispute will appear rather far-fetched.

Just as there are no technically-informed preconceptions about what appropriate market action

might involve, there is no permanent preconceived idea of what that ideal system of social

relations within the enterprise will look like. Instead, it will be the outcome of co-operation; of

ongoing processes of consensus formation in language. The role of formal regulation is therefore

extremely limited. Indeed one might even say that an effective system of managerial relations is

best achieved by dissolving hierarchical administrative systems in favour of flexible systems of

self-management. Thus, decisions about what the enterprise is to do can be focused on its

responses to economic imperatives, but the identification both of what these imperatives are and

the range of effective responses that are normatively acceptable will be a matter for all members

of the enterprise to agree on the basis of open discussion and dialogue.

High Commitment Unitarism

Where a positive evaluation of the employment system interacts with a market economy deemed

to be meaningless we find high commitment unitarism, very similar to ‘soft’ HRM. Within the

community that is the enterprise, effective market action is placed at the head of the social

ordering of cultural values. From this perspective, there is no distinction between a strategy for

market action that is technically effective and one that is politically and ethically legitimate. The

background consensus of the community that pre-defines legitimate coordinated action simply

21

refers to whatever aims and values make for effective action in the market. In practice, this

reference is to managerial expertise.

Managerial expertise can be equated with technical effectiveness because of the non-normative,

objectivist conception of the economy that is characteristic of the high commitment unitarist

frame of reference. The interpretation of what the market demands from the enterprise is

conceived as a technical process and management as a profession whose members aim only to

make the most scientifically effective interventions. Hence, the formal-legal specification of the

scope of managerial competence coincides with the managerial definition of market

effectiveness.

In this context, then, legitimate decision-making does not necessarily require what we would

recognize as democratic processes. Since the commitment of participants to the order of the

organization is essentially hypothetical, since the option of ‘exit’ always remains open, and since

managerial decisions are assumed to be effective, it can straightforwardly be assumed that

community members actively consent to the authority of managers, whatever this should involve.

They will have a positive normative commitment to managerial direction. In a word, the members

of the organisational community are flexible. The other side of this employee commitment,

however, is an open and liberal style of management. Rigid, one-way authority relationships, the

close pre-specification of employee effort, and surveillance-oriented supervision are all seen as

entirely inappropriate.

Integrative pluralism

The integrative pluralist frame of reference represents the lost ideal of reformist IR. From this

perspective, the economic system cannot be represented as politically neutral or fair in itself.

Rather, it embodies the values and interests of a limited group in society: the owners of capital

and their agents in management. However, just as the existence of competing interests in society

22

does not mean that legitimate forms of political organization are impossible, this does not mean

that the order of the enterprise cannot be valid. It simply means that validity must be the outcome

of bargained compromises.

Those who adopt the integrative pluralist frame of reference see the demands of the market,

articulated by employers or managers, as value-laden. They are pragmatic recommendations

drawn up with the aim of realizing the values and interests of capital. As such, they may well be

highly effective, but they will not be universally valid. As Flanders put it, ‘Managerial initiative,

even when it is intelligent and far-sighted, is taken to suit the aims of management and these do

not necessarily coincide with the aims of unions and the people they represent’ (1975, p.23). This

having been said, it remains the case that the aims and values of management are perfectly

legitimate in the sense of being socially permissible. Employers and the owners of capital are

entitled to proper representation of their interests in the goals of the enterprise just as workers are.

While it is not rational for workers to co-operate with employers (and vice versa) regardless of

what the other wants to do, it is certainly rational to seek to strike a bargain in which each side

gets as close to what it wants as is compatible with the same outcome for all; in other words, a

bargain which is fair.

Since the validity of any bargain is defined in relation to this substantive standard, it cannot be

said that a fair bargain is necessarily the best bargain possible for one side or the other on the

basis of the empirical balance of power. The demands of the market have to be respected because

they represent the legitimate interests of one group in society without the co-operation of which

other groups could not pursue their own interests. The respect due, however, is limited by the

need to accord equal respect to the interests of other groups. Once again, this kind of balance

cannot be specified in concrete terms, but it is possible to draw up procedural parameters for

negotiation that ensure that outcomes will be fair.

23

In the context of these kinds of bargaining procedure, the business plans and strategies of the

enterprise are the concern of management alone, just as the aims and values of workers are no

concern of management. What is of joint concern is the labour process, in which workers make

the contribution for which they are compensated, and in which employers receive the value of the

workers’ labour power. The legitimacy of managerial authority depends not on the validity of the

aims and values of management, but on the validity of the compromise between these and the

aims and values of employees. Where managerial instructions are coherent with a fair negotiated

order, then they will be recognized as valid.

