,
Chapter 6
The management question again,
1947–51
A central part of Labour's approach to the productivity issue was an almost entirely new concern with management. As shown in the previous chapters, during the later years of the war and after there was a widespread belief that British management was inefficient and that something must be done to remedy this. Prominent in the attempts at reform were leading Labour figures such as Dalton and Cripps. These Ministers were central to the Attlee Government's decision to create the British Institute of Management, and this is highly significant as a symbol of Labour's new relationship with management.
But there were other important features of that relationship. Not all government activity on management was channelled through the BIM. In the late 1940s there were a range of other institutional expressions of concern, such as the Personnel Management Advisory Service and the Urwick Committee on Management Education. A desire for reform was also expressed in the context of the newly nationalised industries which posed almost unprecedented management problems. Outside government, the unions, too, were called upon to play a part in management improvement But above and beyond these specific initiatives was a general process of reflection on the status and meaning of management and Labour's relation to it. Was there a ‘managerial revolution’, it was asked, and, if so, what were its implications for Labour's traditional view of the economy and how it should be reformed?
This chapter looks at the institutional aspects of Labour's concern with management in the late 1940s and reflects on the content of that ‘managerialism’, before finally considering the wider ideological significance of Labour's evolving conception of management.
The BIM was officially inaugurated by Cripps, supported by Harold Wilson (President of the Board of Trade) and the leaders of the FBI and TUC, on 21 April 1948. The leading management journal welcomed the new body as an ‘impressive climax to 30 years’ struggle — a consummation beyond the dreams of the inglorious pioneers who laboured throughout those discouraging decades’. Further, the ‘lavish material support guaranteed by the Government’ was ‘the measure of its assurance of success’. The whole story added up to a great personal triumph for one man: ‘Sir Stafford Cripps determined that his sponsored Institute should materialise, and his single-mindedness has sustained the project right up to the inaugural meeting’.1
Over the next few years, the Director of the BIM, L. Russell, attempted to turn these early expectations into real gains. Much energy was expended early on, as might be expected, in the task of finding the new organisation a home, and providing it with suitable staff and facilities. At the same time, there were constant efforts to attract members, both via canvasses of individuals and corporations and via negotiated agreements with existing management bodies (most notably the Institute of Industrial Administration). A third kind of activity involved propaganda work in the outside community, which encompassed, amongst other things, a publications programme, a series of major conferences and an attempt to set up a network of Local Management Associations (LMAs) aimed at involving the grass roots.2
All of the different aspects of the BIM's work were interdependent, but to many in the organisation the propaganda function was the most important. In part, this stemmed from a general perception that management standards in Britain were often quite poor. However, there was also the unavoidable fact that few managers had enrolled in any kind of professional organisation during the recent past. One estimate was that there were probably between 200,000 and 400,000 ‘persons exercising management responsibilities’ in the country, but only 20,000 in the existing management bodies.3 In these circumstances, successful propaganda became almost a condition of survival.
The approach that the BIM took to its public work revolved around two aspects of current ‘progressive’ management thinking. There was some insistence, firstly, on the importance of human relations, an emphasis that harmonised with wider Government thinking. Managers were not to ‘disregard the hopes and ideals’ that were stirring ‘the hearts and minds of the common people’. They must recognise that a ‘new dawn’ had occurred, and that old-style punitive incentives to work were redundant. Management, in this perspective, needed to be about building consent and involving the workforce. The first Chairman of the BIM, Sir Charles Renold, could thus argue that the key variable in firms was morale, and that this must be carefully cultivated. As he explained, there were three conditions for success:
