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Organization Theory and Consumption in Post-Modern Era

This document discusses how organization theory has paid little attention to consumption, despite organizations mediating consumption in modern societies. It argues that studying consumption and organizations together could provide insights into power, identity and social change. The paper aims to lay foundations for considering consumption within organization studies and bring theoretical and empirical questions about society into analysis of organizations.

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0% found this document useful (0 votes)
28 views24 pages

Organization Theory and Consumption in Post-Modern Era

This document discusses how organization theory has paid little attention to consumption, despite organizations mediating consumption in modern societies. It argues that studying consumption and organizations together could provide insights into power, identity and social change. The paper aims to lay foundations for considering consumption within organization studies and bring theoretical and empirical questions about society into analysis of organizations.

Uploaded by

juliana.mesquita
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Organization Theory and Consumption in a

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

concerning the nature of power and identity in modern societies.

Introduction

In recent years, there has been an upsurge of interest within sociological


circles in the study of consumption. Initially, this interest was stimulated
by the work of Castells (1977) and his development of the concept of
’collective consumption’ as applied to housing and other aspects of urban
life (for the most extended discussion of this concept and its relation to a
more generalized ’sociology of consumption’ see Saunders 1986: Chap.

8). More recently, however, issues concerned with consumption have


gained a higher profile both inside and outside sociology. From the area
of political economy, the argument has been made that we are entering a
new era of ’flexible specialization’ where consumers require a wide

variety of products. As a consequence, methods of mass production are


being replaced by more flexible systems of work, capable of responding
211 more quickly to changes in consumer demand (see Piore and Sabel 1984
for the clearest exposition of this argument and Pollert 1988 for a
critique). Within historical studies, the ’birth of the consumer society’
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212

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

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213

changes in consumption are inextricably intertwined, yet it is rarely that


any of the theorists concerned with consumption make reference to
’organizational’ issues and it is equally rare for any organization theorist
to make reference to the consumption literature. Thus building a bridge
between the two areas strikes us as a meaningful and worthwhile activity.
This paper attempts to lay down some of the foundations upon which
such a project could begin in earnest.
The paper is organized around four sections. The first concerns itself with
a brief overview of organization theory and its limited consideration of

consumption. In this section, we consider the two strands of consumption


theory as previously identified and seek to develop a framework for
examining consumption and organizations. Within each of the succeeding
three sections we seek to show how the sociology of organizations can
contribute to an understanding of consumption in relation to the frame-
work which we have established. Insofar as theory in the consumption
literature ’has too frequently operated at the most general and therefore
abstract levels’ (Tomlinson 1990: 18), we feel that organizational analysis
can provide an important corrective by examining how contemporary
consumerism is constituted and sustained in everyday organizational and
social practices. However, the advantages flow in the opposite direction
also; by giving attention to consumption, the sociology of organizations is
forced to address current theoretical and empirical questions about the
nature of society and social change, which are often ignored, if not ruled
out of court by the self-appointed guardians of what organization theory
is really about (e.g. Donaldson 1985). In the concluding section, we
emphasize the synergies to be derived from the cross fertilization of ideas
and research work from both organization theory and social theory in the
study of consumption. We also indicate some directions in which research
of this kind might develop.

Organization Theory and Consumption


Our starting point is that organization theory as a whole has paid little
attention to consumption. By exploring the reasons for this, we can begin
to understand both the limitations of the theory and the direction which
needs to be taken. Whilst not wishing to over-emphasize the homogeneity
of ’Organization Theory’ (see Morgan 1990; Reed 1986 for discussions of
the diversity within the field), we accept that Burrell and Morgan (1979)
were correct to identify the predominance of the structural-functionalist
framework in this area. In such a view, ’organization theory’ primarily
concerns the analysis of the organization as a system. The external
environment is conceptualized as the source of inputs to the system as
well as the destination of outputs. In order to survive, the organization
’adapts’ to the environment; in the language of contingency theory, its
internal structure ’fits’ the demands of the environment. In such a view,
organizations are perceived as ’structure-takers, not structure-makers’
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214

(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.

