Underlying theories on interventionism examines the nature and jurisdictions of interfering. The use or threat of force to coercion in altering a political or cultural situation characterizes interventionism. In UK, interventionism commonly deals with government’s or state’s intervention in other’s affairs. It is thus evident that it is an aspect of political philosophy that can be extended to other’s cultures, religions, lifestyles and economic activities. Commonly, interventionism deals with the justification of government’s interference, whether domestically or internationally, with the actual or potential use of coercion.
Intervention speaks of attempts to persuade others to change coercible or forcefully beyond reasoning. Breaking diplomatic relations is not a form of interventionism rather, an option to explain possible choices, but by doing it through a coercer it is an interventionism. If the choices are normally unacceptable or less acceptable, the process is interventionism. To this extent, “governments or states may legislate programs from people to take out adequate insurance or invest sufficiently into pensions requiring health checks or continued education” said Alexander Moseley. On the other hand, political realism reflects that policy prescriptions aids to the primacy of national interest justifying the reasons of economic profit as well as for balance of power considerations (Moseley, 2006).
Economic interventions are common in modern, developed countries like UK. Interference includes taxes, targeted tax credits, minimum wage laws, union shop rules, contracting preferences, direct subsidies, pricing, production quotas, import quotas and tariffs. Effects of interventionism are evident on the reduced overall size of British economy and violation of domestic economic borders. The benefits are usually felt by a small amount of people and the costs are over the entire population and creates political imbalance the intervenes and intervener.
According to (2004), in context, “the United Kingdom is a rapidly changing nation in a rapidly changing world”. The Conservative party and the Labour Party are transforming in order to cope with challenges and changes. It is not an easy task though because of the manner of intervening in the economy by political positions. “Politicians from the right have promoted private property and free markets while politicians in the left have supported collective ownership of key sectors of the economy”. Eventually, this will lead to fragmentation within the economic system in UK. To put, industries and/or markets and employees and employers do have their own political preference.
In between 1945 to 1975, both parties mark a cross consensus on economic policy. The Conservative and Labour adapt Keynesianism wherein the government spending is varied, demand is managed through tax and interest rates manipulation and nationalisation or state ownership is prioritized. Traditional approaches to economic policy produce inappropriateness to modern economic conditions. When Tony Blair becomes the leader, the Labour Party adopts the monetarist macro-economic policy and abandons its commitment to public ownership. There is a new consensus running between the Conservative and the Labour Parties. Both are now “committed to capitalism, promoting ‘sound money’, low inflation, private ownership and low taxation” (2004). The Labour Party sees an active interventionist role of the government in the micro economy level. The government’s belief is to maintain and promote competitiveness. What is unlikely, they are influencing the level of investment, required degree of education and training and the conditions of the labour market to an extent of disregarding the rights and interests of the working people.
Thatcherism continues to influence British political and economic life. Tony Blair, according to some, as a “neo-Thatcherism”, mimics economic policies such as anti-trade union legislation, privatisations and general free market approach. Anti-trade union legislations infringes provision of benefits to members such as ensuring members against unemployment, ill-health, old age, and funeral expenses; collective bargaining power where negotiations with employers over wages and working conditions; industrial actions like organizational strikes or lockout-resistance. It is hard to maintain and improve the employment conditions of the wage-earners without trade unions (New Statesman, 2005).
Privatization, as a part of government intervention, affects more on the employment relationships negatively. State-owned enterprises may borrow may borrow money from debt markets cheaply than private enterprises. Privatizing may force the company to raise prices, lay-off workers and/or lower wages. Anti-privatizations organizations claim lack of incentive for government to ensure financial stability of the said company and due to pressure of future elections the government maximizes efficiency in nationalized companies. Essential profitability of private organizations’ operations will be contractual and payment blocking. Moreover, dangerous cost-cutting measures might be taken in order to maximize profit. Such measure can fuel misunderstanding and disagreements between employees and employers. Interference can also harnesses confusion on organizational relationship regarding power structure from a state-owned asset into private hands. Trade unions oppose privatization because of corruption and accountability, lack of market discipline, cuts in essential services, natural monopolies, concentration of wealth, political influence, downsizing and profit (2006).
Through codes of conduct and declaration of interest, ethical standards and standards of probity cannot assure the transparency of private organizations. This will allow the employers to control the sale for personal gain at the expense of the employees. The public holds no control over private organizations. Private organizations lack strategic importance because their only goal is to maximize profits. They are just going to serve those who can pay disregarding the needs of the majority which is anti-democratic. Furthermore, this can lead to abandonment of the social obligation to those who are less able to pay and where service is unprofitable. A true competition may be at risk and profit is concentrated to owners instead of the common good. A conflict may arise wherein service level is at stake. More likely, private companies cut back on maintenance or staff costs, trainings, and etc., sacrificing the development and improvement of its workforce (2001).
Privatization, in some cases, is acceptable as it consistently improves efficiency through improved incentives and reduces cost. In public sector, a threat of privatizing a company improves transparency, accountability of management, improved internal controls, regulatory systems and better financing. Perhaps, the intervention must deal with redistribution and employee retraining 2006).
Intervention must focus on employment sustainability rather than on employer-core policies. This concept shall trigger ideas for policy development. Sustainability is also “to do with job retention, job stability and career advancement”, employee and employer behaviour, employment measures, sufficiency and technical and economic change (2001),
In UK, policy evaluation focuses more on short-term outcomes instead of sustainability issues. Policy options includes intensive and flexible sequencing options, trainings to support advancement, impact of labour markets on retention, pilot testing of pre- and post-employment services and role of intermediary organizations in delivery of services. Employment sustainability can be address in a number of ways including: job matching mechanisms, work trial supports and preparation assistance, development and further development of skills, expansion of discretionary approach, utilization of knowledge and skills, continuation of support in the workplace, liaison and mentoring system. All of these can develop strategies to maintain a sound relationship between employees and employers through the improvement of by-laws, economic laws and codes, and existing policies in accordance with Labour Party’s objectives and the goal of trade unions.
