Organization Theory and Consumption in Post-Modern Era
Organization Theory and Consumption in Post-Modern Era
Post-Modern Era*
David Knights, Glenn Morgan
Abstract
David Knights, In recent years, social theory has become increasingly concerned with consump-
Glenn Morgan tion and the changing nature of consumer society. By contrast, students of
Manchester
School of
organizations have given only limited attention to the implications of consump-
tion and consumerism for the analysis of their subject matter. In the light of this,
Management, the paper considers the contribution that the sociology of organizations can and
UMIST,
Manchester, U.K.
should make to discussions of consumption and associated debates concerning
contemporary consumer society. Our argument is that since in contemporary
societies, consumption is achieved through the mediation of organizations it fol-
lows that an adequate study of consumption can only be developed in conjunction
with the sociology of organizations. However, it is also the case that the analysis
of organizations must change if it is to take the issue of consumption seriously. By
placing consumption more centrally in our analysis, the study of organizations is,
in our view, forced to address current theoretical and empirical questions about
the nature of modern (or is it post-modern?) society, a task that is sometimes
ignored by organizational analysts but is implicit in the tradition of study deriving
from Weber. The paper seeks to show how these changes open up fruitful new
areas for the study of organizations and consumption and, in particular. questions
Introduction
and its institutions in 18th century England is now being seen as ’the
necessary analogue to the industrial revolution, the necessary convulsion
on the demand side of the equation to match the convulsion on the supply
side’ (McKendrick et a]. 1983: 9). Within critical philosophy, post-
modernism now provides a framework which no longer reduces consump-
tion to the status of a manipulated need (as, for example, in Marcuse
1964) and instead celebrates it as an expression of what Baudrillard
(1988) terms ’hyper-reality’ - that ’strange mixture of fantasy and desire
that is unique to late 20th century culture’ (Kellner 1988). Even within
Marxism, the dominance of discourses based on production is being
undermined; consumption is now no longer subordinated to production
but is seen instead as being essential to the construction of new progress-
ive social forces in these ’New Times’ (see Hall and Jacques 1989 for a
range of arguments which develop this point). Within sociology itself,
renewed interest in status (Turner 1988), ’consumerism’ (Campbell
1987), food (Mennell 1985) and manners (Elias 1978, 1983) are all con-
tributing to an increased concern for the analysis of consumption proces-
ses (see the recent Special Issue of Sociology, 1990 , on Consumption for
various contributions to the emerging debate: also Burrows and Marsh
1991.)
It is important to note the two strands in this debate. On the one hand,
there are those contributions which see consumption in general as a
neglected focus in the social sciences (e.g. Saunders 1986) and therefore
seek to raise its profile in research. In such a view, consumption needs to
be added-on to existing debates and theories. On the other hand, there
are those authors who perceive a sea-change in social life in advanced
western societies over the last two decades and believe that one of the
most important manifestations of such a change is the new role which
consumption plays. This latter position is associated with the Marxist
contributions of the authors of ’New Times’ (Hall and Jacques 1989), the
philosophers of post-modernism (especially Baudrillard 1988) and the
cultural theorists represented in the journal Theory, Culture anct Society
(e.g. Featherstone 1990).
In our view, organization studies has failed to confront these issues to any
significant degree. A cursory look at even the most recent texts (e.g.
Thompson and McHugh 1990; Morgan 1990; Reed 1985) reveals no inter-
est in consumption. Only Clegg (1990) comes close to addressing the
issue, a point we will consider later. Nor is there any evidence in the
major journals such as Organization Studies or Administrative Science
Quarterly that consumption is relevant to organizational analysis.
Unfortunately, however, this lack of interest seems to us to be a case of
institutionalized myopia, rather than the outcome of serious intellectual
argument. After all, in industrial societies, consumption takes place
through the mediation of organizations. Organizations are the sites in
which people purchase goods and services. Organizations are invariably
the producers of those goods and services; indeed they are frequently the
consumers of goods and services as well. Changes in organizations and
(Clegg 1990: 81). Thus the issue for organizational analysis concerns how
the external constraints of the environment are translated into organiza-
tional imperatives.
In this approach, consumers ’disappear’ behind what is objectified as the
market, which is a major constraint on how the organization develops.
