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Labour Management Practices in Non-Union Firms: Australian Abrasive Industry 1945–70

Melissa Kerr*

Australian labour history has traditionally neglected non-union firms as an area of research. However, in recent years, in the context of declining union density, labour management practice in non-union firms has become a topical area of contemporary industrial relations debate. At the heart of much of these debates remains the longstanding assumption that management practice in non-union firms can be categorised within a simple dichotomy of either 'substitution' or 'suppression'. This article seeks to rectify this neglect by examining the labour management practices of two non-union firms during the post-World War II period in Australia. Far from being a simple case of 'substitution' or 'suppression', this article concludes that management action is far more diverse and complex than the simple dichotomy suggests. Furthermore, this article demonstrates that management strategy in non-union firms was contingent on, and shaped by, six factors: the firm's economic fortunes, management's approach to industrial relations, the agency of labour, the labour market, the firm ownership and threat of union organising.

 1
In recent years, in the context of declining union density, contemporary scholars have engaged in debates about both the nature and consequence of labour management strategies in non-unionised firms. In response to these debates, a proliferation of literature has emerged. Traditionally employer attempts to remain union free have been categorised around a simple dichotomy of either 'substitution' or 'suppression'. While this simple dichotomy provides a useful distinction between employer strategies that offer positive benefits for non-membership and those strategies that impose costs on workers joining unions, it has been criticised for its failure to recognize the dynamic nature of the employment relationship. Academics such as Roy, Gall and Peetz have found that management has adopted both approaches simultaneously across space and time or at different moments in space or time.1 2
      However, this contemporary literature suffers from a number of problems. Firstly, despite recent intellectual advancement the simple dichotomy of 'substitution' or 'suppression' remains at the heart of much of the literature. Secondly, this literature is laden with descriptive typologies that detail management's anti-union behaviour, but fail to explain why management has adopted certain strategies, or what factors influenced and shaped their choices. A further striking feature of this discourse has been its almost total failure to place these contemporary debates within a broader historical context. Why would this be important? As Hyman reminds us, 'the present is historically conditioned and historically contingent'.2 3
      If the present is both historically 'conditioned' and 'contingent', what can history tell us about labour management in non-union firms. Recent contributions to the historical literature by overseas scholars such as Jacoby and Sangster have been influential in identifying a range of factors that have shaped management's approach to labour in non-union firms. Unlike their overseas counterparts, Australian labour historians have been slower in contributing to these debates. To date, Wright has provided the most notable contribution to the literature on the development of Australian management. However, while he has provided a comprehensive analysis of management practice during the post-World War II period, it is overwhelmingly management practice in unionised firms. Subsequently, a significant gap still remains in our historical knowledge of labour management in non-union firms. The aim of this research is to contribute to filling this gap in Australian historical literature.3 4
      To address the current gaps in the literature, this article analyses the labour management strategies in two non-union firms involved in the manufacture of abrasive grinding wheels from 1945 until 1970. The post-World War II period were chosen for a number of reasons. Firstly, this was a period of substantial change for Australian managers. Unlike the pre-war, the post-war years were ones of economic boom and prosperity. Secondly, this period was characterised by chronic shortages of labour, high levels of industrial disputation and a reinvigorated and powerful trade union movement. Such labour market conditions are often cited as an important exogenous factor driving the adoption of certain labour management practices. Dunlop and Kalecki argue that a tight labour market will make employers more competitive in acquiring staff and possibly more likely to adopt consent-based approaches to attract and retrain staff. Alternatively, a labour market with high unemployment is likely to see a greater reliance on control-based approaches. This article examines the impact that exogenous factors had on labour management in this non-union firm.4 5
   

