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relativity of organisational practices and theories has perhaps been the other most prominent. Whereas contingency research emphasised factors such as product markets and technologies, he argued that universal principles could not exist regardless of national environments. The accumulation of evidence about different cultures and trajectories of socio-economic development meant that by the 1970s,

It slowly became clear that national and even regional cultures do matter for management. The national and regional differences are not disappearing. They are here to stay. In fact these differences may become one of the most crucial problems for management – in particular for the management of multicultural, multinational organisations, whether public or private. (Hofstede, 1990: 392)

Despite the reference to regional factors, in Hofstede’s work culture is firmly equated with nationality. Nationality has central symbolic value to citizens, creating shared ideas, values and meanings transmitted through family and community. Such social conditioning becomes embedded in, ‘an invisible set of mental programmes which belongs to these countries’ national cultures’ (Hofstede, 1990: 393). In turn, this programming predisposes individuals to act in particular ways and is reinforced by becoming crystallised in institutions such as legal systems, industrial relations and religious organisations. National character and national culture are treated as indivisible. To operationalise these assumptions, Hofstede had to identify a common conceptual currency that could map national cultures and then find a way of collecting data about them. The latter was done on the back of his work as a psychologist for IBM between 1967 and 1971. He was able to collect data through questionnaires to employees in IBM’s many multinational units. The findings appeared to demonstrate ‘remarkable and stable’ differences between countries. There were differences in the mental programming of individuals, but an ‘average’ pattern of beliefs and values was identified. This and related studies have had a huge impact on scholars and practitioners (see Søndergaard, 1994).

The conceptual framework utilises a four-dimensional model for national cultures:

•Power distance This combines societal attitudes based on the extent to which inequalities of various kinds are tolerated, and an intra-organisational dimension related to the degrees of centralisation of authority and autocratic leadership.

•Individualism–collectivism Societies will vary according to how loosely or tightly social norms bind individuals into group membership. Collectivist nations are ones that require individuals to subordinate self-interest.

•Uncertainty avoidance There is a certain amount of ambiguity and risk in any complex society. Some societies encourage individuals to tolerate high levels of uncertainty, others create institutions to maximise security and avoid risk. Technology, laws and religion can all play a role in defining the extent and character of risk toleration.

•Masculinity–femininity This corresponds to the well-known distinction between toughand tender-minded. This is said to be the outcome of the degree to which a society seeks to maximise or minimise the ‘natural’ division of sex roles between men and women. Masculine societies promote performance, achievement, ‘big is beautiful’; feminine ones encourage quality of life, relationships and protection of the environment.

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These dimensions are also held to intersect. For example, collectivist countries ‘always’ have large power distances. On the basis of responses to his questionnaires, Hofstede then plots where countries fall on large/strong, small/weak indexes and sometimes relates this to other factors such as gross national product. In this sense, he is doing more than description. There is an implicit normative dimension. When discussing indi- vidualism–collectivism, it is stated that wealthy countries are more individualist and poor countries collectivist. Amongst the former are the US, Britain and Sweden; the latter include Taiwan, Pakistan and Korea, with Japan, Austria and Spain in the middle. Other results show that all Latin countries are in a strong uncertainty avoidance/large power distance cluster, along with Japan and Korea. In contrast a small power distance/weak avoidance cluster includes the Netherlands, US, Britain and Sweden. Meanwhile the most masculine are Japan and the German-speaking, the most feminine the Nordic and the Netherlands.

On the basis of these results, Hofstede draws some lessons for management theory and practice. In their own terms they are fairly logical. Leadership in a collectivist society will tend towards the group rather than the individual. If there is low power distance, schemes for employee participation will flourish. Self-actualisation will be more of a motivator in highly individualistic societies such as the US than in those where keeping ‘face’ within group relationships is a prime social requirement. However a range of methodological problems has been identified, notably drawing strong generalisations from small samples, taken at a particular time in a specific context that may have changed. Indeed these and other criticisms focusing on the validity of the IBM sample and reliability of results taken solely from attitude surveys have been frequently aired (Kieser, 1993; Søndergaard, 1994).

