More gloom

In the second edition of the book I made some remarks that turned out to be prescient about what at the time I wrote it was the nascent financial crisis. Since it is rather rare for my – or any other social scientist’s - predictions to come true I rather regretted the fact that in updating for the third edition I had to excise them. I’m now working on the fourth edition but by the time that comes out (at the end of this year) I suspect that I will have been overtaken by events and that by then we will be well into another, probably worse, crisis. So I’m going to get my prediction in now.

Of course I’m not the only person saying this. Last week a leading strategist at Societe Generale said the same thing and the Royal Bank of Scotland advised its clients to sell their equity holdings in anticipation. Stock markets across the world are in sharp decline, and the collapsing prices of oil and basic commodities are precipitating a global deflation. At the heart of all this is the slowdown in China and, in particular, the massive growth in corporate debt there, much of it due to a real estate bubble and the rise of a secondary banking sector.

Meanwhile, personal debt in most countries – from Sweden to Thailand - is also rising to higher levels than at the time of the 2008 crisis. Although in the UK and US it is not yet at the same levels as it was then, it is also rising. Once again in the UK much of this debt is related to a house price bubble and lax bank mortgage lending, but also rising is unsecured debt sometimes used simply to cover basic living costs.

If there is another financial and economic crisis the consequences will be much graver than in 2008 for two reasons. One is that the capacity, both financial and political, of nation states to bail out banks will be much more limited. So much the worse for the banks, it might be said; but it will not just be the banks that suffer. The reason why, post-Lehmann’s, the US and other governments stepped in was not because of an outbreak of Keynesianism but because they saw the political and economic consequences that would follow if the cash machines, literally, ran out of money. This time round there's every chance that that will happen.

Second, the intervening years have seen a growing precariousness of employment, symbolised but not limited to the rise of the zero hours contract, as I have written about elsewhere on this blog. At the same time there has been an erosion of welfare provision. Thus the ability of ordinary people to weather another crisis is much more limited. In many countries – Greece and Spain amongst the most obvious examples – the capacity of families to provide support for unemployed young people and pensioners has already reached breaking point. It is one thing to give such support to tide over short-term problems, quite another to do so on a more or less permanent basis.

For, as the distinguished political economist Andrew Gamble (2014) suggests in an excellent book, crisis is now likely to be permanently embedded within the global economy, in the absence of some major shifts in ideology and public policy. Of that, there seems little chance. Despite some initial impetus for reform after the 2008 crash almost nothing came of it. There was no new settlement and no new deal, and every prospect, therefore, of another crash. It looks to me as if 2016 will be the year we see it. 

Reference

Gamble, A. (2014) Crisis Without End? The Unravelling of Western Prosperity. Basingstoke, UK: Palgrave Macmillan.

Death

Our topic today is, cheerily enough, death. It’s prompted by this week’s biggest global news story, the death of David Bowie. One of the consequences of the contemporary media is that within a few hours almost all that could conceivably be said about any big event is said within a few hours, rendering the most obvious thoughts we might have clichés before we have had time to think them. One such cliché is that for people of my age, give or take ten years, Bowie provided ‘the soundtrack to our lives’. And so indeed he did for me. I fell in love for the first time to the accompaniment of Life on Mars; rebelled (sort of, anyway) to the backdrop of Rebel, Rebel; was angst-ridden to the tune of Rock’n’Roll Suicide; uplifted by Heroes; thrilled by Ashes to Ashes; and fell in love again with China Girl in the background.

I mention in the book that I grew up in Croydon and, in Croydon in those days, we claimed Bowie as a local hero (he actually grew up in nearby Bromley), admittedly not having anyone much else in pop culture to lay claim to (Captain Sensible of The Damned and Kirsty MacColl being the other main possibilities). What’s more to the point is that pop music, which can be and can mean many things, can sometimes be a poetry of ‘sound and vision’, speaking both directly and ambiguously to one’s own life and to the human condition. For me this was true of Bowie but also Morrissey and Elvis Costello (whose autobiography I am currently reading) – all notable lyricists as well as musicians.

