Non-production activities in UK manufacturing industry.
Date: 2012-11-29
Institutions: European Commission
Subjects: United Kingdom, industrial policy, labour market, regional disparity, regional economy, regional policy, secondary sector

COMMISSION  OF  THE  EUROPEAN  COMMUNITIES 

· - - - - - - - - - - ,  

studies.·· 

Non-production  activities  in  UK 
manufacturing  industry 

GIONAL  POLICY  SERIES  - 1977 

3 

The  objective  of the  present  study  is  to discover and delimit the character, 
functions,  organisation  and  tr~nds in  the non-production  (NP)  activities of 
the  manufacturing  sector  of  the  United Kingdom with a view to increasing 
understanding of the distribution and  location of these  activities. 

The  study  report  has  two  broad  divisions;  namely  a review of non-produc 
tion  activities  followed  by  an  attempt  to  explain  the  disparities  in  their 
regional  distribution. 

The main  results of the study are  as  follows: 

i) 

ii) 

iii) 

iv) 

NP  workers  as  a  proportion  of  the  total  employment trends  to de 
cline  outwards  from  London  and  within  regions  there  tend  to  be 
higher  levels  in  those  conurbations  that  are  major  regional  centres; 

industrial  structure  only  explains  a  small  part  of  the  excess  of NP 
workers  in  the  South  East,  but  is  a  more  substantial  factor  in  ex 
plaining  the  deficits  in  Yorkshire/Humberside,  and  the  East  and 
West  Midlands.  The  industrial  structure  of the  North,  North  West 
and Scotland  is  relatively  favourable  to NPs; 

regional  variations  in  the  size  and  nature  of single-region  corpora 
tions  are  a  factor  in  all  deficit  regions  and  are  of particular  impor 
tance  in  Scotland,  the  South  West,  West  Midlands  and  Yorkshire/ 
Humberside; 

the  general  effects of centralisation  within  muti-region  corporations 
are  of greatest  importance in  explaining the excess  NPs  in the South 
East and  the deficits in  the North, North West and Wales. 

The  report  concludes  that,  although  it is  clear  that  there  are  considerable 
regional  disparities  in  the  distribution  of NPs,  the  factors  involved are  not 
easily  amenable  to policy measures. 

The study is available in  English  only. 

COMMISSION  OF  THE  EUROPEAN  COMMUNITIES 

-· 

Non-production  activities  in  UK 

manufacturing  industry 
-----

A  report  by  the  School  of Social  Studies 
of  the  University  of  East  Anglia  (Norwich) 
to 
the  U.K.  Department  of  Industry 
and 
the  European  Economic  Community 

R.E.  Crum 
G.  Gudgin 

COLLECTION:-STUDIES: 
Regional  Policy  series  no.  3 .. 
Brussels,  November  1977 

·,;... 

©  Copyright ECSC- EEC- EAEC,  Brussels-Luxembourg, 1978 

Printed in  Luxembourg/Belgium 

The  Secretary  of State  for  Industry,  London,  1978 

Catalogue  number:  CB-NS-77-003-EN-C 

III 

I  N T  R 0  D U C T  I  0  N 

This  study  was  undertaken  at  the  initiative  of  the  U.K.  Deparment  of  Industry 

and  was  carried  out  by  the  School  of  Social  Studies  of  the  University  of  East 

Anglia  (Norwich).  It  was  jointly  financed  by  the  U.K.  Department  of  Industry 

and  the  Commission  of  the  European  Communities  within  the  framework  of 

Article  266  of  the  general  budget  of  the  Commission  ("Regional  studies  at  the 

request  of  the  Member  States"). 

* 

* 

* 

The  present  study  does  not  necessarily  reflect  the  views  of  the  Commission  of 

the  European  Communities  on  the  subject  matter  of  the  study  nor  does  it 

necessarily  anticipate  the  future  attitude  of  the  Commission  on  the  topic. 

v 

FOREWORD 

Ci)  This  report  stems  from  a  research  project  sponsored  by  the  UK 

Department  of  Industry  and  the  EEC  Commission  and  carried  out  at  the 
University  of  East  Anglia  (Norwich).  The  project's  terms  of  reference 
were  :  "The  discovery  and  delimitation  of  the  character,  functions, 
organisation  and  trends  in  the  non-manufacturing  activities  of  the 
manufacturing  sector  of  the  United  Kingdom  with  a  view  to  increasing 
understanding  of  the  distribution  and  Location  of  these  activities". 

Cii)  As  the  terms  of  reference  indicate  the  non-manufacturing  activities  of 

manufacturing  industry  are  an  are;  where  little  is  known  in  a  general 
sense. 
Individual  businessmen  are  well  acquainted  with  these 
activities  and  many  people  in  central  government,  Local  government  and 
the  academic  world  feel  that  they  have  a  basic  knowledge  of  them,  but 
when  it  comes  to  a  detailed  review  of  such  activities  by  industry, 
region  or  occupation  there  is  no  source  of  general  information  that  is 
commonly  available. 

(iii)  To  obtain  such  general  information  the  project  team  collected  a 

considerable  amount  of  unpublished  data  from  the  Censuses  of  Population 
and  Production,  Industrial  Training  Boards,  and  directories,  as  well  as 
carrying  out  four  separate  surveys  of  their  own.  The  report  therefore 
contains  many  tables  of  data  that  have  been  unavailable  hitherto. 
This  gives  it  a  rather  'statistical'  look,  but  few  of  the  details  of 
the  statistical  analysis  are  presented  here,  and  it  is  hoped  that  the 
report  can  be  understood  by  the  non-statistical  layman. 
In  addition, 
although  the  'explanation'  of  regional  disparities  in  non-production 
employment  is  the  ultimate  objective  of  the  report,  individual  chapters 
devote  considerable  attention  to  such  matters  as  the  factors  that 
determine  non-production  employment  in  industries,  at  branch  factories, 
within  head  offices,  and  within  corporations;  and  it  provides  new 
information  on  the  distribution  of  head  offices.  The  report  therefore 
includes  not  only  matters  that  are  of  interest  to  regional  economists 
and  planners,  or  economic  geographers,  but  also  in~Ludes  material  of 
relevance  to  business  and  management  economists  and  sociologists. 

Outline  of  the  report 

Civ)  Chapter  1  provides  a  general  review  of  non-manufacturing  activities  by 
industry  and  by  occupation,  for  1971,  with  a  Less  detailed  Look  at 
trends  in  these  activities  over  the  Last  fifty  years.  Chapter  2  then 
focusses  on  non-production  activities  at  a  regional  level,  discussing 
in  some  detail  the  regional  distribution  of  non-production  workers  by 
occupation.  The  main  objective  of  the  report  is  then  described  in 
Chapter  3,  which  considers  the  extent  to  which  the  regional  differences 
in  the  distribution  of  non-production  employment,  already  shown  in 
Chapter  2,  can  be  explained  in  terms  of  the  industrial  structure  of 
regions.  Some  reasons  for  industry  variations  in  the  average 
proportion  of  total  employment  taken  up  by  non-production  workers  are 
then  discussed  in  Chapter  4. 

VI 

Cv)  Chapter  5  attempts  to  account  for  the  regional  disparities  in  non 

production  workers  in  terms  of  three  components;  industrial  structure, 
and  single  and  multi-region  organisations.  The  accounting  process  is 
carried  out  using  data  from  the  Census  of  Production  and  shows  that 
the  most  important  factor  is  the  multi-region  organisation. 
It  is 
hypothesized  that  the  agglomeration  and  centralisation  of  non 
production  workers  in  such  organisations,  together  with  the  large 
number  of  corporate  head  offices  in  the  South  East,  is  a  major  reason 
for  the  excess  numbers  of  workers  in  manufacturing  industry  who  are 
employed  in  non-manufacturing  activities  in  the  South  East,  and  their 
relative  dearth  in  the  Development  Areas. 

Cvi)  Chapters  6,  7  and  8  are  devoted  to  an  extended  discussion  of  non 

production  workers  at  sites,  within  organisations  and  at  head  offices. 
This  forms  the  basic  material  for  Chapter  9,  which  commences  by 
extending  the  accounting  process  with  estimates  of  employment  in 
detached  corporate  head  offices  and  research  laboratories,  plus 
estimates  of  the  distribution  of  non-production  workers  within 
It  then  continues  by 
sub-corporate  multi-region  organisations. 
providing  reasons  for  the  location  of  corporate  head  offices  and 
research  laboratories  in  the  South  East.  Finally,  Chapter  10 
considers  some  general  implications  of  the  previous  chapters,  paying 
particular  attention  to  their  relevance  for  regional  policy,  and 
chapter  11  provides  a  summary  of  the  whole  report. 

The  special  surveys  undertaken  by  the  research  team 

Cvii)  Because  of  the  unknown  nature  of  the  subject,  the  research  team  had  to 

carry  out  surveys  of  their  own  to  establish  a  data-base  and  investigate 
the  factors  that  appear  to  determine  the  relative  numbers  of  non 
production  workers.  As  these  are  referred  to  throughout  the  text  they 
are  described  in  brief  here. 

(viii)  Site  Survey  :  This  was  a  large-scale  postal  questionnaire  organised 
by  Dr.  M.E.C.  Sant,  one  of  the  consultants  to  the  project,  and 
carried  out  during  the  autumn  of  1974. 
questionnaire  that  covered  a  variety  of  topics,  the  key  features 
being  that  it  was  sent  to  individual  production  sites,  used  a  sample 
that  matched  firms  that  had  recently  moved  with  an  equivalent  number 
on  non-movers,  and  asked  for  the  numbers  employed  in  a  specified  List 
of  ten  non-production  occupation  categories  at  each  site. 
resulted  in  over  1100  usable  responses. 

It  used  a  detailed 

It 

Cix)  Organisation  Survey  :  The  fundamental  feature  of  the  Organisation 

Survey  was  that  it  obtained  data  for  whole  corporations,  or  defined 
subsections  of  corporations,  that  operated  through  a  number  of 
production  sites  in  several  regions. 
Its  other  main  features  were  : 
Ci)  in  each  case  there  was  an  interview  with  a  senior  executive  about 
the  corporation's  structure  and  history,  and  Cii)  the  key  information 
sought  was  the  numbers  employed  at  each  site  in  a  specified  list  of 
20  non-manufacturing  activities  (functions  or  departments),  not 
occupations. 
1976  and  returns  for  over  450  sites  in  some  80  organisations  were 
received.  The  questionnaire  used  is  reproduced  as  Appendix  A. 

It  was  carried  out  over  the  period  October  1975  - May 

VII 

(x)  Head  Office  Survey  :  For  the  larger  corporations  this  survey  also 
incorporated  an  interview  as  well  as  a  questionnaire,  but  a  postal 
questionnaire  alone  was  used  for  smaller  corporations.  The 
questionnaire  was  unusual  in  that  it  did  not  specify  the  departments 
covered;  that  is,  the  respondents  were  asked  to  state  the  numbers 
employed  in  each  head  office  department,  using  their  own  nomenclature. 
It  was  carried  out  during  May  - July  1976  and  130  usable  returns  were 
received.  The  questionnaire  used  is  reproduced  as  Appendix  B. 

(xi)  Research  & Development  Survey  :  The  combination  of  interview  and 

postal  questionnaire  was  repeated  for  the  R.  & D.  Survey,  carried  out 
in  July- August  1976.  This  was  only  small  in  scale  and  resulted  in 
just  over  30  returns. 

The  terms  used 

<xii)  Although  efforts  have  been  made  to  remove  jargon  from  the  report  it 
does  use  a  number  of  words  in  particular  ways,  partly  because  it  is 
operating  in  a  new  field.  Usually  these  are  defined  when  first 
introduced,  and  they  are  often  redefined  later.  Those  most  commonly 
met  are  collected  here  for  reference. 

(xiii)  Employment  :  Total  employment  in  an  industry/region/corporation, 
etc.,  is  divided  into  the  two  categories  of  'production  workers', 
i.e.  those  directly  involved  with  production,  and  'non-production 
workers,  i.e.  those  not  directly  involved  with  production.  These  are 
abbreviated  successively  to  'P-workers'  and  'NP-workers',  and  'Ps' 
and  'NPs'.  Production  workers  are  occasionally  called  'operatives'. 
Official  statistics  are  often  collected  for  a  group  of  NP  occupations 
called  'administrative,  technical  and  clerical  workers',  usually 
abbreviated  to  'ATCs'. 
not  classed  as  ATCs.  ATCs  cover  a  more  restricted  range  of  occupations 
than  those  included  in  the  definition  of  NPs  normally  used  in  the 
report  (see  paragraph  5). 

'Non-ATCs'  refers  to  those  ~orkers  who  are 

Cxiv)  Standardised  employment  :  Since  large  sites,  corporations,  industries 

or  regions  employ  more  NPs  than  small  ones,  NP  employment  needs  to  be 
standardised  for  the  size  of  the  employing  unit.  This  is  usually 
achieved  by  expressing  it  as  a  percentage  of  total  employment  in  the 
unit,  and  calling  it  either  the  'NP  proportion',  or  'NP% 1
For  some 
of  the  statistical  work  it  was  preferable  to  use  the  slightly 
different  method  of  relating  the  number  of  non-production  workers  to 
the  number  of  production  workers,  using  for  this  purpose  the  ratio  of 
NPs  toPs,  expressed  as  the  'NP/P  ratio'. 

• 

<xv)  Sites  :  A site  is  a  place  where  some  of  a  firm's  employees  are 

Located.  A normal  production  site  may  be  called  a  factory,  branch, 
plant,  branch  factory  or  branch  plant. 
If  it  also  includes  a  head 
office  it  is  called  a  'non-detached  head  office',  or  'NDHO'.  A site 
that  is  a  head  office  without  any  production  facilities  also  being 
located  there  is  called  a  'detached  head  office'  or  'DHO',  and  in 
general  any  NP  activity  that  takes  place  away  from  a  production  site 
is  said  to  be 
except  in  its  technical  sense  (see  paragraphs  176/7). 

'detached'.  The  term  'establishment'  is  not  used 

VIII 

<xvi)  Corporations  :  Considerable  difficulty  was  experienced  because  of 
the  various  interpretations  that  may  be  placed  on  the  words 
'companies',  'enterprises',  and  'firms'. 
'corporation'  refers  to  the  entire  UK  operations  of  an  ultimate 
corporate  unit. 
operations  of  all  divisions,  subsidiaries,  subsidiaries  of 
subsidiaries,  branch  factories,  etc.,  are  included. 
that  the  corporation  is  not  owned  by  any  other  UK  corporation.  The 
definition  covers  the  following  situations,  among  others  : 

In  this  definition  the  word 

In  this  report  the  word 

'entire'  means  that  the 

'Ultimate'  means 

(i)  an  independent,  single-site,  company; 
(ii)  a  firm  with  a  corporate  NDHO  and  several  branch  factories; 

(iii)  a  company  with  a  corporate  DHO  that  controls  several 

subsidiary  companies,  each  of  which  may  have  its  own  NDHO 
and  branch  factories; 

Civ)  a  company  with  a  corporate  DHO  that  controls  several 

divisions,  each  of  which  may  have  a  divisional  DHO  and 
comprise  several  branch  factories; 

Cv)  a  company  with  a  corporate  DHO  that  controls  a  Large  number 
of  subsidiary  companies  that  are  grouped  into  a  smaller 
number  of  divisions. 

Corporations  are  divided  into  the  two  categories  'single-region'  and 
'multi-region',  according  to  whether  all  their  sites  are  located 
within  one  region  or  not. 

<xvii)  Organisations  : 

An 

'organisation'  is  either  a  corporation  or  a 

distinct  multi-site  sub-unit  of  a  corporation.  Examples  of  the 
Latter  are  a  major  subsidiary  company  with  several  branch  factories, 
a  division  of  branch  plants,  or  a  division  including  a  number  of 
subsidiary  companies.  Organisations  are  also  divided  into  'single 
region'  and  'multi-region'  categories. 

(xviii)  Ownership  :  Ownership  refers  to  the  nationality  of  the  corporation's 
ultimate  owners,  expressed  as  'UK-owned',  'foreign-owned',  etc. 
Ownership  presents  an  inescapable  problem  in  terms  of  the  definitions 
of  a  corporation  and  an  organisation  discussed  above.  The  entire  UK 
operations  of  a  company  that  is  under  foreign  ownership  is  a 
'corporation'  as  far  as  its  UK  operations  are  concerned,  but  it  is 
'organisation'  inasmuch  as  it  is  a  defined  multi-site  subsection 
an 
of  a  foreign  corporation's  activities.  Such  corporations  are 
usually  called  'subsidiaries  of  foreign  corporations'. 

Cxix)  Structure  :  A distinction  is  made  between  corporations  or 

organisations  that  operate  through  a  series  of  subsidiary  companies 
and  those  that  operate  through  a  number  of  branch  factories.  The 
former  are  called  'subsidiary-type',  the  latter  'branch-type'. 

(xx)  Industries,  regions  and  occupations  : 

Industries,  regions  and 

occupation~  are  defined  and  classified  according  to  the  Standard 
Industrial  classification  (1),  the  Standard  Regions  (2),  and  the 
Classification  of  Occupations  (3). 

In  one  or  two  cases  there  are 
---------
(1)  Standard  Industrial  Classification,  1968.  Central  Statistical  Office. 
(2)  c.f.  Abstract  of  Regional  Statistics,  1972,  Appendices  I  and  II. 

Central  Statistical  Office. 

(3)  Classification  of  Occupations,  1970.  Central  Statistical  Office. 

IX 

slight  variations  from  these  definitions,  particularly  ~n  the 
regional  analysis  of  head  offices  in  Chapter  8. 

Acknowledgements 

Cxxi)  The  number  of  responses  to  the  survey  carried  out  by  the  research 

team  gives  an  indication  of  the  very  Large  number  of  people  in 
manufacturing  industry  who  helped  us,  and  to  whom  we  owe  thanks. 
In  particular  we  are  indebted  to  those  who  were  interviewed  during 
the  surveys,  often  spending  two  hours  of  their  time  in  a  frank 
discussion  about  their  company.  Our  experience  has  led  us  to  believe 
that  the  more  efficient  and  successful  the  company,  the  more  likely 
it  was  to  respond  to  our  surveys,  and  the  more  senior  the  interviews, 
In  addition  we  received  considerable 
the  more  frank  the  discussion. 
assistance  from  staff  in  the  Census  of  Population,  Business  Statistics 
Office,  Scottish  Council  (Development  and  Industry),  Greater  London 
Council,  and  several  of  the  Industrial  Training  Boards,  in  the  form 
of  the  provision  and  interpretation  of  statistics.  Our  work  would 
have  been  impossible  without  this  assistance,  and  we  are  grateful  to 
them  for  the  speed  and  efficiency  with  which  they  provided  us  with 
data.  We  should  also  Like  to  thank  the  many  people  in  academic  life 
to  whom  we  have  spoken,  and  in  particular  Mr.  P.M.  Townroe  and 
Dr.  M.E.C.  Sant,  the  consultants  to  the  project,  who  not  only 
offered  advice  and  criticism  but  were  also  actively  involved  in  its 
initial  stages. 

(xxii)  The  considerable  amount  of  work  involved  in  the  research  project  was 
eased  by  the  expertise  and  industry  of  the  three  key  people  who 
helped  us.  Our  particular  thanks  go  to  Sue  Bailey,  our  research 
assistant,  who  processed,  programmed  and  analysed  the  considerable 
amount  of  data  that  we  acquired  and  provided  ideas  and  constructive 
criticism  that  make  their  impact  in  several  parts  of  the  report. 
Roger  Richards  carried  out  the  bulk  of  the  interviewing  involved,  and 
wrote  a  series  of  very  thorough  reports  on  firms.  He  also,  somewhat 
inadvertently,  provided  convincing  empirical  evidence  of  the 
difficulties  of  cross-country  travel  from  East  Anglia.  Elizabeth 
Eyre,  our  secretary,  bore  with  us  for  two  years,  typing,  arranging 
interviews  and  coding  data  with  complete  efficiency. 

Cxxiii)  Many  other  people  assisted  us  at  various  times  with  the  essential  but 

mundane  tasks  inseparable  from  any  project  of  this  nature  -
innumerable  versions  of  the  same  chapter,  searching  through 
directories,  coding  and  punching  data  etc.  Among  these  we  would  Like 
to  thank  Beverly  Thorpe,  Shirley  Clutten,  Anthea  Iverson  and 
Norman  Thrower.  Without  their  assistance  our  work  would  have  been 
impossible. 

typing 

R.E.  Crum 
G.  Gudgin 

CONTENTS 

Chapter  1 

Chapter  2 

Chapter  3 

Chapter  4 

Non-production  activities  in  UK  manufacturing 
industry  ••••••••••••••••••••••••••••••••••••••• 

The  regional  distribution  of  non-production 
workers  •••••••••••••••••••••••••••••••••••••••• 

Industrial  structure  as  a  determinant  of  regional 
disparities  in  non-production  workers  •••••••••• 

The  causes  of  industrial  variations  in  the 
relative  number  of  non-production  workers 

Chapter  5 

Accounting  for  regional  variations  in  NPs  •••••• 

Appendix  to 
Chapter  5 

Data  on  single-region  organisations  •••••••••••• 

Chapter  6 

Non-production  workers  at  individual  sites 

Chapter  7 

Chapter  8 

Non-production  workers  in  corporations  and 
organisations  •••••••••••••••••••••••••••••••••• 

The  role  of  corporate  head  offices  and  research 
Laboratories  ••••••••••••••••••••••••••••••••••• 

Chapter  9 

The  explanation  of  regional  disparities  in  NPs.. 

Chapter  10 

Implications  of  the  analysis  ••••••••••••••••••• 

Chapter  11 

Summary  •••••••••••••••••••••••••••••••••••••••• 

Appendix  A 

Questionnaire  used  in  the  Organisation  Survey  •. 

Appendix  B 

Questionnaire  used  in  the  Head  Office  Survey  ••• 

Page 

3 

15 

25 

39 

53 

65 

69 

85 

99 

121 

139 

147 

153 

155 

Appendix  c 

Charts  and  Diagrams  •••••••••••• •••••.• ••••• •• •• 

157 

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- 3 -

CHAPTER 

NON-PRODUCTION  ACTIVITIES  IN  UK  MANUFACTURING  INDUSTRY 

Introduction  :  the  activities  concerned 

1.  Although  the  objective  of  manufacturing  industry  is  the  production  of 
commodities  many  people  employed  in  manufacturing  are  not  directly 
involved  in  the  actual  production  process.  For  example,  secretaries, 
clerks,  salesmen,  drivers  and  research  scientists  may  be  employed  by  a 
company  that  is  producing  commodities  but  their  jobs  are  not  involved  with 
the  physical  process  of  production  and  they  may  not  work  in  a  building 
that  is  concerned  with  production. 
that  are  the  subject  of  this  report. 

In  is  these  'non-production'  workers 

2.  Non-production  workers  may  be  categorised  in  two  ways,  either  by  their 
occupations,  as  above,  or  by  the  activity  carried  out  by  the  department 
in  which  they  work,  such  as  the  finance,  marketing,  personnel  or  research 
and  development  departments  of  a  company.  Very  often  their  job  title 
describes  their  functional  activity  - marketing  manager,  personnel  clerk, 
warehouseman,  etc.  On  the  other  hand  some  occupations,  such  as 
secretaries,  typists,  clerks,  drivers  etc.,  may  be  found  in  a  wide  variety 
of  departments;  if  you  are  told  that  someone  is  a  secretary  you  will  not 
know,  without  further  questioning,  with  which  functional  activity  they 
are  associated. 

3.  In  the  United  Kingdom  there  are  no  official  statistics  of  employment  by 

function  and  the  first  chapters  of  this  report,  which  are  based  on 
official  statistics,  are  necessarily  restricted  to  an  occupational 
classification.  The  later  chapters,  which  are  about  individual  sites  and 
corporations  and  are  based  partly  on  the  surveys  carri€d  out  by  the 
research  project  staff,  are  concerned  largely  with  functional 
classifications. 

4.  The  main  source  of  employment  data  by  occupation  is  the  UK  Census  of 

Population,  1971.  However,  the  occupational  classification  available  from 
the  detailed  census  tables  is  too  refined  for  most  purposes  because  it 
includes  more  than  130  individual  non-production  occupations. 
report  these  detailed  occupations  have  been  amalgamated  into  the  28 
occupation  groups  listed  on  the  right-hand  side  of  Table  1.1.  These  in 
turn  are  further  amalgamated  into  the  5  major  occupational  categories 
given  on  the  Left-hand  side  of  Table  1.1. 

In  the 

-4-

Table  1.1  Occupational  classification  used  in  Chapters  1  - 5 (1) 

Managerial  & Professional  General  managers 

Sales  managers 
Personnel  managers 
Specialist  managers 

Clerical 

Scientific  & technical 

Typists/secretaries 
Clerks  & cashiers 
Communication  workers 
(telephonists> 

General  engineers 
Instructors/teachers 
Scientists 
Laboratory  technicians 

Sales  & distribution 

Warehousemen 
Transport  workers 

Service 

Cleaners 
Service  (canteen) 
Protection  (guards/ 

firemen) 

Other  professionals 
Company  secretaries 
Accountants 

Office  machine  operators 
Office  supervisors  & 

managers 

Computer  and  other 

technical  workers 

Methods  & planning 

engineers 

Draughtsmen 

Sales~en,  commercial 

tfavellers 

Retatl  sales  workers 

Property  maintenance  & 

ground  staff 

MediQal  & social  welfare 

workers 

Source  :  Census  of  Population,  1971. 

(1)  The  groups  are  based  on  the  detailed  occupational  classification  used  in 

the  Census,  which,  in  turn,  is  based  upon  the  Classification  of 
Occupations,  1970. 

5.  Throughout  the  report  the  total  numbers  employed  in  non-production 

activities  are  called  non-production  workers  and  are  referred  to  as  NPs, 
NP-workers  etc.  Production  workers  are  called  Ps,  P-workers  etc. 
However,  among  UK  official  statistics  only  the  Census  of  Population  can  be 
used  to  define  NPs  as  widely  as  in  Table  1.1.  The  other  two  main  official 
sources  of  data  on  non-production  activities,  the  Census  of  Production  and 
the  Department  of  Employment,  only  collect  figures  for  an  aggregate 
called  'administrative,  technical  and  clerical  workers'  (ATCs).  This 
corresponds  roughly  to  the  main  mana9erial  and  professional,  clerical, 
and  scientific  categories  of  Table  1.1,  plus  salesmen  and  commercial 
travellers.  So  NPs  include  more  occupations  than  ATCs,  the  difference 
between  them  being  service  workers,  such  as  canteen  staff  and  cleaners, 
plus  warehousemen  and  transport  workers.  ATCs  are  more  Like  'white-collar' 
workers  than  NPs. 

-5-

6.  In  general,  the  larger  the  industry,  region  or  corporation,  the  greater 
will  be  the  number  of  NPs  employed  in  it.  This  means  that  absolute 
numbers  are  not  a  particularly  convenient  statistic  to  use  for  analytic 
purposes  and  the  number  of  NPs  need  to  be  standardised  in  some  way,  so  as 
to  take  account  of  the  varying  size  of  industries,  regions  or  corporations. 
The  method  used  here  is  to  standardise  by  employment,  dividing  NP 
employment  by  total  employment  and  expressing  the  result  as  a  percentage. 
For  example,  in  the  case  of  a  particular  occupation  group  in  one  industry 
the  following  statistic  is  calculated  and  expressed  as  a  percentage  : 

NP .. 
1] 

P.  +  NP. 
J 
J 
=the  numbers  employed  in  NP  occupation  i  in  industry  j) 

the  total  number  of  production  workers  employed  in  industry  j) 

=  the  total  number  of  non-production  workers  employed  in 

industry  j) 

CNP .. 
lJ 

(  P. 
J 
CNP. 
J 

The  text  refers  to  such  percentages  as  1 NP  proportions•. 

The  importance  of  NP  workers  in  UK  manufacturing  industry 

7.  The  workers  involved  in  non-manufacturing  activities  are  now  an  important 

In  1971  NPs  comprised 

component  of  total  UK  manufacturing  employment. 
some  34.6  % of  total  employment  in  manufacturing  industry,  compared  with 
an  ATC  proportion  of  25.2  %.  This  means  that  in  1971  every  two 
production  workers  needed  rather  more  than  one  non-production  worker  to 
service,  support  and  organise  them,  obtain  the  orders,  or  sell  the 
products.  This  shows  a  much  greater  dependence  upon  non-production 
workers  than  in  the  earlier  years  of  this  century.  As  Figure  1.1.  shows, 
the  proportion  of  ATCs  has  been  increasing  steadily  over  the  last  SO  years, 
from  a  mere  10%  in  1924  to  nearly  28  % in  1975.  So,  in  1924  there  were 
almost  nine  non-ATC  workers  per  ATC;  now  the  figure  is  down  to  less  than 
three.  There  is  no  reason  to  believe  that  the  NP  proportion  has  been 
behaving  any  differently. 

8.  Figure  1.1  also  conceals  an  important  point. 

In  numerical  terms 

production  Cnon-ATC)  workers  increased  by  1.7  millions  between  1924  and 
the  early  1950s,  rising  from  4.8  million  to  6.5  million.  Since  then 
their  numbers  have  been  in  decline  and  are  now  down  to  some  5.2  million. 
On  the  other  hand  non-production  workers  CATCs)  increased  steadily  in 
numbers  right  until  1970,  from  half  a  million  in  the  early  1920s  to  2.2 
million  in  1970.  This  means  that  over  the  last  20  years  it  has  been 
employment  in  non-manufacturing  activities  that  has  been  the  growth 
sector  of  manufacturing  employment,  not  the  employment  of  those  involved 
in  direct  production. 

-6-

The  importance  of  NP  workers  in  individual  industries 

9.  The  proportion  of  NPs  in  the  total  employment  of  individual  industries 

can  vary  quite  considerably  from  the  34.6  % average  for  manufacturing 
industry  as  a  whole.  However,  the  proportions  are  crucially  dependent 
upon  how  widely  or  narrowly  the  definition  of  an  industry  is  drawn. 
Using  the  rather  broad  categories  of  Industrial  Orders  of  the  Standard 
Industrial  Classification  (1),  the  NP  pr~portion  (2)  in  1971  ranged  from 
50.9%  for  chemicals  and  allied  industries  to  21.8%  for  shipbuilding. 
On  the  basis  of  a  narrower  classification  of  industries,  the  Minimum 
List  Headings  (MLHs)  of  the  Standard  Industrial  Classification,  the  range 
of  NP  proportions  widens;  from  66.1  % for  the  printing  and  publishing  of 
periodicals,  down  to  10.8%  for  miscellaneous  wood  and  cork  manufactures. 
Even  the  MLHs  that  make  up  any  particular  Industrial  Order  may  show  a 
considerable  variation  in  their  NP  proportions,  although  on  the  whole  they 
tend  to  cluster  around  a  Level  that  is  common  to  that  Order.  This 
variability  makes  the  selection  and  definition  of  industries  of  crucial 
importance  for  the  analysis  and  interpretation  of  NP  proportions. 

10.  Even  though  the  NP  proportions  vary  quite  widely  by  industry  they  have 

behaved  similarly  in  that  they  have  all  been  increasing  over  time.  Figure 
1.2  shows  that  whatever  the  starting  level  of  the  NP  proportion  in  1951 
it  was  comfortably  exceeded  by  the  1971  level.  Moreover  on  the  whole  the 
ranking  of  industries  remained  much  the  same  over  the  period;  although 
individual  industries  may  have  overtaken  one  or  two  others  there  are  no 
Lines  striding  across  the  chart  indicating  a  massive  increase  in  the  NP 
proportion  for  one  industry.  On  the  contrary,  there  appears  to  have  been 
some  slight  reduction  in  the  variability  of  NP  proportions,  largely  due 
to  industries  at  the  Lower  end  catching  up  a  Little  with  those  with 
higher  proportions.  This  may  reflect  a  'law  of  diminishing  marginal 
substitution'  - when  you've  already  got  a  high  proportion  of  NPs,  it 
becomes  more  difficult  to  reduce  the  Ps  or  substitute  an  NP  for  a  P,  than 
when  you  have  a  low  proportion. 

The  distribution  of  NP  occupations  within  manufacturing  industry 

11.  To  give  some  idea  of  the  relative  importance  of  individual  NP  occupations 

Table  1.2  shows  the  numbers  employed  in  1971  for  most  of  the  standard  28 
occupation  groups  detailed  in  Table  1.1.  Clerks  and  cashiers  are  easily 
the  Largest  individual  occupation  group,  followed  by  general  managers, 
typists/secretaries,  and  warehousemen.  The  two  major  categories  of  more 
qualified  personnel,  the  scientific  group  and  the  managerial  group,  are 
of  roughly  equal  size,  but  even  when  taken  together  amount  to  Less  than 
the  clerical  group. 

(1)  Standard  Industrial  Classification,  1968.  Central  Statistical  Office. 

(2)  For  definition  of  the  terms  used  see  the  Foreword,  paragraphs  (xiii) 

(xx). 

- 7-

Table  1.2.  Numbers  employed  iri  non-production  occupations  in  manufacturing 

industry,  Great  Britain,  1971. 

Occupation  groups 
and  categories 

Numbers 
employed 

Percentage  of  total 
employment  in 
manufacturing  industry 

General  managers 
Sales  managers 
Personnel  managers 
Specialist  managers 
Other  professional  workers 
Accountants  & company  secretaries 
Total  :  Managerial  & professional 

Typists/secretaries 
Clerks  & cashiers 
Communication  workers  (telephonists) 
Office  machine  operators 
Office  supervisors  & managers 
Total  :  Clerical 

General  engineers 
Scientists 
Technicians 
Methods  & planning  engineers 
Instructors/teachers 
Draughtsmen 
Total  :  Scientific  & technical 

Warehousemen 
Transport  workers 
Salesmen  etc. 

Total  :  Sales  and  distribution 

Cleaners 
Service  workers  (canteen) 
Property  maintenance  & ground  staff 
Medical  & social  welfare  workers 
lTota l  :  Service 

264,720 
79,000 
12,680 
64,830 
16,750 
32,920 

470,900 

229,230 
623,280 
27,930 
68,740 
21,940 

971,120 

123,180 
52,520 
139,040 
42,020 
15,990 
102,730 

475,480 

240,680 
162,910 
169,380 

572,970 

56,740 
85,830 
116,500 
13,070 

272,140 

3.25 
0.97 
0.16 
0.80 
0.21 
0.40 

5.79 

2.82 
7.66 
0.34 
0.84 
0.27 

11.93 

1. 51 
0.65 
1. 71 
0.52 
0.20 
1.26 

5.85 

2.96 
2.00 
2.08 

7.04 

0.70 
1. OS 
1. 43 
0.16 

3.34 

I 

Workers  specific  to  certain  industries 

Total  :  Non-production  workers 

55,930 

2,818,540 

0.69 

34.64 

Total  employment  in  manufacturing  industry  8,135,790 

100.00 

Source  :  Census  of  Population,  1971. 

- 8-

In  the  early  1960s  the  three  main  differences  between  the 

12.  In  general  terms  the  distribution  of  NP  occupations  in  UK  manufacturing 
industry  is  not  dissimilar  to  that  of  other  industrialised  countries 
(Table  1.3). 
UK  and  the  other  industrialised  countries  were  that,  for  the  UK,  the 
proportion  of  service  workers  was  considerably  higher,  the  proportion  of 
sales  workers  somewhat  lower,  and  the  proportion  of  educationally 
qualified  professional  and  technical  workers  rather  Lower,  than  those 
Some  of  the  implications  of  these  differences  have 
of  other  countries. 
been  commented  upon  elsewhere  (1). 
In  Table  1.2  they  may  be  indicated  by 
the  relatively  small  numbers  in  such  specialised  occupations  as  ·sales  and 
personnel  managers,  and  scientists. 

Table  1.3 

International  comparisons  of  NP  occupations  in  manufacturing 
industry. 

per  cent  of  total  employment  in  manufacturing 

Occupations 

France 

Professional  &  technical  workers 
Admini st raters  &  managers 
Clerical  workers 
Sales  workers 
Service  workers 

1962 

5.5 
4.8 
9.1 
2.2 
1.5 

West 
Germany 

1960 

5.1 
2.2 
9.6 
2.3 
1.8 

TotaL 

23.1 

21.0 

Japan 

1960 

1. 8 
4.0 
11. 1 
3.1 
1. 1 

21.1 

United 
States 

U.K. 

1960 

1961 

7.4 
5.0 
12.1 
3.8 
1. 5 

5.6 
3.8 
11.5 
2.1 
2.5 

29.8 

25.5 

Adjusted  figures  *) 
Professional  & technical  workers 

2.7 

3.7 

1. 6 

I 

6.5 

3.0 

Source  :  M.  Zymelman  :  Productivity,  Skills  and  Education  in  Manufacturing 

Industries  in  "Planning  for  Advanced  Skills  and  Technologies", 
Industrial  Planning  and  Programming  Series  No.  3  United  Nations,  1969. 

*)  These  figures  have  been  'adjusted'  for  Levels  of  education.  That  is,  if 
people  claimed  to  be  professional  and  technical  workers  but  Lacked  the 
necessary  educational  qualifications  they  have  not  been  included. 

-

(1)  e.g.  Chapter  7  of  "Britains  Economic  Prospects"  ed.  R.E.  Caves. 

Allen  & Unwin  Ltd.  1968. 

-9-

NP  occupations  within  individual  industries 

13.  Differences  in  the  proportion  of  particular  NP  occupation  groups  are  the 

main  reason  for  variations  in  overall  NP  proportions  in  individual 
industries  (Table  1.4).  For  industries  such  as  food  and  drink,  sales 
and  distribution  workers  are  of  considerable  importance  and  this  helps  to 
explain  the  overall  NP  proportion. 
In  the  case  of  coal  and  oil  products, 
chemicals,  and  the  engineering  and  vehicle  industries,  scientific  and 
technical  workers  are  well  represented.  On  the  other  hand,  the  scientific 
occupations  are  conspicuously  absent  from  Leather  and  fur,  clothing, 
footwear,and  timber  and  furniture. 

14.  The  Last  row  of  Table  1.4  provides  a  summary  statistic,  the  coefficient 
of  variation  (1),  to  show  the  extent  to  which  occupation  categories  vary 
between  industries;  the  Larger  the  coefficient  of  variation,  the  greater 
the  variability  of  the  NP  occupation  proportions  between  industries.  Of 
the  five  occupation  categories,  managers  and  professional  workers,  and 
clerical  workers,  show  the  least  variation  between  industries,  while 
scientific  and  technical  workers  are  the  category  with  the  greatest 
variation.  The  variation  in  the  proportions  of  the  sales  and  distribution 
category  is  crucially  affected  by  the  very  Large  proportions  found  in  the 
food  and  drink  industries.  Without  these  two  industries  the  coefficient 
of  variation  is  reduced  to  0.26,  and  sales  and  distribution  workers  have 
as  stable  a  proportion  as  managers  or  clerical  workers.  Reference  to 
more  detailed  occupation  x  industry  tables  shows  that  the  major  cause  of 
the  Large  proportion  of  distribution  workers  in  the  food  industry  is  the 
high  proportion  of  salesmen  (7.3  %)  and,  to  a  much  less  extent,  transport 
workers  (4.5  %).  On  the  other  hand  it  is  mainly  the  transport  workers 
(14.1  %)  who  account  for  the  very  high  proportion  of  NPs  in  the  drink 
industry. 

Changes  in  the  importance  of  NP  occupations  over  time 

15.  Figures  1.1  and  1.2  showed  that  NP  proportions  have  been  increasing 

steadily  for  at  Least  twenty  years,  both  in  individual  industries  and  for 
manufacturing  industry  as  a  whole.  Assessing  the  extent  to  which  this  is 
also  true  for  individual  occupation  categories  is  difficult  because  it 
demands  consistency  in  the  definitions  of  both  industries  and  occupation 
categories.  However,  Table  1.5  seems  to  show  that  although  all  the 
occupation  categories  have  been  increasing  in  importance  over  the  time 
periods  considered,  only  in  the  case  of  professional  staff  can  it  be  said 
that  the  growth  in  the  NP  proportion  remains  strong  in  recent  years.  The 
NP  proportions  of  managers  and  clerical  staff  appear  to  have  slowed  down 
their  growth  rate  in  recent  years,  particularly  so  in  the  case  of  clerical 
staff.  The  NP  proportion  of  road  goods  vehicle  drivers  has  almost 
stabilised,  and  those  of  warehousemen  and  storekeepers,  and  sales  staff, 
appear  to  have  fallen  off  in  the  later  five  or  ten  years. 

(1)  Defined  as  the  ratio  of  the  standard  deviation  of  a  set  of  numbers  to 

its  mean. 

- 10-

Table  1.4  Numbers  employed  in  NP  occupations  by  industry 

GB  manufacturing  industry,  1971 

Industry 

Managerial 
& 
professional 

Clerical 

Scientific 
& 

technical  d i s t r i but ion 

Sales 
& 

. 

Service 

Total  NPs( 1) 

Percentage  of  total  industry  employment 

Nos. 

Food 

Drink 

Tobacco 

Coal  &  oil  products 

Chemicals 

Ferrous  metal  manuf. 

Non-ferrous  metal  manuf. 

Mechanical  engineering 

Instrument  engineering 

Electrical  engineering 

Shipbuilding 

Vehicles 

Metal  goods  n.e.s. 

Textiles 

Leather,  fur 

Clothing 

Footwear 
Bricks,  pottery 1  etc. 
Timber  &  furniture 

Paper,  printing,  publ. 

Other  manufacturing 

5.91 

7.80 

4.46 

7.67 

8.20 

3.66 

5.83 

6.62 

6.78 

5.48 

2.89 

3.56 

6.08 

5.27 

7.32 

4.78 

3.81 

5. 71 

6.22 

7.24 

7.12 

11.21 

16.07 

18.64 

15.24 

16.39 

10.42 

11.44 

13.24 

15.09 

13.69 

6.74 

11.33 

10.68 

8.38 

7.65 

6.41 

7.54 

10.85 

8.96 

16.88 

11.25 

2.47 

2.51 

4.73 

11.02 

12.49 

5.18 

5.58 

8. 71 

9.79 

11.65 

6.27 

8.62 

3.47 

2.25 

0.92 

0.47 

0.94 

3.67 

0.98 

1.85 

3.47 

15.14 

22.35 

7.98 

8.31 

9.77 

4.84 

5.13 

6.07 

5.86 

5.34 

3.51 

5.48 

5.48 

5.80 

5.31 

4.08 

4.52 

8.27 

6.27 

8.18 

6.83 

3.89  38.7 

216050 

6.38  55.1 

5.48  41.3 

6.32  48.6 

79190 

15280 

28630 

4.97  52.3 

239740 

5.12  29.2 

122100 

4.08  32.0 

42630 

2.85  37.5 

422220 

2.18  39.9 

58010 

2.96  39.3 

331710 

3.26  22.7 

40880 

2.69  31.7 

250360 

2.66  28.4 

166260 

3.22  25.1 

148610 

2.03  23.2 

12260 

2.20  23.5 

1.67  18.5 

88011] 

17721] 

6.44  35.0 

10692:J 

2.37  25.0 

75530 

2.69  41.5 

254200 

2.80  31.5 

102230 

Total  manufacturing 

5.79 

11.93 

5.85 

7.04 

3.34  34.6  2818540 

Coefficient  of  variation 

0.25 

0.29 

0.72 

0.55 

0.40 

0.28 

0.80 

Source  :  Census  of  Population,  1971. 

(1)  The  total  figures  include  those  'specific  to  particular  industries',  mainly  journalists 

and  pressers  (in  the  clothing  industry). 

-11-

Table  1.5  Trends  in  certain  occupations  in  GB  manufacturing  industry, 

1921  - 1971 

Occupation 

groups 

1921  1931  1951  1961  1966  1971 

in  thousands 
1971 

Percent.  of  total  employment  Nos.  employed 

Managers 
Professional  staff 
(incl.  scientists) 
Clerical  & secretarial  staff 
Warehousemen  & storekeepers 
Road  goods  vehicles  drivers 
Sales  staff 

NIA  NIA  2.7  2.4  2.6  3.2 
N/A  N/A  3.2  5.5  6.1  7.1 
4.8  5.6  9.2  11.0  11.3  11.6 
N/A  N/A  2.4  3.2  3.3  3.0 
N/A  N/A  1.2  1.5  1.6  1.7 
N/A  N/A  1. 8  2. 1  2.3  2.1 

264.7 

574.4 

943.5 
240.7 
135.4 
169.4 

Source  :  Censuses  of  Population  for  1951,  1961,  1966  and  1971. 

Manpower  Studies  No.  7  :  Growth  in  Office  Employment,  Department 
of  Employment. 

N.B.  There  are  differences  both  in  the  definition  of  occupations  and  the 

scope  of  manufacturing  industry  between  any  pair  of  dates. 

16.  Data  problems  preclude  a  detailed  discussion  of  changes  in  the  relative 

importance  of  NP  occupation  groups  in  individual  industries  over  time, 
but  work  carried  out  both  on  Census  of  Population  data  and  the  Department 
of  Employment  annual  enquiry  into  occupations  in  the  engineering 
industries  (1)  tend  to  show  that  the  general  trends  of  Table  1.5  are  also 
true  for  any  particular  industry.  There  are  also  some  indications  of  a 
general  narrowing  of  the  range  of  NP  proportions  between  industries,  due 
mainly  to  industries  with  high  proportions  of  NPs  redu~ing,  or  slowing 
down  the  growth  in,  the  proportion  of  employment  accoL,nted  for  by  the 
clerical  and  secretarial  category,  in  addition  to  the  reductions  in  the 
relative  importance  of  warehousemen  and  storekeepers  that  are  common  to 
most  industries.  Moreover,  for  engineering  industries  it  appears  that 
the  proportional  importance  of  draughtsmen  is  also  declining. 
possible  that  all  these  trends  are  partly  attributable  to  the  diffusion 
of  computers,  starting  with  their  introduction  in  industries  of  a 
scientific  nature  dominated  by  Large  companies. 

It  is 

The  relationship  between  NPs,  Ps,  output  and  capital 

17.  There  are  some  signs  in  Figures  1.1  and  1.2,  plus  Table  1.5,  that  although 

the  overall  NP  proportion  in  manufacturing  industry  is  still  increasing, 
its  rate  of  increase  has  declined  in  recent  years  so  that  it  appears  to 
be  approaching  some  level  of  stability.  On  the  other  hand,  since  some 
individual  industry  NP  proportions  are  at  present  double  the  overall 
manufacturing  average  of  34.6  %,  and  treble  those  of  other  industries, 
there  is  clearly  scope  for  further  increase  in  the  overall  proportion. 

(1)  Department  of  Employment  Gazettes  :March  or  April  issues  of 

recent  years. 

- 12-

18.  Trying  to  assess  whether  the  overall  NP  proportion  is  stabilising  in  the 

short-term  is  difficult  because  it  depends  on  the  numbers  of  P-workers, 
and  the  two  different  types  of  workers  have  been  treated  rather 
differently  by  industry  in  the  past.  Economic  texts  often  claim  that 
•management•  (to  which  might  be  added  scientists,  professional  staff  and 
clerical  staff)  is  treated  as  a  fixed  cost,  whereas  production  workers 
are  a  variable  cost. 
It  follows  that  if  for  some  reason  output  falls, 
Ps  may  be  made  redundant  fairly  quickly,  but  NPs  retained  until  an 
upswing  gets  under  way. 
increased  during  periods  of  Low  output  and  been  Low  during  periods  of 
boom. 

In  the  past  the  NP  proportion  has,  therefore, 

19.  This  is  shown  in  Figure  1.3.  The  scales  in  this  chart  have  been  adjusted 
to  make  the  Lines  come  close  together  and  the  direct  relationship  between 
the  ATC  proportion  and  output  is  immediately  apparent.  However,  the 
early  period,  1948-1958  doesn't  fit  all  that  well,  and  something  also 
seems  to  have  happened  during  the  most  recent  years.  Statistical  analysis 
based  on  the  simple  relationship  between  the  ATC  proportion  and  output 
over  the  whole  period  shows  that  the  ATC  proportion  in  1972-74  was  Lower 
by  some  0.6  - 0.9  percentage  points  than  might  have  been  expected  on  the 
basis  of  past  experience. 

20.  A more  sophisticated  approach  throws  some  Light  on  the  way  in  which  the 

relationships  between  ATCs,  non-ATCs  and  output  have  altered  over  the 
period  1959-73.  Generally  speaking  one  must  expect  the  numbers  of 
production  workers  to  be  related  to  the  Level  of  output,  so  that  changes 
in  output  Lead  to  consequential  changes  in  their  numbers,  but  these 
changes  will  not  be  one-for-one,  nor  will  they  occur  all  at  once. 
output  increases  by  10  % there  is  no  reason  to  expect  the  numbers  of 
production  workers  to  increase  by  10%  because  technological  change  and 
increasing  investment  should  increase  their  productivity,  measured  by 
output  per  P-worker. 

If 

21.  From  the  Left-hand  half  of  Figure  1.4  it  can  be  seen  that  the  productivity 
of  production  workers  did  not  increase  at  a  constant  rate  over  the  five 
business  cycles  that  comprise  the  period  1951-73. 
cycles  output  grew  at  about  3  % per  annum  but  during  the  first  two  cycles 
this  growth  in  output  was  accompanied  by  small  increases  in  the  numbers  of 
production  workers,  whereas  for  the  Last  three  cycles  the  increased  output 
was  accompanied  by  successively  Larger  reductions  in  the  number  of  non 
ATCs.  So  production-worker  productivity  increased  during  each  cycle  and 
has  accelerated  over  the  Last  twenty  years. 