1 The purpose of the firm must be felt to be worth while.
2 Everybody engaged must feel that he belongs.
3 And the show must be well run.4
At the same time, the BIM was interested in improving all of the more technical aspects of industry — the everyday business of purchasing, manufacturing, selling, costing and accounting. The major objectives here, in every case, needed to be professional standards and modern methods; traditional ‘rule of thumb’ saws must be quickly jettisoned. Good management, in this conception, meant proficiency in a defined range of skills. As BIM officials emphasised, the principles to follow were the same whether the organisation was a small family firm or a huge nationalised industry.5
Not surprisingly, the BIM was more successful in some aspects of its work than in others. Russell found that establishing an adequate headquarters organisation was more difficult than expected (his chosen building, for example, turned out to have dry rot) but, by the early 1950s, many of the initial problems had been resolved and the BIM was operating from specially adapted premises, with a large staff and relatively good facilities (such as a library of some 7,000 items). Additionally, the Institute's track record on propaganda continued to impress. At least one management conference was held by the BIM every year from 1948 onwards, with each attracting at least 400 delegates. The publications which were produced, too, were very popular: the Institute offered 50 or 60 titles during these years, and was selling or distributing a quarter of a million copies from this list annually.6
By contrast, other BIM activities were clearly less successful. Progress with establishing the LMAs was slow, with only four being created by 1951. Moreover, the continuing membership campaign proceeded very much as the more gloomy had forecast. There were some notable breakthroughs, as when the deal with the Institute of Industrial Administration (really a successful take-over) yielded 5,700 members at one blow, or when talks with various unions resulted in eleven (including the NUM and the NUR) taking out subscriptions. But, in general, the situation was sticky; despite considerable effort, by mid-1951 only 959 corporate subscribers, 548 individual subscribers and 80 library subscribers had been added to the 541 founder members.7
One of the functions of the BIM was to bring together the wide range of previously existing management bodies and to provide an agency for education in management. But whilst the BIM focused on the education of the practising manager, there was also the question of management qualifications for those at the beginning of their career. Here, the perceived need was to bring together and codify the great range of qualifications available in the field of management, mostly offered in technical colleges. To this end the Government had established a Committee on Education for Management in 1946, chaired by the well-known managerial ideologue, L.F. Urwick. The Report of this committee was published in 1947.8
Urwick apparently had little difficulty in securing widespread support for his view of management education.9 The Ministry of Education regarded him as the leading expert on the issue, for example writing to him in mid-1945 for a booklist on management topics. Most of the existing bodies which issued qualifications in management accepted his approach, with some resistance from the Institute of Mechanical Engineers, which felt that his proposals were too generalist in character to cover all of the ground required for their engineers.10
Certainly, Urwick's proposals were notable for their belief in general management or what he called ‘scientific management’. For him, scientific management was pioneered by F.W. Taylor (and H. Fayol), but what he regarded as the mark of scientific management was not a Tayloristic emphasis on work practices so much as a method. That method was ‘scientific’ in an inductivist sense, and was applicable to the management of any kind of body. In a work of this period Urwick approvingly cited Taylor's Principles of Scientific Management as follows:
scientific management, in its essence, consists of a certain philosophy, which results in a combination of the four underlying principles of management.
1 The development of a true science.
2 The scientific selection of the workman.
3 His scientific education and development.
4 Intimate friendly co-operation between the management and the men.11
Thus, Urwick's ‘scientific management’ was not incompatible with a human relations approach even though this was not his central concern. But, just as important, it led to an understanding of management as primarily to do with general principles of organisation. In Urwick's view, the key to the efficient functioning of large-scale organisations was the specialisation of functions, the separation of conception and execution and therefore the centrality of the ‘science of administration’.12
This approach generated syllabuses for management education which were strategic and universalistic in character. They drew strongly on the Harvard Business School tradition of management as something understandable and teachable, separately from consideration of any particular production process. This was a perspective quite distinct from the American industrial engineering tradition, which focused attention precisely on the specifics of managing different types of production operations, and which might be considered a more legitimate descendent of Taylor's ‘workshop management’ orientation.13
Hence, for Urwick, management could (and should) be taught separately from a technical expertise which was specific to any one industry. This was an interpretation which he urged, for example, in a letter to the Institute of Electrical Engineers, during the discussions of his Report in 1946/7. It was a view, too, which largely informed the detailed syllabuses that resulted from the Urwick Committee's work, though, as P. Armstrong suggests, ‘whilst the shell of Urwick's syllabus embodies his formal and abstract view of management, the scheme as a whole was compromised in its fine print with a much more productivist view’.14
Urwick's notions of appropriate forms of management education are important but not because of the widespread pursuit of the syllabuses that he provided. Though 100 colleges offered the Certificate course and 62 the Diploma, the numbers of awards over the first fifteen years of the scheme's existence were only 810 and 640 respectively.15 At one level this was another ‘great British failure’ in management education. Nevertheless, it is important to note the way in which this approach was able to dominate the field with little resistance, and none from Government. Urwick's views did not conflict with any alternative doctrine of management. Moreover, as noted, they were fully compatible with the human relations approach which the Government treated as axiomatic. Indeed, both orientations were similar in their attention to universal principles of management practice which in turn could draw upon an emerging social science expertise, rather than upon an industrial engineering approach with its quite different levels of generality and forms of knowledge. As we shall see below, in discussing the nationalised industries, these two approaches could be combined to provide a distinctly ‘Labourist’ view of management.