“The attraction of policies that foster employment sustainability of a ‘win-win-win’ situation: individual and family welfare is enhanced; the skill-base of the economy is increased with positive benefits for international competitiveness; and the public expenditure on welfare benefit is reduced”, Keller, et at.
Positive interventionism might be of big help if the policies will include addressing supply and demand, targeting to ensure employee-employer effectiveness, seamless service provision which transcends across the working public, and support on cases of unemployment.
In micro and macro dimension, the effectivity and credibility of the state determines the extent of intervention so as to identify the level of investment and the rate of economic growth. Intrusion of the state in a collectivised economic system depends largely on the political standpoint of the person using the term intervention. In macro dimension, the government regulates through monetary and fiscal policies in pursuing of economic objectives. While, in micro dimension, the government focuses on both labour and product markets to support and achieve policy objectives. These policies include agricultural, education, training, manpower, competition, energy and transport. Taking it from UK perspective, it is often viewed with multi-national complications and burdensome regulations Peter, 2003).
Regulations and deregulations build structural and organizational confusion within an employer-employee relationship and the economic spectrum in general. In January 1994, the Deregulation and Contracting Out Bill proposes 23 measures ending 605 regulations. Mr. Michael Heseltine, then Board of Trade President, states it was the ‘largest bonfire of controls that has taken place’. It introduces legally-binding undertakings in merger cases to avoid investigations and small companies with less than £90K are released to have their accounts audited. These changes bring the administration to mandate compliance costs of new regulations. However, the weakness of these new regulations implies intersection on traditional practices of long-time companies. Adaptability to ever-changing policies and regulations produces be wilderness among the employers and employees. The Labour Party, in order to adjust quantifies the costs and benefits of the regulations in 1997. Regulatory Impact Assessment (RIAU) proposes a UK legislation that has an impact on businesses and company models including employment relationship within a certain organization or body to reduce ‘red tape’ (Peter, 2003). Some people questioned the particular relevance of regulation and deregulation, as a form of intervention, in the industry and economy as it is not making things better but worsen matters specifically in underlying consequences of employment relationship. For example, the Department of Trade and Industry in addressing the needs of manufacturing industry, it is beyond their jurisdiction.
On a more positive note, intervention may aim at increasing competition with regards to the effect of the latter to strength of competitive pressures in the market. For example, in December 2002, the Office of Fair Trading proposes to deregulate the market for dispensing National Health Service prescription is an acceptable mean of encouraging competition. The greater the competition is, the more companies will emerge and the more jobs are created. Through intense competition, the public is also benefiting because of low prices, a more reliable services and the power to have options. Accordingly, government interventionist policies are basically argumentative the way it is perceive by the major political parties in UK.
The human resource management (HRM) contributes to the success and failure of a company. Its dimension and impact is limited but growing base on organizational performance of HRM across all sectors. Performance can be assessed by means of indicators such as measures of activity, measures of output and measures of outcome. In both directions, the government affects HRM approaches and practices and the characteristics, context and priorities of the organization. Recently, HR policies and management “right” are increasingly recognized to upgrade the capacities of the workforce (Buchan, Plumbed Central).
According to Richardson and Thompson (1999), best practices, contingency and linkages contribute to and improve the business performance. Such identified practices, strategies and interventionism can affect the effectivity of HRM in the long run. A most recent issue on HRM interference is off shoring. This can reduce costs and enhance service but it can also unnerve and demodulate home country employees said Jonathan Gardner, an economist at Watson Wyatt. Among country employees this produces job-insecurity in UK-based companies. Perceived threats to UK employment from off shoring to developing countries weaken security policies. Great job migration and/or offshore outsourcing are increasingly alarming. Companies neglect the idea of combining business models and setting rather than focusing on off shoring to reduce labour costs (HRM Guide, 2007). This is high time for the government to intervene and trade unions to realize the economic implications on the rights and interests of home country employees.
As I mentioned above, intervening factors in HRM focuses on training on employees. Since the UK lacks of skilled workers, training and retraining is a must. The British Chamber of Commerce (BCC) reports 55% of the employers are finding it hard to recruit skilled workers. As the effects of globalization is more widely felt, the British economy must remain competitive and the government must support initiatives in employee development (HRM Guide, 2007).
So much movement in the employment market leads to job destruction and not creation. There are 2.65 million British private jobs are destroyed annually and 2.76 million created. Aside from regular skills upgrading, provided by the government, they must also intervene on policy development regarding provisions for employment security, extensive training, improve intranet policy management, reduce status distinctions and barriers between large- and small-scale industries and policies on compensation linked to performance.
In UK, the current economic systems are private ownership of the means of production, public ownership on the means of production and the third system is interventionism. Government interventionism is viewed as a possible and viable social cooperation within the industry. The UK state tends to be an interventionist state as they not openly profess socialism. This is characterized by dualism between market and authority.
Under certain pressures, it forces the entrepreneur and the owners to use presented means which they are not likely to use. Restrictive measures are impose upon by the authority including production, implementation of policies, employment relations, policies within the company, and so on. Each interference alters management and organizational practices and diverts goals and vision of the companies in attempt to influence and drastically change the economy for the common good. Restrictive measures may or may not forbid the measures undertaken by such companies.
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