While the study was undoubtedly methodologically flawed, it is unhelpful to base a critique too much on those factors. For it is perfectly possible to use a different methodology and come up with the same kind of arguments. The best-known example is the work of Hampden-Turner and Trompenaars (1993). Their best-selling management books use a more sensitive device: scenarios containing ethical and practical dilemmas that have been put to over 15 000 managers at their own multinational seminars. On this basis they identify patterns of responses that reflect different systems of values concerning wealth creation. Seven cultures of capitalism are discussed based on national cultures, including the US, Britain, Japan and Germany. As in Hofstede, there is an underlying critique of an ‘American model’, in this case because it is failing to respond to new forms of competition from rival cultures. Some of the value dimensions are different, such as universalism versus particularism and analysing versus integrating, while others – including individualism versus communitarianism, equality versus hierarchy – are much the same. The underlying argument also remains similar to Hofstede. Every culture is held to have a tacit dimension rooted in a subconscious set of beliefs that form the bedrock of national identity. These beliefs are the ‘invisible hand that regulates economic activity’ (Hampden-Turner and Trompenaars, 1993: 4).

Examples of the relationships between such beliefs and practices include the outcomes of American and British preference for universalism, analysing and individualism; in other words for generalisable rules and laws, and for breaking down phenomena into calculable parts. This is then linked to the development of scientific management and bureaucracy, the dominance of the finance function and conglomerate forms of ownership, obsession with short-term performance, high levels of bankruptcies and astronomical salaries. As for the underlying normative message, the two

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perspectives partly diverge. Hofstede’s ‘different is best’ outlook is replicated by Hampden-Turner and Trompenaars’ view that future economic success depends on understanding trading partners. At the same time success also involves managing these value tensions: ‘economic success will accrue to the cultures which do the best job balancing the scale’ (Hampden-Turner and Trompenaars, 1993: 10).

It is not difficult to see the basis of the appeal of cultural relativism. It trades on recognisable, if somewhat stereotypical, national characteristics. Normatively the approach has obvious and useful applications in terms of training to make managers more sensitive to trading partners and to local cultural conditions. Other studies have provided valuable cultural commentaries, such as Lockett (1988) on understanding the characteristics of Chinese management. Limits to theories that promote some form of universal human essence, such as Maslow’s hierarchy of needs, are helpfully exposed. The progressive intent, notably to question the transferability of textbook (read US) models to circumstances, such as former Communist countries, is admirable: ‘what counts is only that a country is managed according to the value systems of its people’ (Hofstede and Søndergaard, 1993: 3).

Unfortunately such benefits come at a price, for there remains a massive credibility gap. By locating attitudes within a largely unvarying national character, cultural relativists tend to produce static descriptions that overestimate durability of values and practices. Many of Hofstede’s pronouncements look particularly dated. Confidently asserting that the degree of individualism in a culture is statistically related to a country’s wealth, the 1970 listing places Japan in the middle, and a number of the East Asian ‘tiger economies’ with the fastest subsequent rates of growth in GNP firmly anchored at the bottom. In a later contribution (Hofstede, 1991), he has to borrow the idea of ‘Confucian dynamism’ to fill the gap.

Let us also take the example of the former Communist countries. Most of them manifested high power distance, collectivism and uncertainty avoidance (Hofstede and Søndergaard, 1993). This is hardly surprising given the nature of their shared command economy and centralised party–state apparatus. In contrast, Russia is now experiencing rampant individualism and uncertainty following the collapse of the old solidaristic social norms. While the situation is not as dramatic in other ex-Eastern bloc countries, there is no evidence in either case that this reflects or is driven by changes in national mindsets.

The fact that the descriptions are often no longer accurate raises questions about the feasibility of the analysis. Such perspectives pick up on cultural differences and then believe they have explained them. For example, Hampden-Turner and Trompenaars refer to the ‘psychology of short and long-term mind-sets’ (1993: 139). But it is not at all clear that finance-driven short-termism derives either from mental models in general, or Anglo-Saxon ones in particular. It is equally possible to argue that the kind of ‘greed is good’ individualism, with associated high levels of bankruptcy and takeovers, was an outcome, not of a mental model, but specific historical and contemporary institutional arrangements in Anglo-American political economies.

