Enterprise and Small Business Principles

Labour management and the small business

Susan Marlow

20.1 Introduction

Evidence indicates that the majority of people currently employed in the private sector work in small firms (DTI, 2003a). Yet until quite recently, we knew relatively little about the terms and conditions of such employment when compared with that in larger enterprises (Marlow, 2002). In the early 1970s, the Bolton Report (1971) reflected upon the harmonious nature of employment relations within the small firm. This pronounce­ment was based on the assumption that proximity between owner and employee within the workplace would create a team environment, a sense of shared rewards and chal­lenges which, in turn, successfully overcame the tensions evident between capital and labour that fuelled industrial relations problems in larger firms. It was taken as read that given the axiomatic nature of this proposition further investigation into the employ­ment relationship in smaller firms was superfluous. It has only been relatively recently that this assumption has been questioned with a growing body of evidence emerging to challenge the harmony thesis while drawing attention to heterogeneity within the sector.

Progress in both conceptual and empirical terms has been notable, with Ram and Edwards (2003: 719) arguing that the growing complexity of the literature exploring labour management in small firms is ‘a key exemplar of analytical advance’. From the expanding base of evidence regarding employment relations in small firms, it is appar­ent that it is inappropriate to presume that firm size alone will determine a specific type of labour management. Whilst there are some qualified generalisations that can be applied, it is recognised that there are a variety of policies and practices that firm owners utilise to manage their employees; moreover, it is essential to place these prac­tices into the wider context of the market. Consequently, this chapter will offer an overview of contemporary evidence regarding employment relations in British small firms drawing attention to common themes and trends while being sensitive to hetero­geneity. In recognition of the influence of differing policy and practice within other nations, an overview of evidence from the European Union (EU) is explored to con­sider the degree to which particular social and economic agendas regarding labour management shape the employment relationship in smaller enterprises.

20.2 Learning objectives

1 To understand the role of small firms as employers within the UK economy.

2 To critically evaluate contemporary accounts of labour management in small firms.

3 To appreciate the internal and external influences upon small firms that generate specific approaches to labour management.

4 To be able to comment upon and critically assess the extent to which the manage­ment of people in the small firm accords with the regulatory approach of the current government.

5 To be able to comment upon labour management practices in small firms in the EU. Key concepts

■ employment relations ■ labour management in small firms

■ terms and conditions of employment

20.3 Employment relations and the small firm

Given the challenges of establishing a consensual definition of a small firm (Storey,

1994) and the evident heterogeneity of the sector, it is with caution that comment will be made upon the management of labour in small firms. Added to the general difficulty of definition and variety is the fact that it is only recently, since the early 1990s, that a body of evidence has grown to explore the specificity of employment relations in smaller firms. Scase (2003: 470) comments upon this issue, noting that: ‘our knowledge of industrial relations in small firms is highly limited for two major reasons. First, small businesses have received little attention in academic social research. Second, issues of employer-employee relations have been considered to be non problematic.’ Tradition­ally, there has been a tendency for academics and policy makers to focus on industrial relations in larger firms as they were deemed to be indicators of national trends in pol­icy and practice and, accordingly, used as the basis for theoretical construct. This is evident from the Workplace Industrial Relations Survey’s time series data (since 1999, the Workplace Employment Relations Survey - WERS) collected periodically to assess the changing nature of labour management in the UK (Daniel and Milward, 1983; Milward et al., 1992; Milward and Stevens, 1986). Not until the late 1990s (Cully et al., 1999) were smaller enterprises included in this survey data that allegedly offered a detailed picture of labour management policy and practice throughout the eco­nomy. Even when this omission was addressed in 1999, only firms with more than 25 employees were included and, moreover, they were not studied as independent entities but in comparison with small multiples (firms owned by larger organisations). In the next edition of this series, labour management practices of firms with more than ten employees will be considered in their own right but it is worth considering that it has taken from the early 1980s until the twenty-first century to recognise the specificity of the employment relationship in small firms.

It should be noted that such omissions are difficult to justify given that DTI statistics indicate that, in 2002, 99.1% of private sector enterprises employed less than 50 employees, that 43% of the work force were employed in such firms and they con­tributed to 36% of domestic turnover (DTI Small Business Service, 2002). Some of the explanation for this lack of interest in smaller firms lies in the notion of academic elitism, by which it is suggested that there has been a certain dismissal of the import­ance and credibility of investigating and commenting upon the employment relation­ship in smaller firms. Such a dismissal is premised on reasons other than a failure to recognise the contribution of small business to contemporary labour management policies and practices. As Curran and Burrows (1986: 274) commented, ‘the small firm has been taken up as the articulating principle of right wing reaction to economic crisis’ (italics inserted). As such, there is a sense that industrial relations research and theory formulation will be diminished by association with smaller firms, whose develop­ment and ethos reflect an academically unpopular political and economic philosophy articulated in an era that saw savage attacks upon the traditional elements of estab­lished industrial relations practices in larger firms. Closer examination of existing research does, however, suggest that such views are blinkered and are, in fact, ensur­ing continued ignorance of a critical area of employment.

A further problem for this particular research agenda is the prevailing presump­tion that employment relations in smaller firms are relatively unproblematic and still reflect the Bolton Report’s (1971) superficial analysis of homogeneous harmony and unitarism across the sector. This presumption is supported once again in 1983 by the Conservative Government whose ‘Moving Forward’ pamphlet declared that a major advantage that small businesses enjoy is the generally good state of relations between owners, managers and employees, the notion being that absence of overt conflict is positively correlated with harmonious employment relations and a sense of partner­ship, made possible because of small group interaction. However, the growing body of research emerging since the late 1980s (Rainnie, 1989; Goss, 1991; Ram, 1994b; Holliday, 1995; Moule, 1998; Marlow, 2002) indicates that a blanket presumption of equanimity in employment relations in smaller firms is both simplistic and inaccurate. Therefore, there is considerable scope for investigation regarding the varied experi­ences of employment in smaller firms and any implication this has for national trends and policy development.

It is not always easy to undertake research in small firms; as Buchanan (1988: 67) notes the art of good research is ‘getting in, getting on and getting out’. To fulfil this seemingly simple formula requires gaining the trust of small firm owners and taking their time and that of employees: in a small firm where human resources are scarce, time is a significant issue. Moreover, it has been established that the terms and condi­tions of employment in smaller firms are generally more informal, less regulated and subject to greater owner idiosyncrasity than those found in larger firms (Marlow et al., 2004). This being the case, there is often reluctance to allow outsiders access to the privileged space of the work-place. So, in terms of research credibility, sample identifica­tion, contact and access, it is apparent that undertaking research into the employment relationship in smaller firms is problematic. However, despite such problems, as noted above, a growing body of evidence has emerged over recent years exploring the par­ticularistic nature of labour management in small firms.