The inter-dependence and social constitution of the market, the con-
sumer and the organization is ignored; they exist as separate,
independent elements both of the overall system and of the academic
disciplines of analysis. The gulf between marketing, economics and
organizational behaviour as academic disciplines institutionalizes the con-
ceptual separation of these phenomena. In this sense, the issue of con-
sumption can be safely relegated to the domain of other disciplines and is
thereby treated as peripheral to the central questions of organizational
analysis.
Such a displacement of attention, however, is difficult to sustain, even
within a systems perspective, as the literature on strategic management
indicates. In this literature, there is increasing recognition that the
‘environment’ does not constitute an objective constraint on the
organization but, on the contrary, is constituted by the organization at a
number of levels. At the most fundamental level, the environment is
constituted as an object of knowledge, as something that is known, by the
interpretive schema of particular groups of managers within the organiza-
tion (Smircich and Stubbart 1985; Knights and Morgan 1991; Knights and
Murray 1992). At another level, organizations cooperate and work
together to create a favourable environment for themselves as the
literature on inter-organizational networks indicates (Pennings 1981:
Astley and Fombrun 1983). Finally, some elements of the strategic
management literature encourage managers to take risks, to do things
which they believe in, to reshape the environment with new products and
ideas (Peters 1987). All of these approaches point to the weakness of the
rigid distinction between organization and environment and the need for
organization studies to examine the inter-relationship and mutual con-
stitution of these phenomena.
This argument can draw some limited sustenance from the other main
tradition of organization theory, developing out of Marxist and Weberian
approaches. These authors have recognized that organizations not only
respond to, or are constrained by, environmental conditions, but also
contribute quite significantly to their reproduction. For example, critical
approaches to organization theory have addressed the issues of class and
politics (e.g. Salaman 1979; Clegg and Dunkerley 1980; Clegg 1989:
Pfeffer 1981), gender and race (e.g. Henriques et al. 1984; Thompson
1983; Collinson et al. 1990) and technology (e.g. Salaman 1979; Reed
1985; Thompson 1983) as elements of social life that are reproduced in
organizations, as well as by them. In this sense, organizations are neither
innocent bystanders nor passive recipients of the structures of social
inequality and scientific innovation. Once again, however, the focus
remains predominantly on the organization as a form of production.
identity within the workplace and in the wider social setting (e.g. Beechey
and Perkins 1987; Cockburn 1984; Grieco and Whipp 1986; Walby 1986).
Even so, a more explicit consideration of consumption can. in our view,
serve to clarify these links and sharpen up discussion.
Our remarks so far could be interpreted as following the argument we
ascribed to Saunders (1986) - namely, that consumption has been
neglected as an issue and therefore somehow needs to be ’added on’ to
any analysis of contemporary life. Such an approach undoubtedly has
merit, but it could be extended. In our view, it is not just that organiza-
tion theory should consider consumption more explicitly. It is also a
question of whether the changes currently taking place in organizations
and society are best understood through a framework informed by a focus
upon consumption.
This latter point has a prima facie validity in that there is already a
significant debate occurring on the borders of organization theory which
makes just this point. The flexible manufacturing thesis (in particular,
Piore and Sabel 1984) points to the development of consumer-driven
industries, in which the mass production of standardized commodities
gives way to short runs of differentiated goods. Piore and Sabel’s model
hypothesizes a range of changes in the nature of technology, the state,
economic organization, class relations and consumers. Given the
ambitious scope of their thesis and its significance for traditional modes of
theorizing, it is not surprising that it has generated severe criticism (see
especially Pollert 1988). On the other hand, it keeps re-appearing as a
framework and set of organizing hypotheses.
Interestingly, one recent discussion of Piore and Sabel is contained in
Clegg (1990). As noted earlier, this is one of the few examples of a text on
organizations which does consider aspects of consumption. In relation to
Piore and Sabel, Clegg labels them as ’neo-romantics’;
’The neo-romantic argument derives from the contribution of Piore and Sabel
(1984) with their insistence that we are at a critical divide in human history, one
whereby the utopian aspects of community, lost with the nineteenth century
demise of craft work in domestic industry, may be regained. The romanticism
resides in the retrospective vision. At base their theory is consumption-driven.’