Apart from the BIM and the Urwick Committee, Labour's concern with management was also expressed through agencies such as the Personnel Management Advisory Service (PMAS), which was set up by the Ministry of Labour.16 This acted initially to encourage the appointment of personnel managers as specialised functionaries within firms. Their role was clearly seen as linked, once again, to the human relations approach regarding management. The PMAS focused on three dimensions of that approach -joint consultation, works information and Training Within Industry. Joint consultation, as discussed in Chapter 5, was at the heart of the human relations ideology, and was propagated by the PMAS as part of good industrial relations rather than directly linked to the productivity drive. Works information was seen as a corollary to joint consultation. The idea here rested upon the belief, so characteristic of this period, that conflict at work was largely the result of ignorance and misunderstanding. At factory level, therefore, one objective should be to provide useful information, news and views about the state of the national economy and individual companies in a simplified and digestible form, which would be disseminated to raise consciousness of production and productivity issues and thus to encourage positive participation in joint consultation.17 Training Within Industry (discussed in Chapter 4) was aimed at supervisors, especially in their ‘personnel management’ role, as the front line of contact between managers and workers. The TWI programme provided a total of 30 hours’ factory-based instruction, divided into sections on job instruction, job relations and job methods.18
How far all of this made much difference to the practices of British management is inherently difficult to judge. There was a feeling in official circles that it was a strategy which in some respects was already failing by the late 1940s. The classic ‘personnel management approach’ of appointing specialised personnel managers was limited by the lack of trained people to fill such jobs and by the resistance of firms worried about their overheads. Interestingly, it was also seen as constrained by the human relations emphasis on good supervision as part of line management, a view rather different from that which proposed ‘personnel’ as a separate, staff function.19
The nationalisation (or socialisation, as it was officially called) of industry in Britain under the Attlee administration opened up a new agenda on many issues. It has commonly been asserted that the wave of nationalisations in this period rested on little detailed preparation, though much of this seems exaggerated.20 But as regards the management of these new bodies the claim does seem close to the truth. As Austen Albu later noted, during the major debates over the form of nationalisation in the 1930s, there was a ‘striking absence’ of debate about how these new institutions would be managed below board level.21
The debates of the 1930s had effectively decided that, to amplify a point touched on earlier, Labour's preferred form of nationalisation would be the public corporation, with a Board appointed on an ‘expert’ rather than ‘representative’ basis. This line had defeated those who wished to see a direct role for workers in management of nationalised enterprises. Though the issue was raised again in the late 1940s the Morrisonian position was strictly maintained by the Labour leadership -both in the Government and the TUC.22
However, opposition to any notions of workers’ control was accompanied by much emphasis on joint consultation as a desirable feature for nationalised industries and, in most of the industries, provision for such consultation was written into the nationalisation statute. The precise meaning of joint consultation was nevertheless obscure, and there was much debate in the late 1940s about the degree of ‘Workers’ Assistance in Management’ that was appropriate. The major arena for these discussions was the Socialisation of Industries Committee, chaired by Herbert Morrison.23
The first stimulus for examining this issue was a memorandum by Morrison which emphasised the need for a forum of management, technicians and workers to discuss the ‘organisation and running’ of nationalised industries. He wanted such consultation to take place at local, regional and national levels. It would, he argued, ‘bring the Board face to face with the problems which were concerning the workpeople and could give the workers an opportunity of presenting their ideas and grievances at first hand to the Board’.24
Part of Morrison's aim in raising this point was undoubtedly his desire to try to pre-empt more radical proposals for worker involvement. At a later date he was to make this explicit when he argued that if ‘the arrangements were not satisfactory, there would undoubtedly be a demand for some form of direct participation by workers or trade unions in management’, and such a development was, for him certainly, an ever present danger. He detected in the National Coal Board (NCB), for example, ‘some signs of a tendency to overmuch consultation with the NUM on matters of management’.25 But it would perhaps be too cynical to dismiss all talk of ‘workers’ assistance’ as a manoeuvre designed to dish any claims for more radical forms of industrial democracy. Ministers did believe that the place of the worker in socialised industries should be different from that in the private sector, even if they were vague on what this meant, and they also hoped that this change would bring about a significant improvement in productivity.
