culture and control in a life insurance company1
TRANSCRIPT
This article was downloaded by: [York University Libraries]On: 18 November 2014, At: 11:05Publisher: RoutledgeInforma Ltd Registered in England and Wales Registered Number: 1072954Registered office: Mortimer House, 37-41 Mortimer Street, London W1T 3JH, UK
Studies in Cultures, Organizationsand SocietiesPublication details, including instructions for authors andsubscription information:http://www.tandfonline.com/loi/gsco19
Culture and control in a lifeinsurance companyDavid Knights a & Hugh Willmott aa Manchester School of Management , UMIST , United KingdomPublished online: 21 Jun 2007.
To cite this article: David Knights & Hugh Willmott (1995) Culture and control in a lifeinsurance company , Studies in Cultures, Organizations and Societies, 1:1, 29-46, DOI:10.1080/10245289508523444
To link to this article: http://dx.doi.org/10.1080/10245289508523444
PLEASE SCROLL DOWN FOR ARTICLE
Taylor & Francis makes every effort to ensure the accuracy of all the information (the“Content”) contained in the publications on our platform. However, Taylor & Francis,our agents, and our licensors make no representations or warranties whatsoeveras to the accuracy, completeness, or suitability for any purpose of the Content. Anyopinions and views expressed in this publication are the opinions and views of theauthors, and are not the views of or endorsed by Taylor & Francis. The accuracyof the Content should not be relied upon and should be independently verifiedwith primary sources of information. Taylor and Francis shall not be liable for anylosses, actions, claims, proceedings, demands, costs, expenses, damages, and otherliabilities whatsoever or howsoever caused arising directly or indirectly in connectionwith, in relation to or arising out of the use of the Content.
This article may be used for research, teaching, and private study purposes. Anysubstantial or systematic reproduction, redistribution, reselling, loan, sub-licensing,systematic supply, or distribution in any form to anyone is expressly forbidden. Terms& Conditions of access and use can be found at http://www.tandfonline.com/page/terms-and-conditions
Studies in Cults., Orgs. and Socs., 1995 Vol. 1 , pp. 29-46 O 1995 Harwood Academic Publishers GmbH Reprints available directly from the publisher Printed in Malaysia Photocopy permitted by license only
Culture and Control in a Life Insurance company1
David Knights and Hugh Willmott
Manchester School of Management, UMIST, United Kingdom
This paper presents a case study of a corporation undergoing organizational and cultural change within the context of a transformation in the political philosophy of Britain. Studying these cultural and symbolic changes enables us to appreciate how the restructuring of the economy is worked out at the level of the enterprise as the British government embraced a New Right politics of "free market" economics. The analysis is framed within an overall perspective that perceives the localised changes within a single enterprise as reflecting certain shared conditions which also effect more global changes in a political economy. In short, the changes that we witness in our case study of an insurance company were already taking place before they were reinforced by the competitive conditions ensuing from New Right governmental policies. The paper provides a thick description of the tensions and difficulties of transforming an organizational culture even when global conditions are providing considerable support.
Introduction
Most commentaries concerning changes in economic culture focus upon issues of macro- economics and political theory (Williamson 1985; Porter 1985; 1990; King 1987; Plant 1984). It is assumed without question that this is the level at which the restructuring of a political economy can best be addressed and subjected to critique. Poststructuralists, however, have challenged the belief that such grand narratives are anything more than myths and mystifications (Foucault 1980; Lyotard 1984). We would not wish to dismiss all talk of large scale or global changes in political and economic culture that have been a medium and outcome of a "New Right" discourse sweeping through western society. On the other hand, we believe that it is only through the examination of everyday political and business practices that changes in an economic culture can be adequately understood. Analyses concerned with the economy as a whole assume, but cannot explore, how changes in philosophy and policy are taking place within work organizations or state institutions. Studying changes of philosophy and practice within these organizations allows a better appreciation of how, for example, the market-centred strategy of the New Right for restructuring the British economy is being worked out at the level of the enterprise.
I An earlier draft of this paper was presented at the 6th SCOS Conference on Organizational Symbolism Copenhagen Business School, Denmark, July, 1991. Earlier formulations of parts of the field work were presented in Knights and Willmott (1987; 1993). We are grateful for the helpful comments and criticisms of the anonymous reviewers and the special editors of this issue. The study was made possible by grants from the Economic and Social Research Council, and the Institute of Chartered Accountants in England and Wales.
Dow
nloa
ded
by [
Yor
k U
nive
rsity
Lib
rari
es]
at 1
1:05
18
Nov
embe
r 20
14
30 D. Knights and H. Willrnott
There is no suggestion that the New Right political philosophy, along with its programme of economic deregulation and privatisation, is uninfluenced by the competitive changes in industry that preceded it. However, prior to this period of neo- conservatism, our case study company and a majority of its competitors had undergone very little change due to the prevalence of highly paternalistic managers operating in a relatively comfortable market. The framework of our analysis is one that perceives certain conditions coinciding at a particular time on a given site that make it more possible for radical change to be instigated. So, for example, the changes that we witness in our case study of an insurance company were already taking place before they were reinforced by the competitive conditions ensuing from New Right governmental policies. In a similar fashion, the New Right politics were constituted out of historically contingent practices and beliefs, a number of which stemmed from the very industries (e.g. insurance) that were then targeted for change. More generally, the global character of this shift in political thinking and practice cannot be separated from the increasing internationalization of trade which itself is an outcome of national and corporate pursuits of prosperity.
The paper is organized as follows. After outlining the methods of research a brief sketch is provided of the sectoral context within which our case study, under the pseudonym of Pensco, functions. This sets the scene for our examination, in the second section, of moves to replace a paternalistic, consensus-oriented philosophy of management with a culture that emphasises "commercial" and "professional" criteria for shaping the strategy and assessing employee and corporate performance. Instead of evaluating corporate performance primarily in terms of its bonuses to existing policy- holders or its reputation in the industry, the assessments of the new management are more attentive to market share, the rate of internal innovation, the control of expenses, the productivity of labour, etc. Relatedly, the contribution of individual managers is evaluated more in terms of their (perceived) role in securing these objectives than their length of service or their formal (e.g. actuarial) qualifications. These developments have been accompanied by closer monitoring of market performance, labour productivity and, more generally, much closer attention to the design and operation of systems of management control.