Culturalist perspectives treat as universal what are the outcomes of historical struggle – such as the dominance of the finance function or conglomerate ownership. They treat as culturally specific what are universal trends, notably scientific management and bureaucracy, which were present in France and Germany in parallel with the Anglo-Saxon countries (Weber, 1968; Doray, 1988). Japan is at the top of the list for firms that take a long-term view. This is attributed to Japanese views of time, which in

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turn are attributed to Buddhist influences.This sounds plausible, but look at the next two countries in: Sweden and West Germany. Each no doubt could be discussed in terms of cultural history. However, what the countries have in common is also significant – institutional configurations within particular market arrangements that promote close relations between the state and major economic actors and a flow of finance between banks and business.

These debates can often get stuck in a ‘chicken and egg’ rut. After all, institutions can be presented as the outcome of deeply-rooted values. This ignores one very important point. As we have seen, the patterns attributed to national mindsets can and do change. Take, for example, the issue of centralisation and autocratic leadership. Hofstede says that high power distance stems from ‘the psychological need for dependence of those people without power’ (1990: 397). What that dubious assertion ignores is that societies or sectors within them can become more centralised and autocratic as the result of political changes, management fashions or power struggles. Not only has this got little or nothing to do with any cravings for domination, there is evidence that employees respond badly to such changes. For example a study by the Carnegie Foundation found extensive and rising dissatisfaction among academics with how autocratic their organisations had become in countries such as Britain and Australia with supposedly low power distance cultures.

Beyond a failure to explain changes in particular places, cultural relativists are unable adequately to understand more general social shifts that happen across societies, albeit unevenly. Notable in this respect has been the increase in risk highlighted by the German sociologist Ulrich Beck (1992). Contemporary political, economic and cultural processes embody greater degrees of instability and change, with consequent impacts on job and social insecurity. This would seem to imply an increase in uncertainty partly independent of any specific national mindset. Defective explanation is a poor basis for policy. Even if we knew what they were, it might not be feasible to ‘manage according to the value systems of a particular people’ in the contemporary political economy. One of the reasons is that other sources of cultural influence, notably of a corporate nature, may constrain or override traditional national values.

There are two ways in which corporate cultures are playing an enhanced role, with the result that multinational companies are becoming carriers of convergent practices across national boundaries. First, firms are needing to integrate an increasingly diverse number of activities and units. Many management theorists portray culture as the glue that binds those diverse units into cohesive and co-ordinated ‘families’ (Handy, 1984; Barham and Rassam, 1989; Rhinesmith, 1991). Second, the increasingly global nature of competition creates pressures for them to adapt to the more rapid diffusion of perceived ‘best practice’. While the latter may not be primarily cultural in nature, both set limits to Hofstede’s argument that ‘The convergence of management will never come’ (1990: 405). As Kieser (1993) notes, it is remarkable that Hofstede never considers the highly distinctive culture of IBM as a factor and how it interacts with national culture.

Modern business thus creates complex cultural environments for international managers and management. Neither the relativist ‘when in Rome’ view of adapting to local culture, nor the newly fashionable concept of the free-floating global manager who owes no allegiance to any country (Reich, 1991), may be adequate in this context. Knowledge and cultural competencies are forged in the interface between the corporate, functional and national, and managers face pressures to pick up the appropriate cues

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that signal what kind of cultural difference is operative (Jones, Thompson and Nickson, 1998: 1060; Schneider and Barsoux, 1997: 169). For example, Jones, Thompson and Nickson (1998) examined the meanings attached to terms such as the need for ‘Swedish behaviour’ in the constituent parts of multinationals from that country. Managers feel comfortable with talk of Swedishness, perhaps because it gives additional meaning and legitimacy. From this perspective, the prominence of Swedish managers in top positions in foreign subsidiaries is less to do with the superiority or distinctiveness of Swedishness, than the advantage such staff give in facilitating the smooth running of the ‘global’ management structure, with its attendant and often standardised knowledge system. For example, service transnationals need to transfer highly standardised knowledge and practice that supports a corporate brand (Child and Rodrigues, 1993: 11). However, such systems are always subject to adaptation. International firms necessarily make ‘compromises’ with local situations and, implicitly, with competing values and ideas of competence.