Much of the discussion of ‘workers’ assistance’ focused on the question of whether consultation should take place using existing channels or through new machinery specifically devised for the purpose. Morrison and the official committee which he appointed to consider the matter looked favourably on the idea of separate machinery, with the Minister suggesting that a single structure tended ‘to mix up questions of wages with questions of organisation’ and seeing a case for different people being involved over different issues.26
As so often, change in this direction was resisted strongly by the Ministry of Labour, which feared any diminution in the authority of the trade unions, always felt to be a possibility with new or specialist machinery. Such a line was sustained, seemingly successfully, throughout the Attlee government period.27
As the official committee considered the merits of the various arguments, the members demonstrated how discussion of the workers’ role in the nationalised sector was to be dominated by the rhetoric of human relations, very much as in the private sector (dealt with in Chapter 5). As the committee saw it, the objective of consultation was ‘to create within the organisation the particular kind of atmosphere or climate which will make the workers happy in their jobs’. So intangible an objective was unlikely to be produced ‘merely by any institutional feature, such as a system of statutory committees’. Crucial to creating a suitable climate would be proper personnel management and works information.28
At the same time the committee stressed that matters of management, and the precise role for workers in it, were for the Boards of the nationalised industries to deal with. This was a constant refrain in these discussions, which was accepted by all of the Ministers involved as a principle (though Morrison in particular saw the doctrine of Board independence and responsibility as compatible with a degree of ministerial prodding).29
This approach was, however, very much a weapon against more radical proposals. For example, when a group of managerial ‘progressives’, including Urwick, Wilfred Brown of Glacier Metals and George Dickson of the London Regional Board for Industry, urged the formation of advisory councils of managers, workers and consumers, emphasising the case for the involvement of workers on human relations grounds, Morrison was willing only to concede that existing managements were ‘unduly cautious and conservatively minded in their approach to the problems of enlisting the assistance of the staff. There was, he emphasised, no call for new measures: ‘He doubted whether any corporate identity could be created out of the rather divergent interests of the workers, management and consumers’ and ‘whether any advisory council should be raised to a degree of responsibility which would derogate from the responsibility of the executive board.'30
This argument rumbled on throughout the Labour Government's period in office. Any proposals for increasing the workers’ role which appeared to threaten the responsibility of the nationalised Boards were firmly rejected — such as happened with the schemes put forward by the National Union of Railwaymen, consistent opponents of the Morrisonian method of organisation, and the Union of Post Office Workers.31
On the other hand, Ministers remained highly conscious that the existing forms of management in the nationalised industries were failing to generate the kind of enthusiasm and support from workers which had once been envisaged. In 1950 Morrison circulated to his colleagues a report about a London conference of employees in nationalised industries, which, he contended, showed ‘a most disturbing situation’. He worried that a ‘continuance of large-scale misunderstanding and discontent among the employees of the socialised industries’ might have ‘the most serious consequences for their efficiency and for the success of policy of socialisation’. Certainly the evidence cited at this conference bore out the report's statement that in many cases no attempt was being made on the part of managements to inform employees of what they were doing or why.32
The fears voiced by Morrison seem to have been shared by his ministerial colleagues, and so a sub-committee was established to look at the issue of ‘Relations with Workers in Socialised Industries’. This accepted that these relations were not good. Whilst active discontent was unusual, passive unenthusiasm was widespread:
there is a widespread sense of frustration coupled with disappointment at the results of socialisation. Sometimes labour relations are good by any standards, but even where this is so there is rarely, if ever, any positive enthusiasm for the new order of things.
The Committee linked these attitudes to a number of features which marked the socialised industries — the continuation in office of the old private sector management, over-large ‘perks’ for managers, excessive bureaucracy, and a ‘lack of concern for efficiency on the part of management’. It then raised again the issue of separate mechanisms for joint consultation, suggesting that, in single structures, the salience of wage issues tended to mean that ‘consultation about wider questions of policy and management will take a subordinate place’. The Committee also criticised the unions for falling short of expectations in ‘educating officers and members in their responsibilities under public ownership’. But despite these quite tough comments, nothing practical seems to have resulted before the Government fell.33
The search for improved human relations in nationalised industries led up some eccentric paths. None was more bizarre, but also perhaps symptomatic of a strand in Labour's politics, than the burst of activity which followed a memorandum from Attlee to Morrison at the end of 1948. In this the Prime Minister recounted a discussion which he had had with General Slim in which both agreed that there was a parallel between good officers in the army and good leadership in industry. The lesson to be learnt, according to Attlee, was clear:
There is need in industry of the kind of spirit and leadership which obtains in a good regiment, an esprit de corps not only of the regiment but of the company, and the platoon. I am sure that this is necessary in, for instance, the coal industry, where you want the esprit de corps of the pit.34
However, Ministers resisted Attlee's idea that General Slim might have any role in spreading the word in civilian life, ‘because the impression might be given that the Government thought that the military spirit should be introduced into industry’. Nevertheless, Attlee's memorandum led to a new round of activity on human relations, with the Minister of Labour suggesting an enquiry into what was occurring in the nationalised sector. This was resisted by the Chairmen of the Boards, but the Ministry of Labour pursued the matter informally, most notably convening a conference on the issue.35
The focus of this conference was on good ‘leadership’, this being the perceived message of Attlee's original memorandum. The occasion was chaired by Lloyd Roberts from the Ministry of Labour, and the central concern, as so often in discussions of this kind, was with the role of supervisors and junior management, seen as in the ‘front line’ of the human relations offensive:
The inquiry was prompted by the belief that the development of harmonious relations between managers and workers can be materially influenced by the appointment to managerial and supervisory positions of those who, in addition to the necessary technical and intellectual qualifications, possess or will develop those intangible qualities which indicate a capacity for leadership.