To signal and promote major organizational change, attention was given to transforming the culture and symbolism which pervaded the company. The remainder of the paper provides an account of aspects of this change by addressing certain tensions that were associated with it. More specifically, the symbolic aspects of corporate identity are examined as conditions and consequences of the emergence and development of changes in the organizational culture. In the discussion section, we reflect on how attempts by senior management to undermine past traditions by ridicule and coercive strategies resulted in passive resistance and counter-productive responses to their demands. In our conclusion we point to some of the implications of this research for studying culture and symbolism in contemporary organizations. First, though, we provide an outline of our methods of research.
Research in the company was longitudinal (see Pettigrew 1983, continuing over a period of approximately three years, with visits being made for two to five days on a bi- monthly basis. Methods employed in collecting data included in-depth interviews, non- participant observation of several decision-making meetings and documentary research. On no occasion were the researchers prevented from attending a meeting, committee or
Dow
nloa
ded
by [
Yor
k U
nive
rsity
Lib
rari
es]
at 1
1:05
18
Nov
embe
r 20
14
Culture and Control in a Life Insurance Company 31
interviewing a manager or member of staff. The exceptional quality of the research access enabled the authors to interview all managers and supervisory staff (many on more than one occasion), to attend departmental and senior management meetings, and to observe the progress of special projects as well as the cycles of operational activity. We conducted approximately 40 in-depth interviews with senior and middle management throughout the company and attended 12 senior executive strategy apd policy-making meetings (Knights and Willmott 1993).
Although the data discussed in this paper was drawn principally from a single case study, its interpretation is informed by a sectoral analysis of financial services conducted over a number of years under two major research programmes. However, we see our field work primarily as a vehicle for exploring and rendering more intelligible a number of theoretical ideas or insights rather than as producing accurate and exhaustive representative truths (Knights 1995).
Pensco in Sectoral Perspective
Pensco was formed in the 19th century as a friendly society - a history which is important in explaining the tradition of paternalist forms of management control within the company. Friendly societies were voluntary self-help insurance organizations often, though not in the present case, established to protect working class members from pauperism due to unforseen risks such as sickness, unemployment or death (Gosden 1961; 1973). The company grew slowly until after the Second World War. New and repeat business was achieved on the basis of the company's reputation amongst intermediaries (e.g. accountants) rather than through more direct, "hard sell" methods of promoting and distributing its policies. Priority was given to the welfare of existing policy-holders and the secure employment of staff.
As a mutual life company, Pensco has not been subjected to the discipline of shareholders and the stock market threat of takeover and, like many of its competitors with similar friendly society origins, it has embraced highly paternalistic management traditions. In addition to the absence of external discipline, Pensco has been protected by trading predominantly in "with profits" policies where the costs of administration are deducted from investment surpluses before any surpluses are distr ibuted to policyholders. This design has meant that market pressures to improve internal efficiency through controlling unit costs of processing business, for example, have been minimal, especially where investment performance has been strong because of "healthy" stock markets; with this "with profits" design, surplus can much more readily be accumulated through investment funds in the capital markets than it can by directly squeezing or intensifying production out of their own labour (Knights and Willmott 1990).
Pensco's steady but unspectacular growth until the 1950s was an unintended consequence of an adequate demand for its products rather than the result of any plan or pressure to expand. Rapid expansion did not occur until the company introduced a pensions product whose distinctive characteristics anticipated legislation passed in 1956. Overnight, this legislation converted a small market into a veritable bonanza. Pensco's leadership in this market allowed the company to ride on the crest of the pensions wave, despite the entry of competitors into a market which has continued to expand.
However, by the late 1970s, the Directors of the company faced a situation in which Pensco had grown quite vigorously in a largely unplanned and unmanaged way. It was
Dow
nloa
ded
by [
Yor
k U
nive
rsity
Lib
rari
es]
at 1
1:05
18
Nov
embe
r 20
14
32 D. Knights and H. Willmotz
therefore ill-prepared and ill-equipped to face a period of turbulent change (e.g., deregulation) and intensifying competition. Much of this market strength may be accounted for by the symbolic elements of success. Once Pensco had acquired a high rank in the performance league tables (through a fortunate but unplanned decision regarding tax calculations), the company enjoyed a symbolic reputation as a leading pensions provider that continued well beyond the specifics of its financial performance. Despite considerable internal personnel problems and inefficiencies that we detected while pursuing our research (Knights and Willmott 1988), the company continued to enjoy a high reputation in the insurance broker market place. Although difficult to achieve, once it is established a positive corporate image tends to be self-reinforcing. As a senior manager at Marks and Spencers told us, "our image as a customer-oriented retailer often results in the media or consumers attributing to us "good" practices to which we are not entitled". Pensco seemed to enjoy a number of these halo effects and associated symbolic benefits within the financial services industry.
"New Times" at Pensco
As a mutual society, it could be argued that a weakening of its competitive position was unimportant so long as the investments of existing policy holders are well managed. In principle, the funds could be closed and a skeleton staff retained to manage the investments and process claims. However, in the early 1980s, the company found itself with about a third of the senior management due for retirement and no managers in the company as obvious replacements. The Board recognised that this presented an opportunity to modernise the company. The strategic replacement of the Chief Executive was a symbolic act that served to demonstrate to employees that "new times" were around the corner. Although an actuary, the new appointment was experienced in personnel and marketing, spheres in which significant change could be anticipated. The opportunity occasioned by the imminent retirements, allowed him to bring in a number of new senior managers. Each of these appointments provided an occasion to stamp a new symbolic identity on the organization.
The view that the new Chief Executive sought to instill, first amongst his senior management team and later amongst middle management, was that Pensco had become a sleepy company, grown complacent with its effortless success. Their collective mission was defined by him as one of waking up the staff to the realities of the company's survival in increasingly volatile and competitive markets. Coming from a marketing background, and with direct experience of the development of the industry in other countries, he formulated a corporate strategy in which great emphasis was placed upon cost-effective methods of administration to support a higher profile in the marketing of innovative products, including planned expansion into the unit-linked market (see below). Despite its questionable appropriateness for the espoused concern of a mutual company to maximise the returns for existing policy holders, the corporate strategy has been infused by a "spirit of capitalism" in which growth and unit-costs have been central objectives. Increasingly mutuals (primarily insurance companies and building societies) in the UK have begun to display all the symbols of capitalist enterprise, demonstrating how effective the New Right has been in instilling "free" market principles and creating the competitive conditions that seemingly can be ignored only at the cost of terminal decline.