The picture that emerges is one of heterogeneity and complexity with some broad agreement regarding greater informality (Ram, 1994b; Moule, 1998; Marlow et al., 2004). To explore these issues in greater detail this chapter will offer an overview of the evidence pertaining to labour management in small firms and consider the implica­tions of the literature. To undertake this task, it is necessary to place employment man­agement practices in small firms within the wider context of the growth of academic and political interest in smaller firms. Existing studies pertaining to employee relations in smaller firms will then be outlined and discussed. Although the main focus of this chapter will be upon studies undertaken in the UK, it is noted that smaller firms play a key role as employers, across Europe in general. In recognition of this, brief comment will be offered upon the employment environment in smaller firms in other European countries but given the complexity of each particular case, this will be an overview.

20.4 The changing economic context, 1979 onwards

The mandate of the 1979 Thatcher administration firmly rejected the post-war con­sensus of corporatism between state, employers and trade unions. In its stead, a com­bination of free markets, monetarism, entrepreneurialism and individualism would address the economic, social and industrial challenges of the late twentieth century. Each individual was deemed responsible for their own needs, encapsulated in the claim that there is no such thing as society; rather, we live among a complex collection of individuals pursuing their own ends. Hence the role of the state was to be constrained to facilitate individual freedom and choice (Hutton, 1996). Thus, inequality was con­sidered the motor of enterprise while unemployment an individual failing and necessary evil to control inflation (Rose, 2003). A key element in the realisation of Conservative policies and philosophies was the reform of industrial relations in large firms, along with the creation of a buoyant, entrepreneurial small firm sector where the employ­ment relationship would constitute the exemplar of harmony (see the Conservative Pamphlet, ‘Small Firm, Big Future’, 1983).

In keeping with the Austrian school of economic thought (Hayek, 1979), it was argued that a free market was critical to encourage individuals to act independently and entrepreneurially while enabling them to fully benefit from their actions. So, it was necessary to deregulate markets for goods and services in society. Regarding the labour market, this entailed a supply-side approach, removing protective legislation, extend­ing periods of employment before claims for unfair dismissal could be registered, dis­banding wages councils and making it altogether easier to hire and fire labour. As state regulation, influence and protection declined, public spending savings would be trans­formed into tax concessions, further enhancing disposable income for individuals who had greater freedom and choice in the free market for goods and services. A key element of this new approach involved privatisation and competitive contracting ini­tiatives in the public sector whereby previously state-owned monopolies and public sector provision were now placed within the private sector. Through the adoption of such strategies, the government effectively reduced the level of publicly owned stock and introduced price competition into that which remained. Such initiatives, coupled with mass unemployment in the 1980s, stimulated a growth in self-employment and to a lesser extent new small firm foundation (Storey, 1994; Stanworth and Purdy, 2003).

Overall, during the 1980s and early 1990s, the employment relationship was deregulated and subject to market discipline; for many employees this has resulted in greater job insecurity, loss of union protection, greater flexibility, a move from larger to smaller employers or venturing into self-employment or small firm ownership (Edwards, 2003). Such a focus on the individual in a deregulated labour market, within the rhetoric of an enterprise society, facilitated self-employment and the start­up of new small firms. Successive governments during that period hoped that develop­ing policy and practice to support greater individual enterprise would contribute towards creating new wealth and reducing unemployment.

Investment in policy to support the creation and sustainability of smaller enterprises has also been a feature of Labour governments elected since 1997. However, the emphasis has shifted away from free-market individualism to one of fairness for all. Although there has been no move to repeal employment relations legislation enacted by previous Conservative governments (particularly that which constrained and con­trolled the power of trade unions) Labour administrations have recognised the European social agenda and introduced, if rather cautiously, a raft of employment regulation legislation (McKay, 2001). This legislation has offered some support for trade unions through statutory recognition procedures but, in the main, focuses upon creating ‘fair­ness at work’ for the individual. Such regulation has, for the most part, been applic­able to firms with more than 20 employees (although exceptions for discrimination and information and consultation regulations are noted). Hence, the employment relations environment has been shaped by such regulation and the manner in which this has actually impacted upon smaller firms will be explored further in the discussion below.

In summary, the post-war industrial relations consensus constructed upon collective laissez faire, Keynesianism, voluntarism and collective bargaining articulated through a pluralist analysis was challenged in the 1970s by crises of capital accumulation and labour resistance to government policies. Since 1979, Conservative governments pro­moted individualism and free-market policies aiming to create wealth, choice and com­petition, but there is little evidence for such - rather, a growth in insecurity, poverty and poor quality employment (Hutton, 1996; Noon and Blyton, 1997). However, there can be little doubt that one outcome of contemporary conservatism has been the expansion of self-employment and a focus upon smaller firms as economic regener­ators (see Chapters 2, 3 and 4). Unemployment, redundancies, a positive image of the entrepreneur, some financial inducement and an expansion of opportunity in the ser­vice sector where entry costs are low, have all combined to ‘push’ and ‘pull’ people into individual enterprise. It is questionable, however, whether these market shifts have had the desired effect with, for example, Stanworth and Purdy (2003) arguing that whilst individual self-employment grew during the 1980s, the number of small and medium­sized enterprises (SMEs) within the economy changed relatively little. Moreover, given the high level of churning within the sector (new start-ups versus failures) and the propensity for a very few smaller firms to grow into large enterprises, the case for wealth and new job creation has not been proven. As Curran (1997: 34) observed: ‘small businesses, on any realistic assessment of their role in the UK economy, are not likely to transform it by themselves into a major player in the global economy though they will play a part in that process’. However, regardless of the shifting parameters of the small firm sector, undoubtedly it does create more new jobs than its larger coun­terpart with a considerable number of employees depending upon such firms for their livelihood. Accordingly, the manner in which labour is managed in such firms is of crit­ical importance to the understanding of employment relations in the broader sense.