The conference also discussed some (unnamed) private sector models of supervisory training, which mainly differed from those in public industries because of their stress on the need for ‘human relations’ skills rather than simple technical proficiency.36
All of this indicates the ways in which ‘human relations’ ideas were floated as relevant to the nationalised sector, just as Chapter 5 showed how, as a result of the productivity drive, they became so prominent in discussions about the private sector. Allowing for the different circumstances of ownership, was the discussion of management in the public sector simply the mirror of that in the private? On the evidence of the deliberations of the Socialisation of Industries Committee, the answer is clearly that it was not. Whilst human relations did to some extent dominate the agenda for discussion on management in the socialised industries there was an alternative theme also present, which focused on the degree of centralisation or decentralisation that was appropriate in both the main administrative pattern used in the socialised industries, and the associated management structures.
This issue first arose in relation to the coal industry, which soon after its nationalisation was deemed to have adopted an overly centralised structure. In a memorandum of late 1947 Hugh Gaitskell, the Minister of Fuel and Power, stressed that the history of the industry was one of fragmentation, and that a big problem for the efficient management of the sector was the lack of managers with experience of running a large-scale organisation. (He backed this up with the assertion that the one exception to this was coal selling, which had been centralised under the Coal Mines Reorganisation Act 1930, and which, he said, was by no accident the most efficient part of the Coal Board.) This criticism was linked to the argument that the make-up of the Board was wrong, consisting largely of functional heads rather than directors with general responsibilities. Such a situation, Gaitskell argued, led to an imprecise chain of command on general management issues.37
This analysis seems to have been widely shared. Morrison, in particular, supported Gaitskell's views, which led him to a search for appropriate models of decentralised large-scale firms. He proposed a working party which, amongst other things, should look at how ICI and General Motors (GM) ran themselves. He himself circulated extensive extracts from P.F. Drucker's book on Big Business (1947) which was largely concerned with GM, presenting it as an ‘essay in federalism’ which offered the important message that the operational units of the company were ‘run much like the units in a planned economy’.38
The proposed working party came to grief because of opposition from the Board Chairmen to any outside scrutiny of their efficiency (see below). But Morrison continued to pursue the issue, for example circulating a Treasury O. & M. discussion of ‘Examples of Industrial Organisation’, which focused on centralisation and decentralisation, with appropriate instances along with organisational charts. Morrison linked this material to a general argument that one of the main problems facing any large socialised industry was ‘the determination of the right degree of decentralisation to adopt’. He was sensitive to the usual economies of scale arguments for centralisation, but again pointed to GM and ICI as examples of how efficient big companies decentralised.39
In the event, such discussions seem to have had little immediate effect, above all because of the continuing saga about government ‘interference’ in the activities of the nationalised industries. Morrison was keen on setting up an efficiency unit which would scrutinise the Boards’ activities. One reason for this proposal was to pre-empt the idea of Parliamentary Select Committees on the nationalised industries, which Morrison opposed as likely to ‘take up a great deal of the time of the senior officers of the boards’, an attempt at compromise which failed to persuade the Board Chairmen.40
But this was not Morrison's only consideration. He seems to have been genuinely concerned to evolve appropriate forms of organisation for the new giant enterprises that he was so instrumental in bringing into existence. He recognised that harmonious human relations were not enough, arguing that ‘while good will between both sides of industry was extremely important, there was a danger that it might be over stressed to the detriment of efficient management and increased productivity'; and, on another occasion, that ‘Education and indoctrination will not be good enough, nor committees; radical changes in organisation, methods of work, and management methods may sometimes be necessary’.41
What is surely striking about Morrison's position is the extent to which the model from the private sector for managing large-scale organisations was treated as unproblematic. No one seems to have asked whether publicly owned industries should be run like General Motors or ICI or what this implied about the purposes of nationalisation. Morrison himself does not appear to have felt called upon to defend the parallel.
The decentralisation issue seems to have emerged as the main 'managerial’ problem that was specifically related to nationalisation in this period.42 In part this occurred because of its compatibility with the stress on human relations. Austen Albu, for example, argued that there was now a ‘universal understanding of the difficulty of maintaining initiative, responsibility, communication of ideas and morale in large-scale undertakings of every kind’. This, in turn, meant that there was a need for greater decentralisation in the nationalised industries, a conclusion which, as for Morrison, pointed to ICI as the best example of decentralised management under a centralised Board.43
This menu of management possibilities for the nationalised industries was obviously rather limited. In practice the management systems which emerged in those industries tended to reflect arguments about collective bargaining and capital finance as much as any notion of internal organisational efficiency. However, there was some tendency to greater decentralisation with successive nationalisations, from the highly centralised Coal Board to the regional organisation of gas. But overall it is obvious that, apart from the platitudes on human relations and a rather one-dimensional notion of centralisation, Labour never really got to intellectual grips with management in the public sector during this period. On the other hand, the parallels drawn with the private sector were linked to emerging trends in Labour's thinking about company organisation and management, a topic which will be considered in the final section of this chapter.