Dow
nloa
ded
by [
Yor
k U
nive
rsity
Lib
rari
es]
at 1
1:05
18
Nov
embe
r 20
14
Culture and Control in a Life Insurance Company 33
Central to the strategy at Pensco has been the understanding that the future of the company will depend increasingly upon selling unit-linked products whose cost structure would place employees under increased pressure to secure mass market sales as well as to maintain a tight control of expenses. This is because, in contrast to "with profits" policies, where administrative costs are taken out of investment surpluses, unit-linked expenses take the form of fixed charges on each contract sold. This creates an economy of scale and pressures to restrain costs. The financial discipline inherent in unit-linked products was firmly articulated in the following quote from the Finance Director:
Over the last 10 years, unit-linking has grown from a very small to a very significant part of the business. Offices that sell nothing else have established clear charges, on the one hand, and expense performance levels, on the other. Since I would assert that a with-profit policy doesn't actually cost any more to sell and administer, or is not significantly different from a unit linked one, you can take the established logic and put it into a conventional office like this. And that's what we're setting out to do. So we will put into Pensco in the next year or so a strategic limit on expenses, saying in order to do our job creditably, we must be at least as efficient as the market in terms of selling our business and administering it. This strategic expense control (i.e. setting an overall budget for the office) comes from looking outside the company at the market place and what the market says you have to administer business for.
Conscious of the current domination of "with profits" policies in the company's business, there has been a determination not only to change this balance but also to apply the financial discipline of a "unit-linked" company to Pensco even before this shift had been achieved.
The requirements of the Financial Services Act (1986) had already added to the pressure to reduce expenses (Morgan and Knights 1990). This i s because "full disclosure" of expenses and "best advice" with respect to product performance has made it incumbent on independent financial advisers (Pensco's main distributors) not to recommend any companies or product lines where costs are above the market average. So, the development of unit-linked products combined with the demands of "best advice" have been significant conditions of organizational change. This shift was anticipated by the Chief Executive who, in commenting upon the increase in unit-linked business, observed:
I think the whole movement into unit-linked is changing the insurance industry. I don't think many of the companies realise what the transformation is going to lead to in due course, and I would suspect that a number of life offices might find themselves ill-equipped to become very expense conscious and budget oriented, it's a very foreign discipline to the insurance industry.
This statement was made even before the impact of the Financial Services Act, and, in particular, the concept of "best advice" had been fully appreciated. For Pensco, the impact on expenses control of "best advice" could turn out to be even greater than the broader shift from "with profits" to "unit-linked" contracts. This is paradoxical since the key factor for the policy holder is not the cost of administering the contract, though this would be of marginal benefit for bonuses, but investment performance. In pursuing a strategy of increasing market share by competing for unit-linked business, the balance will shift radically in favour of expansion combined with cost control in order to reduce unit-costs.
Dow
nloa
ded
by [
Yor
k U
nive
rsity
Lib
rari
es]
at 1
1:05
18
Nov
embe
r 20
14
34 D. Knights and H. Willmott
Although the shift to unit-linked products is significant, we would not want it to be seen as a determinant of the changes in corporate culture and organizational symbolism to which we now turn in more detail. It is simply one of a number of conditions that rendered it both possible and a priority for Pensco to seek a new set of integrative symbols which could transform the organizational culture. In many ways the switch to unit-linked products merely followed market trends. But it could also be seen to reflect, or add support to, the mission of senior management "to bring the company into the 20th century", as the Chief Executive was fond of saying.
New Practices, New Subjects
While recognising their symbolic significance in sustaining andlor recreating a reputation for the company, for purposes of clarity we have so far discussed management control, product development and regulation more as technical issues. Clearly this is an artificial separation since the symbolic and the rnaterialltechnical are always co-present in any phenomenon and each are media of interpretation for one another. We now explore in more detail changes in management control which accompanied the emergence of "new times" at Pensco, before considering an event that distilled a growing preoccupation with transforming organizational symbols and culture as a means of establishing a more commercial, "professional" and competitive approach. Analytically, this section is focused on the way in which senior management exercise their power and use knowledge to constitute the symbolic meaning, reality and identity of "new" managerial subjects.
During the first two years following his appointment, the energies of the new Chief Executive and an inner circle of senior managers were directed at reshaping the structure of the organization, replacing the retiring group of senior managers, introducing more sophisticated management information systems and preparing for the launch of new or revamped products. However, the mission to rebuild the company was checked by the perceived failure of managers to achieve set objectives. Attention then became focused upon the internal running of the company and, in particular, the competence and performance of its middle managers. It was necessary to emphasise certain symbolic features of the old regime in order to elevate the new. The previous system of management was stigmatised as paternalistic, complacent, lacking leadership and entrepreneurial flair as well as being unaccountable. By contrast, the new regime began to emphasise the symbols of professionalism, accountability and quantification as key elements of management practice. Although evident in the attention given to planning and controlling strategic developments at Pensco (e.g, product planning, IT innovation), the shift of focus in the company's operations was symbolised in a two-day, weekend meeting of all senior and middle management at a luxury hotel. Before examining this particular meeting in some detail, we sketch relevant developments which preceded it.
Corporate Planning as A Symbol of Change
The installation of the new regime at Pensco was most transparent and pervasive in an exhaustive (and exhausting) process of planning and monitoring of achievement that was
Dow
nloa
ded
by [
Yor
k U
nive
rsity
Lib
rari
es]
at 1
1:05
18
Nov
embe
r 20
14
Culture and Control in a Life Insurance Company 35
directly overseen by the Chief Executive. Not only was the change of philosophy embodied in the persona of the Chief Executive whose flamboyant confidence, persuasiveness and panache distinguished him sharply from his less colourful senior colleagues. It was also institutionalised in the company strategy document as:
1 . Visibility of senior management 2. A top-down planning system albeit involving heavy consultation 3. Effective and delegated decisions with an emphasis on the necessity to research issues and to
take decisions 4. Individual accountability 5. Open and relevant communication 6. Effective staff participation 7. Considerate staff-management relationships
Much of the pressure upon divisional and departmental managers stemmed from the incessant meetings that are needed to determine, coordinate and deliver the elements of their respective plans whose progress has been closely monitored on a quarterly basis. This close supervision of management reflected a philosophy in which "old time" practices of relying upon the loyalty of staff and the gentlemanly conduct of managers were to be replaced by an almost exclusive emphasis upon setting and achieving planned objectives relevant to the key corporate tasks of increasing market share and reducing expenses. To secure this change, competence and individual accountability was demanded by fiat. Virtually overnight, staff accustomed to established, comparatively undemanding routines, where allowance was always made for any shortcomings, were confronted by a highly interventionist Chief Executive who insisted upon exposing the adequacy of their cosy, antiquated practices to the harsh light of modem "professional" management. (Knights and Willmott, 1992).