The other immediately stated but also true cliché about Bowie’s death was that he made that death into art, especially in the extraordinary song and video Lazarus. Extraordinary, that is, in its depiction of a bandaged, emaciated figure struggling on his (death)bed and straining to get words down on paper before dying. Bowie was a kind of poster-boy for what sociologists call reflexive modernity – constantly and knowingly giving an account of his own life – and providing what both Victorian aesthetes and postmodernists might recognize as an aesthetics of the self.

That this should include a knowing and aesthetically careful depiction of death is particularly extraordinary because of the way that death is so comprehensively written-out of contemporary culture. There’s an idea – implicit, anyway – that death is a kind of embarrassing and certainly best-avoided topic. Possibly – if one is sufficiently careful in terms of diet, exercise, not smoking, not drinking – avoidable; perhaps in any case something for which a cure might one day be found, and in the meantime better not thought about.

Organization studies does not have a great deal to say about death (at least that is my impression; I haven’t undertaken the dreaded literature review required by academic journals). It could do: after all, funeral parlours and cancer wards are organizations, but I’m not aware of too many cases studies of them. The German organizational psychologist Burkard Sievers (1990) wrote a thought-provoking essay on this, arguing that “collectively, we have displaced death from experience” (p.132) and he referred to the great sociologist, Norbert Elias (1985) to claim that “death, like the dead body, has to be isolated and hygienically hidden” (Sievers, 1990: 132).

From that perspective, Bowie’s Lazarus rips open the stage curtain to show death, or at least, a representation of death because that is (and must be) what it means to make death into art. In another post I wrote about the death of Tony Benn, who said something very powerful and moving about his wife, Caroline, who pre-deceased him: “she taught me how to live and she taught me how to die, and you can’t ask more from anyone than that”. Bowie did something like that.

A final thought. When I was a teenager and first listened to Bowie there was a boy in my class at school called Simon. Now, he is a Buddhist scholar known as Vishvapani who often speaks on Radio 4’s Thought for the Day, and did so last Wednesday taking Bowie’s death as his theme. He said that “the most basic fact of our lives is that nothing endures”. That is of course true and for Buddhists the implication is to become less self-absorbed. For those of us who are not Buddhists the issue might be the more egotistical one of what we leave behind. That is unpredictable, for sure. A chance conversation might ripple through the ages; a magnificent book languish unread. For myself, I like the idea that at some point in the future someone might come across something I have written in a dusty corner of the library (if libraries still exist) and find it of passing interest.

References

Elias, N. (1985) The Loneliness of the Dying. Oxford: Blackwell

Sievers, D. (1990) ‘The Diabolization of Death: Some thoughts on the obsolescence of mortality in organization theory and practice’, in Hassard, J. & Pym, D. (eds) The Theory and Philosophy of Organizations, pp 125-136. London: Routledge.

Everyone needs a Willie

The phrase ‘every Prime Minister needs a Willie’ was uttered by Margaret Thatcher, apparently without realising the double entendre it contained. It was a reference to her sometime deputy as Conservative Prime Minister, William Whitelaw. Whitelaw’s significance to Thatcher lay in the fact that he provided a point of connection between her and the wider Conservative Party, especially during the early years of her leadership in the late 1970s and early 80s. For it is easy to forget that during those years Thatcher was engaged in remaking her party, in a process that was by no means unopposed from within, away from its traditional, pragmatist and patrician form and into a much more ideologically-motivated neo-liberal entity.

This did not happen all at once, by any means, and the presence in her first cabinet in particular of ‘Tory wets’ (the more traditional, centrist, one nation Conservatives) are a testament to this fact. Not only was there an ideological battle here but also Thatcher, both in her class background and her gender, did not fit the established image of a Tory leader. Willie Whitelaw’s significance lay in being both doggedly loyal to his boss but also being trusted by the wider party, since he was very much from its traditional mould (public school, Cambridge, ex-army). He was thus able to be a conduit between traditional and new Tory parties.

In the 1990s, a very similar role was undertaken within Tony Blair’s New Labour party by John Prescott, who also became Deputy Prime Minister. Here again a party was being re-made towards a more neo-liberal posture, but this time against a traditional backdrop defined in terms of socialism, or at least social democracy, and trade unionism. That constituency was alien to Blair’s ideology and his personal background (public school, Oxford, ex-lawyer) but one that Prescott, a working-class former trade union official, was steeped in. Like Whitelaw he formed a key conduit between traditional and new Labour parties.