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215

Deeply embedded in Marxist approaches has been the emphasis upon


production and this has been reflected in the concern with class as con-
stituted in, and through, organizations. It is perhaps feminist analysis
which has come closest to bridging the gap between production and
consumption as it has examined the complex links between the home as a
site of production, reproduction and consumption and both the role of
women in organizations and the organizational construction of female

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

example of flexible manufacturing systems, as distinct from the mass


production, bureaucratic systems of the U.S.A. and the U.K. Implicit
throughout Clegg’s book is an interest in consumption and the ways in
which it is linked to organizations. Flexibility is one example of this, but
Clegg also considers the powerful influence of cultural consumption
values over organization structure, for instance, in his discussion of
French bread and French bakeries. In these ways, Clegg comes close to
raising the central importance of consumption for organization
theory.
However, in the end, too much remains implicit and attention to con-
sumption is diverted by a concern to apply the term ’postmodern’ to
organizations, as though it were synonymous with ‘flexible manufactur-
ing’. In conflating these conceptualizations, Clegg ignores the arguments
of authors such as Lash that postmodernism is ’confined to the realm of
culture’ (Lash 1990: 4). By going beyond the discourse of ’post-Fordism’
to that of postmodernism, Clegg links the cultural and the organizational
but within a framework in which the analysis of consumption remains
limited. In particular, it is unclear whether he conceives of a fundamental
change in organizations, culture and society, revolving around the issues
of consumption or whether he is arguing that these divergent possibilities
(i.e. flexibility and bureaucracy) are embedded in industrialism per se. If
it is the latter, then flexibility, and with it the importance of consumption,
simply needs to be more highlighted in organizational analysis. If it
is the former, then the specific role of consumption needs explicit
consideration.
There may be an objection at this point that there is no necessary

incompatibility between the add-on view and the alternative perspective.


To some extent, we would accept this argument, so long as it is recognized
that there are two distinct but inter-connected issues here. On the one
hand, there is the striving for a theory of organizations which incorporates
an understanding of the interdependencies between organizations and
consumers. On the other hand, there is the attempt to understand trans-
formations in modern societies as related to qualitative changes in the
nature of consumption. Analytically, it should be possible to build these
two arguments together, though they are not necessarily the same argu-
ment. We try to do this in the remaining part of the paper.

’ z

The Category of Consumption


This task can be clarified by considering Warde’s recent analysis of con-

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

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217

focuses upon commodities, arguing that they can be analyzed in terms of


three characteristics - exchange value, use value and identity value
(Warde 1991). Exchange value refers to the monetary value given to the
commodity; use value refers to how the product or service is actually
used; identity value refers to the way in which the commodity contributes
to the constitution of the social identity of the consumer.
While each of these points are interrelated, emphasizing a different
aspect of consumption, from the perspective of organization studies it is
best that we focus attention on the social constitution of commodities.
This is for two reasons. First, we need to break away from the dominant
focus on production in organization analysis and second, a concentration
on the final stage of consumption would take the analysis away from the

commonly understood study of organizations. Having said this. the con-


nections between the organization of production through, for example,
wage labour and the organization of consumption either privately or
within households through kinship, power, ethnic and gender relations
cannot be ignored. There is no space here, however, to provide such a
comprehensive analysis and therefore we merely attempt to translate the
three characteristics of commodities, which Warde identifies, into issues
for the sociology of organizations. In relation to exchange, we examine
how organizations construct exchange values. In relation to use values,
we consider how organizations constitute commodities as ’useful’.