Established systems of work organization were scrutinised and criticised for being excessively bureaucratic, unwieldy and inefficient. Practices perpetuated by the previous senior management team were castigated for being bumbling and "unprofessional". In contrast to the understated and forgiving style of the "old g u a r d , the new philosophy aspired to evaluate the qualities of individual managers principally, if not exclusively, in terms of their capacity to organize effectively; their social skills were positively assessed only insofar as they were perceived to have instrumental value in securing corporate objectives.
Consideration for the integrity of individuals and the quality of relations was progressively subordinated to a "hard-nosed and impersonal assessment of technical competence; the labour of management was increasingly treated as a commodity - as an object of use. Sceptical observations about pressure were answered with the assertion that a more professional use of management time, including the "cascading" of responsibility down the hierarchy, would result in the easing of pressure. Indeed the very experience of such pressures was interpreted as symptomatic of the inefficiency and ineffectiveness of "creaking" Pensco systems and staff who remained embedded in an outmoded, paternal tradition of management control. To some extent, these intense pressures had changed the culture through a process of attrition in which a large number of senior and middle management left or were moved sidewards. This presented opportunities to hire staff (often from other sectors or from "unit-linked" companies)
Dow
nloa
ded
by [
Yor
k U
nive
rsity
Lib
rari
es]
at 1
1:05
18
Nov
embe
r 20
14
36 D. Knights and H. Willmott
who were more likely to be enthusiastic supporters of "new times". Nonetheless, there remained a large group of managers and supervisory staff who, for a variety of reasons (e.g. age, roots in the local town) were effectively immobile and resistant to change.
Preaching The Gospel
As if responding to established employees who were resistant to change, a two-day meeting of all managerial staff was held away from the company. An overt theme of the meeting was that of improving the day-to-day operation and routine decision-making process within the company. Six months earlier, senior management had presented to middle managers key elements of the corporate strategy (e.g. safeguarding a reputation for integrity; producing superior service; developing a marketing orientation) but not the operational means of realising these objectives. The two-day meeting was master- minded by the Chief Executive and designed to correct this gap in operational management. Conceived as a conference on a grander scale, great attention was given to the presentation of the sessions as well as to details and nuances - such as the specially designed logo that appeared on all publicity material, programmes, badges and menus.
It seemed to us that the conference had as its (barely) hidden agenda a new phase in the campaign to secure and strengthen Pensco's competitive position - a campaign in which all levels of management were being urged to constitute and discipline themselves as subjects capable of "taking on" the new challenges of the market. In this light, the meeting can be viewed as a critical moment in a (symbolic) struggle to construct a particular regime of truth in which "the true and false are separated and specific effects of power (are) attached to the true" (Foucault 1980:p.132). The power effects of this campaign in internalising a sense of meeting the challenge of these "new times" were supported and enhanced by the way messages in the company coincided with those outside in the general economy where self-discipline, competitive individualism, entrepreneurialism and market principles were heavily promoted by the New Right's ascendancy in British, and indeed, world politics.
At the two-day meeting, the "truth" was provided in a series of presentations by senior managers who reinforced the earlier message that Pensco has to survive and prosper in a market place, and that every member of staff had a key role to play in ensuring their own survival and prosperity. Once knowledge of the "market" is transformed into "truth" through the exercise of power upon it, effective debate or discourse questioning its validity is weakened and individuals can only secure themselves as subjects, both materially and symbolically, through participation in practices that continually reproduce such "truth". Within the conference two major themes of symbolic significance appeared to stand out: the emphasis upon team working and the importance of becoming "professional" managers - which generally meant quantifying all one's activities. In proceeding to examine each of these in turn, it is worth noting how every item on the conference agenda was informed by, or reached a conclusion which supported, one or both of these symbolic features of the changing culture.
Dow
nloa
ded
by [
Yor
k U
nive
rsity
Lib
rari
es]
at 1
1:05
18
Nov
embe
r 20
14
Culture and Control in a Life Insurance Company 37
Team Working
Despite the emphasis on individualistic self interest and competition, a major symbol of the new entrepreneurial culture was the team metaphor. In opening up the proceedings of the conference, the Chief Executive asserted that:
Every team, particularly new ones, need to spend time together working out how they should organize themselves . . . our meeting here is to give ourselves just such an opportunity.
The use of the team metaphor evokes a series of other conative signifiers that are routinely associated with the usage of team as a signifier (cf. Rosen 1985; Moire and Myerhoff 1977). The notion of a team does not simply reflect the reality of the situation. Rather, if successful, its articulation has the effect of defining the situation in a particular way (Sperber 1975; Linstead 1985), and thereby transforms into "truth" what would otherwise be more open to debate. Its usage is at once symbolic and ideological insofar as it exerted the "truth effect" of constituting the identity of Pensco middle management.
The metaphor of the team conveys the image of a "community" in which norms are shared, where the captaintleader speaks for the group, where the objective of the "game" is well established, and where the players are under a moral obligation to follow the leader's instructions as they engage in the play. During our research, the Chief Executive sought confirmation from us that, for example, the top team of general managers were seen as a team by the staff and he expressed a degree of anxiety when we were unable to provide him with this assurance. His anxiety stemmed from a conviction that Pensco should work as a team and that this was only credible if the senior management were seen as an integrated team. Team effort is intended to have the result of drawing everyone into the "corporate persona", but their conversion should include an element of training on how to "spread the word". Thus, participants are enjoined to absorb company identity and to effectively disseminate the new found Pensco-person image to their subordinates (Kerfoot and Knights 1994). In our discussions with staff they were clearly not convinced of the team metaphor propaganda and this was partly the reason for the conference's heavy focus on promoting team work.
