. > I fabian tract 431 working power chapter 1 introduction ·:·' 1' 2 assumptions . 5 3 problems 9 4 policies 17 5 conclusion 21 '· J . . ·'; this pamphlet, like all publications of the Fabian Society, represents not the collective view of the Society but only the view of the individuals who prepared it. The responsibility o.f the Society is limited to approving publications it issues as worthy of consideration within the Labour movement. Fabian Society, 11 Dartmouth Street, London SW1 H 9BN. September 1974 ISBN 7163 0431 7 ' •,1!.' introduction ·" Industrial democracy ,, is now on the :poLitical agenda for the first time since the 1930s. The TUC is debating a ~major reporton industrial democracy at its 197 4 conference. The minority Labour Government _has promised legislation soon. An three major p()litica:l parties !Wiill be putting to the electorate proposals to increase " participation ". Journalists, management consultants, ell!lightened managementsspend muoh time discussing the issue. Even the em has agreed that some changes . are needed. Yet, despite the general interest, there is · no rugreement on what is meant lby industPial democmcy or on what is the most aJppropriate and effective way of bringing · this 1aJbout. Indeed, when tJhe various slogans . are e~plored, it becomes clear thaJt very different things rure meant bydifferent people. The Conservative party, who, when in government, devoted a great deal of time and energy to trying to mme t:he unions by the 1971 Industrial Relations Act, are now in favour of compulsory consult- abi{m. 11he LiberaJs, who have a rather more consistant attitude on the issue, propose a system whose essential elements are profit sha1ning by employees eombined wi~h statutory works councils. Theybelieve t!hat suoh ohanges, by g,iving ·the workers 1a " stake ,, in the enterprise, would ~ead to " greater indu trial harm ny ". The CBI are fir,mly against both works councils and employee representrution on boards of ~management but consider that consultat,ion should be improved. This reflect a growing interest by progressive managements in developing more " democratic" styles of supervision and ma nagement, devising better systems of con ultation and communication, and experimenting with ways to increase job sati faction ". A ma jor cPiticism of the aJpproaches of the Conservatives, Liberals and the em is that, whatever their merits, they give employees " tJhe iHusion of involvement without the reality of power" (W. W. Daniel and Neil Mcintosh, The Right to Manage, PEP, 1972, page 125). For democracy is rubout the transfer of power, not about consultation, job involvement, profit sharing or even prjmaPily about participation. It is because trade unions have always understood this that they have concen1trated their resources on bargaining as the most effective method of democratisingindustry. IndividuaHy, employees are no match .for their employers. But, by oPganising their coUective strengtlh, ~hey tap a source of power independent of and capaJble of standing up to management. Thus, in Britain, the ml(1in thrust of the efforts of employees to influence managerial decision making has 1been through collective 1bargaining and craft control. the traditional trade union approach The eadiest successful attempt to usurpmanagerial decision making power was made lby !the craft umons in .the 19th century and was based on the ability of skilled workeliS to control entry to the Lrubour market. In many fi·Pms, craft control has developed tJhrouglh the estaJblishment of " custom and practice " into a more sophisticated cont.flain.rt on managerial freedom to regulate work oPganisation, recruitment, discipline and tech11icaJl change. The unskilled workers, lacking the initial bargaining power of the skilled workers, had to organise in strength before they could create 1a method of influencing management. However, the growth in trade union m embership amongst the workers, particularly dur.ing two world wars, created the baS~is for an effective collective bargaining system by which, in manyindustries, unilateral regulation has been replaced tby tJhe joint regulation of both substantive (about the terms and conditions of employment) and procedural (ahout the way in which substantive norms are made, challenged, interpreted and applied) .issues. After the war full employ,ment led to the development of shopfloor bargaining, w1ith shop stewards negotiating, as the Donovan report showed, over a wide range of issues. 1'hus, through coB.ective ba·rgaining, employees have not only been able to ()btain higher living st:andavds but also a share in decisjon making in certain vital, if J,imited, aJreas which were formerly the prerogative of management. Not sunprisingly, therefore, most British trade union leaders have fought shy of other ways of controlling managerialdecision making. It !is true that Guild Socialism, which advocated a trade union partnership w.ilth the state to run Jndustry, had its supporters from immediately before the 1914-18 war until the middle twenties. Also during the second wodd war, joint production committees of mana; gers and shop stewards in the engineering industry discussed a wide vange of subjects, so much so that, for a few years aJfter ltlhat 'War, many saw jolint consultation, •particularly in the nationalised industries as a useful adjunct to collective bargaining. In practice, however, the insistence that joint consultation should be kept sepavate from collective bargaining meant