In  each  of  the  five 

22.  The  relationship  between  NPs  and  output  is  much  weaker  than  that  between 
Ps  and  output.  Firstly,  athough  some  non-manufacturing  activities,  such 
as  quality  control,  wage  payments,  transport  etc.,  are  fairly  tightly 
tied  to  output,  quite  a  number  of  NP  activities,  such  as  sales  marketin~1, 
R & D,  company  secretaries  etc.,  are  not.  Changes  in  output  could  not  be 
expected  to  alter  the  numbers  employed  in  the  Latter  group  to  any  great 
extent.  Secor .... ;Ly,  a  high  proportion  of  NP  workers  have  •staff'  status 
and  possess  particular  skills,  so  that  in  the  past  they  were  retained  in 
a  downswing  and  not  Laid  off,  unless  the  outlook  was  very  grim  and  the 
financial  situation  extremely  stringent.  Finally,  the  demand  for  some 
NPs  may  depend  upon  changes  in  government  Legislation  or  practice,  such 
as  the  introduction  of  tachometers  of  the  Health  and  Safety  at  Work  Act; 

- 13-

new  Legislation  on  pensions,  credit  control  or  drivers  hours;  or  the 
operations  of  the  Price  Commission.  All  these  recent  events  lead  to 
increased  NP  employment  (1).  The  total  impact  of  all  these  factors  is 
such  that  one  would  not  expect  to  find  a  particularly  strong  correlation 
between  changes  in  the  number  of  NPs  and  changes  in  output. 

23.  In  addition,  new  technology  and  additions  to  the  stock  of  capital  have 
different  effects  on  NPs  compared  with  Ps.  For  Ps  the  effect  of  new 
capital  is  almost  always  to  increase  in  some  way  their  productivity, 
measured  as  output  per  production  worker,  but  fo~ NPs  such  capital  may 
mean  only  an  increase  in  the  output  to  sell,  or  more  buildings  to 
maintain.  The  effect  of  new  capital  applied  to  Ps  is  therefore  to  add  to 
the  demand  for  NPs.  When  new  capital  is  applied  directly  to  NP  activities 
it  may  be  possible  to  reduce  their  numbers,  but  it  may  also  generate  new 
demands  for  their  services,  just  as  the  construction  of  a  new  motorway 
generates  additional  traffic.  For  example,  the  invention  of  the  telephone 
or  typewriter  generates  additional  communication  or  discussion;  the 
introduction  of  the  pocket  calculator  or  computer  increases  the  quantity 
of  statistical  analysis  performed.  There  is  therefore  no  a  priori  reason 
to  expect  aggregate  investment  to  have  a  marked  effect  on  the  productivity 
of  NPs,  measured  by  output  per  NP-worker. 

24.  The  right-hand  half  of  Figure  1.4  shows  that  NP  productivity  accelerated 

markedly  over  the  period  1951-73. 
In  the  first  cycle  NPs  increased  in 
numbers  by  nearly  5  % per  annum  for  a  3  % per  annum  growth  in  output; 
that  is,  their  productivity  declined.  For  the  three  middle  periods,  with 
a  similar  output  growth,  their  numbers  only  increased  by  2- 2  1/2%  per 
annum,  implying  a  small  increase  in  productivity.  Yet  for  the  most 
recent  business  cycle  of  1969-73  their  numbers  actually  declined  although 
output  grew  at  an  average  rate  of  3  % per  annum,  so  that  their  productivity 
increased  by  more  than  3  % per  annum.  Over  the  whole  period  1951-73  the 
growth  rate  in  the  productivity  of  ATCs  increased  from  -2  1/2  % per  annum 
to  just  over  3  % per  annum. 

25.  The  relatively  Low  ATC  proportion  in  1972-74,  remarkej  on  in  paragraph  19, 
can  therefore  be  interpreted  as  the  result  of  a  mark~d  increase  in  NP 
productivity  compared  with  production-worker  productivity,  although  the 
rate  of  increase  in  NP  productivity  still  remained  below  that  of  P-workers. 
This  marked  increase  may  have  been  due  to  the  increased  use  of  computers 
having  a  delayed  effect  on  employment  (2),  or  to  a  change  in  employers 
attitudes  towards  NPs. 
In  any  case  it  is  clear  that  the  relationship 
between  NPs  and  Ps  has  been  changing  in  the  1970s  and  although  one  must 
expect  the  NP  proportion  to  continue  to  rise  in  the  future,  it  is  likely 
to  do  so  more  slowly  than  has  been  the  case  over  the  Last  twenty  years. 

(1)  For  example,  see  page  58  of  "The  effects  of  the  price  code"  by 
R.  Evely  in  National  Institute  Economic  Review,  August  1976. 

(2)  It  is  generally  thought  that  the  introduction  of  computers  increases 
employment  initially  and  may  only  Lead  to  reductions  in  employment 
after  a  delay  of  several  years.  See  P.  Stoneman,  "The  effect  of 
computers  on  the  demand  for  Labour",  Economic  Journal,  September  1975. 

- 14-

Summary 

26.  Employment  in  non-manufacturing  activities  in  individual  manufacturing 

Individual  industries  vary  in  their 

industries  has  been  increasing  in  proportional  i~portance  for  most  of 
this  century  and  it  now  accounts  for  over  one  third  of  total  employment 
in  manufacturing  industry. 
dependence  on  NPs,  those  of  a  scientific  or  technical  nature,  or  those 
dependent  upon  sales,  transport  and  distribution  workers,  being  more 
Likely  to  have  high  NP  proportions.  The  increase  in  NP  proportions,  and 
the  recent  slowing  down  in  their  rate  of  increase,  may  be  due  to  a  more 
rapid  increase  in  the  growth  rate  of  NP  productivity  in  the  post-war 
period,  compared  with  the  growth  rate  of  production  workers  productivity, 
although  the  growth  rate  of  NP  productivity  remains  below  that  of 
production  workers.  A major  reason  for  the  recent  increase  in  the  growth 
rate  of  NP  productivity  may  be  the  introduction  of  computers,  and  it  is 
this  that  may  be  responsible  for  a  tendency  towards  stabilisation  in  the 
proportion  of  total  employment  represented  by  clerical  and  secretarial 
workers,  and  reductions  in  the  proportions  accounted  for  by  warehousemen 
and  storekeepers,and  draughtsmen. 

- 15-

CHAPTER  2 

THE  REGIONAL  DISTRIBUTION  OF  NON-PRODUCTION  WORKERS 

27.  The  main  objective  of  this  report  is  the  description  of  the  regional 
distribution  of  non-manufacturing  activities  in  the  United  Kingdom 
together  with  an  explanation  of  that  distribution.  The  first  part  of  this 
objective  is  carried  out  in  this  chapter,  the  rest  of  the  report  serving 
as  an  attempt  at  the  second  part. 

General  features  of  the  regional  distribution  of  NPs  in  1971 

28.  The  regional  distribution  of  non-production  workers  is  summarised  in 

Table  2.1,  which,  like  Tables  1.2  and  1.4,  is  based  upon  the  UK  Census  of 
Population,  1971,  and  uses  the  occupational  categories  common  to  those 
tables.  The  areas  used  in  Table  2  and  throughout  this  report  are  the 
Standard  Regions  of  the  United  Kingdom  or  parts  thereof  (1).  Sometimes 
regions  are  divided  into  their  conurbations  and  the  remainder  of  the 
region. 
In  the  case  of  the  South  East  the  latter  is  divided  into  two 
areas.  Northern  Ireland  is  excluded  throughout  because  the  detailed 
tables  of  both  the  Census  of  Population  and  the  Census  of  Production  are 
restricted  to  Great  Britain. 

29.  Care  must  be  taken  in  the  interpretation  of  Table  2.1.  NP  proportions  (2) 

vary  considerably  between  industries  (Table  1.4  and  paragraph  13)  and  it 
is  common  knowledge  that  individual  industries  are  concentrated  in 
particular  areas  of  the  country.  For  example,  textiles  are  important  in 
the  North  West  and  Yorkshire  and  Humberside,  engineering  and  metal  goods 
in  the  West  Midlands,  shipbuilding  on  Tyneside  etc.  Consequently,  the 
industrial  composition  of  each  area  plays  a  considerable  role  in 
determining  the  regional  proportions  of  NPs. 

30.  Nevertheless  it  is  unlikely  that  industrial  composition  can  provide  an 

explanation  for  the  dominant  feature  of  the  table  -
the  NP  proportion  in  the  Greater  London  area  (45.7  %)  and  the  Outer 
Metropolitan  Area  COMA)  (41.9  %)  exceeds  that  for  all  other  regions. 
Without  these  two  regions  the  average  regional  NP  proportion  is  31.85% 
<with  a  low  coefficient  of  variation  of  0.07).  Thus  the  NP  proportion  in 
the  Greater  London  area  is  almost  half  as  much  again  as  that  for  the  rest 
of  the  country  and,  excluding  the  Greater  London  area  and  the  OMA,  there 
is  relatively  little  variation  between  the  overall  NP  proportions  in  the 
other  parts  of  the  country. 

the  extent  to  which 

31.  There  are  two  other  main  features  of  Table  2.1.  Firstly,  the  overall 

dominance  of  London  is  also  indicated  by  the  way  NP  proportions  tend  to 
decline  with  distance  from  Greater  London.  After  the  OMA  the  areas  with 
the  next  highest  NP  proportions  are  those  lying  closest  to  London.  These 
areas  (Other  South  East,  South  West  and  East  Anglia)  each  have  an  NP 
proportion  of  over  33  %,  close  to  the  national  average.  Beyond  the 

(1)  c.f.  Abstract  of  Regional  Statistics,  1972,  Appendices  I  and  II. 

Central  Statistical  Office. 

(2)  For  definitions  of  the  terms  used  see  the  Foreword,  paragraphs 

Cxiii)  - Cxx). 

- 16  .... 

Table  2.1  Numbers  employed  in  NP  occupations  by  area 

GB  manufacturing  industry,  1971 

Area 

Managerial 
& 
professional 

Clerical 

Scientific 
& 

Sales 
& 

technical  di st ri buti on 

Service 

Total  NPs  (1) 

Percentage  of  total  employment  in 
manufacturing  industry 

Nos. 

Tynes ide 

conurbation 

Other  North 
w.  Yorkshire 
conurbation 

Other  Yorkshire 
&  Humberside 

Merseyside 

conurbation 

S.E.  Lanes. 

conurbation 

Other  North  West 

East  Midlands 

Birmingham 

conurbation 

Other  West  Midlands 

East  Ang l ia 

Greater  London 

Outer  Metropolitan 

Area 

Other  South  East 

South  West 

Wales 

Clydeside 

conurbation 

Other  Scotland 

Great  Britain 

Coefficient  of 

variation  :  all 

regions 

Coefficient  of 

variation  :  all 
regions  other  than 
Greater  London  and 
Outer  Metropolitan 
Area 

4.30 

3.85 

5.60 

4.71 

4.85 

5.63 

4.70 

5.01 

5. 51 

4.97 

5.79 

9.27 

7.13 

6.22 

5.48 

3.84 

4.59 

4.20 

5.79 

10.78 

8.99 

5.64 

5.63 

6.63 

5.96 

3.77  32.0 

3.84  28.9 

4445[) 

9306[) 

10.24 

3.45 

7.05 

3.22  30.3 

109820 

10.62 

4. 51 

6.94 

3.94  31.1 

136760 

11.20 

4.96 

6.75 

3.71  31.8 

59770 

11.27 

9.79 

10.33 

11.22 

11.05 

11.82 

5.51 

6.09 

5.03 

4.85 

6.27 

5.20 

17.28 

6.27 

14.59 

12.18 

I  11.62 
9.15 

11.82 

9.39 

9.09 

6.82 

7.20 

4.96 

5.27 

4.31 

11.93 

5.85 

6.93 

6.11 

6.64 

6.35 

6.60 

7.48 

7.92 

7.39 

7.85 

7. 77 

6.49 

7.55 

7.10 

7.04 

3.57  33.7 

162941] 

3.63  30.7 

164181) 

2.90  30.4 

184061] 

3.27  31.4 

200590 

3.18  32.3 

154020 

2.94  33.8 

68090 

3.23  45.7 

499950 

3.18  41.9 

313370 

2. 74  36.5 

165030 

3.03  35.6 

149760 

4.02  28.9 

97500 

3.66  33.7 

95460 

3.50  29.2 

119730 

3.34  34.6  2818540 

0.23 

0.17 

0.21 

0.08 

0.11 

0.13 

0.64 

0.13 

0.09 

0.17 

0.08 

0.11 

0.07 

0.35 

Source  :  Census  of  Population,  1971. 
( 1)  Total  figures  include  'those  specific  to  particular  industries•,  mainly  journalists  and 

pressers  Cin  the  clothing  industry). 

- 17-

southern  areas  the  other  regions  (except  Wales)  all  have  NP  proportions  of 
32  %,  some  three  percentage  points  below  the  national  average.  Wales, 
Other  North  and  Other  Scotland  have  the  lowest  proportions  of  all,  around 
29  %. 
In  this  respect  NP  proportions  share  a  tendency  that  is  repeated  by 
a  wide  variety  of  other  indicators  of  economic  performance  or  welfare. 

32.  A further  systematic  element  in  the  disparities  in  NP  proportions  lies  in 
the  differences  between  conurbations  and  non-conurbations.  For  the  three 
occupation  categories  that  largely  make  up  ATC  employment  (1)  the  major 
conurbation  in  each  region  (2)  has  on  average  an  ATC  proportion  two 
percentage  points  higher  than  the  non-conurbations.  This  substantiates 
the  general  hypothesis  that  administrative  and  distributive  functions 
gravitate  to  major  regional  or  national  centres  for  ease  of  communications 
and  for  the  contact  linkages  with  business  services,  government  departments 
and  other  organisations  which  are  also  concentrated  there  (3). 

33.  Birmingham  occupies  an  anomalous  position  in  this  respect  which  fits  its 

It  seems  that  Birmingham  fails  to  act  as  a  regional  focus  to  the 

known  tendency  for  service  employment  generally  (outside  manufacturing) 
to  fall  below  the  normal  relationship  between  service  employment  and  city 
size. 
same  extent  as  other  major  cities.  West  Yorkshire,  as  will  be  seen  later, 
reverts  to  the  normal  situation  of  having  more  NPs  than  its  surrounding 
hinterland  after  allowance  is  made  for  its  unfavourable  industrial 
structure. 

Changes  in  regional  disparities  over  time 

34.  Although  data  for  the  same  regions  and  occupations  as  those  in  Table  2.1 

is  not  available  over  time,  Table  2.2  shows  that  over  the  period  1963-1971 
ATC  proportions  have  increased  in  all  regions.  But,  unlike  the  experience 
of  industries  over  time  pointed  out  in  paragraph  8,  those  regions  that 
started  out  with  a  high  proportion  of  ATCS  in  1963  seem  to  have  increased 
their  lead.  This  is  particularly  the  case  for  the  South  East  and  the 
South  West,  as  can  be  seen  in  Figure  2.1.  Further  investigation  shows 
that  these  changes  have  occurred  despite  varied  experience  with  growth  in 
the  actual  numbers  of  ATCs  and  it  seems  probable  that  the  existing 
disparities  in  regional  ATC  or  NP  proportions  have  been  increasing  for  at 
least  the  last  decade. 
have  been  pulling  further  ahead,  whilst  the  North  and  West  Midlands  have 
dropped  even  further  behind. 

In  particular,  the  South  East  and  South  West 

(1)  Managerial  and  professional,  clerical,  and  scientific  and  technical 

workers.  c.f.  paragraph  5  and  Table  1.1. 

(2)  Taking  the  South  East  Lancashire  conurbation  (Manchester)  to  be  the 

relevant  conurbation  for  the  North  West  and  counting  Merseyside  as  a 
non-conurbation. 

(3)  Goddard  J.B.  (1973)  Office  Location  and  Linkages.  A study  of 

Communications  and  Spatial  Patterns  in  Central  London.  Progress  in 
Planning  Vol.  1 .. 

- 18-

Table  2.2  Changes  in  ATC  proportions,  by  region 

1963-1971 

Region 

Percentage  of  total  employment 
in  manufacturing  industry 

North 
Yorkshire  & Humberside 
East  Midlands 
East  Anglia 
South  East 
South  West 
North  West 
West  Midlands 
Wales 
Scotland 

Great  Britain 

1963 

22.7 
19.6 
20.8 
23.6 
27.3 
25.9 
22.7 
22.3 
21.7 
20.9 

23.4 

Source  :  Census  of  Production  :  1963,  1971. 

1971 

24.6 
22.7 
24.1 
26.6 
31.1 
29.4 
25.6 
23.9 
24.3 
23.9 

26.4 

Increase  in 
% points 

1963-1971 

1.9 
3.1 
3.3 
3.0 
3.8 
3.5 
2.9 
1. 6 
2.6 
3.0 

3.0 

The  regional  distribution  of  individual  occupations 

35.  Table  2.3  reproduces  the  information  on  the  regional  distribution  of  NPs 
that  is  given  in  Table  2.1,  but  uses  as  an  indicator  the  ratio  of  the  NP 
proportion  for  an  individual  occupation  category  at  a  regional  level  to 
its  NP  proportion  at  a  national  level.  For  example,  the  NP  proportion  for 
the  managerial  and  professional  category  in  Other  North  is  3.85  %,  whereas 
the  national  proportion  is  5.79%  (Table  2.1).  The  ratio  3.85/5.79  =  0.66, 
and  this  shows  that  the  managerial  and  professional  category  in  the  Other 
North  area  are  proportionately  represented  to  only  66  % of  the  extent  that 
they  are  in  the  country  as  a  whole.  Ratios  greater  than  1  indicate  that 
the  occupation  category  is  over-represented  in  an  area. 

36.  The  use  of  these  indicators  makes  it  easier  to  assess  the  extent  to  which 

a  particular  region  is  above  or  below  the  NP  averages  for  Great  Britain  in 
just  one,  several,  or  all  occupation  categories.  On  the  whole,  Table  2.3 
shows  that  variations  in  individual  occupation  categories  are  consistent 
within  regions.  Of  the  ten  full  regions  (underlined  in  the  table)  two  are 
completely  consistent  in  that  all  occupation  categories  are  below  the  GB 
average  (West  Midlands  and  East  Midlands),  and  five  are  almost  consistent 
in  that  four  out  of  the  five  occupation  categories  are  either  below  the  GB 
average  (North,  Yorkshire  & Humberside,  North  West  and  Wales)  or,  in  the 
case  of  the  South  East,  above  it. 
worker  category  that  is  the  odd  man  out,  being  under-represented  in  the 
South  East  and  over-represented  in  the  other  four  regions. 

In  these  cases  it  is  always  the  service 

37.  The  paragraphs  that  follow  consider  each  occupation  category  in  detail. 
They  are  based  on  Tables  2.1  and  2.3,  together  with  similar  tables  for 
each  of  the  twenty-eight  occupation  groups  detailed  in  Table  1.1. 

- 19-

Table  2.3  Regional  differences  in  NP  proportions  by  occupation,  1971 

Region/area 

Managerial 
& 
professional 

Clerical 

/Scientific 
& 

Sales 
& 

Service 

Total  NPs  C 1) 

technical  distribution 

RegionaL  percentage  as  a  proportion  of  GB  percentage 

North 

Tynes ide  conurbation 

Other  North 

Yorkshire  & 
Humber side 
w.  Yorks  conurbation 
I 
Other  Yorkshire/ 
i  Humberside 

[East 

Midlands 

lEast  An9lia 
I 

South  East 
I Greater  London 
I Outer  Metropolitan 

Area 

'  Other  South  East 

South  West 

North  West 

S. E.  Lanes 

conurbation 

Merseyside 

conurbation 

Other  North  West 

West  Midlands 

Birmingham 

conurbation 

Other  West  Midlands 

Wales 

Scot Land 
Clydeside  conurbation 

I 

Other  Scotland 

D.69 

D.75 

D.66 

0.86 

0.96 

0.81 

D.87 

1.DD 

1.38 

1.6D 

1. 23 

1.07 

0.95 

0.85 

D.79 

D.9D 

D.  75 

D.88 

D.86 

D.8Y 

0.87 

0.99 

1.30 

1. 45 

1.22 

1.02 

D.97 

D.88 

D.96 

D.96 

D.96 

0.64 

0.5D 

0. 77 

0.86 

0.89 

1.35 

1.07 

1.55 

1. 17 

1.23 

D.97 

D.88 

D.94 

D.85 

D.99 

1.DD 

D.99 

D.94 

1.D6 

1.10 

1.13 

1.05 

1.12 

1.1 D 

0.92 

1. 15 

1.13 

1.15 

1.08 

0.96 

1.88 

0.87 

0.88 

0.94 

D.97 

D.95 

D.82 

D.91 

1.D9 

D.86 

0.92 

0.83 

0.89 

D.87 

D.9D 

D.88 

D.97 

1.23 

1. 32 

1. 21 

1.D5 

1. DO 

D.93 

0.96 

D.94 

0.94 

\ 

0.98 

1.D7 

0.97 

0.85 

0.81 

0.92 

0.95 

D.86 

D.66 

D.75 

D.79 

D.73 

D.94 

D.82 

0.94 

0.94 

0.93 

D. 77 

D.87 

0.99 

0.79 

0.85 

1.D4 

0.93 

0.83 

1.07 

D.85 

D.80 

0.90 

D.74 

0.96 

D.87 

D.92 

D.90 

0.94 

D.92 

1.D3 

1.07 

1.01 

1. 11 

1.D9 

D.97 

0.98 

0.95 

1. 20 

0.07 

1.10 

1. 05 

0.92 

0.89 

0.92 

0.91 

D.93 

D.83 

D.9D 

D.97 

0.84 

I 

I 

I 

I 

I 

I 
I 

I 

I 

I 

I 

j 

i 

I 
I 
I 

I 

Great  Britain  average  % 

5.79 

11.93 

5.85 

7.04 

3.34 

34.64 

Source  :  Census  of  Population,  1971. 

(1)  TotaL  figures  include  'those  specific  to  particular  industries',  mainly  journalists  and 

pressers  Cin  the  clothing  industry). 

- 20-

Managerial  and  professional  occupations 

38.  The  managerial  and  professional  occupations  have  a  more  uneven  distribution 

across  regions  than  any  other  NP  occupation  group.  London's  dominance  is 
much  more  marked  for  managers  than  other  occupations  while  the  Low  NP 
areas,  particularly  the  non-conurbation  areas  in  the  more  peripheral 
regions,  have  more  deficiencies  in  managers  than  in  other  occupations. 
These  differences  are  weaker  in  the  principal  conurbations  and  in  areas 
flanking  London  and  the  South  East,  so  that  there  is  a  considerable 
contrast  between  conurbations  (again  excluding  Merseyside)  and  their 
hinterlands.  Conurbations  have  on  average  16  % more  managers  than  their 
hinterlands,  but  only  5  % more  of  other  NPs. 

39.  From  more  detailed  tables  it  can  be  seen  that  London's  pre-eminence  is 

greatest  among  sales  managers,  'other'  professionals,  accountants  and 
company  secretaries;  occupations  which  also  tend  to  be  concentrated  in  the 
conurbations  rather  than  the  hinterlands.  For  this  group  the  northern 
conurbations  have  somewhat  Lower  Levels  than  Birmingham,  although  the 
Manchester  conurbation  emerges,  as  with  the  other  managerial  occupations, 
above  the  general  trend  of  declining  proportions  outwards  from  London. 
The  other  three  managerial  occupations,  i.e.  general  managers,  specialist 
managers  and  personnel  managers,  all  have  closer  Links  to  the  day-to-day 
running  of  companies  and  hence  to  production  sites.  As  a  result  their 
geographical  distribution  show  Less  marked  concentrations  in  London  and  the 
conurbations,  although  the  concentrations  are  still  greater  than  for  most 
non-managerial  occupations.  A particular  reason  for  general  managers  being 
associated  with  production  sites  is  that  they  tend  to  be  associated  with 
small  firms  and  their  geographic  distribution  reflects  this. 

C Leri caL  workers 

40.  Clerical  workers  can  be  associated  with  the  managerial,  sales  and  technical 

occupations  and  they  are  spread  across  regions  in  a  manner  closely 
resembling  that  of  NP  workers  as  a  whole.  As  a  result,  the  geographical 
pattern  of  the  NP  proportion  for  clerical  workers  has  the  usual  tendency  to 
decline  with  increasing  distance  from  London,  while  conurbations  generally 
have  higher  proportions  than  their  hinterlands. 

41.  A more  detailed  examination  of  individual  clerical  occupations  should 

reveal  distinct  differences  in  regional  patterns,  since  typists  are  most 
closely  connected  with  managers,  a  highly  concentrated  group,while  clerks 
and  machine  operators  are  associated  with  scientific  and  sales  staff  who 
are  less  regionally  concentrated.  More  detailed  tables  than  those 
reproduced  here  show  that  this  is  the  case.  Typists,  and  the  <small) 
communication  workers  category,  have  highly  concentrated  distributions 
closely  resembling  those  of  the  managerial  occupations.  The  dominance  of 
London  is  extreme  in  both  cases,  while  the  major  conurbations  in  each 
region  have  higher  employment  levels  than  their  hinterlands.  Clerks  and 
office  machine  operators  on  the  other  hand,  together  comprising  one  in 
twelve  of  all  employment  in  manufacturing,  have  spatial  distributions  with 
Less  extreme  contrasts;  the  distributions,  especially  in  the  case  of 
clerks,  are  very  close  to  that  of  all  NP  workers.  The  last  occupation 
group,  office  managers  is  geographically  intermediate  between  the  two 
types  of  clerical  occupation  considered  above,  with  a  strong  decline  in 
NP  proportions  outwards  from  London. 

- 21-

Scientific  and  technical  workers 

42.  Scientific  and  technical  workers  include  three  principal  groups  : 

In  another  sense  they  can  be  subdivided  into  research  workers 

scientists  and  laboratory  technicians;  engineers  and  engineering  assistants; 
draughtsmen. 
(including  most  scientists  and  laboratory  technicians  but  only  about  half 
of  the  engineers),  production  engineers,  and  draughtsmen.  Unlike 
managerial  and  clerical  workers  each  of  these  groups  is  markedly  more 
important  in  some  industries  than  in  others  and  as  a  consequence  industrial 
structure  plays  an  important  part  in  the  regional  spread  of  their 
employment. 

43.  Table  2.1  reflects  this  in  that  the  two  regions  with  the  greatest 

employment  in  the  Less  technological  industries,  such  as  textiles  and 
clothing,  are  worse  placed  in  technical  employment  than  for  all  NP  workers. 
In  these  regions,  Yorkshire  and  Humberside  and  the  East  Midlands, 
scientific  and  technical  workers  comprise  four  and  five  per  cent  of 
employment  compared  with  a  GB  average  of  almost  six  per  cent.  Regions  with 
Little  employment  in  the  textile  industry  and  more  employment  in  metal 
making  and  metal  using  trades  have  relatively  large  numbers  of  technical 
workers,  although  peripheral  regions  such  as  the  North  and  Wales  still 
remain  below  average. 
distribution  has  Less  of  a  north-south  contrast  and  more  of  the  northern 
areas  are  close  to  the  national  average,  although  always  on  the  lower  side 
of  it.  However,  a  significant  amount  of  the  general  north-south  pattern 
does  remain  in  that  the  region  with  the  highest  NP  percentage  in  this 
occupation  category  is  still  the  South  East. 

The  overall  consequence  is  that  the  regional 

44.  The  major  difference  between  this  occupation  category  and  the  others  Lies 

In 

in  the  relative  employment  Levels  of  conurbations  and  hinterlands. 
every  case  <except  Scotland)  the  hinterlands  have  higher  proportions  than 
the  conurbations.  This  is  most  clearly  seen  within  the  South  East;  London 
is  Little  above  the  GB  average  but  the  Outer  Metropolitan  Area  has  almost 
one  in  ten  of  all  its  manufacturing  employment  in  this  category.  With  the 
single  exception  of  managers  in  London,  the  figure  for  scientific  and 
technical  employment  in  the  OMA  is  the  highest  in  Table  2.1.  Similar  sharp 
differences  within  the  North  West  and  West  Midlands  strengthen  the 
impression  that  some  process  is  at  work  acting  to  Locate  this  group  of 
occupations  outside  the  conurbations,  although  this  is  not  the  case  in 
Scotland.  The  apparent  preference  for  Less  urban  Locations  is  also 
noticeable  in  the  case  of  the  South  West,  which,  with  over  seven  per  cent 
of  all  manufacturing  employment  in  this  category,  has  the  second  highest 
figure  of  any  region. 

45.  A  review  of  the  more  detailed  occupation  classification  indicates  that  it 
is  research  workers  who  are  located  principally  in  non-conurbation  areas. 
These  research  workers  are  normally  scientists  but  may  also  be  engineers, 
particularly  in  regions  with  important  engineering  industries.  This 
explains  the  situation  in  the  West  Midlands,  where  the  conurbation/ 
hinterland  difference  occurs  for  engineers  rather  than  scientists.  The 
two  categories  of  technicians  are  also  probably  dominated  by  research 
technicians,  and  again  a  strong  bias  towards  non-conurbation  areas  is 
found.  However  the  remaining  occupations  in  this  cateogry  have  Little 
connection  with  research  and  development  and  for  the  most  part  their 
geographical  distributions  are  unlike  the  occupations  considered  above. 

- 22-

Production  engineers  tend  to  be  concentrated  in  conurbations  rather  than 
elsewhere,  except  in  the  West  Midlands,  although  particularly  high  NP 
proportions  are  observed  in  the  OMA  and  the  South  West. 
In  each  case 
industrial  structure  is  probably  an  important  factor.  Draughtsmen  have  a 
very  similar  distribution,  with  conurbations  having  higher  proportionate 
Levels  of  employment  in  the  north,  and  hinterlands  in  the  south. 

Sales  and  distribution  workers 

46.  The  geographical  pattern  for  this  occupation  category  is  much  more  uniform 
than  that  of  those  discussed  so  far,  although  retaining  the  usual  decline 
in  proportions  outwards  from  London.  As  sales  and  distribution  workers 
are  numerically  quite  a  large  occupation  category  this  regional  uniformity 
does  much  to  damp  down  the  larger  disparities  in  other  occupations,  but  the 
equalising  effect  is  almost  purely  numerical  since  workers  in  this  category 
are  predominantly  manual  workers  with  rates  of  pay  below  the  average  for 
male  NP  workers  (1). 

47.  In  detail  the  geogra~hical  distributions  are  of  two  types.  Transport 
workers  and  warehousemen  share  a  distribution  in  which  employment 
proportions  vary  relatively  Little  between  regions  and  in  which  the  South 
East  region  is  only  slightly  above  average,  although  warehousemen  are 
generally  more  important  in  the  conurbations  and  transport  workers  in  the 
hinterlands.  On  the  other  hand  the  distribution  of  salesmen  has  much  more 
marked  regional  differences  than  that  of  distribution  workers  as  a  whole 
(2).  London  has  about  the  same  relative  Levels  for  salesmen  as  for  all 
NP  workers,  but  the  regions  and  sub-regions  around  London  have  higher 
levels  of  salesmen.  The  corollary  of  this  is  a  lower  Level  in  most  other 
areas,  except  Scotland. 

Service  workers 

48.  The  term  'service  workers'  refers  to  those  manual  occupations  concerned 
with  the  maintenance  of  buildings  and  grounds,  security,  cleaning  and 
canteens.  Table  2.1  shows  that,  unlike  any  other  category,  the  levels  of 
employment  of  service  workers  rises  from  south  to  north,  but  the  magnitude 
of  the  figures  is  such  that  the  overall  variability  between  areas  is  not 
great.  The  range  from  18  % below  the  GB  average  to  20%  above  it  is 
marginally  greater  than  that  of  sales  and  distribution  workers,  but  much 
smaller  than  that  of  the  other  three  occupation  categories.  This  small 
range,  allied  with  the  relatively  small  numbers  involved  (3.3%  of  total 
employment),  means  that  service  workers  makes  only  a  small  impact  on  the 
dominant  south-north  pattern  of  declining  NP  proportions.  The  reversal  of 
pattern  is  partly  continued  in  the  conurbation-hinterland  differences. 
Although  London  has  significantly  more  service  workers  than  'Other  South 
East',  in  all  of  the  other  cases  the  hinterlands  either  have  higher  Levels 
or  else  the  difference  is  slight. 

(1)  Almost  80  % are  transport  workers  or  warehousemen  and  the  relevant 

managers  are  excluded. 

(2)  This  interpretation  is  based  on  the  census  figures  as  they  stand.  From 
surveys  carried  out  by  the  research  team  it  is  known  that  entire  sales 
forces  may  be  nominally  on  the  books  of  a  head  office  although  the 
individuals  rarely  appear  there,  often  working  from  home. 

- 23-

49.  The  higher  employment  levels  in  the  more  peripheral  areas  is  most 

pronounced  in  the  case  of  cleaners,  of  whom  the  southern  regions  have  only 
about  70%  of  the  GB  average  proportion  whereas  the  proportion  rises  to 
36%  above  the  GB  level  in  Tyneside,  Other  Yorkshire  and  Other  Scotland. 
There  is  little  evidence  of  systematic  differences  between  conurbations 
and  hinterlands.  On  the  other  hand  canteen  and  related  staffs  have  a 
different  distribution  in  which  conurbations  have  generally  higher  levels 
than  hinterlands  (Birmingham  once  again  being  an  exception),  with  London 
and  the  OMA  having  the  highest  levels.  Other  than  the  pre-eminence  of 
London  itself  there  is  no  systematic  decline  in  proportions  outwards  from 
London. 

Summary 

50.  The  geographical  distribution  of  NP  workers  varies  in  two  major  ways. 

Firstly  their  proportion  of  total  employment  tends  to  decline  outwards 
from  London.  Secondly,  within  regions  there  tend  to  be  higher  levels  in 
those  conurbations  that  are  major  regional  centres.  These  aggregate 
patterns  result  from  the  distribution  of  individual  occupations.  The 
dominant  element  in  the  high  NP  Levels  of  London  and  their  decline  outwards 
from  London  is  undoubtedly  the  group  of  occupations  involved  in  general 
administration,  including  managers,  (non-technical)  professional  workers, 
typists  and  communication  workers.  Sales  managers,  accountants  and 
professionals'  are  the  occupations  most  concentrated  within  conurbations 
with  differences  between  regions  being  much  less  sharp  for  the  remaining 
occupations.  Salesmen  and  the  related  clerical  occupations  (clerks  plus 
office  machine  operators)  are  spread  in  a  manner  similar  to  NP  workers  as 
a  whole,  while  scientific  and  other  technical  workers  are  distributed  with 
a  less  marked  north-south  contrast.  However,  within  this  category 
engineers  have  high  proportions  in  the  south,  and  for  the  category  as  a 
whole  the  area  with  the  highest  levels  is  not  London  but  the  Outer 
Metropolitan  Area. 

'other 

51.  The  remaining  categories,  distribution  and  service  workers,  are  distributed 
relatively  uniformly  across  regions,  but  service  workers  are  contrary  to 
all  others  in  having  higher  NP  proportions  in  the  north  than  in  the  south. 
This  geographical  pattern  emphasises  the  extent  to  which  the  higher 
executive  occupations  are  concentrated  in  and  around  London  while  manual 
occupations  have  uniform  or  'reversed'  distributions. 

I 
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- 25-

CHAPTER  3 

INDUSTRIAL  STRUCTURE  AS  A DETERMINANT  OF  REGIONAL  DISPARITIES  IN  NON-PRODUCTION 
WORKERS 

52.  Table  1.4  showed  that  industries  vary  markedly  both  in  their  overall 

proportions  of  NPs  and  in  their  occupational  composition. 
It  is  therefore 
highly  probable  that  the  geographical  distribution  of  industries  will  have 
a  large  influence  on  both  the  distribution  of  NP  employment  as  a  whole, 
and  on  the  distribution  of  individual  NP  occupations.  This  chapter 
assesses  the  extent  to  which  the  varied  industrial  structure  of  each  region 
contributes  to  the  regional  disparities  in  NPs  reviewed  in  Chapter  2,  and 
considers  the  way  in  which  NPs  are  over- or  under-represented  in  each 
region  after  taking  account  of  its  industrial  structure. 

53.  The  method  used  to  carry  out  this  exercise  is  the  conventional  one  of 

calculating  the  'expected'  number  of  NP  workers  in  a  region,  given  the 
actual  industrial  structure  of  that  region.  This  'expected'  quantity  is 
the  number  of  NPs  that  would  be  employed  in  a  region  if  each  industry  in 
that  region  had  the  national  average  proportion  of  NP  workers.  The 
expected  number  of  NPs  is  then  compared  with  two  quantities,  the  'actual' 
number  of  NPs  in  the  region,  and  the  number  of  NPs  that  the  region  would 
have  if  it  not  only  had  the  national  NP  proportions  in  each  industry  but 
also  had  the  national  industrial  structure. 

54.  There  are  therefore  three  separate  figures  being  used  : 

A. 

'Actual'  NPs 

the  actual  number  of  NPs  in  a  region,  given  the 
actual  industrial  structure  of  the  region  and  its 
actual  NP  proportions  for  each  industry. 

B. 

'Expected'  NPs 

the  number  of  NPs  that  a  region  would  have  with  its 
actual  industrial  structure  but  with  national  NP 
proportions  in  each  industry. 

C . 

1 Nat i on a l'  N P s 

the  number  of  NPs  that  a  region  would  have  if  it  had 
both  the  national  industrial  structure  and  each 
industry  had  national  NP  proportions. 

55.  For  any  region  the  overall  difference  A - C can  be  divided  into  the  two 

effects  (A-B)  +  (B-C).  The  second  of  these,  (B-C)  or  'expected'  minus 
~ational',  can  be  taken  to  represent  the  effect  of  industrial  structure  on 
the  numbers  of  NPs  in  the  region.  This  is  because  both  B and  C assume 
that  NPs  are present  in  the  national  average  proportions,  but  whereas  B 
assumes  that  the  actual  regional  industrial  structure  is  present,  C 
assumes  that  the  region  has  the  national  industrial  structure.  The  first 
effect,  A-B  or  'actual'  minus  'expected',  is  then  called  the  'residual'. 
Since  both  A and  B  take  the  actual  industrial  structure  to  be  given,  the 
difference  between  the  two  Lies  in  A accepting  that  the  region's  industries 
have  their  actual  NP  proportions,  whereas  B assumes  that  they  have  the 
national  average  NP  proportions. 
(A-B)  can  therefore  be  said  to  be  a 
measure  of  the  extent  to  which  NPs  are  over- or  under-represented  in  a 

- 26-

region,  given  its  industrial  structure. 
when  (A-B)  is  positive,  is  sometimes  called  an 
representation,  with  CA-B)  negative,  is  referred  to  as  a  'deficit'. 

'excess',  whereas  under 

In  the  text,  over-representation, 

56.  Several  questions  arise  about  the  use  of  this  statistical  procedure. 
Why  should  a  region  be  'expected'  to  have  the  national  average  NP 
proportions?  Exactly  how  should  the  NP  proportions  (1)  be  measured? 
Are  there  any  problems  in  interpreting  the  results  of  the  exercise?  Are 
there  any  alternative  ways  of  carrying  out  the  exercise?  These  questions 
are  considered  in  paragraphs  57-60. 

57.  The  answer  to  the  first  question  is  that  'expected'  in  this  context  does 

not  have  its  usual  connotation  in  English  of  something  that  'ought'  to  be. 
The  expected  value  is  a  statistical  construct  used  as  a  norm  or  standard 
against  which  to  compare  the  region's  actual  NPs  (A),  and  the  'national' 
NPs  (C). 
It  seems  appropriate  to  use  national  NP  proportions  and  the 
actual  industrial  structure  for  this  purpose  because  it  can  be  claimed 
that  within  any  one  industry  each  factory  will  have  common  elements  of 
production  and  administration  and  therefore  NP  workers  connected  with 
that  industry  might  be  expected  to  be  present  at  each  factory  in  the 
national  average  proportions. 

58.  So  far  in  this  report  NPs  have  always  been  expressed  as  a  percentage  of 
total  employment  (2),  so  the  answer  to  the  second  question  in  paragraph 
56  seems  to  be  pre-determined.  However,  for  the  calculation  of  expected 
values  NP  proportions  in  this  form  are  not  entirely  suitable  and  an 
alternative  measure,  the  ratio  of  NPs  to  Ps,  is  used.  For  regions  with 
high  NP/P  ratios  using  this  second  approach  produces  results  for  the 
total  difference  CA-C)  that  are  larger  than  those  that  would  arise  using 
the  previous  NP  proportion  related  to  total  employment.  For  example,  on 
the  basis  of  the  NP/P  approach  the  South  East  region  actually  has  283,000 
more  jobs  than  it  would  have  had  if  it  had  the  national  industrial 
structure  and  its  industries  had  national  NP/P  ratios,  compared  with  only 
184,700  more  jobs  if  the  calculation  is  carried  out  using  national  NP 
proportions.  Similarly,  regions  with  'deficits'  due  to  their  low  NP/P 
ratios  compared  with  the  national  average,  will  have  larger  numerical 
deficits  using  the  preferred  NP/P  method  than  if  NP  proportions  were  used. 

59.  This  type  of  statistical  exercise  is  a  simple  form  of  the  'shift-share' 

technique  used  by  regional  economists  (3),  and  Like  that  technique  it  is 
possible  to  carry  it  out  in  a  number  of  different  ways  based  on  a  variety 
of  assumptions.  For  example,  it  is  possible  to  calculate,  as  an 
alternative  to  8,  an  expected  value  based  upon  the  regions  actual  NP 
proportions  but  the  national  industrial  structure  (the  opposite  of  8). 
If  this  is  called  8',  then  (A-8')  would  measure  the  effects  of  industrial 
st~ucture,  whilst  CB'-C)  would  become  the  residual.  This  approach  would 
produce  different  results  from  those  reproduced  here.  The  rationale  for 
the  method  actually  employed  is  simply  that  it  appears  to  be  more 
appropriate  in  the  particular  circumstances. 

(1)  For  definitions  of  the  terms  used  see  the  Foreword,  paragraphs 

(xiii)-Cxx). 

(2)  c.f.  Foreword,  paragraph  (xiv)  and  paragraph  5  of  Chapter  1. 
(3)  i.e.  the  'national'  figure  C  is  greater  than  the  'actual'  figure  A, 

so  that  A-C  is  negative. 

- 27-

60.  Clearly  a  major  problem  of  the  actual/expected  technique  is  that  the 

results  achieved  depend  upon  the  method  employed.  In  addition,  and  also 
as  in  shift-share  analysis  (1),  they  also  depend  upon  the  degree  of 
industrial  disaggregation  employed. 
data  indicated  that  the  analysis  should  be  carried  out  on  the  basis  of 
the  Industrial  Orders  of  the  Standard  Industrial  Classification,  but  a 
side-exercise  seemed  to  indicate  that  if  the  more  detailed  Minimum  List 
Heading  industries  had  been  used  the  results  would  not  have  been 
substantially  different  from  those  reproduced  here. 

In  practice,  the  availability  of 

61.  The  net  result  of  these  variations  is  that  the  calculation  of  expected 

values  can  only  be  considered  as  a  statistical  exercise,  carried  out  on  a 
basis  that  appears  to  be  logical.  There  are  alternative  methods  of 
carrying  out  such  an  exercise,  and  they  will  give  different  results  in 
terms  of  the  total  differences  between  the  actual  and  national  figures, 
and  in  the  way  that  those  differences  are  divided  between  the  industrial 
structure  effects  and  those  due  to  the  under- or  over-representation  of 
NPs  after  industrial  structure  has  been  taken  into  account.  However,  it 
is  unlikely  that  the  overall  balance  between  the  Latter  two  effects  will 
be  substantially  affected  by  the  use  of  alternative  methods,  although 
there  are  clear  reasons  for  thinking  that  alternative  methods  would 
produce  fairly  Large  variations  in  the  total  difference. 

Results  :  all  NP  workers 

62.  Table  3.1  gives,  for  each  region  and  sub-region,  actual,  expected  and 

In  this  figure  and  in  all  similar  cases,  the  blunt 

national  employment,  together  with  the  'residual'  (actual-expected),  and 
the  effects  of  industrial  structure  (expected-national).  These  statistics 
are  expressed  graphically  in  Figure  3.1,  which  is  based  upon  actual  and 
expected  NP/P  ratios. 
end  of  the  arrow  represents  the  'expected'  NP/P  ratio,  a~d  the  sharp  end 
the  'actual'  NP/P  ratio.  The  difference  between  the  t~~  is  the  'residual', 
as  in  Table  3.1.  The  length  of  the  arrow  represents  tne  extent  to  which 
NPs  are  over- or  under-represented  in  a  region,  given  its  industrial 
structure.  When  the  arrow  is  pointing  downwards  the  residual  is  called 
negative,  there  is  said  to  be  a  'deficit',  and  NPs  ~re  under-represented. 
The  effects  of  industrial  structure  are  shown  in  the  diagrams  by  the 
difference  between  the  blunt  ends  of  the  arrows  <expected  values),and  the 
GB  average.  There  is  no  horizontal  scale,  the  regions  being  arranged  in 
order  of  their  distance  from  London. 

63.  Considering  first  the  impact  of  industrial  structure,  Table  3.1  (and 

Figure  3.1)  show  that  three  groups  of  area  have  favourable  industrial 
structures.  These  are  the  three  southern  regions  (South  East,  East 
Anglia  and  South  West),  the  two  most  northerly  regions  (North  and  Scotland), 
and  finally,  Merseyside  and  Other  North  West.  The  remainder  of  the 
industrial  north  plus  the  Midlands  all  have  unfavourable  structures  for 
NP  employment,  with  the  worst  industrial  mixes  occurring  in  the  East 
Midlands  and  the  West  Yorkshire  conurbation.  Both  of  these  latter  areas 

(1)  See  Bishop,  K.C.  and  Simpson,  C.E.,  "Components  of  Change  Analysis  : 
Problems  of  Alternative  Approaches  to  Industrial  Structure",..:!!:!. 
Regional  Studies,  Vol.  6,  pp  59-68,  1972,  and  the  references  therein. 

- 28-

Table  3.1  An  in i t i a l  d i vi s i on  of  regional  di s~arities  in  non-eroduction  emelo~ment, 
----- GB,  1971  ( 1) 

thousands 

Region/area 

Actual 
employment 

Expected 
employment 

National 
employment 

Residual 
employment 

1 

2 

3 

(1-2)  =  4 

Industrial 
structure· 
effect 
(2-3)  =  ~; 

North 

Tynes ide  conurbation 

Other  North 

Yorkshire  & Humber side 
w.  Yorks.  conurbation 
Other  Yorkshire/Humberside 

East  Midlands 

East  An~ l ia 

South  East 

Greater  London 

Outer  Metropolitan  Area 

Other  South  East 

South  West 

North  West 

S.E.  Lanes  conurbation 

Merseyside  conurbation 

Other  North  West 

West  Midlands 

Birmingham  conurbation 

Other  West  Midlands 

Wales 
' - - -

Scotland 

Clydeside  conurbation 

Other  Scotland 

137.6 

44.5 

93.1 

246.8 

109.9 

136.9 

184.5 

68.1 

981.6 

502.4 

341.1 

314.1 

149.9 

387.4 

163.4 

59.8 

164.2 

354.9 

200.8 

154.1 

97.5 

215.5 

95.7 

119.8 

178.5 

50.4 

128.1 

274.0 

118.1 

155.9 

200.5 

74.7 

739.6 

333.6 

249.4 

156.6 

145.8 

442.2 

167.0 

74.7 

200.5 

383.6 

217.6 

166.0 

125.2 

259. 7 

100.1 

159.6 

.11.h?. 
50.1 

121.1 

295.0 

134.1 

160.9 

223.4 

70.8 

698.6 

315.1 

230.8 

152.7 

144.0 

435.1 

170.4 

68.2 

196.5 

403.8 

232.5 

171.3 

127.3 

254.2 

99.8 

154.4 

-40.9 

-5.9 

-35.0 

-27.2 

-8.2 

-19.0 

-16.0 

-6.6 

+242.0 

+168.8 

+64.7 

+8.5 

+4.1 

-54.8 

-3.6 

-14.9 

-36.3 

-28.7 

-16.8 

-11.9 

-27.7 

+7 .0 

+0.3 

+6.7 

-21.0 

-16.0 

-5.0 

-22.9 

+3.9 

+41.0 

+18.5 

+18.6 

+3.9 

+1.8 

+7.1 

-3.4 

+6.5 

+4.0 

-20.2 

-14.9 

-5.3 

-2.1 

-44.2  ~ 
-4.4 

+0.3 

-39.8 

+5.2 

Great  Britain 

2823.8 

2823.8 

2823.7 

Q 

_Q 

Source  :  Census  of  Population,  1971. 

(1)  The  terms  used  in  this  table  are  explained  in  paragraph  53.  The 

'actual'  figures  differ 

slightly  from  those  in  Table  2.1  because  they  include  an  allowance  for  employment  in 
detached  head  offices  'not  allocable  elsewhere'  that  are  assumed  to  belong  to  manufact 
uring  industry. 

- 29-

have  large  textile  and  clothing  industries,  employing  few  NPs.  The  other 
major  feature  is  that  in  all  cases  conurbations  have  relatively  less 
favourable  industrial  structures  for  NPs  than  their  adjacent  hinterlands 
( 1) • 

64.  The  two  regions  with  above  average  NP/P  ratios,  the  South  East  and  the 

South  West,  both  have  industrial  structures  that  are  favourable  for  NPs  -
in  Figure  3.1  the  blunt  ends  of  the  arrows  are  above  the  GB  average. 
This  contributes  to  their  overall  advantage  in  NPs  but  the  effect  of 
industrial  structure  accounts  for  only  a  small  part  of  the  additional  NP 
employment  in  both  regions,  although  it  nevertheless  amounts  to  almost 
43,000  jobs.  Within  the  South  East  the  OMA  can  be  seen  to  possess  the 
most  favourable  structure.  The  remaining  areas  with  favourable  industrial 
structures  for  NPs,  such  as  East  Anglia  or  Merseyside,  all  have  actual 
In  each  case  the  industrial 
NP/P  ratios  that  are  below  the  GB  average. 
structure  ameliorates  a  position  which  would  otherwise  have  been  worse, 
and  in  the  cases  of  Merseyside  and  Other  North,  much  worse  than  the  GB 
average. 