Although stressing ideas of voluntary cooperation, the model of strategic change held by the Chief Executive barely concealed an autocratic and technocratic conception of management (cf. Smircich 1983). The repetitive use of terms like "our" and "we all" within the conference agenda and documentation asserted the idea that a common purpose could be taken for granted. The absence of any discussion of organizational goals prefaced an assumption that these were unproblematical, and that the legitimate objective of the conference was to identify and acquire the relevant and effective means (techniques) for their attainment (Jehenson 1984). The formal programme of the conference involved three agenda items: an assessment of our current position, an understanding of some of the major tasks, and an examination of techniques which we all use to organize ourselves, namely the planning process and decision taking, leaving no space for discussion of the legitimacy of the leadership or the relevance of its agenda for those who were to be subjected to it.
Despite a belief in the success of the company, a major theme of the conference was "getting organized", which involved equipping managers with the instrumentally rational
Dow
nloa
ded
by [
Yor
k U
nive
rsity
Lib
rari
es]
at 1
1:05
18
Nov
embe
r 20
14
38 D. Knights and H. Willmott
recipes for improving both the social and the technical organization of work. Use of the team metaphor assumed the existence of a team manager whose responsibility is understood to be the provision of relevant resources (i.e. management training) with which to convert a new team into a well-drilled squad. In sum, the "truth" of the emerging corporate culture was already displayed through the symbolic significance of the formal programme and the exercise of power that undermined any point of difference with this construction of reality. Despite the contradiction of seeking to impose a commitment to team work, rather than encouraging its evolution through a participative approach to strategic decision-making, the conference proceeded to impose the second major set of symbols on the participants.
"Professional" Management
Scheduled for the evening of the first day, the first item on the agenda involved an assessment of Pensco's trading position compared to its competitors. In a presentation by the new Finance Director (also Deputy to the Chief Executive), no less than 25 slides were flashed up which purported to present objective, statistical data on market share, asset position, rate of growth and expense ratios. In summarising this information, the Finance Director identified three "positive features": rapid growth in New Business (just over one quarter above the average); good investment performance; and sound reserves. These served to "balance': his concentration upon the three negative points: staff numbers rising more than 2 1 2 times the average; poor and deteriorating expenses ratios relative to other companies (bottom quartile); and rising unit costs. In each case, the business norms of competitiveness and performance were drawn upon to organize and evaluate the data, and in doing so the logic of this cognitive order was reconstituted. At the same time, "positive" elements were recalled to anchor the understanding that managers were fortunate to be working for such a successful company, and that the self- esteem derived from this enviable position would be damaged if "the team" failed to respond effectively to forces that threatened to undermine it.
Following this presentation, the Chief Executive signalled his determination to develop what he termed "a management culture". In such a culture, he declared, the capacity to act "professionally" would be the measure of individual contribution and reward; and what he meant by this would become clearer as they moved on to consider some of the major tasks facing the company and, especially, to look at the techniques used for effective planning and decision making. This was a view echoed by the Finance Director when closing the session:
What has happened in Pensco is a preoccupation with success. A lot of our problems stem from growth-for example, our systems were designed to take 25% of what they are doing. We have to change the way the company is run. We have got to become a professional company. Pensco is an up-market office. We don't have to go out and prove ourselves. The problems we have are simple ones and they lie within our own jurisdiction.
So, on one level, what is problematic about Pensco is represented as an unintended consequence of its success. In the process of alluding to some problems, the soundness of the organization is celebrated. The problems are thereby defined as secondary, and
Dow
nloa
ded
by [
Yor
k U
nive
rsity
Lib
rari
es]
at 1
1:05
18
Nov
embe
r 20
14
Culture and Control in a Life Insurance Company 39
their remedy is seen to lie in the hands of management who are urged to constitute themselves as professional subjects. This theme was repeated in a second, briefer session on the current position in which the Marketing and Assets Directors gave short presentations. Taking the form of after-dinner pep talks, the Assets Director closed his contribution with a reminder of the afternoon's session which had celebrated the very strong performance of his (investment) staff. In a parting shot, he asked his audience to "think of what this company could do if everyone were meeting this standard of performance" before inviting them to agree that it was "All credit to the Board and to Jim (the Chief Executive) that they have taken on the task of change" which, he implied, would raise the game of members of the team to that of his star players. Precisely what this change implied for Pensco managers became clearer as the sessions devoted to the other topics on the agenda unfolded.
Another aspect of the conference designed to impress on managers the need for both a professional approach and team work were the syndicate sessions. Mixed groups of specialist middle managers, chaired by one of the Directors were required to examine, understand and rank the importance of 20 major activities for enabling Pensco "to operate efficiently and effectively over the next three to five years". They were given a list of about 20 tasks which included the decision about a long-term computer supplier, the standardization of work within the branches, career development, budgetary control, the strengthening of the personnel function, etc. Following a period of deliberation, each syndicate returned with a listing of its "top ten" tasks. These were then aggregated to show forecasting and planning, productivity, and the strategic control of expenses as the recipients of the largest number of votes. In an earlier session the Chief Executive had given a dramatic (and seemingly risky) promise to reveal the priorities identified by the senior managers who had undertaken a similar exercise a few weeks earlier, and he now proceeded to do this.
Needless to say, there was a close correlation between the top three tasks. In fact, this was hardly surprising (nor was the dramatic gesture particularly risky). Planning had been perhaps the most highly profiled feature of Pensco management since the Chief Executive was appointed. The importance of expenses control had been the central theme of the Finance Director's presentation. And the high priority of productivity had already been signalled when, during his introduction to the conference, the Chief Executive had himself anticipated that "Number 14" (productivity) would be highly rated - a remark that was repeated by another Director in his after-dinner pep talk. Nonetheless, the Chief Executive faithfully played out his self-scripted drama, noting how pleased he was to see "the remarkable similarity" and "high correlation" between their ratings. Expressing delight at this result, which had emerged quite "spontaneously", he said that it confirmed his belief in the existence of a team united in its diagnosis of the current position and its prescription for future action. The truth of the priorities and prescriptions of senior management were thus reflected back to them, but in a way that had the appearance of being independent of their power and volition.