I have been recalling these two because of the current situation within the Labour Party. Jeremy Corbyn is seeking to re-shape Labour away from Blairism and also, like Thatcher and Blair, has a persona that only appeals to some sections of his party. In some ways his situation is more complicated than Thatcher’s or Blair’s in that he differs from both the new right of his party (too left-wing) and from the old left (too liberal and metropolitan). At all events he faces opposition and mistrust from, at least, its MPs, very few of whom wanted him to become their leader (his support base being, rather, amongst party members). One reason that task is proving so hard, I would suggest, is that there appears to be no one willing and able to act in the kind of conduit role that Whitelaw and Prescott fulfilled; someone trusted by the parliamentary rank-and-file and willing to use that trust in support of the new leadership.

If anything, Corbyn seems more inclined to seek to surround himself with those who agree with him, with this week’s sackings of shadow cabinet members for ‘disloyalty’. That is always a temptation for any leader but it carries with it enormous dangers. In the long run it leads to isolation from dissenting opinions (something that played a part in the downfall of both Thatcher and Blair, and probably of many business leaders) and hence the well-worn problem of ‘group think’, and that of cultism*. But in the short-run it hamstrings the necessary process in any form of politics, including organizational politics, to build what are inevitably forms of coalition. It seems related in some way to the well-known – within critical organization theory, at least - limitations of seeing leadership in terms of individuals: precisely because leadership involves coalition building it also requires a broader set of appeals than are likely to be provided by a single person. Corbyn needs urgently to find his Whitelaw or Prescott or even, given his particular situation of being neither Old nor New Labour, a couple of them.

* For an excellent analysis of cultism in leadership, and indeed of the dangers and difficulties of leadership including the over-focus on the individual, see Dennis Tourish’s The Dark Side of Transformational Leadership: A Critical Perspective (London: Routledge, 2013).

Required reading

Over Christmas I have been reading Jonathan Coe’s latest novel, Number 11. Like John Lanchester’s Capital, which I ‘reviewed’ on this blog, it can be read as a ‘state of the nation’ novel (Coe even makes a joke about this) and, via five interlocking sub-stories, it reprises some of the themes of his earlier books, especially What a Carve Up! and The Closed Circle. Overall, I would characterise these themes as being about the unwinding of the post-war welfare state and its accompanying collectivism, and the ongoing consequences of individualization, privatization and – a key one in Number 11 – monetization (in the sense of putting monetary value on things like education which might otherwise be regarded as valuable in themselves).

The title Number 11 carries several resonances: the address of Britain’s finance minister; the number of the circular bus route that a character rides so as to be warm without heating her home; the number of subterranean floors being dug below an uber-rich family’s London home to extend their already commodious residence. For it’s a satire – sometimes almost judderingly heavy-handed, other times almost painfully delicate – that often addresses some of the themes of this blog, especially those of inequality, tax avoidance, the pitfalls of choice, the politics of ‘austerity’ and, even, the perils of twitter.

The section that spoke most profoundly and personally to me is entitled ‘The Crystal Garden’ which tells of the doomed attempt of Roger, an Oxford academic of about my age, to track down a short film he had seen as a child:

“Roger was convinced … that life was better, simpler, easier, in the past … it wasn’t just a hankering for childhood. It was bigger than that. It was to do with what the country was like … in the sixties and seventies …. For Roger it was about welfarism, and having a safety net, and above all … not being weighed down by choice all the time … he loved the idea of trusting people to make decisions on his behalf. Not all of them. Just some. Just enough so that you were free to live other parts of your life the way that you wanted.” (Coe, 2015: 176)

It’s important to understand that this isn’t about nostalgia, or at least not just about nostalgia. It’s about a rupture that animates – in very different ways – the politics of both nationalists and socialists across, at least, Europe. In France, Les Trentes Glorieuses, Jean Fourastié’s term for the 1945-1975 period of economic growth and social security, captures the same sentiment that Coe expresses. This rupture is described in my book in terms of the shift in the 1970s to the new capitalism (pp. 104-120) and so, of course, present in the book I most heavily draw on in that section, Richard Sennett’s (2006) The Culture of the New Capitalism. And it’s no coincidence that at the heart of Roger’s memory was “waiting for his father to come home from work – from the same place he worked for forty years” (Coe, 2015: 176) because stable employment was at the heart of the economic and social security of those years. As I’ve argued elsewhere on this blog, the erosion of that security constitutes the most pressing political issue of the present time in Western societies, in ways well-captured (for all that it is startlingly inattentive to the ‘critical management’ literature that says much the same thing) by Boltanski and Chiapello’s (2007) The New Spirit of Capitalism.