Historiography and Management Practice in Non-Union Firms

 
As mentioned previously, labour historians have generally neglected labour management practices in non-union firms. This neglect can be contributed to the fact that prior to the 1980s Australian employers had traditionally represented 'something of a lacuna in industrial relations research'.5 In part, this neglect can be attributed to one of the dominant theoretical influences in Australian research: 'systems theory'. While Dunlop's 'systems theory' included management as an actor in the industrial relations system, it failed to capture management's ability to unilaterally impose rules in the workplace. Heavily influenced by Dunlop's model, many scholars have had a long-term preoccupation with the macro features of the industrial relations system. Thus, many have viewed organised labour as the great moderator of the excesses of unbridled capital, and the state as the empowered and independent adjudicator of these collective arrangements. By investing the state and labour movement with such an important function these scholars have inevitably treated management and in particular, non-union firms as socially retrograde, and thus undeserving of scrutiny.6 6
      The conventional wisdom associated with the 'business cycle' approach can also explain this traditional neglect of non-union firms, especially during the post-World War II period. This approach argues that union growth is positively associated with the economic upturn, and negatively with an economic downturn. Thus, many assumed that during the post war period chronic labour shortages exacerbated union growth and lessened the likelihood of non-union firms.7 7
      A further corollary of this neglect has been the long-standing assumption by Australian labour historians that non-union labour is inherently passive. However, studies by Quinlan and Patmore into labour management relations in the period prior to World War II have challenged this long-standing assumption. Therefore, we cannot presume that a lack of union presence negates the agency of labour to act, especially if they feel aggrieved. Nor should such actions always be overt, labour historians have long noted the ability of labour to act covertly. For example, Patmore found in the New South Wales Railways that labour covertly expressed their discontent with work-to-rule bans.8 8
      Australian scholarly neglect also extended to the agency of trade unions. A long-standing assumption within the literature had been that trade unions had failed to actively organise for most of the twentieth century. Howard had argued that the system of compulsory arbitration usurped the need and motivation for Australian unions to organise. Instead he attributed union growth not to the agency of trade unions, but as an outcome of a state controlled industrial relations system. However, research by Cooper has since challenged this claim. Cooper found that high levels of union growth during the early decades could be attributed to union intervention. She argues that Howard's simple casual connections between an improved economy, arbitration and union growth are simplistic and fail to recognise the actions of both the union movement and employers. By investing so heavily in the state and in the power of the arbitration system, Howard and the other pluralist scholars had effectively presumed away the agency of both the unions and management in shaping their own destiny.9 9
      Since the 1980s Australian industrial relations academics have started to overcome the traditional neglect of Australian management. Wright argues that foreign owned firms engaged in sophisticated forms of welfarism to thwart unionisation. Eklund however, argues that management's decision to introduce welfarism was not necessarily influenced by union activity. Wright also identified that management had adopted four distinct industrial relations approaches during the post World War II period: confrontational, sophisticated paternalist, constitutional and consultative.10 10
      The lack of Australian research on labour management practice in non-union firms contrasts markedly with the situation overseas. In Canada and the United States labour historians and industrial relations academics have undertaken extensive historical research on labour management in large non-union firms. Sangster's study of a large Canadian non-union firm from the 1920s and Jacoby's research into three large non-union firms in the United States from the 1930s found that management had thwarted union attempts by engaging in a sophisticated form of welfarism. Management engineered loyalty and consent through the provision of high wages, generous retirement funds, sporting clubs, newsletters and consultative arrangements while ensuring compliance with suppressive tactics of victimisation and anti-union propaganda. In both studies the drive and commitment to avoid unionisation emanated from the strong anti-union mentality of the firm's founder. Jacoby argues that these founders created harmonious industrialised communities, as an alternative to the Taylorised bureaucracy and market contractualism of the period. Moreover, Jacoby and Sangster argue that underpinning management's ability to engage in such tactics was a stable and steadily expanding product market.11 11
      The size of the firm and managements form of control has also received attention within the literature. In the case of small firms it has been argued that management relies on simple control. The notion of simple control can be linked to Edwards, who argued that the 'personal power and authority of the capitalist constituted the primary mechanism for control'.12 Based on this premise Edwards argued that this personal relationship subverted a need for more sophisticated forms of control. However, such conclusions have received considerable criticisms. Recent contributions to the literature have challenged the notion simple control is in fact simple.13 Gospel refutes Edwards' claim and argues that some small firms have adopted a range of sophisticated and innovative approaches to thwart union influence. The most notable strategy involved the use of a core and periphery labour force. Gospel found that any small employers engineered loyalty and consent from a core group of employees.14 12
      As the previous discussion has shown Australian historical scholars have been slower to contribute to the literature on non-union firms. Nonetheless several themes have been distinguished in the literature: firm ownership; management's approach to industrial relations; the agency of labour; the labour market and union organising. Overseas historical scholars have identified the firm's founder; firm size and the firm's economic fortunes which were underpinned by stable and steadily expanding product market. 13
   

Contemporary Debates: The Simple Dichotomy Revisited

 
The recent proliferation of non-union workplaces both in Australia and overseas has stimulated academic interest into non-union firms. At the heart of these debates remains the assumption that management action can be encapsulated within the simple dichotomy of either substitution or suppression. One implication of this approach is that non-union firms have been characterized along a 'good' or 'bad' or 'ugly' continuum. The 'good' firm offers generous wages and conditions; while the 'bad' firm offers poor wages and conditions without malice; and the 'ugly' firm seeks to exploit workers. More recently, this has translated into the question of whether non-union firms represent either 'human resource innovators' or 'bleak houses'. However, the empirical evidence in this debate has been at best unclear and fragmented.15 14
      In the United States Foulkes found that large non-union workplaces were characterised by highly sophisticated human resource management practices. In contrast to this finding, British studies by Sisson found that in Britain human resource management practices have been distinctively less visible in large non-union workplaces than in unionised sites. While a later British study by Guest and Hoque identified that large non-union firms were no more, or less likely, to have clear human resource management strategies than unionised workplaces. Australian scholars Deery et al found that non-union workplaces were distinctively less innovative in their employee relations practices than union workplaces. They argue that non-union workplaces were neither 'human resource innovators' nor 'bleak houses'.16 15
      Small non-union firms have also received considerable attention in contemporary scholarship. British scholars have sought to gain a deeper understanding of employment practices of what these writers aptly name the 'black-hole'.17 The 'black-hole' literature challenged the traditional assumption that small non-union firms represent one of two polarised positions: 'small is beautiful' or 'small isn't beautiful'. However, Rainnie and Ram have challenged this simplified polarised notion, instead they argue that the interpersonal relations between managers and employees is what shapes the maintenance of either union or non-union status of a firm.18 16
      Guest and Conway found 'peering into the black-hole' can reveal 'shades of grey and shafts of light'. Rather than revealing an either/or analogy, they discovered a mix of both 'pleasant' and 'unpleasant' employment forms. However, it is important to note that Guest and Conway drew their conclusions by extrapolating evidence from the large scale Workplace Employment Relations Survey, rather than any assessment at the enterprise level.19 Dundon et al expanded further on the conclusions drawn by Guest and Conway through an analysis at the workplace level. Dundon et al concluded that familial control contains contradictions and tensions that are far more complicated than one of the two polarised ideals.20 17
      In seeking to encapsulate the diverse and dynamic relations at the workplace level Roy, Gall and Peetz have developed typologies and models of labour management practice in non-union firms. Roy developed a four-fold typology of employer anti-union strategies; Gall later expanded this to a six-fold typology. More recently, Peetz developed a more sophisticated model: 'Model of Decollectivist Employer Behavior'. Peetz found that an employers decollectivist strategy has both real and symbolic dimensions that may be inclusivist, exclusivist or both. However, while these typologies/models expand our understanding of management practice they fail to identify the factors that have shaped management practice. Rather than seeking an elegant typology/model of non-union firms, it is argued that it is more historically accurate to look at the problems and opportunities that have confronted management over time, the factors which have shaped their approach and at the mix of strategies with which they have experimented.21 18
   