(Clegg 1990: 209)
Whilst rejecting Piore and Sabel’s vision of an idealistic past and future,
Clegg nevertheless shares their interest in flexibility. However, in con-
trast to them, he finds the roots of flexibility more in the Far East than in
Emilia-Romagna. He focuses particularly on Japanese industry as an
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216
’ z
sumption (Warde 1990, 1991 ). There are three main points to his argu-
ment. First is the view that consumption involves ’different stages in a
cycle between the production and final enjoyment of a good or service’
(Warde 1990: 3) each of which needs to be specified and examined.
Second, these different stages are embedded in distinct sets of social
relations within the ’cycle from production to final use’ (ibid: 4). Third he
products that they calculate will be acceptable in the market place. Hav-
ing done this, the price leaves the organization as though it were an
objective characteristic of the commodity. Since so little of the organiza-
tion theory literature concerns itself with consumption as opposed to
production, the processes through which prices are constituted within
organizations are ignored or taken for granted a5 unproblematic.
Hopwood’s genealogical analysis of the accounting practices developed
by Josiah Wedgewood, the 18th century English potter (Hopwood 1987)
gives an indication of the sort of issues which need to be tackled. In the
early days of Wedgewood’s factory ’accounting information did not
inform his product and pricing decisions or the selection of his methods of
work’ (Hopwood 1987: 215). However in the early 1770s, demand for his
pottery fell heavily and Wedgewood felt it necessary to lower his prices in
order to survive the recession better. The problem was how to ensure that
the new prices exceeded costs of production, for at this time, there was no
system for operationalizing costs.
’Cost remained an idea, not a fact.... Costs had ... to be constructed rather
than merely revealed. An organizational economy grounded in a domain of
accounting facts had to be forged painstakingly rather than merely exposed ...’
(Hopwood 1987: 215-217)
’Prices were actively changed in the name of new knowledge of costs and profits.
A basis for a more systematic consideration of marketing policies was created.
The newly emergent facts of the economic provided a basis for re-appraising the
organization of the manufacturing processes, the advantages of large volume
production and the calculation of piece-rates, wages and bonuses. The inner
workings of the organization had been made amenable to a new form of economic
analysis.’ (Hopwood 1987: 217)
Hopwood shows clearly how, even in its earliest stages, the market was
not merely an abstract entity to which the but
producer must respond,
rather a set of consumers whose buying behaviour could be constructed
or modified through the specific actions of an organization. The organiza-
tion had to constitute for itself a social understanding of ’price’ and once
this was done it began to educate consumers into a ’price mentality’. The
reconstruction of this historical process as both a phenomenon internal to
organizations and internal to the way in which consumers understand
goods and services and the concept of ’value’ has barely begun. This is
the history of the ways in which products and services are transformed
from having individual and incommensurable use-values into commodi-
ties which are constructed on the basis of money-values. In this process, a
universal standard comes into being whereby all commodities can be
measured quantitatively in terms of comparative worth.
Historically, the process of commodification is complex. It involves the
dissolution of non-commodity institutions, such as those based on
communal forms of sociability like kinship, friendship and locality, as
well as those founded in collective organizations of self-help and mutual
self-improvement (see Grieco and Whipp 1986). This transformation also
involves the state and its role in sustaining capitalist social relations. A
significant example of a shift from communal or non-commodity pro-
vision is to be found in the sphere of insurance. Prior to the development
of insurance techniques, the provision of ’security’ for individuals in
sickness, old age, widowhood or loss of parents would be caring either by
the extended family and/or the local community. Indeed, so taken for
granted was this provision, that not until the formation of friendly
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220
societies and the poor law was there much institutional recognition of a
problem of ’social security’ (see Atjony et al. 1979; Knights and
Vurdubakis 1991). Gradually, the quasi-commodified character of
friendly society provision gave way to the emergence of collecting
societies and industrial life insurance companies, which constituted social
security as a problem that their particular commodified products were
designed to resolve. The point of entry for this commodification of
security was the provision of burial insurance which working-class
families readily purchased in order to avoid the indignity of a pauper’s
funeral (Knights 1988). Partly as a result of the failure of the market to
ensure universal treatment, even in the provision of minimal death bene-
through culture, that none exist independently of it, and that a hierarchy of
authenticity and moral correctness is quite impossible to establish.’ (Nava 1990:
8)
however, its ’use’ value is taken for granted. Thus, at a very simple level,
we can argue that organizations create ’use-values’.