Getting the managers to prioritise the strategic aims of the company in such a way as they were almost bound to coincide with those of senior management was highly significant symbolically. It was clearly intended to develop an ownership of, and commitment to, corporate strategy with the assumption that Pensco managers would then communicate with their subordinates to ensure increased attention to forecasting and
Dow
nloa
ded
by [
Yor
k U
nive
rsity
Lib
rari
es]
at 1
1:05
18
Nov
embe
r 20
14
40 D. Knights and H. Willmott
planning, productivity and the control of expenses. Success in these tasks would, of course, be dependent on professional management with an emphasis on measurement and on a commitment to team work.
The themes of professional management and team work were re-emphasised in the final sessions where the focus was on planning and decision-taking. The first of these sessions took the form of a further presentation by the Finance Director in which he outlined the most recent iteration of the planning process - a process which had evolved into an annual cycle of interdependent activities (e.g. strategic planning, divisional plans, departmental plans, budgeting, etc). The second of these final sessions, which focused on decision-taking, was opened by the Chief Executive who began by asking the newly appointed personnel manager to identify the most basic problem of organization within the company, and asked him to suggest whose fault this was. The predictable (and pre- arranged?) response to this enquiry was that slow decision-talung was the problem for which responsibility was collective. The Chief Executive concurred, and again stressed the importance of "how we are organized as a team". What was crucial, he asserted, was "to get one clear system of how we can work", and stressed that "the prize is productivity and the satisfaction of pushing jobs away". Before proceeding to present a six-point guide to better decision-making, he elaborated his diagnosis of the basic problem of the organization and proclaimed his own duty to instigate a more effective, professional approach:
I frequently see decisions two or three times. We rarely hit it first time. One reason for the pressure of work is that we are slogging at it. It soaks up a lot of time. The responsibility is upon me to spell out what the decision taking process is. It will come as no surprise because the things that are messing us up are a matter of common sense. There is nothing fancy. The problem is that we don't actually do it.
Implicit within this diagnosis is the understanding that managers have not been applying their common sense when defining problems and taking decisions. Underlining the Personnel Director's view of the problem as a collective responsibility, the Chief Executive uses the term "we", rather than "you". But he then makes it clear that it is others who are slogging at it; and, finally, he asserts his authority to tell them how they should take decisions. By appealing to "common sense" and self-interest (reduce pressure and slogging), the Chief Executive naturalises what he "spells out". In sum, by appealing to a collective interest in the success of the company, the responsibilities of his office and the unexceptional nature of his mission, he contrived to legitimise both his position of dominance and his demand for active cooperation in raising productivity.
Discussion
By appealing to popular images, such as the idea of management as a team or of Pensco as a successful company, senior management mobilised (and privileged) a particular chain of signifiers that constituted the context in which their communications were to be interpreted. By elevating team symbols, paternal and family values could be displaced whilst retaining elements of co-operation that were vital to the new competition for service. For the fulfilment of the objectives and tasks identified by senior management depended upon the agency of other managers (and their stafo - as the Chief Executive's
Dow
nloa
ded
by [
Yor
k U
nive
rsity
Lib
rari
es]
at 1
1:05
18
Nov
embe
r 20
14
Culture and Control in a Life Insurance Company 41
ardent appeals to "get after it" and "lift our game" bore witness. Although their positioning within the symbolic universe of the corporate hierarchy enabled them to stage and "bring off' the conference as an event, this "achievement" could provide no guarantee that the resolutions accepted at the conference would be translated into practice at the office. In practice. the constitution of managerial subjects continuously foundered upon subjectivities that did not dispute the abstract "truth" of arguments about competitiveness and efficient working practices but still resented and resisted the real imposition of such changes upon them. Paying lip service to this "truth" was one thing; embodying it in everyday working practices was quite another.
As we noted earlier, the existence of a management problem of this kind was (tacitly) recognised in the holding of the conference. When expanding upon the theme of the conference, the Chief Executive referred directly to "a lot of minor difficulties" of organization. However, instead of interpreting this as symptomatic of the preference of many staff for established, "sleepy" routines, these difficulties were attributed to people being in new jobs and "the organization moving through a learning curve". The Chief Executive was in no doubt that there was a better, more "professional" way of doing things-a way of doing things which, if only the staff would adopt it, would also reduce the (mounting) pressures upon them. From this perspective, the "difficulties" were interpreted largely as the result of an irrational, habitual attachment to unprofessional practices which could be overcome by showing staff how to organize themselves more effectively.
The practical resistance of staff was expressed in comparatively "invisible" and difficult-to-discipline ways. For example, there was a widespread reluctance to adopt innovative management techniques (e.g. budgeting) and repeated failures to meet deadlines. During the conference itself, this passive resistance was reflected in the absence of participation following the formal presentations by the Finance Director and the Chief Executive. In fact, although appeals to the management team were constantly made, a physical and psychological distance between senior and middle management was assiduously maintained. At only one point did this separation surface when, in response to the Finance Director's description of the planning process as "top-down", a young, "fast track", departmental manager raised the question:
Should we involve the next level down of management in planning?
To which the Assets Director, rather than the Finance Director, quickly responded:
There must be consultation going right down to ensure that we are devoting resources in the right direction. One of the reasons for this conference is to demonstrate that we are a whole team.
We interpret the departmental manager's question as an expression of the kind of frustration experienced by a number of middle managers who felt isolated from key planning and decision-making processes. To put it in a more direct way, many of these managers did not feel part of the "team"; and, in some cases, were less than enthusiastic about the game. In principle, senior managers were expected to draw ideas for shaping corporate plans from middle managers. In practice, however, the ideology of consultation, linked here by the Assets Director to the effective deployment of resources, presented little more than the illusion of involvement-an illusion that was quickly unmasked in the absence of substantive confirmations. Hence the Assets Director's immediate appeal to the organization of the conference in an effort to "demonstrate" the
Dow
nloa
ded
by [
Yor
k U
nive
rsity
Lib
rari
es]
at 1
1:05
18
Nov
embe
r 20
14
42 D. Knights and H. Willmort
validity of this claim. In championing the cause of change, culture and symbolism were interpreted principally as objects of manipulation and control. The assumption seemed to be that culture could be changed simply by demonstrating to managers that it had to be changed to ensure corporate growth and that it would be changed by learning a better way of doing things.