Methodology

 
The research for this article was based upon historical case study using a combination of oral history and documentary evidence. The reasons for this are varied. Labour-management relations involve an intricate web of factors that range from the social to the economic, from the collective to the individual. Such complexity means that an understanding of the causes and effects of management strategy can be best understood through in-depth qualitative analysis. Documentary evidence provided a rich source of historical data for this research. Both primary and secondary documents were used in this research. Primary documents included Commonwealth Arbitration transcripts, reports from the Commonwealth Department of Labour and National Service, reports from the Commonwealth Department of Trades and Customs, trade union journals and archives. A secondary document titled The Norton Story was also utilised. Oral history provided an important source of information and a means for cross checking documentary evidence. Nine in-depth semi-structured interviews with former employees and managers were conducted.22 19
   

The Hard Abrasive Industry in Australia

 
The Australian abrasive industry emerged before World War II. Prior to this period, Australian industry had been virtually dependent on overseas sources for the supplies of grinding wheels, sharpening stones and other abrasives. The industry itself is divided between two distinct products: soft abrasives and hard abrasives. Soft Abrasives include sandpaper and abrasive belts. Hard Abrasives refers to the manufacture of abrasive grinding wheels. While both soft and hard abrasives consist of similar raw materials, they differ considerably in their manufacturing process. They also differ in the gender composition of their labour-force. The hard abrasives labour-force is predominantly male, while the soft abrasives labour-force is predominantly female. Both firms in this article were involved in the manufacture of hard abrasives.23 20
      High capital investment and sophisticated technical knowledge are required to manufacture hard abrasives. Such technical knowledge however, is only required by a small number of specialised staff. The production process is the domain of unskilled labour. With no formal training these workers perform laborious, mundane, and monotonous tasks. Such jobs include mixing the formula, filling the moulds, firing the wheels, and finishing and testing the product. Not only were these workers involved in repetitive and boring tasks, the machines that they operated also controlled the pace of the work.24 21
      Naxos Products was the first hard abrasive firm established in Australia. Established by Louis Cambas in 1919, Naxos Products was initially involved in the distribution of abrasive products. In 1934 the firm diversified its operations to include the manufacture of hard abrasives. To raise the much needed capital Cambas sold 50 per cent of the company to two silent partners. In the pre-war period Naxos Products experienced considerable success securing major contracts with a range of large companies and government departments. This success however, was short lived. During the early years of the war Naxos Products became paralysed due to management ineptitude and internal infighting between the partners.25 22
      Following a protracted struggle between the partners, Cambas emerged victor regaining total ownership and control of the firm in 1945. However, the firm was now on the verge of bankruptcy. The firm's economic fortunes remained bleak in the subsequent years and, in 1952, Cambas sold the firm to Edgar Green. Under the leadership of Green, Naxos Products economic fortunes swiftly changed. Green brought with him a range of new customers and new ideas. By rationalising the product range and becoming a distributor for its major competitor, Australian Abrasives, Naxos Products became financially viable by the late 1960s.26 23
      Naxos initially dominated the hard abrasive industry in the period prior to the outbreak of World War II. However, by 1940 Naxos's dominance was being undermined by the internal fracturing of the partnership and the emergence of a fierce competitor in the domestic market. Australian Abrasives was established at Auburn, Sydney in 1940 by a consortium of the largest abrasive manufacturers and distributors in the world. The Australian Abrasives venture was the brainchild of a United States multinational Norton Company. While Norton recognised the possibilities of the Australian market they also had serious reservations over its small industrial base. These reservations were overcome through a carefully planned web of vertical and horizontal integration. Horizontal integration allowed Norton to share the risks with its competitors, while also eliminating any future serious competition. Vertical integration ensured a favorable means of distribution into the domestic market. From the outset, Australian Abrasives was a sophisticated operation specifically designed to offset the restrictions imposed by tariff protection (which they believed to be imminent), variations in exchange rates, and most importantly, to monopolise and manipulate the Australian market. Most importantly, Australian Abrasives was specifically designed to be a non-union operation.27 24
      War-time shortages and a lack of competition in the domestic market enabled Australian Abrasives to gain a stranglehold over the local industry and by the close of the war they had grown to 300 employees. This stranglehold in the market place continued throughout the post-war decades. Underpinning the stable and expanding product market was the massive expansion of Australian industry.28 25
      As mentioned previously, the post-war decades were characterized by economic prosperity, chronic labour shortages, high levels of industrial disputation and a reinvigorated and powerful trade union movement. As Wright argues such conditions largely influenced and shaped the industrial relations strategies in post-war Australian firms.29 While both of these firms operated within a steadily and expanding product market they experienced differing economic fortunes. As Jacoby and Sangster argue, a firm's economic fortune largely shapes management's approach to labour.30 While both firms also differed in size and ownership they operated within the same context. As the following discussion will illustrate they faced different opportunities and challenges which shaped their approach to labour management. 26
   