Overall the message of this discussion is that we need different, more historically sensitive and contextually bounded explanations of culture. Put simply, locating culture in ways of doing rather than thinking allows us to explain how cultures develop and change more adequately.

Institutional theories

A focus on culture is a traditional antidote to explanations that overemphasise economic and technical convergence, given that the former has more scope for grasping ‘local’ variation and organisational distinctiveness. However, as we have seen, culture is a slippery concept that can be applied with misleading results. Institutional theories, which have been around in organisational analysis since the 1970s (Meyer and Rowan, 1977), have been the means for correcting some of the problems associated with Hofstede and associated ideas. Organisations still adapt to the environment, but to different features of it. The emphasis is on normative adaptation and the cultural rules to which organisations conform. This arises not from the requirements for efficiency, but from the need for legitimacy and resource support that is the reward for conforming. Indeed, in some cases rules may be ceremonial and transmitted through myths rather than technical. Not only do organisations conform to the environment, but to each other. This process whereby organisations increasingly come to resemble each other is described using the strange term ‘institutional isomorphism’ (Di Maggio and Powell, 1983). The main factors promoting convergence across companies are key agents who adhere to universalistic standards of best practice, notably professionals such as accountants, engineers and personnel officers, as well as the state itself.

We should not be misled by the term ‘culture’. This is used to mean social rules embodied in institutional processes more than mental constructs carried about in people’s heads. These institutional frameworks are essentially national: as Clegg puts it, ‘A stress on culture as institutionally framed and nationally diverse’ (1990: 151). An important feature of this approach is to affirm the possibility of successful organisational designs to promote industrialisation in different institutional environments. The emphasis on diverse organisational rationalities is usefully strengthened through the concept of business systems, associated particularly with the work of Whitley (1992a, 1992b, 1999). J. Henderson (1992: 4) describes them as, ‘distinctive ways of coordinating economic activity that give rise to particular configurations of market–firm

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relations’. The advantage of this concept is that it attempts to tie together in a coherent way the historical, cultural and institutional processes that shape national or regional economies. It enables a focus on the way in which state, financial, industrial relations and other systems combine together to influence organisational practices. Whitley (1992b) makes a useful distinction between background institutions (for example, family, education) that structure general social patterns and norms, and proximate institutions (for example, labour market systems) that constitute the more immediate business environment.

The role of factors such as state direction and family ownership in East Asian economies figures prominently in institutionalist accounts (Hamilton and Biggart, 1988; Whitley, 1992a; G. Henderson, 1993). Japan has received considerable academic attention for its distinctive forms of ownership and management. For example, in the influential corporate form of keiretsu, units are part of vertically organised enterprise groups clustered around a dominant company or companies. Interlinked shareholdings involving subcontractors and banks establish stability and mutual interest in the longterm success of the group; the joint risk-taking and access to capital avoids the short-termism associated with the Anglo-Saxon model (G. Henderson, 1993: 38–9). Crucially, this risk-taking is also shared with the state, as in the well-known example of orchestration of economic development through the Ministry of International Trade and Industry (MITI).

Japan and other Asian economies have undergone financial crises and lower growth more recently, leading some commentators to question the extent of any ‘economic miracle’ (Krugman, 1999). Whatever judgements may be made about current events, there is much less doubt that the particular configuration of practices discussed above was frequently a characteristic feature of late industrialisation. In Japan the commercial class was marginal to early industrialisation and the state was the primary agent in mobilising capital and mediating market forces (Littler, 1982). But the primary example of state-sponsored development is in Korea. Conglomerate enterprise groups, known as chaebol, are both directed and disciplined by the state through financial controls, subsidies and incentives. For example, following the bankruptcy of the leading cement producer in the 1970s, the South Korean government transferred its production facilities to another chaebol (Amsden, 1992: 15). This pattern has been repeated continually in the immensely successful restructuring process that made the country into one of the fastest growing in the world.