When closing the conference, the Chief Executive re-affirmed his belief that by adopting a "system" based on plain common sense, "we can lift our game in one go". Here he seemed to be echoing a central tenet of In Search of Excellence: the importance of creating "institutional purpose" through which "transactional leadership" is transmuted into "transforming leadership" (Bums 1977). Quoting Selznick (1957), Peters and Waterman (1982:~. 85) contend that:
the inbuilding of purpose . . . involves transforming men and groups from neutral, technical units into participants who have a particular stamp, sensitivity, and commitment . . . From the standpoint of the committed person, the organization is changed from an expendable tool into a valued source of personal satisfaction
Pensco managers were invited to take pride in "their" achievements and in the excellent performance of "their" company. But they were then told that this could be fully justified and enjoyed only if they cooperated in the adoption of common sense practices which the Chief Executive deemed necessary to "raise their game".
Paradoxically, what the Chief Executive and other influential senior managers overlooked in striving to achieve this change was the very culture which they sought to transform. Instead of appreciating how existing practices were already valued by Pensco staff, they were regarded as an irrational obstacle which could be removed by applying "common sense". Seemingly, it did not occur to senior management that it was precisely the "common sense" of Pensco employees that sustained the practices which they wished to reform. There was little evidence of any depth of understanding of how these practices had evolved within the established culture of paternalism through which many middle managers had been constituted. Instead, these managers were treated as "neutral, technical units" who could be transformed through a process of cultural engineering "into participants having a particular stamp, sensitivity, and commitment". What senior management saw, yet failed to notice, was the strength of the existing culture which had treated employees with dignity (albeit paternalistically) and had already provided them with "a valued source of personal satisfaction" (Peters and Waterman 1982:p. 85).
When interpreting the situation in this way, there i s a danger of attributing incompetence to senior management. But this would be to ignore the conditions in which they were working. A long tradition of paternalism had rendered middle managers submissive and deferential, making it difficult to develop greater responsibilities. Perhaps sensing that 'constructive' participation from their audience would not be forthcoming, senior managers did not encourage middle managers to assess the company's strengths and weaknesses. Instead, they did it for them. In effect, the senior managers designed the conference in a way that (unintentionally) reinforced the problem which they sought to address. Namely, the problem that middle managers were not sufficiently committed to, and involved in, the mission to "bring the company into the 20th century". Their decision-making about the design of the conference spoke volumes about their unspoken view of Pensco staff as second-rate managers who had yet to attain a satisfactory level of "professionalism".
Dow
nloa
ded
by [
Yor
k U
nive
rsity
Lib
rari
es]
at 1
1:05
18
Nov
embe
r 20
14
Culture and Control in a Life Insurance Comoanv 43
Subsequently, an internal staff audit indicated that staff in the company, including many managers, were reluctant to make decisions for fear of the consequences of getting it wrong. On being informed of this finding, the Chief Executive was shocked and angry for he always felt himself to be "open" and friendly. But while this was true at the level of personality, his managerial actions told a very different story and staff were continuously scared and on their guard not to make any mistakes. Apparently, although we have not had the chance to confirm the story, the Chief Executive has quite recently attempted to enlist the past paternalistic traditions in support of his strategic goals. In effect, at this point he began to recognise how the tradition of paternalism might be mobilised to "naturalise", and consolidate a more complete acceptance of, the new regime. Although the (competitive, aggressive) metaphor of the team continued to be privileged (not the cosy, protective metaphor of the family), the symbolic medium of paternalism associated with the latter, and particularly its cooperative dimensions was clearly a set of symbols that the Chief Executive had mistakenly undermined previously, thus making his task of transforming the organization that much more difficult. He will now, of course, have to overcome a substantial deficit of trust before such a plan can hope to succeed.
The previous reluctance of senior management to involve their staff in a more "open- ended" way was by no means irrational. Precisely because they lacked confidence in their middle managers, they were unwilling to countenance any significant degree of participation in the planning process. But, of course, the consequence of this exclusion was that middle managers felt snubbed, complained about senior management hypocrisy and, in many more or less subtle ways, subverted the planning process. Senior managers had sensed a problem, and had convened the conference to do something about it. But they had also sensed the smouldering resentment of middle managers. Combined with their lack of confidence in middle managers, which served to absolve senior managers of responsibility for many "minor difficulties" identified by the Chief Executive, knowledge of dissatisfaction amongst many middle managers (reflected in exit interviews with those who had moved elsewhere) reinforced the logic of "leading from the front", as the Chief Executive was inclined to put it.
Conclusion
At the broad level of economic change in contemporary Britain, Pensco has been responsive to general cultural, economic and political pressures to compete more aggressively, to act more entrepreneurially and "professionally", and to subject itself to the forces of the market. The intensification of competition, stemming from the rapid expansion of the new unit-linked companies, has been further stimulated by the Conservative Government's intervention both to regulate and deregulate the financial services in the late 1970s. Partly in response to these changes but also as a reflection of a more broad-ranging national and international economic competitive impetus, Pensco adopted a marketing-oriented stance. This marketing orientation gives priority to product development and diversification, and promotes products (i.e. unit-linked policies) that enforce an expense discipline on the company.
The established, deferential culture of paternalism at Pensco, we have argued, provided a basis for senior managers to open up for dialogue the challenges and
Dow
nloa
ded
by [
Yor
k U
nive
rsity
Lib
rari
es]
at 1
1:05
18
Nov
embe
r 20
14
44 D. Knights and H. Willmott
problems with their staff without becoming exposed to hostile attack. However, a belief in the need to "professionalise" the practices of middle management led senior managers to devalue qualities of paternalism which, potentially, could have facilitated the ambition to change the company. In fact, with the exception of the more recent example referred to above, the only elements of the culture of paternalism that were valued were its capacity to impede the replacement of a staff association with union representation and the sense of cooperation that was needed in developing team working in the company. With these exceptions, established practices were viewed wholly negatively. So, instead of seeking to understand and work with the culture of the organization as they found it, senior management pursued a "scorched earth" policy in which every opportunity was taken to expose its failings and, by implication, the inadequacy of those constituted within it.
At the same time, senior management sought to gain the support and commitment from staff whose competence and value they systematically negated. Not surprisingly, their attempts to win cooperation and "raise the game" were less than effective. Instead of creating a team, they produced players who either placed themselves on the transfer list or became increasingly skilled in managing the appearance of competence by avoiding situations in which this might be put to the test. In this they were supported by senior managers who were reluctant to delegate tasks to subordinates in whom they lacked confidence. As a consequence, there was a continuing resort to more coercive methods of management control. This has had the unintended effect of ensuring that the building of a Pensco team of "professional" managerial subjects remains an uncompleted task, though its powerful symbolism is kept alive by the organization of regular vertical and horizontal team briefings.
