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					                   Culture and Control in a Life Insurance Company


                                        David Knights
                                    School of Management
                                    University of Keele, UK

                                       Hugh Willmott
                               Judge Institute of Management
                                University of Cambridge, UK

A later version of this article appears in Studies in Culture, Organizations, and Societies, 1, 1: 1-18

For more information on published articles                by   Hugh     Willmott   please    refer   to

Culture and Control in a Life Insurance Company

David Knights
Hugh Willmott
Manchester School of Management

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.


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.

Culture and Control in a Life Insurance Company

           Most commentaries concerning changes in economic culture focus upon
issues of macro-economics and political theory (Williamson, 1985; Porter, 1985; 1990;
King, 1987; Plant, 1988). 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.

           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 organised 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, 1985), 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 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 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 and 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
organisations 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
distributed 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 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, both 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
          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 is
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 can be ignored
only at the cost of terminal decline.

           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’ (Finance Director).

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 is because ‘full
disclosure’ of expenses and ‘best advice’ with respect to product performance makes

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.’ (Chief Executive)

           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.
           While 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 has 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 and/or 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 material/technical 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 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

modern ‘professional’ management.
           Established systems of work organisation 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 guard’,
the new philosophy aspired to evaluate the qualities of individual managers principally,
if not exclusively, in terms of their capacity to organise 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 their
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) 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:
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

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 organise themselves...our meeting here is to give ourselves just such an

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 (c.f. 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 captain/leader 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 co-operation, the model of strategic
change held by the Chief Executive barely concealed an autocratic and technocratic

conception of management (c.f. 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 (c.f. 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 organise ourselves, namely the planning process

and decision taking left 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 organised’, which involved equipping managers with the

instrumentally rational recipes for improving both the social and the technical
organisation 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 encourage
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 (27% above average); good investment performance; and, sound
reserves. These served to ‘ balance’ his concentration upon the three negative points:
staff numbers rising (270% above 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 organise
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’ (emphasis added)

          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 their remedy is seen to lie in the hands of management who are urged
to constitute themselves as professional subjects. This theme which 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

            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 twenty major activities for
enabling Pensco ‘to operate efficiently and effectively over the next 3 to 5 years’. They
were given a list of about 20 tasks which included the decision about 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

            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 they would then
communicate with their subordinates to ensure increased attention to forecasting and
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 [7]. The predictable (and pre-arranged?) response to this enquiry
was that slow decision-taking 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 6-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 2 or 3 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 legitimised
both his occupation of a position of dominance and his demand for their active
cooperation in raising productivity.

           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 staff) - as the Chief Executive’s 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
  ‘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 that 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 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’ (Burns, 1980). 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 sought 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, the 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 they 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, 1982:85).

           When interpreting the situation in this way, there is 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 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’.
           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 co-operative 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.

           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 entrepreneurial 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 has 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 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 co-operation 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 which 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 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

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