20.5 Managing people in small firms

As noted above, over the past 15 years greater attention has been focused upon the terms and conditions of employment in smaller firms and, from the emerging evidence, it is possible to identify some common trends and themes that underpin the employ­ment relationship while remaining sensitive to heterogeneity. To explore these issues in more depth, the now infamous quote from the Bolton Report (1971: 21) will be noted from which the discussion will take its departure point:

In many aspects, the small firm provides a better environment for the employee than is pos­sible in most large firms. Although physical working conditions may sometimes be inferior in small firms, most people prefer to work in small groups where communication presents few problems: the employee in a small firm can more easily see the relation between what he(sic) is doing and the objectives and performance of the firm as a whole. Where management is more direct and flexible, working rules can be varied to suit the individual. Each employee is also likely to have a more varied role with a chance to participate in several kinds of work. . . turnover of staff in small firms is very low and strikes and other kinds of industrial dis­pute are relatively infrequent. The fact that small firms offer lower earnings than larger firms suggests that the convenience of location and generally the non-material satisfactions of working in them more than outweigh any financial sacrifice involved.

Thus, an image of harmonious employment relations in small firms was portrayed where the antagonism between labour and capital was successfully overcome through partnership and shared ambition. The very scale of operations enabled individual employees to identify their contribution to the organisation, thus overcoming the anomie associated with working for the larger bureaucracy. This was an image which was presented during a period when focus was renewed upon small-scale activity with the ‘small is beautiful’ thesis generated by Schumacher (1974) becoming increasingly influential. Further support for individual job satisfaction was offered by Ingham (1970) who argued that small firm employees self-select themselves to such enterprises precisely because the identification with the firm, its owner and other employees is sufficient compensation for lower wages and a restricted career path. Emphases on small-scale enterprise also emerged in the early 1980s with theoretical debates sur­rounding the emergence and existence of post modernism.

20.5.1 Flexibility

In post modernist society, Piore and Sabel (1984) argued, a second industrial divide would emerge with skills as a defining feature. Production would be focused on SMEs with a core group of multi-skilled employees working with advanced technologies. The emphasis was upon flexibility in that the size of the firm would facilitate a rapid flexible response to changing market demand; the polyvalent nature of the employee would enable a quick response to such changes while advanced technology would make such flexible production possible. Core employees in smaller enterprises would be highly valued and rewarded - thus collective protection such as that offered by unions would be needless, whilst secondary or peripheral labour, utilised casually where and when necessary, would be too weak to resist either individually or collectively. When such theoretical considerations were aligned with an ideology of harmonious labour rela­tions, an image of the entrepreneur as pioneer of risk and uncertainty with rewards shared by all, and the individualistic free market philosophy of the newly elected Conservative government in the early 1980s, the advantages of supporting small firm development were strong and convincing.

However, challenging such a presumption of harmony, a number of studies emerged questioning the role of smaller firms as the leaders of a new epoch in respect of the relations of production. As early as 1979, Curran and Stanworth questioned Ingham’s (1970) view of self-selection pointing out that it was, in fact, employers who had greater prerogative in terms of recruitment and selection (which then extended into determining the nature of the employment relationship). Moreover, it was argued that a blanket presumption of harmonious employee relations could not be applied to such a heterogeneous sector as that of small firms, an issue that formed the basis of many subsequent studies (Goss, 1991; Ram, 1994b; Marlow, 2002).

20.5.2 Harmony

During the 1980s, further critical analysis emerged regarding the harmony thesis. Rainnie and Scott (1986) argued that as part of the market economy small firms still have to address the tension inherent within capitalism. From a Marxist perspective, the researchers argued that it is necessary for small firm owners to purchase labour and extract surplus value (profit), through exploitation, so the challenge is to identify how exploitation is experienced and how it is made effective. Rainnie and Scott rejected the notion that the absence of trade unions in small firms facilitates harmony but argued instead that whilst there may be a positive correlation between non-unionism and an absence of overt dispute, this does not denote a causal relationship (given that a wide range of variables will impinge upon union presence such as sector, age, locality, labour characteristics, any inference must recognise and adjust for complexity). Rather, further attention needed to be focused on other channels for articulating discontent such as turnover, absence and industrial (now employment) tribunal referrals. Hence, attention is drawn to the importance of class relations, the limited opportunities small firm employees have for expressing overt discontent and the necessity of analysing the complexity of intervening variables underpinning any such assertions.

In a more comprehensive study of labour management in small manufacturing firms, Rainnie (1989) also critically assessed the notion of independence of small firm owners and managers. When considering their position in the wider labour market, Rainnie argues that labour management styles of small firm owners are constrained by the demands and competitive position of their larger counterparts (as customers or suppliers) and by the market for goods itself. To demonstrate this, Rainnie offers a typology of relations between small firms and the market:

■ Dependent - where survival is totally dependent on a relationship with a larger firm (e. g. as a subcontractor).

■ Competitive dependent - competition is directly with larger firms, therefore survival depends on the ability to cut costs and is likely to result in extreme exploitation of labour.

■ Old independent - niche market firms where growth is constrained due to market demand.

■ New independent - new or developing markets where larger firms may invade if the opportunities for profit and expansion are attractive.

To fully comprehend the manner in which labour is managed, the market conditions under which the firm operates must be analysed and so awareness of heterogeneity and labour markets is critical. These studies were useful in identifying the heterogeneity of small firms and locating them in the wider economy - in particular Rainnie draws attention to the falseness of the ‘dual’ approach where small and large firms are deemed as being separate spheres without overlapping confluence. There are some problems with the analysis, which depends on a deterministic presumption that external pressures will fully dictate labour management strategies. It must also be questioned whether typologies and taxonomies can realistically be applied to markets or whether they can only exist as generalised overviews or conceptual examples. Finally, the empirical work which Rainnie utilises to illustrate his theory is based largely upon manufactur­ing firms whereas the majority of small firms are located in the service sector (Curran,

1991) , so a question of representation remains. However, despite a number of issues regarding this study, it was of considerable importance in articulating a comprehensive and theoretically grounded critique of the harmony thesis.