The state is not the only manager of the industrialisation process. As Amsden (1992: 9) shows, ‘Salaried engineers are a key figure in late industrialisation because they are the gatekeepers of foreign technology transfers’. With Korean firms choosing specialised engineers over administrators, we have a further example of different forms of enterprise management within managerial capitalism. Family ownership is a key dimension of South Korea’s corporate structures and familialism has been a further characteristic of some East Asian economies, particularly Taiwan and Hong Kong. Family business, particularly among overseas Chinese, operates according to particular lineage and inheritance rules, which, in turn, shape how businesses grow given that a wider sharing of trust is constrained by the familial form. More importantly for our purposes, the forms of co-ordination and direction of the enterprise are necessarily distinctive: ‘there is strong patrimonial and personalistic direct control, rather than on the more impersonalised, formalised and standardised control of the rational-bureaucratic model which we are familiar with from the West’ (Clegg, 1990: 164). Whatever the source of influence

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or configuration factors, what is being argued is that dominant social institutions generate distinctive business recipes that are relatively similar within nation states.

It is also worth remembering that there are substantial differences between those economies, as well as common contrasts to ‘Western’ models, further highlighting the importance of a comparative analysis of management structures and practices (Whitley, 1999). In this respect it is possible to learn from a close cousin of the above perspectives. Such organisational theories have a great deal in common with broader institutional perspectives in sociology, particularly the societal effects approach (Maurice, Sorge and Warner, 1980). Their research showed that work organisation patterns differ markedly due to nationally specific institutional logics that produce stable organisational and employment patterns. Such logics are particularly located in education, training, labour market and industrial relations structures. This helps to explain why salary structures, career patterns, management and authority relations vary among closely matched French, German and British firms. Within a similar framework Lane (1991) has looked at relations between large, medium and small firms in Germany, France and Britain. She demonstrates that the distinctiveness of ‘populations’ of organisations arises from their transaction with specific industrial orders. As a consequence national patterns continue to reproduce divergence rather than the homogeneity predicted by old-style convergence theory (Kerr et al., 1960).

Societal effect approaches have stressed the principle of functional equivalence, thus appearing to avoid determinist or ‘one best way’ fallacies. However comparison is accompanied, implicitly or explicitly, by evaluation. For example, the comparisons of France, Britain and Germany in the work of Lane consistently favour the latter, particularly with reference to the organisational and technical competencies of firms and their underpinnings in educational training systems. Strong arguments promoting the positive lessons of East Asian business systems can also be seen in the work of G. Henderson (1993).

There are, however, problems within institutionalist frameworks. The earlier versions reproduce a view of ‘the organisation as a passive reactor to the environment’ (Bryman, 1993: 87) that is equally deterministic as population ecology or contingency, though shifting the focus to normative pressures. Even the more complex accounts run the risk of producing a mirror image of the convergence argument, focusing solely on difference. It is of course true that work organisation and other features of the industrial order will always differ from others on a local and national basis. Whether such explanations were ever wholly viable in the past, it is very doubtful that they are now. Societal institutions are increasingly subject to ‘external’ pressures for change. As Smith and Meiksins observe: ‘Institutional analysis tended to focus on and reinforce national differences. The immediate problem with this perspective is to account for change and the dynamic nature of economies that are global, not nationally bounded systems’ (1995: 3). Traditional industrial relations also tended to focus primarily on national systems or comparisons between them. This fails to engage with economic internationalisation and is inadequate in a period when those industrial relations regimes are increasingly forged at regional and supra-national levels (Howarth and Hughes, 2000).

It is inaccurate and unrealistic to go on treating organisations as ‘societies in miniature’ in the manner of Sorge et al. (1983: 54), who say that ‘the differences between societies are so pervasive as to be immediately and consistently noticeable in every unit’. In reality, as we shall see later, large business organisations such as IBM are themselves carriers of distinctive financial, employment or technical practices. Sparrow and Hiltrop

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make a similar point with respect to the internationalisation of HRM practices: ‘The “culture-bound” perspective runs the gauntlet between generalisations and stereotyping and fails to consider the equally pervasive impact of both individual differences and organisational choice over resource development’ (1998: 83).