How then has this study contributed to an illumination of the New Right politics that has been dominant in Western cultures in the past decade? First, it has provided a more substantive picture of the implications of national and international governmental policy for everyday organizational and management practices. Second, while certain changes were occurring prior to the evolution of the new entrepreneurial and competitive climate, the case study indicates considerable resilience to organizational change. The paper has provided evidence that organizational cultures do not change overnight to accommodate a major shift in political and economic ideology even when, as in our case study, the Chief Executive was committed to pushing through policies which are material and symbolic reflections of, as well as an impetus to, such ideologies. Indeed, as was noted earlier, in this case a recognition of employee resistance to such policies has been the condition of a re-evaluation of "caring" traditions eroded by New Right thinking - a shift that has its parallels in a resurgence in the symbols of communitarianism (e.g. citizenship) in the wider political arena.
References
Adams, G.B. and Ingersoll, V.H. (1990) Painting Over Old Works: The Culture of Organization in an Age of Technical Rationality. In Turner, B.A. (ed) Organizational Symbolism. Berlin: de Gruyter.
Bums, J.M. (1977) Leadership. New York: Harper and Row.
Dow
nloa
ded
by [
Yor
k U
nive
rsity
Lib
rari
es]
at 1
1:05
18
Nov
embe
r 20
14
I Culture and Control in a Life Insurance Company 45
Child, J . and Smith, C . (1987) The Context and Process of Organisational Transformation-Cadbury Limited in its Sector. Journal of Management Studies,. 24, 565-593.
Financial Services Act (1986) London: HMSO. Foucault, M. (1980) Power/Knowledge: Selected Interviews and other Writings, edited
by Colin Gordon. London: Routledge Kegan Paul. Gosden, P.H.J.H (1961) The Friendly Societies in England 1815-75. Manchester:
Manchester University Press. Gosden, P.H.J.H (1973) Self-Help: Voluntary Association in the 19th Century. London:
Batsford. Jehenson, R. (1984) Effectiveness, Expertise and Excellence as Ideological Functions: A
Contribution to a Critical Phenomenology of Formal Organizations. Human Studies, 7, 3-21.
Kerfoot, D. and Knights, D. (1993) Management, Masculinity and Manipulation: From Paternalism to Corporate Strategy in Financial Services. Journal of Management Studies, 3014.
Kerfoot, D. and Knights, D. (1994) The Gendered Terrains of Paternalism. In S. Wright, D. Marsden, M. Roper and E. Young (ed) Anthropology of Organisations. London: Routledge.
King, D.S. (1987) The New Right: Politics, Markets and Citizenship. London: Macmillan.
Knights, D. (1995) Refocusing the Case Study: The Politics of Research and Researching Politics in IT Management. Technology Studies, 3, Fall.
Knights, D. and Murray, F. (1990) Information Technology and the Marketing Driven Firm: Problems and Prospects. PICT Policy Research Paper No. 9, Oxford: ESRC.
Knights D. and Willmott, H. (1987) Organisational Culture as Management Strategy: A Critique and Illustration from the Financial Services Industry. International Studies of Management and Organisation, 17(3), 40-63.
Knights, D. and Willmott, H. (1988) The Executive Fix : Strategic Decision Making in the Financial Services Industry. in J. McGoldrick (ed) Business Case File on Behavioural Science Students. Wokingham : Van Nostrand Reinhold.
Knights, D. and Willmott, H. (1990) Capital Markets and Labour Processes: A Case Study of Class and Organisation in a Mutual Life Insurance Company. In S. Clegg, (ed) Organization Theory and Class Analysis. Berlin: De Gruyter.
Knights, D. and Willmott, H. (1992), Conceptualizing Leadership Processes: A Study of Senior Managers in a Financial Services Company, Journal of Management Studies, 29,6: 761-782.
Knights, D. and Willmott, H. (1993) A Very Foreign Discipline: The Genesis of Expenses Control in a Mutual Life Insurance Company. The British Journal of Management, 313 1-1 8.
Linstead, S. (1985) Symbolization and Ambiguity in Organizations: Induction, Humour and the Symbolic Process. Journal of the Centre for European Business Education Studies, 1 (2), 52-97.
Loytard, J.F. (1984) The Postmodern Condition. Manchester University Press. Moore, S.F. and Myerhoff, B.G. (1977) Introduction. In S.F. Moore and B.J. Myerhoff
(eds) Secular Ritual. Atlantic Highlands: Humanities Press.
Dow
nloa
ded
by [
Yor
k U
nive
rsity
Lib
rari
es]
at 1
1:05
18
Nov
embe
r 20
14
46 D. Knights and H. Willmott
Morgan, G. and Knights, D. (1990) The Financial Services Act: The Development of a New Regulatory Regime. Financial Services Research Centre Report: Manchester School of Management, UMIST.
Pettigrew, A. (1985) The Awakening Giant: Continuity and Change at ICI. Oxford: Blackwell.
Peters, T. and Waterman, R.H (1982) In Search of Excellence. New York: Harper and Row.
Plant, R. (1984) Equality, Markets and the New Right. London: Fabian Tract. Porter, M. (1985) Competitive Advantage. New York: Free Press. Porter, M. (1990) The Competitive Advantage of Nations. New York: Free Press. Rosen, M. (1985) Breakfast at Spiros: Dramaturgy and Dominance. Journal of
Management, 1 1 ( 2 ) , 3 1-84. Selznick, P. (1957) Leadership and Administration. New York: Harper and Row. Smircich, L. (1983) Organizations as Shared Meanings. In L.R. Pondy, P.J. Frost, G.
Morgan and T.C. Danbridge (eds) Organizational Symbolism. Greenwich, C.T.: JAI Press.
Social Security Act (1986) London: HMSO. Sperber, D. (1975) Rethinking Symbolism. Cambridge, Mass achusetts: Chicago
University Press. Williamson, O.E. (1985) The Economic Institutions of Capitalism: Firms, Markets,
Relational Contracting. New York: Free Press.
Dow
nloa
ded
by [
Yor
k U
nive
rsity
Lib
rari
es]
at 1
1:05
18
Nov
embe
r 20
14