Once again, the area of financial services provides a number of examples
of the constitution of use-values for consumers. Take the introduction of
credit cards for which, presumably, few consumers would have felt a
burning need, but as a result of usage, now find it inconvenient if not able
to use them. The facility of not having to carry large amounts of cash and
the potential to spend beyond current cash resources gave the credit card
an almost instant popularity and an immense use-value. That it con-
tributes to higher levels of consumption because of the ease of spon-
taneous purchasing and the partial removal of a psychological resistance
to parting with cash, shows how the use-value of one commodity can
extend exponentially the exchange-value of others. Life insurance prod-
ucts provide an equally valid example, as consumers very often prefer to
deny or ignore their use-values in favour of more immediately gratifying
forms of consumption. Only through the ’art’ of interpersonal selling are
consumers persuaded that the use-value of insurance is great enough for
them to participate in an exchange relationship with producers (Knights
and Morgan 1991).
We are not seeking to argue that organizations have some autonomous
and unconstrained power to ’construct’ needs. The demise of the Sinclair
C5 electronic car is only one of the more amusing examples of an
organization which totally failed to ’constitute’ a need or a use for its
product. Organizations ’fail’ all the time, because they produce com-
modities which either are not considered ’useful’ or cannot be exchanged
because their costs of production surpass their market value.
The argument here is that organizations take in information about the
existing structure of needs and use-values which is then converted into a
new design and marketing venture. This venture is launched within an
already existing context of needs and use values. Its effects may be
negligible, either because they are neutralized by the effects of other
organizations and institutions, or, on the contrary, they may be formi-
dable because of the way in which they coincide with broader social
constructions which have mutually reinforcing effects. In the latter case,
the effects are magnified and can produce a variety of new uses and
consumption needs. The computer industry provides a pertinent exam-
ple : over the last decade, the expansion of computer sales into the per-
sonal consumption sphere has been made possible by the coincidence
of a whole series of conditions - the development of the technology and,
in particular, user-friendly software related to and surrounding the
personal computer; the high profile given to computing in industry and
education; the development and elaboration of computer games which
have dramatically expanded the leisure use of computers; and, the
general proliferation of computer technology into everyday life through
their use in washing machines, microwave ovens, videos and cash dis-
pensers, for example. There is then a proliferation of influences en-
couraging consumers to feel some need to purchase and use a PC and this
point of production. It is partly for this reason that we find a whole new
range of human resource management techniques designed to transform
workers into self-disciplined customer oriented employees committed to
their corporations’ strategic aims and objectives (Knights and Morgan
1991).
Just as the ’market’ has become more clearly a focus for ’management
science’ and ’managerial discourses’, so have professional marketing per-
sonnel claimed an expertise in ’interpreting’ and finding solutions to
’problems’ of the market. In a bid for power, these professionals have
sought to redefine the priorities of organizations around notions of busi-
ness and corporate strategy and in this task they have clearly been
assisted by a proliferating academic and consultant literature (ibid). A
plethora of expertises - market research, market intelligence. sales tech-
niques - are associated with the ’rise’ of marketing, some of which exist
in-house and others are bought in from external agencies and consultants
(a feature, particularly of advertising; see Slater 1989 and Ewen 1990, but
also the Special Issue of Accounting, Organizations and Society 15 1/2
(1990) on Accounting and Strategy, and especially Dent 1990). The way
in which these groups operate to constitute an understanding of the
market and the ’needs’ of consumers has so far been barely touched upon
in the sociology of organizations.