rthat, except during the over- Iiiding crisis of the war, when joint consultatJon developed into something only a little short of joint control, the effectiveness of joint consultative committees was extremely limited. And, w.itJh the grow:th in shop floor bargaining, shop stewards did not see why there should continue to be sepa!'1ate a.lirangements for dealing with issues which, though they were wider than wages and conditions, could st'iU be matters on whioh opinions might differ. As a result, the consultative committees either were brought into the ·ba·rgaining system or became very anodyne indeed. Majority Dpinion was also against the idea of having employee representatives of tr.ade unions to participate in mana;gement boa•rds. In the debate at the end of the second wodd war on how nationa!lised industries should be run, the rue set its face firmly against workers' control. Instead, it gave its backing to the Morrisonion concept of a pUiblic corporati, on without direct trade union representation A·s the 1944 rue document on postwar reconstruction put it : " it does n'ot seem 1by any mean ·certain that it would be in the best interests of the workpeople of a rrat1on:alised industry to have, as directly representative of them, members of the cont!'1olling board who would be comrnitted ,to its joint decisions ... trade 1 unions should maintain their complete j ndependence ". T-rade union directors, • usually on a part time 'basis, were appoin-I ted but al,ways from outside the industryconcerned. Thus, whil.e Western Germanylegislated for employee representation on supervisory hoards and, with many other European countries, for works councils, the Briti·sh Trade Union Movement was content to rely on collective bargaining and, it cis only fair to add, on its great pol.itical power (which enabled it to lobbyboth Labour and Conservative governments with a very real chance of beingheard) to influence mana,gement. tradition modified Perhaps bhe first change in aJttitude taken by the T£ade Union Movement came in 1968 with the TUC evidence to the Donovan Commission. In a cautious shift of position, it stated that " there is now a grow~ng recognition that rut least in industries under pUJblic ownership provision should rbe made at each level in the management structure for trade union representatives of the work people employed in these industries to paaticipate in the formrulration of policy and in the day to day operation of these industries ", and argued that ·there shoill.d be participation at three different levels-plant, intern1edia ·ry and board level. At plant level, the rue proposed that workplace representatives should sit on "whatever is the norma[ body which regularly meets at plant level to take decisions on the run- Illing of that plant"; that there should also be trade union representation at intermediate level ; and that, at board level, there Should be legislation to allow companies if they wished to make provisionfor trade union representation. Later, in 1967, an infiuentiwl Labour Partywork.ing prurty, under the chairmanshipof Jack Jones, also called .for experiment in " new foi1Ills of workers' participation " within tlhe rpublic sector. Wbi~e the report . emphasised the crucial role of collective bargaining in the development of indus. rjal democ·racy, it concluded that workers' representatives (not necessarily fuH time officers of the union) should be placed on boa·rds of nationalised indus ' .ries. In the private sector, the working party concluded that it was more impor, tan:t to concentrate on the extension of r ~ollective bargaining " because it would 1 be dangerous to obstruct the question of worker ifepresentation on company boards of directors and so forth .from this ·more fundamental question of the st·rengtheningand co-ordination of col•lective bargaining within the company". 11he change in emphasis led, under the LCllbour administrations of the 1960s, to limited experiments in worker represent. at.ion on the boaads of publicly owned enterprises. In 1967, the British Steel Corporation's scheme for the appointment of worker directors on div•isional boards was 1 • agreed on an experimental basis between the Tuc's steel cotnmittee and the British Steel Co!lporation. The TUC General Council successfully argued that some appointments to the Passenger T.ransport Authorities, set up by bhe 1968 Transport 1 Act, should •be from trade unions who organised employees of the new boards, · while ~t also urged that the 1970 Ports J BiH should make provis·ion for employee e representation on th e Port Boards. 0 Though the shuft in attitudes amongst ~orne trade union leaders and Labour politicians during .1Jhe 1960s was significant in the modification of British tradition, even •more crucial were initiatives at shopf1 oor level. orne of the e were basically defens.ive in character, a reaction to managerial ·decisions which threatened c1 osures and redundancies. The most famous example was the " work in " at Utpper Clyde Shupbui•lders of 1971 -72 which saved four yards ; other actions included "sit ins" at Plessey (Alexandria), Fisher Bendix, Alvis Chalmers and the .former BLMC Thorneycroft •factory at Basingstoke. Yet though some " work ·ins " and " sit ins " have been successful, ~their import·ance was more symbolic than actual, tlhe last ditch defiance of a desperate work force. Pl"oba:bly more important were advances achieved in collective bargaining. 