Peering into the 'Black Hole' Naxos Products

 

There was no abrasive workers union and that's why you had to fight for yourself.31
What union? No union ever came to organise, I don't know why?32
 These retrospective observations from former employees of Naxos Products reflect the commonly held belief that they were alone in their struggle over the employment relationship. Such statements are particularly interesting when you realise that the firm was located in Liverpool Street Sydney, only 150 metres from the Trades Hall Building where both the Federated Rubber Workers Union and the Federated Brick Tile and Pottery Union were located. Despite this close proximity, there is no evidence that any union official ever attempted to organise the labour force. Given that there was no union presence, how did these employees 'fight' for themselves and how did management react?33		 27
      Under the management of Cambas, Naxos Products appears to represent a case of 'small isn't beautiful', as the 20 employees faced a draconian environment, exploitative practices and a manager that had a confrontational approach to industrial relations. Despite the fact that union had not attempted to organize the workplace, Cambas continually indulged in anti-union rhetoric and propaganda. He regularly labeled trade unionists as Communists, who he claimed were intent on destroying Australian society and often threatened to dismiss anyone who joined the union. A closer examination reveals however, that despite management's approach to labour and the lack of union presence at the workplace the employees did in fact fight to improve their conditions.34 28
      In response to Cambas's harsh approach a close bond of solidarity emerged between a group of longstanding full-time employees and the foreman. This was particularly the case with five employees known as the 'old hands' who were employed at Naxos from the 1930s until their retirement, which in some cases was not until the 1980s. These employees formed the core of the labour force. The periphery of the labour force was composed of casual migrant workers who often stayed for a very short time.35 29
      By the early 1950s the core employees had become increasingly resentful over their employment conditions. Dissatisfied with Cambas unilaterally setting their wages and conditions, the employees bandied together to redress this situation, this became known as the 'round table dispute'. The chronic labour shortages of the time strengthened the bargaining position of these core employees. Recognising this bargaining power of these employees Cambas acquiesced to the demands. While the core employees enjoyed improved the wages and conditions such benefits were not extended to the periphery of the labour force.36 30
      The year 1952 represented a major juncture for Naxos Products. Under the new ownership of Edgar Green significant changes occurred in labour management relations. More realistic practices and expectations replaced the draconian rules of the previous years. Cambas's confrontational approach had been replaced by Green's sophisticated paternalistic approach. Unlike his predecessor, Green sought to garner co-operation and commitment through means of consultation and communication. The employees welcomed these dramatic changes, particularly the flexibility in work practices and the ability to express their concerns in an unthreatening environment.37 Unlike Cambas, Green faced no industrial disputation during this period. Nor were there any attempts by the union to recruit the workforce. While on the surface the image of 'small isn't beautiful' seemed to disappear, it was not necessarily replaced by 'small is beautiful'; rather what we see are 'shades of grey and flecks of light'.38 31
      Chronic labour shortages remained a formidable hurdle at Naxos Products. Despite the marked improvement in labour-management relations, staff turnover continued to be high. As had been the case in the earlier period, migrant labour continued to be a source of replacement labour. However, the migrants recruited during this period had two significant characteristics. Firstly, they were predominantly Eastern European, and secondly, they were over the age of forty-five. Green assumed that employees who shared these characteristics were more responsible and stable. It may also be argued that these employees were also seen as less likely to be militant.39 32
      Employment relations continued to be organised around a group of core employees. However, during these years the distinction between the core and periphery were far greater. The same five employees, the 'the old hands', who had joined Naxos in the 1930s remained at the core of the labour force during these years. Green recognised the loyalty these 'old hands' had displayed under Cambas and set about encouraging the continuation of this loyalty. While Green unilaterally set the wages and conditions at Naxos Products he provided annually increased wage rates in line with the cost of living.40 33
      By peering into the 'black-hole' we fail to find a case of 'small is beautiful' or 'small isn't beautiful', instead these findings concur with Dundon, Guest & Conway, Gospel and Edwards who argue that these either/or categories of union avoidance oversimplify and polarise practices that are remarkably complex and diverse. While Cambas adopted a confrontational approach to the management of labour, he still faced challenges from his unorganised workers. This evidence concurs with the temporary combinations identified by Patmore and Quinlan. Green on the other hand adopted a consent-based approach towards a core labour force, while also manipulating the periphery labour-force along the lines of race and age. 34
      However, we are left with one unanswered question: why did the union not attempt to organise Naxos Products? Clearly proximity was not a prohibitive factor. Did the small size of the labour force provide a disincentive for the union organising? This case raises questions about the trade union organising strategies during these years. From the evidence in this case it appears that there was a threshold in union organising campaigns during this period. 35
   

Managing by Consent: Labour Management Practices Australian Abrasives

 