Finally, we discuss the role of organizations in changing or reinforcing the


identities of consumers. In this analysis, we are conscious that a number
of other issues which Warde raises are ’bracketed off. However, we do
this in the hope that it aids the clarity of our exposition which we see as a
starting point in the attempt to bring together the analysis of consumption
and organizations, rather than a conclusive analysis.
Such an approach, we believe, also has the benefit of both illustrating the
process of adding on consumption to existing analyses and also
demonstrating the potential for reconstructing our approach to organiza-
tion theory as a whole. In particular, Warde’s concern with the nature of
value in commodities raises some important issues. As Marxist cate-
gories, use-value and exchange-value have been extensively theorized
within that literature (e.g. Oilman 1971; Gamble and Walton 1976;
Weeks 1981; O’Connor 1984; Haug 1986), but the same cannot be said of
identity-value. Indeed, it might be argued that an analysis of identity
outside the sphere of psychology, where it is usually reduced to a set of
quantifiable variables that have little bearing on the individual’s actual
experiences, is one of the most neglected topics within social science (c.f.
Willis 1976, 1990; Knights and Willmott 1985; Giddens 1991). By
integrating this theme directly into the sociology of consumption, Warde
has opened up an important area of investigation. By considering how
consumption is linked to identity and the role of organizations in this
process, we can link our analysis to current theoretical debates about the
nature of modern society, thus reintegrating the study of organizations
with mainstream social theory.

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218

In this, we do not see ourselves as producing a new model of organiza-


tions to displace what has gone before, but rather as introducing issues
which have been neglected in previous studies. More importantly, these
issues are of increasing relevance as the market and consumption begins
to take on a new force in world politics and economics, not least because
of radical transformations in the Eastern Bloc countries.

Organizations and Exchange Values


In modern capitalist societies, economic life is dominated by the
organization of exchange values, yet in most organizational analysis, this
remains invisible, victim yet again of the boundary maintenance proces-
ses of academic disciplines. Economics is the discipline concerned with

prices and exchange values and organizational analysis cannot trespass on


these hallowed grounds. Yet, if we are going to take consumption
seriously, then we must examine this area. In our society, consumption is
primarily organized through exchange values. Without considering how
exchange values and prices are constituted, we cannot progress further in
bringing together organizational analysis and consumption. In this sec-
tion, therefore, we are concerned to concentrate on two central issues
relating to the organization of exchange values. First, the way in which
prices are not simply the product of the ’hidden hand’ of the market but
have to be constructed within organizations and second, the complex
issues surrounding the commodification of goods and services and the
shifting nature of state interventions with respect to them.
The goods that organizations produce for the market need to be sold;
they must have an exchange value which is greater than their costs of
production. The organization therefore has to transform its products or
services into commodities that bear a price which not only the market will
bear but also can guarantee an excess over and above production costs.
This conversion of goods with some use-value into ones with exchange-
value, where individuals are prepared to pay more than the costs of
production for the privilege of ’consuming’ them is what is commonly
known as the process of commodification. It involves members of the
producer organization drawing on intersubjective understandings as well
as material and symbolic resources to generate a set of prices for their

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

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219

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)

Constructing cost standards and financial records gave Wedgewood a


crucial new means of responding to crises.

’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-

fits, the state began to intervene to appropriate and modify insurance


techniques with the aim of establishing bureaucratized modes of social
security. Social security from birth to the grave was the outcome of these
interventions in mid-20th century Britain, but currently this is suffering
some erosion as New Right regimes seek to return responsibility for

security back to the consumer in the form, for example, of actuarially


constructed private pensions. Thus an area of social life which was
previously non-commodified, i.e. the provision of security in old age and
ill-health is being successively commodified (at first, on a mutual self-help
basis with rudimentary techniques of accounting and actuarial calcula-
tion, but later giving way to more professionalized forms of selling and
accounting, linked to the search for profit of the private insurance com-
panies), then partially de-commodified (through the establishment of the
welfare state, though the maintenance of the ’insurance principle’
sustains an exchange value element in the process) and finally partially re-
commodified (through the encouragement by the state for people to
purchase private health and private pensions).
A complex array of social processes is occurring in the construction of
exchange values. We could distinguish the following as being of particular
importance to organizational analysis:
1. The development of financial and accounting techniques which make
possible the concept of price and its construction in particular
instances.
2. The intra-organizational relations through which particular techniques
become used and the interests which are represented therein.
3. The inter-organizational relations which affect these decisions, i.e.
how the organization interprets the meaning of price in relation to its
consumers and its competitors.
4. The expectations of consumers about price - what constitutes a ’fair
price’, what constitutes a ’bargain’ (for some fascinating analyses of
this, see Smith 1989 on ’Auctions’ and Pinch and Clark 1986 on
market traders).
5. The role of the state in constructing prices. This occurs in three ways:
within state institutions themselves through the construction of ’arti-
ficial’ prices e.g. at present in the U.K., constructing the price of
health services; through the state’s role in legitimating accounting