65.  Considering  now  the  extent  to  which  NPs  are  over- or  under-represented 
after  taking  into  account  the  effects  of  industrial  structure  (measured 
by  the  length  and  directions  of  the  arrows  in  Figure  3.1)  in  only  four 
areas  in  two  regions  can  NPs  be  said  to  be  over-represented. 
cases  this  only  involves  small  amounts  (Other  South  East  and  South  West), 
with  large  •excesses'  being  confined  to  Greater  London  and  the  Outer 
Metropolitan  Area,  which  are  the  only  parts  of  the  country  to  have  NP/P 
ratios  significantly  greater  than  those  expected  on  the  basis  of  their 
industrial  structures.  The  additional  jobs  accounted  for  in  this  way 
amount  to  246,100  for  all  four  areas  (Table  3.1)  with  London  and  the  OMA 
accounting  for  95  % of  this  total.  The  situation  is  thus  one  in  which 
London  and  OMA  have  a  Large  excess  above  expected  Levels,  while  for 
almost  all  the  rest  of  the  country  NPs  are  under-repre~ented by  an  equal 
magnitude  in  total. 

In  two 

66.  Among  the  areas  beyond  the  Outer  Metropolitan  Area  ir,  which  NPs  are  under 

represented  three  types  of  area  may  be  distinguishe~  : 
Ci)  conurbations  (excluding  Merseyside); 
Cii)  non-conurbation  areas  that  are  not  Development  Areas; 

(iii)  Development  Areas  outside  conurbations  (2); 

For  these  groups  the  number  of  jobs  involved  as  net  deficits  are  38,900, 
77,200  and  117,400  respectively. 

(1)  Merseyside  is  still  being  counted  as  a  non-conurbation. 
(2)  Included  in  Cii)  are  Other  South  East,  South  West,  East  Anglia, 
East  Midlands,  Other  West  Midlands,  Other  North  West  and  Other 
Yorkshire  and  Humberside.  <iii)  includes  Wales,  Merseyside,  Other 
North  and  Other  Scotland. 

-~-

67.  Within  the  group  of  conurbations  (paragraph  66  (i))  the  S.E.  Lancashire 
conurbation  (Manchester)  has  a  particularly  small  deficit  (figure  3.1), 
showing  that  NPs  are  only  marginally  under-represented  there.  Clydeside 
has  the  next  smallest  deficit,  whereas  that  for  Tyneside  is  relatively 
Large. 

There  may  be  several  factors  at  work  here,  such  as  the  size  of  the 
conurbation  and  its  distance  from  other  major  centres.  Thus  Merseyside 
Loses  NPs  by  being  close  to  Manchester,  as  does  Birmingham  by  being  too 
near  to  London.  Tyneside,  on  the  other  hand,  is  the  smallest  conurbation 
and  presumably  cannot  offer  the  benefits  of  aggregation  required  by  NPs. 

68.  The  extent  to  which  NPs  are  under-represented,  given  the  industrial 

structure  of  each  region,  worsens  markedly  with  increasing  distance  from 
London  when  the  non-conurbation  areas  outside  the  Development  Areas  are 
considered  (paragraph  66  (ii)).  The  one  clear  exception  to  this  trend 
is  East  Anglia,  which  has  a  smaller  deficit  than  the  Midland  areas, 
although  it  is  still  Larger  proportionately  than  those  of  the  northern 
areas.  The  greatest  under-representation  of  NPs,  after  allowing  for 
industrial  structure,  is  shown  by  the  four  areas  within  the  Development 
Areas  outside  the  conurbations  (paragraph  66  (iii)). 
In  three  of  these 
cases  the  under-representation  results  in  actual  NP/P  ratios  that  are 
furthest  below  the  GB  average,  despite  relatively  favourable  industrial 
structures.  The  foutth  case,  Merseyside,  has  an  actual  NP/P  ratio  more 
in  Line  with  the  non-development  areas  outside  the  south  because  it  has 
the  country's  most  favourable  industrial  structure.  Within  this  group  of 
four  areas  it  can  be  seen  that  the  two  Lying  closest  to  London  have 
smaller  deficits  than  the  two  further  north. 

69.  These  points  can  be  summarised  in  a  brief  area  by  area  account.  London 

and  the  OMA  have  favourable  industrial  structures  for  NPs  but  their  high 
actual  NP/P  ratios  are  mostly  due  to  NPs  being  over-represented  beyond 
this.  East  Anglia  and  the  South  West  also  have  favourable  industrial 
structures. 
In  the  Latter  case  this  is  magnified,  but  only  slightly, 
by  a  tendency  to  over-representation,  while  in  East  Anglia  the  industrial 
structure  is  fully  offset  by  NPs  being  under-represented.  The  belt  of 
areas  including  the  Midlands,  northern  England  (but  not  North  East), 
and  Wales,  mostly  have  unfavourable  industrial  structures,  and  in  all 
cases  NPs  are  under-represented  in  addition.  Finally,the  North-East  and 
Scotland  have,  in  all  four  areas,  a  favourable  industrial  structure  for 
NPs  combined  with  under-representation  of  them.  The  extent  of  this 
under-representation  in  the  two  hinterland  areas  result  in  them  having 
Britain's  worst  NP/P  ratios,  along  with  Wales. 

Actual  and  expected  employment  in  occupation  groups  in  the  South  East 

70.  It  is  possible  to  disaggregate  the  actual  and  expected  figures  for  each 

region  into  their  occupation  groups  and  consider  every  region  in  terms 
This  is  only  carried  out  Cin  Table  3.2)  for  the 
of  its  occupat1ons. 

- 31-

South  East  region  (1).  Subsequent  sections  of  the  report  look  at 
individual  occupation  categories  and  it  is  possible  to  use  these  to 
piece  together  the  picture  for  other  regions. 

71.  For  the  South  East  the  total  difference  between  the  actual  and  national 
figures  amounts  to  over  280,000  jobs,  of  which  40,000  are  due  to  the 
region's  favourable  industrial  structure  and  240,000  to  NPs  being  over 
represented  beyond  that.  Much  the  largest  occupation  category  involved 
is  the  clerical  one,  accounting  for  40%  of  both  the  industrial  structure 
effect  and  the  residual  over-representation.  Scientific  and  technical 
workers  are  similar  to  clerical  workers  in  that  they  also  account  for  a 
fixed  proportion  (18  %)  of  the  two  effects  distinguished. 

72.  This  is  not  the  case  for  the  other  categories.  The  managerial  and 

professional  class  account  for  17  % of  the  industrial  structure  effect, 
almost  exactly  pro  rata  with  their  relative  importance  in  manufacturing 
industry,  but  this  rises  to  25%  for  their  residual  over-representation. 
Sales  and  distribution  show  a  similar  increase  between  the  two  factors, 
but  in  each  case  they  are  well  below  their  overall  importance  in 
manufacturing.  Nearly  one  quarter  of  the  industrial  structure  effect  is 
attributable  to  the  miscellaneous  category,  who  are  mainly  journalists 
and  other  workers  in  publishing  and  printing,  whereas  a  relative  lack  of 
industries  employing  service  workers  reduces  the  overall  size  of  the 
total  industrial  structure  effect.  Neither  of  the  Latter  two  categories 
contribute  much  to  the  residual  over-representation  of  NPs,  which  is 
attributable  Largely  to  managerial  and  professional  workers  and  scientific 
and  technical  workers,  together  with  their  dependent  occupation  categories 
of  clerical  and  secretarial  workers. 

(1)  The  figures  in  Table  3.2  differ  from  those  in  Table  3.1  because  they 
omit  estimates  for  some  head  office  employment 
(MLH  866).  The  occupation 
groups  include  a  miscellaneous  category  of  'occupations  specific  to  an 
industry'  including  journalists  and  editors,  beauticians  (in  the  toilet 
preparations  and  pharmaceuticals  industries)  and  pressers  (in  the 
clothing  industry). 

- 32-

Table  3.2  Excess  NP  employment  in  the  South  East  region,  1971  (1) 

Occupation 
category 

Total  difference 
(actual-national) 

Industrial 
structure 
effect 

Residual 

No. 

% of 
total 

No. 

% of 
total 

No. 

Managerial  and 
professional 

Clerical 
Scientific  and 
technical 

Sales  & 

di st ri buti on 
Service 
Miscellaneous 

66,308 
112,913 

23.6 
40.2 

6,974 
16,897 

49,685 

17.7 

7,488 

35,536 
4,052 
12,542 

12.6 
1. 4 
4.5 

3,537 
-3,005 
9,813 

16.7 
40.5 

18.0 

8.5 
-7.2 
23.5 

59,334. 
96,016 

42,197 

31,999 
7,057 
2,729 

% of 
total. 
-

24.8 
40.1 

17.6 

13 • .lf 
2.9 
1. 1 

Total 

281,036 

100  % 

41,704 

100  % 

239,332 

100  ,.; 

Source  :  Census  of  Population,  1971. 

73.  Each  of  the  following  five  sections  is  based  on  a  figure  similar  to 

Figure -3.1.  The  interpretation  of  each  figure,  and  the  terminology  used, 
follows  that  of  paragraph  62. 

Actual  and  expected  employment  managerial  and  professional  workers 
(Figure  3.2) 

74.  Figure  3.2  shows  that  the  effect  of  industrial  structure  on  regional 

variations  in  the  proportions  of  managerial  and  professional  workers  is 
slight.  The  blunt  ends  of  the  arrows  are  all  close  to  the  GB  average  and 
all  regions  have  industrial  mixes  which  would  lead  to  a  ratio  of  managers 
to  operatives  of  between  8  and  9.5  to  a  hundred. 
industries  vary  only  slightly  in  their  managerial  proportions  (2),  and 
regional  variations  in  industrial  composition  count  for  little.  The 
differences  in  expected  ratios  that  do  exist  tend  to  favour  all  areas 
except  those  in  a  belt  across  the  country  from  Wales  to  Yorkshire, 
omitting  the  North  West. 

This  is  because 

75.  By  far  the  greatest  amount  of  geographical  variation  in  NP/P  ratios  for 
this  group  derives  from  their  over-representation  after  industrial 
structure  is  taken  into  account.  This  is  much  the  greatest  for  London 
and  the  OMA,  while  large  deficits  indicating  under-representation  are 
concentrated  in  northern  England  and  Wales. 

In  each  region  the 

(1)  See  footnote  to  para.  70. 
(2)  cf  Table  1.4. 

- 33-

conurbations  are  more  favourable  for  the  managerial  and  professional 
category  than  their  hinterlands,  although  the  differences  decrease  quite 
markedly  northwards.  More  detailed  information  on  individual  occupation 
groups  shows  that  the  largest  amounts  of  over  or  under-representation 
occur  for  sales  managers,  accountants,  and  other  professionals,  whereas 
general  managers,  company  secretaries,  personnel  and  other  specialist 
managers  are  rather  more  evenly  spread. 

76.  These  patterns  for  the  more  detailed  occupations  can  be  easily  explained. 
The  large  positive  residuals  for  sales  managers  in  London  and  the  OMA, 
representing  their  over-representation  beyond  the  Levels  indicated  by 
the  industrial  structure  of  those  regions,  occurs  because  of  the 
strategic  importance  of  these  areas  as  a  meeting  place  for  buyers  and 
sellers,  both  home  based  and  foreign.  These  sales  managers  may  not  be 
in  head  offices  but  in  separate  detached  sales  offices.  This  geographic 
pattern  also  goes  some  way  towards  explaining  the  under-representation 
of  sales  managers  in  areas  where  the  size  of  market  is  Limited- Wales, 
Other  Scotland,  Other  North.  Accountants  and  other  professionals  are  also 
more  dominantly  head  office  occupations  than  are  other  occupations,  and 
they  are  therefore  concentrated  in  the  South  East,  which  has  the  greatest 
concentration  of  head  offices. 

77.  On  the  other  hand  the  extent  of  the  over  or  under  representation  of 

general  managers  is  probably  much  influenced  by  the  local  importance  of 
small  firms.  The  conurbations  in  Yorkshire,  the  North  West  and  West 
Midlands  tend  to  have  little  under-representation  or  even  have  over 
representation  in  this  occupation  group,  and  these  are  areas  that  have 
particular  concentrations  of  industries  such  as  textiles  or  mechanical 
engineering  including  large  numbers  of  small  firms  run  by  general 
managers.  Similarly,  specialist  managers  are  likely  to  be  at  production 
sites  and  not  concentrated  to  an  excess  in  the  South  East. 

Actual  and  expected  employment  :  clerical  workers  (Figure  3.3) 

78.  Figure  3.3  shows  that  industrial  structure  has  a  larger  influence  on  the 
distribution  of  clerical  workers  than  it  bad  for  managers  and  other 
professionals;  that  is,  the  blunt  end  of  the  arrows  are  rather  more 
scattered  around  the  average  line.  Since  the  NP  proportion  of  managers 
is  less  varied  than  that  of  clerical  workers,  both  by  industry  and  by 
region  (1),  and  clerical  workers  are  an  occupation  group  that  is  dependent 
upon  other  occupations,  the  variations  in  the  clerical  workers  must  be 
due  to  variations  in  the  sales  and  distribution,  and  scientific  and 
technical  workers  groups. 

79.  The  regions  with  unfavourable  industrial  structures  for  clerical  workers 
are  once  again  concentrated  in  the  belt  from  South  Wales  to  Yorkshire 
while  the  areas  in  the  south  and  the  north,  plus  Scotland,  have  favourable 
industrial  compositions.  The  area  that  really  stands  out  is  Merseyside, 
presumably  because  of  its  relatively  high  proportions  of  sales  and 
distribution  workers  whose  activity  demands  some  clerical  support.  The 
industrial  composition  of  the  East  Midlands  and  West  Yorkshire,  with  the 
dominance  of  the  textile  and  clothing  industries,  leads  to  Low  employment 
levels  for  managers  and  scientific  and  technical  workers,  and  this  is 

(1)  cf  Tables  1.4  and  2.1,  and  Figure  3.2. 

- 34-

reflected  in  the  very  low  expected  levels  for  clerical  workers,  of  whom 
secretarial  workers  are  a  major  component. 

80.  After  taking  industrial  structure  into  account,  the  pattern  of  over  and 

under-representation  is  once  again  dominated  by  the  large  excesses  in 
London  and  the  OMA,  and  by  under-representation  throughout  the  Development 
In  all  regions,  clerical  workers  in  conur·bations  are  less  under 
Areas. 
represented  than  in  their  hinterlands.  These  patterns  reflect  a  similar 
state  of  affairs  in  both  the  managerial  and  the  sales  and  distribution 
categories. 

81.  A more  detailed  examination  of  clerical  occUpations  emphasises  the 

difference  between  secretaries/typists  and  communication  workers,  and 
clerks  and  office  machine  operators.  The  former  have  large  variations  in 
the  differences  between  actual  employment  and  expected  employment, 
greatly  to  the  advantage  of  London  and  the  OMA,  and  reflecting  the 
distribution  of  managers.  As  clerks  depend  not  only  upon  managers  but 
also  upon  scientists  and  salesmen  etc.,  their  geographical  distribution 
tends  to  follow  the  pattern  of  these  occupations  and  be  considerably  less 
varied  overall  than  that  of  typists. 

Actual  and  expected  employment  :  scientific  and  technical  workers  (Figure  3.4) 

82.  The  actual  distribution  of  scientific  and  technical  workers  is  unique  in 

that  it  is  the  hinterlands  that  have  higher  employment  proportions  than 
the  conurbations,  contrary  to  the  normal  position,  and  it  is  the  OMA  that 
has  the  highest  proportion,  not  the  GLC  area.  Figure  3.4  can  be  used  to 
assess  the  extent  to  which  this  is  due  to  industrial  structure  rather 
than  other  'residual'  factors. 

83.  Comparison  of  Figure  3.4  with  Figures  3.2  or  3.3  shows  that  variations  in 
the  expected  NP/P  ratios  due  to  industrial  structure  are  indeed  much 
larger  than  is  the  case  with  the  previous  two  occupation  groups.  The 
industrial  structures  of  Other  North,  Tyneside  and  Merseyside,  are  most 
favourable  for  these  scientific  occupations;  those  of  the  East  Midlands, 
West  Yorkshire,  Other  Yorkshire/Humberside,  and  Other  Scotland  less 
favourable.  These  patterns  follow  the  geographical  distribution  of  the 
high-technology  industries,  particularly  chemicals.  On  the  whole 
hinterlands  have  more  favourable  industrial  structures  than  their 
conurbatidns,  although  this  is  not  the  case  for  the  West  Midlands  and 
Scotland.  This  feature  may  again  be  due  to  the  particular  requirements 
of  the  chemical  industry  - often  not  a  welcome  neighbour  in  a  conurbation. 

84.  The  most  striking  feature  of  Figure  3.4  is  the  overwhelming  dominance  of 
the  over-representation  of  this  group  in  the  OMA,  amounting  to  over 
23,000  jobs  even  when  industrial  structure  is  taken  into  account.  Apart 
from  this  the  extent  of  over  or  under-representation  is  relatively  even, 
although  usually  that  for  a  hinterland  is  equal  to  or  greater  than  that 
of  the  relevant  conurbation,  except  for  the  West  Midlands.  Thus  although 
hinterlands  tend  to  have  better  industrial  structures  for  scientific  and 
technical  workers,  they  also  tend  to  have  them  under-represented  in  those 
areas  to  a  greater  extent,  and  this  may  nullify  the  structural  effect. 
The  South  West  region  is  of  particular  interest  in  that  it  has  a  large 

- 35-

excess  of  scientific  workers,  given  its  industrial  structure,  and  this  is 
the  first  occasion  of  such  an  excess  appearing,  other  than  in  the  South 
East. 

85.  A review  of  the  individual  scientific  and  technical  occupations  shows 

that  the  major  advantage  of  the  OMA  and  other  areas  in  the  South  East  and 
South  West  lies  in  the  research  occupations  :  scientists,  general 
engineers  and  technicians.  Production  engineers  and  draughtsmen  also  tend 
to  be  over-represented  in  these  areas,  but  for  these  occupations  the 
advantage  is  only  half  as  large.  Several  other  areas  outside  the  south 
have  'excesses•  for  draughtsmen,  including  Tyneside  and  Clydeside,  the 
two  conurbations  most  noted  for  shipbuilding  and  heavy  engineering. 

Actual  and  expected  employment  :  sales  and  distribution  workers  (Figure  3.5) 

86.  The  effects  of  industrial  structure  appear  greater  in  Figure  3.5  than  is 
in  fact  the  case  because  this  figure  has  a  larger  scale  than  previous 
ones.  Nevertheless  it  is  clear  that  three  regions,  East  Anglia, 
Merseyside  and  Other  Scotland,  have  extremely  favourable  industrial 
structures  for  sales  and  distribution  workers  whilst  quite  a  number  of 
other  areas  also  have  favourable  structures,  including  the  South  West, 
Other  North  West,  Other  Yorkshire  and  Humberside  and  Other  North,  but 
excluding  four  conurbations. 

87.  These  somewhat  unusual  patterns  of  favourable  industrial  structure  are 
due  to  the  concentration  of  sales  and  distribution  workers  in  the  food 
and  drink  industries.  These  industries  tend  to  be  located  in  rural  areas 
producing  milk  and  vegetables,  the  whisky  distilling  areas,  and  major 
grain  and  food  importing  ports.  Since  these  are  the  production  locations 
the  expected  values,  which  are  based  on  figures  of  production  workers, 
are  high  for  these  areas.  But  sales  and  distribution  workers  are  market 
oriented  and  the  markets  for  the  food  and  drink  industries  are  in  the 
conurbations  well  away  from  the  production  sites.  So  actual  figures  are 
relatively  Low  in  the  rural  areas  whereas  the  expected  figures  are 
relatively  high. 
In  Figure  3.5  this  results  in  large,  downward-pointing, 
arrows,  showing  extensive  under-representation  of  sales  and  distribution 
workers. 
example  of  how  the  use  of  expected  values  may  be  misleading  -
reason  at  all  to  expect  a  man  selling  butter  to  supermarkets  to  be 
Located  at  a  creamery  in  Somerset. 

In  this  respect  this  occupation  category  provides  an  interesting 

there  is  no 

88.  On  the  other  hand  areas  without  major  food  and  drink  industries,  such  as 
the  Birmingham  and  S.E.  Lancashire  conurbations,  or  the  East  Midlands, 
typically  have  unfavourable  industrial  structures  but  about  average 
proportions  of  sales  and  distribution  workers.  The  relative  over 
representation  of  this  category  in  West  Yorkshire  is  probably  a  reflection 
of  the  large  numbers  of  small  firms  there,  whereas  their  massive  over 
representation  in  the  South  East  is  due  to  the  size  of  its  market  and  its 
status  as  a  centre  of  physical  communications,  which  acts  as  a  magnetic 
attraction  not  only  for  salesmen  but  also  for  transport  workers  and 
warehousemen. 

-~-

Actual  and  expected  employment  :  service  workers  (Figure  3.6) 

89.  The  small  vertical  scale  of  Figure  3.6  indicates  that  there  is  relatively 
little  variation  in  NP/P  ratios  for  service  workers,  but  the  little  there 
is  is  contrary  to  the  patterns  for  all  other  occupation  categories.  The 
industrial  structure  of  southern  England  is  unfavourable  for  such 
workers- the  blunt  ends  of  the  arrows  are  below  the  GB  average- whilst 
northern  England  other  than  the  S.E.  Lancashire  conurbation  and  West 
Yorkshire  has  a  favourable  industrial  structure.  The  effect  of  the  over 
or  under-representation  of  service  workers  beyond  the  industrial  structure 
is  then  to  raise  London  and  OMA  back  above  the  average.  For  regions  north 
of  the  Midlands,  service  workers  are  either  over-represented,  bringing  the 
S.E.  Lancashire  conurbation  above  the  GB  average,  or  insufficiently  under 
represented  as  to  counteract  the  favourable  industrial  structures  (1). 

90.  The  second  clear  element  in  the  pattern  of  expected  values  is  the 

consistently  lower  values  observed  for  conurbations  when  compared  with 
their  hinterlands.  Despite  this  the  relative  effect  of  over  or  under 
representation  is  to  alter  the  ranking  of  the  actual  NP/P  ratios,  except 
for  West  Yorkshire.  Thus  industrial  structure  and  the  relative  size  of 
over  or  under-representation  are  inversely  correlated  -
they  move  in 
opposite  directions  - between  conurbations  and  hinterlands.  This  is 
principally  because  service  workers  (largely  in  canteens)  and  cleaners 
are  concentrated  in  conurbations,  whereas  rural  areas  are  less  likely  to 
provide  the  canteens  and  have  the  office  blocks  that  might  be  associated 
with  these  occupations.  For  protection  workers  (2),  over-representation 
after  taking  industrial  structure  into  account,  is  ranked  in  an  interesting 
way  : 

Clydeside 
Merseyside 
Other  North  West 
GLC 
Other  Scotland 
Tynes ide 

+  56  % 
+  35.7 
+  20.3 
+  16.7 
+  11.7 
+  7.8 

% 
% 
% 
% 
% 

Actual  and  expected  employment  :  summary 

91.  The  areas  can  be  grouped  as  below  :  -

(a)  The  effects  of  industrial  structure 

<i>  ~Q~!b~rn_~r~~~ 

London  and  the  OMA  have  generally  better  industrial  structures 
for  NPs  than  the  surrounding  areas. 

<ii>  g~~!-~i91~n9~~-§irmiogb~m-~ng_~~~S-Y2r~~bir~ 

These  areas  have  the  worst  industrial  structure  for  virtually  all 
NP  occupational  categories. 

(1)  Except  for  Other  Scotland 
(2)  Firemen,  security  officers  and  works  police,  guards. 

- 37-

<iii>  Q!b~r-~~~!-~i9!~o9~~-2!b~r-Y2!~~bir~~-~!!~~~-~~g~-h~o~~~bir~~ 

!ro~~i9~-~og_f!r9~~i9~-~2o~r2~!i2o~ 
Intermediate  industrial  structures  which  are  close  to  the  GB 
average  for  almost  all  NP  occupation  groups,  although  usually 
below  rather  than  above  average  for  managagerial,  clerical  and 
sales  and  distribution  workers. 

(b)  Over  or  under-representation  after  taking  industrial  structure  into 

account 

(i)  h20920-~0Q_!b~-Q~~ 

Considerable  over-representation  of  all  occupation  categories. 
London  has  more  over-representation  than  the  OMA  except  for 
scientific  and  technical  workers.  The  advantage  held  by  these 
two  areas  is  much  Larger  in  the  ATC  occupation  groups  than  in 
the  other  groups. 

(ii>  Q!b~!_£QO~!Q~!iQO~ 

General  under-representation  of  NPs,  except  for  service 
occupations,  but  this  is  small  in  magnitude,  and  in  particular 
the  under-representation  is  smaller  than  that  occurring  in  the 
hinterlands.  The  under-representation  is  Less  favourable  for 
the  ATC  occupation  groups  than  for  the  other  groups. 

(iii)  ~QO:£QO~!Q!!lQO_!!~!~_io_!b~-~Q~!b_~QQ_~i9!~DQ~~-P!~~-Q!b~! 

!2r~~bir~ 
Over  or  under-representation  is  generally  small  in  this  group  but 
it  worsens  with  increasing  distance  from  London.  The  Other  South 
East  has  over-representation  except  in  the  service  occupations. 
The  South  West  region  has  a  mixed  result,  the  managerial, 
clerical  and  service  groups  being  under-represented.  The 
remaining  areas  either  have  small  effects  or  are  close  to  the  GB 
average. 

<iv)  ~QO:~QO~!Q!!iQO_Q~Y~!QPill~O!-~r~~~~-P!~~-Q!b~!-~Q!!b_~~~! 

All  NP  occupation  categories  are  well  under-represented,  after 
taking  account  of  industrial  structure,  except  for  service 
workers  which  are  only  marginally  so.  These  features  are 
particularly  the  case  for  Other  North  and  Other  Scotland. 

92.  Even  after  allowing  for  industrial  structure  the  overall  pattern  of  over 
or  under-representation  remains  that  of  London  and  its  surrounding  areas 
having  high  levels  of  NP  employment  while  the  non-conurbation  areas  in 
the  north  and  Wales  have  low  levels.  Other  areas  are  intermediate. 
When  the  effects  of  industrial  structure  are  added,  the  excesses  of  the 
south  and  deficits  of  the  north  remain  but  the  position  of  the  Midlands 
and  Yorkshire-Humberside  is  made  worse. 

- 39-

CHAPTER  4 

THE  CAUSES  OF  INDUSTRIAL  VARIATIONS  IN  THE  RELATIVE  NUMBER  OF  NON-PRODUCTION 
WORKERS 

93.  In  Chapter  3  the  effects  of  industrial  structure  on  regional  variations 

in  NP  proportions  were  investigated  using  a  technique  based  on  average 
NP/P  ratios  for  Great  Britain.  But  Table  1.4  and  the  discussion  in 
paragraphs  13/14  showed  clearly  that  NP  proportions,  and  hence  NP/P 
ratios,  vary  quite  widely  between  industries. 
It  therefore  seems  proper 
to  step  back  and  examine  the  causes  of  these  variations  before  continuing 
the  regional  analysis  in  later  chapters. 

94.  Table  4.1  is  an  extension  of  Table  1.4  of  Chapter  1  and  presents  NP 

proportions  for  11  occupation  groups  by  21  industries  plus  manufacturing 
industry,  with  a  coefficient  of  variation  for  each  occupation  group.  As 
in  Table  1.4  two  broad  patterns  can  be  seen.  The  first  is  that  industries 
with  Large  proportions  of  NP  workers  tend  to  have  Large  proportions  in 
most  of  the  individual  occupation  groups.  The  second  major  feature  is 
the  wide  disparities  between  NP  proportions  in  different  industries, 
shown  by  the  large  coefficients  of  variation.  This  is  particularly  the 
case  for  the  sales  and  distribution  occupations  and  the  technical 
occupations.  On  the  other  hand  the  variation  in  NP  proportions  for 
managers,  warehousemen,  typists,  clerical  workers  and  service  workers  is 
very  much  less  marked. 

95. 

'Explanations'  of  these  varying  proportions  and  relationships  come 
readily  to  mind.  The  proportions  of  scientists  and  technicians  are  high 
in  those  industries  that  carry  out  a  great  deal  of  scientific  research, 
whilst  the  proportions  of  engineers  and  draughtsmen  are  greatest  in  the 
engineering  industries.  Equally,  the  high  proportions  of  transport 
workers  in  the  food,  drink,  coal  and  oil  products,  and  bricks,  pottery 
and  cement  industries  are  probably  due  either  to  the  nature  of  the 
products  involved  - Low  value,  high  volume  or  weight  - or  to  institutional 
features  such  as  a  large  number  of  retail  outlets  to  be  served.  However, 
some  of  these  'explanations'  are  only  of  a  first-order  nature,  that  is, 
they  only  provide  the  direct  reason  -
than  providing  second-order  explanations  -
important  in  only  a  few  industries.  Moreover  it  is  not  easy  to  find 
intuitive  explanations  for  all  the  variations,  such  as  the  high  proportion 
of  sales  workers  in  chemicals,  or  the  Low  proportion  of  professional 
workers  in  shipbuilding. 

rather 
the  reasons  for  R & D being 

the  prevalence  of  R & D -

96.  The  objective  of  this  chapter  is  the  explanation  of  these  variations  in 

the  distribution  of  NP  workers  by  industry.  The 
based  on  two  hypotheses  : 

'explanation'  offered  is 

I.  For  some  NP  occupations,  the  main  factors  involved  in  explaining 

variations  in  their  proportionate  importance  in  various  industries 
are  a  set  of  industry  characteristics  such  as  the  quantity  of 
capital  per  head  in  the  industry,  or  the  nature  of  its  markets.  Such 
occupations  are  said  to  be 
'directly'  dependent  upon  these  industry 
characteristics.  For  example,  the  proportion  of  scientists  in  an 
industry's  total  employment  probably  depends  upon  its  R & D 
expenditure. 

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- 41  -

II.  On  the  other  hand,  for  some  NP  occupations  the  main  factors  involved 
in  explaining  variations  in  their  proportionate  importance  in 
various  industries  are  the  numbers  employed  in  other  NP  occupations. 
This  implies  that  ultimately  they  depend  upon  industry  characteristics 
as  in  I  above,  but  the  connection  is  indirect,  through  other  NP 
occupations,  rather  than  direct  as  in  I.  For  example,  the  proportion 
of  typists  in  an  industry's  total  employment  may  be  governed  by  the 
relative  numbers  of  managers,  which  may  in  turn  depend  upon  specific 
industry  characteristics. 

97.  Occupational  structures  are  rarely  quite  as  simple  as  portrayed  by  the 
two  hypotheses  above.  To  start  with  one  must  recognise  that  the 
proportionate  importance  of  any  particular  NP  occupation  group  may  involve 
elements  from  both  hypotheses.  The  number  of  clerks  may  depend  upon  an 
industry  characteristic,  such  as  selling  in  small  batches  and  hence 
requiring  a  relatively  high  clerical  input  (Hypothesis  I),  but  it  may  also 
be  dictated  by  the  number  of  specialist  managers  who  require  clerical 
assistance  (Hypothesis  II).  Moreover,  spurious  relationships  may  appear 
if  two  occupation  groups  are  related  to  the  same  industry  characteristic. 
If  the  NP  proportions  of  both  sales  workers  and  transport  workers  are 
governed  by  the  proportion  of  total  sales  sold  to  retail  shops,  then  these 
two  groups  may  appear  to  operate  according  to  Hypothesis  II,  instead  of 
being  independent  cases  of  Hypothesis  I. 

98.  Actual  NP  proportions  are  the  result  of  a  complex  and  interlocking  set  of 
relationships  between  industry  characteristics  and  other  occupations. 
The  number  of  such  characteristics  and  relationships  may  be  large  and  the 
task  of  completely  unravelling  the  system  would  be  extremely  difficult. 
In  the  sections  that  follow  only  the  clearest  statistical  results  are 
presented.  They  are  based  upon  a  statistical  analysis  using  the  NP 
occupation  proportions  in  1971  in  some  120  Minimum  List  Heading 
industries  (1).  The  sections  first  consider  independent  tests  of  the 
first  hypothesis  (paragraphs  99-109),  then  review  independent  tests  of 
the  second  hypothesis  (paragraphs  110-120),  and  finally  examine  the 
results  of  allowing  both  hypotheses  to  stand  together  (paragraphs 
121-128). 

Tests  of  hypothesis  I 

that  the  numbers  in  given  NP  occupations  depend  upon 
industry  characteristic 

99.  A  large  number  of  industry  characteristics  may  govern  the  proportion  of 

NP  workers  and  the  choice  of  appropriate  ones  for  investigation  necessary 
has  to  be  made  on  the  basis  of  a  priori  hypotheses  about  the  strength  of 
different  factors,  and  the  availability  of  appropriate  statistics  at  the 
level  of  the  Minimum  List  Heading  industry. 
was  based  on  a  set  of  industry  characteristics  that  included  : 

In  the  event  the  analysis 

Productivity  (PROD).  This  was  defined  as  output  per  production  worker, 
where  output  is  measured  as  net  output.  The  hypothesis  being  tested  is 
that  the  greater  the  productivity  of  the  production  workers  in  an  industry, 
the  greater  is  the  proportionate  importance  of  NP  workers  in  the  total 
employment  of  that  industry. 

(1)  For  definitions  of  the  terms  used  see  the  Foreword,  paragraphs 

<xiii)  - Cxx). 

- 42-

It  is  likely  that  the  greater  the  investment  in  plant  and 

Capital  Intensity  <CAP).  This  variable  was  defined  as  capital  per 
P-worker. 
machinery  per  production  worker,  the  greater  wiLl  be  the  relative  numbers 
of  NPs  who  are  involved  in  maintenance,  quality  control,  R & D,  security 
and  safety  etc.  CAP  is  related  to  PROD  above  because  there  is  empirical 
evidence  that  in  general  output  per  production  worker  is  dependent  upon 
capital  per  production  worker. 

It  is  assumed  that  the  greater  the  proportion  of  net 

Labour  costs  CLAB). 
output  that  is  allocated  to  labour  costs  <wages  and  salaries),  rather  than 
returns  to  capital,  the  lower  the  capital  intensity  of  the  industry  and 
hence  its  labour  productivity.  Since  labour  productivity  can  be 
considered  to  vary  directly  with  NP  proportions  Cc.f.  PROD  above),  LAB  is 
Likely  to  vary  inversely  with  PROD  <and  CAP).  Labour  costs  are  however 
subject  to  modifying  influences,  such  as  the  degree  of  labour  skill  or 
unionisation  in  an  industry,  and  these  make  LAB  sufficiently  different 
from  CAP  and  PROD  as  to  warrant  its  inclusion  in  the  analysis. 

Consumption  CCON)  and  exports  CEXP). 
nature  of  the  markets  served  by  each  industry  determines  in  part  the 
nature  of  its  sales  effort,  and  hence  the  NP  proportions  for  clerks, 
salesmen,  managers,  etc.  Two  market  concepts  are  included  in  the  analysis; 
the  proportion  of  sales  going  to  consumption,  and  the  proportion  of  sales 
exported. 

One  possible  hypothesis  is  that  the 

In  a  sense  this  is  almost  a  tautology 

R & D Expenditure  (R  & D). 
those  industries  spending  most  on  R & D are  likely  to  employ  the  greatest 
numbers  of  scientists  and  technicians.  However  there  does  not  appear  to 
be  any  completely  independent  variable  that  is  a  good  predictor  of  R & D, 
and  this  particular  variable  was  taken  so  that  something  at  Least  could 
be  said  about  the  technical  occupations. 

This  variable  was  defined  on  postage  and 

Communications  <TEL). 
communications  per  unit  of  net  output.  The  hypothesis  is  simply  that  some 
indust~ies  require  a  greater  amount  of  effort  put  into  communications, 
either  internally  or  externally,  than  others,  and  this  will  throw  up  a 
greater  need  for  managers,  typists,  etc.  The  type  of  industry  in  question 
could  be  those  involved  heavily  in  contracts  with  customers,  by  selling 
to  them,  servicing  the  equipment  they  have  bought,  or  providing  spare 
parts. 

This  was  defined  as  the  average  size  of  establishment 

Plant  size  CSIZ). 
in  the  industry.  The  impact  of  the  size  of  establishment  on  NP 
proportions  can  be  explained  in  several  ways.  For  example,  an  economist 
would  talk  of  increasing  or  decreasing  economies  of  scale  in  the  use  of 
NPs,  whereas  a  sociologist  would  refer  to  the  incr~asing  administrative 
complexity  of  large  organisations.  Size,  therefore,  is  important,  but 
its  effect  could  be  in  various  directions. 

Other  variables.  A number  of  other  variables  were  included  in  the 
statistical  analysis  for  each  occupation  but  since  none  of  them  proved  to 
be  of  general  significance  they  are  not  included  here.  Mention  is  made 
of  them  in  the  text  when  they  are  of  importance. 

-~-

100.  Appropriate  values  for  the  industry  characteristics  were  used  as 

independent  variables  in  a  multiple  regression  analysis,  using  the  NP 
occupation  proportions  of  Table  4.1  as  dependent  variables,  but  with  the 
analysis  extended  to  cover  some  120  Minimum  List  Heading  industries.  The 
most  significant  of  the  relationships  found  between  the  individual  NP 
occupations  and  the  industry  characteristics  are  summarised  in  Table  4.2 
although  the  text  below  occasionally  refers  to  less  significant 
relationships,  not  included  in  the  table.  The  table  gives  Beta 
coefficients,  which  are  statistical  coefficients  that  allow  comparisons 
of  the  relative  importance  of  the  independent  variables  to  be  made, 
especially  in  cases  where,  as  here,  the  variables  are  measured  in 
different  units.  The  occupations  are  divided  into  four  roughly  similar 
groups  and  the  industry  variables  are  divided  into  four  pairs  that 
approximate  to  a  productivity  factor,  a  size  factor,  a  market  factor, 
and  a  technological  factor.  The  final  column,  giving  the  Coefficient  of 
Determination,  represents  the  proportion  of  the  total  variation  in  the  NP 
proportions  in  the  120  industries  that  can  be  'explained'  by  the  fitted 
equation. 

101.  Taking  this  Last  column  first  it  can  be  seen  that  the  greatest  success  in 
terms  of  'explanation'  is  for  the  technical  pair  of  occupations,  which 
are  Largely  dependent  upon  R & D and  capital  intensity.  Since  the 
Coefficient  of  Determination  is  around  0.70  for  these  occupation  groups 
only  some  30%  of  their  variation  between  industries  is  Left  to  be 
explained  by  industry  factors  not  included  in  the  analysis,  or  by  their 
dependence  upon  other  NP  occupations.  On  the  other  hand  the  industry 
characteristics  included  in  the  analysis  only  account  for  26%  of  the 
variations  in  the  NP  proportion  of  professional  workers  and  warehousemen. 
The  other  occupation  groups  are  in  an  intermediate  position,  with  about 
one  half  of  their  inter-industry  variations  being  explained  by  the 
industry  characteristics  used. 

102.  Managers.  The  proportion  of  an  industry's  total  employwent  classed  as 
managers  is  inversely  related  to  its  average  size  of  plant,  since  the 
Beta  coefficient  on  SIZ  is  negative.  Therefore  the  La"ger  the  plant  size, 
the  Lower  the  proportion  of  managers  is  likely  to  be.  This  appears  to  be 
a  clear  economy  of  scale  effect.  Managers  are  also  r.irectly  related  to 
productivity  <net  output  per  operative)  probably  beca~se  of  the  increased 
overall  complexity  of  the  administrative  process  in  high  producti~ity 
industries.  Finally,  industries  that  spend  more  on  communications  are 
also  Likely  to  employ  a  Larger  proportion  of  managers,  although  the 
direction  of  cause  and  effect  cannot  be  specified  in  this  case. 

103.  Professional  workers  n.e.c.  The  productivity  of  Ps  is  also  the  predominant 
factor  in  the  explanation  of  the  NP  proportion  of  professional  workers. 
However,  none  of  the  other  industry  characteristics  are  of  importance  and 
the  regression  equation  that  was  fitted  only  'explained'  26  % of  the 
industry  variations  in  the  extent  to  which  professional  workers  comprise 
part  of  total  employment.  This  poor  result  may  arise  because  the 
occupations  concerned- solicitors,  surveyors,  architects,  economists  etc. 
are  those  whose  services  may  be  brought  in  by  smaller  companies,  or  that 
may  be  used  only  by  companies  in  particular  industries  such  as  building 
products  firms. 
reason  connected  with  the  industry  characteristics  used  in  the  regression 
analysis,  but  depend  more  upon  institutional  features  within  each  industry. 

If  this  is  the  case  NP  proportions  may  vary  for  no 

- 44-

Table  4.2  Summary  of  the  most  important  relationships  between  NP  occupation 

proportions  and  independent  industry  variables 

Occupation 

Managers 
Professional 
workers  n.e.c. 
Sales  workers 
Warehousemen 
Transport 
workers 
Service 
workers 
Engineers  & 
draughtsmen 
Scient i s t s  & 
technicians 

0.55 

0.56 

0.55 

0.39 

'Productivity' 

PROD 

LAB 

'Size' 

TEL 

SIZ 

'Markets' 
EXP 
CON 

0.35 

-0.61 

Coeffi-
cient  of 
'Technology'  Determi-

R&D 

CAP 

nation(1) 

0.59 

0.26 
0.61 
0.26 

0.54 

-0.40 
-0.41 

0.19 
0.36 

0.25 

0.18 

-0.36 

-0.26 

-0.15 

0.24 

0.56 

-0.30 

0.30 

0.77 

0.37  0.50 

0.69 

Source  :  Census  of  Population  1971,  Census  of  Production,  1971,  Input-Output 

Tables  for  the  UK,  1971. 

(1)  Based  on  a  wider  set  of  industry  variables  than  those  listed  in  the  table. 

See  paragraphs  97/8. 

104.  Sales  workers.  Here  again  a  productivity  measure,  in  terms  of  labour 

In  addition  advertising  expenditure 

costs,  is  the  predominant  factor. 
and  the  amount  of  merchanting  undertaken  by  an  industry  are  of  some 
importance  C1),  representing  either  the  intensity  of  the  sales  effort 
or  the  additional  quantity  of  goods  to  be  sold.  Expenditure  on 
communications  also  appear  to  be  relevant,  though  this  may  again 
represent  an  effect  rather  than  a  cause.  The  coefficient  of  determination, 
at  0.61,  implies  ~hat a  high  proportion  of  the  industry  variations  in  the 
NP  proportions  of  sales  workers  is  explained  by  the  industry 
characteristics  used. 

105.  Warehousemen. 

Productivity  in  the  form  of  Labour  costs,  together  with 

expenditure  on  communications,  are  the  predominant  explanatory  variables, 
but  the  average  size  of  establishments  is  also  of  importance,  as  is  the 
extent  of  export  sales.  However,  even  though  four  of  the  eight  industry 
characteristics  have  some  relevance  only  some  26%  of  the  variation  in 
the  proportions  of  warehousemen  can  be  accounted  for.  This  relative 
failure  arises  because  : 

Ci)  the  industry  characteristics  fail  to  include  anything  relating  to 

the  LE'  ·els  of  stocks; 

Cii)  warehousing  is  heavily  dependent  upon  institutional  factors.  For 

example  in  the  food  industry  some  firms  run  their  own  distribution 

(1)  These  two  industry  characteristics  are  included  under  the  'Other 

variables'  category  in  paragraph  97. 

- 45-

networks,  others  work  through  wholesalers  or  other  middle-men. 
None  of  the  industrial  characteristics  used  can  account  for  such 
variations. 

106.  Transport  workers.  Here  again  productivity  appears  as  an  important 

explanatory  factor.  The  negative  relationship  with  exports  could  be  the 
result  of  companies  with  a  high  proportion  of  exports  using  outside 
contractors,  or  being  sited  near  their  export  ports. 
that  exports  are  commodities  of  high  value  and  low  weight,  requiring 
relatively  few  transport  workers.  High  value  and  low  weight  are  also 
acceptedfeatures  of  technologically  advanced  products  and  these 
characteristics  may  explain  the  negative  relationship  between  the  NP 
proportions  for  transport  workers  and  expenditure  on  R & D shown  in  Table 
4.2. 

It  is  more  likely 

107.  Service  workers. 

Se~vice  workers  include  both  canteen  and  medical  staff, 

who  may  be  thought  of  as  servicing  other  personnel;  and  ground  staff, 
property  maintenance  workers,  cleaners  and  security  workers,  who  may  be 
thought  of  as  servicing  capital.  The  relationship  between  the  NP 
proportions  for  service  workers,  capital  per  P-workers,  and  productivity 
per  P-worker,  is  therefore  of  no  surprise,  but  the  implied  relationship 
with  expenditure  on  communications  is  puzzling. 

108.  Engineers  and  draughtsmen. 

The  most  successful  result  of  the  regression 
analysis  based  on  industry  characteristics  is  its  ability  to  account  for 
the  industry  variations  in  the  NP  proportions  of  engineers  and 
draughtsmen.  These  variations  are  largely  the  result  of  technical 
factors,  such  as  expenditure  on  R & D.  The  proportion  of  sales  that  is 
represented  by  consumer  markets  is  inversely  correlated  with  the  NP 
proportions  for  engineers,  reflecting  the  lower  engineering  input  into 
such  commodities  as  foodstuffs  and  furniture. 

109.  Scientists  and  technicians.  Here  again  expenditure  on  R  & D  and  capital 

per  P-worker  provides  an  expl-anation  for  a  high  propr1rtion  of  the 
variations  in  the  NP  occupation  proportion. 

Tests  of  hypothesis  II 

that  numbers  in  given  NP  occupations  depend  upon  the 
numbers  in  other  NP  occupation  groups 

110.  This  section  is  solely  concerned  with  evidence  for  relationships  between 

In  an  individual  organisation  or  office  it  is  easy  to 

NP  occupations. 
find  examples  of  these  relationships.  For  example,  the  numbers  of 
secretaries  depend  upon  the  number  of  executives.  But  the  analysis  in 
this  chapter  is  based  upon  NP  proportions  in  industries,  not  individual 
sites  or  organisations,  and  it  does  not  follow  that  relationships 
intuitively  obvious  in  a  particular  office  will  also  be  true  between 
different  industries.  This  necessitates  the  use  of  statistical  methods, 
leaving  the  intuitive  and  subjective  approach  based  upon  the  observation 
of  individual  sites  to  act  as  supporting  empirical  evidence. 

- 46-

111.  As  a  first  approach  the  NP  proportions  of  one  of  the  eleven  occupation 
groups  of  Table  2.1,  but  in  120  MLH  industries,  were  related  to  the 
equivalent  NP  proportions  of  a  second  occupation  group  and  the 
correlation  coefficient  was  calculated  from  the  120  pairs  of  NP 
proportions. 
strength  of  the  relationship  between  two  variables. 
tendency  for  high  NP  proportions  of  managers  tend  to  be  associated  with 
high  NP  proportions  of  clerks,  it  will  be  around  +0.6  to  +0.9. 
If  the 
opposite  is  true,  that  high  proportions  of  managers  tend  to  be  associated 
with  low  proportions  of  clerks,  then  the  correlation  coefficient  will  be 
around  -0.6  to  -0.9. 

In  principle  the  correlation  coefficient  measures  the 
If  there  is  a 

112.  All  the  correlation  coefficients  for  the  55  pairs  of  occupation  groups 
that  can  be  obtained  from  the  11  occupation  groups  concerned  have  been 
calculated  but  Table  4.3  is  restricted  to  those  found  to  be  statistically 
significant,  together  with  those  between  each  occupation  group's 
proportion  and  the  total  NP  proportion.  Each  figure  gives  the  correlation 
coefficient  between  the  occupations  in  the  relevant  row  and  column.  To 
look  at  the  succession  of  correlation  coefficients  between  one  occupation 
group  and  each  of  the  other  occupations  it  is  necessary  to  look  along  the 
row  until  the  diagonal  is  met,  and  then  turn  down  the  column. 

Table  4.3 

Intercorrelations  between  occupation  groups  (1) 

MAN 

PRO  TYP 

CLK 

SCI 

ENG 

TEC 

SAL 

WHS 

TRN 

SER 

MAN 
PRO 
TYP 
CLK 
SCI 
ENG 
TEC 
SAL 
WHS 
TRN 
SER 

ALL 

1. 00 
0.35  1.00 
0.56  0.38  1.00 
0.28  0.39  0.78  1.00 
0.23  0.30  0.47  0.37  1.00 

0.34  0.34 

1.00 

0.25  0.34  0.40  0.25  0.65  1.00 

0.33 

0.39  0.50  0.26 
0.29  0.45 

0.25 
0.30 

0.28  0.22  -0.22 
0.30  0.52 

1. DO 
0.24  1.00 
0.41 

1.00 
0.48  1.00 

0.44  0.43  0.78  0.87  0.59  0.35  0.47  0.62  0.32  0.50  0.45 

Source  :  Census  of  Population,  1971. 
Note  :  Values  shown  are  significant  at  the  one  per  cent  level  (with  118 

degrees  of  freedom>.  Other  values  are  omitted. 

( 1)  This  table  uses  the  shorthand  notation  for  occupation  groups  shown  in 

Table  4.1. 