There was no union, nobody wanted a union we had everything we could want. Mr. Miller was a great manager, everybody was happy, we respected him. It all changed when Mr. Adams came, he set the cat amongst the pigeons; when he pitted worker against worker we had no choice, we needed a union.41
 This retrospective observation from a former employee provides an insight into the fundamental changes that occurred in labour-management relations at Australian Abrasives during the post-war decades. Inherited from its American parent, Australian Abrasives under the management of Roy Miller was founded on a sophisticated form of welfarism. This approach was from the very beginning part of a conscious attempt to avoid union influence. Until his retirement in 1962, Miller was the guiding force of the company's personnel policy. Miller saw himself in terms familiar to the paternalistic father: as one that shows both concern and discipline over his family. Indeed it was revealing that many employees and associates constructed their memories of the company around a narrative theme that stressed the rise and decline of the family. In this narrative theme the family and the business have merged, their fate tied to the legacy of Miller and the death and destruction of the family tied to the actions of his successor, John Adams. Unlike his predecessor, Adams viewed the management of labour in much harsher terms. He believed that unions were an inevitable part of industrial life and thus held a constitutional approach to industrial relations. Subsequently, and despite the continuation of the generous welfare benefits, his hostile attitude towards labour coupled with the introduction of scientific management led to the labour force becoming completely unionised by late 1962.42		 36
      Before arriving in Australia, Miller had spent the previous ten years as manager of the technical division at Norton's Worcester plant. On arriving at Australian Abrasives, Miller endeavored to entrench Norton's paternalistic philosophy on his employees. For Miller it was important to manage by consensus, which meant developing close relationships with his employees. He regularly walked through the factory, greeting the employees by their first names, inquiring about the health and happiness of their families. However, Miller's actions were not as altruistic as they may seem. Miller's actions were designed to create an industrial 'family' that was isolated from the industrial turmoil of the period.43 37
      Bureaucratic rules and procedures inherited from the American parent were clearly evident in the operation at Australian Abrasives. The 'bible' as it was referred to by the Australian Abrasives managers, detailed Norton Company policies and practices. These policies and practices were designed to ensure that all foreign subsidiaries conformed to Norton standards and most importantly, that they remain union free. However, the 'bible' did provide managers with a certain amount of discretion to be exercised in light of local conditions. Miller exercised this discretion by not introducing scientific management practices into the Australian Abrasives. Miller feared that such practices would create division and unrest within his 'family' and ultimately result in his greatest fear being realised: the unionisation of the labour force.44 38
      Australian Abrasive's management hierarchy was clearly defined. Miller headed up the operation and guided the firm's direction. The personnel manager was responsible for overseeing the implementation of the company's welfarism. This included ensuring that all new recruits were suited to the company's culture and in particular, they were aware of the company's stance on unions. Miller instilled in his foreman and managers the importance of building consent, showing concern for their employees and creating a harmonious environment. Miller trained his mangers and foremen to listen and mediate, rather than to reject complaints and especially, not to patronise or humiliate the employees.45 Within this fairly rigid structure, there existed a small degree of flexibility for managers and foreman, which assisted the company's efforts to manufacture consent by mitigating the intrinsic alienation of wage labour. Sympathetic to the monotonous nature of each job, management encouraged job rotation, workplace joking, singing and socialising.46 39
      In line with their desire to create a loyal family, the company inaugurated a personnel policy deigned to secure long term investment in employee stability. While the impetus for this approach stemmed from their desire to avoid union influence, for employees enjoying such generous entitlements, this thinly veiled goal did not concern them. Employees received above average wages; additional annual leave; carers leave; years of service payments; bonus payments; absenteeism incentive scheme; funeral benefits and a generous superannuation scheme.47 40
      It was not only through material benefits that Miller was able to engineer consensus and create his 'industrial family'. Through the provision of a heavily subsidised canteen and a carefully rostered lunch break system, the company ensured that all its employees were able to interact and become acquainted. The company's on-site tennis court and lunchtime competitions were designed to enhance the 'family' atmosphere. Miller actively supported the social club and a range of sporting clubs. Miller, his managers and foremen, regularly participated in Saturday competitions. Miller believed that such social activities would break down barriers between the management and the factory floor and tie the employees to each other, and most importantly to the company.48 41
      If team sports supplied one method of cementing the Australian Abrasives family together, another was Australian Abrasives Spirit, the company publication. The Spirit, as it became known, was a well-planned strategy, designed to emphasise the importance of the Australian Abrasives 'family'. While social activities and gossip dominated the publication, Miller ensured that a part of the publication was devoted to enure that the employees were aware of the company's performance and objectives.49 42
      Welfarism also provided management with an effective recruitment tool. Despite the chronic labour shortages of the period turnover was extremely low and positions at Australian Abrasives were rare and sought after. One report it states that 'only four men left during the time Mr. Miller was manager'.50 Recruitment into the Australian Abrasives 'family' generally occurred through family connections. As one former employee explains, 'the conditions were so good the only way to get a job was through family connections'.51 Because the jobs were rare and sought after, workers often developed a sense of debt to their employer. The culture of promoting from within only served to increase this debt of gratitude.52 43
      Despite the appearance of family harmony there is also evidence of unrest. For example there were instances when management had unilaterally changed the organisation of the work much to the dismay of the employees. In response, the employees banded together to challenge managerial prerogative. In each case Miller listened to the complaints of the employees and negotiated a resolution that was acceptable to both parties. Miller was conscious that the strategy of welfarism would only be successful while relations between labour and management remained harmonious.53 44
      Miller's welfarism appeared to prove successful despite attempts by the Federated Brick Tile and Pottery Union to organise the labour force. However, Miller's welfarism was not as sweet as it may appear. Beneath the surface lurked a more sinister element. During recruitment drives, Miller refused union requests to access the factory premises. He also had a policy of refusing to enter into any correspondence with the union. Furthermore, he left his employees in no doubt of his hostilities towards unions, often claiming he would not employ a unionist.54 45
      On Miller's retirement, John Adams came to Australian Abrasives from another Norton subsidiary, Behr-Manning. The reasons behind Adams' appointment to Australian Abrasives are, unfortunately, unknown. For a company who had prided themselves on its success at remaining union free, the choice of Adams was uncharacteristic. During his term at Behr-Manning, the labour force had become unionised. Adam's harsh and controlling attitude towards labour coupled with the introduction of scientific management practices resulted in industrial turmoil. Despite the continuation of the welfare benefits, which had been instituted under Miller, the labour force became unionised by late 1962.55 46
      These findings of this article support the argument put forth by Jacoby, Sangster and Wright that non-union firms can avoid unionisation by adopting sophisticated forms of welfarism. Wright had found that these practices had been inherited from the foreign parent company and this was indeed the case at Australian Abrasives. The sophisticated welfarism operating at Australian Abrasives encapsulated both suppressive and substitutive elements. The firm's ability to engage such practices was underpinned by its economic success in a rapidly expanding and stable product market. While the firm's economic performance was important, it is argued that welfarism as a strategy to avoid union influence is reliant on a consensus style of management. This research concurs with Quinlan and Patmore arguing that non-union workers when aggrieved will challenge managerial prerogatives. While Jacoby and Sangster have emphasised the founder's culture in driving this approach, as we have seen a change in management can usurp this culture.56 47
   