We can understand this in conventional political terms: the social democratic consensus of North and West Europe and, to an extent, the USA in the post-war decades was about the best economic and social arrangement that has so far existed (even if it did not always seem so at the time). But perhaps it is better understood without thinking in terms of economic or political theory. Bill Bryson’s humorous memoir The Life and Times of the Thunderbolt Kid expresses it well as regards the United States; David Lodge’s novel Nice Work captures the beginning of it in the UK, especially as regards academic life. And Coe’s book is the latest example of the powerful way that art and humour can illuminate social science.

In a somewhat related vein, another Christmas read was Douglas Board’s novel MBA. This is not nearly so well-written (but, to be fair, whereas Coe is a well-established professional novelist Board is a coaching and leadership consultant who has turned his hand to fiction) and it’s a fairly clumsy satire, if not farce, of business schools. Still, it does hit what are for me some familiar targets in terms of the corporatization and even corruption of the contemporary business school, including the hubris of high-flying deans (see Parker, 2014 for a real world example). And there are some acute insights along the way about, for example, the enmeshment of business schools and politicians in the marketization of the public sector that also get a look-in in Coe’s book. MBA certainly isn’t a great or even a good novel, but it’s the first that I know of that tackles the business school. I feel sure that this setting is ripe for the attention of a latter-day Malcolm Bradbury or David Lodge campus novel.

Corridors of power

For what will probably be my final post of the year I return, as no doubt I will many times next year, when it is likely to be held, to the UK Referendum on EU membership. For those interested in the global economic context of organizations, but also in the way that decision making happens in both politics and organizations, the current ‘renegotiation’ is fascinating.

The British Prime Minister, David Cameron, is seeking to renegotiate the terms of UK membership so as to be able to recommend to the British people that they vote to remain in the EU. The terms he is seeking, even if achieved, will not in any way change the minds of those in his own party and beyond who are implacably opposed to EU membership. And although I disagree with their opposition, they are absolutely right to see the renegotiation as a charade. Even if it succeeds, it will not in any substantive way change the terms of membership. So what is it about?

The answer is that it will enable Cameron to say to his party and voters that a deal has been struck that they can support. The more there seem to be huge difficulties and conflicts over getting the deal, the better it will be in terms of making that case. This is widely understood within the political class, the media and informed observers. So the only way that it can be successful is by its appeal to those undecided and/or only mildly anti-EU voters not following events closely and who only tune in during the run-up to the referendum (currently widely expected to be held in June 2016). They will hear that there has been a fundamental change and – if things go to plan – will vote to stay in.

Since I am strongly in favour of Britain’s membership of the EU I hope this works. But it is a risky and in many ways unsatisfactory strategy. It’s risky for two reasons. First, if Cameron doesn’t get even the limited deal he is seeking it won’t have much credibility. Second, it’s by no means guaranteed that those voters it is designed to appeal to will hear this message, rather than that of the campaign to exit. But it’s unsatisfactory because it repeats the errors of the past in failing to make a positive case for EU membership, and just trying to bamboozle a semi-detached electorate into making a half-hearted choice.

Outside of the government, the embryonic campaigns are both, to varying degrees, in trouble. Neither is as yet a single organization (although that will change when the Electoral Commission identify and fund the campaign groups). The ‘in’ campaign is dominated by Lord Rose’s (former head of Marks and Spencer) rather dull, accounting approach, stressing the benefits of membership for businesses, although something more sparky and populist is offered by Alan Johnson’s leadership of the Labour Party’s campaign. And the Labour leader, Jeremy Corbyn, remains at best lukewarm on British membership, a major danger for the ‘in’ campaign. Meanwhile the ‘out’ campaign is openly wracked by conflict between rival groups, a key issue being the extent to which Nigel Farage, the populist but divisive anti-immigration leader of the UK Independence Party (UKIP) will figure. Just today, UKIP’s only MP suggested that Farage should stand down as his party’s leader.