In his study of social harmony in smaller firms, Goss (1988) criticises the reliance on employer perception of the quality of employment relations which leads to positive reporting. To evaluate such perceptions, Goss argues that conflict is submerged beneath ‘intergroup credibility’ (p. 116), which emerges from the pragmatic response to power­lessness by small firm employees. It is argued that the proximity of owner, managers and labour when at work ensures that ‘trouble makers’ can be identified or removed and conflict is masked. Goss (1988: 116) states that ‘small firms provide an environ­ment in which contradictions implicit in the labour/capital relation can be relatively effectively contained or neutralised by employers’. In his critique of the social harmony thesis, Goss focuses upon the ability of employers, combined with market pressures to limit opportunities for employee resistance to labour management tactics. Using evidence from a small study of printing firms, Goss found that owners identified good and bad employees according to their willingness to tolerate labour process changes, demands for overtime and flexible working. Those deemed bad were denied pay bonuses and had their jobs threatened - thus, compliance with the owner was based on powerlessness, not identification. So, Goss reiterates Rainnie’s (1989) findings that harmony and conflict are complex issues that cannot be presumed from the presence or lack of overt conflict.

In a later work, Goss (1991) develops this debate further by developing a typology to demonstrate the manner in which employers exert control over both employees and the labour process itself but also how employees might resist such control. A number of categories are identified:

■ Fraternalism - where there is a shared sense of skill and effort, owners tend to work alongside employees (e. g. in construction). There is a reliance on negotiation between employer and employee with a realisation that all are needed for the firm to survive; thus the circumstance of mutual reliance and close working generate a form of partnership.

■ Paternalism - there is a differentiated power relationship between employer and employee but an effort is made to generate an identification from labour with the ethos of the enterprise (e. g. in agricultural communities). Other forms of employ­ment may be scarce but employers still need commitment from labour to undertake unsupervised work, unscheduled overtime and display other forms of flexibility. Identification with the work-place extends into the community with some evidence of mutual obligation. (For more discussion, note the concept of the ‘deferential worker’, Newby, 1977.)

■ Benevolent autocracy - there is a clear identification of the role of employer and the power this commands but this is based solely within the work-place. There is a tend­ency towards informality with a pragmatic acceptance of labour/capital inequality but some evidence of joint identification of organisation needs.

■ Sweating - again a clear imbalance of power but the employer makes no effort to cultivate employee identification and there is a critical focus on cost containment.

Goss notes the complexity of managing employee relations in smaller firms and, import­antly, notes that there is potential for some employees to influence social relations at work. This analysis again underpins the complexity of the employee relationship and the need to consider carefully definitions of harmony, but the dependence of typo­logies is not always useful (see above) and the study is, again, overly dependent upon manufacturing firms for conclusions.

Reflecting the critical analyses developed by Rainnie (1989) and Goss (1991) that recognised heterogeneity and complexity, a number of studies have emerged over the intervening years drawing largely upon the case study approach to explore such issues in more depth. Such studies, with their detailed exploration of the dynamics of daily life in smaller firms, exposed the complex web of relations between the external and internal environment of the firm. So, for example, the work by Ram (1994b) explored labour management issues in three family-owned textile firms. Through the adoption of the case study approach, Ram was able to build a picture of the employment rela­tionship that enabled the influences of market constraints, ethnicity, gender and family tensions and allegiances to be acknowledged and incorporated. From this research, Ram argued that the employment relationship within many small firms is underpinned by a complicated system of social negotiation between owners and employees and, indeed, between the workers themselves. In drawing attention to the importance of the social relations of production, Ram (1994b: 150) argued that theories based upon deterministic market relations, such as those outlined by Rainnie (1989), did not fully ‘convey the bargained nature of life on the shop floor, the extent of mutual dependency between workers and management and the importance of informal accommodation’.

20.5.3 Social negotiation

Holliday (1995) offered further support to the social negotiation thesis; her study focused upon family firms where she found that family priorities strongly influenced the approach towards labour management. In particular, the notion of paternalism - the idea of a father figure making key decisions in the interest of all - was evident. More recent work by Dundon et al. (1999) also draws attention to the manner in which family dynamics are influential upon small firm management. Focusing upon non­unionism in smaller firms, Dundon et al. commented upon the background to their case study firm where there had been a ‘long history of familial control in which “walking the shop floor” had been the main way owner-managers engaged with employees. Traditionally, family members had always occupied strategic positions. . . there are few personnel policies and no formal method of involving employees other than a familial culture of friendly relations’ (1999: 255). Indeed, this case is apposite as the introduction of non-family managers and other changes were being undertaken to improve competitiveness in an increasingly tight market environment. The resulting move from what Dundon et al. describe as traditional paternalism to autocratic pater­nalism had created disquiet among staff and prompted some interest in unionisa­tion, but this had not on the whole prompted formal resistance or notably increased labour turnover. Rather, the research team found a high degree of satisfaction with the informal social relations of production between the employees themselves; also the level of positive customer interaction was appreciated and enjoyed by employees. So, despite considerable dissatisfaction with pay, worries over job security and poor pro­motion prospects, very few employees stated that they would leave the firm if offered work elsewhere. It was argued that family paternalism transposed into the setting of the firm blurred and camouflaged the reality of exploitation within the employment relationship but, with the introduction of a professional tier of management, such ten­sions were exposed.

The manner in which social relations underpin the employment relationship in a complex and varied fashion is further illustrated by the work of Ram et al. (2001) exploring the Indian restaurant sector. In analysing this sector, Ram et al. note that it is defined by very poor terms and conditions of employment but the influence of wider labour market discrimination, family reciprosity, social pressures and informal work­ing meant that employees were drawn to such work on the basis of a wide range of social and economic elements, themselves embedded within the local community. The interaction of location, social expectations and reduced economic prospects else­where generate a particular working environment that reflected market, community and familial issues and pressures. As such, the employment relationship was embedded within the norms of local community values which bounded both employer and employee behaviour (Granovetter, 1985).

Acknowledging the influence of social negotiation upon the employment relation­ship in smaller firms, Taylor (2004) generates a conceptual analysis focused specifically upon the discourse of human resource management (HRM) and particularly how this approach ‘fits’ the smaller organisation. HRM strategies and policies emerged in both theory and practice in the 1980s as a new managerial strategy to increase the value added to the production process by employees (Beardwell et al., 2004). As such, most

large organisations have now adopted the rhetoric, if not the reality, of HRM (Legge,

1995) based upon the presumption that it is an effective and efficient economic and functional approach to labour management. However, within the HRM discourse there is little sensitivity to the context of the firm size. Again, using detailed case study material Taylor considers the ‘building blocks’ of HRM - recruitment, selection, train­ing, development, appraisal and reward - finding that the interaction of management norms, state regulation and organisational culture within small firms critically affects the manner in which the HRM discourse is articulated. It is noted that: ‘cultural bar­riers (related to firm size) are also cited when commentators suggest how to “improve” managerial practice within smaller organisations. Lack of resources to train specialists, lack of complexity. . . lack of familiarity with management theory, disinclination to seek or take advice on management. . . mitigate against the adoption of modern best practice in analysing why smaller organisations remain stubbornly rooted in an alter­native way of thinking’ (Taylor, 2004: 35).