- 47-

113.  The  table  may  be  interpreted  in  two  ways;  firstly,  by  looking  at  the  size 
of  the  individual  coefficients,  secondly,  by  looking  for  the  number  of 
times  any  particular  NP  occupation  group  is  significantly  correlated  with 
other  occupation  groups. 
the  correlation  coefficient  <r>,  are  :  -

In  terms  of  size  the  main  relationships,  with 

(i) 
(ii) 
(i;;) 
Ci v> 

<v> 
<vi> 
(vii> 
<viii> 
< i x> 
(x) 

clerical  workers  with  all  NPs, 
typists/secretaries  with  all  NPs, 
typists/secretaries  with  clerical  workers, 
engineers  and  draughtsmen  with  computer  and 
other  technical  workers, 
sales  workers  with  all  NPs, 
scientists  and  technicians  with  all  NPs, 
typists/secretaries  with  managers, 
scientists  and  technicians  with  service  workers, 
transport  workers  with  all  NPs, 
sales  workers  with  clerical  workers. 

r  = 0.87; 
r  = 0.78; 
r  = 0.78; 
r  = 0.65; 
r  = 0.62; 
r  = 0.59; 
r  = 0.56; 
r  = 0.52; 
r  = 0.50; 
r  =  0. 50. 

114.  The  interpretation  of  these  relationships  needs  to  be  made  with  care;  the 
existence  of  a  statistical  correlation  is  not  necessarily  an  indication  of 
a  causal  relationship.  However  it  is  intuitively  satisfactory  that 
typists  and  clerks  are  associated  largely  with  the  total  NP  proportion, 
with  each  other,  and,  in  the  case  of  typists,  with  managers.  The  latter 
may  be  deemed  to  be  an  example  of  hypothesis  II;  the  number  of  typists 
depends  upon  the  number  of  managers.  The  correlation  between  computer 
and  other  technical  workers,  and  engineers  and  draughtsmen  is  probably 
also  causal.  The  most  surprising  result  is  that  between  scientists  and 
technicians,  and  service  workers.  This  may  be  due  to  the  scientists  and 
technicians  being  associated  with  considerable  capital  equipment  and 
special  conditions  that  need  maintenance  and  cleaning,  and  produce  safety 
and  security  problems. 
occupation  groups  is  the  result  of  their  mutual  dependence  upon  an 
industry  characteristic  and  not  a  consequence  of  any  relationship  between 
them. 

In  this  case  the  correlation  between  the  two 

115.  Using  the  second  approach  of  paragraph  113  the  list  below  orders  the 
occupation  groups  according  to  the  number  of  times  their  correlation 
coefficients  with  other  groups  exceeds  0.34. 

CLK  6 
TYP  5 

PRO  3 
SCI  3 
SAL  3 

MAN  2 
TEC  2 
TRN  2 
SER  2 

WHS 
ENG 

Both  clerical  workers  and  typists/secretaries  are  strongly  dependent  upon 
the  proportions  in  other  NP  occupation  groups,  with  typists/secretaries 
being  particularly  dependent  upon  the  numbers  of  managers  and,  to  a 
lesser  extent,  scientists  and  technicians.  On  the  other  hand  warehousemen, 
and  engineers  and  draughtsmen,  are  not  closely  linked  to  any  other 
occupation  group.  The  seven  occupation  groups  in  the  middle  have  certain 
Links  with  other  occupation  groups,  but  these  are  not  marked  and  very 
often  are  the  reverse  of  the  links  with  clerical  workers  and  typists/ 
secretaries.  Abstracting  from  the  cleri calltypi st  links,  the  only  strong 
links  remaining  that  have  not  been  identified  in  paragraph  113  are  those 
between  professional  workers  and  managers,  and  sales  workers  and  transport 
workers. 

-48-

116.  It  needs  to  be  recognised  that  the  previous  analysis  is  deficient  in  that 
it  only  considers  relationships  between  two  NP  occupation  groups  at  a 
time.  To  bring  out  the  relationships  between  one  group  and  several  other 
NP  occupation  groups  simultaneously  it  is  again  necessary  to  use  multiple 
regression  analysis.  On  this  basis  the  following  results  were  obtained. 

117.  Typists/secretaries. 

The  NP  proportion  of  typists/secretaries  is 

related  largely  to  the  NP  proportions  of  managers,  sales  workers, 
professional  workers,  engineers  and  scientists,  and  some  65  X of  the 
variation  in  the  typists  proportion  can  be  explained  in  this  way.  Of 
the  individual  categories  the  •other  professional  workers•  were  least 
important.  Somewhat  surprisingly,  the  NP  proportions  of  sales  workers 
and  engineers  and  scientists  are  more  important  than  those  of  managers 
'when  it  comes  to  explaining  industry  variations  in  the  NP  proportions  of 
typists/secretaries. 

118.  Clerical  workers. 

The  NP  proportion  of  clerical  workers  is  like  that  of 

typists/secretaries  in  that  it  is  related  to  a  similar  set  of  occupations 
managers,  engineers,  scientists,  sales  workers- and  this  is  one  reason 
why  the  correlation  coefficient  between  the  two  occupation  groups 
clerical  workers  and  typists/secretaries  is  so  high  (cf.  Table  4.3  where 
r  = 0.78). 
In  addition,  clerical  workers  are  related  to  both  transport 
workers  and  warehousemen.  The  implication  is  that  clerical  workers  are 
dependent  upon  three  types  of  other  occupations;  the  sales/stores/ 
transport  distribution  sector;  the  engineering/scientific  sector,  and 
the  managerial  sector. 

119.  Computer  and  other  technical  workers.  The  NP  proportion  of  computer  and 
other  technical  workers  is  largely  dependent  upon  those  of  engineers  and 
draughtsmen,  with  no  other  occupation  group  being  of  great  significance. 

120.  Managers. 

In  this  case  multiple  regression  analysis  proves  to  be 

unfruitful,  showing  that  the  NP  proportion  for  managers  depend  upon  those 
of  salesmen,  scientists,  engineers  and  transport  workers  to  only  a 
limited  extent,  these  occupations  only  accounting  for  less  than  20  X of 
the  total  variation  in  the  proportion  of  managers. 
are  best  considered  as  dependent  upon  industry  characteristics,  rather 
than  upon  other  NP  occupations. 

It  seems  that  managers 

Testing  hypotheses  I  and  II  simultaneously 

121.  When  considering  the  first  hypothesis,  in  paragraphs  94-109  (that  NP 

proportions  depend  upon  a  set  of  industry  characteristics)  it  appeared 
that  this  was  a  relatively  satisfactory  way  of  explaining  the  NP 
proportions  of  engineers  and  draughtsmen,  scientists  and  technicians, 
sales  workers,  managers,  service  workers  and  transport  workers. 
It 
failed  to  cope  satisfactorily  with  professional  workers  n.e.c.  (not 
elsewhere  classified)  and  warehousemen.  The  second  hypothesis,  that  NP 
proportions  for  some  occupations  depend  upon  the  proportions  of  other 
NP  workers,.  was  also  fairly  satisfactory  in  explaining  the  proportionate 
importance  iri  total  employment  of  dependent  occupations  such  as  typi.sts/ 
secretaries,  clerical  workers,  and  computer  and  other  technical  workers. 

-~-

122.  This  leaves  warehousemen  and  professional  workers  n.e.c.  as  the  two 

occupation  groups  for  which  no  satisfactory  explanation  has  been  found. 
It  also  leaves  open  to  question  the  extent  to  which  a  combination  of 
hypothesis  I  and  II  may  explain  the  NP  proportions  for  any  other 
occupation  group.  Thi~ question  has  also  been  tackled  using  multiple 
regression  methods,  the  most  interesting  results  of  which  are  reviewed 
in  the  following  paragraphs. 
It  should  be  noted  that  warehousemen  and 
professional  workers  n.e.c.  remain  as  the  groups  for  whom  statistical 
analysis  at  the  industry  level  provides  no  reliable  explanation. 

123.  Managers. 

In  paragraph  102  the  NP  proportions  of  managers  were  shown  to 
be  dependent  upon  industry  characteristics,  whilst  paragraph  120  indicated 
that  they  were  only  partially  dependent  upon  other  occupations.  Analysis 
on  the  basis  of  both  hypotheses  somewhat  increases  the  relative  importance 
of  other  occupations,  the  most  important  occupation  groups  being  computer 
and  other  technical  workers,sales  workers,  professional  workers  and 
scientists.  The  most  important  industry  characteristics  are  the  average 
size  of  plant,  productivity  per  P-worker,  and  expenditure  on  communications. 

124.  This  result  is  satisfactory  in  that  each  of  the  seven  variables  are  fairly 
distinct,  and  it  is  realistic  in  that  everything  is  included.  The  task  of 
managers  is  to  manage,  and  you  need  more  of  them  the  more  you  increase  the 
sales  effort;  indulge  in  R & D;  emoloy  professional  workers,  computer  and 
other  technical  workers  and  scientists;  the  greater  is  operative 
productivity;  and  the  more  the  expenditure  on  communications  that  is 
incurred.  But  for  many  of  these  relationships  the  causal  connection  is 
It  is  possible  that  industries  may  indulge  in  R & D,  computer 
obscure. 
and  other  technical  workers,  and  professional  workers,  simply  because 
they  employ  a  proportionately  high  number  of  managers,  rather  than  need 
the  managers  to  administer  these  activities  and  staff.  The  only  variable 
that  provides  a  clear  causal  relationship  isthe  average  size  of 
establishment;  the  Larger  the  average  establishment  size  in  an  industry, 
the  smaller  the  proportion  of  managers  in  total  employment  in  that 
industry. 

125.  Typists/secretaries.  Although  the  NP  proportion  of  typists/secretaries 

seems  Likely  to  depend  Largely  upon  the  NP  proportions  of  other 
occupations,  the  inclusion  of  industry  characteristics  appears  to  show 
that  productivity,  communications  and  the  type  of  market  also  exert 
strong  effects. 
is  unclear.  Typists/secretaries  are  essentially  a  dependent  occupation 
group  and  one  must  assume  that  the  industry  characteristics  are  working 
through  other  occupation  groups. 

In  this  case  the  meaning  of  the  statistical  relationship 

126.  Clerical  workers. 

This  occupation  group  is  similar  to  typists/ 

secretaries  but  the  inclusion  of  both  industry  characteristics  and  other 
occupation  groups  only  serves  to  highlight  the  dependence  of  their 
proportionate  size  on  industry  characteristics.  This  is  largely  because 
the  occupation  groups  with  whom  they  are  related- sales  workers, 
computer  and  other  technical  workers,  scientists,  warehousemen  and 
transport  workers  - are  those  directly  related  to  the  industry 
characteristics  of  markets  and  technology.  The  industry  characteristics 
picked  up  directly  by  the  equation  are  again  those  related  to  the  volume 
of  production  (productivity  and  communications),  with  establishment  size 
also  playing  a  role. 

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- 51-

127.  Service  workers.  Although  service  workers  appear  to  be  related,  via 

capital  intensity  and  scientific  workers,  to  a  technological  factor,  they 
are  also  related  to  sales  workers  and  transport  workers,  indicating  a 
distribution  link  for  which  no  intuitive  explanation  is  apparent.  They 
remain  a  somewhat  mysterious  category. 

128.  Computer  and  other  technical  workers. 

As  one  might  expect,  this  group  is 

closely  associated  with  engineers  and  research,  although  the  NP 
proportions  of  professional  workers  are  also  important,  as  is  the  average 
size  of  establishment. 

Summary 

129.  This  chapter  has  tried  to  establish  the  factors  that  determine  why  the  NP 

proportion  for  any  given  NP  occupation  group  varies  between  industries. 
It  is  based  upon  two  principal  hypotheses- that  NP  proportions  may 
depend  upon  Ci)  individual  industry  characteristics,  Cii)  the  proportions 
of  other  NP  occupations  in  an  industry.  There  is  also  the  possibility 
that  both  hypotheses  may  be  valid  for  any  particular  occupation  group. 

130.  The  results  of  testing  these  hypotheses  are  summarised  subjectively  in 
Table  4.4.  There  are  six  occupation  groups  that  appear  to  be  largely 
dependent  upon  industry  characteristics.  These  are  the  groups  confined 
to  the  top  left-hand  corner  of  the  table  :  scientists  and  technicians, 
engineers  and  draughtsmen,  transport  workers,  warehousemen,  sales 
workers,  and  professional  workers  n.e.c. 
are  largely  dependent  upon  technological  factors,  such  as  expenditure 
on  R & D,  and  capital  per  P-worker;  the  next  three  occupation  groups  are 
largely  correlated  with  productivity  and  the  type  of  markets  served  by 
the  industry;  the  Last  category  is  professional  workers,  for  which  the 
analysis  is·relatively  unsuccessful. 

Of  these  the  first  two  groups 

131.  There  follow  three  occupation  groups- computer  and  other  technicians, 

that  appear  to  be  not  only  dependent  upon 

service  workers  and  managers  -
industry  characteristics,  but  for  whom  the  NP  proportions  of  other 
occupation  groups  are  also  of  some  significance.  For  these  groups  the 
most  important  industry  characteristic  appears  to  be  the  average  size  of 
establishment  in  the  industry.  Finally,  there  are  two  occupation  groups, 
clerical  workers  and  typists/secretaries,  that  are  best  considered  as 
being  occupations  whose  relative  size,  as  a  proportion  of  total  industrial 
employment,  is  governed  by  the  extent  to  which  other  NP  occupation  groups 
are  represented  in  an  industry's  Labour  force. 

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I 

-53-

CHAPTER  5 

ACCOUNTING 

FOR  REGIONAL  VARIATIONS  IN  NPs 

The  importance  of  industrial  structure 

132.  The  aim  of  this  chapter  is  to  present  a  formal  outline  of  the  approach 

used  in  this  report  to  account  for  regional  variations  in  NP  employment. 
The  outline  is  brief  but  forms  an  important  link  between  the  previous 
chapters  and  those  that  follow.  The  theme  of  regional  variations  was 
introduced  in  Chapter  2,  where  the  actual  regional  distributions  of  NPs 
were  described.  Chapter  3  then  attempted  to  measure  the  importance  of 
industrial  structure  in  contributing  to  the  regional  disparities  in  NP 
employment. 
considered  in  three  ways;  in  terms  of  the  actual  numbers  of  jobs,  related 
to  the  overall  regional  disparity  in  NPs  in  each  region,  and  related  to 
the  expected  number  of  NPs  in  each  region. 

In  Table  5.1  the  effects  of  industrial  structure  are 

Table  5.1  The  importance  of  industrial  structure  in  accounting  for  regional 

disparities  in  NP  employment  in  Great  Britain,  1971. 

Effect  of  industrial  structure 

Region 

Total  ex cess 
or  deficit(1) 
(thousands) 

Absolute 
numbers(2) 
(thousands) 

1 

2 

As  a  per  cent. 
of  the  total 
excess  or  deficit(3) 
3 

As  a  per 
of 
expected 

cent. 

NPC4) 

4 

5.5 
1.2 
5.3 
11.4 
5.2 

7.7 
1.6 
2.1 
1. 7 
3.9 

+  14.5 
+  30.5 
+  41.3 
+  58.9 
-144.4 

+  44.5 
- 14.9 
- 14.2 
+  7.0 
- 20.6 

South  East 
South  West 
West  Midlands 
East  Midlands 
East  Anglia 
Yorkshire  and 
Humber side 

+  283.0 
5.9 
+ 
- 48.9 
-
38.9 
-
2.7 
-
47.2 
- 47.7 
North  West 
-
38.7 
Scotland 
-
29.8 
Wales 
-
33.1 
North 
Source  :  Census  of  Population,  1971. 
1) 
2> 
3) 

+  41.0 
+  1. 8 
- 20.2 
- 22.9 
+  3.9 

- 21.0 
+  7.1 
+  5.5 
-
2.1 
+  7.0 

'Actual'  minus  'national'  employment  in  Table  3.1. 
'Expected'  minus  'national'  employment,  i.e.  column  5  of  Table  3.1. 
Column  2  divided  by  column  1.  A positive  value  in  column  3  indicates 
that  the  effect  of  industrial  structure  acts  in  the  same  direction  as 
the  total  disparity  of  column  1.  A negative  value  indicates  that  the 
industrial  structure  acts  in  a  contrary  direction. 
Column  2  divided  by  column  2  of  Table  3.1. 

4) 

-54-

133.  There  are  three  regions  in  which  industrial  structure  plays  an  important 
role  relative  to  the  overall  deficit  or  excess  in  NPs.  Of  these  three, 
Yorkshire  and  Humberside  and  the  East  Midlands  are  Britain's  major 
textile  producing  regions,  whereas  the  West  Midlands  is  heavily  dominated 
by  mechanical  engineering  and  vehicle  industries  with  below  average  NP 
proportions. 
In  the  South  West  the  effect  of  industrial  structure  is 
reasonably  large  in  proportional  terms  but,  as  with  East  Anglia,  the 
absolute  magnitudes  are  very  small. 
structure  plays  little  or  no  role  in  accounting  for  the  employment 
disparities  in  proportional  terms,  although  in  the  South  East  the  absolute 
number  of  jobs  involved  is  fairly  large  (41,000).  Because  of  the  small 
relative  importance  of  the  effect  of  industrial  structure  in  virtually  all 
regions,  except  the  Midlands  and  Yorkshire  & Humberside,  the  residual 
employment,  after  taking  structure  into  account,  is  almost  as  large  as 
or,  in  some  cases,  larger  than  the  total  excess  or  deficit  indicated  in 
Table  5.1. 
numbers. 
column  1  of  Table  5.2  below  (1). 

This  residual  is  equivalent  to  'actual'  minus  'expected' 
It  is  given  in  column  4  of  Table  3.1  and  is  also  reproduced  in 

In  all  other  regions  industrial 

134.  The  industrial  structure  factor  has  been  singled  out  at  this  early  stage 

in  the  discussion  because  as  far  as  is  known  it  is  the  only  structural 
factor  of  any  real  importance. 
In  this  context  the  term  structural  is 
taken  to  refer  to  some  broad  characteristic  of  industry  in  the  regions, 
such  as  the  mix  of  products,  relative  size  structures  of  factories,  or 
the  processes  of  production  (e.g.  mass  production).  The  important  common 
factor  in  each  case  is  that  these  structural  factors  are  relatively  static 
in  the  short  or  medium  term  and  there  is  little  scope  for  devising 
policies  that  may  ameliorate  the  problems  caused  by  these  factors,  other 
than  in  the  long  term. 

The  size  of  non-structural  regional  disparities  in  NPs 

135.  The  remaining  'residual'  variations  in  NP  employment,  after  taking  account 
of  industrial  structure,  are  reproduced  in  Tables  5.2  and  5.3  in  a  form 
that  is  more  convenient  than  that  used  in  Chapter  3. 
regions  are  grouped  into  three  categories  according  to  the  relative  extent 
by  which  actual  employment  exceeds  that  expected  on  the  basis  of  their 
actual  industrial  structure.  The  South  East  and  South  West  regions  have 
more  NP  employment  than  expected,  as  noted  in  Chapter  3,  although  the 
degree  of  excess  in  the  South  East  far  exceeds  that  of  the  South  West. 
An  intermediate  category,  including  most  of  the  rest  of  England,  has  an 
NP  employment  deficit  amounting  to  between  an  eighth  and  a  twelfth  of  the 
expected  employment.  Those  regions  which  ~re  wholly  Development  Areas 
constitute  the  final  category,  having  a  deficit  close  to  twenty  per  cent. 
in  each  case. 

In  both  tables  the 

(1)  For  definitions  of  the  terms  'actual',  'expected'  and  'national',  and 

the  division  of  the  difference  between  the  actual  and  national 
figures  into  an  industrial  structure  effect  and  a  residual  see 
paragraphs  54  and  55. 

-55-

Table  5.2  Residual  variations  in  NP  employment  by  region,  1971 

Region 

South  East 
South  West 
West  Midlands 
East  Midlands 
East  Anglia 
Yorkshire  and  Humberside 
North  West 
Scotland 
Wales 
North 

Actual  - Expected  (1) 
(thousands) 
1 

Column  1  as  a  per  cent. 
of  expected  NPs  (2) 
2 

+ 
+ 
-
-
--
-
-
-
-

242.0 
4.1 
28.7 
16.0 
6.6 
27.2 
54.8 
44.2 
27.7 
40.9 

+  32.7 
+  2.8 
- 7.5 
- 8.0 
- 8.8 
- 9.9 
- 12.4 
- 17.0 
- 22.1 
- 22.9 

Source  :  Census  of  Population,  1971. 
1)  Column  4  of  Table  3.1. 
2) 

(Actual  - Expected)  x  100,  or  column  1  as  a  per  cent.  of  expected 

Expected 

numbers  (column  2  of  Table  3.1). 

136.  The  percentage  residuals  for  the  individual  occupation  categories  are 

described  in  Table  5.3,  from  which  two  points  are  immediately  apparent. 
Firstly,  the  proportional  disparities  are  greatest  in  the  managerial  and 
professional,  and  clerical,  occupation  categories,  and  they  are  Least  in 
the  sales  and  distribution  workers,  and  service  worker  categories. 
Secondly,  the  ordering  of  the  regions  based  on  the  percentage  disparities 
in  total  NP  employment,  given  in  Table  5.2,  is  closely  reflected  by  that 
of  the  managerial  and  professional  workers,  and  the  clerical  workers. 
In  the  scientific  and  technical  worker  category  the  South  West  has  much 
more  similarity  to  the  South  East  than  it  has  in  other  occupations, 
whereas  Yorkshire  and  Humberside  joins-
larger  proportional  deficits.  Except  for  the  clear  dominance  of  the 
South  East,  Table  5.3  shows  less  systematic  patterns  in  the  cases  of  sales 
and  distribution  workers  and  service  workers. 

the  development  regions  with  the 

137.  Although  the  percentage  excesses  and  deficits  used  in  Tables  5.1  to  5.3 

are  a  useful  way  of  indicating  the  importance  of  the  effects  of  industrial 
structure  and  the  residual,  most  of  this  report  is  more  concerned  with 
the  absolute  magnitudes  given  in  column  2  of  Table  5.1  and  column  1  of 
The  aim  of  the  report  is  to  demonstrate  how  individual 
Table  5.2. 
factors  contribute  to  the  overall  excess  or  deficit  in  terms  of  the 
numbers  of  jobs.  The  relative  importance  of  each  factor  will  only  be 
considered  in  passing. 

-56-

Table  5.3 

'Residual'  variations  (1)  in  NPs  by  region  and  occupation  categorlL 
1971 

Region 

South  East 
South  West 
West  Midlands 
East  Midlands 
East  Anglia 
Yorkshire  and 
Humberside 

North  West 
Scot land 
Wales 
North 

Managerial 
and 
professional 

Clerical 

Scientific 
and 
technical 

Sales 
and 
di st ri but ion 

Service 

+  48.1 
-
4.4 
- 6.4 
- 12.6 
-
5.0 

- 13.2 
- 16.9 
- 29.5 
- 35.8 
- 36.6 

+  37.3 
-
3.5 
-
7.4 
-
9.9 
- 6.5 
- 10.1 
- 14.9 
- 17.9 
- 28.7 
- 26.7 

+  32.7 
+  26.8 
- 14.1 
-
2.3 
- 11.5 

- 21.5 
-
8.0 
- 18.6 
- 26.5 
- 22.1 

+  22.0 
+  9.7 
- 2.7 
-
1. 8 
- 1 D. 0 
- 3.3 
- 13.7 
- 12.1 
-
7.7 
- 18.9 

+  11.0 
- 2.9 
-
6.4 
- 13.2 
- 13.8 
- D •.  2 
+  3 ..  D 
-
4 .. 4 
- D .. 3 
- 3 ..  7 

Source  :  Census  of  Population,  1971. 

1)  ((Actual  - Expected)/(Expected))  x  100,  or  the  percentage  by  which  actual 
NPs  in  a  given  occupation  category  in  a  region  differ  from  the  number  of 
NPs  expected,  taking  industrial  composition  into  account. 

The  role  of  single  and  multi-region  organisations 

138.  The  remaining  non-structural  factors  that  dominate  most  of  the  rest  of 
this  report,  and  that  are  considered  to  account  for  the  residual 
disparities  in  NPs,  are  connected  with  the  organisation  of  industry  in 
two  senses.  The  first  sense  is  that  of  the  internal  structure  of 
corporations  and  organisations  (1),  involving  such  considerations  as  the 
location  of  head  offices  and  the  status  of  factories  in  the  hierarchy  of 
corporate  control.  The  second  sense  is  that  of  productivity,  which  was 
shown  in  Chapter  4  to  be  correlated  with  NP  proportions  in  industries. 
Although  productivity  is  an  important  factor  which  distinguishes 
individual  industries  and  is  therefore  intimately  bound  up  with  industrial 
structure,  future  discussions  in  this  text  only  consider  productivity 
variations  that  are  independent  of  industry  differences,  or,  in  other 
words,  productivity  variations  between  factories  in  the  same  industry. 

139.  It  seems  that  the  internal  structure  of  corporations  and  organisations  is 
a  much  more  important  influence  on  NP  proportions  than  is  productivity 
and  one  particular  structural  aspect  is  taken  to  be  fundamental  to  the 
approach  of  this  study.  This  is  the  separation  of  those  organisations  or 
corporations  that  control  sites  in  only  one  region  from  those  whose  sites 
straddle  two  or  more  regions.  This  division  is  a  fundamental  one  simply 
because  multi-region  corporations  or  organisations  have  the  option  of 
concentrating  their  NP  employees  between  regions  in  a  way  that  does  not 

(1)  For  definitions  of  the  terms  used  see  paragraphs  (xiii)  - Cxx) 

in 

the  Foreword. 

-57-

reflect  the  regional  distribution  of  their  production  workers.  A common 
practice,  for  example,  is  to  locate  some  NP-workers  away  from  any 
production  site  in  'detached'  head  offices  or  research  and  development 
laboratories.  Single-region  corporations  or  organisations  on  the  other 
hand  cannot  concentrate  NPs  in  such  a  way  as  to  create  regional 
disparities,  because  by  definition  all  of  their  employment  remains  within 
a  single  region. 

140.  In  this  study  attention  if  normally  focussed  on  organisations,  which  are 
defined  as  either  whole  corporations  (if  these  are  relatively  small)  or 
the  Largest  sub-unit  of  a  large  corporation,  such  as  a  division  or  large 
subsidiary  company.  Single-region  organisations  are  therefore  defined  as 
being  either  corporations  with  all  their  sites  located  in  one  region,  or 
divisions  or  subsidiary  companies  of  a  large  corporation  which  have  all 
their  sites  in  one  region.  Multi-region  organisations  are  also  whole 
corporations,  divisions  or  subsidiary  companies,  but  in  this  case  the 
organisation  has  sites  in  two  or  more  regions. 

141.  Focussing  attention  on  organisations  rather  than  corporations  appears  to 
be  somewhat  artificial  at  first  sight,  but  on  reflection  seems  to  be  one 
of  the  few  meaningful  ways  to  unravel  the  effects  of  the  huge  corporations 
whose  complexity  is  frequently  much  greater  than  might  initially  be 
imagined.  Multi-region  corporations  include  virtually  all  the  country's 
largest  corporations  from  ICI  (Imperial  Chemical  Industries  Limited)  and 
GEC  (General  Electric  Company  Limited)  down  to  those  of  a  relatively 
modest  size.  Within  most  of  these  corporations,  and  especially  the 
larger  ones,  there  is  usually  more  than  one  level  of  corporate  control. 
Very  large  corporations  commonly  have  three  Levels.  The  highest  is  the 
corporate  Level  wherein  NPs  serve  (or  direct)  the  corporation  as  a  whole 
rather  than  any  defined  part  of  it.  The  next  Level  down  typically 
consists  of  divisions  of  branch  plants  or  small  subsidiary  companies, 
and  within  these  divisions  there  will  be  some  staff  wh9se  function  is 
directed  at  the  whole  division  rather  than  any  part  of  it.  Large 
subsidiary  companies,  such  as  Birds  Eye  Foods  within  Unilever  Limited  or 
Wiggins  Teape  within  B.A.T.  Industries  Limited  may  be  thought  of  as 
being  equivalent  to  divisions.  Finally  there  may  be  subsidiaries  of 
subsidiaries  or  subsidiaries  within  divisions,  and  once  again  some  staff 
will  have  company-wide  responsibilities  at  that  level. 

142.  The  significant  aspect  of  this  hierarchical  arrangement  is  that  regional 
disparities  in  NPs  relative  to  the  distribution  of  operatives  can  arise 
at  all  Levels  in  the  hierarchy.  As  an  example,  a  corporation  may  have 
detached  head  offices  at  all  Levels  in  the  hierarchy,  i.e.  there  will  be 
a  DHO  at  the  corporate  level,  a  detached  divisional  head  office,  and 
DHOs  for  subsidiary  companies  within  divisions.  Any  attempt  to  analyse 
regional  disparities  is  thus  immediately  forced  to  take  sub-corporate 
organisations  into  account.  The  disparities  identified  in  each 
organisation  are  mutually  exclusive  and  non-overlapping,  although  they 
may  in  principle  be  summed  to  obtain  a  total  disparity  for  the  whole 
corporation. 

-~-

143.  In  this  study  corporate  functions  and  staff,  and  the  regional  disparities 
that  they  generate,  are  dealt  with  in  a  separate  chapter  on  corporate 
head  offices  and  research  and  development  laboratories  (Chapter  8). 
Disparities  arising  from  sub-corporate  (multi-regional)  organisations  are 
considered  separately  (Chapter  7).  The  strategy  can  be  summarised  as 
follows  : 

Total  residual 
disparities  in 
NP  employment 

Single-region 
organisations 
Multi-region 
organisations 

Corporate  Level(DHOs  and  research 

Laboratories) 

Sub-corporate  Level 

144.  The  total  disparities  have  been  disaggregated  into  these  components 

because  it  is  hypothesised  that  different  types  of  factor  will  cause 
regional  disparities  in  each  case.  Notice  that,  for  each  component, 
allowance  is  made  for  regional  differences  in  industrial  structure.  This 
is  because  variations  in  industrial  structure  would  otherwise  cloud  the 
interpretation  put  upon  the  disparities  produced  by  each  component.  The 
sum  of  the  separate  industrial  effects  is  the  total  effect  of  industrial 
structure  already  discussed  in  Chapter  3  and  in  the  opening  paragraphs 
of  this  chapter. 

Data  for  single-region  and  multi-region  organisations 

145.  Having  outlined  in  principle  the  approach  to  be  used,  the  final  problem 
Lies  in  the  measurement  of  the  effects  of  the  various  components.  There 
is  no  published  data  which  gives  NP  employment  in  single  and  multi-region 
organisations,  but  the  research  team  were  fortunate  in  obtaining 
unpublished  figures  compiled  by  the  Business  Statistics  for  their  internal 
use  (1).  These  allow  the  nearest  approximation  to  single- and  multi 
region  organisation  figures  that  is  likely  to  be  made  available  in  the 
foreseeable  future.  This  data  relates  to  ATCs,  not  NPs,  and  is  drawn  from 
the  returns  made  by  companies  to  the  Business  Statistics  Office  for  the 
Census  of  Production.  Although  the  BSO  prefers  separate  returns  to  be 
made  for  each  site,  multi-plant  firms  often  send  in  returns  which  account 
for  several  sites. 
In  1971  such  multi-site  returns  accounted  for  half  of 
all  employment  in  manufacturing  and,  in  particular,  multi-site  returns 
that  straddled  two  or  more  regions  accounted  for  about  40%  of  total 
employment  (2) 

146.  The  BSO  data  can  therefore  be  used  to  identify  two  categories  of 

respondents  : 

(i)  multi-site  returns  for  plants  Located  in  two  or  more  regions- these 

are  equated  with  multi-region  organisations  in  what  follows; 
Cii)  single-site  returns  and  multi-site  returns  for  plants  Located  in 

only  one  region  -
in  what  follows. 

these  are  equated  with  single-region  organisations 

<1>The  research  team  are  particularly  grateful  to  Dr.  Mitchell  of  the 

Business  Statistics  Office  for  allowing  us  to  use  these  figures,  and 
for  his  careful  description  of  the  basis  of  their  collection. 

(2)See  the  appendix  to  this  chapter  and  paragraphs  176  and  177. 

-59-

The  data  acquired  from  the  BSO  by  the  research  team  related  to  single 
region  returns.  Estimates  for  multi-region  organisations  were  obtained 
by  subtracting  the  single-region  data  from  total  employment. 

147.  The  multi-site  returns  that  straddle  two  or  more  regions  can  only  come 

from  multi-region  organisations.  Although  they  may  not  include  all 
multi-region  organisations  it  is  likely  that  they  include  a  large  majority 
of  them.  At  the  very  least  the  multi-region  returns  constitute  a  majority 
sample  of  multi-region  organisations  and  are  thus  unique  in  this  respect. 
On  the  other  hand  the  single-region  returns  can  include  responses  from 
the  following  types  of  organisations 

(i) 
( i i) 
( i i i) 
< i v) 

single-region  corporations; 
single-region  subsidiary  companies  of  multi-region  corporations; 
single-region  divisions  of  multi-region  corporations; 
individual  plants  which  form  part  of  wider  multi-reglon 
organisations  or  corporations. 

For  reasons  outlined  in  the  appendix  to  this  chapter  it  is  felt  that 
single-region  corporations  probably  contribute  half  of  the  employment  in 
the  single-region  returns  while  subsidiary  companies  account  for  most  of 
the  rest.  Although  some  individual  plants  from  multi-region  organisations 
may  be  included  within  the  single-region  returns  it  is  likely  that  the 
majority  of  these  returns  consists  of  true  single-region  organisations. 

148.  The  procedure  described  above  only  relates  to  returns  made  for  regions  in 

It  is  obvious  from  the  figures  that  some  multi-region 

England.  For  Wales  and  Scotland  the  situation  differs.  The  Census  of 
Production  form  carries  an  instruction  that  companies  should  send 
separate  information  for~ plants  located  in  either  Scotland  or  Wales, 
i.e.  multi-site  returns  that  include  plants  in  Scotland  or  Wales  are  not 
allowed. 
corporations  or  organisations  comply  with  this  instruction  but  a  large 
number  ignore  it.  The  result  is  that  figures  for  sinJle-region 
organisations  for  Scotland  and  Wales  exist  and  are  r~latively high 
compared  with  similar  data  for  the  English  regions,  whereas  the  estimates 
for  multi-region  organisations  are  artifically  low  (1).  Since  the  data 
for  Scotland  and  Wales  is  not  strictly  comparable  with  that  for  the 
English  regions  subsequent  tables  based  on  these  figures  separate  those 
two  countries  from  the  English  regions.  Finally,  minor  technical 
adjustements  have  been  made  and  these  are  described  in  the  appendix  to 
this  chapter. 

C1)  Attempts  have  been  made  to  estimate  employment  in  multi-region 

organisations  in  Scotland  and  Wales,  taking  into  account  the  volume  of 
postwar  industrial  movement  into  those  countries,  using  Department  of 
Industry  figures  for  1945-66  and  1966-71  separately,  and  taking  the 
North  and  North  West  regions  as  a  benchmark.  On  this  basis  employment 
in  multi-region  organisations  in  Wales  and  Scotland  comprise  46.1  % 
and  44  % of  total  employment  in  manufacturing  industry,  respectively. 
No  attempt  has  been  made  to  allow  for  the  relatively  high  proportion 
of  movement  into  Scotland  that  has  come  from  outside  the  United 
Kingdom  and  which  is  likely  to  be  single-region  in  a  UK  context. 

- 60-

Employment  in  multi-region  and  single-region  organisations 

149.  Total  and  ATC  employment  in  single  and  multi-region  organisations  is  given 
in  Table  5.4,  from  which  it  can  be  seen  that  the  relative  importance  of 
multi-region  organisations  is  greatest  in  the  North  and  North  West  (1), 
followed  by  the  South  East. 
It  is  possible  that  this  pattern  reflects 
the  geography  of  post-war  industrial  movement,  with  Development  Areas 
acquiring  a  considerable  number  of  plants  belonging  to  large  multi-region 
organisations.  The  relatively  low  proportion  of  'multi-region'  employment 
in  East  Anglia  is  partly  a  result  of  its  industrial  structure  being 
biased  away  from  industries  that  favour  multi-site  returns,  and  partl)' 
because  industrial  movement  into  the  region  has  been  Largely  in  the  form 
of  overspill  from  London.  This  overspill  has  included  a  large  proportion 
of  transfers  of  complete  firms,  as  opposed  to  moves  of  branch  plants. 

Table  5.4  Employment  in  multi-region  and  single-region  organisations  (1),'1971 

Employment  in  thousands 

Total  employment  as  a  per  cent. 
of  total  regional  employment  (2) 

Region 

Multi-region  Single-region 
organisations  organisations  Multi-region 

organisations 

Total 

ATC 

Total 

ATC 

South  East 
888.9  360.6  1197.5  381.0 
South  West 
241.0 
70.4 
145.7 
·west  Midlands  412.5 
672.4  158.7 
East  Midlands  227.8 
81.1 
350.3 
East  Anglia 
33.0 
133.9 
63.9 
Yorkshire  and 
Humberside 

39.3 
96.1 
48.9 
15.8 

278.0 
55.9 
483.3  102.2 

486.0  110. 1 
661.8  168.7 

North  West 

Scotland 
Wales 

190.9 
75.4 

39.6 
4.2 

456.1  104.9 
60.1 
245.6 

North 

204.4 

34.9 

238.9 

57.6 

42.6 
37.7 
38.0 
39.4 
32.4 

36.4 
42.2 

29.5 
23.5 

46.1 

Single-region 
organisations 

57.4 
62.3 
62.0 
60.6 
67.6 

63.6 
57.8 

70.5 
76.5 

53.9 

Source  :  Unpublished  Census  of  Production  data,  1971. 
1)  For  descriptions  of  the  data,  their  sources  and  interpretation,  see 

paragraphs  145-148  and  the  appendix  to  this  chapter. 

2)  Total  regional  employment  is  defined  as  the  sum  of  the  total  employment 
in  multi-region  organisations  and  the  total  employment  in  sing le-regi ctn 
organisations. 

(1)  Plus  Scotland  and  Wales,  if  the  estimates  in  the  footnote  to  para.  148  are 

accepted. 

- 61-

Regional  ATC  employment  disparities  in  single  and  multi-region  organisations 

150.  Using  the  data  described  above  it  is  possible  to  estimate  the  degree  to 

which  multi-region  organisations  and  single-region  organisations  each 
contribute  to  regional  disparities  in  non-production  employment.  Since 
the  data  source  is  in  this  case  the  Census  of  Production,  the  analysis 
is  necessarily  confined  to  ATCs  and  excludes  the  manual  NP  occupations, 
such  as  service  workers.  However,  service  workers  exhibit  relatively 
weak  regional  disparities  (Table  5.3)  and  ATCs  account  for  about  90  % 
of  the  total  regional  disparities  in  NPs. 

151.  Since  the  data  available  for  single  and  multi-region  organisations  is  in 
the  same  form  as  that  for  total  employment,  the  calculation  of  regional 
disparities  in  ATCs  at  this  disaggregated  Level  follows  exactly  that 
described  in  paragraphs  53-55  for  total  employment.  That  is,  actual, 
expected  and  national  estimates  of  ATCs  are  first  calculated,  using  the 
SIC  Order  level  of  disaggregation,  and  regional  disparities  in  ATCs  for 
each  type  of  organisation  are  obtained  after  making  allowance  for 
industrial  structure.  These  ATC  disparities  are  displayed  in  Table  5.5 
as  percentages  of  the  expected  employment  by  each  type  of  organisation 
in  each  region.  The  table  shows  immediately  that  the  regional 
disparities  have  a  similar  pattern  for  both  single  and  multi-region 
organisations,  but  that  the  differences  between  regions  are  much  greater 
in  the  latter  case. 

Table  5.5  Residual  disparities  in  ATC  employment  in  single  and  multi-region 

organisations,  1971 

Region 

South  East 
South  West 
West  Midlands 
East  Midlands 
East  Anglia 
Yorkshire  and  Humber side 
North  West 

Scotland 
Wales 

North 

per  cent  of  expected  employment(1) 

SingLe-region 
organisations 

Multi-region 
organisations 

+  20.1 
+  15.6 
- 11.5 
-
3.8 
- 8.3 
-
9.3 
-
1. 8 

- 12.3 
-
8.6 

- 14.3 

+  79.7 
+  2.3 
- 20.1 
- 18.4 
- 12.3 
- 21.8 
- 28.1 

- 29.5 
- 82.8 

- 44.7 

Source  :  Unpublished  Census  of  Production  data,  1971. 
1 )  ((Actual- Expected)/(Expected))  x  100. 

- 62-

152.  For  single-region  organisations  the  ATC  disparities  show  clear  excesses 

in  both  the  South  East  and  the  South  West.  All  the  remaining  regions  have 
relative  deficits  in  ATCs  but  the  pattern  is  not  quite  the  familiar  one 
of  the  deficits  increasing  in  size  with  distance  from  London.  The  East 
Midlands  and  the  North  West  have  very  small  deficits  while  the  rest  of 
the  deficit  regions  have  deficiencies  in  ATCs  to  about  10  % of  their 
expected  employment. 
over-estimated  because  of  the  way  in  which  the  original  data  was 
obtained  <1>. 

The  deficits  for  Scotland  and  Wales  are  probably 

153.  The  ATC  employment  disparities  within  multi-region  organisations,  again 

after  making  allowance  for  regional  differences  in  industrial  structure, 
are  much  Larger  than  those  within  single-region  corporations.  The  South 
East  has  almost  80%  more  ATC  employment  than  expected  while  the  North 
has  45  % Less  than  expected  and  all  the  other  regions  have  deficits  of 
10- 30%  (2).  The  pattern  of  the  residual  is  the  familiar  one,  with  an 
excess  of  ATC  jobs  in  the  South  East,  a  small  excess  in  the  South  West, 
and  deficits  that  increase  in  size  with  distance  from  London.  These 
disparities  are  likely  to  be  the  result  of  the  centralisation  of  ATCs  at 
head  offices  and  their  aggregation  at  other  sites  within  organisations. 
This  proposition  is  investigated  further  in  the  next  three  chapters  and 
in  Chapter  9  it  is  given  a  quantitative  form. 

The  components  of  regional  disparities  in  ATCs 

154.  From  the  previous  sections  it  can  be  seen  that  the  regional  pattern  of 

industrial  structure,  single-region  organisations,  multi 

ATC  employment  is  dominated  by  the  way  in  which  multi-region  organisations 
or  corporations  Locate  their  white-collar  employees.  This  conclusion  can 
be  extended  by  measuring  the  quantitative  contribution  made  by  each 
component  -
region  organisations- to  the  total  disparity  in  ATC  employment,  defined 
as  'actual'  employment  minus 
disparity  is  given  in  the  first  column  of  Table  5.6,  using  Census  of 
Production  figures,  together  with  an  estimate  of  the  relative  importance 
of  each  of  the  three  components. 

'national  employment  (3).  This  total 

(1)  See  paragraph  148. 
(2)  The  figure  for  Wales  is  not  comparable  with  those  of  the  other 

It  is  probably  very  Large  because  only  the  very  highly-

regions. 
centralised  organisations  sent  in  multi-site  returns,  and  the 
branch  plants  controlled  by  these  organisations  have  very  few  ATCs. 
See  paragraph  148. 
(3)  c.f.  paragraphs  54/5. 

- 63-

Table  5.6  The  components  of  regional  disparities  in  ATC  employment,  1971 

Region 

South  East 
South  West 
West  Midlands 
East  Midlands 
East  Anglia 
Yorkshire  and 
Humberside 

North  West 

Scotland 
Wales 

North 

Total  disparity 
in  ATC  ( 1) 

employment 
(thousands) 

The  results  of  : 

regional  differences 

in  industrial 
structure  ( 2) 
% 

single- multi-
region 
region 
organisations 

% 

% 

+  257.4 
+  10.3 
- 43.3 
- 30.9 
-
4.7 
- 48.7 
- 42.9 
- 35.9 
-
27.9 
- 33.4 

-

13 
14 
4 
54 
- 11 

45 
0 

13 
7 

- 13 

25 
74 
48 
10 
64 

23 
7 

41 
21 

29 

62 
12 
56 
36 
47 

32 
93 

46 
72 

84 

Source  :  Census  of  Production,  1971,  including  unpublished  data. 
1) 

'Actual'  ATC  employment  minus  'national'  ATC  employment.  See  paragraphs 
54/5. 
'Expected'  ATC  employment  minus  'national'  ATC  employment.  See 
paragraphs  54/5.  A minus  sign  indicates  that  the  effect  of  industrial 
structure  acts  in  the  opposite  direction  to  the  total  disparity. 

2) 

155.  The  impact  of  industrial  structure  has  been  outlined  previously  (1), 

although  it  should  be  noted  that  the  change  of  data  to  an  ATC  basis  alters 
the  conclusions  in  two  cases.  Scotland  appears  to  have  a  slightly 
unfavourable  industrial  structure  in  Table  5.6  whereas  it  was  considered 
to  be  slightly  favourable  in  the  NP  analysis  of  Table  5.1.  A more 
important  change  occurs  in  the  case  of  the  West  Midlands  for  whom  the 
industrial  structure  effect  in  Table  5.6  is  very  slightly  favourable  to 
ATCs,  whereas  in  Table  5.1  it  was  particularly  unfavourable,  to  the 
extent  of  20,000  jobs.  Other  than  in  these  two  cases  the  general  pattern 
is  unaltered,  with  industrial  structure  accounting  for  a  significant  part 
of  the  total  disparity  in  ATCs  in  only  the  two  'textile'  regions  of  the 
East  Midlands  and  Yorkshire  and  Humberside. 

156.  The  impact  of  multi-region  organisations  is  gre•ter  than  that  of  single 
region  organisations  in  all  regions  except  East  Anglia  and  the  South 
West,  for  whom  the  total  disparity  is  in  any  case  very  small.  The 
multi-region  organisations  are  particularly  important  in  the  North,  North 
West  and  Wales;  the  three  regions  which,  with  Scotland,  have  been  the 
main  recipients  of  post-war  industrial  movement. 
both  have  higher  proportions  of  their  total  employment  in  manufacturing 
industry  in  branch  plants  than  do  other  regions,  and  this  may  account  for 
the  large  ATC  employment  deficits.  The  same  process  that  Leads  to  Low 

It  is  very  likely  that 

(1)  e.g.  paragraph  133 

- 64-

ATC  proportions  in  branch  plants  also  Leads  to  high  proportions  in  head 
offices,  and  the  effects  of  this  can  be  seen  in  the  major  role  played  by 
multi-region  organisations  in  the  South  East. 

157.  Leaving  aside  East  Anglia  and  the  South  West,  with  their  small  total 

disparities,  the  regions  in  which  single-region  organisations  make  their 
most  significant  impact  are  the  West  Midlands  and  Scotland.  However, 
they  make  an  important  impact  everywhere  except  in  the  North  West  and 
the  East  Midlands,  and  in  all  cases  they  reinforce  the  pattern  created 
by  the  multi-region  organisations  alone. 

158.  The  influence  on  the  regional  distribution  of  ATC  employment  can  not  be 

seen  to  be  relatively  complicated.  An  intuitive  assessment  of  them  would 
probably  give  most  weight  to  the  process  by  which  white-collar  jobs  are 
concentrated  in  head  offices,  mostly  in  the  South  East,  at  the  expense  of 
branch  plants,  many  of  which  are  in  the  Development  Areas.  However,  since 
this  process  must  operate  only  within  the  multi-region  organisations,  the 
factors  involved  are  shown  by  Table  5.6  to  be  of  Lesser  importance  in  at 
least  half  the  regions,  including  Scotland  (1).  Moreover,  it  is  by  no 
means  obvious  that  this  process  even  explains  all  of  the  regional 
disparities  within  multi-region  organisations,  since  other  explanations 
such  as  variations  in  regional  productivity  levels,  the  supply  of  NP 
services,  or  the  average  size  of  sites,could  also  cause  ATC  employment 
variations  within  multi-region  organisations  as  well  as  single-region 
ones.  Even  so,  the  process  of  centralisation  and  aggregation  is  Likely 
to  be  a  major  causal  factor  in  regional  employment  disparities. 

159.  In  conclusion,  three  factors  are  proposed  as  possible  causes  of  regional 

disparities  in  ATC  Cor  NP)  employment.  These  are  : 

(i)  the  effects  of  regional  variations  in  industrial  structure; 
Cii)  consistent  regional  variations  due  to  single-region  organisations; 

(iii)  the  effects  of  multi-region  organisations. 

Of  these  the  last  is  the  most  important  factor  in  those  regions  with  the 
greatest  excesses  or  deficits  of  NP  employment.  No  analysis  has  been 
presented  to  account  for  the  mechanism  by  which  the  latter  two  factors 
influence  NP  Levels,  although  various  statements  have  been  made  about  the 
centralisation  of  NPs  in  multi-region  organisations  or  corporations,  with 
their  concentration  at  head  offices,  and  the  intriguing  correlation  of 
NP  proportions  with  regional  productivity.  The  next  three  chapters 
consider  NPs  in  general,  starting  with  their  numbers  and  proportions  at 
individual  sites  (Chapter  6),  then  considering  them  in  organisations  and 
corporations  (Chapter  7),  and  finally  reviewing  the  role  of  corporate 
head  offices  and  research  laboratories  (Chapter  8). 

(1)  It  is  possible  that  a  certain  amount  of  the  variations  in  ATC 
employment  in  si11gle-region  organisations  is  the  result  of  particular 
effects  in  the  Large,  single-region,  divisions  or  subsidiaries  of  multi 
region  corporations  that  are  included  in  the  single-region  data  (c.f. 
paragraph  147).  The  somewhat  anomalous  position  of  Scotland  may  be 
attributable  to  the  data  difficulties  connected  with  Scotland  and  Wales, 
see  paragraph  148  and  its  footnote. 