As readers of this blog will know, I was recently in Paris and whilst there had several conversations with people who expressed bemusement at the fact that this debate was even happening in Britain, and certainty that the outcome would be a vote to stay in. I am not sure that this is true, or at least that the vote will be decisive enough to prevent the question to continue to be raised. Opinion polls suggest that the result will be very close, although there is an interesting divide between internet polls (suggesting a close result) and telephone polls (suggesting an easy win for the stay in campaign). This may reflect the fact that the anti-EU movement (at least as regards UKIP) has a very well-organized online presence, and that views within the general population are rather different. It also seems likely that, unsurprisingly, the answer depends on how the question is asked.

Leaving aside the EU issue, I’m struck by how much of this has parallels with how decisions get made in organizations. Often there is a small group of highly involved and committed people on different sides of the argument, and a larger group of more or less uninterested or ambivalent people. Similar techniques are used of taking decisions and discussions to various forums and then bringing them to other bodies to make a final decision, with all the detail having been decided elsewhere. It is a perennially fascinating process about which much has been written in the organization studies literature. But, to bang on about another of my hobby horses, nowhere more insightfully than in the novels of C.P. Snow such as his 1964 masterpiece Corridors of Power.

As I said earlier, I will for sure be returning to these issues in 2016. In the meantime, a very Happy Christmas and New Year to all those reading this blog.

Bitter chocolate

At one point in the book on which this blog is based, I discuss the chocolate firm Cadbury’s as an example of how the ‘new capitalism’ works:

“This was a firm with a history dating back to the nineteenth century and marked by a strong interest in worker welfare. In 2009 a hostile takeover bid from Kraft, a giant US food corporation, was rejected but subsequently, in 2010, a deal was agreed. The deal generated an estimated £240 million in fees for the investment banks and advisers involved. One especially controversial aspect is that Cadbury’s had had plans to close its factory in Somerset and move production to Poland, but Kraft undertook that this would not happen if they took over. However, after the takeover the factory was closed in favour of the Polish location, and amongst the hundreds laid off were families who had worked for Cadbury’s for decades. So here a workplace rooted in a history and a community was eviscerated. Is this just ‘the way things are’? No, because such situations arise from particular regulatory regimes and, as the former chairman of Cadbury’s has argued, the UK regulation of overseas takeovers is especially lax.” (p.106)

My point here was about the fracturing of links between organizational ownership, communities and places. But this connects with another issue, also mentioned briefly in the book (p.118) but more extensively on this blog, namely corporate taxation. For it has now emerged, perhaps unsurprisingly, that Cadbury’s under its new owner Mondelez International, a spin-off of Kraft, paid no UK corporation tax last year. This was not because it was unprofitable (Cadbury’s made £96.5M profit in 2014) but because it used a complex, albeit perfectly legal, device to avoid paying the tax. Briefly, the tax liability was avoided using interest payments on an unsecured debt, listed as a bond on the Channel Islands’ stock exchange, which were then offset against the profits made leading to a zero corporation tax liability.

The use of tax avoidance techniques such as these is widespread. Facebook, Starbucks and Amazon are amongst high profile cases and the recently announced 'reverse takeover' of Pfizer by Allergan is another variant. Here Pfizer – the bigger firm – is formally being taken over by the smaller one, allowing it to headquarter the new entity in the lower corporate tax regime, in this case the Republic of Ireland; so-called tax inversion. These techniques link to the wider issue of organizations and localities because they reflect the freedom of companies to locate globally and the absence of any legal or for that matter normative commitment to any particular country or community.

The problem here is not – or not simply – one of abstract morality. It is that corporate tax avoidance leads to the erosion of the tax base. It is remarkable that with so many countries pursuing policies of fiscal balance there is so much more attention paid to government spending than to government revenues. Yet what the OECD refers to as Base Erosion and Profit Shifting (BEPS) has become a major problem, especially in the developing world leading to a set of proposals for reform being presented to the G20 last October. The OECD initiative, and that of the EU, may in time have an impact (although in the case of the EU proposals they have, depressingly, been rejected by the UK). However, it is equally likely that corporations and their advisers will find new ways to circumvent these rules, and in any case I am not clear that they would have any traction in cases such as Cadbury’s. One problem here is that both national, and these new transnational, rules are immensely complex and it is that very complexity which gives rise to new loopholes.