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221

practices which make sense of certain pricing structures; and finally,


through state regulation of prices in certain sectors.
These levels can only be differentiated for heuristic reasons. In any con-
sumption process, all these issues are implicated and have profound
influences on organizations. By focusing on exchange value in the con-
sumption process, we link organizational analysis and its concern for
internal processes with wider issues related to the nature of commodifica-
tion, the changing structure of state institutions, and the role of con-
sumers. These highly controversial and political issues have been ignored
in most organizational analysis and yet there is no reason for this to be the
case if we incorporate consumption into our analysis.

Organizations and Use-Values

So far, we have focused on commodification processes without paying too


much attention to their use-values. Clearly, however, commodities must
have some sort of use-value in order that people will want to consume
them. In this section, we explore the role of organizations in constructing
use-values.
The idea that use-values are socially constructed needs clarifying. Some
authors imply that certain use-values are ’authentic’, whereas others are
not. This parallels the debate between ‘real’ and ’false’ needs in that
certain use-values are assumed to respond to ’real’ needs, whilst others
are supposed to represent ’false’ needs. Thus, for example, it might be

argued that a toothbrush represents a real need, but a battery-powered


toothbrush is a false need. In a recent paper, Nava clearly states the
objection to this view;
’There is a failure to recognize that all desires are constructed and interpreted

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)

Similarly, we do not believe that, within this context, it is particularly


helpful to consider whether organizations are producing commodities
that are ’really’ useful or not. Whatever our personal views about the
merits of his musicals, how would we determine whether Andrew Lloyd
Webber’s ’Really Useful Corporation’ was producing ’really useful’
musicals or not? Such an argument detracts from the point that, unless
there are at least some people who believe that a commodity has a use,
the organization producing that commodity could not survive. This. in
turn, leads on to a corollary - that organizations are implicated in
constituting ’needs’ and ’use-values’. Through organizational innova-
tions, people come to perceive that certain things have a use which
previously they might not have been able to imagine. Take, for example,
the Sony Walkman: until an organization produced it, it was unlikely that
anybody could have felt they had a ’need’ for such an object; now,

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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

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223

can easily turn into a ’virtuous’ production-consumption circle.


As with the construction of exchange values, we need to understand how
the production of use-values is an historically constituted process that has
its own conditions of possibility in technology, culture, politics and the
economy. As far as organizations are concerned, we want to emphasize
how these developments create a more complex inter- and intra-organiza-
tional field of power relations. Throughout the post-war years there has
been a greater systematization of design, advertising and marketing,
reflected in an increased confidence in the belief that it is possible to
design products that consumers want even if they do not yet know it. This
is associated with the growth of a new set of management professionals
within the sphere of marketing. A key feature of this change is the way in
which management has become less concerned with problems of internal
organizational and labour control and more with the external issues of
managing or controlling the market (see Knights and Morgan 1991;
Knights, Morgan and Murray 1991 for a discussion of this). Of course.
this does not imply that the switch of attention to the market displaces
issues of management control. Quite clearly, customer care and service,
which is part of the attempted ’new model’ of organizations, can only be
provided by staff changing their attitudes and orientations. This could be
seen as demanding a mode of control well beyond that required at the

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

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224

products but they are omnipotent in this regard, nor are


by no means

consumers passive recipients of their propaganda. On the contrary, as

suggested earlier. organizational failure is frequent as consumers resist


particular products and services. In seeking to overcome such resistance
to consumption, organizations continually appeal to or seek to create
specific identities among consumers.