However, such perspectives are not necessarily conceptually tied to the state as an object of analysis. Neo-institutional approaches are becoming more sophisticated in their understanding of environments. As Warhurst (1997) observes, there is a growing recognition that the institutional environment does not mechanically determine organisational forms. As with conceptions of strategic choice in the previous chapter, there are still choices within constraints, and embeddedness still has to be enacted. Neoinstitutionalism is also being extended to cover sectors, regions, and systems. With a small number of giant transnational firms increasingly dominating sectors and ‘best practices’ spreading rapidly within them, industry recipes consisting of conventions governing marketing, pricing, production methods and industrial relations can become influential (Whitley, 1987). Sectors can be conceived of as an ‘organisational field’ linking firms and the broader society (Di Maggio and Powell, 1983). Arias has demonstrated the value of this orientation in her analysis of the pharmaceutical industry in Ecuador. Multinationals operating in the area spread modern HRM practices from their headquarters to their subsidiaries. But local firms do not mimic the multinationals and ‘seem to constitute a world of their own organised along family business lines’ (1993: 24). Organisations in the two fields are responding to different normative environments and relational constraints such as rules set by government favourable to the largest players. Despite the persuasiveness of the analysis, Arias goes on to argue that the relevance of national boundaries remains paramount. But it is not enough to take the firm and the market as units of analysis, without appreciating the broader dynamics of capitalist political economy (Warhurst, 1997).

Globalisation

With many best-selling contemporary management books adding ‘global’ in their titles, we can be sure that a considerable amount of hype surrounds the idea. But globalisation has also become a focal point for an important debate about contemporary organisations and the economy (see for example, Smith and Elger, 1994) and for a range of serious accounts of the refashioning of key sectors such as engineering (Edquist and Jacobsson, 1988) and high technology (J. Henderson, 1989). The process can be said to consist of a number of interrelated tendencies.

The internationalisation of production and services Foreign direct investment (FDI) and industrial location have obviously been long-term developments. This is now much more prominent. FDI by companies outstripped world output by four times and trade by three from 1983–90 (Beneria, 1995). What is also newer is the organisation and coordination of activities by transnational companies at a global level: ‘Rivals compete against each other on a truly worldwide basis, drawing on competitive advantages that grow out of their entire network of worldwide activities’ (Porter, 1990: 35).

Stateless corporations Transnationals that utilise foreign direct investment to establish ‘globally’ integrated production or service chains are increasingly the key players. They are differentiated from multinationals that create branches in separate

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countries in order to penetrate domestic markets. Though genuinely ‘stateless’ corporations are rare, contemporary corporate structures articulate a complex network of parent–subsidiary relations, as well as direction and co-ordination of economic activities across national boundaries. Know-how which is gained centrally or in one particular subsidiary operating unit is capable of being transferred to the various sub-units of the corporation.

World markets This tendency refers not merely to the growth, but to the integration of world trade. Included within this framework are the development of relatively standardised, albeit regionally adapted, global products such as the ‘world car’ announced by Ford in 1994, the erosion of protected national industries (for example, European telecommunications industries or previous state firms), and the acceleration of movement out of mainly domestic markets by particular national capitals.

Increased integration into the international division of labour Within the ideal type of globalisation, ‘distinct national economies are subsumed and rearticulated into the system by essentially international processes and transactions’ (Hirst and Thompson, 1992: 360). This may include the development of international state apparatuses that interact with and shape the international division of labour (Pitelis, 1993). New countries (for example, China), regions or social formations, notably the new post-Communist economies of Eastern Europe, are gradually brought into the financial and corporate workings of the global economy and pressured to specialise in the provision of certain goods or services such as cheap labour.

The internationalisation of financial markets National currencies are still significant, but markets for finance have become truly global in the recent and more deregulated past, accelerated by 24-hour trading and new communication technologies (Warhurst, Nickson and Shaw, 1998: 267). There has also been closer integration with production. Transnational banks offer new services to multinationals, such as the financing of acquisitions, management of liquid assets and leasing arrangements. At the same time, increasing numbers of banks are subsidiaries of multinationals. It is therefore possible to speak of transnational finance capital in which the two actors, ‘are organically linked in their internationalisation’ (Andreff, 1984: 66).