- 65-

APPENDIX  TO  CHAPTER  5 

DATA  ON  SINGLE-REGION  ORGANISATIONS 

160.  In  principle  the  returns  from  companies  responding  to  the  Census  of 

In  practice  many  firms  send  in 

Production  relate  to  individual  sites. 
aggregated  data  covering  several  sites  because  their  internal  accounting 
and  stockholding  systems  do  not  distinguish  the  individual  sites. 
1971  multi-site  returns  accounted  for  half  the  employment  in  manufacturing 
industry.  Most  of  these  multi-site  returns  include  sites  in  two  or  more 
regions,  but  a  proportion  of  them  are  confined  to  only  one  region.  Thus 
there  are  two  types  of  Census  returns  that  provide  data  that  is  confined 
to  one  region  :  (i)  single-site  returns  and  (ii)  multi-site  returns 
covering  several  sites  in  one  region.  These  'single-region'  returns,  as 
they  are  called  in  this  report,  accounted  for  61  % of  employment  in 
manufacturing  industry  as  measured  by  the  Census  of  Production.  The 
'multi-region'  statistics  used  in  the  report  have  been  obtained  by 
subtracting  the  single-region  returns  from  the  total  employment  in  each 
region  and  industry.  The  important  questions  therefore  relate  to  the 
single-region  data. 

In 

161.  There  are  two  problems  involved  in  using  this  data.  The  first  is  one  of 
knowing  how  closely  the  single-region  returns  correspond  to  single 
region  organisations  (1),  the  second  is  a  question  of  accuracy.  On  the 
question  of  interpretation  there  are  a  number  of  possible  types  of 
single-region  respondent  :  (a)  the  multi-site  returns  that  are  restricted 
to  a  single  region  must  come  from  whole  organisations,  which  may  include 
(i)  single-region  corporations,  Cii)  single-region  divisions  of  either 
single  or  multi-region  corporations,  (iii)  single-region  subsidiary 
companies  of  other  single  or  multi-region  corporations;  (b)  the  single 
site  returns  must  relate  to  individual  plants  but  these  may  form  part  of 
either  a  single  or  a  multi-region  organisation. 

162.  The  three  categories  under  (a)  all  fall  within  the  definition  of  single 
region  organisations  because  they  are  all  Large  sub-units  within  one 
region,  but  the  individual  plants  in  (b)  do  not  necessarily  belong  in  the 
single-region  category  because  it  is  possible  that  they  include  individual 
plants  or  subsidiaries  that  properly  belong  to  multi-region  organisations. 
The  problem  is  that  the  number  of  individual  plants  belonging  to  multi 
region  organisations  included  in  the  single-region  returns  <if  any)  is  not 
known.  However,  from  the  Census  of  Production  (Summary  Table  8,  1971)  it 
is  known  that  corporations  that  employ  1000  people  or  Less  account,  in 
aggregate,  for  over  2.6  million  employees.  Furthermore,  the  work  involved 
in  arranging  the  Organisation  Survey  included  extensive  searching  through 
company  records  and  trade  directories  etc.,  and  on  this  evidence  it  can 
be  claimed  that  most  of  these  smaller  corporations  are  single-region 
corporations. 
Some  smaller  corporations  are  multi-regional  but  these 
may  be  assumed  to  balance  out  with  the  few  larger  ones  that  are  single 
region  and  not  multi-region.  The  figure  of  2.6  million  employees  can 
therefore  be  assumed  to  relate  to  single-region  corporations,  and  this 
accounts  for  over  half  of  the  employment  included  in  the  single-region 
returns. 

(1)  For  definitions  of  the  terms  used  see  the  Foreword,  paragraphs 

Cxiii)  - Cxx). 

- 66-

163.  The  rema1n1ng  employment  in  the  single-region  returns  is  either  in  whole 
divisions  or  major  subsidiaries  of  single  or  multi-region  corporations, 
or  in  individual  plants.  Again,  on  the  basis  of  the  work  needed  to  carry 
out  the  Organisation  Survey,  plus  the  way  in  which  individual  organisations 
arranged  to  complete  the  survey  questionnaires  for  their  sites,  it  can  be 
claimed  that  : 

(i)  most  corporations  hold  employment  records  at  the  subsidiary 
company  or  divisional  level  and  find  it  most  convenient  to 
reply  for  these  subsidiaries  or  divisions  rather  than  for 
individual  sites; 

Cii)  most  operational  divisions  (i.e.  those  with  more  than  a  nominal 
number  of  division  staff)  are  large  multi-region  organisations. 

164.  On  the  basis  of  this  evidence  it  seems  that  the  most  likely  originators 

of  returns  to  the  Census  of  Production  are  individual  subsidiary 
companies,  whether  in  a  nominal  division  or  not,  or  divisions  when  such 
divisions  consist  of  a  number  of  branch  plants  rather  than  a  number  of 
subsidiary  companies.  Support  for  these  assumptions  can  be  gained  from 
the  Census  of  Production  (Summary  Table  II,  1971)  which  shows  that  the 
100  largest  corporations  sent  in  an  average  of  34  returns  each  (1). 
This  number  is  too  Large  to  consist  wholly  of  divisions,  and  too  small 
to  consist  only  of  individual  plants. 
It  could  include  a  mixture  of 
divisions,  subsidiary  companies  and  plants,  but  the  number  is  of  the 
right  order  of  magnitude  to  agree  with  the  assumption  that  the  majority 
of  the  responses  come  from  subsidiary  compan1es  or  operating  divisions. 
Thus,  if  half  the  employment  in  single-region  returns  comes  from  single 
region  corporations  (paragraph  162),  most  of  the  rest  must  come  from 
single-region  subsidiary  companies  belonging  to  Large  corporations, 
whether  they  are  included  in  some  nominal  division  or  not,  and  most  of 
the  rest  will  come  from  just  a  few,  single-region,  operating  divisions. 
Thus  the  scope  for  there  being  a  substantial  number  of  individual  plants 
belonging  to  multi-region  organisations,  but  included  in  the  single 
region  returns,  is  limited.  On  the  other  hand,  most  of  the  multi-site 
returns  are  likely  to  come  from  operating  divisions  that  are  large, 
multi-region  organisations. 

165.  The  second  question  of  paragraph  161,  on  the  accuracy  of  the  data, 

involves  rather  more  clear-cut  considerations. 
out  that  the  figures  for  ATC  employment  in  each  region  that  are  presented 
in  the  Census  of  Production  involve  a  significant  degree  of  estimation. 
The  multi-site  returns  to  the  census  include  the  total  employment  at  each 
individual  site  covered  by  each  return,  but  not  the  ATC  employment,  which 
is  only  provided  for  the  aggregate  of  the  individual  sites  in  each  return. 
The  Business  Statistics  Office  then  estimates  ATC  employment  at  each  site 
by  assuming  that  the  ATC  proportion  for  the  whole  return  applies  generally 
at  each  individual  site. 

It  must  be  first  pointed 

(1)  The  term  'establishment'  used  in  th!  Census  of  Production  means  the 

same  as  the  words  'response'  or  'return'  in  this  report. 

- 67-

166.  The  work  on  the  Organisation  and  Head  Office  Survey  indicates  that  this 
assumption,  although  simple  and  convenient  to  apply,  is  almost  certainly 
wrong.  The  tendency  is  for  ATCs  to  congregate  at  certain  sites, 
particularly  head  office  and  research  sites,  with  considerably  higher 
ATC  proportions  in  the  South  East  and  lower  ones  elsewhere,  especially  in 
the  Development  Areas.  This  view  is  supported  by  a  comparison  of  the 
Census  of  Production  figures  for  1971  when  those  of  the  Census  of 
Population  (Table  A1),  using  a  classification  of  NP  occupations  that 
matched  the  Census  of  Production  definition  of  ATCs  as  closely  as 
possible. 

167.  Table  A1  shows  that  the  Census  of  Population  estimate  for  total 

manufacturing  employment  in  1971  is  about  500,000  greater  than  that  of 
the  Census  of  Production.  This  is  thought  by  the  Business  Statistics 
Office  to  be  due  to  the  greater  coverage  of  very  small  factories  and 
fringe  trades  by  the  Census  of  Population.  On  the  other  hand,  the 
figures  for  overall  ATC  employment  from  the  two  sources  agree  very 
closely  in  total,  but  not  in  their  regional  distribution.  The  Census  of 
Production  figure  for  the  South  East  is  100,000  below  that  of  the  Census 
of  Population,  but  the  Census  of  Production  figures  are  higher  than  those 
of  the  Census  of  Population  in  every  other  region  (1).  This  pattern  of 
relative  under-estimation  in  the  South  East  and  over-estimation  elsewhere 
is  exactly  that  predicted  in  the  previous  paragraph. 

Table  A1  A comparison  of  data  sources  for  ATC  and  total  employment  in 

manufacturing  industry  in  Great  Britain,  1971 

thousands 

Total  employment  from  the  : 

ATC  employment  from  the  : 

Census  of 
Production 

Census  of 
Population 

Census  of 
Production 

Census  of 
Population 

South  East 
South  West 
West  Midlands 
East  Midlands 
East  Anglia 
Yorkshire  and 
Humberside 
North  West 
Scotland 
Wales 
North 

2,086,4 
386.7 
1,084.9 
578.0 
197.8 

764.0 
1,145.1 
647.0 
321.1 
443.1 

Great  Britain 

7,654.1 

2,293.9 
420.8 
1,115.0 
604.8 
201.5 

802.1 
1,206.2 
693.8 
337.3 
460.5 

8,135.8 

649.1 
113.8 
259.8 
139.3 
52.7 

173.4 
293.2 
154.5 
78.1 
109.1 

751.0 
111.1 
258.0 
131.6 
49.5 

168.2 
274.4 
146.3 
65.1 
93.7 

2,023.0 

2,048.9 

Source  :  Census  of  Production,  1971,  and  Census  of  Population,  1971. 

(1)  The  Census  of  Population  figures  used  throughout  this  report  relate  to 

place  of  work,  not  place  of  residence. 

-~-

168.  Because  it  seems  Likely  that  the  Census  of  Population  estimates  of  ATC 
employment  are  the  more  accurate,  these  estimates  have  been  adopted  in 
Chapter  5,  although  for  the  purpose  of  accounting  for  the  total 
disparity  in  ATCs  they  have  been  multiplied  by  2023.0/2048.9  (=  0.987) 
to  ensure  that  they  sum  to  the  Census  of  Production  estimate  for  total 
ATC  employment.  Since  the  hypothesis  of  paragraph  166  is  that  the 
relative  inaccuracy  of  the  Census  of  Production  data  arises  Largely  due 
to  the  estimating  procedure  used  for  multi-site  returns  it  has  been 
assumed  that  the  ATC  figures  in  the  single-region  returns  are  accurate 
and  all  the  adjustments  are  made  to  the  multi-region  returns. 

169.  The  calculation  of  'expected'  employment,  allowing  for  industrial 

structure,  requires  one  final  minor  point  of  explanation.  For  total 
employment  the  expected  figures  were  initially  calculated  using  the 
original  <unamended)  Census  of  Production  figures.  The  results  were  then 
multiplied  by  the  ratio  of  the  amended  to  the  unamended  ATC  employment. 
This  process  was  also  used  in  the  calculation  of  expected  employment  in 
multi-region  organisations,  because  all  the  amendments  were  presumed  to 
relate  to  the  multi-region  returns  and  not  the  single-region  ones,  as 
explained  above. 

-M-

CHAPTER  6 

NON-PRODUCTION  WORKERS  AT  INDIVIDUAL  SITES 

170.  In  this  chapter  the  numbers  or  proportionate  importance  of  NPs  at 

individual  sites  are  examined  in  three  ways.  The  first  part  of  the 
chapter  tries  to  assess  the  extent  to  which  NPs  are  present  at  all  at 
production  sites,  and  the  factory  sizes  at  which  various  NP  occupations 
are  introduced.  A second  section  then  considers  variations  in  average 
NP  proportions  with  increasing  factory  size  and  then  looks  at  the 
variations  in  NP  proportions  produced  by  other  characteristics,  such  as 
the  organisational  status  of  the  factory  or  its  type  of  owner  (1). 
Finally,  the  implications  of  regional  variations  in  the  average  size  of 
establishment  are  examined  and  it  is  concluded  that  they  can  have  only  a 
modest  effect  on  the  figures  in  Table  5.6.  Much  of  the  chapter  is  based 
upon  the  special  surveys  undertaken  by  the  research  team,  especially 
the  Site  Survey  and  the  Organisation  Study  (1). 

The  occurence  of  NPs  at  sites 

171.  Both  the  Site  Survey  and  the  Organisation  Survey  obtained  data  on 

individual  locations.  The  Site  Survey  has  the  advantage  that  it  produced 
a  larger  number  of  responses  but  suffers  from  the  disadvantage  of  the 
restricted  number  of  NP  occupations  for  which  information  was  requested, 
and  from  a  sample  that  was  heavily  weighted  towards  firms  that  had  moved. 
The  Organisation  Survey  produced  fewer  responses  from  a  more  limited 
range  of  multi-region  organisations,  but  covered  a  much  wider  range  of 
NP  functions,  not  occupations. 

172.  Table  6.1  is  restricted  to  respondents  to  the  Site  Survey  who  claimed 

that  their  company  had  no  other  operating  site.  These  single-site  firms 
have  been  divided  into  those  that  are  independent  and  those  that  are 
subsidiary  to  some  Larger  organisations. 
that  the  typical  small  company  of  up  to  25  employees  only  employs  a 
general  manager  and  clerical  staff.  At  around  the  25-49  size  group  a 
proportion  of  sites  introduce  some  specialist  activities,  such  as 
technical  workers,salesmen,  transport  workers  and  warehousemen/ 
storekeepers,  with  the  addition  of  specialist  managers  in  the  case  of 
independent  firms. 
that  a  full  range  of  NP  occupations  can  be  said  to  be  employed. 

It  is  not  until  sites  have  reached  the  100+  size  group 

In  either  case  it  can  be  seen 

(1)  For  descriptions  of  the  surveys  see  the  Foreword,  paragragraphs 

<xiii)  - (xi),  and  for  definitions  of  the  terms  used  see  the  Foreword, 
paragraphs  Cxiii)  -

(xx). 

- 70-

Table  6.1  The  proportion  of  single-site  firms  that  employ  given  NP 

occupations,  1974 

Per  cent  of  f1rms  1n  g1ven  emp  oyment  s1 ze-grou_p_s 
Subsidiaries  of  UK  firms 

Independent  firms 

Employment  size  groups  ( 1) 

Occupation 

25-
0-
24  49 

so-
99 

100-
199 

200-
349 

General  managers 
Specialist  managers 
Accountants 
Clerical  and 

secretarial  workers 

Technican  workers 
Computer  operators 
Sales  workers 
Transport  workers 
Warehousemen  and 
storekeepers 

74  85 
16  42 
19  27 

86  92 
19  37 
-
4 
26  40 
29  40 

19  44 

No.  of  observations 

58  84 

89 
55 
57 

99 
46 
6 
60 
53 

68 

94 

77 
87 
79 

100 
77 
15 
79 
82 

95 

39 

0-
24 

93 
21 
29 

100 
85 
92 

100  100 
21 
100 
-
46 
100 
29 
14 
85 

100 

13 

29 

14 

25-
49 

so-
99 

100-
199 

200-
349 

89  87 
20  64 
71 
29 

100  97 
36  70 
4 
38  64 
40  62 

2 

47  78 

45  69 

89 
77 
78 

100 
78 
14 
62 
71 

92 

65 

92 
92 
85 

96 
90 
23 
77 
75 

100 

52 

Source  :  Site  Survey. 
(1)  Computer  operators  reach  100  % in  size-group  500-749  employees  for 

independent  firms  and  1000-14999  employees  for  subsidiaries  of  UK  firms. 

173.  Comparison  of  the  independent  and  subsidiary  companies  is  a  little 

difficult  because  of  the  different  industrial  compositions  of  the 
responses  to  the  survey.  On  the  whole  the  independent  companies  were 
small  and  concentrated  in  mechanical  engineering,  whereas  the 
subsidiaries  were  more  widespread  in  both  size  and  industrial  coverage. 
It  is  fairly  clear  that  the  Larger  subsidiaries  make  Less  use  of 
computer  operators,  sales  and  transport  workers,  than  the  independent 
firms,  probably  because  of  their  use  of  the  facilities  provided  by  their 
parent  corporations.  On  the  other  hand  there  seems  to  be  Little 
difference  between  the  two  types  of  firm  in  their  introduction  of  NP 
occupations  in  the  smaller  size  groups. 

174.  Table  6.2  is  taken  from  the  Organisation  Survey. 

It  is  based  on  a  given 

set  of  NP  functions  rather  than  occupations,  and  has  been  obtained 
completely  independently  from  the  Site  Survey,  but  corroborates  the 
results  for  single-site  subsidiaries  in  almost  every  detail.  The  main 
point  of  difference  between  Tables  6.1  and  6.2  is  that  some  functions, 
such  as  the  product  design,  research  and  development,  market  research 
etc.,  and  sales,  start  to  disappear  as  the  size  of  factory  increases. 
This  is  because  large  factories  that  do  not  contain  a  head  office  are 
likely  to  belong  to  large  organisations,  and  these  particular  functions 
have  been  taken  from  them  and  concentrated  in  detached  head  offices, 
sales  offices  or  R & D laboratories. 
In  this  respect  Table  6.2  is  of 
interest  because  it  indicates  the  functions  that  branch  factories  Lack, 

- 71-

in  particular  public  relations,  data  processing,  legal  etc.,  product 
design,  R & D,  and  most  of  the  sales  and  marketing  functions. 

175.  From  Tables  6.1  and  6.2  it  appears  that  factories  include  an 

increasingly  wide  variety  of  NP  activities  as  their  size  increases.  This 
does  not  necessarily  mean  that  the  relative  number  of  NPs  increases  with 
increasing  factory  size  since  so  far  only  the  occurrence  of  activities 
has  been  considered,  not  the  numbers  of  people  employed  in  each  one. 
This  is  the  subject  of  the  next  section. 

Average  NP  proportions  for  increasing  factory  size 

176.  The  obvious  data  to  use  of  ascertaining  relationships  between  NPs  and 

factory  size  is  the  Census  of  Production.  Unfortunately,  since  1968  the 
establishment  in  the  Census  of  Production  has  been  defined  as  'the 
smallest  unit  which  can  provide  the  information  sought'.  Because  of  the 
spread  of  computers  and  integrated  accounting  systems  such  establishments 
may  now  comprise  more  than  one  factory  unit  in  more  than  one  region. 
In  recent  years  establishments  covering  local  units  in  two  or  more 
regions  account  for  one  third  of  total  employment  in  UK  manufacturing 
industry  (1). 

177.  It  follows  that  the  use  of  census-based  establishment  information  for 
analysing  average  NP  proportions  is  suspect.  Nevertheless,  Figure  6.1 
uses  census  data  to  examine  NP  proportions  by  industry  and  size  of 
establishment,  selecting  the  data  for  1968  as  a  period  when  the  use  of 
aggregated  returns  was  less  common  than  now.  The  main  feature  of  the 
figure  is  the  rise  in  ATC  proportions  with  increasing  establishment  size, 
with  some  tendency  to  stabilisation  at  the  largest  sites  in  certain 
industries. 

178.  To  try  and  avoid  the  difficulties  of  the  census  data  the  research  team 
acquired  a  considerable  amount  of  material  from  Industrial  Training 
Boards.  This  is  less  subject  to  the  problems  of  defining  an 
establishment  and  it  also  indicates  that  in  industries  that  are 
narrowly  defined,  so  that  the  effects  of  changing  industrial  composition 
are  Limited,  there  is  still  a  general  tendency  for  the  NP  proportion  to 
increase  with  size  of  establishment.  But  in  many  cases  the  NP  proportion 
tends  to  become  stable  after  a  given  size-group,  and  it  may  then  decline. 
In  very  few  industries  does  the  NP  proportion  decline  steadily  with  size. 

179.  The  reasons  for  these  trends  can  be  found  by  looking  at  individual 

occupations.  A review  of  the  Training  Board  statistics  and  the  three 
surveys  carried  out  by  the  research  team  shows  that  the  individual 
occupation  groups  behave  in  the  following  manner  : 

(i)  Managers  The  average  NP  proportion  of  managers  has  much  the 

clearest  trend,  declining  with  increases  in  average  factory  size 
in  almost  all  industries. 

(1)M.C.  Fessey. 

"Establishment-Based  Research  and  the  Business  Statistics 

Office 11 
UniversitY  of  Glasgow,  December  1976. 

in  Urban  and  Regional  Studies  Discussion  Paper  No.  22, 

- 72-

Table  6.2  The  proportions  of  non-head  office  sites  that  include  given  non 

manufacturing  activities,  1975/76 

Per  cent  o f  s1tes  1n  g1ven  emp  oyment  s1ze  groups 

Department 
or  function  (1) 

1.  General  managers  (including 
assistants  and  secretaries) 
2.  Public  relations  and  information 
3.  Data  processing 
4.  General  office  services  (not  tied 
to  specific  departments,  e.g. 
typing  pool,  filing,  records, 
telephonists) 
5.  Wages  and  salaries 
6.  Accounts  and  financial  services 
7.  Legal,  insurance,  pensions 
8.  Purchasing 
9.  Personnel  (including  training) 
10.  Health,  welfare,  canteens  etc. 

(including  hourly-paid  workers) 

11.  Safety  and  security,  factory 

maintenance  (including  hourly-
paid  workers) 

12.  Product  design  (including 

drawing  office,  artists  etc. 

13.  Production  planning  and 

management 

14.  Quality  control  (inspection) 
15.  Research  and  development 
16.  Market  research,  advertising 

sales  promotion 

17.  Sales 
18.  Installation,  servicing  of 

sales  (including  hourly-paid 
workers) 

19.  Transport,  warehouse  and  stores 
(including  hourly-paid  workers) 

No.  of  observations 

Employment  size  groups 
0- 25- 50- 100- 200- 350- 750- 1500 
24  49  99  199  349  749  1499 lJ:>lus 

80  96  91 
- 4 
-
- 4 
7 

86 
5 
17 

91 
5 
16 

94 
9 
28 

80 
10 
38 

84 
29 
61 

60  78  77 
30  33  59 
10  41 
61 
-
-
2 
- 26 
41 
- -

16 

- 15  47 

81 

77 
78 
14 
59 

45 

53 

81 

84 

78 

66 

93 
82 
86 
96 
11 
10 
61 
70 
75  100 

65 

88 

78 
79 
90  100 
23 
39 
69 
87 

95 

83 

97 

87 

10  22  54 

73 

77 

94 

89 

87 

10  33  34 

40  48  82 
30  11 
52 
-
4  11 

10  4  14 
30  44  52 

10  7  14 

20  56  68 
10  27  44 

36 

86 
72 
20 

17 
53 

22 

80 

64 

46 

91 
86 

26 

14 
40 

28 

79 

57 

48 

94 
91 
34 

19 
43 

16 

88 

67 

48 

39 

98  100 
95 
87 
39 

60 

33 
40 

28 

83 
40 

11 
26 

18 

82 
38 

Source  :  Organisation  Survey. 
(1)  This  table  reproduces  in  full  descriptions  of  the  functions  used  in  thE~ 
Organisation  Survey.  Later  tables  and  text  that  is  based  on  the  surve)' 
will  use  abbreviated  descriptions  of  these  functions. 

- 73-

(ii)  Clerical  and  secretarial  workers  The  average  NP  proportion  of 

clerical  workers  increases  with  increases  in  the  size  of  factories, 
but  stabilizes  when  employment  levels  of  100+  are  reached.  The 
Lack  of  any  clear  trend  may  be  attributed  to  this  occupation  group 
depending  largely  on  other  occupations,  and  thus  reflecting  shifts 
in  their  relative  distribution  (c.f.  Chapter  4). 

(iii)  Accountants  and  other  administrative  and  professional  workers 

No  clear  trend  is  apparent.  The  proportion  of  accountants  as  a 
group  may  decline  with  increasing  factory  size  but  this  does  not 
appear  to  be  true  for  the  aggregate  of  professional  workers.  The 
only  common  feature  is  a  pronounced  fall  in  the  Largest  size-groups. 

(iv)  Scientists  and  engineers  There  are  clear  indications  that  the  NP 
proportion  of  scientists  and  engineers  increases  with  increasing 
factory  size.  One  may  also  note  that  their  proportion  varies  very 
considerably  by  industry. 

(v)  Technicians  and  draughtsmen  These  follow  the  pattern  set  by 

scientists  and  engineers  but  without  their  overall  consistency. 
Again,  their  proportion  varies  widely  by  industry  and  falls  in  the 
largest  size-groups. 

<vi)  Computer  operators  Yet  again,  the  proportion  of  computer  operators 
increases  with  increasing  factory  size,  but  may  fall  off  in  the 
Largest  size-groups. 

(vii)  Distribution  workers  This  group  appears  to  remain  a  relatively 

constant  proportion  of  total  employment,  regardless  of  factory 
size. 

180.  The  overall  relationship  of  total  NP  proportions  to  the  size  of 

factories  for  any  industry  is  the  result  of  adding  together  the  trends 
of  the  individual  occupation  groups.  Generally  speaking  the  proportion 
rises  because  increased  proportions  of  the  more  technical  occupations 
more  than  counterbalance  a  falling  proportion  of  managers.  Eventually 
the  technical  groups  proportions  reach  a  stable  Level  and  the  declining 
managerial  proportion  begins  to  pull  down  the  overall  NP  proportion. 
For  the  very  Largest  size  groups  there  is  a  pronounced  fall  in  almost 
all  NP  occupation  proportions,  but  this  may  be  partially  due  to  them 
being  split  off  into  separate,  detached,  offices,  warehouses  and 
laboratories. 

The  influence  of  other  variables  :  1.  Organisation  status  of  sites 

181.  The  preceding  discussion  has  indicated  that  the  numbers  of  NPs  at  a  given 
site maydepend  upon  whether  a  company's  head  office,  main  warehouse,  or 
research  laboratory  is  Located  at  that  site.  To  obtain  some  indication 
of  the  impact  of  head  offices  the  Site  Survey  classified  sites  according 
to  whether  they  were  the  only  site  of  the  company  nominally  owning  them 
(single-sites),  whether  they  were·  production  sites  that  contained  the 
head  office  of  amulti-site  company  <a  non-detached  head  office- NDHO), 
or  whetherthey  were  a  site  without  a  head  office  but  belonging  to  a 
multi-site  company  (branches).  Table  6.3  shows  that  there  is  a 

- 74-

consistent  pattern  across  industries;  branches  have  Lower  ATC  proportions 
that  single-sites,  and  single-sites  have  Lower  proportions  than  NDHOs. 

182.  That  NDHOs  should  have  more  NPs  than  branches  is  obvious.  The  particular 
NP  activities  in  which  they  excel  is  indicated  by  Table  6.4.  NDHOs 
combine  the  production  activities  of  a  branch  with  the  head  office 
activities  of  a  detached  head  office  COHO),  so  for  production-oriented 
functions  their  average  NP  proportions  are  close  to  branches  (cf. 
functions  1,2,11,13,14,19  in  Table  6.4).  On  the  other  hand  they  have 
higher  average  NP  proportions  in  peculiarly  head  office  areas,  such  as 
data  processing,  accounts  and  financial  services  and  sales  etc.  (DHOs 
by  definition  have  100%  NPs- the  96.1  % in  Table  6.4  being  due  to  an 
aberrant  response). 

Table  6.3.  Average  ATC  proportions  at  sites  by  organisation  status  and 

industry,  1974 

Per  cent  of  total  employment 

Branch 
site 

Single 
site 

Head  office 
at  a 

production  site 

(NDHO) 

Food 
Coal/chemical 
Metal  manufacture 
Mechanical  engineering 
Instrument  and  electrical  engineering 
Vehicles 
Metal  goods  n.e.s. 
Textiles 
Clothing 
Bricks,  pottery,  glass  and  cement 
Timber  and  furniture 
Paper,  printing  and  publishing 
Other  manufacturing 

Total  manufacturing 

Source  :  Site  Survey. 

19.9 
30.0 
21.3 
22.4 
17.9 
16.6 
16.9 
14.2 
7.9 
17.3 
15. 1 
22.8 
16.7 

18.8 

19.7 
35.5 
17.5 
26.9 
28.1 
17.3 
19. 1 
14.7 
10.8 
18.2 
17.7 
18.7 
17.4 

21.8 

32.1 
50.5 
24.2 
33.5 
27.2 
19.8 
26.7 
23.3 
20.2 
27.2 
9.6 
20.5 
21.3 

27.5 

183.  On  combining  the  organisation  status  of  factories  with  their  size  a 

puzzling  feature  appears  (Table  6.5).  Despite  the  Census  of  Production 
data  of  Figure  6.1  indicating  that  for  all  industries  except  chemicals 
and  mechanical  engineering,  average  NP  proportions  increase  with 
increasing  size  of  establishment,  Table  6.5  shows  that  the  proportions 
decline  steadily  in  branches  and  NDHOs,  and  decline  in  single  sites 
employing  more  than  2000.  Moreover,  the  decline  in  branches  in  Table  6.5, 
based  on  the  Site  Survey,  is  confirmed  by  the  Organisation  Survey 
(Table  6.6)  (1). 

(1)  This  table  also  supports  the  overall  trends  of  occupations  with  size 

of  establishment,  discussed  in  paragraph  180  above. 

- 75-

Table  6.4  Average  NP  function  proportions  by  organisation  status  of  factory, 

1975/76 

Department(or  function)  ( 1) 

Number  of  observations 

1.  General  management 
2.  Public  relations 
3.  Data  processing 
4.  Office  services 

Sub  total  :  General  management 

5.  Wages  and  salaries 
6.  Accounts  and  finance 
7~  Legal,  insurance  etc. 
8.  Purchasing_ 

Sub  total  :  Specialist  services 

9.  Personnel  etc. 

10.  Health,  welfare  etc. 
11.  Securit~ and  maintenance 
Sub  total  :  Personnel  & maintenance 
12.  Product  design 
13.  Production  planning 
14.  Quality  control 

Sub  total  :  Production-related  deR_artments 

15.  Research  and  development 
16.  Market  research  etc. 
17.  Sales 
18.  Sales  servicing 
19.  Distribution 
Sub  total  :  Marketing  and  distribution 

20.  Other 

Total  :  NP  functions 

Source  :  Organisation  Survey. 

per  cent  of  total  employment 

Branch  Production  site  Detached 

including  head  head  office 

office 
(NDHOs) 

(DHOs) 

352 

2.1 
-
0.3 
2.0 

4.5 

0.9 
1. 9 
0.1 
0.8 

3.7 

0.6 
1 • 1 
4.4 

6.2 

1. 4 
4.1 
2.1 

7.6 

0.7 

0.5 
2.4 
0.5 
3.8 

7.2 

0.6 

30.4 

i 

64 

2.0 
0.1 
0.9 
2.2 

5.2 

1. 0 
3.4 
0.2 
1.2 

5.8 

0.8 
1. 4 
4.6 

6.9 

2.1 
4.1 
2.2 

F..4 

1.7 

1. 6 
6.2 
1. 9 
3.9 

13.3 

0.4 

41.7 

32 

12.0 
1. 3 
5.5 
1 o. 1 
28.9 

1.2 
11.9 
2.3 
2.3 

17.6 

3.2 
1. 9 
1. 4 

6.4 

2.7 
3.7 
0.7 

7.1 

5.4 

5.6 
14.7 
3.8 
5.9 

30.0 

0.6 

96.1 

(1)  For  detailed  descriptions  of  functions  see  Table  6.2. 

- 76-

184.  These  differences  can  be  reconciled  fairly  easily.  Figure  6.1  includes 

all  establishments,  but  the  relative  importance  of  each  type  changes  with 
the  size  group  considered.  Most  small  sites  will  be  branches  or  single 
sites,  with  NP  proportions  of  about  28%  on  average  (Table  6.5).  As 
sites  increase  in  size  the  relative  number  of  single  sites  declines,  but 
that  of  branches  and  NDHOs  increases  and  this  keeps  the  overall  NP 
proportion  increasing.  For  most  industries  there  are  relatively  few  large 
sites  and  these  will  mainly  be  NDHOs,  so  that  the  NP  proportion  still 
keeps  increasing.  However,  in  the  chemical  industry,  which  is  highly 
concentrated,  most  of  the  larger  sites  are  branches,  so  an  overall  decline 
sets  in  quite  early.  On  the  other  hand  mechanical  engineering  contains  a 
Large  number  of  single  site  companies  and  these  dominate  that  industry 
(c.f.  Table  6.5  and  Figure  6.1c). 

Table  6.5  Average  NP  proportions  at  sites  by  organisation  status  and  fact~ct 

size,  1974 

Factory  size  (employment) 

Branch 
factories 

Single 
sites 

Head  office  at  a 
production  s it·e 

(NDHO) 

per  cent  o f  tot a 

emp  oyment 

1  -

99 
- 499 
- 1999 

100 
SOD 

2000+ 

28.4 
28.4 
27.5 
24.6 

27.9 
29.4 
34.0 
31.0 

36.5 
33.8 
30.5 
29.3 

2.  The  use  and  provision  of  NP  services 

185.  The  distinction  between  branch  factories,  NDHOs  and  DHOs  implies  that 

branches  are  users  of  services  provided  by  the  head  office.  Such  services 
could  be  specialist  personnel  functions,  wage  payments,  technical 
assistance  and  research  etc.  Similarly,  it  is  possible  that  branches, 
head  offices  or  corporations  may  buy  in  NP  services  from  firms  outside 
manufacturing  industry.  Such  services  may  include  transport,  cleaning, 
advertising,  legal  assistance,  maintenance  of  the  shareholders  register, 
etc. 

186.  Both  the  Site  Survey  and  the  Organisation  Survey  asked  questions  on  the 

import  and  export  of  NP  functions  and  Table  6.7  shows  that  to  a  great 
extent  branches  that  imported  services  have  lower  average  NP  function 
proportions  than  those  making  no  claim  to  use  outside  schemes.  Of  course 
no  one  branch  would  claim  to  use  all  NP  functions  from  elsewhere,  or 
supply  them  all,  so  that  any  particular  branch  factory  that  claimed  to 
import  some  services  and  export  others  appears  in  both  the  relevant 
columns  of  Table  6.7  in  respect  of  the  services  imported  or  exported. 
The  third  column  of  Table  6.7,  headed  'Both  imports  and  exports  services' 
relates  to  branches  that  claimed  they',both  used  a  particular  service  that 
was  supplied  from  elsewhere,  and  supplied  such  a  service  themselves. 
For  example,  a  branch  might  have  Limited  data  processing  facilities,which 
it  also  provided  to  another  factory  in  the  same  firm,  but  for  a  really 
big  job  it  might  have  to  rely  on  the  company's  central  computer  at  the 
head  office. 

- 77-

Table  6.6  Average  NP  function  proportions  by  factory  size  :  branches  only, 

1975/76 

Department  (or  function) 

( 1) 

1.  General  management 
2.  Public  relations 
3.  Data  processing 
4.  Office  services 

Sub  total  :  General  management 
5.  Wages  and  salaries 
6.  Accounts  and  finance 
7.  Legal,  insurance  etc. 
8.  Purchasing 

Sub  total  :  Specialist  services 
9.- Personnel  etc. 
1 o.  Health,  welfare  etc. 
11.  Security  and  maintenance 

Sub  total  :  Personnel  and  maintenance 
12.  Product  design 
13.  Production  planning 
14.  Quality  control 

Sub  total  :  Production-related  departments 
15.  Research  and  development 

16.  Market  research 
17.  Sales 
18.  Sales  servicing 
19.  Distribution 

Sub  total  :  Marketing  and  distribution 

Total  :  NP  functions  (2) 

Source  :  Organisation  Survey. 

per  cent  of  total  employment 

0-
199 

Employment 
200-
499 

500-
1999 

2000+ 

3.5 
-
0.2 
3.4 

7.1 

1. 1 
2.0 
0.1 
0.9 

4.0 

0.3 
0.8 
3.1 

4.2 

1.7 
3.8 
1. 2 

6.7 

0.3 

0.7 
3.4 
0.6 
3.8 

8.6 

1. 8 
-
0.3 
1. 4 

3.6 

0.9 
1. 9 
0.1 
0.7 

3.6 

0.7 
1. 4 
5.0 

7.1 

1. 3 
3.4 
3.1 

7.9 

0.6 

J.3 
2.3 
0.7 
3.7 

7.0 

0.7 
-
0.4 
1. 0 

2. 1 

0.6 
1.6 
0.1 
0.7 

2.9 

0.9 
1. 3 
5.6 

7.9 

1. 4 
4.6 
2.3 

8.4 

1. 1 

0.2 
1.4 
0.4 
3.9 

5.9 

0.3 
-
0.5 
0.6 

1.5 

0.4 
1. 6 
0.1 
0.4 

2.4 

1.1 
1.3 
5.0 

7.4 

0.8 
5.4 
3.4 

9.6 

1.3 

0 
0.6 
0.1 
3.9 

4.6 

I  32.0 

30.2 

28.3 

I  27.1 

(1)  For  detailed  description  of  functions  see  Table  6.2. 
(2)  Includes  function  20  : 

'Other•. 

- 78-

187.  To  assess  the  possible  implications  of  the  import  or  export  of  NP 

services  for  NP  employment  one  can  assume  that  there  exists  a  branch  that 
imports  some  NP  services  in  all  the  19  functions  and  whose  NP  employment 
is  given  by  the  sum  of  the  1~P% in  the  'import'  column,  i.e.  23  %. 
This  can  be  contrasted  with  a  branch  that  neither  imports  or  exports  NP 
services,  whose  NP  employment  would  amount  to  33  %,  the  sum  of  the  NP  % 
in  the  final  column  of  Table  6.7.  On  this  basis  the  conversion  of  a 
'total  importer'  to  a  'nil'  importer  would  add  10%  to  its  total 
employment. 

188.  As  one  might  expect,  the  main  NP  functions  that  importers  of  NP  services 

Lack  are  those  that  occur  in  detached  units,  such  as  data  processing, 
finance,  purchasing,  product  design,  market  research  and  sales. 

3.  The  effect  of  the  Location  of  decision~making 

189.  The  Site  Survey  contained,  as  a  variant  on  questions  about  the  use  of 

services,  a  question  about  where  in  the  corporate  hierarchy  12  specified 
decisions  were  made.  The  alternatives  given  were  'at  this  establishment  , 
at  divisional  headquarters,  or  at  company/group  headquarters'.  The 
replies  to  this  question  were  weighted  and  converted  into  a  'decision 
index'  for  each  site.  Figure  6.2  relates  the  Levels  of  the  decision  index 
to  the  average  NP  proportions  in  various  occupations. 

190.  With  the  exception  of  scientific  and  technical  employees  the  average  NP 
occupation  proportions  in  fully  independent  plants  are  double  those  in 
plants  controlled  from  elsewhere. 
In  the  case  of  managers  there  is  a 
steady  decrease  in  NP  proportions  as  the  number  of  Locally-made  decisions 
diminishes,  but  in  the  'clerical'  and 
do  not  decline  noticeably  until  a  'half  and  half'  position  is  reached. 
When  aggregated,  these  relationships  cause  the  overall  NP  proportion  to 
hold  constant  over  the  autonomous  to  half-way  part  of  the  range,  but  to 
fall  steeply  thereafter. 

'other'  groups  the  NP  proportions 

191.  This  implies  that  there  is  Little  difference  in  the  proportion  of  NP 

workers  between  those  sites  that  are  fully  autonomous  and  those  sharing 
decision-making  equally  with  their  headquarters  elsewhere.  Only  when 
control  is  Largely  from  elsewhere  does  the  NP  proportion  begin  to  decline 
significantly.  This  form  of  relationship  was  observed  in  most  industry 
groups  taken  separately,  although  in  chemicals  the  decline  in  white-collar 
workers  was  more  marked,  falling  from  fifty  per  cent  down  to  fifteen  per 
cent.  This  provides  another  reason  for  the  marked  fall  in  the  average 
ATC  proportions  for  the  chemical  industry  in  Figure  6.1c. 

4.  The  type  of  process  used 

192.  The  Site  Survey  allowed  respondents  to  select  from  eight  specified  types 
of  process,  of  which  three  received  very  few  replies,  while  quite  a 
large  number  ~f  respondents  selected  more  than  one.  The  Organisation 
Survey  restr1~ted  the  number  of  process  types  to  three  :  individual  units 
or  small  batches;  Large  batches,  mass  production  or  continuous  flow;  both 
types. 

- 79-

Table  6.7  Average  NP  function  ~ro~ortions  b~  whether  the  site  is  an  im~orter 

or  ex~orter  of  services  :  branches  onl~t.  1975/76. 

per  cent  of  total  employment 

(2) 

Both  imports  Neither  imports 

and 
exports(3) 
services 

Department  (1) 
(of  function) 

1.  General  management 
2.  Public  relations 
3.  Data  processing 
4.  Office  services 

5.  Wages  and  salaries 
6.  Accounts  & finance 
7.  Legal,  insurance 

etc. 
8.  Purchasing 

9.  Personnel  etc. 
10.  Health,  welfare 

etc. 
11.  Security  & 

maintenance 

12.  Product  design 
13.  Production 
planning 
14.  Quality  control 

15.  Research  & 
development 

16.  Market  research 
17.  Sales 
18.  Sales  servicing 
19.  Di st ri buti on 

(2) 
Imports 
services 

(3) 
Exports 
services 

1.5 
-
0.1 
2.3 

0.7 
1.2 

-
0.3 

0.4 

0.9 

6.9 

0.2 

2.2 
1.6 

0.6 

0.1 
0.5 
0.1 
3.4 

4.6 
-
f. 7 
1.9 

1.0 
2.9 

0.3 
2.2 

1. 6 

1. 7 

9.5 

5.1 

6.3 
2.6 

3.9 

1. 6 
6.9 
4.1 
5.0 

1.6 
0.2 
0.5 
1.0 

0.8 
2.5 

0.1 
1. 9 

0.8 

0.6 

4.1 

8. 7 

6.1 
1. 8 

1. 9 

0.2 
3.1 
3.0 
5.6 

nor 
exports 
services(4) 

2.3 
0.1 
0.5 
2.0 

1.0 
2.2 

0.1 
1.0 

0.7 

1.2 

3.4 

1. 8 

4.5 
2.2 

0.6 

1 .1 
4.0 
0.6 
3.9 

Source  :  Organisation  Survey. 
(1)  For  detailed  description  of  functions  see  Table  6.2. 
(2)  Uses  NP  services  provided  either  from  elsewhere  within  the  organisation  or 
from  outside  the  organisation. 
(3)  Supplies  NP  services  either  to  other  sites  within  the  organisation  or  to 
other  sites  outside  the  organisation. 
(4)  This  column  relates  to  those  respondents  who  failed  to  specify  that  a 
particular  function  was  imported  or  exported. 
It  therefore  assumes  that  a 
failure  to  include  the  function  can  be  equated  with  neither  importing  nor 
exporting  it.  Since  the  majority  of  respondents  to  the  survey  answered  the 
import/export  question  in  respect  of  at  least  some  NP  functions  this  assumption 
seems  to  be  justified,  but  it  is  possible  that  the  failure  to  reply  could  be 
because  a  branch  is  making  no  use  at  all  of  a  particular  function,  or  to  an 
unwillingness  to  answer  the  question. 

- 80-

193.  A distinctive  feature  of  both  surveys  was  that  although  some  industries 
concentrated  particularly  on  one  type  of  process,  others  did  not.  Thus 
although  the  food,  drink  and  tobacco,  and  paper  industries  were 
predominantly  based  on  mass  production  or  continuous  flow  techniques, 
whilst  paper  products  and  printing  concentrated  on  small  batches,  the 
textile  industries,  chemicals  and  other  manufacturing  seemed  to  use  all 
the  types  of  process  specified.  This  makes  the  analysis  of  NPs  by  procE~ss 
hazardous.  Any  one  process  may  be  used  by  all  types  of  industry  with  aLL 
types  of  NP  proportions  and  an  average  over  the  sample  is  crucially 
affected  by  biases  in  it.  It  is  therefore  necessary  to  compare  individual 
industries  and  see  if  any  pattern  appears. 

194.  The  results  of  the  Organisation  Survey  were  consistent  :  for  almost  all 

industries  factories  using  small-scale  processes  had  higher  average  NP 
proportions  than  those  using  Large-scale  processes.  The  exception  to 
this  rule  were  chemicals,  paper  and  paper  products  manufacture,  and  parts 
of  the  building  materials  industries.  These  results  were,  on  the  whole, 
corroborated  by  the  Site  Survey.  Of  the  13  industry  sub-groups  into  wh·ich 
it  was  divided,  in  11  cases  it  was  one  of  the  large-scale  processes  that 
had  the  Lowest  NP  proportions,and  in  10  cases  one  of  these  processes 
ranked  second  lowest.  However,  again  some  industries  seemed  to  go  against 
the  trend,  and  this  was  particularly  the  case  with  the  paper,  printing 
and  publishing  industry.  Thus,  in  general,  large-scale  processes  are 
associated  with  low  NP  proportions,  but  this  is  not  consistent  across 
industry. 

195.  These  inconsistencies  between  industries  and  processes  probably  Lie  in 
differences  between  mass  production  techniques  and  continuous  flow 
processes.  The  former  require  considerable  production  Labour  and 
maintenance  workers  who  may  well  be  classifed  as  production  workers.  The 
Latter  type  of  process  needs  few  production  workers  but  a  Large  number  of 
NPs  involved  in  plant  maintenance  and  quqlity  control.  Thus  mass 
production  techniques  require  Low  NP  proportions,  continuous  flow  requires 
high  NP  proportions,  and  the  overall  relationship  between  Large-scale  and 
small-scale  processes  may  depend  upon  the  relative  proportions  of  these 
two  process  types. 

5.  Other  factors  :  ownership  (1)  and  movement 

196. 

'Ownership'  is  distinguished  by  whether  the  factory  belongs  to  a  UK  firm 
or  is  owned  ultimately  by  a  foreign  company.  The  Site  Survey  received 
relatively  few  replies  from  foreign-owned  sites  but  Table  6.8  gives  data 
for  three  separate  industries  where  the  numbers  of  sites  are  substantial 
and  on  that  basis  it  appears  that  foreign  subsidiaries  tend  to  have  a 
higher  proportion  of  NPs  than  either  independent  companies  or  U.K. 
subsidiaries,  but  divisions  of  UK  companies  have  NP  proportions 
approaching  those  of  the  foreign  subsidiaries.  These  results  should  not 
be  surprising. 
productivity  levels  than  UK  firms,  and  Chapter  4  has  shown  that  NP 
proportions  in  industries  are  highly  correlated  with  productivity. 
therefore  follows  that  we  should  expect  to  find  the  results  presented  in 
Table  6.8. 

It  is  known  that  foreign  subsidiaries  tend  to  have  higher 

It 

(1)  For  definition  of  the  terms  used  see  the  Foreword,  paragraphs 

Cxiii)- <xx). 

- 81-

Table  6.8  Average  NP  proportions  at  sites,  by  ownership,  1974 

per  cent  of  total  employment  (1) 

Industry 

Chemicals  (including  coal 
and  petroleum  products) 

Mechanical  engineering 

Instrument  and  electrical 
engineering 

Independent 

Divisions  of 
companies  subsidiaries  subsidiaries  UK  companies 

U.K. 

U.K. 

38.7  ( 19) 
31.4  (93) 

43.0  (36) 
33.5  (79) 

51.2  ( 29) 
36.4  ( 26) 

50.1  ( 10) 
28.1  (4) 

26.8  (41) 

30.4  (60) 

33.4  ( 34) 

35.4  ( 1 0) 

Total  manufacturing 

26.5(442) 

29.1(505) 

34.8(148) 

32.8  (52) 

Source  :  Site  Survey. 
(1)  Bracketed  figures  give  the  number  of  observations. 

197.  Table  6.9  is  concerned  with  detailed  NP  occupations  and  the  ownership  of 

Its  main  features  are  that  foreign  subsidiaries  have  considerably 

sites. 
higher  proportions  of  their  workers  in  technical  occupations,  working  as 
computer  operators,  and  as  salesmen.  These  results  are  in  complete 
agreement  with  those  presented  in  para.  12  of  Chapter  1. 

Table  6.9  Relative  NP  occupation  proportions  at  sites,  by  ownersh~p,  1974  (1) 

Occupations 

NPs 
ATCs 
Managers 
Clerical  workers 
Technical  workers 
Computer  operators 
Sales 
Distribution  workers 

Source  :  Site  Survey. 

UK  subsidiaries 

Foreign  subsidiaries  Divisions 

relative  to  independent  companies 

1.10 
1.05 
0.84 
1.16 
1.25 
1.30 
0.81 
1.18 

1.25 
1.25 
0.93 
1. 18 
1.60 
4.62 
1.29 
1.34 

1. 24 
1. 12 
0.69 
1. 08 
1.83 
5.05 
0. 71 
1.41 

(1)  The  figures  refer  only  to  the  aggregate  of  the  chemical,  mechanical 

engineering,  instrument,  and  electrical  engineering  industries.  Each 
figure  is  the  ratio  of  the  NP  occupation  proportion  in  the  designated 
type  of  factory  to  that  in  independent  companies. 

- 82-

198.  The  distinctive  feature  of  the  Site  Survey  was  that  it  was  designed  to 
obtain  data  on  factories  that  had  moved  recently  as  well  as  those  that 
had  remained  in  their  present  location  for  a  number  of  years. 
important  to  distinguish  these  'movers'  from  'branches'.  A  'branch'  is 
an  organisational  concept  and  refers  to  a  factory's  place  in  the 
organisation  of  a  corporation.  A  'mover'  is  a  factory  that  has  been 
opened  recently,  having  its  origin  elsewhere;  it  may  be  a  branch,  but  it 
might  be  a  single-site  independent  company. 