1ihe devolution of bavg.aining to plant level, the irrcrease in lay partici'{ Jation in negotiating machinery, the 1beginning of bargaining at a companylevel, and the extension of col!lective bargaining into areas .of managerial control- all these created a new •base from which ·more a1mbitious sohemes of industria{ democracy could be launched. Perhaps the most critical faotor orf all was the recognition during the 1960s and 1970s of the interlocking nature of managerial decision making. It MTas not enough to have joint control merely over wages and conditions. These decisions were shruped .by earlier decisions ·On investment, product•ion, and design whioh, in their turn, were part of an overall corporate strategy. It was the worsening economic conditions of this peniod which hlghligihted the Hmitations of traditional collective bClJrgaining. Although there had been extensions of bargaining, particut. ady at shopfloor level, the cent•ral management decisions (investment, location, closures and mergers, the future shaJpe of corporate strategy) remained outside t!he scope of collective bargainjng. It was beco~ ming increasingly obviou that the Labour Movement would have to work out a planned and concerted strategy for f,u rthering indu tria~ democracy. The pressure from below coinoided with other developments. With Britain's entry ·into the European Economic Community, even a Conservative administration at loggerheads with the Trade Union Movement over the Industria!l Relations Act of 1971 , was forced to react to two European initiatives-the proposal for a "EuropeanCompany " statute and the draft of a fi f th directive on Company Law. T'he proposed statute, whioh is not intended to be mandatory, is concerned with the govern~ ment .of tJhe " European Company ", ·a new form of legal entity envisaged as emerging as a •resuit of the nationaJlisat-ion of companies operating across national boundaries and is based on the German co~deter·mination raodel, with supeiVisory boards and works councils. The proposed" European " statute is, at the moment, of little practical importance, as it is unlikely in the near future that concerns wiU wish to register as "European companies ", even .if the Oouncil of Ministers agree on the statute. Trhe draft fifth directive, which is potentially more si·gnificant as it would cover aH public limited liability companies with more than 500 employees, puts forward a imilar structure to that !proposed for the European company, except tJhat it proposes two alternative systems for appointing the supervisory board. Under the fin~t system (based on the German model), at least one third of the board must be appointed 'bY the workers, eitlher by direct eJection o[ their representatives or through recognised trade union machinery according to the discretion of the member states. Under the second system (based on the Dutch model), there would be coorption for the whole supervisory board, including workers' representatives with a limited power of veto over candidates to the :board. Faced by these two initiatives, the Conservative Government consulted the CBI and the TUC. 'Dhough the CBI gave the EEC proposals a dusty answer, the TUC in its comments, while rejecting the works council as inappropriate to the British indrustriaJl relations system, was prepared to accept that there was now a case for employee ·representation on supervisoryboa:rds, but aligued that it thought that this representation should 1be strengthened to a "parity" posi.tion and directly linked to trade union organisation at company and plant level. Meanwhile, in the valuable new spirit of close co-operation developed between the Labour Party and the TUC during the early 1970s, the Labour Party and the TUC discussed jointlly policies to promote more industrial democracy. Independently, at the 1973 :rrades Union Congress, the Trade Umon Movement approved an important interim statement on industrial democracy. Like the 1967 Labour working party report, it conoluded that " the major way to extend coilective contro[ of wo,rk .people over thek work situation will continue to tbe through the strengthemng of tra!de union organisation and the widening of :the scope of collective bargaining ". However, because even the extension of collective 1bargaining would ,]eave " a wide range of fundamental managerial decisions affect,ing work people ... beyond the control of work people and their trade unions ", the TUC statement, in a deciSJive break with traditional TUC 'POlicy, proposed that trade union repre· sentHtives should form one haif of a new board supervising the mana·gement bnaro of alol compalllies employing more than 200 people (during 1974, af.ter discussion with 1:Jhe LaJbour Party, this proposal was modified to cover, in the first instance, only companies employing more than 2,000 employees). In addition, the supervisory board would be the supreme body in the company, while management would be obliged in law to take account of employee interests. A statement embodying these proposals is being presented to the 1974 Congress. The minority Labour government has promised a biU to further industliial democracy and, if re-elected, is likely to publish a WhJite Pa:per at the end of 1974. The puvpose o[ this pam.phlet, which brings together the main threads orf the 'Papers and dis·cussions o.f a Fabian working party, is to provide both a perspect·ive to and a critkal discussion ·of Labour party and trade union polioies to produce more industrial democracy, to highlight some of the problems involved and to