Turning to the question of the unions and management, it is clear from Chapter 5, that the TUC and most union leaderships strongly supported the Government's productivity drive. This support raised the issue of what attitude was to be taken to management. Here, two rather different emphases co-existed. On the one hand, there was the persistent union claim for a greater share in management, meaning greater consultation from the shopfloor to the national level rather than any idea of joint management or radical forms of industrial democracy. On the other hand, there was the tendency to regard management as a technical practice, as an expert function on a par with other professional competencies. In this context management was something to be learned and thus something that, if mastered, might strengthen the unions’ claim to a greater say in the running of industry. The latter position served to give an ideologically congenial gloss to the campaign by the TUC in particular to encourage union members to learn management techniques.
Both of these arguments were apparent, for example, in the report of the TUC to the special conference of union executives in September 1948. The aim here was to encourage unions to do more to take advantage of existing management training facilities. Whilst the immediate context was that of raising productivity, education in management technique, it was argued, also arose ‘for the unions as a question of long term policy, mainly from the standpoint of the workers’ claim to fuller participation in the control of industry’.44
The TUC's support for training in these latter terms was further emphasised in the document Trade Unions and Management, produced after the 1949 Congress. Much of this was taken up with descriptions of the kinds of techniques that unions should be interested in learning. These were seen as encompassing job evaluation, time and motion study, and work measurement. But the underlying message emphasised the longer term objective. Jack Tanner of the Amalgamated Engineering Union, for example, argued that there ‘must be a development in the attitude of trade unionists to industrial management’. Management ‘should be no longer regarded as a "mystery" and it was essential that … unions should learn its techniques and the elements of production engineering’. This kind of lesson was very much supported by E.P. Harries, in charge of the TUC's Production Department. He saw a major part of the task of that department as educating ‘all sectors of the T.U. movement in the problem of management’, adding that this was a crucially necessary development at workshop as well as headquarters levels.45
In some ways such an attitude towards management is unsurprising, given the general union commitment to production and productivity, though it is in marked contrast to the attitude typically taken prior to the war. But what is perhaps more interesting is the precise way in which this new attitude to management was advocated. Trade Unions and Management produced two reasons why the unions should change their approach. One emphasised individual advancement: there was a common assumption at this time that in the long run, at least in the nationalised industries, the normal route to an administrative job would be by training competent trade unionists in management. The other was that such knowledge would allow unions to ‘react knowledgeably to simpler proposals’.46
This reactive posture, which characterised most of the TUC's pronouncements on management, needs to be compared with what may be called a ‘radical productionism’, where learning about management was seen as allowing unions ‘to participate directly in achieving productive efficiency’. This contrast should not be overdrawn. There were undoubtedly shades of opinion on the issue of the degree to which training trade unionists in management involved the idea that existing managers were inefficient. But some trade unionists did certainly take a highly critical line, even though they were in a minority against the TUC view, which was that such a challenge to the legitimacy of management could cut across the industrial co-operation and consensus that it wished to establish.47
The position on this of one union, the Association of Supervisory Staff and Engineering Technicians (ASSET), is of especial interest. ASSET'S role was central partly because, at least on occasions, it opted to take a ‘radical productionist’ line. But, in addition, ASSET was the union for (junior) managers and supervisors, and so was integral to the attempt to forge a new link between labour and management. Moreover, Labour's two key ideologues on management, Austen Albu and Ian Mikardo, were prominent ASSET members.
‘Radical productionism’ did not become a consistent ASSET position, but it was powerfully expressed on occasions and this was especially so during the economic crises of 1947 and 1949. In the latter case, for example, an editorial in the union's journal argued that: ‘Inside ASSET we have many, many managers who are fighting bitterly to establish industrial democracy; are waging a ceaseless war against directors’ policy that creates inefficiency and discontent.’ The union also provided Mikardo (the union's parliamentary spokesman) with a platform to expound similar views.48
Mikardo was partly successful in getting this kind of radical view of management into the economic policies of the Left in the Labour Party. Both of the best known manifestos of the Labour Left in this period, Keep Left and Keeping Left, essentially accepted the kind of case that ASSET was promoting. The first of these, for example, attacked the BIM as too conservative in its approach to management reform: ‘Its constitution and powers are circumscribed in order not to offend the existing institutions and the existing firms of consultants — a major example of that tenderness to vested interests to which we have already referred.’ Keeping Left linked its proposal for the extension of economic planning in the name of greater efficiency to the argument that this action by the Government ‘would entitle it to ask the unions to institute a mass scheme of education in management for their officers, shop stewards and other representatives, and would thus canalise the energies of the unions into a new progressive full employment function’.49
Mikardo was therefore something of a link over ‘radical productionism’ between ASSET and the Left of the Labour Party. This position, whilst noted, is not sufficiently emphasised in most treatments of the Labour Left. In fact, one of the striking features of the period is the extent to which the Left in this area mirrored the priorities of the Labour leadership. The Left, too, put increased output and higher productivity at the centre of its agenda — it just advocated more radical means than the leadership to achieve these ends. This sharply divided the Parliamentary Left from the Communists, who after 1947 rejected their earlier ‘radical productionism’ in favour of a posture stressing the defence of working-class standards against ‘heightened exploitation’.50
Nevertheless, the appeal of this ‘radical productionist’ position should not be exaggerated. ASSET itself was an ambiguous body. Whilst there seems to have been little active resistance to Mikardo's role as spokesman for the union, its own ‘managerialism’ was more complex than a simple endorsement of standard contemporary Left positions. The idea of a training in management as preparation for advancement up the industrial career hierarchy was clearly popular in ASSET, and this obviously tended to produce a rather different perspective on the legitimacy of existing industrial organisation. But more important was the way in which ASSET could also be drawn into the dominant consensual approach to industrial issues.