Taylor goes on to argue that the smaller organisation is then presented as the ‘other’ in terms of an inability or unwillingness to adopt best practice employment relations as demonstrated by their larger counterparts. This, it is suggested, completely fails to recognise the specificity of the small firm context and the mediating role of firm cul­ture that does not offer a ready home to HRM policy and practice. In essence, Taylor is arguing for greater sensitivity to heterogeneity and, once again, recognition of the manner in which employment relations are socially embedded within the culture of the organisation such that there cannot be one best practice example. From this brief snapshot of contemporary analyses of labour management in small firms, a number of themes are emerging. Clearly, empirical evidence would indicate that the social relations of production in small firms are shaped by firm size and the ensuing proximity between employers and employees, which is itself founded upon the notion of informality.

20.5.4 Formality and informality

There is some temptation to view formality and informality in labour management as a dichotomy. However, it is more appropriate to consider these concepts as existing along a continuum. As Ram et al. (2001: 846) note, ‘informality is, therefore, a matter of degree not kind’. Marlow (2002) explores these notions in some detail and observes that large firms have a foundation of formal policy and practice that bounds the employ­ment relationship even if issues of custom and practice dominate regarding the daily management of work. Smaller firms, however, are less likely to employ professional HR or personnel managers (Wynarczyk et al., 1993) and so the employment relationship is more likely to reflect the idiosyncrasies of the owner’s priorities and interests. This lack of professional, in-house skill ensures that it is unlikely that formal policy and practice will be put into place and/or observed upon a daily basis. Furthermore, the proximity of owner, manager and employee positively encourages informal consultation, supervision, grievance and discipline articulation. Added to such internal pressures for informality, Ram et al. (2001) also argue that this preference is a response to shifting labour and product market demands, and contributes to the much lauded flexibility of smaller firms.

Accordingly, it would appear that, as Marlow et al. (2004: 6) argue, there are dif­ferentiated degrees of informality and formality in both large and small firms but, ‘that within larger firms, the dynamic of control and consent is bounded by formality in that if, and when, line managers have to overtly assert authority, they have the channels by which to do so’. On the other hand, in small firms, owner prerogative is more likely to shape the parameters of the employment relationship without any fall-back position of formal policy and practice. Axiomatically, it would seem appropriate for smaller firms to adopt informality given the proximity between employers and employees, team-working ethos and paternalistic management practices. However, this approach has inherent problems, particularly regarding the development and application of fair, objective and clear employment rules and regulations. Where individual managerial prerogative dominates, there is obvious scope for spontaneous subjective action and discrimination.

So, although there is little firm evidence regarding labour turnover in smaller firms, that which does exist finds higher levels of quitting than within larger firms and, more­over, a greater tendency for tribunal applications for unfair dismissal (Earnshaw et al.,

1998) . It would therefore appear that whilst informality may be advantageous for those who fit well in the firm, it does not accommodate those who either do not accord with the norm or who might wish to raise objections to labour management practices. Further to these implications regarding individual employee management, a preference for informality also raises a range of issues regarding regulatory compliance.

20.6 Employment regulation and smaller firms

Since their election in 1997, successive Labour governments have regulated the employ­ment relationship through a series of Acts that have recognised the European social agenda, extended individual rights at work and, to some degree, offered limited sup­port to strengthen trade union rights and offer a statutory recognition process. This has been evident by the enactment of two Employment Acts (1999 and 2002), a National Minimum Wage Act and the adoption of a number of EU Directives (if, in a minimal fashion) (McKay, 2001). Evidently, firms that favour informality will find it difficult to incorporate formal employment regulation into their very limited policy and practice regime and so demonstrating compliance will be challenging. Contemporary research that has considered employment regulation compliance in smaller organisations has, to date, found a less severe impact upon their performance than had been prophesised by both representative pressure groups (Federation of Small Business, 2000) or media commentators (Oldfield, 1999). Blackburn and Hart (2001) found pessimistic predictions regarding deteriorating performance to be unfounded; it appears that the perception of potential problems does not seem to have been borne out in reality.

Moreover, in a study of regulatory compliance focused specifically upon the Employ­ment Relations Act 1999, Marlow (2002) found a high degree of ignorance concerning the details of the Act. Over a third of her sample of firms, all of whom employed more than 20 employees (the base line figure for compliance), did not even issue formal con­tracts or offers of employment letters and, as a group, this sample had but a basic knowledge of new legislation. Moreover, the firm owners demonstrated little concern regarding lack of compliance as they could not foresee how this would ever be a problem where the only sanction might be a tribunal application. Those who had been subject to tribunal claims had certainly given some attention to policy and practice or had contracted the HR function to a professional agency, but had been irritated by the tribunal process rather than deeply affected. Similarly, Ram et al. (2001) and Gillman et al. (2002) found a very fluid, negotiated approach to National Minimum Wage com­pliance with some owners again ignoring regulation while others adopted a range of practices that reflected both the owner’s idiosyncrasies and external market conditions.

It is argued that the current approach to employment regulation does not fully recognise the peculiarities of the small firm context (Marlow, 2002; Hart and Blackburn,

2004) . The very proximity of employer and employees, plus the social ties between them, makes the adoption of formality in policy and practice incongruous and unlikely. However, the problem with this stance, as noted above, is the lack of objectivity in the fair application of uniform standards for all employees. Moreover, given the lack of formal trade union recognition within smaller firms there are few opportunities for employees to voice concerns other than a direct approach to the owner or line man­ager (Dundon et al., 1999). The lack of opportunity to voice dissent is again apparent in the statistics on employment tribunal applications where smaller firms dominate in issues of unfair dismissal and cases relating to redundancy (DTI, 2002).