It  is 

199.  This  distinction  is  important  because  there  is  a  tendency  to  equate 

branches  with  movers  and  claim  that  since  branches  have  low  NP  proportions, 
so  will  movers.  Table  6.10  appears  to  substantiate  this  partly,  in  that 
for  total  manufacturing  the  average  NP  proportion  for  branches  that  have 
moved  is  slightly  lower  (28.1  %) 
(28.3  %).  But  this  is  the  result  of  varying  industrial  composition. 
For  branches,  in  12  out  of  the  13  industries  movers  had  a  higher  overall 
NP  proportion  than  non-movers.  A similar  result  holds  for  single-site 
companies,  so  that  it  can  be  fairly  claimed  that  movers  have  higher  NP 
proportions  than  non-movers. 

than  that  for  non-moving  branches 

200.  This  is  probably  the  result  of  movers  having  new  factories  and  equipment, 

higher  P-productivity,  and  greater  maintenance  needs,  a  hypothesis  that 
is  supported  by  a  review  of  the  occupational  differences  between  movers 
and  non-movers  that  showed  that  movers  are  particularly  strong  in  the 
technical  and  sales  functions. 
that  these  are  also  the  functions  in  which  foreign  subsidiaries  excel. 
A proportion  of  'movers'  may  well  be  branches  of  foreign  subsidiaries. 

It  is  perhaps  not  entirely  coincidental 

Summary 

201.  In  the  last  two  sections  the  effects  of  seven  independent  variables  on 
average  NP  proportions  at  individual  sites  have  been  investigated. 
In  each  case  the  variables  have  been  taken  in  isolation,  except  that 
industry  differences  were  usually  taken  into  account  because  of  their 
considerable  and  known  impact.  This  procedure  implies  that  some  of  the 
results  found  may  have  been  due  to  the  effects  of  other  variables  :  for 
example,  the  effects  of  ownership  may  be  the  result  of  variations  in  the 
average  size  of  factories  by  the  different  ownership  types. 

202.  With  this  proviso,  the  key  effects  appear  to  be  that  average  NP 

proportions  : 

(i)  increase  with  average  factory  size  but  reach  some  upper  limit; 
(ii)  are  lower  in  branch  factories  than  detached  or  non-detached  head 

(iii)  are  lower,  the  greater  the  extent  to  which  services  are  imported 

Civ)  are  lower,  the  greater  the  extent  to  which  decisions  are  made 

office  sites; 

from  outside; 

elsewhere; 

(v)  are  higher  for  factories  using  small-scale  processes; 
(vi)  are  higher  in  the  subsidiaries  of  foreign  corporations; 
(vii)  are  higher  in  firms  that  have  moved  recently. 

- 83-

Table  6.10  NP  proportions  at  sites  by  status,  movement  and  industry,  1974 

Industry 

Food 
Chemicals 
Metal  manufacture 
Mechanical  engineering 
Instrument  and  electrical 
engineering 

Vehicles 
MetaL  goods  n.e.s. 
Textiles 
CLothing 
Bricks,  potter,  glass  and 
cement 

Timber  and  furniture 
Paper,  printing  and  publishing 
Other  manufacturing 

Total  manufacturing 

Source  :  Site  Survey. 

per  cent  of  total  employment 

Branch 

S i ng l e- s i t e  company 

Non-mover 

Mover 

Non-mover 

Mover 

35.4 
44.5 
26.9 
27.4 

22.5 

22.3 
23.5 
20.4 
14.7 

28.4 

24.2 
20.1 
17.6 

28.3 

28.3 
45.0 
28.4 
30.0 

26.8 

31.4 
26.2 
21.4 
15.8 

30.0 

24.5 
32.5 
30.5 

28.1 

27.5 
39.7 
21.5 
32.1 

33.9 

25.1 
24.8 
21.7 
16.9 

~ 

28.6 

25.3 
20.9 
20.9 

26.9 

28.4 
48.5 
23 
35.6 

32.5 

28.8 
27.1 
25.0 
16.7 

22.7 

23.4 
27.2 
25.1 

30.3 

Factory  size  variations  as  an  explanation  of  regional  disparities  in  NPs 

203.  The  effects  Listed  above  give  ample  scope  for  there  to  be  consistent 

regional  variations  in  average  NP  proportions  within  corporations. 
Regions  that  include  high  proportions  of  small  factories,  of  UK  ownership, 
that  have  been  located  at  their  present  site  for  a  number  of  years,  and 
that  use  large-scale  processes  and  outside  services,  will  have  lower  NP 
proportions  than  regions  that  have  high  proportions  of  the  opposite  type 
of  factory.  However,  it  is  only  possible  to  assess  the  impact  of  one  of 
these  variables  -
in  NPs. 

the  average  size  of  factories  - on  regional  disparities 

204.  Factory  size  distributions  are  difficult  to  illustrate  because  they  are 
usually  such  that  there  are  very  Large  numbers  of  small  plants  and 
relatively  few  very  Large  ones.  The  usual  way  to  dr~w them  is  to  use 
Log-probability  graph  paper  on  which  cumulative  Lognormal  distributions 
appear  as  straight  Lines.  This  is  done  in  Figure  6.3  in  which  the  higher 
the  line,  the  Lower  the  average  size  of  establishments.  From  the  figure 
it  can  be  seen  that  the  southern  and  the  midland  regions  have  smaller 
factories  than  the  development  regions,  with  the  South  East  having  the 
smallest  ones  of  all.  The  differences  between  regions  are  not  great  but 
it  is  nevertheless  possible  that  the  consequences  for  NP  employment  may 
be  of  significance. 

- 84-

205.  Efforts  to  estimate  the  effects  of  different  factory  size  distribution 
on  regional  disparities  in  NPs  show  that  regional  differences  in  size 
structure  are  not  Large  enough  to  materially  alter  any  conclusions  already 
drawn  about  the  impact  of  the  effects  of  industrial  structure  and  the 
residual  effects.  The  estimates  indicate  that  the  residual  (difference 
between  actual  and  expected)  for  the  South  East  has  been  slightly  under 
estimated  and  that  allowance  for  both  industrial  structure  and  size 
structure  would  give  a  residual  Larger  by  about  10,000  jobs.  Similarly 
the  negative  residuals  in  the  Northern  region  and  Wales  have  been  slightly 
under-estimated,  but  only  by  a  thousand  or  so  jobs.  Those  of  the  remaining 
regions  are  hardly  affected. 

206.  Differences  in  the  average  size  of  factories  could  in  theory  apply  to  both 

single-region  and  multi-region  organisations  and  the  effects  of  factory 
size  cannot  be  allocated  between  these  two  categories.  Of  the  other  six 
variables  Listed  in  paragraph  202,  three  may  be  said  to  apply  particularly 
to  multi-region  organisations  with  head  offices  in  the  London  area  and 
branch  factories  elsewhere.  These  three  factors  are  factory  status, 
importing  services  from  outside  and  the  location  of  decision-making.  On 
the  other  hand  two  factors  - being  a  subsidiary  of  a  foreign  corporation, 
or  having  moved  recently- would  point  to  higher  NP  proportions  in  the 
Development  Areas. 

207.  Whatever  the  case,  the  rough  one  to  two  division  of  regional  disparities 
between  single-region  and  multi-region  organisations  shown  by  Table  5.6 
can  hardly  be  the  consequence  of  regional  variations  in  the  average  size 
of  factories.  The  other  explanations  for  site  differences  given  in 
paragraph  202  are  largely  concerned  with  factors  more  Likely  to  be  met 
with  in  multi-region  organisations  than  single-region  ones.  Regional 
disparities  attributable  to  single-region  organisations  must  therefore 
either  be  determined  by  a  more  restricted  set  of  variables,  such  as  Local. 
variations  in  the  use  of  outside  services  or  the  process  types  used,  or 
be  dependent  upon  other  factors  not  considered  here.  One  such  possible 
factor  is  the  variation  of  NP  proportions  with  different  overall  sizes  of 
organisations. 

- 85-

CHAPTER  7 

NON-PRODUCTION  WORKERS  IN  CORPORAtiONS  AND  ORGANISATIONS 

208.  In  Chapter  5  the  residual  regional  disparities  in  NPs,  after  taking 

industrial  structure  into  account,  were  allocated  between  single-region 
and  multi-region  organisations  (1),  and  it  was  argued  that  the 
distribution  of  NPs  within  multi-region  organisations  was  a  major  factor 
in  explaining  these  regional  disparities.  This  chapter  therefore 
concentrates  on  NPs  at  the  corporate  the  sub-corporate  level. 
It  follows 
the  structure  of  Chapter  6  in  that  it  first  reviews  the  occurrence  of  NPs 
in  corporations  and  organisations,  and  provides  some  hypotheses  for  the 
manner  in  which  they  are  introduced,  and  then  continues  by  considering 
variations  in  average  NP  proportions  in  corporations  and  organisations  by 
size,  and  as  a  result  of  other  factors.  There  follows  an  extended 
discussion  of  the  allocation  of  NPs  within  mutli-region  organisations, 
and  in  particular  their  distribution  between  branch  plants  and  head 
offices,  and  between  regions.  A final  section  describes  the  location 
patterns  of  the  sub-corporate  head  offices  of  the  respondents  to  the 
Organisation  Survey.  Corporate  head  offices  are  considered  in  Chapter  6. 

The  Organisation  Survey 

209.  Official  sources  cannot  provide  data  about  NPs  at  the  corporate  level 
and  almost  all  the  statistics  discussed  in  this  chapter  have  been 
obtained  from  the  Organisation  Survey  carried  out  by  the  research  team. 
The  procedure  used  in  the  survey  was  first  of  all  to  interview  a  senior 
executive  in  a  Large,  multi-region,  organisation,  and  then  use  his  good 
offices  to  secure  the  completion  of  a  one  page  questionnaire  for  each 
site  of  that  organisation  (2).  This  system  resulted  in  responses  whose 
quality  and  accuracy  were  superior  to  that  achieved  from  postal  surveys, 
such  as  the  Site  Survey. 
list  of  19  specific  NP  functions,  not  occupations,  and  therefore  produced 
data  not  obtainable  from  elsewhere. 

In  addition,  the  questionnaire  was  based  on  a 

210.  This  procedure  incurred  two  disadvantages.  Although  it  resulted  in 

completed  questionnaires  from  some  350  branches  and  more  than  60  non 
detached  head  offices  as  well  as  34  detached  head  offices,  this 
information  came  from  only  84  organisations.  This  is  really  too  few  to 
analyse  in  terms  of  more  than  one  variable  and,  because  of  biases  in 
the  sample,  it  provides  an  imperfect  base  for  the  estimation  of 
aggregate  figures  for  each  region. 

211.  The  second  major  problem  of  the  Organisation  Survey  Lies  in  the  definition 

of  a  corporation  that  was  employed. 
geographic  variations  of  NPs  within  a  corporation  it  is  essential  that 
all  its  sites  should  be  included.  The  omission  of  certain  sites,  such  as 
sales  offices,  warehouses  or  research  Laboratories  will  bias  the  results. 
For  example,  if  only  a  major  subsidiary  company,  or  an  entire  dfvision, 
is  investigated  then  certain  NPs  in  the  head  office  of  the  corporation, 

Ideally,  for  the  analysis  of 

(1)For  definitions  of  the  terms  used  see  the  Foreword,  paragraphs  (xiii) 

(xx). 

(2)  The  questionnaire  is  reproduced  as  Appendix  A. 

-86-

who  are  nominally  responsible  for  and  working  on  behalf  of  that  subsidiary 
or  division,  will  have  been  omitted  from  the  reckoning.  Their  numbers 
may  not  be  great,  but  their  omission  will  produce  a  biased  result. 

212.  Although  it  proved  possible  to  obtain  full  details  for  all  the  sites  of 

quite  substantial  corporations,  employing  up  to  10,000  people,  it  was 
not  possible  to  obtain  such  complete  data  from  industrial  giants  that 
might  employ  50,000  people  on  50  or  more  sites. 
In  these  cases  distinct 
subsections  of  the  corporation,  such  as  a  major  subsidiary  company  or  a 
division,  were  approached.  These  subsections  are  called  'organisations' 
in  the  sense  of  Chapter  5.  Thus  in  this  report  the  word 
is  used  to  refer  to  an  entire  corporate  entity,  including  all  its 
subsidiaries.  An 
'organisation'  refers  to  an  entity  that  may  be  a 
complete  corporation,  but  it  could  also  be  a  substantial  and  defined 
subsection  of  a  corporation,  such  as  a  major  subsidiary  company  or  a 
division.  The  Organisation  Survey  obtained  data  from  84  organisations, 
but  only  27  of  these  were  corporations. 

'corporation' 

213.  The  effect  of  including  organisations  within  the  scope  of  the  Organisation 

Survey  is  that  it  must  be  recognised  that  for  many  of  the  returns  it  is 
possible  that  some  NPs,  who  are  responsible  for  a  particular  organisation, 
have  been  omitted.  They  will  be  located  in  the  corporate  head  office  or 
research  laboratory  and  not  in  the  organisation.  The  omission  of  such 
NPs  has  a  relatively  slight  effect  on  the  total  number  of  NPs  in  any 
organisation,  but  it  tends  to  be  concentrated  in  particular  functions, 
such  as  accounts  and  finance,  public  relations,  personnel  and  R & D. 
For  this  reason  corporate  head  offices  and  research  laboratories  are 
treated  separately  in  Chapter  8. 

214.  A further  implication  of  dealing  with  organisations  rather  than 

corporations  is  that  there  is  a  lack  of  variables  by  which  to  analyse  the 
data.  Of  the  variables  associated  with  individual  sites  in  Chapter  6, 
the  type  of  process  used  or  the  classification  by  industry  present 
difficulties  because  organisations  may  straddle  several  industries  or 
employ  a  variety  of  types  of  processes.  The  location  of  decision-making 
or  the  extent  of  the  import  or  export  of  services  are  also  less 
applicable  to  organisations;  in  an  entire  organisation  both  of  these 
effects  will  net  out,  by  and  large.  Ownership  also  presents  a  problem. 
Of  the  12  foreign-owned  organisations  that  responded  to  the  survey,  10 
were  included  as  corporations;  that  is,  their  entire  UK  operations  were 
included.  This  is  logically  the  case  for  their  UK  status,  but  even  so 
they  may  be  subsidiary  to  a  European  or  United  States  head  office,  and 
therefore  be  organisations  when  considered  in  a  world  context. 

215.  As  a  result  of  these  difficulties  the  Organisation  Survey  needs  careful 

interpretation  when  considered  at  the  aggregated  level,  although  even 
so  it  does  provide  valuable  and  original  data  on  large,  multi-region, 
organisations. 

- 87-

The  occurrence  of  NPs  in  corporations 

216.  When  considering  the  occurrence  of  NP  occupations  at  individual  sites,  in 

Chapter  6,  it  was  found  that  almost  all  such  occupations  were  present  in 
sinqle-site  independent  firms  employing  250-349  people.  One  might  expect, 
therefore,  that  all  corporations  employing  more  than  500  people  would 
include  most  NP  functions,  but  this  is  not  necessarily  so  (Table  7.1). 
Certain  specialised  NP  functions,  such  as  data  processing;  Legal, 
insurance  etc.;  and  research  and  development,  only  become  common  in 
corporations  employing  more  than  500  workers,  and  even  at  sizes  of  2000+, 
public  relations  is  not  a  universal  NP  function.  The  slight  shortfall  in 
the  other  four  categories  at  Large  corporate  sizes  (R  & D,  market  research, 
sales,  sales  servicing),  is  probably  the  result  of  a  failure  to  include 
certain  sales  offices  in  the  survey,  to  sales  servicing  having  an  industry 
bias  towards  engineering  industries,  and  to  one  or  two  rogue  responses. 

217.  Taken  together,  Tables  6.1  and  7.1  show  that  the  number  of  NP  functions 

increases  with  increasing  corporate  size.  To  see  how  this  comes  about 
one  must  start  with  a  typical  small  manufacturing  firm.  Such  a  firm 
will  necessarily  have  to  carry  out  a  number  of  activities  : 

purchase  of  raw  materials  and  supplies; 
storage  of  raw  materials  and  finished  products; 
maintenance  of  fixed  capital; 
payment  and  servicing  of  the  Labour  force; 
management  of  production; 
production  of  commodities; 
sale  of  finished  products  or  search  for  others; 
distribution,  or  arranging  for  distribution; 
basic  accounts; 
general  management. 

218.  This  List  of  activities  is  almost  entirely  a  recital  of  NP  functions. 

They  may  be  carried  out  by  one  or  more  people  as  part  of  their  general 
duties,  or  they  may  be  the  particular  responsibility  of  certain  personnel 
or  departments  whose  occupational  or  functional  descriptions  specify  that 
particular  function. 
implicit,  in  the  Latter  they  have  become  explicit. 

In  the  former  case  the  functions  may  be  said  to  be 

219.  As  corporations  increase  in  size  four  things  happen 

Ci)  specialisation  occurs  and  implicit  functions  become  explicit; 
Cii)  external  pressures  add  to  the  tasks  of  existing  functions  and 

Lead  to  the  introduction  of  new  ones; 

(iii)  the  goals  of  the  firm  alter  and  this  necessitates  the  introduction 

of  new  NP  functions; 

Civ)  the  balance  between  the  use  of  internal  and  external  sources  of 

NP  activities  alters. 

- 88-

Table  7.1  ReQ resent at ion  of  non-manufacturing  activities  in  corQorations~(1) 

1975/76 

Department  (2) 
<or  function) 

1.  General  management 
2.  Public  relations 
3.  Data  processing 
4.  Office  services 

5.  Wages  and  salaries 
6.  Accounts  and  finance 
7.  Legal,  insurance,  etc. 
8.  Purchasing 

9.  Personnel  etc. 
10.  Health,  welfare,  etc. 
11.  Security  and  maintenance 
12.  Product  design 
13.  Production  planning 
14.  Quality  control 

15.  Research  and  development 
16.  Market  research  etc. 
17.  Sales 
18.  Sales  servicing 
19.  Distribution 

No.  of  observations  (3) 

per  cent  of  total  number  of 

cor_por at 1 ons 

Employment 

1-499 

100 
-
33 
100 

100 
66 
33 
100 

33 
66 
66 
66 
100 
100 

33 
66 
66 
33 
100 

3 

500-
999 

100 
25 
87 
100 

100 
100 
75 
100 

100 
100 
100 
87 
100 
87 

62 
100 
100 
62 
100 

8 

1000-
2000 

2000-
4999 

100 
60 
80 
100 

100 
80 
80 
80 

1 DO 
1 DO 
100 
100 
100 
80 

80 
100 
80 
80 
100 

5 

100 
57 
100 
100 

100 
100 
86 
100 

100 
100 
100 
100 
100 
100 

86 
86 
86 
86 
100 

7 

Source  :  Organisation  Survey. 
(1)  Corporations  are  defined  here  in  the  sense  of  paragraphs  211-3  and  relate 

to  complete  entities. 

(2)  For  detailed  descriptions  of  functions  see  Table  6.2. 
(3)  It  is  realised  that  the  number  of  observations  included  in  this  table  is 
extremely  small  but  the  data  has  been  reproduced  in  this  form  because 
this  type  of  information  has  not,  hitherto,  been  available  for 
corporations  in  the  United  Kingdom. 

220.  Specialisation  means  than  an  NP  activity  previously  carried  out  as  part 
of  one  person's  duties  becomes  too  great  for  him/her  and  one  or  more 
people  take  it  on  as  a  particular  occupation  or  function.  For  example 
in  very  small  firms  the  transport  or  stores  functions  may  be  part  of  one 
person's  duties.  With  increasing  size  they  become  the  particular 
responsibilities  of  designated  individuals  or  departments.  Specialisation 
is  almost  always  associated  with  economies  of  scale  and  implicit 
functions  becoming  explicit. 

- 89-

221.  The  external  forces  that  impinge  on  the  growing  corporation  largely  stem 
from  the  government,  trade  unions,  and  financiers.  They  rarely  involve 
the  creation  of  new  functions,  unless  a  change  in  the  legal  status  of 
the  company  requires  the  introduction  of  a  company  secretary,  but  they 
add  to  the  burden  of  the  existing  personnel.  More  attention  has  to  be 
given  to  government  legislation  and  requirements.  Trade  unions 
necessitate  the  introduction  of  formal  wage-bargaining,  etc. 

222.  Although  not  completely  inevitable,  increasing  corporate  size  is  also 

likely  to  change  the  goals  of  the  firms  owners/managers. 
concerned  with  the  immediate  and  short  run  their  attention  shifts  to  the 
long  run.  The  longer  time-horizon  necessitates  the  introduction  of 
functions  whose  objective  is  safeguarding  the  long-term  future  of  the 
firm.  These  will  be  product  design,  market  research,  research  and 
development  and,  in  really  large  corporations,  corporate  planning  and 
development.  Public  relations  may  also  be  included  in  this  category,  as 
may  advertising,  to  the  extent  that  it  is  an  investment  in  goodwill. 

From  being 

223.  These  three  factors  increase  the  number  of  specialist  NP  functions  carried 

out  in  corporations  as  they  increase  in  size,  but  this  does  not 
necessarily  imply  that  NPs  increase  in  numbers  or  as  a  proportion  of  total 
employment.  There  is  always  the  possibility  that  firms  will  solve  any 
difficulties  by  purchasing  services  from  outside,  such  as  contract 
cleaning,  canteen  services,  hiring  transport  or  legal  assistance. 
Furthermore,  it  may  be  possible  to  substitute  capital  for  NPs  in  the  form 
of  computers,  warehouse  equipment,  maintenance-free  premises  etc.  Or 
there  may  be  real  economies  of  scale;  processing  orders  for  ~10,000 may 
be  far  from  ten  times  as  labour-intensive  as  processing  orders  for  ~1000. 

224.  Thus,  even  if  two  corporations  produce  identical  outputs  using  an  identical 
If  the  methods 

number  of  production  workers,  the  number  of  NPs  may  differ. 
of  production  differ,  so  that  fewer  production  workers  are  used  but  more 
capital,  then  the  number  of  NPs  may  increase  even  though  the  output 
remains  the  same  as  in  the  previous  case. 
will  rise  both  because  of  the  additional  NPs  and  because  of  the  reduced 
number  of  production  workers.  There  is  no  a  priori  reason  to  expect  the 
number  or  proportion  of  NPs  to  either  rise  or  fall  with  increasing 
corporate  size. 

In  this  event  the  NP  proportion 

Average  NP  proportions  with  increasing  corporate  size 

225.  Table  7.2  is  restricted  to  UK  corporations  and  organisations  because  the 

subsidiaries  of  foreign  corporations  have  characteristics  that  differ 
from  UK  ones  and  this  necessitates  their  separate  treatment.  The  table 
includes  both  whole  corporations,  where  all  the  NPs  in  a  corporate 
entity  are  known  to  be  included,  and  also  'other  organisations'  as  a 
separate  set,  where  it  is  known  that  some  NPs  are  missing  because  the 
organisation  in  question  is  a  major  subsidiary  or  division  and  presumably 
there  are  NPs  in  the  head  office  of  the  ultimate  corporation  who  are 
responsible  for  that  organisation.  These  two  types  of  organisation  can 
therefore  be  expected  to  differ  slightly  in  their  NPs  and  this  must  be 
allowed  for  in  the  interpretation  of  the  table,  along  with  any  other 
differences  that  may  occur  because  of  industry  biases  or  rogue  entries 
in  the  individual  returns  to  the  survey. 

- 90-

Table  7.2  Average  NP  function  proportions  in  UK  corporations  and  organisations, 

1975/76 

per  cent  of  total  employment 

Department 
(or  function) 

( 1) 

1.  General  management 
2.  Public  relations 
3.  Data  processing 
4.  Office  services 

5.  Wages  and  salaries 
6.  Accounts  & finance 
7.  Legal,  insurance  etc. 
8.  Purchasing 

9.  Personnel  etc. 
10.  Health,  welfare  etc. 
11.  Security  and 
maintenance 

Organisation  t'•pe  and  employment 
Whole 

cornoratinns(2) 
0-
999 

1000-
2499 

2500+ 

Other  organisations  (3) 
0-
999 

1000-
2499 

2500-
4999 

5000+ 

3.7 
0.1 
1.6 
3.4 

1. 0 
2.8 
0.2 
1. 9 

0.4 
1. 3 

1. 2 
0. 1 
1. 4 
2.7 

2.1 
1. 7 
0.1 
0.9 

0.9 
0.6 

2.0 
0.1 
0.9 
2. 1 

0.8 
2.2 
0.2 
1. 3 

0.9 
1. 0 

2.8 
0.1 
0.3 
2.9 

1. 2 
3.4 
0.2 
1. 1 

0.3 
0.9 

1.8 
o. 1 
0.5 
2.0 

0.9 
2.8 
0.2 
1.3 

0.9 
1. 1 

1.2 
0.1 
1. 0 
2.0 

0.8 
2. 2 
0.1 
0.8 

1. 1 
1.6 

0.8 
0.1 
0.5 
1. 3 

0.5 
1. 8 
0.1 
0.4 

0.9 
1. 4 

2.6 

2.2 

3.1 

2.2 

2.7 

8.3 

4.8 

12.  Product  design 
13.  Production  planning 
14.  Quality  control 

1.2 
2.5 
1. 9 

1. 3 
2.9 
0.9 

1 5.  Research  & 
Development 

116.  Market  research  etc. 
117.  Sales 
118.  Sales  servicing 
19.  Distribution 

1.3 

1.0 

0.8 
4.6 
1. 7 
3.7 

5.0 
7.7 
0.9 
5.2 

3.1 
5.4 
4.6 

0.9 

0.5 
4.9 
1. 1 
3.3 

1. 8 
3.3 
1. 7 

2. 2 
4.5 
1. 9 

1. 0 
3.6 
2.0 

1. 6 
4.4 
2.1 

0.8 

2.1 

1. 7 

2.8 

0.8 
2.5 
1.2 
3.5 

1.5 
4.6 
1.5 
3.6 

0.4 
4.0 
0.8 
5.0 

0.4 
1. 1 
1. 7 
3.6 

Total:  NP  functions 

39.3  38.8 

38.4 

30.9  35.9 

37.7 

30.3 

No.  of  observations 

8 

5 

3 

14 

16 

15 

l 

11 

Source  :  Organisation  Survey. 

(1)  For  detailed  descriptions  of  functions  see  Table  6.2. 
(2)  Relates  to  all  the  sites  of  a  corporation,  including  those  belonging  to 

all  its  subsidiaries  and  divisions. 

(3)  Relates  to  all  the  sites  of  a  distinct  part  of  a  corporation  such  as  a 

major  subsidiary  or  division. 

- 91-

226.  With  these  provisos  it  appears  that,  on  the  whole  : 

Ci)  Average  NP  proportions  in  corporations  decline  slowly  with  increases 
in  corporate  size,  due  largely  to  declining  NP  proportions  in  the 
administrative  functions- general  management,  data  processing, 
office  services,  wages  and  salaries,  accounts,  purchasing  etc.  -
which  are  not  counteracted  by  increasing  NP  proportions  in 
production-oriented  functions  such  as  security  and  maintenance, 
product  design,  and  production  planning  etc.  Thus  there  are  clear 
economies  of  scale  in  employment  terms  in  the  administration  of 
large  corporations. 

(ii)  These  trends  for  whole  corporations  are  repeated  by  those  for  other 

organisations,  but  in  a  more  extreme  form. 

(iii)  Whole  corporations  have  relatively  more  NPs  in  the  administrative 

functions  than  other  organisations,  particularay  in  data  processing, 
but  excepting  accounts  and  finance.  They  have  rather  fewer  NPs  in 
production-oriented  functions. 

227.  These  trends  are  as  might  be  expected. 

'Other  organisations'  have 

relatively  few  NPs  in  those  functions  that  might  take  place  in  the  head 
office  of  the  ultimate  corporation  to  whom  they  belong,  and  this  lack 
accentuates  NP  proportions  in  other  functions.  The  higher  NP 
proportion  in  accounts  and  finance  is  probably  a  response  to  the  more 
stringent  financial  monitoring  required  by  the  ultimate  head  office. 

The  influence  of  other  variables 

228.  As  paragraph  214  indicated,  the  nature  of  corporations  and  organisations 

In  interpreting  the 

prevents  an  assessment  of  the  influence  of  variables,  ~ther  than  size, 
on  NP  function  proportions  ex~ept  for  the  two  variabl2s  considered  in 
Table  7.3,  the  nationality  of  the  organisation's  ult~mate owner,  and  the 
range  of  products  produced  by  the  organisation. 
effects  of  t-he  range  of  products  it  is  useful  to  re.nember  that  single 
product  and  dominant  product  companies  are  concentrated  in  industries 
that  specialise  in  the  mass  production  of  standard  commodities,  such  as 
beer,  tobacco,  cement,  glass,  steel,  vehicles  and  some  foodstuffs.  These 
commodities  require  a  fairly  high  capital/labour  ratio  and  usually  have  a 
low  value/weight  ratio.  Because  the  products  are  standardised  it  is 
possible  to  centralise  administrative  processes  such  as  general  management 
and  accounts  as  well  as  other  functions  such  as  product  design,  production 
planning,  R & D,  and  sales.  So  these  functions  have  relatively  low  NP 
proportions.  On  the  other  hand,  because  of  the  high  capital/labour  ratio 
and 
maintenance,  have  high  NP  proportions,  as  does  transport  and  distribution. 

low  value/weight  ratio,  functions  that  are  capital-oriented,  such  as 

229.  The  other  main  feature  of  Table  7.3  is  the  extent  to  which  NP  proportions 

in  subsidiaries  of  foreign  corporations  exceed  those  in  UK-owned 
organisations,  particularly  in  the  more  professional  activities,  such  as 
data  processing,  accounts  and  finance,  personnel,  and  sales,  together 
with  production-oriented  activities.  This  is  partly  a  difference  in 
nomenclature;  UK-owned  firms  have  higher  proportions  in  general  management 
and  office  services. 

It  is  also  partly  a  reflection  of  higher  operative 

- 92-

Table  7.3  Average  NP  proportions  in  organisations  by  product-type  (1)  and 

by  n~tionality  of  ultimate  owner,  1975/76 

Department 
Cor  function)  (2) 

1.  General  management 
2.  Public  relations 
3.  Data  processing 
4.  Office  services 

5.  Wages  and  salaries 
6.  Accounts  and  finance 
7.  Legal,  insurance•etc. 
8.  Purchasing 

9.  Personnel 
10.  Health,  welfare 
11.  Security  and  maintenance 

12.  Product  design 
13.  Production  planning 
14.  Quality  control 

15.  Research  and  development 

16.  Market  research 
17.  Sales 
18.  Sales  servicing 
19.  Distribution 

per  cent  of  total  employment 

Range  of  products 

Ultimate  owm~r 

Single  Dominant  Related 
product  product 

products 

UK 

Foreign 

1. 6 
-
0.9 
2.3 

1.3 
2.2 
-
0.9 

1. 0 
1.2 
4.7 

1.2 
2.7 
1. 8 

1.2 

1.7 
3.2 
1. 0 
4.8 

1. 7 
0.1 
0.6 
2.3 

0.9 
2.5 
0.1 
0.8 

0.8 
1. 1 
3.6 

1. 4 
4.6 
1. 8 

1.2 

0.6 
3.6 
1. 1 
4.1 

1. 9 
0.1 
0.9 
2.0 

0.8 
2.8 
0.2 
1.2 

0.8 
1.5 
5.4 

2.1 
4.1 
1.8 

2.0 

1. 2 
5.3 
1. 4 
4.2 

1. 9 
0.1 
0.8 
2.3 

1. 0 
2.5 
0.1 
1. 1 

0.8 
1.2 
4.1 

1. 6 
3.8 
1. 9 

1. 6 

1. 1 
3.8 
1.3 
4.0 

1.2 
0.1 
1.5 
1. 1 

0.7 
3.5 
0.2 
1. 1 

1.5 
1.9 
7.6 

2.0 
5.1 
2.4 

1.3 

1. 1 
4.5 
1.5 
4.5 

Total  :  NP  functions 

35.4 

33.1 

39.8 

34.8 

42.7 

No.  of  observations 

18 

21 

35 

72 

12 

Source  :  Organisation  Survey. 

( 1)  Two  other  product  typ~s  are  not  included  as  only  a  small  number  of 

organisations  were  included  in  these  categories. 
(2)  For  detailed  descriptions  of  functions  see  Table  6.2. 

- 93-

productivity  in  foreign-owned  firms,  which  has  the  effect  of boosting  all 
the  NP  proportions.  However,  even  taking  these  factors  into  account  there 
seems  to  be  some  striking  differences  in  the  use  of  professional  services 
between  the  two  types  of  ownership,  differences  which  parallel  those  of 
Table  1.3,  which  is  on  an  international  basis. 

The  geographic  distribution  of  NPs  within  organisations 

230.  In  Tables  6.3  to  6.5  it  was  established  that  average  NP  proportions 

varied  according  to  the  organisational  status  of  sites  and  in  particular 
their  import  and  export  of  services,  and  the  extent  of  their  decision 
making  capability.  As  a  result  branches  had  lower  average  NP  proportions 
than  production  sites  that  included  head  offices  Ci.e.  NDHOs).  (Detached 
head  offices  have  100%  NPs). 
branches  are  distributed  in  a  manner  different  from  the  distribution  of 
head  offices,  then  the  distribution  of  NPs  in  multi-region  organisations 
may  help  to  explain  the  regional  disparities  in  NPs. 

It  is  therefore  perfectly  possible  that  if 

1.  Geographic  variations  in  the  use  of  services 

231.  An  initial  attempt  at  illustrating  the  geographic  impact  of  importing 

services  from  outside  is  given  by  Table  7.4,  which  distinguishes  branches 
from  NDHOs  by  their  Location  according  to  a  broad  area  classification 
London,  Central  and  Southern  England,  development  areas  - and  the  extent 
to  which  they  import  or  export  services.  Branches  import  services  to  a 
much  greater  extent  than  they  export  them,  but  the  extent  of  their  import 
increases  with  the  distance  of  the  branch  from  London,  whereas  the 
quantity  of  services  exported  decreases.  This  pattern  is  also  true  for 
NDHOs,  but  they  always  import  fewer  services  than  branches  do,  and 
export  more. 

Table  7.4  The  import  and  export  of  services,  by  region,  1975/76 

Reg ion 

average  number  of  functions  (1) 

Branches 

NDHOs 

Imported 

Exported 

Imported 

Exported 

Greater  London  (2) 
Central  and  Southern  England 
Development  Areas 

6.3 
6.4 
7.5 

0.7 
0.6 
0.2 

3.9 
2. 7 
5.2 

5.0 
4.3 
2.6 

Source  :  Organisation  Survey. 

( 1)  The  average  no.  of  functions,  out  of  19,  imported  or  exported  by  branches 

or  NDHOs  answering  the  use  of  services  question  in  the  Organisation 
Survey. 

(2)  Includes  the  Outer  Metropolitan  Area. 

- 94-

2.  Centralisation  within  multi-region  organisations 

232.  As  the  Organisation  Survey  obtained  data  for  all  the  sites  within  an 

organisation,  the  number  of  NPs  that  could  be 
be  calculated  on  the  basis  of  the  number  of  production  workers  at  each 
site.  That  is,  the  total  number  of  NPs  in  an  organisation  is  allocated 
around  its  sites  according  to  the  distribution  of  production  workers  (1). 
The  difference  between  the  actual  numbers  at  a  site  and  the  numbers 
expected  can  then  be  derived. 

'expected'  at  each  site  can 

233.  If  this  difference  is  taken  for  head  office  sites,  whether  detached  or 
not,  an  Index  of  Centralisation  can  be  calculated  by  relating  the 
difference  to  the  total  employment  in  the  organisation  : 

Index  of 
Centralisation 

= 

(Actual  NPs  at  head  office- Expected  NPs  at  head 
office) 

Total  organisation  employment 

This  index  shows  the  extent  to  which  NPs  are  concentrated  in  the  head 
office  more  than  might  be  expected.  The  average  Index  of  Centralisation 
for  all  organisations  in  the  Organisation  Survey  was  +7.7  %,  that  is, 
on  average  7.7%  of  total  employment  consisted  of  NPs  who  were  located 
in  the  head  office  beyond  the  Level  that  might  be  expected.  The  higher 
the  index  figure,  the  greater  the  degree  of  centralisation. 

234.  The  extent  of  this  centralisation  partly  depends  upon  the  structure  of 

the  organisation.  The  main  types  of  organisation  were  distinguished  in 
the  Organisation  Survey  : 

Ci)  branch  type  :  In  this  case  the  branch  factories  of  the  organisation 

carry  the  organisation's  name. 
Corporation  operates  processing  plants  throughout  the  sugar-beet 
growing  areas  of  the  United  Kingdom,  each  of  which  is  known  as  a 
factory  belonging  to  BSC  Limited. 

For  example,  the  British  Sugar 

(ii)  Subsidiary  type  :  This  type  of  organisation  operates  through  a  series 
of  subsidiary  companies,  each  having  their  separate  identity.  For 
example,  Royal  Worcester  Limited  operates  through  11  subsidiary 
companies  in  the  United  Kingdom. 

(1)  In  practice  two  forms  of  'expected'  NPs  were  calculated  (i)  based 

simply  on  the  number  of  Ps  at  each  site  Cii)  based  on  the  number  of 
Ps  at  each  site,  but  taking  account  of  the  site's  industry,  process 
type,  employment  size  and  the  amount  of  merchanting  undertaken. 
Regression  tec1miques  were  used  to  calculate  the  expected  values  for 
the  second  type  of  estimate. 
estimate  was  the  appropriate  one  to  use  in  the  subsequent  analysis 
since  within  any  one  organisation  individual  sites  may  differ  very 
considerably,  and  the  factors  taken  into  account  are  those  Likely  to 
affect  the  numbers  of  NPs  at  each  site. 

It  was  considered  that  this  second 

- 95-

235.  One  would  expect  that  subsidiary-type  organisations  would  exhibit  less 
centralisation  of  NPs  than  branch-type  ones,  since  the  existence  of 
separate  subsidiaries  indicates  a  degree  of  autonomy  greater  than  a  normal 
branch  factory  would  have.  The  Index  of  Centralisation  supported  this 
hypothesis,  the  values  being  5.9%  for  subsidiary-type  organisations  and 
9.0  % for  branch-type  ones. 

236.  This  distinction  is  of  importance  if  certain  regions  have  higher  relative 
numbers  of  branch-type  factories  than  factories  that  belong  to  subsidiary 
firms.  There  are  faint  indications  that  this  is  the  case  for  the 
respondents  to  the  Organisation  Survey,  but  the  survey  is  too  small  to 
rely  on.  There  is  further  supporting  evidence  from  the  Site  Survey,  but 
this  was  biased  towards  firms  that  had  recently  moved,  and  this  may  have 
affected  the  relative  numbers  of  branch  factories.  However,  in  general 
there  is  a  belief  that  branch  factories  are  more  prevalent  in  the  North, 
Wales  and  Scotland,  than  in  the  South  East,  and  hence  centralisation 
within  branch-type  organisations  must  be  partly  responsible  for  some  of 
the  NP  disparities  of  these  regions. 

3.  The  distribution  of  NPs  within  multi-region  organisations 

237.  Since  the  calculation  of  the  'expected'  numbers  of  NPs  was  carried  out 
for  each  site  in  an  organisation,  and  by  the  six  main  categories  of  NP 
functions  as  well  as  the  total,  it  is  possible  to  calculate  the  'actual 
expected'  figures  for  all  the  sites  in  any  given  organisation  in  the 
Organisation  Survey.  But  the  sites  may  be  classified  by  a  number  of 
characteristics,  such  as  their  industry,  range  of  products  or,  in 
particular,  the  region  of  their  Location.  For  any  one  region  it  is  then 
possible  to  add  up  the  excesses  or  deficits  given  by  the  'actual-expected' 
calculation  for  all  the  sites  in  that  region,  and  relate  this  total  to 
the  total  employment  of  the  sites  in  that  region,  as  given  by  the 
Organisation  Survey. 

238.  This  exercise,  the  results  of  which  are  given  in  Table  7.5,  cannot  be 

In  addition,  the  survey  included  some  organisations  whose 

expected  to  give  an  accurate  picture  of  the  overall  distribution  of  NPs 
in  multi-region  organisations,  simply  because  the  Organisation  Survey 
was  too  small  to  be  used  for  that  purpose  and  does  not  provide  a  proper 
sample. 
returns  were  quite  evidently  exceptional  cases.  Even  so,  Table  7.5, 
which  is  confined  to  sub-corporate  organisations,  provides  statistics 
that  are  sufficiently  similar  to  the  regional  disparities  in  NPs  discussed 
in  Chapters  3  and  5  to  indicate  that  the  distribution  of  NPs  within  multi 
region  organisations  is  partly  responsible  for  those  disparities. 
particular,  the  development  regions  are  consistently  in  deficit,  whereas 
the  South  East  is  in  surplus. 
In  addition  there  are  slight  indications 
that  the  position  is  worse  in  hinterlands  than  in  the  conurbations. 

In 

- 96-

The  Location  of  sub-corporate  head  offices 

239.  Given  the  key  part  that  distribution  within  multi-region  organisations 

~lays  in  explaining  regional  disparities  in  NPs,  it  is  of  some  importance 
to  investigate  the  Location  of  the  head  offices  and  other  detached  sites 
of  these  bodies. 
of  sub-corporate  organisations,  not  corporations.  This  is  because 
Chapter  8  discusses  the  location  of  the  head  offices  of  corporations, 
and  the  Location  of  corporate  research  laboratories  in  greater  detail. 

In  this  chapter  emphasis  is  laid  on  the  head  offices 

1.  Non-detached  head  offices  at  the  sub-corporate  level 

240.  Over  three-quarters  of  all  the  sub-corporate  organisations  in  the 

Organisation  Survey  had  their  headquarters  at  a  production  site. 
cases  the  head  office  was  a  distinct  unit  housed  in  an  office  block 
adjacent  to  a  factory. 
the  management  of  the  whole  organisation  from  that  of  the  main  company  or 
factory,  since  senior  executives  had  dual  roles.  There  was  no  evident 
distinction  based  on  size  between  those  sub-corporate  organisations  with 
head  offices  at  a  production  site  and  those  without,  but  three  particular 
types  of  NDHO  stand  out. 

In  other  cases  it  was  difficult  to  distinguish 

In  some 

Category  1 

241.  This  occurs  when  the  organisation  develops  at  a  single  location  which 

remains  both  the  main  factory  and  the  head  office.  There  were  nineteen 
such  organisations  in  the  Organisation  Survey,  of  which  five  had  locations 
that  were  geographically  eccentric  in  relation  to  their  production  sites. 
Almost  half  of  the  nineteen  had  their  main  plants  in  the  South  East,  but 
since  virtually  all  of  them  had  developed  from  their  main  plant  location 
the  predominance  of  the  South  East  and  Midlands  plus  Manchester  cannot  be 
explained  as  a  rational  or  conscious  choice  of  these  regions  as  head 
office  locations. 
the  outcome  of  a  long  history  of  enterpris~  in  these  areas.  However,  it 
is  not  possible  to  rule  out  the  possibility  that  there  was  bias  in  either 
the  selection  of  companies  or  the  responses  to  the  Organisation  Survey. 

It  seems  more  likely  that  this  ~istribution  represents 

Category  2 

242.  Eleven  organisations  were  divisions  or  major  subsidiaries  of  very  large 
In  each  case  the  headquarters  were  organisationally  distinct 

companies. 
and  located  in  an  office  block  adjacent  to  a  major  factory.  All  of  these 
organisations  were  the  results  of  rationalisation  within  their  companies 
and  are  different  from  the  organic  growth  which  categorised  the  previous 
category.  There  was  some  element  of  conscious  choice,  even  if  only 
small,  in  the  selection  of  their  headquarters  location,  and  the  location 
pattern  of  their  headquarters  was  different  from  those  in  the  previous 
group.  Southern  Locations  were  in  a  minority  and  main  plants  and  most  of 
the  other  factories  were  in  the  Midlands  or  in  the  Development  Areas. 
Production  site  location  has  tended  to  entail  a  northern  location  for  the 
head  office. 

- 97-

243.  The  main  question  is  why  for  these  organisations,  production  site 
locations  were  selected  in  preference  to  detached  sites.  The  most 
apparent  reason  is  the  six  of  the  organisations  were  in  heavy  chemicals 
or  engineering  industries  for  whom  a  detached  or  London  location  is  not 
a  prerequisite  for  the  sales  and  marketing  functions. 

Category  3 

244.  Eight  organisations  had  recently  moved  their  head  offices  from  London  and 

three  of  these  had  moved  to  the  main  production  site,  the  others  having 
moved  to  detached  office  blocks.  All  the  moves  occurred  in  the  wave  of 
office  dispersal  in  the  late  sixties  and  early  seventies. 
finance  in  one 
form  or  another  was  a  major  factor  and  the  three  that  moved  to  production 
sites  seemed  to  be  obeying  a  company  tradition  in  that  other  parts  of 
In  addition,  since  they  only  moved 
their  corporations  also  had  NDHOs. 
to  the  South  West,  West  Midlands  and  within  the  South  East,  they  retained 
easy  access  to  London. 

Detached  sub-corporate  head  offices  near  the  corporate  head  office 

245.  Ten  organisations  in  the  survey  (14  %)  had  detached  headquarters  which 
were  located  either  in  the  same  building  as  the  corporate  head  office 
(in  London),  or  else  had  recently  moved  out  of  that  building  to  another 
office  block  not  very  far  away.  These  moves  were  into  London's 
commuter  belt,  with  one  exception  which  was  over  a  distance  of  fifty 
miles.  Eight  of  these  organisations  produced  a  relatively  standardised 
product  and  were  highly  centralised  Leading  to  a  large  divisional  staff 
and  a  greater  likelihood  of  detachment  from  production  sites. 
In  three 
cases  the  companies  appeared  also  to  be  highly  centralised  at  the 
corporate  level,  giving  strong  Links  between  the  corporate  and  divisional 
head  office  staffs.  The  two  organisations  not  covered  by  the  remarks 
above  seem  to  be  special  cases. 

246.  In  seven  of  the  ten  organisations  London  was  probably  the  best  location 

from  which  to  reach  the  production  sites,  either  because  most  production 
was  in  the  South  East,  or  because  it  was  very  widely  spread  across  the 
country. 
In  the  latter  case  the  road,rail  and  especially  air 
communications  from  London  are  superior  to  those  of  almost  any  other 
city.  Several  respondents  emphasised  the  speed  with  which  they  could 
reach  remote  factories  from  a  base  in  or  near  London. 

Detached  sub-corporate  head  offices  away  from  group  head  offices 

247.  Four  organisations  had  headquarters  which  were  detached  but  which  were 

not  at  (or  near)  group  head  office,  nor  had  they  ever  been  so.  All  four 
were  subsidiary  companies  which  had  been  formed  relatively  recently  by 
a  policy  of  acquisition  and  rationalisation.  The  major  reason  for  the 
detached  location  for  three  companies  was  that  they  were  subsidiary-type 
organisations,  with  a  large  head  office.  This  had  been  formed  from  the 
merger  of  two  Large  and  well  established  companies  each  with  its  own 
substantial  headquarters.  The  new  Location  was  not  near  either  of  the 
original  head  office  sites  and  appears  to  have  been  a  compromise  between 
the  conflicting  claims  of  the  two  subsidiaries. 

- 98-

Summary 

248.  Detached  head  offices  formed  less  than  one  quarter  of  the  head  offices 

of  sub-corporate  organisations  but  tended  to  be  located  in  the  South 
East.  Non-detached  head  offices  on  the  other  hand  were  often  away  from 
the  South  East,  particularly  if  the  main  plants  of  the  organisation 
were  not  located  there,  or  the  location  had  been  selected  on  a  quasi 
rational  basis,  rather  than  having  developed  with  the  overall  growth  of 
the  organisation. 

Chapter  summary 

249.  Specialised  NP  functions  increase  in  number  with  increasing  corporate 
size,  but  average  NP  proportions  probably  show  a  small  decline,  as  the 
effects  of  scale  economies  in  administration  are  almost  counterbalanced 
by  increasing  NP  proportions  in  the  production-oriented  functions. 
Branch  factories  have  Lower  NP  proportions  than  head  offices,  and  the 
regional  distribution  of  branch  factories  and  sub-corporate  head  offices 
favours  the  South  East  at  the  expense  of  the  development  areas. 

-H-

CHAPTER  8 

THE  ROLE  OF  CORPORATE  HEAD  OFFICES  AND  RESEARCH  LABORATORIES 

250.  Much  the  greater  part  of  this  chapter  is  devoted  to  the  role  of  corporate 

head  offices  in  explaining  the  regional  distribution  of  NPs. 
structure  the  section  on  head  offices  follows  that  of  Chapters  6  and  7, 
starting  with  the  occurrence  of  NP  functions,  followed  by  a  discussion  of 
the  variations  in  average  NP  proportions  by  increasing  corporate  size 
and  other  relevant  variables.  The  overall  population  of  large  UK 
manufacturing  corporations  is  then  surveyed  and  this  population,  together 
with  the  results  of  the  Head  Office  Survey,  is  used  to  derive  estimates 
of  the  regional  distribution  of  NPs  in  corporate  head  offices.  There 
then  follows  a  short  section  on  research  laboratories. 

In 

I.  HEAD  OFFICES 

251.  This  review  of  head  offices  is  concerned  almost  entirely  with  whole 

corporations  and  only  includes  statements  about  the  head  offices  of  sub 
corporate  organisations,  such  as  major  subsidiaries  or  divisions,  in 
paragraphs  255/6  and  Table  8.2. 

It  is  based  largely  upon  two  sources 

(i)  an  analysis  of  the  manufacturing  corporations  included  in  the 

'Times,  1000,  1974/75'  (1),  using  directories,  company  reports, 
publicity  material  etc.; 

Cii)  the  Head  Office  Survey  carried  out  by  the  research  team. 