Organizations and Identity


The constitution of use-values begins to draw us past our add-on analysis
of consumption and organizations towards the need for fundamental
reconstruction. The process which we have described whereby organiza-
tions develop experts and expertise in the areas of marketing, design and
advertising in order to construct new use-values is one that is com-
paratively recent. It depends on there being a market of sufficiently
affluent customers who are able to look beyond mere subsistence because
they have some discretionary disposable income. This is a complex
historical phenomenon and we do not wish to over-simplify. The
nineteenth century in Europe and the U.S.A. saw the development of a
range of markets and retail institutions serving different groups of the
population. Marketing, design and advertising all gradually developed
during this period, particularly in the U.S.A. However, not until the
twentieth century did this process really begin to take off, fuelled by the
growth of mass media, higher standards of living and increasingly
sophisticated management techniques. Indeed, as a mass phenomenon. it
would seem correct to point to the period since the 1950s as the time
when the creation of different use-values has expanded exponentially. In
doing so, profound changes have been brought about in society and if we
are to understand what this means for organizations, we need to examine
it in more depth.
In our view. the key transformation here can best be understood through
the concept of identity. Recently, this theme has become the object of
analysis within organizations. For example, Rose (1988) and Miller and
Rose (1990) indicate how industrial psychologists and associated experts
have been instrumental in devising programmes which link the subjective
preoccupations of individual workers with the productive concerns of
managers. These experts have thereby ’constituted the domain of subjec-
tivity as itself a possible object for rational management’ (Rose 1988:
184). Knights and Willmott (1985, 1989) have also sought to demonstrate
how crucial an understanding of identity and subjectivity is to the analysis
of power within organizations and have also suggested that labour process
theory has lacked proper concepts of subjectivity and identity (see also
Knights and Morgan 1991 for an empirical case study of the construction
of identity within the labour process of insurance sales). Other authors.
notably Burawoy (1979), utilized the notion of identity in his empirical
analysis of game playing as a form of workplace consent. Cockburn
(1984) has also illustrated the links between technological work and

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225

masculine identity in printing. However, thus far, these arguments have


been confined to internal aspects of the organization i.e. the way in which
subjectivity and identity is constructed through the labour process. In this
section of the paper, we want to emphasize the power effects of organiza-
tions in contributing to the constitution of identities outside the organiza-
tion i.e. to the identity of consumers.
This theme can be considered through an examination of the contradic-
tions between use-value and exchange-value. Whilst organizations have
developed to produce a plethora of commodities and to advertise these as
necessary and useful to people, they cannot actually ensure that they will
be sold or exchanged. For not only do people have to want commodities,
but they also need to have the purchasing power to buy them. The power
effects of organizations in creating use-values or constructing messages
about lifestyles etc. run up against the barriers of class inequality. Not
everybody can afford Gucci shoes etc.! However, as cultural theorists
such as Hebdige (1979, 1988), Hall and Jefferson (1974) and Willis (1976,
1990) have shown, this does not stop those deprived of wealth and income
from generating their own ideas of style and individuality which
simultaneously call on conventional notions while often subverting them.
Thus youth cultures cannot be understood as being constructed by
organizations; rather they exist within the ’field of force’ of organizations,
but the distinctive character of youth culture is to reshape and re-code
conventional messages. Furthermore, this is not a one-way street.
Organizations are involved in a continuous incorporation of cultural
messages which are then restructured and re-introduced in the environ-
ment when marketing their products (see Frith 1990 and Laing 1990 for
discussions of this dynamic, particularly in relation to popular music). No
more vivid example of this is the way in which companies - from food to
financial services - have turned the ecological movement to its advan-
tage in providing a whole new range of differentiated ’green’ products at
appropriately higher prices. Organizations then produce commodities
which consumers either accept, modify or reject; the organization adapts
-

new modifications are made; new forms of resistance grow up - and


so the process continues.
The example of youth cultures shows vividly the complex interplay
between organizations and identity value; the way in which the two are
interdependent yet never fused. A realm of freedom remains. The con-
struction of identity is an active process, but what is distinctive about the
current period is the number and significance of consumables in that
process. In modern Western societies it is through consumption that
individuals are continuously transformed into subjects who secure a
meaning, personal significance and a sense of identity through a socially
mediated relation with the object or symbol consumed. McCracken des-
cribes this process in the following terms:

