The greatest influence on UK management policies over the next few years will be the opening up of the Single European Market, which was inaugurated in January 1993. This has considerable implications for the British economy, particularly for the management of business and public sector organisations. Britain’s participation in the European Union (EU) means that its own laws (and customs) can, and will be, affected by EU laws, guidance, codes of practice and administrative decisions. Although individual countries will be permitted to retain, or develop, certain local practices (the notion of ‘subsidiarity’), the overall intention of the underlying legislation (the Treaty of Rome) is to work towards the harmonisation of business and economic practices between all the EU nations. In this situation, the key issue for all concerned is how to balance local (i.e. national) wishes with acceptance of EU-wide policies and practices, at a time when there will be increased competition in home markets as a direct result of the lifting of trade barriers within the Union.
Whereas in other parts of the world, regional co-operation is by means of trade agreements, the European model, as evidenced in the EU, is intended to achieve close political union internally, as well as to develop trade both internally and with the worldwide community. Already, in Europe, the laws of the EU take precedence over those of its members on certain issues affecting the management of enterprises (such as equal opportunities legislation). Under EU law, an Article is directly binding on member states, and a Directive requires a member to introduce its own legislation, whilst not being directly binding.
An example of an Article is Article 117 of the main Treaty, which aims to promote the harmonisation of improved living and working conditions for workers. Within the context of this binding legislation, discussions have particularly centred on the EU’s so -called ‘Social Charter’, which many UK business organisations object to on the grounds that it is too prescriptive and inflexible, and will lead to increased labour costs at a time when international competitors are reducing theirs. The fact is that, whilst there are several common problems faced by managers in the EU (e.g. encouraging greater job flexibility in production, managing employee relations in times of economic and technological change, achieving greater efficiency with smaller workforce and so on), the solution to them are quite varied, as each country follows its own preferred pattern of handing competitiveness, productivity, and employee relations.
The emphasis in the UK’s enterprise economy has been to break down large organisational structures in favour of smaller units with delegated powers, and to encourage individual as opposed to state initiatives and responsibility. Whilst some decentralisation of business and state enterprises has also taken place in many EU countries, there is nevertheless a greater emphasis on community affairs and a more regulated partnership between governments, employers and trade unions than in the United Kingdom. Thus there are several issues on which British and other EU opinions are likely to vary, and the so-called ‘social’ aspects of business and economic activities provide a case-in-point.