The issue of the journal ASSET for July 1947 carried a front page message from Herbert Morrison. He wrote:
I wish ASSET luck in its work and hope that by spreading and extending its membership this vast miscellaneous body of the middle class, which is composed of the technical, supervisory and the managerial classes, will become ever more competent to make an increasing contribution to the economic and social well-being of the community.
Underlying this mellifluous message lay a rather different kind of managerialism than that espoused by Mikardo. The point of organising managers into a union was not to spearhead the exposure of existing inefficiencies, but to draw managers into the great arch of co-operative endeavour across classes in the cause of higher productivity.51
Morrison's outlook echoed that of Austen Albu in 1942. The latter had suggested then how Labour needed to approach management:
If the Trade Union movement were to make a constructive approach to them, proposing collaboration for positive social purposes, many of them could be persuaded that the real interests, both of themselves and of the nation, lie in an association with the political and industrial organisations of the Labour movement.
And this in turn was reminiscent of ideas put forward very clearly in Sidney Webb's undeservedly neglected work of 1917.52 Such a view of management was embedded in a much broader view of changes in British society. The possibility of a Labour alliance with management was commonly seen not as an act of political will, but as resting on a fundamental change in the function of management in the modern corporation. In short, it depended upon the idea of a managerial revolution.
As has been already noted, the book titled The Managerial Revolution, written by James Burnham, had appeared in Britain in 1942. Burnham had argued that the world was already a long way down a path which would lead to managers becoming everywhere the ruling class (in a context of state-owned property). His analysis was couched in Marxist terms, and he saw this new ruling class as co-existing with different political arrangements, totalitarian initially, possibly democratic later, but always maintaining effective power.53
This work was a frequent reference point for the Left in the later 1940s. Broadly speaking, Labour writers, especially but not exclusively those on the Right of the party, tended increasingly to accept the central thesis about the shifting locus of power in society, a process which may perhaps be seen as culminating in the New Fabian Essays of 1952 and Crosland's Future of Socialism of 1956.54
The idea of a shift in the locus of power rested in turn on the idea of the separation of ownership and control in the modern corporation. This alleged separation became a commonplace in much Labour discussion of the late 1940s and early 1950s. It implied both that the ‘old’ idea linking political centrality to the ownership of the means of production was outdated, and also, perhaps more important in the current context, that managers were no longer ‘agents of capital’. Rather, they were (actual or potential) experts in administration and human relations, a ‘third estate’ in the realm, with no inherent reason for being anti-Labour.55
Such propositions were hardly new in the 1940s, but they were becoming much more important as Labour, from its position as the party of government, had to grapple both intellectually and politically with management. Faced with issues about running newly nationalised industries, Labour was forced to take a view on how far this process of management would differ from that in the private sector. As suggested above, discussions on managing the nationalised industries implicitly suggested the difference was small. This was made explicit by Albu, once more, who argued that the real division in relation to producer units was not that between the publicly and privately owned but that between the owner-controlled and the professionally controlled, the latter making up the bulk of the private sector.56
Similarly, faced with the need to deal with the 80 per cent of the economy remaining unnationalised, Labour was forced to take a view on the character of the private sector. It is important not to oversimplify the substance of that view but Brady, a critic of the managerial revolution thesis, seems to have broadly got it right when he linked it to the perception of management as a neutral expertise: ‘Here the thesis of Burnham's Managerial Revolution seems to have been taken over by Labour spokesmen and theoreticians, lock, stock and barrer he wrote; ‘In effect for the syndicalist idea has been substituted a Labour version of the Burnham thesis of management by disinterested professional experts.'57 Indeed the whole enthusiasm for the BIM can be seen as based on this understanding of management. The central function of the BIM, therefore, was to generate and deploy ‘expertise’ through the economy, not least amongst trade unionists.