explore some of the policy options. We ho'De that it w.iU make a contri·bution to debate within the Labour movement. assumptions he pamphlet has three underlyingassumptions. Fi1rst, it ~s argued that the democratic case has an ethical basis separate from and independent of other considerations. Secondly, there is evidence that employees and their representatives want more say. Thirdly, industrirul demo- cracy should ~be defined primarily tin terms of a change in power relationships. tt:he democratic case The democratic case within industry has the same ethical basis as democratic argu- . ments elsewhere-that every individual should have .the right to control his own envtironment. The democratic chaLlenge · to managerial prerogative wiuhin industry is the saJme as the chall.enge to autocracyeverywhere-" by what right ? " Ttraditiona1ly, managerJa.il prerogative has rested on property rights. 'Ilhrcmgh direct . ownersh1p or through power delegated by shar~holders, managers have claimed the right :to manage ·enterprises unilaterally without reference to their employees. 'f'he justification of managerial prerogativebased on property rights has, however, come under attack from a number of directions. llhe development of a mixed economy with a lange pubLic sector has undermined the strenguh of the case based on private property rights. And, in manyof the Jargest private firms, the link be- tween owner.ship and control is now so tenuous that the property aJrgument is decisively weakened-so much so that in a number of areas, for example in the pa)'iments of redundancy benefits, em- ployees h ave turned the argument on i:ts head 1by themselves establishing rights based on their "ownership " of their jobs (tlhrorugh employee rights are stiU not recognised in company [aw). A superficially more convincing case argllled :in ternns of techn:icaJ expertise is now populCl!f amongst managers. In an industrial system which is growing more complex, so the argument runs, mana- gerial prerogative is more :than ever justi- fied, because 'management alone possesses the necessary skills. In a sense, an unchal- lengeable argument-only management now has the opportunity to exercise these skills. But when we talk about managerialskills, what do we mean? Of course, there are specialised skills (accounting, economic forecasting, data processing, legal exper- tise and so on) to which manaJgement needs access. Galbraith has, in fact, claimed (in The New Industrial State) that the development of these spedalisations are an important, even decisive, contraint on management. However, the fact is the strategic decisions are still. made by the managers-even i.f it is on the basis of evidence supplied by the specialists. 'f'he central ·management function is one of decision making (decision making at a number of different levels) ; and it is this process W~ith whrch the advocates of more industrial demooracy are concerned. Employee representatives at different levels already rmake a contribution to deoision making on a number of subjects, through collective bargaining. Is it seri- ously argued that workers' representa- tives, even after the appropriate training, will •remain incapa;ble of making a ·con- tribution to other kinds of decisions. The fact that management remains anxious to attra:ct shop stewards into junior manage- ment positons and recruit trade union officials into management jobs at hi·~her levels, :induding the 1boa·rdroom, casts grave doubts on this type of assertion. 'f'he unease fel:t ·by management Cl!pologistsis reflected in the foliowing statement by the Director Generrul of the CBI : "Man- agers do not-1f they ever had-have a divine right to manage. There is no auto- matic prerogative to make decisions and eXJpect them to be canried out. The pro- cess of decision making w:iH have to be more and more justified and demonstrated to be rig;ht in or.der to command the respect not only of the people working in the company 1but the community as a whole" (W. C. Adamson, CBI Director General's inaugural letter to members, 1970). In other words management is beginning to accept the legitimacy of a differen:t basis .for authority-that o.f consent. Of course, :there can be very different meanings attached to "consent". The assumptions he pamphlet has three underlyingassumptions. Fi1rst, it ~s argued that the democratic case has an ethical basis separate from and independent of other considerations. Secondly, there is evidence that employees and their representatives want more say. Thirdly, industrirul demo- cracy should ~be defined primarily tin terms of a change in power relationships. tt:he democratic case The democratic case within industry has the same ethical basis as democratic argu- . ments elsewhere-that every individual should have .the right to control his own envtironment. The democratic chaLlenge · to managerial prerogative wiuhin industry is the saJme as the chall.enge to autocracyeverywhere-" by what right ? " Ttraditiona1ly, managerJa.il prerogative has rested on property rights. 'Ilhrcmgh direct . ownersh1p or through power delegated by shar~holders, managers have claimed the right :to manage ·enterprises unilaterally without reference to their employees. 