’Advertising is ... a means of delivering meaning from the culturally constituted


world to the product ... The meanings chosen for the product will depend on the

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226

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)

It is important to perceive the qualitative change which has occurred in


the way in which consumption contributes to identity. Consumption has
always been important to identity. Historically it has been a major
mechanism of demonstrating one’s class or membership of a status group.
Weber (1948), for example, explicitly defined status groups in terms of
shared patterns of consumption. Status groups find their identity through
sharing certain ways of consuming products - similar clothes, housing,
entertainment, leisure pursuits etc. often in a ’conspicuous’ manner
-

(Veblen 1912) in order to make one’s membership of an exclusive group


absolutely clear to both insiders and outsiders.
However, in the post war period, this form of consumption has given way
to a more diversified or pluralistic range of consumption patterns where
the search for a degree of distinctiveness results in a multiplicity of identi-
ties and displays of difference through a highly differentiated set of con-
sumer products. It is characteristic of the multiplicity of use-values which
now exist that they can be combined in many ways to create a sense of

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:

’As previously privileged and cultural items became available to a


prestigious
mass-market, elite leaders and cultural, avant-garde groups were forced to create
new forms of taste, difference and distinction to preserve their cultural superiority

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227

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)

This can be clearly seen in relation to the role of


organizations in under-
mining status orders. It is in the interests of organizations to expand
markets - to resist artificial closures, whilst simultaneously segmenting
markets according to personal identity. Thus no product or lifestyle can
be confined to one group; everything - from clothes to holidays to
culture - must be repackaged and repriced so as to be accessible to the
mass of the population (see Hirsch 1978 and Urry 1990a, 1990b for an

interesting comparison of the effects of this on tourism; also Thompson


1990 and Tomlinson and Walker 1990). Organizations are the dynamic
force in this process. They establish new use-values by constructing sym-
bolic messages that link their products and services to individual identity.
In the process, existing status group differentiations are no longer sacred.
They become part of the play of commodities; their meanings are
appropriated, subverted and reproduced as ’floating signifiers’, attached
almost at will to new products and services. Production, design, market-
ing and, above all, advertising feed on these processes. Advertising in the
current era lives on the playful and self-reflexive nature of post-modern
culture. Adverts attach signifiers to disparate objects and just as quickly
unattach them - all in the name of novelty and play, though beneath the
surface the serious purpose of selling remains (Slater 1989).
The power effects of organizations in producing goods and services that
expand consumption possibilities across the population means that social
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228

closure through restricting patterns of consumption becomes less and less


possible. Consumption objects are the floating signifiers which consumers
play with in the creation of their own identity and subjectivity (see
Bourdieu 1986 for the most extended discussion of the relationship
between consumption and social identity; see also Lash 1990: Chap. 9).
Without the power of organizations to produce this multiplicity of goods
and services and, as importantly, the central role of marketing and
advertising in playing with signifiers, this process of status decay would
not occur.
The de-differentiation of the postmodernist culture economy in
which:

’... 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.

Summary and Conclusion .

By focusing on the power effects of organizations as actors in the field of


consumption, we have sought to show how the study of organizations can
be made relevant to current debates about the nature of contemporary
society. Whilst the determination of use-value by exchange-value is an
inherent characteristic of capitalist organization, the way in which this has
developed needs to be understood in the context of organizational and
cultural change which takes account of the social constructions of those
(e.g. marketeers, advertisers, accountants, etc.) who seek to create use-
values and convert them into exchange-values. At the same time, the
consumption processes created by organizations are difficult to under-
stand independently of an analysis of the identities and images that con-
sumers seek to develop and elaborate. The increased use of calculative