The  Head  Office  Survey 

252.  The  Head  Office  Survey  was  carried  out  in  two  parts.  For  the  smaller 

corporations  (1)  in  the  Times  1000  only  a  postal  survey  was  used,  but  an 
interview  was  carried  out  with  personnel  in  the  head  offices  of  most  of 
the  large  corporations  that  responded  to  the  survey.  This  interview  was 
not  only  used  to  check  the  responses  to  the  questionnaire  but  it  also 
enabled  the  research  team  to  ask  subjective  questions  about  the  Location 
of  the  head  office,  its  history,  and  the  links  between  the  head  office, 
the  rest  of  the  corporation,  and  outside  bodies. 

253.  The  questionnaire  used  in  the  Head  Office  Survey,  reproduced  as  Appendix 

B,  was  unusual  in  that  it  allowed  respondents  to  use  their  own 
departmental  descriptions  when  filling  it  in.  This  resulted  in  over  160 
categories  of  departments.  After  discarding  those  of  no  relevance,  such 
as  the  offices  of  subsidiaries  or  divisions,  the  remaining  categories 

(1)'The  Times  1000,  1974/75',  Times  Newspapers  Limited,  1974. 
(2)  For  definitions  of  the  terms  used  see  the  Foreword,  paragraphs 

(xiii)- (xx). 

- 100-

were  amalgamated  into  the  35  functions  presented  in  Table  8.1  (1). 

254.  A head  office  is  not  just  a  building,  it  is  the  group  of  people  who  are 
called  the  head  office  staff  in  the  administrative  structure  of  a 
corporation.  These  people  may  be  in  several  buildings,  which  may  be 
located  in  separate  towns.  For  example,  the  head  offices  of  Fisons 
Limited  and  the  Imperial  Group  Limited  are  split  between  London  and 
Ipswich  and  London  and  Bristol  respectively.  Because  of  this  possibility 
four  definitions  are  used  here 

Ci)  Aggregate  Head  Offices  (AHOs).  The  total  head  office  employment  at 

all  head  office  sites. 

Cii)  Main  Offices  (MOs).  Head  office  employment  at  the  sole  or  main 

office.  These  may,  or  may  not,  be  detached  from  production  sites. 
They  are  not  necessarily  the  largest  head  office  sites  in 
employment  terms  but  contain  the  top  management  and  controlling 
functions. 

(iii)  Detached  Offices  (DOs).  Head  office  employment  at  all  single  site 
DHOs  plus  the  detached  MOs  of  multi-site  head  offices  and  detached 
satellite  offices. 

Civ)  Satellite  Offices.  All  head  office  sites  that  are  not  Main  Offices. 

The  occurrence  of  NP  functions  in  head  offices 

255.  If  the  Organisation  Survey  is  used  to  consider  the  occurrence  of  NP 

functions  in  head  offices  then  a  comparison  can  be  made,  on  a  consistent 
basis,  between  branch  factories  and  head  offices,  although  it  must  be 
noted  that  the  corporate  unit  is  the  organisation,  not  the  whole 
corporation.  A comparison  of  Tables  8.2  and  6.2  shows  that  normally, 
for  any  given  size-group,  the  head  office  is  more  likely  than  the  branch 
factory  to  include  any  particular  NP  functions,  especially  in  the  cases 
of  public  relations;  data  processing;  Legal,  insurance  etc;  and  market 
research.  However,  this  is  not  always  the  case  for  accounts  and  finance, 
production  planning,  and  quality  control.  These  functions  are  closer  to 
the  actual  process  of  production  and  are  therefore  more  Likely  to  be 
located  at  production  sites. 

(1)  In  Table  8.1  and  subsequent  tables  based  on  the  Head  Office  Survey 

the  functions  within  two  lines  (Nos.  03,  07,  11,  17,  and  34)  comprise 
more  than  the  sum  of  the  constituent  parts  immediately  above  them 
(Nos.  01  and  02;  04,  05,  and  06;  08,  09  and  10;  12  and  13;  15  and  16; 
31,  32  and  33  respectively).  This  situation  arises  because  some 
respondents  replied  in  terms  that  could  only  be  included  as  a  total 
(e.g.  Finance  and  Accounts),  whereas  others  gave  separate  figures  for 
each  category  Ce.g. 
In  the  former  case  the  tables  include  only  an  entry  for  the  total 
(No.  07);  in  the  latter  case  they  include  entries  for  each  individual 
item  and  a  total  (Nos.  04,  05  and  07). 

'Finance•  and  'Accounts'  as  separate  items). 

- 101-

Table  8.1  Functions  used  in  the  analysis  of  the  Head  Office  Survey 

Code 
No. 

Description 

Directors  or  directors  and  their  secretaries 

01 
02  Other  senior  executives  and  managers 
03  All  directors  and  executives 
04 

Finance  (wherever  finance  is  mentioned,  including 
financial  accounts) 

OS  Accounts  (all  other  types  of  accounts) 
06  All  other  financial 
07  All  finance 
08 
09 
10 

Company  secretary,  secretariat,  etc. 
Pensions 
ALL  other  sections  of  company  secretary's  office 

(including  insurance,  archives) 

le_ga l  functions 

Company  secretary's  office 
Legal  department 

i 11 
12 
13  Other  Legal  functions  (such  as  patents,  contracts) 
14.  ALL 
15 
16  Other  Labour/staff-related  functions 
17  AlL  personneL  and  labour  functions 
18 

Personnel  (wherever  personnel  is  mentioned) 

Economics  and  planning  <including  a  mixture  of 
business  strategy,  corporate  development,  etc. 
Purchasing 
Transport  and  distribution  (including  shipping, 

19 
20 

stores  and  warehouse) 
Sales  (including  exports  and  commercial  depts.) 

21 
22  Overseas  (including  translation) 
23 

Publicity,  (including  internal  elements  such  as 

Short  description 

Directors 
Other  management 
Top  management 
Finance 

Accounts 
Other  finance 
Total  finance 
Co.  Secretary 
Pensions 
Other  co.  secretary 

Co.  sec.  office 
LegaL 
Other  legal 
Total  legaL 
Personnel 
Other  p_ersonne L 
Total  personnel 
Econ.  and  planning 

Purchasing 
Transport  and  d. 

Sales 
Overseas 
Publicity 

Library,  information,  magazines,  exhibitions  etc.) 

24 

Property  (including  estates,  building  services, 

Property 

architects  etc.,  but  excluding  the  maintenance  of 
the  head  office) 
Production  (including  engineering,  quality  control 
and  production  planning) 

25 

Production 

26  Marketing  (including  advertising  and  market  research)  1  Marketing 
27  Customer  services,  including  installation 
28 

Technical  (including  R & D,  development  engineering, 
technical  services,  standards,  product  development 
etc) 

Customer  serv. 
Technical 

29  General  administration  (including  various  categories  Admin. 

of  administration  and  services  which  may  include 
elements  of  other  categories) 

30  Data  processing  (including  computer,  0  & M,  OR, 

systems,  etc.) 

Canteen  or  restaurant 
Secretarial  and  typing 

31 
32 
33  Other  services  <chauffeurs,  travel,  security,  print-
ing,  telecommunications,  post,_  registry,  etc.) 

HQ  services 

34 
35  AlL  other 
Source  :  Head  Office  Survey. 

I 

Computer 

Canteen 
Secretarial 
Other  HQ  services 

HQ  services 
Other 

- 102-

Table  8.2  The  proportions  of  head  offices  that  include  given  non 

manufacturing  activities,  1975/76  (1) 

Per  cent  o 

f  h  d  ff' 

0  1 ces 

ea 

Department 
(or  function)  (2) 

1.  General  management 
2.  Public  relations 
3.  Data  processing 
4.  Office  services 

5.  Wages  and  salaries 
6.  Accounts  and  finance 
7.  Legal,  insurance  etc. 
8.  Purchasing 

9.  Personnel  etc. 
10.  Health,  welfare  etc. 
11.  Security  and  maintenance 

12.  Product  design 
13.  Production  planning 
14.  Quality  control 

15.  Research  and  development 

16.  Market  research  etc. 
17.  Sales 
18.  Sales  servicing 
19.  Distribution 

No.  of  observations 

Source  :  Organisation  Survey. 

o-
99 

93 
36 
36 
79 

36 
86 
57 
36 

57 
7 
7 

36 
29 
14 

29 

29 
43 
7 
14 

14 

m  g1ven  em_g  oyment  s1zegrouQs 

Employment  size  groups 

100-
199 

200-
349 

350-
749 

750-
1499 

1500 
plus 

100 
20 
30 
90 

70 
90 
30 
60 

30 
80 
80 

40 
70 
60 

40 

80 
100 
50 
60 

10 

100 
13 
40 
87 

93 
100 
20 
73 

80 
73 
80 

67 
93 
67 

40 

80 
100 
53 
73 

15 

95 
25 
85 
80 

80 
95 
50 
80 

100 
85 
85 

60 
100 
75 

50 

70 
90 
40 
90 

20 

95 
45 
70 
95 

90 
90 
45 
90 

100 
90 
100 

65 
90 
90 

60 

85 
90 
45 
90 

20 

100 
60 
67 
93 

73 
93 
67 
80 

100 
93 
100 

93 
100 
87 

8,0 

80 
73 
53 
100 

15 

Includes  both  NDHOs  and  DHOs. 

(1) 
(2)  For  detailed  description  of  functions  see  Table  6.2. 

- 103-

256.  Despite  head  offices  being  more  likely  to  include  any  given  NP  function, 
they  do  not  do  so  universally.  Public  relations;  legal, insurance  etc.; 
and  research  and  development  are  met  with  in  hardly  more  than  60  % of  head 
offices.  Moreover,  the  rate  of  occurrence  of  some  functions,  such  as  data 
processing,  or  sales,  appears  to  decrease  with  size.  Both  of  these 
apparent  peculiarities  arise  partly  because  Table  8.2  is  based  on  the 
Organisation  Survey,  and  thus  relates  to  organisations  and  not  whole 
corporations,  and  also  because  of  the  inclusion  of  both  NDHOs  and  DHOs. 
Some  functions  are  not  represented  in  sub-corporate  organisations  as  they 
are  located  at  the  corporate  headquarters.  The  inclusion  of  NDHOs  means 
that  the  size-groups  are  slightly  misleading  because  an  NDHO  of  size 
2000  may  include  a  factory  employing  1900  production  workers  and  only  100 
NPs.  To  avoid  these  difficulties  it  is  essential  to  consider  only  the 
head  office  staff  of  whole  corporations. 

257.  This  is  the  subject  of  Tables  8.3  and  8.4,  the  distinction  between  which 

is  that  whereas  Table  8.3  relates  to  Aggregate  Head  Offices,  Table  8.4 
is  concerned  with  Main  Offices  (1).  Both  of  the  tables  exhibit  the 
standard  features  of  NP  functions  becoming  explicit,  and  increasing  their 
representation,  with  increasing  corporate  size.  There  are  also 
indications  in  both  tables  that  by  no  means  all  NP  functions  are  present 
in  head  offices,  particularly  in  the  case  of  accounts,  planning,  sales, 
and  marketing,  although  this  may  be  partially  due  to  the  lack  of  specific 
functional  categories  in  the  questionnaire  (2).  The  main  differences 
between  the  two  tables  lie  in  the  upper  size  ranges,  where  certain 
activities,  such  as  pensions,  legal,  other  legal,  personnel,  purchasing, 
and  the  computer,  are  present  in  Aggregate  Head  Offices  but  not 
necessarily  in  the  Main  Office.  This  shows  the  extent  to  which  these 
activities  are  detached  into  satellite  locations,  often  Located  in  outer 
suburbs,  whilst  the  Main  Office  concentrates  on  activities  connected  with 
the  management  and  control  of  the  corporation  (top  management,  finance, 
personnel)  plus  certain  longer-term  functions,  such  as  economics  and 
planning. 

Average  NP  function  proportions  in  head  offices 

258.  The  Head  Office  Survey  is  of  interest  in  that  it  enables  a  wider  range  of 

NP  functions  to  be  analysed  by  a  greater  number  of  variables  than  could 
be  considered  for  the  Organisation  Survey.  The  relative  importance  of 
these  functions  both  in  the  total  corporation  and  in  Aggregate  Head  Offices 
(i.e.  all  head  office  sites)  is  given  in  Table  8.5.  Finance  dominates  the 
AHO  employment,  followed  by  the  essentially  service  activities  of  HQ 
services  and  computer.  Employment  in  any  of  the  purely  managerial  or 
administrative  functions  is  relatively  small). 

(1)  c.f.  paragraph  254. 
(2)  As  the  questionnaire  left  the  specification  of  functions  open,  the 

lack  of  any  indication  for  a  function  such  as  marketing,  for  example, 
could  be  due  to  its  inclusion  under  some  other  heading,  such  as 
publicity.  This  is  particularly  the  case  for  top  management,  as 
many  respondents  failed  to  include  the  directors  of  their  company. 

- 104-

Table  8.3  Representation  of  functions  in  Aggregate  Head  Offices  by  corporat~ 

size  :  UK  corporations  only,  1976 

l 

per  cent  of  total  no.  of  corporations 

Department  (or  function)  (1) 

Code  No. 

Description 

1-1999 

Total  corporate  employment 
sooo-
14999 

15000-
49999 

2000-
4999 

03 

04 
OS 
07 

08 

09 

10 

12 

13 

15 
16 
18 
19 

21 
22 
23 

25 
26 

30 
31 
33 

Top  management 

Finance 
Accounts 

Total  finance 

Co.  sec. 

Pensions 

Other  co.  sec. 

Legal 

Other  Legal 

Personnel 

Other  personnel 
Econ.  and  planning 
Purchasing 

Sales 
Overseas 
Publicity 

Production 
Marketing 

Computer 
Canteen 
Other  HQ  services 

No.  of  observations 

64 

50 
36 

79 

21 
-
-
-
-
21 

14 
-
36 
36 

7 
-
36 
36 

21 
14 

21 

14 

77 
63 

54 
94 

29 

9 

11 

14 

3 
40 

17 
17 

11 
23 

9 
29 

14 

14 

29 

14 
23 

35 

81 

73 
42 
96 

50 
46 

31 

42 

12 

73 
31 

62 
38 

15 
12 
58 

15 
27 

38 
23 
38 

26 

63 
68 
47 

95 

74 
58 

42 

47 

37 

68 

37 
58 

58 

32 
42 
68 

21 

42 
68 
26 
37 

19 

50000 
plus 

63 
88 
38 

100 

50 

62 

37 

63 

63 
88 
so 
63 

63 
13 

50 
88 
13 

38 

75 
50 

75 

8 

Source  :  Head  Office  Survey. 
(1)  Code  numbers  and  descriptions  from  Table  8.1. 

-

- 105-

Table  8.4  Representation  of  functions  in  Main  Offices  by  corporate  size 

UK  corporations  only,  1976 

per  cent  of  total  no.  of  corporations 

Department  (or  function)  (1) 

Code  No. 

Description 

1-1999 

Total  corporate  employment 

2000-
4999 

sooo-
14999 

15000-
49999 

50000 
plus 

103 
04 

OS 
07 

08 

09 
10 

12 
13 

15 

16 

18 

19 

21 

22 

23 

25 

26 

30 
31 

33 

Top  management 

Finance 

Accounts 
Total  finance 

Co.  sec. 

Pensions 

Other  co. sec. 

Legal 

Other  legal 

Personnel 

Other  personnel 

Econ.  and  planning 

Purchasing 

Sales 

Overseas 

Publicity 

Production 

Marketing 

Computer 
Canteen 
Other  HQ  services 

No.  of  observations 

57 

43 
-
71 
21 
-
-
-
-
21 

7 
-
36 

36 

7 
-
36 

36 

21 

14 

21 

14 

77 

63 

14 
94 

29 

9 

11 

14 
-
31 

14 

17 

11 

23 

9 

23 

14 

11 

26 
11 

23 

35 

i 

I 

81 

73 

31 
96 
so 
31 

31 

38 

12 
69 

27 

46 

38 

15 

12 

54 

12 

23 

31 
19 

38 

26 

63 

68 

42 

89 

74 

32 

21 

37 

26 

58 

26 

53 

47 

21 

32 
68 

21 

37 
37 

26 

32 

I  19 

63 

63 

25 
88 

38 

25 

25 

38 

38 

63 

38 

63 

38 

13 
so 
50 

13 

38 

13 
38 

38 

8 

Source  :  Head  Office  Survey. 
(  1)  Code  numbers  and  descriptions  from  Table  8.1. 

- 106-

Table  8.5  Average  NP  function  proportions  in  Aggregate  Head  Offices,  1976 

Department  (or  function)  (1) 

Code  No. 
01 
02 
03 
04 
05 
06 
07 
08 
09 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
29 
30 
31 
32 
33 
34 
35 

Description 
Directors 
Other  management 
Top_  management 
Finance 
Accounts 
Other  finance 
Tot a l  f i nan c e 
Company  secretary 
Pensions 
Other  co.  secretary 
Co.  sec.  office 
Legal 
Other  legal 
Total  legaL 
Personnel 
Other  personnel 
Total  personnel 
Econ.  and  planning 
Purchasing 
Transport  and  d. 
Sales 
Overseas 
Publicity 
Property 
Production 
Marketing 
Customer  service 
Technical 
Admin. 
Computer 
Canteen 
Secretarial 
Other  HQ  services 
HQ  services 
Other 
Total 

Mean  % of 
corporation 
UK  employment 
0.10 
0.01 
0.11 
0.39 
0.34 
0.07 
0.80 
0.04 
0.02 
0.02 
0.08 
0.02 
0.01 
0.04 
0.15 
0.03 
0.17 
0.07 
0.18 
0.18 
0.54 
0.03 
0.08 
0.05 
0.35 
0.23 
0.22 
0.30 
0.22 
0.38 
0.03 
0.08 
0.07 
0.39 
0.02 
4.45 

I 

~ 
J 
J 
I 

Mean  % of 
corporation 
AHO  employment 
7.1 
0.5 
7.6 
11.7 
8.7 
2.4 
22.8 
3.8 
1.6 
1.2 
6.6 
1. 2 
0.6 
1. 7 
3.9 
1.3 
5.1 
2.0 
2.5 
2.1 
5.0 
1. 1 
2.3 
1.3 
2.4 
2.9 
1.7 
4.3 
3.9 
9.6 
0.9 
5.1 
3.2 
13.5 
1. 8 
100.0 

-

Source  :  Head  Office  Survey. 

(1)  For  detailed  descriptions  of  functions  see  Table  8.1  and  the  note  to 

paragraph  253. 

- 107-

259.  Table  8.5  is  based  on  each  corporation's  employment  in  the  UK.  The 
company  reports  of  Larger  companies  often  also  include  their  total 
employment  throughout  the  world  and  this  forms  an  alternative  method  of 
standardisation  that  is  more  appropriate  when  head  offices  service 
world-wide  activities.  Table  8.6  shows  that  the  relative  size  of  AHOs 
on  a  'world'  basis  is  about  20%  less  than  that  on  a  UK  basis,  for  large 
corporations. 
the  main  feature  of  Table  8.6;  the  relative  size  of  AHOs  diminishes  with 
increasing  corporate  size.  For  corporations  employing  less  than  1000  it 
is  nearly  15  %,  for  those  employing  more  than  50,000  on  a  world  basis  it 
is  0.6  %. 

In  addition  the  transfer  to  a  world  basis  accentuates 

Table  8.6  The  relative  size  of  Aggregate  Head  Offices,  by  corporate  size, 

1976  (1) 

UK  corporations 

Subsidiaries  of 
foreign  corporation~ 
No.  of 
observa- as  a 

HQ  size 

percentage 
of  total 
employment 

HQ  size 
as  a 
percentage  tions 
of  total 
I employment 

All  corporations 

HQ  size 

No.  of 
observa- as  a 
tions 

percentage 
of  total 
employment 

Corporate 
total 
employment 

No.  of 
observa 
tions 

UK  based  (1) 

Less  than  1000 
1000-1999 
2000-4999 
5000-14999 
15000-49999 
50000+ 

World  based  (1) 

Less  than  1000 
1000-1999 
2000-4999 
5000-14999 
.15000-49999 
·50000+ 

4 
10 
35 
26 
20 
8 

4 
10 
32 
28 
17 
12 

10.6 
9.5 
2.4 
2.1 
1. 9 
0.8 

10.6 
9.5 
2.5 
1. 8 
1.5 
0.6 

4 
5 
9 
5 
5 
1 

4 
5 
9 
4 
6 
1 

18.9 
13.9 
9.4 
6.3 
3.2 
0.9 

18.9 
13.9 
8.9 
6.7 
3.0 
0.9 

8 
15 
44 
31 
25 
9 

8 
15 
39 
32 
23 
13 

14.8 
14.0 
3.9 
2.8 
2.2 
0.8 

14.8 
11.0 
3.9 
2.4 
1. 9 
0.6 

Source  :  Head  Office  Survey. 

(1)  In  the  top  half  of  the  table  the  mean  size  of  AHOs  is  calculated  as  a 
percentage  of  the  corporation's  UK  employment. 
In  the  bottom  half  of 
the  table  it  is  calculated  as  a  percentage  of  the  world  employment  of 
the  corporation. 

----------------------------------------------------~ 

- 108-

260.  The  other  distinctive  feature  of  Table  8.6  is  the  considerably  larger 

size  of  the  head  offices  of  the  subsidiaries  of  foreign  corporations 
compared  with  those  of  UK  corporations.  The  difference  between  the  two 
is  relatively  greater  in  the  intermediate  size  ranges  than  for  either 
the  smaller  or  larger  ones.  This  is  the  result  of  a  pronounced  drop  in 
the  relative  size  of  the  head  offices  of  UK  corporations  once  they 
employ  about  2,000  people.  The  probability  is  that  beyond  that  size  UK 
corporations  move  to  an  organisation  that  concentrates  control  at  the 
centre,  in  relatively  few  hands,  but  develops  decision-marking  to  the 
divisional  or  subsidiary  Level.  Subsidiaries  of  foreign  corporations  on 
the  other  heand  tend  to  concentrate  their  administration  at  the  centre, 
partly  because  their  relative  concentration  in  single  and  dominant 
product  activities  allows  them  to  do  so,  and  maintain  relatively  large 
head  offices. 

261.  A comparison  of  the  AHO  figures  of  Table  8.6  with  those  for  Main  Offices 

in  Table  8.7  shows  that  the  restriction  of  the  definition  of  a  head  office 
to  a  particular  site  reduces  its  proportionate  weight  by  between  10  - 20%. 
This  implies  that  10  - 20%  of  AHO  employment  is  in  satellite  offices, 
away  from  the  Main  Office. 

262.  The  Main  Office  concept  also  allows  the  use  of  the  distinction  between 

detached  and  non-detached  offices  and  from  Table  8.7  it  can  be  seen  that, 
despite  some  instability  in  the  figures,  DHOs  are  usually  smaller  than 
NDHOs,  and  can  be  as  Little  as  between  one  half  and  one  quarter  of  their 
size.  This  difference  is  probably  the  result  of  comparing  disparate 
corporate  structures  rather  than  detachment  as  such.  DHOs  of  UK 
companies  tend  to  include  control  functions  only,  and  as  such  have  fewer 
employees  than  an  NDHO  that  is  actively  engaged  in  production  as  well  as 
centro L. 

Table  8.7  The  relative  size  of  Main  Offices,  by  size  and  detachment 

UK 

employment  based,  1976 

Corporate 
total 
employment 

Detached  offices  Non-detached  offices  All  Main  Offices~ 

No.  of  Main  Office  No.  of  Main  Office  No.  of  Main  Office 
observa- size  as  % 
observa- size  as  % 
ti ons 
t ions 

observa- size  as  % 
tions 

Less  than  1000 
1000  - 1999 
2000  - 4999 
5000  - 14999 
15000-49999 
50000+ 

6 
9 
29 
23 
20 
8 

of  total 
employment 
10.9 
7.0 
2.2 
2.4 
0.8 
0.5 

2 
6 
15 
8 
5 
1 

of  total 
emoloyment 
13.4 
14.9 
4.8 
1.7 
5.1 
0.5 

of  total 
emplo~ment 

8 
15 
44 
31 
25 
9 

I  11.5 

10.1 
3.1 
2.2 
1. 7 
0.5 

Source  :  Head  Office  Survey. 

- 109  -

263.  One  way  of  comparing  the  head  offices  of  UK-owned  and  US-owned  companies 
is  to  take  the  ratio  of  the  average  NP  function  proportions  (UK/US). 
These  can  then  be  ranked  as  follows 

Functions  in  which  the  UK  average 
employment  is  greater  than  the  US 
(UK/US  ratio  in  brackets) 

Functions  in  which  the  US  average 
employment  is  greater  than  the  UK 
(UK/US  ratio  in  brackets) 

Overseas 
Canteen 
Other  co.  secretary 
Admin. 
Co.  sec.  office 
Pensions 
Production 
Top  management 

(22.0) 
(3.1) 
(2.5) 
(1.9) 
(1.7) 
(1.5) 
(1.3) 
( 1.1) 

Total  personnel 
Total  legal 
Technical 
Purchasing 
Finance 
HQ  services 
Computer 
Total  finance 
Marketing 
Sales 
Accounts 
Transport  & d. 
Other  finance 
Econ.  & planning 

(0.3) 
(0.3) 
(0.3) 
(0.3) 
(0.3) 
(0.3) 
(0.2) 
(0.2) 
(0.2) 
(0.2) 
(0.2) 
(0.1) 
(0.1) 
(0.1) 

(Functions  as  defined  in  Table  8.1). 

264.  Some  of  these  differences  are  purely  definitional  -

the  obverse  positions 

of  administrative  and  HQ  services  for  example.  Others  are  legal;  the 
subsidiaries  of  US  corporations  are,  in  the  main,  private  companies  and 
therefore  do  not  need  quite  such  a  large  company  secretary's  department. 
The  UK  corporations  probably  classify  some  activities  as  'production' 
that  might  be  more  closely  defined  in  the  foreign  subsidiaries. 
Nevertheless,  the  clear  tendency  is  for  UK  corporations  to  have  larger 
amounts  of  general  administration,whilst  US  ones  have  larger  numbers  in 
precisely  defined  departments  of  a  technical  nature. 

265.  Figure  8.1  shows  that  the  picture  is  rather  more  co~plicated  than  this. 
The  company  secretary's  office  is  always  larger  in  the  UK  whatever  the 
size  of  the  corporation,  but  top  management  in  the  different  ownership 
types  becomes  similar  in  relative  numbers  with  increasing  corporate  size. 
This  is  presumably  because  smaller  UK  corporations  are  run  by  directors, 
whereas  US  companies  have  one  factory  manager  or  managing  director  and 
a  series  of  specialised  managers.  With  increasing  size  UK  corporations 
pass  more  into  the  hands  of  the  specialist  managers  and  become  more  like 
their  US  counterparts. 

266.  A  similar  situation  holds  for  purely  administrative  functions,  such  as  HQ 
services  and  accounts.  Here,  for  smaller  corporations  the  US-owned  ones 
have  a  considerably  larger  HQ  employment,  but  with  increasing  size  this 
is  reduced  towards  a  UK  level.  But  for  a  Large  number  of  technical 
functions,  such  as  finance,  marketing  and  sales,  although  the  US 
proportion  does  decrease  more  rapidly  than  the  UK  equivalent,  even  for 
the  largest  subsidiaries  of  US  corporations  it  remains  above  the 
equivalent  UK  figures.  The  US  subsidiaries  always  have  a  greater 
proportionate  employment  in  computer  operations. 

- 110-

267.  These  variations  with .size  necessitate  the  qualification  of  first 

impressions  about  subsidiaries  of  US  corporations.  Their  Larger  head 
offices  are  due  partly  to  the  smaller  US  subsidiaries  being  much  more 
centralised  than  UK  ones.  But  in  the  Larger  size  ranges  they  appear  to 
be  acquiring  certain  of  the  characteristics  of  the  UK  companies,  although 
still  having  far  more  personnel  in  technical  functions. 

268.  A subjective  categorisation  of  corporations  by  type  of  product  (single  or 
multiple)  and  by  strength  of  control  (Loose/tight)  gives  fairly  consistent 
results  for  both  UK  and  US  owned  corporations.  Single-product 
corporations  usually  have  Larger  head  offices  than  multiple-produce  ones, 
and  this  holds  true  for  both  nationalities  of  ownership.  The  sole 
consistent  exception  is  •other  HQ  services•  hardly  an  important  category. 
The  expected  relationship  of  the  head  offices  'Loosely-controlled' 
companies  being  smaller  than  those  of  'tightly  controlled'  companies  is 
not  quite  so  consistent.  There  are  more  occasions  when  the  UK  Loosely 
controlled  companies  appear  to  have  Larger  AHOs  than  the  tightly-controlled 
ones  - an  unexpected  result  and  against  the  US  trend.  There  are  two 
occasions  when  both  UK  and  US  corporations  go  against  expectations  and 
although  one  is  a  relatively  meaningless  category- 'other•  -
case  is  'overseas'. 

the  second 

Corporate  head  offices  and  regional  disparities  in  NPs 

269.  To  find  out  the  extent  to  which  regional  disparities  in  NPs  are  due  to 

the  geographic  allocation  of  corporate  headquarters  it  is  simply  necessary 
to  establish  the  geographic  distribution  of  these  head  offices,  preferably 
by  corporate  size,  and  then  multiply  them  by  the  appropriate  NP  %, 
derived  from  the  Head  Office  Survey.  Before  carrying  out  this  exercise 
some  attention  is  given  to  the  overall  population  of  manufacturing 
corporations  and  in  particular  to  those  Large  manufacturing  corporations 
included  within  the  'Times  1000 1  for  1974/5. 

The  population  of  Large  manufacturing  corporations  in  the  United  Kingdom 

270.  Table  8.8  shows  that  over  20  % of  the  Largest  manufacturing  corporations 

are  subsidiaries  of  foreign  corporations,  although  the  proportion 
declines  with  increasing  corporate  size.  These  foreign  subsidiaries  are 
concentrated,  to  a  greater  extent  than  UK-owned  corporations  in  single  or 
dominant  product  activities.  There  is  a  tendency  for  the  UK-owned 
corporations  to  spread  over  wider  product  ranges  with  increasing  size, 
but  the  proportion  of  single  or  dominant  product  UK  companies  appears  to 
fluctuate.  This  is  probably  due  to  the  patterns  of  industrial 
concentration  for  commodities  such  as  beer,  cement  or  bricks. 
cases  the  market  is  shared  between  a  few  very  Large  corporations  and  a 
Larger  number  of  small  ones,  without  any  firms  straying  into  wider 
product  ranges. 

In  these 

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- 112-

271.  For  corporations  smaller  than  those  included  in  the  Times  1000  there  is 
an  increasing  tendency  to  be  single  or  dominant  product,  and  single 
rather  than  multi-region  as  size  diminishes. 
manufacturing  corporations  below  the  Times  1000  is  not  great,  perhaps 
some  400,  and  a  considerable  proportion  of  these  are  subsidiaries  of 
foreign  companies  (1).  Major  subsidiaries,  such  as  Watney  Mann  or 
Wiggins  Teape,  are  already  included  in  Table  8.8  as  part  of  their  parent 
companies. 

The  numbers  of  substantial 

In  two  size  groups,  2-3000  and  5-10,000,  the 

272.  The  proportions  of  headquarters  that  are  detached  away  from  production 
sites  are  very  similar  for  both  the  UK  and  foreign-owned  corporations 
and  for  each  category  the  extent  of  detachment  increases  steadily  with 
size  (Table  8.9). 
subsidiaries  of  foreign  corporations  have  a  considerably  higher  proportion 
of  DHOs  but  there  seems  to  be  no  particular  reason  why  this  should  be  so. 
However,  as  the  overall  extent  of  detachment  is  fractionally  greater  for 
subsidiaries  of  foreign  corporations,  and  there  are  few  really  Large  ones, 
the  implication  is  that,  size  for  size,  subsidiaries  of  foreign 
corporations  are  slightly  more  likely  to  have  DHOs  than  UK  corporations. 
Below  an  employment  of  about  1500  there  is  a  rapid  fall  in  the  proportion 
of  corporations  that  have  detached  head  offices. 

Table  8.9  Head  offices  of  large  UK  manufacturing  corporations,  by  ownershipL 

size  and  detachment,  1974/5 

UK  corporations 

Total  UK 
employment 
in  thousands 

Detached 
head 
office 

Non-

TotaL 
detached  number 

head 
office 

Subsidiaries  of 
foreicn  coroorations 
Non-

Total 
detached  number 

Detached 
head 
office 

head 
office 

% 

% 

% 

% 

Less  than  2 
2  but  less  than  3 
3  but  less  than  5 
5  but  less  than  10 
10  but  less  than  20 
20  but  less  than  50 
50  but  less  than  100 
100+ 

Total 

45 
39 
42 
65 
64 
80 
87 
100 

51 

55 
61 
58 
44 
36 
20 
13 
-

49 

105 
87 
90 
79 
44 
35 
15 
4 

459 

41 
60 
41 
69 
60 
75 
100 
-

52 

59 
40 
59 
31 
40 
25 
-
-
48 

41 
20 
29 
16 
10 
4 
2 
-

122 

Source  : 

'Times  1000'  for  1974/5  plus  company  reports  etc. 

(1)  cf.  Britain's  Quoted  Industrial  Companies,  1975,  Financial  Analysis 
Group  Ltd~,  and  Britain's  Top  1000  Foreign  Owned  Companies,  1975/6, 
Graham  and  Trotman  Limited. 

- 113-

The  regional  distribution  of  corporate  head  offices 

273.  Table  8.10  gives  the  regional  distribution  of  the  DHOs  of  the  manufacturing 

corporations  in  the  Times  1000  and  Table  8.11  gives  the  same  data  for  the 
NDHOs  for  comparison.  For  UK-owned  corporations  the  regional  distribution 
of  detached  head  offices  follows  the  expected  pattern  (Table  8.10).  The 
Large  majority  of  them  are  in  Central  London,  and  the  proportion  Located 
there  increases  steadily  with  corporate  size.  This  does  not  mean  that 
other  regions  are  devoid  of  DHOs.  The  development  regions,  containing 
Large  cities  such  as  Manchester,  Glasgow  and  Edinburgh,  muster  some  17% 
of  them  and  Southern  England  a  further  11  %.  The  rather  high  percentage 
of  very  small  corporations  having  detached  head  offices  in  Central  London 
can  probably  be  explained  by  them  being,  in  the  main,  small  holding 
companies.  For  the  subsidiaries  of  foreign  corporations  the  regional 
distribution  is  very  different.  They  have  virtually  no  DHOs  outside  the 
South  East,  where  they  are  concentrated  to  a  greater  extent  than  UK  firms. 

274.  The  distribution  of  non-detached  offices  also  follows  the  expected  pattern 
for  UK  corporations  (Table  8.11).  There  are  virtually  none  in  Central 
London,  other  than  those  of  newspaper  offices  and  publishing  companies. 
In  the  area  around  London  NDHOs  are  present  in  roughly  the  same  proportion 
as  DHOs.  However,  both  Central  and  Southern  England  and  the  Development 
Areas  have  a  considerably  greater  share  of  NDHOs  than  DHOs,although  it  is 
the  former  area  and  not  the  development  regions  that  is  comparatively  the 
worse  off.  The  distribution  of  the  NDHOs  of  the  subsidiaries  of 
foreign  corporations  is  again  different.  The  Outer  London  Area  is  still 
dominant  but  outside  that  area  it  is  the  development  regions  that  do  best. 
This  pattern  is  probably  due  to  history. 
In  the  inter-war  years  foreign 
companies  settled  near  London.  After  the  war  regional  incentives  caused 
them  to  locate  in  development  areas. 

275.  For  UK  companies  a  rough 

interpretation  of  Tables  8.10  and  8.11  is  that 

small  companies  are  confined  to  one  region  and  have  NDHOs,  or  DHOs,  in 
that  region.  Only  if  a  firm  becomes  a  true  holding  company  does  it 
migrate  to  London.  But  with  increasing  size  there  is  an  increasing 
tendency  for  head  offices  to  be 
'detached'  and  Located  in  the  London 
area.  This  still  Leaves  quite  a  number  of  Large  companies  with  detached 
or  non-detached  head  offices  out  of  London,  especially  if  they  are 
confined  to  one  broad  product  area  in  which  a  region  has  an  expertise. 
Thus  Tootal  remains  in  Manchester,  Pilkington  Bros.  in  St.  Helens,  Coats 
Patens  in  Glasgow,  Distillers  in  Edinburgh,  and  Joseph  Lucas  and  Tube 
Investments  in  Birmingham. 

The  impact  of  corporate  head  offices  on  regional  disparities  in  NPs 

276.  The  overall  population  of  detached  corporate  head  offices  can  be 

multiplied  by  the  average  proportions  of  total  employment  in  DHOs,  given 
in  Table  8.7,  to  obtain  an  estimate  of  employment  in  DHOs.  Certain 
adjustments  need  to  be  made  to  the  data  of  Table  8.7  to  allow  for  other 
detached  satellite  offices,  and  an  additional  estimate  has  to  be  made  for 
the  small  corporations  not  in  the  Times  1000.  These  estimates  are  made 
and  incorporated  in  Table  8.12. 

- 114-

Table  8.10  Regional  distribution  of  detached  corporate  head  offices  by 
corporate  size  group  and  ownership,  1974/75  (1) 

Total  UK 
employment 

Central 
London 

Inner  and  Other 
South 
East 

Outer 
London 

Central  and 
Southern 
England 

Development 
regions 

TOTAL 

Per  cent  of  total 

Number 

UK  corporations 

Less  than  2000 

2000  - 2999 

3000  - 4999 

5000  - 9999 

10000  - 29999 

30000+ 

Total  UK 

Subsidiaries  of 
foreign 
corporations 
Less  than  2000 

2000  - 2999 

3000  - 4999 

'5000  - 9999 

10000  - 29999 
30000+ 

Total  foreign 

53 

38 

42 

73 

50 

93 

57 

41 

58 
so 
55 

43 

75 

51 

9 

26 

11 

20 

18 

14 

53 

42 

42 

45 

43 

25 

44 

2 

14 

2 

13 

18 

18 

14 

7 

11 

6 

8 

3 

23 

18 

29 

7 

18 

17 

47 

34 

38 

44 

44 

29 

236 

17 

12 

12 

11 

7 

4 

63 

Source  :  'Times  1000'  for  1974/5  plus  company  reports  etc. 

(1)  Central  London  is  defined  as  being  roughly  within  the  Circle  Line. 
and  Outer  London  is  the  area  beyond  this  but  has  not  been  taken  as 
extending  as  far  as  the  officially  designated  Outer  Metropolitan  Area. 
Central  and  Southern  England  includes  the  East  and  West  Midlands,  East 
Anglia  and  the  South  West.  Development  regions  include  all  other  regions. 

Inner 

- 115-

Table  8.11  Regional  distribution  of  non-detached  corporate  head  offices  by 

corporate  size  group  and  ownership,  1974/75  (1) 

Inner  and  Other  Central  and  Development  TOTAL 

South 
East 

Southern 
England 

regions 

Total  UK 
employment 

CentraL 
London 

UK  corporations 

Less  than  2000 

2000  - 2999 

3000  - 4999 
5000  - 9999 
10000  - 29999 
30000+ 

Total  UK 

Subsidiaries  of 
foreign 
corporations 

Less  than  2000 
2000  - 2999 
3000  - 4999 
5000  - 9999 

10000  - 29999 
30000+ 

Total  foreign 

2 
-
2 

9 

5 
-

3 

-
-
-
-
-
-
-

Outer 
London 

17 

13 

21 

20 

23 

33 

18 

33 

25 
41 

80 

50 

100 

41 

Per  cent  of  total 

Number 

\ 
i 

2 

2 

8 

4 
-
-

4 

i 
i 
I 
! 
I 
I 
!  17 
l  13 
!  18 
i 
-
I 
-
-

l 

j 

14 

38 

40 

27 

21 

32 

66 

35 

8 

37 

6 

20 

50 
-

15 

41 

45 

42 

34 

41 
-

41 

42 

25 

35 
-
-
-

31 

I 
I 
l 
I 

l 

I 

58 

53 

52 

35 

22 

3 

223 

23 

9 
17 

5 
4 

1 

59 

Source  :  'Times  1000'  for  1974/5  plus  company  reports  etc. 
(1)  Regions  are  defined  in  Table  8.10,  note  1. 

- 116-

Table  8.12  Estimates  of  employment  in  detached  corporate  head  and  satellite 

offices  :  GB,  1975 

Central  Other 
London 
London 
Area(1)  East 

Rest  of  Central  &  Development 
regi ens ( 3) 
South 

Southern 
England(2) 

Times  1000 

Detached  head  offices 
and  satellite  offices 
in  the  same  resion 

UK  corporations 
Subsidiaries  of 
foreign  corporations 

20,000 

8,500 

3,500  ) 
) 
9,250  ) 

350 

) 
)  2,600 
) 

4,500 

Total 

28,500  12,750 

350 

2,600 

4,500 

Satellite  offices 
in  other  regions 
UK  corporations 

Subsidiaries  of 
foreign  corporations 

I 

1,350 

800 

450 

) 
)  3,800 

800 

300 

-

) 

Total 

2,150 

1,100 

450 

3,800 

250 

250 

1Non-Times  1000 
Detached  head  offices 

UK  corporations 

\ 

500 

250 

Subsidiaries  of 
foreign  corporations 

500 

1,500 

100 

150 

) 

) 

) 

600 

1,000 

·Total  1 detached 1  units 

131,650  15,600 

1,050 

7,000 

5,750 

Source  :  Research  team  estimates;  see  paragraph  276. 
(1)  Outside  the  Central  Area  and  including  most  of  the  Outer  Metropolitan 

Area. 

( 2)  East  and  West  Midlands,  East  Anglia  and  South  West. 
( 3)  Yorkshire  & Humberside,  North  West,  North,  Wales,  Scotland. 

- ll7-

277.  Detached  corporate  head  offices  appear  to  have  accounted  for  the 

employment  of  nearly  50,000  people  in  the  South  East  in  1975,  30,000  of 
them  being  in  Central  London.  At  first  glance  the  Latter  figure  may 
appear  to  be  Low  but  it  must  be  realised  that  it  excludes  non 
manufacturing  corporations  and  sales  offices;  major  subsidiaries  such  as 
Shell  UK  Oil  and  Watney  Mann;  and  the  staff  of  divisional  offices. 
Moreover  it  is  confined  to  the  central  area  of  London  so  that  British 
Oxygen  in  Hammersmith  and  ICL  (Holdings)  Ltd.  at  Putney  are  also  omitted. 
Non-detached  offices,  such  as  those  of  the  newspapers  and  breweries,  are 
also  excluded.  The  other  factor  to  be  borne  in  mind  is  that  UK  companies 
typically  operate  on  a  devolved  basis  with  a  very  small  head  office,  so 
that  the  giant  London  offices  of  Shell,  ICI  and  Unilever  are  an  exception. 
The  resulting  figure  of  30,000  jobs  is  not  out  of  Line  with  other 
estimates,  allowing  for  the  differences  outlined  above  and  the  drift  of 
office  jobs  out  of  London. 

278.  Subsidiaries  of  foreign  corporations  with  their  tendency  to  have  more 

concentrated  head  offices,  account  for  a  disproportionate  amount  of 
employment  in  corporate  head  offices  in  Central  London,  nearly  one  third. 
They  also  appear  to  have  moved  out  of  the  centre  to  the  suburbs  well 
ahead  of  UK  corporations  so  that  they  employ  about  three  times  as  many 
people  as  UK  corporations  in  the  OMA. 

279.  Satellite  offices  and  small  corporations  add  Little  to  these  figures. 

In  the  other  areas  major  cities  have  a  number  of  main  offices  and 

The  major  additional  source  of  NP  employment  in  the  London  area  arises 
from  major  subsidiaries  and  divisional  headquarters  not  shown  in  the 
table. 
since  development  regions  have  more  cities  they  acquire  more  employment 
in  main  offices.  Central  and  Southern  England  appears  to  have  more 
satellite  offices,  usually  as  a  spin-off  from  head  offices  in  the  London 
Area. 

II.  RESEARCH  AND  DEVELOPMENT  LABORATORIES 

280.  Research  and  development  laboratories,  like  head  offices  and  sales 

offices,  can  be  classified  according  to  their  place  in  the  corporate 
structure,  by  the  nature  of  the  products  with  which  they  are  concerned, 
or  by  whether  or  not  they  are  Located  at  a  production  site.  As  industrial 
R & D concentrates  on  development  and  applied  research,  and  a  considerable 
quantity  is  undertaken  by  the  metal  and  engineering  industries,  a  Large 
proportion  of  R & D employment  is  located  at  production  sites.  Typical 
patterns  of  the  dispersion  of  R & D facilities  within  corporations  and 
organisations  are  :  (i)  small  units  at  all  production  sites,  (ii)  one 
central  facility  plus  smaller  units  at  some  or  all  production  sites, 
(iii)  one  central  R & D unit. 

- 118-

281.  In  addition  to  these  basic  categories  Large  corporations  with  a  series 

of  divisions  or  subsidiaries  may  carry  out  research  at  this  level,  using 
one  of  the  basic  categories  above  or  variants  thereof,  but  in  addition 
have  a  central  group  facility  such  as  the  Hirst  Research  Centre  of  GEC 
or  the  Rank  Research  Laboratories  of  the  Rank  Organisation.  A further 
variantoccurs  when  a  corporation  hives  off  research  into  a  specialised 
company,  such  as  Shell  Research  Ltd.,  or  Glaxo  Research  Ltd. 
In  this 
case  a  definitional  problem  arises  as  to  whether  the  staff  of  such 
companies  are  truly  in  manufacturing  industry. 
taken  that  they  are. 

In  this  report  it  is 

The  population  ofresearch  units 

282.  There  is  no  general  guide  to  the  research  units  of  industrial  firms  so 

that  it  is  not  possible  to  describe  R & D laboratories  other  than  by 
using  the  results  of  the  research  team1 s  R & D and  Organisation  Surveys. 
Of  84organisations  in  the  Organisation  Survey  18  carried  out  no  research, 
or  failed to include  any  employment  under  the  appropriate  functional 
category.  There  were  usually  small  companies  employing  less  than  2000 
people. 
decision;  in  a  financial  crisis  in  1971  the  firm  had  decided  to  dispense 
with  research  and  license  other  peoples  developments. 

In  one  case  the  Lack  of  R & D was  the  result  of  a  conscious 

283.  The  remaining  66  organisations  distributed  R & D as  follows 
30  at  one  site  only,  including  5  that  had  only  a  handful 
of  people  involved; 

21  at  less  than  half  their  sites; 
15  at  more  than  half  their  sites  {including  4  at  all  their  sites>. 

Thus  the  majority  of  organisations  in  the  Organisation  Survey 
concentrated  their  R & D at  a  few  sites,  usually  one  site,  perhaps  with 
small  Laboratories  at  one  or  two  others.  Of  those  organisations  that 
had  concentrated  their  R & D the  majority  had  established  it  either  at 
a  production  site  or  at  an  NDHO. 
at  a  DHO  and  so  detached  from  production. 

In  only  7  cases  was  it  established 

284.  These  general  proportions  were  borne  out  by  the  R & D Survey,  which 

focussed  on  the  central  or  group  research  laboratories  of  corporations 
but  also  obtained  details  of  the  distribution  of  R & D within  them. 
Only  two  firms,  both  of  them  in  the  engineering  industry,  had  spread 
R & D to  all  their  sites. 
at  most  of  the  production  sites  but  for  these  there  was  noticeable 
concentration  at  one  particular  Location.  A typical  situation  occurs 
when  the  central  facility  does  the  more  basic  and  longer  term  research 
and  also  acts  as  a  consultant  or  advisory  service  for  the  other  sites 
carrying  out  the  shorter  term  development  work.  Otherwise,  the 
proportions  of  the  responses  to  the  R & D Survey  were  more  or  less  in 
line  with  those  of  the  Organisation  Survey. 

In  7  other  cases  there  was  some  R & D activity 

- ll9-

Employment  in  R & D 

285.  It  is  well  known  that  employment  in  R & D varies  widely  according  to 

corporate  size  and  the  nature  of  the  products  produced.  The  R & D 
Survey  indicates  the  following  broad  ranges  of  corporate  R & D employment, 
by  industry  : 

% of  total  corporate  employment 

Food,  textiles 
Engineering,  electrical 
engineering 

Metals,  ceramics,  glass, 

0 

3/4  % 

1/2 

2  1 I 2  % 

rubber,  plastic 
products 

Chemicals 
Electronics 

4  1/2  % 

1  1/2 
4 
5 

9  % 
- 10  % 

286.  The  subsidiaries  of  foreign  corporations  form  an  outstanding  exception 

In  some  cases  their  R & D appears  to 

to  these  broad  general  ranges. 
fall  into  the  UK  pattern  but  in  others  it  can  be  wildly  outside,  falling 
as  Low  as  1/2%  and  rising  to  over  25%  for  some  chemicals  firms. 
The  explanation  of  these  discrepancies  Lies  in  the  structure  of  the 
parent  corporation.  Sometimes  the  UK  subsidiary  includes  one  of  the 
three  or  four  world  research  bases  of  the  parent,  and  in  this  case  R & D 
appears  to  be  extremely  important. 
In  other  cases  the  world  Laboratories 
are  elsewhere  and  the  UK  operation  produces  the  results  of  somebody 
else's  research,  thus  having  a  very  small  R & D function. 

287.  The  composition  of  employment  in  R & D  Laboratories  is  fairly  consistent 

comprising  : 

41  % Scientists,  engineers,  other  research  workers  of  degree  standard. 
38  % Technicians  and  other  technical  personnel. 
5.5  % Managerial  and  other  senior  administrative  personnel. 
7.5  % Secretarial  and  clerical  workers. 