'f'he justification of managerial prerogativebased on property rights has, however, come under attack from a number of directions. llhe development of a mixed economy with a lange pubLic sector has undermined the strenguh of the case based on private property rights. And, in manyof the Jargest private firms, the link be- tween owner.ship and control is now so tenuous that the property aJrgument is decisively weakened-so much so that in a number of areas, for example in the pa)'iments of redundancy benefits, em- ployees h ave turned the argument on i:ts head 1by themselves establishing rights based on their "ownership " of their jobs (tlhrorugh employee rights are stiU not recognised in company [aw). A superficially more convincing case argllled :in ternns of techn:icaJ expertise is now populCl!f amongst managers. In an industrial system which is growing more complex, so the argument runs, mana- gerial prerogative is more :than ever justi- fied, because 'management alone possesses the necessary skills. In a sense, an unchal- lengeable argument-only management now has the opportunity to exercise these skills. But when we talk about managerialskills, what do we mean? Of course, there are specialised skills (accounting, economic forecasting, data processing, legal exper- tise and so on) to which manaJgement needs access. Galbraith has, in fact, claimed (in The New Industrial State) that the development of these spedalisations are an important, even decisive, contraint on management. However, the fact is the strategic decisions are still. made by the managers-even i.f it is on the basis of evidence supplied by the specialists. 'f'he central ·management function is one of decision making (decision making at a number of different levels) ; and it is this process W~ith whrch the advocates of more industrial demooracy are concerned. Employee representatives at different levels already rmake a contribution to deoision making on a number of subjects, through collective bargaining. Is it seri- ously argued that workers' representa- tives, even after the appropriate training, will •remain incapa;ble of making a ·con- tribution to other kinds of decisions. The fact that management remains anxious to attra:ct shop stewards into junior manage- ment positons and recruit trade union officials into management jobs at hi·~her levels, :induding the 1boa·rdroom, casts grave doubts on this type of assertion. 'f'he unease fel:t ·by management Cl!pologistsis reflected in the foliowing statement by the Director Generrul of the CBI : "Man- agers do not-1f they ever had-have a divine right to manage. There is no auto- matic prerogative to make decisions and eXJpect them to be canried out. The pro- cess of decision making w:iH have to be more and more justified and demonstrated to be rig;ht in or.der to command the respect not only of the people working in the company 1but the community as a whole" (W. C. Adamson, CBI Director General's inaugural letter to members, 1970). In other words management is beginning to accept the legitimacy of a differen:t basis .for authority-that o.f consent. Of course, :there can be very different meanings attached to "consent". The slave ·can .be said to "consent" to his exploitation-but that :is because he has no alternative. In the same way the worker may " consent " to managerialdomination in many areas, because through social and cultural " blindness " he cannot " see " any other alternative. But "oonsent ", in the widest sense, implies fuH recognition of the ~rights of employees. It follows that it is not possible, once the broad ·meaning of " consent " has been accepted, to draw distinct,ions between those issues whioh are to be the subject of discussion, negotiation and agreement and those issues which must remain exclusively the prerogative of management. Management decisions are indiv,isible. Management cannot in !logic say "yes, we are prepared to discuss wages and conditions but all the rest-job des,ign, hiring and firing, managerial appointment, investment, corporate planning-these are our business ". Decisions about wages and conditions are connected and often shaped by earlier decisions on other even more fundamental ·matters. Thus, within industcy, as elsewhere, authority based on consent implies an increase in democracy. Democracy ,is infectious. This is one of tae main strengths of the industrial democrat's case. For, in a society in which democratic Ll'ights are increasingly recognised, it becomes more and more difficult to maintain that industry should remain exempt. Why should industry remain one of the major areas to which democflatic principles do not apply ? It was Vfctor Hugo who said that nothing is more poweliful than the idea wihose time has come. It is undeniable that a shift in society's vaiues has helped to undermine the traditional basis of industrial authority and substantially strengthened the clai,ms of demooracy. Thus the case for a " democratic " .industry is stronger todaythan ever be£ore. A final point : the democratic case is va],jd in its own ~dght. It may be t~rue that industrial authority will 1break down unless it rests on consent or that, if t!here is more democracy, industry will work more efficiently. But these are Importantbut subsidiary a•flguments. In the same way, it is not either a validation or invalidatllon of the democratic case if workers either wish or do not wish to exercise their democratic rights. What is essential is that democratic ri~hts should be available .and workers should have the opportunity to exercise them. the demand for more say There is, however, evidence both of a demand by employees for more say and also that, once more say has been adhieved, workers support the change. As far as the demand for more say 1s concerned, three