A central argument of this book is that market and firm structures and the organisation of production had a major impact on the management of labour. Market conditions provided either an incentive or a disincentive to particular labour strategies; corporate structures and managerial hierarchies either facilitated or obstructed the implementation of particular policies. The organisation of production, in part shaped by market and firm structures, but also chosen by employers, in turn promoted or constrained labour policies. In this chapter the nineteenth-century background of market conditions, corporate structure, and the organisation of production is examined. Within this context, the chapter then examines managerial decisions in the areas of work relations, employment relations, and industrial relations and shows how, for the most part, British employers pursued strategies of externalisation.

Markets and firms

During the course of the nineteenth century, markets grew in geographical scope, largely as a result of improvements in transportation and cost reductions. At the end of the century, some markets remained predominantly local in nature, for example, in building, in consumer durables such as clothing and furniture making, and in non-durables such as brewing and baking. Other markets were already national in scope, especially those in packaged consumer goods such as soap, biscuits, sugar confectionery, and cigarettes. Still other markets in which British firms operated, such as cotton, iron and steel, and shipbuilding, were more international in scope. In the late nineteenth century in most markets there was an increase in competition, and in particular manufacturers involved in international trade became aware of an intensification in foreign competition, especially from the US and Germany.