20.6.1 New legislation

The forthcoming Information and Consultation for Employees Act (ICE) which (from 2008) will apply to firms with more than 50 employees aims to offer opportunities for employee consultation and voice. Again, however, drawing upon existing evidence regarding regulatory compliance, which indicates patchy acknowledgement at best, it is unlikely that the forthcoming ICE Act will be the solution to the lack of employee voice in smaller firms. As Marlow and Gray (2005) suggest, in the case of the ICE there will be differentiated levels of compliance as evidence indicates (Wynarcyzk et al., 1993; Storey, 1994) that, as firms grow, so they adopt more formalised management functions (although HR is usually of low priority). Given that the key provisions of the ICE are:

■ the identification of employee representatives for consultation purposes and as con­duits for information dissemination;

■ consultation regarding changes to terms and conditions of employment; and

■ information regarding terms and conditions of employment, firm performance and prospects;

it is unlikely that in the firms within the smaller size bands, where owners, managers and employees work in close proximity so that interaction is direct and immediate, specific representatives will be appointed or formalised consultation adopted. Further­more, given the context of the smaller firm, there are some dangers in focusing upon formal employee representation: ‘there would be some question regarding how frank the representative may want to be with the firm owner who is also the direct employer. . . in an environment where there are a small group of employees working in proximity with management, some doubt must be expressed in regarding the ease of maintaining the anonymity of employees expressing dissatisfaction’ (Marlow and Gray, 2005).

20.6.2 Implementation of legislation

In this short consideration of employment regulation, it is evident that firm context is highly influential in shaping labour management; there are real difficulties in ensuring the uniform application of regulation. Indeed, as noted above, interest groups such as the Confederation for Business and Industry and the Federation of Small Businesses have strongly criticised regulatory regimes but this does beg the question regarding the protection of those who work for smaller firms. Atkinson and Storey (1994) and Earnshaw et al. (1998) have largely supported the overall view that there is a problem with the durability and quality of work in the small firm sector. Such employment, on the whole, commands lower pay, offers fewer opportunities for training and develop­ment, small internal labour markets constrain career progression, and hours worked are either longer to enhance wages or are more likely to be part-time. However, it is interesting to note that there is some indication that employees are not necessarily dis­contented in such work or that employers fear external regulation that would improve conditions, such as that from trade unions (Curran, 1997; Dundon et al., 1999).

Regarding pathways to encourage compliance, the government is committed to a voluntary approach but, as noted above, this is likely to have a limited impact upon smaller firms in general. In considering alternative options to encourage or compel compliance, it would seem inappropriate to give trade unions, for instance, greater powers as regulatory enforcers for a number of reasons. It is difficult to force employers to grant union recognition and even more challenging to ensure bargaining occurs in good faith. Employers cannot be forced to welcome trade unions so it is questionable whether they could be forced to even tolerate them where they were unwanted. It is debatable to what extent private service sector employees, in particular, would support union regulation having little experience of union benefits and no tradition of union affiliation. So, unions would require some official status and funding to ‘police’ work­places where they were not recognised - and this is unlikely. Also, it must be ques­tioned whether unions would be up to such a task in the short or even medium term as policing regulation would require coherent strategies and significant numbers of well-trained organisers. This is clearly not beyond the scope of unions given time, resources and official encouragement. However, given the distant relationship that cur­rently exists between trade unions and the Blair government, this is not a very likely scenario. Alternatively, existing bodies such as the Health and Safety Executive could be further empowered or new regulatory organisations pertaining to wages and con­ditions could be formed. These bodies would require substantial funding, professional advisers and powerful sanctions to be effective - all of which is perfectly possible and would ensure greater professional management and uptake of advice.

So, it is clear that, on the balance of existing evidence, the argument for greater regulation to improve employment conditions in small firms is persuasive. Yet it is difficult to imagine how focusing on one particular sector of the economy, which is noted for its heterogeneity, could be adequately justified given the criticisms this would elicit. Also the effect on production costs and consequent implications for firm survival must be recognised. Moreover, whilst the Labour government has made a pledge to promote fair employment through a flood of regulation, in keeping with traditional UK approaches the emphasis is on voluntary regulation with some sanctions available through the employment tribunal system. So, whilst formal regulation might be the most effective manner to address inequality and exploitation in employment, the social and market context of many smaller firms will ensure that compliance is uneven across the sector.

For voluntary regulation to be effective, it must offer sustainable benefits for all interested stakeholders. This might be obtained through extending and developing the system which in the past pertained to local government contracting whereby tenders were considered on not just cost but also issues such as employment standards. Given the dependency of many smaller firms upon such contracts within the private and pub­lic sector, this would encourage a review of standards while offering the benefit of con­tracts. This type of requirement is already evident in some cases where larger firms require sub-contractors to attain Investor in People status or other quality standard indicators (Marlow, 2002). Whilst this would necessitate larger firms extending their remit for tenders, given the formality/bureaucracy of such organisations this would not be excessively demanding.

20.6.3 Critical themes summarised

From this overview of labour management in small British firms, a number of critical themes have emerged. As recognised at the outset, generalisations are made but the heterogeneity of sector is noted; Scase (2004), for example, explores labour manage­ment strategies within a number of sub-sectors of small firms noting how the employ­ment relationship in high-tech firms will differ markedly from that in a traditional craft-based business. However, recognising differences in degree concerning style and approach, there are still common themes that can be identified. So, for instance, it appears that size, owner and employee proximity combined with market situation is likely to favour an informal approach to managing labour. Whilst there are undoubted benefits to this in terms of promoting team working, shared goals and aspirations while enabling flexibility, there are also disadvantages.

Where owner prerogative dominates there is clear scope for subjectivity in the man­ner in which employees are managed; moreover a lack of professional HR knowledge mitigates against engaging with the most efficient and effective employment policy and practice. Of course, as noted in detail above, informality is a barrier regarding regu­latory compliance. A number of case study explorations (Ram, 1994; Holliday, 1995; Moule, 1998) have all drawn attention to the degree of social negotiation that surrounds the employment relationship in smaller firms where the close working relationship between owner and employees creates, to some extent, a sense of mutual dependence and shared interest, particularly regarding the survival of the firm. However, again these cases reveal how certain employees have greater leverage regarding the ability to negotiate their conditions; such leverage might be gained by the possession of valued skills but it was evident that issues such as seniority, gender, family affiliation and friendships also swayed this relationship. While recognising the importance of negoti­ated employment relations, it also emerged that owner prerogative was still highly evident and could be called upon whenever required to reassert managerial authority.