Such trends are undoubtedly influential ones, with the result that the space for the national and local is squeezed as organisational forms and practices demonstrate convergent tendencies. This can be seen in Austria and Sweden, both of which are societies with traditionally distinctive national models embodied in social settlements and ways of regulating the political economy. But such arrangements are under considerable strain from the rapid internationalisation of their domestic economies. Sweden has had to cope with the dual pressures of an accelerated drift of capital abroad and competition at home from Japanese models and other variants on lean production. The closure of Volvo’s Udevalla and Kalmar plants has had a particularly destructive effect on attempts to create a new ‘Swedish model’ based on innovative work organisation. Sandberg (1993: 8) comments that, ‘The management of Volvo does not seem to be able to resist the pressure of comparisons and the possibilities of moving the production between units, that the alliance with Renault will bring’.

This convergence is aided by other processes. Supra-national state systems such as

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the EC, the North American Free Trade Agreement (NAFTA) and Asia Pacific Economic Co-operation (APEC) are not new, but ‘What is significant today is the sheer increase in their number, the growth in their territorial scope, and their acquisition of important new functions’ (Jessop, 1992: 10). The Social Chapter of the Maastricht Treaty has been just one example of the development of webs of rules involving the standardisation of qualifications, social rights, quality systems, and employment regulation (Cressey and Jones, 1991). Conservative politicians proclaimed the much-vaunted British opt-out from this dimension of the treaty. This, however, was a hollow victory. Many transnational firms applied the provisions anyway, for example by setting up employee consultation through works councils, given that it would have been legally and ethically very difficult to exclude British employees from the new practices.

Transnational companies are significant in a variety of other ways. There is more rapid diffusion of ‘best practice’. True, this is not a wholly new phenomenon. In the post-war period the giant US corporations transferred work organisation and managerial techniques across capitalist countries. Firms can be effective ‘social carriers of techniques’, standardising the environments around them. The role of transnationals in spreading new technology and production organisation techniques across the globe is widely acknowledged, particularly with reference to Japanese firms (Edquist and Jacobsson, 1988). The more extensive integration of corporate structures noted above, allied to factors such as the internationalisation of consultancy, business schools, and the market for management literature, is enabling more rapid learning processes (Mueller, 1996). A global economic and political order ‘has resulted in a transformation of particular national patterns of work organisation, management and labour relations into universal standards of best practice’ (Smith and Meiksins, 1995: 20). Greater convergence can result from the fact that such comparisons are coercive in a context of competitive benchmarking (Ferner and Edwards, 1995; Berggren, 1996). Finally, more advanced information technology such as computer networks for co-ordination and control are facilitating standardisation and integration of corporate activities (Marginson et al., 1995).

All these trends exist and are important, but we have to add some qualifications. There is a danger of simply reverting to the earlier determinism and unproblematic notions of efficiency. This danger can be illustrated by reference to The Machine that Changed the World (Womack et al., 1990), which has had a substantial influence on governments and companies. Drawing on the experience of Japanese production systems and extensive research into the motor industry, the authors promote the principles of ‘lean production’, which they claim produces efficiently with half the human effort, with considerable zeal. Such principles ‘can be applied equally in every industry across the globe’ (Womack et al., 1990: 8), as long as auto companies adopt the necessary structures and practices to promote diffusion. An example of the latter would be ‘an integrated, global personnel system that promotes personnel from any country in the company as if nationality did not exist’ (Womack et al., 1990: 4). We are concerned here to evaluate not the merits of lean production but its status as a universal ‘best practice’. The study has been heavily criticised for getting the statistics wrong and exaggerating Japanese advantage (Williams et al., 1992a). For example it does not explain how Toyota and other firms take labour out of production, ignoring the specific features of post-war Japanese labour relations, where defeated unions and malleable workforces allow high levels of work intensification. Taking a different direction, Berggren (1993) questions whether the record of Japanese manufacturers at