Conclusion

 
This article has sought to overcome the problems with the contemporary literature by providing historical context to contemporary debates. It has been argued that management strategies in non-union firms are far more complex and diverse that the traditional dichotomy suggests. In a context of industrial turmoil, chronic labour shortages and high levels of industrial disputation both these non-unionised firms faced different challenges and instituted different labour management strategies. Naxos Products while being constrained by poor economic performance and chronic labour shortages still engineered loyalty by manipulating the labour force along the lines of age and race. The favourable benefits enjoyed by the core of the labour force during the early period, were due to the agency of labour rather that union intervention. Furthermore, the lack of union organising at Naxos Products negated management's need or desire to develop a more sophisticated strategy. This case raises questions about the extent of union organising, particularly in small firms during this period. Inherited from its American Parent, Australian Abrasives engineered loyalty and consent through a sophisticated form of welfarism. This involved management engineering consent through a range substitutive tactics, while ensuring compliance by engaging in suppressive tactics. In conclusion this article argues that management strategy was contingent on, and shaped by, six factors: the firm's economic fortunes, management's approach to industrial relations, the agency of labour, the labour market, the firm ownership and threat of union organising. 48


Melissa Kerr is a PhD candidate in the discipline of Work and Organisational Studies at the University of Sydney. Her thesis is a historical examination of the state's role in managing unemployment through labour market institutions. Her research interests include labour management practices in non-union firms, company unions and Australian labour history generally.
<m.kerr@econ.usyd.edu.au>


Endnotes

* This article has been peer-reviewed for Labour History by two anonymous referees.

1. D. Roy, 'Repression and Incorporation: Fear Stuff, Sweet Stuff and Evil Stuff: Management's Defenses Against Unionization in the South', in T. Nichols (ed.), Capital and Labour: Studies in Capitalist Labour Process, Athlone Press, London, 1980, pp. 395–415; G. Gall, 'Management Control Approaches and Union Recognition in Britain', Work Employment and Society Conference, University of Nottingham, September 2001, p. 1; D. Peetz, 'Decollectivist Strategies in Oceania', Relations Industrielle/Industrial Relations, vol. 57, no. 2, 2002, pp. 252–278.

2. R. Hyman, 'Contribution to Review Symposium', Industrial Relations, vol. 21, no. 1, 1982, pp. 108.

3. S. Jacoby, Modern Manors: Welfare Capitalism Since the New Deal, Princeton University Press, Princeton, 1997; J. Sangster, 'The Softball Solution: Female Workers, Male Managers and the Operation of Paternalism at Westclox, 1923–1960', Labour/Le Travail, vol. 32, 1996, pp. 166–199; C. Wright, The Management of Labour: A History of Australian Employers, Oxford University Press, Melbourne, 1995.

4. J. Dunlop, Industrial Relations Systems, Holt and Co, New York, 1958; M. Kalecki, Selected Essays on the Dynamics of the Capitalist Economy 1933–1970, University Press, Cambridge, 1971, pp. 140–141.

5. C. Wright, The Management of Labour, pp. 1.

6. J. Dunlop, Industrial Relations Systems, pp. 6–18; for examples of authors who have written from the Pluralist perspective, see: D. Plowman, 'Industrial Relations and the Legacy of New Protection', Journal of Industrial Relations, vol. 34, no. 1, 1992, pp. 59–60; B. Dabscheck, 'The Australian System of Industrial Relations: An Analytical Model', Journal of Industrial Relations, vol. 22, no. 2, 1980, pp. 216–217; S. Jacoby, Modern Manors.

7. G.N. Chaison and J.B. Rose, 'The Macrodeterminants of Union Growth and Decline', in G. Strauss, D.G. Gallagher and J. Fiorito (eds), The State of the Unions, Industrial Relations Research Association, Madison, 1991, p. 19.

8. M. Quinlan, 'Industrial Relations Before Unions: New South Wales Seaman 1810–1852', Journal of Industrial Relations, vol. 38, no. 2, June 1996, pp. 264–293; G. Patmore, 'New South Wales Railways Before 1878', Australian Historical Studies, vol. 23, no. 93, October 1989, pp. 426- 441.

9. W.A. Howard, 'Trade Unions and the Arbitration System', in Brian Head (ed.), State and Economy in Australia, Oxford University Press, Melbourne, 1983, pp. 238–251; R. Cooper, 'The Organising Committee of the Labor Council of NSW, 1900–1910' Labour History, vol. 83, November 2002, pp. 43–64.