Having ascertained that employment relations in small firms are complex, the ‘prob­lem’ of regulation emerges as one of uniform application and compliance. From one perspective, the problem focuses upon the desirability and possibility of introducing greater regulation into the fluid employment relationships that can be found in small firms. By attempting to introduce an element of uniformity and formality, the com­petitive edge gained from flexibility, team working and mutual interests will be com­promised. However, if the government is to achieve its wish to promote fairness at work for all, smaller firms cannot be excluded from this policy, particularly as evidence would indicate that employees in the sector have poorer terms and conditions across a range of measures compared with their counterparts in larger organisations. Yet the government has excluded firms with fewer than 20 employees from much of the con­temporary regulation (discrimination issues being a notable exception) and those with fewer than 50 are exempted from the ICE. With no effective strategy to impose regula­tion, however, evidence would indicate that compliance is at best partial and uneven (Hart and Blackburn, 2004). Having outlined issues regarding labour management in small firms in the UK, the discussion is now broadened to include some examples from the EU.

20.7 Labour management in small firms in Europe

Managing labour is a key task for any organisation regardless of place, context or sector so, it can be argued, all firms must address the problem of the effort-wage bargain (Burawoy, 1979) - that is, how much work will be undertaken for what level of reward. To some extent it is accepted that there is a universal element to the employment rela­tionship but it is also axiomatic that differing economic, social, legal and political regimes within nations will create specific contextual environments that will shape the employment relationship. In the case of smaller firms throughout Europe, despite their economic and social importance to the EU, in-depth comparative studies are rare. How­ever, in 2002 the European Foundation for the Improvement of Living and Working Conditions (EFILWC) produced a report detailing key elements of the employment relationship in a range of European countries including those of Eastern and Central Europe such as Bulgaria. From these collective findings, the report reflects many of the points made above in relation to the UK and notes a number of distinctive character­istics pertaining to labour management in micro and small enterprises as follows:

■ a central role for the firm owner;

■ a close relationship between owner and employee;

■ employees are more visible to employers and vice versa;

■ family involvement within the firm and its employment;

■ informality of management and a lack of procedures;

■ distinctive employment characteristics in terms of gender, education, skills;

■ the sector is heterogeneous and generalisations are thus cautious.

20.7.1 Unionisation

Looking in more detail at specific issues, the report notes that overall collective repre­sentation opportunities are limited (EFILWC, 2001). Recognising that very little precise data is available, some examples were identified. For example in Germany small firms with fewer than five employees are not obliged to recognise a works council. In fact, Backes-Gellner (2000) found that only about 14% of firms with fewer than 50 employ­ees had any form of works council. In Finland, where collective representation through voluntary shop stewards is highly developed, firms with fewer than 30 employees were unlikely to have such representatives. It is recognised that ‘legal provisions in most EU Member States explicitly establish minimum enterprise size thresholds that exclude smaller enterprises from the possibility to set up formal employee representation struc­tures. Notwithstanding this, irrespective of existing regulations, most micro and small enterprise employees never exercise these collective representation structures’ (EFILWC, 2001: 7).

The report also finds that unionisation rates among smaller firms are generally low, again reflecting the situation in the UK. However, there are some exceptions with Denmark, Finland and Norway having up to 88% density in firms with more than one employee, reflecting broader economic and social trends towards union membership and recognition in such countries. This is an interesting finding as it indicates that where there is consistent state sponsorship of wider employee representations and employees themselves gain substantive benefit from such, allegiance is strong. Moreover, despite sentiments expressed within the UK, for example, it also illustrates that small firms can operate productively while tolerating a union presence. When considering the EU as a whole, what is notable is that data on unionisation are not available for Austria, Belgium, France, Greece, Ireland, Italy, Portugal or Spain but it is suggested that this is because density is so low. In a closer examination of the French case, Lepley (2000) argues that the benefits of union membership are not appreciated by employees; in fact they are perceived as disruptive, generating conflict and creating rigidity. However, it is argued that such opinions are based on a very poor knowledge of the role and activ­ities of unions.

Similar to the case in the UK (Stanworth and Gray, 1991), trade unions themselves have not developed strategies to recruit small firm employees in many European nations; so for instance in France there are no specific branches for small and micro firms whereas in Spain attention is focused upon large firms (Costa and Duffy, 1991). The EFILWC report also draws attention to the informality in smaller firms, finding that this is a barrier to union representation. In Germany there are recognised informal structures such as ‘Monday Roundtables’ where owner and employees meet to discuss problems and issues but these are subject to limitations as the owner generally dictates the agenda. Overall, when considering employee representation across Europe, it was found that all formal representation, councils and committees are less likely to be pre­sent in small firms as informality mitigates against these structures, the proximity between employers and employees makes them rather superfluous and employers per­ceive formal representation as a stimulating resistance to owner prerogative.

20.7.2 Terms and conditions

It is generally agreed that the terms and conditions of employment improve as firms grow (Atkinson and Storey, 1994). This assertion was examined by EFILWC in rela­tion to a number of key constituents of the employment relationship, i. e. wages, fringe benefits, working time, labour turnover and training within the broader context of Europe. Taking the case of wages and salaries, in all the cases where data was exam­ined in some detail - Germany, Finland, France and Spain - it was found that there was a positive correlation between increasing reward and firm size. It is noted that firm size is not the only influence upon wages as, for example, employee productivity and skills tend to be greater in larger firms whereas smaller enterprises draw a disproportionate number of employees from the most vulnerable and least skilled sectors of the work­force (older workers, younger workers, temporary workers, ethnic minority employees, women). Moreover, even where minimum wage legislation is in place, similar to the UK experience, compliance among smaller firms is poorer than within their larger counterparts and compounding this issue, as noted above, such firms have a higher dependence upon minimum wage labour. So, for example, it was found that in France approximately 26% of micro-enterprise labour was drawn from minimum wage employees compared with 12% in larger firms (CFDT, 1998). Not surprisingly, given this evidence regarding wages and salaries, when other fringe benefits were considered by EFILWC, they were lower in smaller enterprises; whilst little detailed evidence is available, that from France, Germany and the UK indicates that pensions, productiv­ity bonuses and management benefits are generally poorer than those in large firms.

Regarding working time and flexibility, detailed information is again generated for France, Germany and Spain. From official data collected from firm owners in France, it emerged that the smaller the enterprise, the longer the working hours; in 1997 it was found that whilst only 2% of employees in larger firms worked more than 41 hours per week the comparative data in micro enterprises indicated that this figure was more than 23%. In Germany, it was found that, overall, statutory holiday entitlement was less likely to be observed in smaller firms with notable deviations from the normal five - day working week. Evidence from Spain (Ortega, 1999) also found long hours to be a feature of small-firm employment with Spanish employees obliged to work over­time hours and weekends; furthermore, holidays often fell below collectively agreed minima. Given that the German and French economies, in particular, are perceived as having fully embraced the EU agenda for employee regulation and protection, and the latter has a 35-hour working week, it might be supposed that in the case of smaller enterprises they would be demonstrating best practice. This would indicate that even if data for other EU members is scarce, it is unlikely that provision will be superior to that of the countries described.