Bureaucratic unitarism

From the perspective of the bureaucratic unitarist frame of reference – the classical Weberian

model of political-administrative bureaucracy – economic success is seen as a positive social

value, a benefit to society in general. However, the imperatives of the market are conceived

broadly, in such a way as to be more or less self-evident. Much more important are the technical

means by which these ends are achieved. This, rather than the interpretation of the market, is the

focus of the expertise of management. The aim is to design and operate the most efficient and

rational organization that is possible – to find something like Taylor’s ‘one best way’ of

organizing production. Corporate roles are conceived impersonally, in isolation from the

capacities of individuals.

At the same time, the positive value status of the market means that conformity with the

technical-bureaucratic requirements of organization is invested with an ethical value in such a

way that the enterprise appears as a carrier of the values of the society in which it operates. The

particular role of each employee may have no intrinsic value, but the fact of being a cog in the

machine is nonetheless laudable, something to be proud of. The enterprise, with its extensive

formal regulation and the culture that fixes an interpretation of these rules, is the focus of its

employees’ collective identity. The self-understanding of the enterprise is dominated by the

24

technical needs of the employment system: what is good for the enterprise is good for its

members.

The enterprise’s role as a carrier of social values also means that it is likely to be accorded a de

facto role in national economic governance. While enterprises may not feature in the legal

structure of democracy, consultation with business leaders in advance of policy-making is

entirely coherent with the idea that the economy is a legitimate social phenomenon.

Low commitment unitarism

Low commitment unitarism, similar to ‘hard’ HRM, represents the most anomic possible

conception of the enterprise: the meaningless corporate structure in pursuit of meaningless market

goals. From this perspective, management is an entirely technical process encompassing both the

interpretation of market imperatives and their translation into corporate action via organization

structures and modes of production. Participation in the enterprise is wholly strategic and hence

individuals will see duties as something to be minimized and rights as something to be

maximized. The enterprise is likely to be characterized by a tendency towards rigid authority

relationships, limitation of employee effort, and surveillance-oriented management.

Adversarial pluralism

The key characteristic of the adversarial pluralist frame of reference is the belief that to act

according to the demands of the economic system is to act in the interest of a certain social group

of which employees are not members. Nevertheless, since employees, whether individually or

collectively, can do nothing to change this situation, they are forced by their material

circumstances to work within that economic system. It is therefore rational for employees to co-

operate with employers – in the sense of working towards the fulfilment of market demands – if

this co-operation is rewarded in such a way that their material needs are met. Similarly,

employers can do little to change the politically or socially sanctioned ability of employees to

25

resist their authority, whether this resistance takes the form of organized collective action or more

individualized conflictual practices. Hence, it is rational for them to accept the power of workers

as long as it is possible to maintain an adequate return on the investment in labour. The definition

of adequacy here is tactical or pragmatic: an adequate reward or return on investment is the

largest which is practically (politically) possible given the balance of power between capital and

labour. Employees will carefully measure and restrict their input to ensure that the employer

gains nothing for which she has not paid. For their part, employers will carefully monitor the

behaviour of employees to ensure that their contribution is precisely as has been agreed.

On this view, both the demands of the economic system and the essentially non-economic

individual or collective goals of workers or trade unions are reflected in the negotiated order that

governs the enterprise. Perhaps most importantly, since market imperatives merely represent the

intentions of a particular group, the viability of enterprises need not be damaged by the apparent

non-optimality of enterprise action under these circumstances. All that is required is an

adjustment of capital’s expectations to the unavoidable social reality of worker power. Optimal

corporate performance – from all perspectives – depends on the adoption of the most technically

effective systems of collective bargaining.

Ethical Conflict

Where the market economic system is viewed positively, but managerial relations are seen as

illegitimate, then the enterprise will experience political-ethical or even moral conflict.

Participants will tend to blame the failure of the enterprise to construct a universally acceptable

order on the other participants. Employees may blame corporate failure on managers, for issuing

instructions that do not accurately capture the collective interest of the enterprise’s members.

Managers – who will consider that their instructions do properly reflect the collective interest –

may in turn blame employees for refusing to comply, thereby unreasonably putting their

individual interests ahead of those of the enterprise. In both cases, the blame has a moral

26

character. The blamed participants are seen to be selfishly preventing the enterprise from

effectively pursuing market goals, an activity of great value to society.

At the same time, the positive value status of the market may lead actors to remain within the

enterprise despite its internal problems. The members of the organization will not persist with

their conflictual relationships simply because of their individual material need, but because of the

needs of the local community or society in general. While negotiated forms of organization may

be seen as fundamentally forced, they will nonetheless be perceived as better than abandoning the

enterprise altogether.