different levels are .relevant-the employees themselves, their shop floor representatives, and national trade union officials. Inevitably, their different levels will give different perspectives. Employee v[ews are expressed in a more negative than a positive fashion, as .a reaction against assertions of managerial authority. Shop floor representat- ives tend to be more positively assertive, but ~n a locati.sed, sectionai way. For obvious reasons (some of which are organisational), national trade headquarters see things in a wider context. Attitude surveys of employees are inevita; bly unsatlisfactory. Those who are not used to participation tend to be uncertain whether they ·Want it--,particulady if they, Like most people, are uncertain w.hat it entails. There is the additiona;l fear, some- ti,mes encouraged by management, that more democracy can only be obtained at the expense of so.me other desirable objective- such as better pay and conditions. What is surprising, .given aU these difficulties, is the very brge section of the work force (as revealed by the inquiry carried out by the Donovan Cornmission and the Cambridge study of the affluent worker) wanting a greater say in manage ment. Turning to the shopfloor representatives of employees-the shop stewards-theyhave been for a number of years demanding more say at shopfloor level (some times in response to manager.ial encroach' ments) and often getting it. The surveyca1"ried out for the Donovan Commiss•ion showed that the vast majority of shopstewarrds negotiated with management on a wide range of topics including wages, working conditJions, hours of work, disci. p1ine and employment issues, such as work allocation, workpower, machine moving, job transfer and distribution of overtime. McCarthy and Parker summed . up shop steward activities as follows : : shop stewards a·re " essentially shop floor · workers, using atH the opportuni~ies presented to them to satisfy their members grievances and olaims ". llhey are prepared to "use any avenue of access to management" and if necessary "circumvent estrublished rules and procedures to get what their mem•bers want " (McCa.rtJhyand Parker, Research Paper 10, Donovan Commission). In short, shop stewards- key figures on the shop floor-represent a steady pressure at this level for employee encroachm·ent on .managerial prerogative. At national level, trade unions have a:lso been asking for more influence in the nmning of enterprises. This has expressed itself in two ways through bargaining at company level and in resolutions and policy statements calling .for more industrial democracy. In a num1ber of recent trade union side olaims (ICI and Fords, for example,) trade union nego~iators have tried to open up questions-the quaJ!lity of working life, Jnvestment, corporate planning-which were formerlythe prerogative of management. At trade union conferences, including those of some of the largest unions, there have been a nrumtber of resolutions and pdl•icy statements on industrial democracy. Thus adding together the evidence from the three levels (employees, sho:pftoorreoresentatives and national trade union orgar1isations), we :get a clear indication of substantial suppo·rt for a move towa.rds industrial democracy. As to employees' attitude towards systems in which they have more say, Paul Biumberg in his thorough examination of the subject, Industrial Democracy: the Sociology of Participation, has this to say, " There is hardly a study in the entire literature which fails to demonstrate that satisfaction Jn work is enhanced or that generally acknowledged ·beneficial consequences accrue from a genuine increase in workers' decision malci.ng power. Such consistency of findings, I submit, is rare in social research". He conoludes "It is not really difficult no explain why 'Participation works ; jt is almost a matter of common sense ~hat men will take greater pride and pleasure in their work if they are allowed to participate tin shaping the policies and decisions whioh affect that work " (quoted in McCarthy and Ellis, "Management by Agreement"). changing power relationships Industrial democracy shou1d be defined primarily in terms of power relationships. Thus an effective democratic st,rategy must genuinely change the balance of power in favour of employees and not :tnerely wive a democra:tic facade to an otherwise authoritarian structure. We should, therefore, be suspicious of anymanagement orientated approaoh which does not shift power towards employees. By the srume token, we should also reject any new structure or maohinery, however democratic they appear on pa:per, whioh either does not materially increase or actually su:btracts from e:xdsting sources of employee power, for example, tra;de union organisation. This does not mean that .good job design which increases an employee's scope for autonomy and sel.f ex:pression is not important or that the development of consultative, democratic styl~ of management is not to be encouraged. On the contrary, a growing body of research has shown that employees are becoming increasingly ·dissatisfied wJth jobs w.hich are unrewa.vding in human terms. And there is .a[so a l1ink between job satisfaction and industr.ial democracy-in tJhat the greater the involvement in work itself the ,more mearungful the involvement in tlhe !funning of the enterprise is .J.ikely to be {as demostrated by the work of the Tavistock dnstitute). Even so, increasing job satisfaction by itself does nothing to redistr.i