Apart from legal and regulatory changes to the tax system, the only other game currently in town is consumer action and boycotts. There is some evidence that these can be effective, with Starbucks responding to a UK boycott threat by moving its headquarters to London in 2014, although it has been questioned whether this really made much difference to tax revenues. In any case, such an approach is only ever going to be applied to a few high profile cases. How many consumers will, or could, apply pressure to all the corporates involved in tax avoidance? It’s difficult to imagine many users of Viagra boycotting its maker, Pfizer, to protest against the abstruse-sounding tactic of reverse takeover to facilitate tax inversion!

Whether through changing tax laws or exerting consumer pressure, both these approaches suffer from the fact that they are after the fact attempts to address problems arising from the fracture of ownership and places, especially countries. Thus I continue to think, as implied in the extract from my book that I quoted earlier, that the more important issue is the regulation of international mergers and acquisitions. We can’t put the genie of globalization back in the bottle but there are pragmatic and eminently workable ‘glocalized’ approaches to organization.

It is already the case that takeover rules in Germany, say, are far tougher than in the UK. One consequence of this is the strength of the Mittelstand – medium-sized, often family-owned, businesses – that are the bedrock of German manufacturing and exports. These are firms which are plainly local, and maintain a strong link between ownership, community and employment. Yet this is not an ‘anti-globalization’ argument for the Mittelstand is most certainly global in its clientele. A combination rather like Cadbury’s, in fact, in the days before it was taken over.

Three years on

A rather inward-looking post today. It’s now about three years since this blog started and at this time in previous years I have taken a look at how many people are viewing it and where from (for last year’s report see here). Overall, there have been 17,800 page views since the blog started, up from 7,055 this time last year meaning there have been over 10,700 views this year. In the last month there have been 985 views compared to 364 in the equivalent month last year. So it seems as if the audience is increasing, although it is also the case that I have posted more often this year (40 this year so far as compared to 24 in 2014).

The countries from which people view are shown below (with last year's figures in brackets). Overall it is a similar mix to last year (China has dropped out of the Top 10, Sweden come in), but the United States now tops the chart.

Country	Pageviews
United States (2)	4608 (1761)
United Kingdom (1)	3830 (2206)
Russia (7)	965 (198)
France (6)	871 (209)
Norway (4)	751 (243)
Ukraine (3)	688 (350)
Ireland (8)	646 (147)
Germany (5)	501 (216)
Netherlands (10)	315 (98)
Sweden (-)	190 (-)

 The rising US readership seems to be linked with the fact that by far the most-read post now (846 unique page views) is Reviewing Organization Studies, posted on 3 July 2014 and most of its readers are US-based. I’m guessing that someone in the US organization studies community linked to it. In some ways I slightly regret this as mostly in this blog I try to write about the wider world rather than focussing on narrowly academic matters. But I am certainly not complaining.

Last year I also looked at some of the online reviews of the book, and amongst the new ones this year, I’m particularly amused by this one, posted by ‘smallkids’ on Amazon, which is almost a Haiku:

“HI grey
The words are too small
BUt thx as it is cheap”

And particularly pleased by this one, posted by ‘M Bal’, also on Amazon:

“The author provides a critical overview of organisational theory that is accessible to all who might be interested in the topic, not just academics. He follows a historical perspective in a way that makes approaches to the study of organisations both digestible and contextualised in their contemporary cultural and social ideas. This facilitates the development of a critical perspective on the views of how organisations are "best" managed today in order to stimulate further thought and reflection that could translate to meaningful practice for those possessing some influence in their organisation. Some (introductory) familiarity of organisational theory and management are likely to be beneficial prior to reading the book”.

Overall on Amazon there are 7 reviews of the third edition, averaging 4.4/5 and 14 reviews of the second edition, also averaging 4.4.

Whether any of this is even fairly interesting to anyone but me I don’t know, but it’s not just reasonably cheap but free, and at least the words aren’t too small. At all events, many thanks to those of you reading this blog, wherever you may be reading from.