Perhaps not surprisingly, evidence linked to labour turnover indicates higher levels in smaller firms. In Finland for instance, unemployment arising from ‘churning’ (new jobs created versus jobs lost through downsizing or failure) is greater in smaller businesses while such firms have not complied with policies to employ long-term unemployed or difficult-to-place labour (Saari, 1996). In Spain, it emerges that greater numbers of temporary and casual employees are employed in smaller enterprises to adapt to peaks and troughs in demands and to avoid complex and costly dismissal procedures. Hence, such firms utilise insecure forms of employment to create greater flexibility within labour markets (Ortega, 1999). Finally, in respect of training and development there is a considerable body of extant evidence indicating that oppor­tunities increase with firm size so, for example, the IKEI and ENSR survey (1997) of training initiatives within SMEs demonstrates a positive relationship between firm size and propensity to train. Drawing upon survey data from 840 smaller firms in Austria, Belgium, Finland, France, Greece, Iceland, Italy, the Netherlands, Norway, Portugal and Spain, it was found that slightly more than a quarter of micro firms undertook some training activity whereas this rises to 84% for firms with between 50 and 249 employees. Moreover, the formality and sophistication of training initiatives increased with firm size.

The EFILWC report offers an overview of its findings in relation to labour man­

agement in smaller firms across Europe which they represent as follows:

■ In general, working conditions deteriorate as firm size decreases.

■ Wages and salaries are generally poorer in smaller enterprises.

■ Fringe benefits are less common and generally poorer.

■ Working hours are longer and more weekend work is involved.

■ Employment is more insecure and more likely to involve temporary or casual work.

■ Training and development opportunities improve as firms grow.

The reasons for such outcomes are summarised as:

■ higher presence of family members;

■ blurred boundaries between labour and capital;

■ informal, multi-task approach to work;

■ lack of professional HR management;

■ more jobs without formal contracts;

■ greater job insecurity leading to workers accepting worse conditions.

To this list should also be added the element of volatile markets and uncertain com­petitive environments.

As has been noted in the introduction to this chapter and is reiterated in this European report, although common trends and themes can be identified for the purpose of debate and discussion, there is heterogeneity within and between small firms. EFILWC draw attention to the differences between the service and manufacturing sector particularly, noting the importance of craft enterprises in countries such as Germany and Italy where the employment relationship is subject to institutional frameworks. It is also recognised that those working in sectors that depend on highly skilled labour, such as high-tech firms, have greater leverage to negotiate preferential terms. For instance, in Germany such employees are more likely to benefit from the observation of collective agreements and wage settlements for the whole branch of the industry.

Meanwhile, in France location is influential as networks across communities and locales facilitate the development of minimum local standards and employment prac­tices across the region. Moreover, French employees must have a written contract speci­fying hours, tasks, wages and working conditions. Indeed the French labour market is highly regulated with most of these provisions applicable to smaller firms. This might be compared with the case in Bulgaria, for instance, where employment contracts are rare and, given the difficult competitive environment, profits are marginal so there is little investment in individual training, development or collective forms of social insurance (National Statistical Institute, 2000). Hence, there are clearly discrete influences arising from specific national contexts upon the employment relationship but there are also a number of common themes that span these borders. Firm size, sector and the tendency for individually negotiated employment relationships in an environment of informality appear to be widely influential upon labour management policy and practice in smaller enterprises. The manner and extent to which these trends emerge will clearly be influ­enced by the national agenda regarding social and economic policy.

20.8 Chapter summary

This chapter has offered an overview of labour management practices in small firms in both Britain and Europe. It is evident that the extant evidence and conceptual ana­lysis regarding the employment relationship in smaller organisations has advanced substantially over recent years. In a recent critique of academic progress, Barrett and Rainnie (2002) argued this debate had, in fact, stagnated, with the ‘small is beautiful’ hypothesis still evident. This stagnation arose largely from the ongoing ignorance of structural forces and uncertainties by key researchers. However, in a robust response to this argument, Ram and Edwards (2003: 720) point to the increasing recognition given to the analysis of labour management in small firms within leading employ­ment relations texts, research monologues (Marlow et al., 2004) and critical empirical research (Workplace Employment Relations Survey, 1998) as a discrete and crucial area of study. This focus has been made possible by the expanding body of debate, analysis and empirical evidence afforded to employment relations practice and policy within smaller firms. As noted by Ram and Edwards, the theoretical approach has become increasingly sensitive to the manner in which the tensions surrounding mana­gerial control of labour are articulated in the smaller organisations; moreover this analysis recognises both market imperatives and internal managerial strategies. The use of qualitative methodologies to explore and illustrate those processes that shape the employment relationship has substantially advanced the understanding of concepts of informality, negotiation and the prevailing social relations of production. In focus­ing upon the creation and recreation of the employment relationship upon a daily basis, this detailed evidence has also enabled a detailed exploration of the differenti­ated approaches to regulatory compliance.

It is recognised that there remains much to do in this area, particularly in the analysis of heterogeneity; although common trends such as informality have been identified, it is now essential to explore how this is influenced with respect to specific contexts. Moreover, although the arguments presented by Barrett and Rainnie (2002) regarding analytical progress are disputed, it is accepted that the interplay between structure and action in terms of market constraints and firm context merits further attention. Moreover, the issue of how firms change in respect to labour management practices, particularly as they grow, is an area of considerable interest. In the case of European countries again, commonalities were identified but, equally, the influence of differing national policy and practice was recognised. Questions arise regarding the impact of regulation upon smaller firms in France and Germany, why trade unions are influential

in Finland and Scandinavia and, of course, the implications for small firm performance and standards of employment in these differing cases.

As such, this chapter has provided a flavour of the differences and similarities that define the employment relationship in smaller firms. Since the 1990s, a growing body of empirical evidence and a distinct conceptual analytical framework have emerged to illustrate and explore key issues and it is expected that this extant literature will con­tinue to grow in future in terms of both depth and sophistication.