In this section, we have examined the effects of organizations producing
use-values. We have argued that these effects are generated by internal
processes of organizational design and marketing, but that their conse-
quences go much wider. Organizations participate in the construction of
needs or use-values through the way in which they advertise and market
marketing plan and the sophistication of client, account executive, research group
and creative team. How well they arc represented in and manipulated by the
advertisement will depend in particular on the creative director and his or her
staff. But the final act of meaning transfer is performed by the consumer. It is
...
he or she who completes the act of meaning transfer in a sudden act of recog-
nition. The advertisement allows the consumer to see the essential similarity
between the elements and the product. It enables the consumer to see that the
cultural meanings contained in the people, objects and contexts of the advertise-
ment are also contained in the product. Badly crafted advertisements do not.’
(McCracken 1990; on the ’semiotics’ of advertising, see Mick 1986; also Belk and
Pollay 1985)
identity for their consumers. Indeed, organizations use this; they seek to
create a sense of difference between their own products and those of their
competitors. Product differentiation, alongside market segmentation, are
the ways in which organizations seek to create a niche for themselves,
offering commodities which make individuals or groups of people feel
special, exclusive and individual. It may be designer labelled clothes, the
latest model of a particular car or specifically personalized or customized
products. In itself, the product does not have to be necessarily expensive,
so long as alone, or in combination with some other goods or products, it
can be individualized to make people believe that they are special.
In current conditions, this process subverts existing status group differen-
tiations. Whereas membership of an exclusive class or group and the
attempt to secure a particular identity relied on stable social evaluations
and status hierarchies, together with restricted access to the consumption
goods that bound the group together, modern marketing and cultural
trends seem to be undermining such stability. Turner describes the pro-
cess as follows:
over the aspiring masses. However, given contemporary means of mass cultural
production, changes within the cultural field are so rapid that it becomes increas-
ingly difficult to identify the leading-edge of either the art-world or the market
place of consumer goods.’ (Turner 1988: 74)
According to Featherstone:
’The implication is that we are moving towards a society without fixed status
groups in which the adoption of styles of life (manifest in choice of clothes, leisure
activities, consumer goods, bodily dispositions) which are fixed to specific groups
have been surpassed.’ (Featherstone 1987: 75)
The decline of fixed status hierarchies was predicted by Marx (1959) over
one hundred years ago. It is this ’revolutionary
spirit’ in commodity
production that Berman identifies in Marx’s famous phrase ’All that is
solid Melts into Air’. The cultural foundations of capitalism i.e. the status
order and obedience to hierarchy etc. are undermined by the way in
which its material conditions sweep away all barriers before it. Berman
argues that:
’The truth of the matter, as Marx sees it, is that everything that bourgeois society
builds is built to be torn down ... Their (the bourgeoisie’s) secret - a secret they
have even managed to keep from themselves - is that behind their facades they
are the most violently destructive ruling class in history ... Marx unveils the
modern bourgeois as consummate nihilists on a far vaster scale than modern
intellectuals can conceive.’ (Berman 1982: 100)
’... one is hard put to say where the commercial institution stops and where the
cultural product starts’ (Lash 1990: 11-12)
both reflects and reinforces the trend whereby organizations are continu-
ally developing new products and packages. McCracken (1990: 8) aimed
at appealing to diverse groups of consumers ceaselessly searching for
distinctive meanings and identities. Our argument has been that organiza-
tions thereby contribute significantly to the construction of consumer
subjectivity in contemporary society.
but at the symbolic level it works its way into the subjective identity of all.
. Bauman argues that consumers ’need the market as the foundation of
their certainty and self-confidence all perceptions and expectations,
...
topical relevances are trained and moulded inside the new &dquo;founda-
.
offers to resolve.
In conclusion, our argument has been that the sociology of organizations
should turn outward and consider changes in the broader society. Once
we consider those changes, we will see that organizations are inextricably
.
involved in their development, transformation and reproduction through
the effects of their practices on the constitution of exchange-value, use-
I&dquo;&dquo;
value and identity-values. It is time that the study of organizations made
this move and instead of continuously focusing on problems of production
in which the characters of ’workers’ and ’managers’ dance their never-
ending steps, began also to examine some of the ways in which organiza-
tions respond to, and change, social relations in the broader
society.
In terms of future research, we believe that there is a pressing need to
*
Note This paper was originally delivered at the World Congress of Sociology in Madrid, July
1990. It is derived from research financially supported by TSB plc. We would like to thank
our colleagues at UMIST for their comments, particularly Hugh Willmutt.
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