10. C. Wright, The Management of Labour, pp. 107–111; E. Eklund, 'Managers, Workers, and Industrial Welfarism: Management Strategies at ER&S and the Sulphide Corporation, 1895–1929', Australian Economic History Review, vol. 37, no.2, pp.137–156.

11. S. Jacoby, Modern Manors; J. Sangster, 'The Softball Solution'.

12. R. Edwards, Contested Terrain: The Transformation of the Workplace in the Twentieth Century, New York, Basic Books, 1979, pp. 25

13. H. Gospel, Markets, Firms and the Management of Labour in Modern Britain, Cambridge University Press, Melbourne, 1992; C. Wright, The Management of Labour.

14. H. Gospel, Markets, Firms and the Management of Labour in Modern Britain.

15. P. Beaumont, The Decline of Trade Union Organisation, Croom-Helm, London, 1987, pp. 26; P. Blyton and P. Turnbull, The Dynamics of Employee Relations, Macmillan, London, 1998 pp. 267; D. Guest and K. Hoque, 'The Good, the Bad, and the Ugly: Employment Relations on New Non-union Workplaces', Human Resource Management Journal, vol. 5, no.1, 1994, pp. 1–14; I. McLoughlin and S. Gourlay, Enterprises Without Unions, Open University Press, Buckingham, 1994; S. Deery, J. Walsh and A. Knox, 'The Non-Union Workplace in Australia: Bleak House or Human Resource Innovator?', International Journal of Human Resource Management, vol. 12. no. 4, 2001, pp. 669–683.

16. F. Foulkes, Personnel Policies in Large Non-Union Companies, Prentice Hall, Englewood Cliffs, 1980; K. Sisson, 'In Search of Human Resource Management', British Journal of Industrial Relations, vol. 31, no. 2, 1993, pp. 201–210; N. Millward, The New Industrial Relations?, Policy Studies Institute, London, 1994; D. Guest and K. Hoque, 'Human Resource Management and the New Industrial Relations', in I. Beardwell, Contemporary Industrial Relations: A Critical Analysis, Oxford University Press, Oxford, 1996, pp. 11–36; S. Deery, J. Walsh and A. Knox, 'The Non-Union Workplace in Australia', pp. 669–683.

17. T. Dundon, I. Grugulis and A. Wilkinson, 'Looking out the Black-hole-Hole', Employee Relations, vol. 21, no.3, 1999, pp. 251; K. Sisson, 'In Search of Human Resource Management', pp. 210–10; D. Guest. and N. Conway, 'Peering into the Black-hole: The Downside of the New Employment Relations', British Journal of Industrial Relations, vol. 37, no. 3, September 1999, pp. 367–390.

18. Re 'small is beautiful' see J. E. Bolton, Report of the Commission of Inquiry on Small Firms, Cmnd 4811, HMSO, London, 1971; A. Rannie, 'Is Small Beautiful? Industrial Relations in Small Clothing Firms', Sociology, vol. 19, no. 2, 1985, pp. 213–224; re 'Small isn't Beautiful' see A. Rannie, Industrial Relations in Small Firms: Small Isn't Beautiful, Routledge, London, 1989. M. Ram, Managing to Survive, Routledge, London, 1994.

19. D. Guest and N. Conway, 'Peering into the Black-hole', pp. 369–390.

20. T. Dundon, I. Grugulis and A. Wilkinson, 'Looking out the Black-hole', pp. 251.

21. D. Roy 'Repression and Incorporation', pp. 395–415; G. Gall, 'Management Control Approaches and Union Recognition in Britain' pp.1; D. Peetz, 'Decollectivist Strategies in Oceania', pp. 252–278.

22. R. Whipp, 'Qualitative Methods: Technique or Size', in K. Whitfield and G. Strauss (eds.), Researching the World of Work, Cornell University Press, Ithaca, 1998, pp. 56; R. Yin, Case Study Research: Design and Methods, (2nd edn), Sage, Thousand Oaks; M. Tymeson, The Norton Story, Norton Co, Worcester, Massachusetts, 1953.

23. Occupational Descriptions: Abrasive Manufacturers, series SP193/4, item T63682, National Archives Australia, Sydney (hereafter, NAA); Author's interview Edgar Green, Manager Naxos Products, Auburn, 20 February 2003; Australian Abrasives, The Story of Abrasives, Auburn NSW, 1955; M. Tymeson, The Norton Story, Norton Co, Worcester, Massachusetts, 1953; Contacts with Firms: Industrial Metals and Machines: Australian Abrasives Pty Ltd, series SP 146/1, item 599/4/78, NAA.

24. Occupational Descriptions: Abrasive Manufacturers, series SP193/4, item T63682, NAA.

25. Naxos Products Pty Ltd, series A1539, item 1944/W/415, NAA.

26. Author's interview with Edgar Green, Former Naxos Manager, 20 February 2003 Former Naxos Manager; Author's interview with Edgar Green, Former Naxos Employee 23 April 2003; Author's interview with Jim Denton Former Naxos Employee, 11 July 2003.

27. Australian Abrasives, The Story of Abrasives; M. Tymeson, The Norton Story; Contacts with Firms: Industrial Metals and Machines: Australian Abrasives Pty Ltd, series SP 146/1, item 599/4/78, NAA.