Localized Conflict

The distinction between the ‘moral conflict’ and ‘localized conflict’ enterprise frames of

reference turns on the perception of the market. Whereas in the former case it is seen as social

phenomenon, in the latter it is thought of as something objective. For this reason, the failure of

participants in action to agree on modes of organization will not be considered an injury to

society, but a matter of bad faith, ignorance or incompetence on the part of existing members of

the enterprise. The conflict within the enterprise is therefore unrelated to any features of wider

society. Members will persist with their participation in action only for as long as their individual

situations mean that their interest in membership remains positive.

Class Conflict

Where the enterprise is conceived as the site of class conflict, participants’ actions will be

designed to pursue the partial values and interests of communities beyond the enterprise. From

the perspective of this frame of reference, the enterprise is permanently and irrevocably divided

into an ‘us’ and a ‘them’. Division within the enterprise reflects the conflicting economic interests

of capital and labour in wider society. An agreed definition of effective organization is simply

impossible, as it makes no sense to argue that interests can be aligned even temporarily.

27

Depending on whether one adopts an employee or managerial perspective, either the enterprise

exploits the material need of the workers, or the workers exploit the initiative and organization of

the enterprise. Each side coerces the other. The organizations of each side – employers’

associations and trade unions – take on the aspect of conspiracies plotting to prevent the other

from receiving its proper entitlements. Maintaining the enterprise in a minimally viable functional

state is the best that can be hoped for.

Conclusions

On the basis of Fox’s three frames of reference, no useful distinction can be drawn between

adversarial and more co-operative forms of pluralism, nor between ‘hard’ and ‘soft’ unitarism.

Social partnership, particularly in its more radically democratic forms, and cooperative enterprise

are more or less impossible to classify and seem difficult to defend as policy aspirations. Neither

does Fox’s approach give us much purchase on the extraordinary global decline in unionisation

and collective bargaining coverage over the last thirty years, nor the relative passivity with which

employees have accepted the massive and unprecedented shift in the balance of social and

economic power towards capital and away from labour. To this extent, a greater focus on his

particular version of institutionalist IR is unlikely to change the fortunes of IR as a discipline.

On the other hand, it is obvious to this author that Fox was entirely correct to argue that the only

realistic way to understand industrial behaviour and IR policy-making is to start from actors’

cognitive and normative grasp of the social and economic structures within which they live and

work. Similarly, Fox’s emphasis on the need for coherence between the different aspects of the

structures of the situation and between those structures and the perspectives of the managers and

workers whose behaviour they direct and constrain is as pertinent today as it was in the 1970s.

We have argued that Fox’s approach remains considerably less useful than it might be because he

failed to appreciate not only that actors grasp market and managerial relations separately, but also

28

that each of these sets of structures can be viewed as normatively neutral or meaningless as well

as value-laden (whether in a positive or negative sense). Addressing these problems shows that a

wider and more nuanced set of frames of references may exist than was previously thought. This

updated frames of reference approach, sketched only very briefly here, gives rise to a number of

testable hypotheses and has the potential to shed some light on a number of intractable IR

problems. Just to give one example, we might suggest that in the context of standard, hierarchical

forms of management and belief in the autonomy of markets there will be a tendency for the

social organization of work to become less normatively demanding because the principal

procedural foundation for the production and reproduction of legitimate norms and values in

contemporary society – democracy – does not exist within enterprises. To put it another way, we

could say that there is a kind of ‘gravitational pull’ towards the centre of our table of frames of

reference, low-commitment unitarism. Recognizing that a great deal of resources in terms of

communication and the symbolic construction of community are required to resist this pull could

in turn help to explain both why high-commitment unitarist approaches are chosen relatively

rarely by managers (Altman 2002) and why the high levels of unionisation and bargaining

coverage associated with both integrative and adversarial pluralism are rarely found in the

absence of strongly and publicly pro-pluralist government policy (Howell 2007).

These proposals only scratch the surface of what appears to be possible with this neo-Foxian

approach and it appears to us that it is, if not the answer to Piore’s call for IR to be refounded on

the basis of broader conceptual apparatus (2011), it is at least an answer, and one well worth

further discussion.

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Table 1: The 9 Frames of Reference

Market economy

Managerial relations system

Positive Meaningless Negative

Positive Universalist Unitarism Bureaucratic Unitarism Ethical Conflict

Meaningless High Commitment Unitarism

Low Commitment Unitarism

Localized Conflict

Negative Integrative Pluralism Adversarial Pluralism Class Conflict

32