techniques within organizations has enabled management to produce a


wider range of commodities with a better understanding of costs, prices
and profits. It has enabled more and more areas of social life to be
commodified and monetized.
Exchange value can only be realized if commodities can be sold. This
requires that they embody some sort of use-value. Here organizations
have been crucial in generating new or elaborating existing ideas of con-
sumer needs and supplying ever more distinct and sophisticated com-
modities to meet them. Personalizing commodities is part of this process;
it serves the function both of inviting the consumer into a ’personal’
relationship (no matter how distant) and segmenting the market. Thus
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229

organizations can become specifically targeted in their ’marketing strate-


gies’ and the effects of competition become more manageable, but the
proliferation of use-values runs up against the barrier of exchange-
value ; not every product can be sold given existing structures of
inequality.
Nevertheless, the concerns of governments with economic growth both as
a means of securing material resources (i.e. taxes) for state activities and

sustaining the legitimacy of their rule and re-election generates a support


for, and promotion of, commodity relations. Furthermore, economic
growth advances the conditions of subjective well-being whereby
individual citizens become self-disciplined and committed to the
exchange relations that help to sustain such growth. This is not to argue
that self-discipline and need manipulation eradicate conflict and
resistance. There are always forces at work that undermine the commodi-

fication of relations even when the state is directly involved in reinforcing


them.
.

Still, these tensions and resistances are not guaranteed to undermine



.

commodity production; often, they can be turned to its advantage by


companies, advertisers and consumers. If not everybody can buy certain
goods, everybody can play with them in a ’symbolic’ way. Thus style and
consumption becomes an active process of play, imitation and distinction
.
in which organizations participate for purposes of expanding their
markets. Thus organizations produce commodities and symbols which
undermine accepted status orders and offer an ’equality of consumption’
> ..
to all. Obviously, this has material constraints that cannot be breached,

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,
...

as well as life-rhythm, qualities of memory, attention, motivational and


.

topical relevances are trained and moulded inside the new &dquo;founda-
.

tional&dquo; institution - that of the market’ (Bauman 1988: 165-166). What


.
is significant about consumer society is that it helps to create or reinforce
the problems (e.g. identity uncertainties and insecurities) that it alone -
.

through the promotion of material and symbolic goods for consumption


-

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

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230

study the specialists within organizations who have considerable impact


on the way that exchange-value, use-value and identity-values are
advanced and realized in terms of commodities in the market place.
Research also needs to be developed on the dramatic change in interna-
tional markets deriving not just from globalization issues but also as a
result of the radical shifts in the world political order since the decline of
communism. It would also be valuable to develop more detailed investi-
gations of the way in which organizations are able to turn radical change
and forms of resistance in society to advantage by developing commodi-
ties that feed into the alternative identities surrounding such opposition-
ary forces. Clearly green issues, feminism and youth culture responses to
conventional commodities are areas for research here.
Of course it is equally important that social theorists take seriously the
‘organizational’ dimension. In doing so, they will see that no matter how
’free-floating’ the signifiers, their production and reproduction is
generated through organized social relations. This, in turn, must lead to a
focus upon organizations. It is here where the rationalization of the
labour process and bureaucratic coordination has created a population of
experts concerned to generate consumption. The way in which existing
social relationships are addressed and reproduced by these people is at
the heart of post-modernism. It is therefore appropriate to develop a
post-modernist analysis of organizations and their members (see Cooper
and Burrell 1988; and Burrell 1988 for some discussion of such an
enterprise).
If the sociology of organization takes up the issue of consumption, it will
give meaning and focus to itself as a central part of social theorizing. For
Marx and Weber, organizations were central to their theory of society
because of what was happening in production. In no way do we wish to
jettison that insight, but what we would say is that in the current situa-
tion, we have to pay as much attention to consumption. This can be
linked to emerging trends in the study of organizations regarding the
managerial division of labour and the role of particular groups, but rather
than setting that argument within a framework of production, we need to
conceptualize the power effects of organizations in the sphere of con-
sumption. If this paper has convinced the reader of nothing more than
that, it will have achieved its purpose.

*
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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231

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