28. NAA; Contacts with Firms: Industrial Metals and Machines: Australian Abrasives Pty Ltd, series SP 146/1, item 599/4/78, NAA; Australian Abrasives Pty Ltd: supply of small mounted grinding wheels for lapping of 303 dies, series D1743, item 1941/4468, NAA; Australian Abrasives Pty Ltd, Parramatta Road, Auburn, series SP215, item 991, NAA.

29. C. Wright, The Management of Labour,

30. S. Jacoby, Modern Manors: Welfare Capitalism Since the New Deal, Princeton University Press, Princeton, 1997; J. Sangster, 'The Softball Solution'.

31. Author's interview with Jim Denton, 11 July 2003.

32. Author's interview with Ray Patmore, abrasives worker at Naxos Products, Harbord, 19 July 2003.

33. Author's interview with Edgar Green, 20 February 2003; Author's interview with Edgar Green, 23 April 2003; Author's interview with Jim Denton, 11 July 2003.

34. Author's interview with Edgar Green, 20 February 2003; Naxos Products Pty Ltd, 347 Sussex Street, Sydney, series SP215/1, item 231, NAA.

35. Author's interview with Jim Denton, 11 July 2003; Naxos Products Pty Ltd, series A1539, item 1944/W/415, NAA; Naxos Products Pty Ltd, 347 Sussex Street, Sydney, series SP215/1, item 231, NAA.

36. Author's interview with Jim Denton, 11 July 2003.

37. Author's interview with Edgar Green, 20 February 2003; Author's interview with Edgar Green, 23 April 2003; Author's interview with Jim Denton, 11 July 2003.

38. Author's interview with Edgar Green, 20 February 2003; Author's interview with Edgar Green, 11 July 2003.

39. Author's interview with Jim Denton, 11 July 2003; Author's interview with Ray Patmore, 19 July 2003; Author's interview with Edgar Green, 11 July 2003.

40. Author's interview with Jim Denton, 11 July 2003; Author's interview with Ray Patmore, 19 July 2003; Author's interview with Edgar Green, 11 July 2003.

41. Author's interview with Ron Bunn, 10 July 2003.

42. Author's interview with Ron Bunn, 10 July 2003; Author's interview with Gerry Lunney, 30 July 2003; Author's interview with Edgar Green, 20 February 2003; Author's interview with Ruth Dean, 30 July 2003; Australian Abrasives Pty Ltd and The Federated Rubber Workers' Union: Introduction of modernisation of plan, series B206/149, item 441/1964, NAA.

43. Author's interview with Ron Bunn, 10 July 2003;Author's interview with Gerry Lunney, 30 July 2003; Author's interview with Edgar Green, 20 February 2003; M. Tymeson, The Norton Story.

44. Contacts with Firms: Industrial Metals and Machines: Australian Abrasives Pty Ltd, series SP 146/1, item 599/4/78, NAA; Sales Bulletin, series A1336, item 56659, NAA.

45. Contacts with Firms: Industrial Metals and Machines: Australian Abrasives Pty Ltd, series SP 146/1, item 599/4/78, NAA; Author's interview with Ron Bunn, 10 July 2003; Author's interview with Gerry Lunney, 30 July 2003.

46. Author's interview with Ron Bunn, 10 July 2003; Author's interview with Gerry Lunney, 30 July 2003; Contacts with Firms: Industrial Metals and Machines: Australian Abrasives Pty Ltd, series SP 146/1, item 599/4/78, NAA; Author's interview with Ruth Dean, 30 July 2003.

47. Contacts with Firms: Industrial Metals and Machines: Australian Abrasives Pty Ltd, series SP 146/1, item 599/4/78, NAA; Author's interview with Ron Bunn, 10 July 2003; Author's interview with Gerry Lunney, 30 July 2003; Author's interview with Ruth Dean, 30 July 2003.

48. Author's interview with Ron Bunn, 10 July 2003; Contacts with Firms: Industrial Metals and Machines: Australian Abrasives Pty Ltd, series SP 146/1, item 599/4/78, NAA.

49. Author's interview with Ruth Dean, 30 July 2003; Author's interview with Ron Bunn, 10 July 2003; Author's interview with Gerry Lunney, 30 July 2003.

50. Australian Abrasives Pty Ltd and The Federated Rubber Workers' Union: Introduction of modernisation of plan, series B206/149, item 441/1964, NAA.

51. Author's interview with Gerry Lunney, 30 July 2003.

52. Author's interview with Ron Bunn, 10 July 2003; Author's interview with Gerry Lunney, 30 July 2003; Author's interview with Ruth Dean, 30 July 2003.

53. Author's interview with Ron Bunn, 10 July 2003; Contacts with Firms: Industrial Metals and Machines: Australian Abrasives Pty Ltd, series SP 146/1, item 599/4/78, NAA; Author's interview with Gerry Lunney, 30 July 2003; Author's interview with Ruth Dean, 30 July 2003.

54. Author's interview with Ron Bunn, 10 July 2003; Author's interview with Gerry Lunney, 30 July 2003; Author's interview with Ruth Dean, 30 July 2003; Contacts with Firms: Industrial Metals and Machines: Australian Abrasives Pty Ltd, series SP 146/1, item 599/4/78, NAA.

55. Australian Abrasives Pty Ltd and The Federated Rubber Workers' Union: Introduction of modernisation of plan, series B206/149, item 441/1964, NAA; Author's interview with Ron Bunn, 10 July 2003; Author's interview with Gerry Lunney, 30 July 2003.

56. S. Jacoby Modern Manors; J. Sangster 'The Softball Solution, pp. 166–199; C. Wright, The Management of Labour.

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