On the basis of such a view of management's role, Labour seemed willing to offer management their place in the sun of British politics. And there is evidence that politically this posture had some success. Cripps, the leader and symbol of Labour's new managerialism, was a popular figure with significant sections of management. But there is also good evidence of subsequent disillusionment, based on the fact that despite the foundation of the BIM and Labour's undoubted enthusiasm for managers as (potential) key agents in the productivity campaign, the stratum never really felt itself to have been accepted.
In October 1945 Industry Illustrated noted that the ‘present government’ was concerning itself with industrial management to a degree that was a ‘novelty in this country’ but then went on to lament the fact that official policies, especially on the Working Parties, had not broken away ‘from the rather jejune doctrinaire assumptions about employer cum trade union partnerships’. There could be no doubt, the journal continued, ‘that in the last analysis industry is run by the managers, who must still be there to lead the productive team, whether the political climate is a socialistic or a capitalistic one’. Later the same year the seriousness of the Government's intent about efficiency was noted, but there was also criticism of Labour for having ignored the professional manager in its new reforms. As the journal's editor put it: ‘One would have thought this government would have been the most ready to recognise and appreciate Industry's tiers état.'58
In fact, throughout the Labour Government's period in office, most of the economic bodies that it established were resolutely tripartite and involved employers, unions and government (though in some cases ‘experts’ substituted for government as the third element). This pattern was true of such bodies as the Working Parties, the National Production Advisory Council for Industry, the Economic Planning Board, the Anglo-American Council on Productivity and most smaller scale committees. The BIM was denied its place in these forums, despite its claims, and support from MPs such as Mikardo.
The issue of management's role in such bodies does not seem to have been raised at Cabinet level, but discussions amongst senior civil servants give the flavour of the thinking behind this position. The most explicit reference here occurred in the context of debate about whether or not the BIM should send representatives to the Committee on Industrial Productivity. The BIM couched its claim for such representation by asserting that it had an analogous position to the TUC and FBI. The civil service response is worth quoting in full:
In the first place, the analogy is false, since the B.I.M. is not a political union of managers and does not claim to represent the personal interests of managers in the way in which the F.B.I, or T.U.C. represent their members.
In the second place, if the BIM claims were admitted it could only open the door to its being pressed on other occasions and for other bodies as various as NPACI, Regional Boards for Industry and Development Councils. In fact every two-sided body might well become triangular in future, and the role of the independent or Government member to ensure that the work got done with maximum reconciliation of the employers and trade unionists would tend to disappear in the claim of the non-elected manager to speak in effect for the public interest in efficiency. This would be the ‘managerial revolution’ with a vengeance.59
This view seems to have prevailed. In this instance and occasionally elsewhere the BIM was granted a small representation, but explicitly on the basis of its expertise, not as an interest group.
Undoubtedly, all of this ultimately rested on a sensible appreciation of political realities. Partly as a consequence of government encouragement, by the late 1940s the BEC, FBI and TUC had become significant power-brokers, and bodies jealous of their prerogative as presenters of industrial opinion to government. This governmental role given to ‘the two sides of industry’ both reflected and reinforced the adversarial system of industrial relations in Britain. It was a system in which organised management remained at best a bit player. As Stalin might have said, how many divisions had the BIM? But it chimed in very poorly both with the rhetoric of the managerial revolution and with Labour's attempted rapprochement with management in the name of production and productivity.
In conclusion, it is apparent that Labour was forced to think hard about management in the late 1940s, perhaps especially in relation to the nationalised sector. Much (but not all) of the Labour Movement was persuaded to accept that management was neutral, an embodiment of expertise, which both could and should be an ally of Labour. The expertise in question must involve a large dollop of human relations, but was to remain administrative in character and largely separate from knowledge about any particular production process. The figure of the manager was, at least potentially, both progressive and professional.
This intellectual alliance with the manager rested in turn on a conception of the large joint stock company as an increasingly benign agency, unless monopolistic or with a history of particularly bad industrial relations or investment policies. Hence the broad movement to ‘consolidationism’ in Labour's policies both reflected and reinforced a particular view of management and its role in the private corporation.
Such a position was not without its contradictions. If big private and nationalised companies were so similar, and ICI a plausible model for the nationalised industries, why was it so often considered for investigation by the Monopolies Commission or as a prime target for nationalisation?60 If managers’ knowledge was so important why were their counsels usually to be excluded from the major places where economic policy was discussed?
Labour could, of course, have gone down a different route and attempted a path of ‘radical productionism’, allying itself more strongly with ‘progressive’ management against employers. But whatever else might be said about such a strategy, it would have necessitated a very radical break with the party's emergent understanding of the private sector. Whereas, before 1945, relatively little had been generated on this subject, by 1951 the situation was very different. The simple fact was that Labour had been forced to come to terms with industry because of national considerations, which meant recognising and dealing with employers’ associations alongside the TUC. Such a relationship effectively precluded carrying the theory of the managerial revolution into political practice.