8  % Others  (e.g.  cleaners,  canteen,  security,  maintenance,  transport). 

There  are  some  variations  around  these  figures  - US  companies  may  employ 
more  degree-Level  personnel  and 
fewer  managers;  research  dependent  upon 
animals,  agriculture  or  the  maintenance  of  machinery  may  use  more 
1 other'  -but  otherwise  the  proportions  are  similar  for  most  research 
work. 

Regional  employment  in  detached  corporate  R & D  Laboratories 

288.  Research  and  development  staff  are  included  in  most  of  the  tables  that 
arise  out  of  the  Organisation  Survey,  particularly  in  Table  7.5  on 
regional  disparities.  However,  these  tables  exclude  employment  in 
corporate  'central'  or  'group'  Laboratories,  because  they  are  based  on 
organisations  rather  than  whole  corporations,  and  they  also  exclude  the 
detached  R & D  laboratories  of  the  separate  research  compan1es  that  have 
been  created  by  some  Large  corporations.  To  estimate  employment  at  these 

- 120-

sites  the  numbers  of  such  units  and  their  locations  were  obtained  using 
directories  (1),  company  reports,  the  Organis~tion  Survey,etc.  Sixty 
sites  were  identified,  of  which  the  employment  in  27  was  directly 
available  from  the  R & D Survey,  Organisation  Survey,  company  reports  or 
In  a  further  26  cases  the  directory  gave  the  number 
careers  Literature. 
of  graduate  staff  employed  and  the  results  of  the  R & D Survey  were  used 
to  produce  a  total  employment  figure  on  the  basis  of  there  being  1  1/2 
other  employees  for  each  graduate.  This  left  7  cases  where  crude 
estimates  were  resorted  to. 

289.  The  results  of  these  calculations  are  that  the  South  East  accounted  for 
over  17,000  jobs  in  R & D whilst  Central  and  Southern  England  had  only 
2,850  and  development  regions  3,300.  Over  5,000  of  the  employment  in 
the  South  East  came  from  the  project  development  teams  of  the  big  car 
manufacturers,  but  the  rest  is  quite  widely  spread,  with  Large  detached 
Laboratories  of  the  oil  and  fine  chemicals  corporations  predominating. 
Moreover,  these  figures  are  likely  to  be  underestimated  because  of  the 
imperfect  nature  of  the  population  used. 
One  might  conclude  that  the 
group  and  detached  R & D centres  of  manufacturing  industry  account  for 
some  20,000  jobs  in  the  South  East,  3,500  in  Central  and  Southern  England 
and  4,000  in  development  regions.  This  is  out  of  a  total  of  163,000  jobs 
in  the  research  departments  of  all  manufacturing  industry,  most  of  which 
are  at  production  sites  (2). 

(1)  e.g.  'Industrial  Research  in  Britain'.  Francis  Hodgdon,  1971. 
'Employment  on  scientific  research  and  development  in  British 
(2) 
Industry•.  Trade  and  industry,  13  February  1975. 

- 121-

CHAPTER  9 

THE  EXPLANATION  OF  REGIONAL  DISPARITIES  IN  NPs 

industrial 

In  Chapter  5  the  regional 

the  Last  of  which  was  found  to  be  the  most  important 

290.  This  chapter  brings  together  a  series  of  explanations  for  the  regional 
disparities  in  NP  employment,  concentrating  on  those  applicable  to 
multi-region  corporations  and  organisations. 
disparities  were  disaggregated  into  three  components  -
structure  effects,  disparities  attributable  to  single-region 
organisations  and  disparities  resulting  from  multi-region 
organisations  (1)  -
factor  in  accounting  for  the  disparities  in  the  South  East  and  the 
development  regions. 
procedure  is  continued  with  a  further  disaggregation  of  the  multi-region 
component,  using  some  of  the  material  displayed  in  Chapters  S-8.  This  is 
followed  by  a  second  section  that  discusses  the  reasons  for  the  location 
of  detached  corporate  head  offices  and  research  laboratories  in  the  South 
East. 
Lie  behind  the  regional  disparities  in  NPs.  These  factors  are  in 
principle  applicable  to  both  single- and  multi-region  organisations, 
although  the  main  analytic  section  relating  the  regional  productivity 
of  production  workers  to  regional  NP  proportions  is  carried  out  using 
data  for  single-region  corporations. 

The  chapter  ends  by  considering  two  other  factors  that  could 

In  the  first  part  of  this  chapter  the  accounting 

I.  The  effects  of  Aggregation  and  Centralisation  in  Multi-region 

Corporations  and  Organisations 

291.  Previous  chapters  have  provided  ample  evidence  for  part,  at  Least,  of 
the  disparities  in  NPs  being  the  result  of  the  effects  of  aggregation 
and  centralisation  in  multi-region  organisations  and  corporations. 
The  reasons  for  this  aggregation  and  centralisation  are  easy  to 
understand.  Although  many  NP  activities  have  fairly  direct  Links  with 
production,  or  the  personnel  and  equipment  needed  for  production,  a  high 
proportion  of  them  are  essentially  footloose  -
anywhere  and  not  necessarily  at  production  Locations.  The  historical 
improvement  in  communications  techniques,  together  with  the  increasing 
specialisation  of  professional  activities  and  the  introduction  of  new 
activities  such  as  market  research  and  publicity,  has  Led  to  increases 
in  the  number  of  such  footloose  activities,  both  over  time  and  with 
increasing  corporate  size. 

they  may  be  Located 

292.  The  natural  inclination  of  such  footloose  activities  is  for  them  to 

cluster  or  concentrate  at  particular  sites  and  thereby  gain  economies  of 
scale,  so  long  as  communications  costs  do  not  outweigh  this. 
principle,  if  a  corporation  is  multi-site  there  will  be  one  production 
site  that  is  preferred  for  any  footloose  function.  However,  in  as  much 
as  the  function  is  truly  footloose  there  is  no  need  to  restrict  it  to 
existing  production  sites. 
Location,  away  from  production.  Thus  there  is  a  natural  and  inevitable 
tendency  for  NP  activities  to  cluster,  either  at  particular  production 
sites,  or  in  particular  detached  offices,  research  Laboratories, 
warehouses  etc.  This  clustering  of  NPs  is  considered  first  at  the  sub 
corporate  Level  and  then  corporate  sites  such  as  head  offices  are  brought 
into  the  discussion. 

It  may  well  be  Located  in  a  'detached' 

In 

(1)  For  def1nitions  of  the  terms  used  see  the  Foreword,  paragraphs 

(xiii)  -

(xx). 

- 122-

NP  disparities  within  sub-corporate  multi-region  organisations 

293.  A  rough  estimate  of  regional  employment  disparities  at  the  sub-corporate 

It  has  been  derived  by 
Level  is  included  in  column  2  of  Table  9.1. 
multiplying  the  employment  disparities  from  the  Organisation  Survey 
(Table  7.5)  by  the  estimated  employment  in  multi-region  organisations 
(Table  5.4)  (1).  Although  these  figures  are  included  in  the  same  table 
as  the  total  disparity  <column  1  of  Table  9.1)  they  are  not  strictly 
comparable  with  it  as  they  refer  to  NPs,  not  ATCs,  and  also  because  the 
basis  of  standardisation  used  in  arriving  at  the  estimates  in  Table  7.5 
involved  more  than  a  simple  allowance  for  industrial  structure ·(1). 
Finally,  the  figures  are  for  1975/76  survey  results  multiplied  by  1971 
employment  estimates  and  therefore  are  not  on  par  with  the  1971  ATC 
disparities. 

294.  Despite  these  differences  in  the  basis  of  the  calculations  the  magnitudes 

in  column  2  are  broadly  in  Line  with  expectations  in  that  in  the  South 
East  and  South  West  regions  sub-corporate  organisations  give  rise  to  an 
excess  NP  employment,  while  elsewhere  there  are  deficits,  except  in  the 
two  Midland  regions.  The  excesses  in  the  Midland  regions  may  be  due  to 
biases  in  the  Organisation  sample,  but  it  is  possible  that  at  this 
sub-corporate  Level  they  reflect  the  effects  of  postwar  industrial 
movement.  Sub-corporate  head  offices  have  tended  to  remain  in  the  regions 
that  have  exported  branch  plants  to  the  development  regions,  and  the 
Midlands  have  been  a  source  of  industrial  movement  as  well  as  the  South 
East.  Thus,  at  the  sub-corporate  Level,  it  is  possible  that  the  Midlands 
have  excess  NPs  as  well  as  the  South  East  and  South  West  regions. 

(1)  In  more  detail,  the  NP/P  ratio,  on  which  Table  7.5  was  based,  was 

multiplied  by  the  number  of  operatives  in  multi-region  organisations. 
This  procedure  is  in  accordance  with  that  used  to  derive  the  regional 
disparities  in  Chapter  3  and,  as  in  that  chapter,  the  move  from  NP 
proportions  to  NP/P  ratios  has  the  effect  of  increasing  the 
disparities  (cf.  paragraph  58). 
It  should  also  be  noted  that  these 
figures,  and  those  for  detached  corporate  head  offices  and  research 
and  development  laboratories  in  columns  3  and  4  of  Table  9.1,  have 
been  standardised  for  differences  at  each  site.  That  is,  an 
'expected'  number  of  NPs  was  first  obtained  on  the  basis  of  the 
number  of  production  workers  at  a  site,  and  then  the  residual 
disparity  at  that  site  was  calculated  (equal  to  the  'actual'  minus 
the  'expected'  numbers). 
The  employment  disparity  in  each  region 
can  then  be  thought  of  as  the  sum  of  the  residuals  at  the  individual 
sites. 
production  workers,  so  the  expected  number  of  NPs  is  zero,  and  the 
residual  values  equal  the  actual  employment.  Columns  3  and  4  of 
Table  9.1  therefore  give  actual  employment  in  detached  corporate 
head  offices  and  research  and  development  Laboratories. 

In  the  case  of  the  detached  corporate  sites  there  are  no 

- 123-

Table  9.1  Employment  disparities  and  multi-region  organisations  and 

corporations,  Great  Britain,  1971  (1) 

Region 

TotaL  disparity 
in  multi-region 
organi sat ions(2) 
(ATCs) 

Estimates  of  NP 
employment 
disparities  at 
the  sub-
corporate  Leve( 

(3) 

South  East 
South  West 

West  Midlands 
East  Midlands 
East  Anglia 
Yorkshire  and 
Humber side 
North  West 

Scotland 
Wales 
North 

+  159.8 
1.2 
+ 

-
-
-

-
-

-
-
-

24.2 
11.0 
2.2 

15.5 
40.0 

16.5 
20.2 
28.2 

Source  :  see  footnotes  and  text. 

2 

+  59.3 
+  4.7 

+  28.0* 
+  5.2 
- 10.0 

- 34.9 
- 29.5* 

- 42.3 
- 12.1 
- 33.6 

NP  employment  in 
corporate 
detached  sites 

Head 
offices(4) 

3 

48.3 
1.9 

4.6 
0.3 
0.2 

1.3 
1. 7 

1. 5 
0.4 
0.8 

R  &  D 
(5) 
Laboratories 
4 

20.0 
0.1 

2.1 
0.8 
0.5 

3.7 

0.1 

0.2 

1.  See  paragraph  293. 
2.  Derived  from  Table  5.6. 
3.  For  derivation,  see  paragraph  293  and  the  footnotethereto. 
4.  Derived  from  Table  8.12. 
5.  For  derivation, 

see  paragraph  289. 

*·  One  extreme  observation  has  been  omitted  from  the  cal~ulation  of  this 

figure. 

295.  The  analysis  of  the  Organisation  Survey  showed  that  most,  but  not  all,  of 
the  regional  disparities  within  multi-region  organisations  was  the  result 
of  the  centralisation  of  NPs  within  head  offices  which  tended  to  be  in 
the  South  East  or  the  Midlands. 
However,  there  was  also  a  tendency 
for  branch  plants  in  the  Midlands  and  South  to  have  higher  NP  proportions 
than  those  in  the  development  regions.  A major  reason  for  this  appears 
to  be  that  Southern  or  Midland  branches  are  often  older  and  more  integral 
parts  of  the  production  process,  undertaking  more  skilled  operations. 
One  engineering  company  for  example  had  a  headquarters  outside  London  and 
two  branch  plants.  One  branch,  in  London,  was  the  company's  oldest  plant 
and  specialised  in  prototype  work,  and  the  manufacture  of  spare  parts  in 
small  runs.  The  other  branch  in  the  North  East  was  much  Larger  and 
involved  in  the  more  routine  mass  production  and  assembly  operations  with 
a  relatively  low  ratio  of  NPs  to  operatives.  Another  situation, 
encountered  several  times,  was  for  a  sub-corporate  R & D department  to 
be  located  away  from  the  headquarters,  but  at  a  nearby  branch  rather  than 
at  a  distant  one  in  some  Development  Area. 

- 124-

NPs  at  the  corporate  Level  (1) 

296.  In  principle  the  consideration  of  NPs  at  the  corporate  Level  should 

In  practice  the  analysis  here  is 

include  all  corporate  sites. 
restricted  to  detached  sites  alone.  This  is  for  two  reasons.  Firstly, 
the  distinction  between  corporate  and  sub-corporate  staff  becomes 
blurred  outside  the  largest  corporations,  except  when  the  head  office  is 
a  physically  distinct  unit.  Secondly,  non-detached  head  offices  tend  to 
be  distributed  around  the  country  more  or  Less  in  proportion  to  the 
number  of  operatives.  The  South  East  for  instance  had  31  % of  the  NDHOs 
of  the  corporations  in  the  'Times  1000,  1974/5',  compared  with  25%  of 
the  operatives  Cin  1971)  (2).  Hence  the  main  disparities  at 
corporate  Level  are  the  result  of  employment  in  detached  units. 

the 

297.  In  Table  9.1,  columns  3  and  4  give  the  number  of  NP  workers  in  detached 
corporate  head  offices  and  in  detached  corporate  R & D sites  (3). 
Since  the  figures  include  all  NP  occupations  they  are  not  strictly 
comparable  with  the  ATC  figures  of  the  first  column  but  the  difference 
is  slight  as  the  manual  NP  occupations  comprise  under  10%  of  all 
A further  cause  of  non 
employment  in  these  detached  sites  (4). 
comparability  is  that  column  one  refers  to  1971  while  the  other  figures 
are  for  1976. 

298.  Table  9.1  shows  that,  except  in  the  South  East,  employment  in  detached 

corporate  head  offices  is  very  small  indeed.  Even  in  the  South  East  it 
represents  less  than  a  third  of  the  overall  disparity  in  multi-region 
organisations.  The  same  conclusion  holds  for  detached  corporate  R & D 
laboratories.  Only  in  the  North-West  <where  I.C.I.  among  others  have 
their  corporate  R & D site)  and  the  West  Midlands,  are  there  more  than  a 
types  of 
few  hundred  employees  in  such  sites.  Taken  together  these  two 
corporate  Level  non-production  site  account  for  about  40  % of  the  South 
East's  'excess'  employment  in  multi-region  organisations.  The  other  side 
of  the  coin  is  seen  in  the  remaining  regions  which  have  much  Less 
employment 
the  amount  of  manufacturing  employment  in  each  region. 

in  detached  corporate  units  than  might  be  expected,  given 

(1)  The  calculation  of  the  NP  employment  disparities  in  column  2  of 

Table  9.1,  which  was  based  on  the  Organisation  Survey,  excluded  all 
corporate  level  sites  and  it  is  therefore  proper  to  consider  the 
corporate  Level  as  an  additional  factor  in  accounting  for  the  NP 
disparities. 
(2)  cf.  Table  8.11. 
(3)  The  figures  were  obtained  by  the  methods  described  in  Chapter  8, 
paragraphs  276  and  289.  See  also  footnote  1  to  paragraph  293. 

(4)  cf.  Table  8.5  and  paragraph  287. 

- 125-

299.  The  other  forms  of  corporate-level  activity  are  of  Less  importance.  The 

non-detached  head  offices  of  UK-owned  corporations  are  evenly  spread 
over  the  country  and  it  is  only  the  NDHOs  of  the  subsidiaries  of  foreign 
corporations  that  are  concentrated  in  the  South  East  region  (Table  8.11). 
An  approximate  estimate  would  be  that  NP  employment  in  foreign-owned, 
non-detached,  head  offices  amounts  to  about  5000  in  the  South  East  region 
(with  about  the  same  number  across  the  rest  of  the  country).  Since  some 
production  workers  in  the  subsidiaries  of  foreign  corporations  also  work 
in  the  South-East  not  all  of  this  total  of  5000  jobs  can  be  viewed  as 
part  of  the  South  East's  excess  of  NP  employment. 

300.  Finally,  there  may  be  a  few  corporate  R & D sites  that  are  not  detached 
from  factories,  although  few  of  these  were  discovered  in  the  R & D 
Organisation  Surveys  and, 
staff  not  to  be  too  closely  identified  with  any  one  production  site. 
It  is  important  to  realise  that  the  great  majority  of  R &  D staff  are 
employed  at  sub-corporate  levels  in  the  hierarchy  and  at  production 
sites,  because  involvement  with  production  problems  is  usually  an 
important  part  of  their  work. 

in  general,  companies  prefer  corporate  R & D 

301.  The  concentration  of  NP  staff  in  corporate  headquarters  and  laboratories 
thus  leads  to  some  70,000  'excess'  jobs  in  the  South  East  region,  with  a 
corresponding  CconceptuaLY  d~ficit  shared  between  the  remaining  regions. 
Thus  something  over  two~fifths  of  the  disparity  in  multi-region 
organisations  in  the  South  East  occurs  at  the  corporate  level.  The 
reasons  for  the  Location  of  these  head  office  and  R  & D sites  are  an 
important  aspect  of  the  overall  explanation  of  NP  employment  disparities 
and  they  are  discussed  in  the  next  section  of  this  chapter. 

Summary  :  components  of  multi-region  corporation  disparities  in  NPs 

302.  Although  the  various  sets  of  figures  in  Table  9.1  are  not  strictly 
comparable  with  one  another  a  clear  set  of  conclusio•1s  emerge  with 
respect  to  the  process  of  organisational  centralisation.  Because  large 
corporations  Locate  their  central  head  office  in  t~e  South-East,  some 
70,000  'excess'  NP  jobs  accrue  to  that  region.  The  headquarters  of 
subsidiary  companies  and  divisions  also  tend  to  be  in  the  South  East  but 
often  because  the  company  developed  there  originally,  subsequently 
expanding  with  branch  plants  in  other  areas,  particularly  in  the 
Development  Areas.  The  location  of  NP  staff  at  sub-corporate  headquarters 
and  in  other  branch  plants  in  the  South  East  leads  to  a  further  excess 
estimated  at  60,000  NP  jobs.  Together  these  would  appear  to  account 
for  most  of  the  total  disparity  estimated  at  160,000  jobs  in  1971 
(although  this  estimate  is  for  ATCs  only). 

303.  In  the  other  regions  there  is  much  Less  consistency  between  the  various 

sets  of  figures  in  Table  9.1.  The  implication  of  the  Organisation  Survey 
is  that  large  deficits  are  generated  by  sub-corporate  organisations  but 
than  the  total  CATC)  disparity  in 
in  several  cases  these  are  Larger 
column  1  of  Table  9.1.  For  the  two  Midland  regions  the  Organisation 
Survey  predicts  a  surplus  in  NP  employment  at  the  sub-corporate  Level, 
and  in  addition  almost  7000  jobs  exist  in  detached  corporate  sites  in 
the  West  Midlands.  These  advantages  accord  with  intuition  since  many 
Development  Area  branch  plants  are  controlled  by  Midland  companies, 

- 126-

and  yet  the  total  disparity  in  column  1  of  Table  9  is  negative  in  both 
cases.  The  relative  Lack  of  corporate  Level  employment  is  one  factor, 
but  other,  more  general,  factors  may  be  at  work. 
applies  to  the  West  Midlands,  which  has  one  of  the  Largest  proportional 
deficits  within  the  single-region  organisations  <Table  5.5). 

This  particularly 

Interim  conclusion  on  accounting  for  regional  disparities  in  NPs 

this  Latter  figure,  while  single-region  organisations 

304.  The  important  Lesson  to  be  drawn  from  the  employment  accounts  compiled 
in  this  chapter  and  in  Chapter  5  is  that  regional  disparities  in  NP 
employment  have  a  variety  of  causes.  This  is  best  summarised  in  the 
case  of  the  South  East  which  includes  virtually  all  of  the  excess 
employment.  The  total  disparity  in  the  South  East  is  of  the  order  of 
250,000  jobs  (1),  although  only  about  230,000  of  this  total  is  accounted 
for  here.  The  favourable  industrial  structure  accounts  for  about  one 
seventh  of 
account  for  about  one-sixth.  The  Largest  factor  appears  to  be 
process  of  centralisation  in  multi-region  organisations  at  both  corporate 
and  sub-corporate  Levels.  This  accounts  for  about  half  the  total  excess, 
although  a  variety  of  different  causal  factors  are  included  within  this 
general  heading.  Finally,  it  can  be  estimated  from  a  detailed  analysis 
of  individual  occupations  that  perhaps  10  - 15,000  people  are  employed 
in  detached  sales  offices  and  distribution  depots  in  the  South  East. 
The  Location  of  these  units  is  Likely  to  reflect  the  importance  of  the 
South  East  market  and  the  strategic  position  of  London  in  the  national 
communications  system. 

the 

II.  Reasons  for  the  Location  of  Detached  Corporate  Head  Offices  and 

Research  Laboratories  in  the  South  East 

Detached  corporate  head  offices 

305.  The  paragraphs  that  follow  present  a  set  of  reasons  that  account  for 

the  concentration  of  detached  corporate  head  offices  in  the  South  East. 
They  are  based  upon  the  interviews  associated  with  the  Head  Office 
Survey. 
Linkages 

In  these  paragraphs  stress  is  Laid  on  three  sets  of  contacts  or 

Ci) 

<ii) 

(iii) 

external  contacts  :  i.e.  outside  the  company.  These  are  :  with 
other  companies  as  buyers  or  sellers;  with  institutions  and 
advisers  such  as  merchant  banks,  clearing  banks,  Legal  advisers, 
patent  agents;  with  Qfficial  bodies  such  as  government  departments, 
Trade  Unions,  the  CBI;  and  with  professional  bodies,  committees, 
etc. 
internal  contacts  :  i.e.  within  the  company.  These  include  contacts 
with 
may  be  by  telephone,  telex  or  Letter,  or  may  involve  travel  to 
the  sites  or  from  the  sites. 
internal  contacts  within  the  head  office  :  i.e.  the  pattern  of 
daiLy  ,.,eetings  and  discussions  within  the  head  office.  Traval  may 
be  involved  if  the  head  office  comprises  several  Locations. 

subsidiaries,  divisions,  production  sites  etc.  Such  contacts 

(1)  The  exact  figure  depends  upon  the  source  of  the  data.  If  the  Census 

of  Population  is  used  the  figure  is  280,000  jobs. 

- 127-

The  key  figure  :  the  chairman  or  managing  director 

306.  The  key  figure  in  the  location  of  corporate  head  offices  appears  to  be 

In  several  cases  firms  have  moved 

the  chairman  or  managing  director,  the  strength  of  his  impact  on  its 
location  depending  in  part  upon  his  own  strength  of  character,  in  part 
upon  that  of  his  fellow-directors. 
out  of  London  to  locations  within  easy  travelling  distance  of  the 
managing  director's  house,  although  in  each  case  the  location  was  also 
convenient  for  travel  into  London,  Heathrow,  and  the  rest  of  the 
country.  On  the  other  hand  there  are  firms  whose  head  office  has  moved 
to  London,  or  where  the  head  office  is  outside  London  but  the  firm 
maintains  a  chairman's  office,  pied-a-terre,  showroom,  etc.  in  London. 
In  the  latter  situation  it  is  common  to  find  the  senior  executives  of 
the  company  travelling  into  London  two  or  three  times  a  week,  with  the 
chairman  nominally  resident  there. 

307.  It  is  difficult  to  pin  down  the  contacts  and  Linkages  that  make  the 

London  area  so  essential  for  these  key  figures.  The  chairman  or 
managing  director  has  no  particular  functional  role,  he  is  a  jack-of 
all-trades.  His  main  characteristic  appears  to  be  that  as  the  top 
decision-maker  of  a  large  corporation  he  deals  with  equally  senior 
decision-maker  in  other  companies,  official  bodies,  and  overseas 
visitors.  London  offers  aggregation  economies  in  this  respect.  Not  only 
does  it  have  most  of  the  s~nior  b~siness personnel,  but  it  also  has  all 
the  senior  financial  personnel,  all  the  top  civil  servants  and  ministers, 
and  most  of  the  top  class  hotels  and  facilities  for  overseas  businessmen. 

The  key  Linkage  :  finance 

308.  Although  the  key  figure  may  be  the  managing  director  the  main  direct 

external  linkage  in  London  is  undoubtedly  finance.  A distinction  must 
be  made  between  financial  control,  which  is  largely  an  accounting 
function,  and  money  management.  The  financial  control  activity  is 
internal  to  the  company,  involving  the  preparation  of  plans  and  budgets, 
meetings  to  discuss  them,  etc.  As  such  it  can  take  place  almost 
anywhere.  Money  management  on  the  other  hand  is  much  more  technical  in 
nature  and  far  less  administrative. 
It  comprises  three  basic  functions: 
the  raising  of  cash  or  credit;  the  centralisation  of  cash  flow;  foreign 
exchange  operations.  Of  these  three  the  first  appears  to  necessitate 
frequent  contacts  with  merchant  bankers  or  the  main  clearing  banks 
whereas  the  second  is  more  of  an  accouriting  procedure.  Foreign  exchange 
operations  may  take  place  via  intermedi~ries  or  from  afar,  but  many 
companies  fe~L  that  it  is  essential  to  have  a  continuing  presence  and 
ear  to  the  ground  in  London,  otherwise  they  may  Lose  c100,000  in  an 
afternoon. 

309.  The  strength  of  these  Linkages  can  be  measured  by  the  amount  of  time  the 
finance  director  spends  out  of  his  office  in  the  City.  For  the  very 
Largest  companies  finance  directors  appear  to  spend  two  days  a  week  in 
meetings  in  the  City,  and  this  applies  even  if  the  corporate  head  office 
is  outside  London. 
outside  the  London  area  it  is  common  to  find  the  finance  director  sharing 
a  London  office  with  the  chairman  or  managing  director.  Smaller  companies 

In  cases  where  the  corporate  head  office  is  well 

- 128-

may  not  generate  sufficient  cash  flow,  or  need  sufficiently  Large  sums, 
to  warrant  such  intensive  contact  and  in  these  cases  the  finance  director 
may  visit  London  only  once  a  fortnight. 

Other  strong  London  Linkages 

310.  Commodities/purchasing  Companies  dependent  upon  commodity  purchasing 

must  maintain  a  purch~sing  facility  near  the  main  commodity  markets. 
This  applies  to  commodities  such  as  coffee,  cocoa,  tea,  rubber,  and,  to 
a  Lesser  extent,  the  non-ferrous  metals.  The  need  for  a  purchasing 
facility  goes  further 
frequently  and  in  quantity. 

if  a  company  buys  in  semi-processed  manufactures 

311.  Sales  Although  sales  offices  are  very  often  detached  from  head  offices, 
corporations  involved  in  selling  Large  quantfties  of  bulk  commodities, 
such  as  glass  bottles,  cans  or  paper,  may  feel  that  the  presence  of 
important  purchasing  companies  in  London  requires  a  high-Level  sales 
presence  in  the  head  office.  For  example,  if  you  are  selling  cans  or 
bottles  by  the  million  to  food  processors  you  need  to  be  near  the 
executives  who  buy  them  as  well  as  the  production  planners  in  your  own 
corporate  head  office. 

312.  Personnel  Much  of  the  work  of  the  normal  personnel  department  does  not 

the  increasing  intricacy  of 

require  a  specific  location.  However, 
Labour  Legislation  is  leading  to  more  consultation  with  government 
departments  and  thus  adding  to  the  attractive  power  of  London  for  the 
personnel  function.  Moreover,  mostly  for  single-product  corporations 
but  also  for  others,  the  increasing  centralisation  of  wage  bargaining 
coupled  with  the  Location  of  the  headquarters  of  the  major  trade  unions 
in  London  has  added  to  the  pressure  to  Locate  a  personnel  function 
there.  Many  personnel  departments  in  Large  corporations  also  maintain 
an  extensive  monitoring  system  of  senior  personnel  on  an  international 
basis,  and  this  requires  proximity  to  Heathrow. 

Less  strong  London  Linkages 

313.  For  a  series  of  functions  London  is  a  preferred  Loration  without  there 

In  the  main  this  is  the  case  for  functions 

being  any  strong  reason. 
which  frequently  require  the  expert  advice  which  tends  to  be 
concentrated  there,  such  as  advice  on  taxation,  pensions,  legal, 
insurance,  patents,  etc.  For  the  more  financial  services  the  Links 
needed  and  contacts  made  may  be  real  and  frequent  but  in  the  main  they 
tend  to  be  more  haphazard  and  Less  frequent. 

- 129-

The  multiplying  effect  of  internal  linkages  within  the  head  office 

314.  The  general  impact  of  the  preceding  paragraphs  is  that  London  has  a 

magnetic  attraction  for  the  chairman  or  managing  director,  the  finance 
director,  and  possibly  one  or  two  key  functional  groups.  The  hypothesis 
of  this  section  is  that  there  are  a  series  of  internal  Linkages  which 
operate  so  as  to  increase  the  size  of  the  desirable  head  office. 

315.  At  the  first  stage  the  managing  director  and  finance  director  find  it 

necessary  to  have  at  hand  the  company  secretary  and  personnel  director 
or  manager.  At  the  second  stage  these  four  find  that,  for  efficiency, 
a  small  number  of  key  departments  need  to  be  set  up.  These  include  a 
planning  function,  a  small  finance  and  personnel  staff,  and  a  series  of 
functional  groups  under  the  general  oversight  of  the  company  secretary 
and  finance  director,  including  taxation,  insurance,  Legal,  pensions 
and  management  accounting  departments. 
work  is  that  of  reducing  the  inefficiency  of  having  broken  communication 
links. 

In  each  case  the  key  element  at 

316.  The  ultimate  cause  of  the  need  to  keep  these  communication  Links  Lies  in 
the  hierarchical  structure  of  firms  and  the  nature  of  responsibility. 
Responsibility  is  exercised  by  taking  note  of  and  monitoring  the 
activities  of  those  one  Level  below  you  in  the  hierarchy.  The  customary 
span  of  control  of  the 
management  activities,  but  also  the  financial  control  ones.  He  therefore 
needs  to  keep  at  hand  those  directly  below  him  in  both  activities,  even 
though  there  may  be  no  locational  significance  in  having  the  financial 
control  activity  in  London  rather  than  Birmingham.  Similarly,  if  the 
company  secretary's  span  of  control  includes  the  Legal  and  pensions 
departments,  the  nature  of  that  responsibility  necessitates  Linkages 
between  him  and  them. 
In  addition  there  are  Less  strong  direct  Links 
between  these  individual  functions  and  London. 

financial  director  includes  not  only  the  money 

317.  At  some  point  the  Link  of  responsibility  may  be  broken  by  the  detachment 
of  the  Lower  order  in  the  hierarchy.  This  break  will  usually  occur  when 
that  Lower  order  is  essentially  executive  or  administrative  in  nature 
whereas  the  superior  one  is  policy-making  or  controlling. 
some  Large  companies  feel  the  need  to  centralise  some  activities,  such  as 
personnel,  technical  departments,  0  & M.  etc.,  which  are  service 
activities  for  the  whole  organisation.  These  are  often  dignified  with 
the  separate  status  of  'Group  Services•  and  are  completely  separate  from 
the  direct  chain  of  Links  and  responsibilities  that  belong  to  the  head 
office  proper. 

In  addition 

318.  The  mechanism  described  above  increases  the  size  of  the  desirable  head 

office  from  the  managing  director  plus  finance  director  to  a  rather 
compact  group  of  policy-making  and  control  activities.  At  that  stage 
head  office  may  grow  further,  by  keeping  in  the  administrative  or 
executive  functions,  or  centralising  or  internalising  a  number  of  service 
functions.  However  the  policy-making  group  is  relatively  fixed  and  could 
only  be  reduced  by  altering  the  corporate  structure  so  as  to  reduce  the 
responsibilities  of  the  senior  executives.  For  example,  if  the  financial 
director  were  not  responsible  for  financial  control,  but  only  money 
management,  the-financial  control  function  could  be  more  easily  detached 

- 130-

from  the  head  office.  Again,  if  the  Legal  aspects  of  the  company 
secretary's  customary  functions  were  to  be  separated  into  a  specifically 
Legal  department  with  direct  responsibility  to  the  managing  director, 
the  company  secretary's  status  would  become  more  Like  that  of  a  normal 
committee  secretary,  and  again  might  be  detachable.  On  the  other  hand 
there  would  then  be  even  stronger  reasons  for  the  Legal  department  to  be 
in  London. 

319.  On  this  basis  one  may  use  the  Head  Office  Survey  to  construct  a  'minimal' 
head  office,  taking  this  to  consist  of  top  management,  finance,  the 
company  secretary,  pensions,  Legal,  personnel,  economics  & planning, 
purchasing  and  overseas  departments  with  a  Limited  amount  of  office 
services.  This  crude  calculation  gives,  as  a  percentage  of  total  UK 
employment 

Employment 
size  group 

1000  - 4999 
5000  - 49999 
50000  + 

'Minimal'  head  office 

'Actual'  head  office 
in  Central  London 

1.2  % 
0.65  % 
0.3  % 

0.9% 
0. 7  % 
0.6% 

320.  The  closeness  of  the  results  is  due  in  part  to  the  calculated  'minimal' 
head  office  being  based  on  the  aggregate  results  of  the  Head  Office 
Survey,  including  head  offices  with  quite  Large  departments.  Nevertheless 
the  general  picture  is  that  existing  head  offices  in  Central  London  are 
already  fairly  close  to  a  minimal  size. 

321.  This  subjective  i~pression  of  the  contacts  and  Linkages  of  manufacturing 
head  offices  in  Central  London  is  corroborated  by  the  work  on  office 
communication  patterns  by  Professor  Goddard  (1).  His  conclusion  is  that 
over  80%  of  all  contacts  in  Central  London  (where  contacts  includes 
telephone  calls)  could  be  readily  carried  on  outside  the  centre.  Only 
15%  of  all  contacts  exhibited  characteristics  that  suggested 
telecommunications  would  be  inappropriate.  But  of  this  15  %,  75%  were 
meetings,  and  these  involved  only  a  relatively  small  number  of  people. 
As  it  happens  those  most  frequently  involved  in  meetings  were  managing 
directors  and  chairmen,  followed  by  other  directors,  company  secretaries 
and  other  managers.  Moreover  meetings  were  particularly  important  for 
the  advertising,  purchasing,  finance  and  insurance  departments,  and 
meetings  connected  with  business  overseas  were  of  greater  importance  to 
manufacturing  industry.  Thus  the  impressions  of  the  Head  Office  Survey 
reproduce  the  more  refined  statistics  of  a  study  on  communications 
patterns. 

London  and  contacts  within  organisations 

322.  The  final  major  advantage  of  London  is  that  it  is  the  centre  of 

communications  in  the  United  Kingdom.  The  Head  Office  Survey  found  one 
or  two  companies  that  had  moved  into  London  specifically  because  it  made 
access  to  their  sites  easier,  and  one  company  that  had  moved  out  30 

(1)  'Offices  Linkages  and  Location'  by  J.B.  Goddard,  Pergamon  1973. 

- 131  -

miles  commented  that  whereas  their  London  Location  enabled  their  plant 
managers  from  anywhere  in  the  UK  to  visit  the  head  office  and  return 
within  one  day,  this  was  no  Longer  possible  in  their  new  Location. 

323.  The  importance  of  this  factor  is  that  certain  head  office  functions 
involve  a  good  deal  of  travel,  particularly  for  the  managing  and 
divisional  directors  and  the  personnel  staff.  Typical  situations  are 
where  the  managing  director  visits  each  production  site  once  a  month, 
Board  meetings  rotate  around  the  production  sites,  and  personnel  officials 
spend  two  days  a  week  out  of  head  office  visiting  sites.  For  extensive 
country-wide  travelling  there  is  no  superior  location  to  the  London  area. 
In  particular  cases  with  a  specific  pattern  of  production  sites,  the 
motorway  system  may  allow  other  locations  near  motorway  nodes  to  rival 
London,  but  in  general  transport  improvements  have  either  accentuated  the 
advantages  of  Central  London  or  moved  the  optimal  location  positions  to 
the  west  side  of  London. 

324.  London  or  areas  to  the  west  of  it  also  has  a  general  superiority  in 

overseas  communications.  These  are  not  confined  to  the  almost  daily 
interchanges  of  the  three  trans-nationals- Shell,  Unilever  and  Dunlop 
Pirelli  - but  are  widespread. 
extensive  contacts  with  Europe  when  the  UK  company  is  part  of  a  European 
operation,  whether  it  be  as  the  European  Regional  Head  Office  or  merely 
as  a  satellite  site.  Moreover  any  company  with  overseas  subsidiaries 
almost  automatically  generates  a  number  of  trips  abroad  by  the  managing 
director  or  divisional  director,  merely  as  part  of  their  general 
responsibilities. 
sales,  installation  of  equipment  and  general  review  of  markets. 

In  addition  there  are  the  overseas  trips  required  for 

In  particular  US  subsidiaries  have 

Summary 

325.  The  preceding  section  may  be  summarised  as  follows  : 

(i)  the  London  area  has  positive  advantages  for  chairmen  and  managing 
directors  because  of  the  potential  for  extensive  contacts  with 
other  senior  personnel  in  other  companies,  government,  finance  and 
from  abroad; 

(ii)  finance  directors  of  large  organisations  need  to  be  near  the  City; 

(iii)  internal  Linkages  within  firms  make  it  desirable  that  a  head  office 

includes  a  company  secretary  and  personnel  function; 

(iv)  the  hierarchical  structure  of  organisations  and  the  need  for 

frequent  contact  with  those  for  whom  one  is  personally  responsible, 
impel  the  creation  of  a  number  of  small,  policy-oriented  and 
controlling  departments,  for  many  of  which  London  is  also  a 
desirable  Location  because  of  the  opportunities  for  contacts  that 
it  affords; 

(v)  these  tendencies  are  accentuated  by  the  superiority  of  the  London 

area  for  UK  and  international  communications,  and  they  are  being 
increased  by  the  centralisation  of  wage-bargaining  and  extensive 
government  interaction  with  industry. 

- 132-

The  location  pattern  of  corporate  research  and  development  laboratories 

326.  In  general,  corporations  that  distribute  R & D throughout  their  sites  are 
largely  engaged  in  development  work,  and  they  are  predominantly  in  the 
engineering  industries.  Such  units  tend  to  be  small  and  scattered 
throughout  the  London  area,  the  Midlands  and  most  of  the  development 
regions.  On  the  other  hand,  single  or  dominant  product  corporations 
concentrate  their  R  & D to  obtain  such  economies  of  scale  as  exist. 
If  production  facilities  are  needed  for  this  purpose,  as  tends  to  be  the 
case  for  engineering  development,  a  branch  factory  or  NDHO  has  to  be 
selected,  its  location  depending  upon  the  availability  of  space  and 
facilities.  But  if  research  is  not  directly  connected  with  production, 
which  may  be  the  case  for  research  into  many  aspects  of  the  chemical, 
metal  manufacturing,  ceramics  and  rubber  industries,  a  decision  has  to 
be  made  whether  to  lo~ate  the  research  facility  at  a  production  site  or 
not. 

327.  Two  separate  factors  come  into  play  here.  The  first  is  the  existence  of 
well-established  feelings,  in  each  case  based  upon  many  past  case 
histories  of  disaster,  and  well  expressed  by  the  people  interviewed  by 
the  research  team.  These  feelings  involve  two  contradictory  views  : 
(i)  you  must  locate  your  research  at  a  production  site  or  otherwise  the 
scientists  will  be  shut  away  in  an  ivory  tower  and  produce  little  of  any 
use,  Cii)  if  you  put  your  central  R  & D at  a  production  site  your 
scientists  spend  too  much  time  on  the  short  term  problems  of  that  site  at 
the  expense  of  their  proper  tasks  of  longer  term  research  for  all  sites. 
As  far  as  is  known  there  is  no  research  on  research  sites  to  establish  the 
degree  of  truth  in  these  statements. 

328.  The  other  major  factor  is  the  size  of  the  research  laboratory. 

If  main 
research  sites  only  are  considered,  detached  ones  employ  on  average  300 
people  against  150  for  non-detached  ones.  Clearly,  if  a  multi-site 
corporation  wishes  to  concentrate  its  R & D and  is  considering  whether  to 
add  300  rather  than  150  people  to  an  existing  production  site  it  is  more 
likely  that  the  300  will  end  up  by  being  entirely  detached.  The  most 
likely  place  for  detachment  is  near  the  head  office,  so  that  an  eye  may 
be  kept  on  them.  Given  the  distribution  of  head  offices  it  is  natural  to 
find  a  tendency  towards  the  South  East  in  this  type  of  R & D location. 
It  is  also  likely  that  even  when  a  production  site  is  chosen  it  will  be 
one  not  too  far  from  the  head  office. 

329.  This  Leaves  one  category  of  R & D site  -

the  Group  one.  Here  it  is 

probably  even  more  essential  that  the  site  should  not  be  at  a  production 
site,  and  companies  large  enough  to  warrant  a  group  of  central  Laboratory 
are  also  Likely  to  have  their  head  offices  in  Central  London  and  quite  a 
number  of  production  sites  in  the  South  East.  Thus  the  South  East  is 
again  favoured. 

330.  Four  other  factors  accentuate  the  tendency  of  detachable  R & D 

Laboratories  to  be  Located  in  the  South  East;  the  supply  of  Labour, 
contacts,  ownership  and  the  ease  of  international  contacts,  and  the 
history  of  site  acquisition. 

- 133-

331.  As  with  many  of  the  professional  and  scientific  occupations,  the 

accessibility  of  a  Large  pool  of  qualified  staff  is  an  important  factor 
accounting  for  the  Location  of  new  research  Laboratories.  The  Largest 
existing  pool  of  scientific  personnel  is  in  the  South  East  and  this  must 
be  a  considerable  factor  in  any  assessment  of  new  sites.  Moreover,  the 
existence  of  such  Large  numbers  of  scientific  and  technical  workers 
guarantees  an  ease  of  contact  and  the  exchange  of  ideas  that  cannot  be 
provided  by  any  other  area  of  Great  Britain. 
the  professional  institutions  and  has  three  major  scientific  universities 
within  easy  reach.  These  are  more  attractive  to  the  industries  providing 
detached  R & D Laboratories  that  the  engineering-based  northern 
universities.  Finally,  of  course,  the  London  area  houses  the  head  offices 
to  which  the  corporate-Level  Laboratories  are  nominally  responsible. 

In  addition,  London  houses 

332.  An  increasingly  important  part  of  present-day  contact  patterns  is  the  ease 

of  access  to  international  travel  facilities,  and  this  applies  to 
scientific  staff  as  well  as  administrative  and  sales  staff. 
corporate  R  & D  facility  of  a  UK  corporation  is  concerned  with  problems 
encountered  in  overseas  subsidiaries  it  will  be  more  Likely  to  be  Located 
near  Heathrow.  This  is  an  even  more  important  feature  for  those 
subsidiaries  of  foreign  corporations  whose  research  base  in  the  United 
Kingdom  is  the  regional  research  facility  for  a  European  region,  or  is 
one  of  only  two  or  three  world  research  Laboratories. 

If  the 

333.  A  Last  factor  that  accounts  for  the  considerable  number  of  scientific 

staff  in  the  Outer  Metropolitan  Area  is  concerned  with  the  history  of  the 
acquisition  of  their  sites.  The  interviews  associated  with  the  R & D 
Survey  revealed  that  many  Large  research  Laboratories  had  been  founded  in 
the  early  years  after  the  Second  World  War,  when  new  buildings  cpuld  not 
be  provided,  but  the  supply  of  Labour  and  the  necessity  for  easy  access 
to  head  offices  and  other  scientific  centres  were  still  of  importance. 
In  these  circumstances  many  Large  firms  bougrt  country  houses  within  easy 
reach  of  London,  and  these  sites  have  now  increased  in  size  until  they 
employ  several  thousand  research  workers. 

Summary 

334.  The  concentration  of  detached  corporate  research  facilities  in  the  South 

East  can  be  explained  by  : 

Ci)  the  regional  distribution  of  industries  in  the  United  Kingdom  being 

such  that  industries  with  a  Low  R & D content,  or  that  are 
organised  in  such  a  way  that  R & D is  Located  at  production  sites, 
are  relatively  absent  from  the  South  East,  whereas  industries  whose 
organisation  structure  is  amenable  to  detached  facilities  for  R  & D 
are  Located  there  to  a  more  than  proportionate  degree; 

Cii)  the  existence  of  a  Large  potential  supply  of  scientific  and 

technical  personnel  in  the  South  East; 

Ciii)  the  contact  advantages  of  being  near  head  offices  and  scientific 

centres  and  having  easy  communications  both  to  production  sites 
and  abroad; 

Civ)  the  past  history  of  the  acquisition  of  suitable  sites. 

- 134-

III.  Other  explanatory  factors 

335.  The  accounting  procedure  carried  out  in  Chapter  5  and  the  first  section 
of  this  chapter  was  restricted  to  the  effects  of  three  components 
industrial  structure  and  single  and  multi-region  organisations  - and  the 
previous  sections  of  this  chapter  have  emphasised  the  factors  underlying 
the  effects  of  multi-region  organisations.  Attention  is  now  focussed  on 
two  other  characteristics  that  could  apply  equally  to  single  and  multi 
region  organisations. 

336.  In  principle,  any  characteristic  that  varies  between  regions  could  provide 

'explanation'  of  regional  disparities  in  NPs.  For  example,  Chapter  6 

an 
discussed  the  average  size  of  establishments  and  found  that  regional 
differences  did  exist  but  that  they  are  of  minor  explanatory  value  (1). 
Other  variables  that  could  be  employed  include  some  of  those  used  in  the 
industry  analysis  of  Chapter  4,  such  as  output  per  production  worker  or 
capital  per  operative,  as  well  as  a  host  of  other  factors  such  as 
regional  variations  in  the  input  of  the  labour  force,  the  quality  of 
management,  or  the  supply  of  NP  services  from  outside  manufacturing 
industry;  or  regional  differences  in  the  extent  of  urbanisation  or 
agglomeration.  However,  this  type  of  analysis  is  hampered  by  the  lack 
of  suitable  statistics  and  although  work  has  been  carried  out  on  three 
or  four  hypotheses  the  results  have  been  relatively  limited. 
event  only  two  variables  are  considered  here;  industrial  concentration 
and  production-worker  productivity. 

In  the 

The  effects  of  industrial  concentration 

337.  Areas  with  high  concentrations  of  particular  industries  may  be  expected 
to  have  high  NP  proportions  for  two  reasons  that  are  independent  of  the 
industries  involved.  Firstly,  they  may  have  more  large  companies  and 
large  plants,  and  average  NP  proportions  certainly  increase  with  plant 
size  until  the  very  Largest  plants  are  reached.  Secondly,  they  may  have 
relatively  more  head  offices  or  sal~s  offices.  The  Latter  will  occur 
because  companies  selling  to  those  industries  will  be  more  likely  to 
locate  their  sales  office  in  the  areas  of  industry  concentration  than 
in  London  or  other  major  cities.  London  may  be  a  fine  place  for  an 
office  selling  printing  ink,  but  if  you  are  trying  to  sell  ceramic  glazes 
or  fluxes  for  the  steel  industry  you  are  more  likely  to  place  your  sales 
office  in  the  Potteries  or  Sheffield,  respectively. 

338.  Extreme  examples  of  industrial  concentration  occur  for  textiles  in 

Lancashire,  Yorkshire  and  the  East  Midlands,  footwear  (East  Midlands), 
motor  manufacture  (West  Midlands),  spirit  distilling  (Scotland),  office 
and  refrigeration  equipment  and  scientific  instruments  (South  East). 
By  using  the  1968  Census  of  Production  some  illustrative  examples  can  be 
provided  for  these  industries.  For  spirit  distilling  90%  of  production 
is  in  Scotland,  and  the  ATC/non-ATC  ratio  in  Scotland  is  greater  than 
the  GB  ratio,  whereas  the  ATC/non-ATC  ratio  for  all  industries  in 
Scotland  is  only  90%  of  the  national  ratio.  Hence,  this  case  provides 
some  support  for  the  hypothesis.  Other  supporting  cases  are  wool 
textiles,  of  which  70%  of  production  is  in  Yorkshire,  and  hosiery  and 
footwear,  of  which  56%  and  40%  production  respectively  is  in  the  East 
Midlands.  At  Lower  levels  the  same  is  true  for  glass  (33%  in  the 

- 135-

Indeed  in  a  selection  of  eight  randomly  chosen 

North  West  region). 
examples  only  one  clear  counter-example  emerged.  This  was  watches  and 
clocks,  of  which  52%  of  output  comes  from  Scotland. 
In  this  case  the 
ATC/non-ATC  ratio  was  much  further  below  the  national  level  than  is  true 
for  all  ATC  workers  in  Scotland. 

339.  Further  work  on  concentration  taking  into  account  other  variables  showed 
that  although  it  may  have  some  effect  upon  NP  proportions,  particularly 
in  cases  of  extensive  industrial  concentration,  distance  from  London  is 
a  more  significant  explanatory  factor,  and  concentration  as  such  must  be 
rejected  as  a  significant  structural  effect. 

Production-worker  productivity  and  NPs 

340.  Relationships  between  NPs  and  productivity  at  the  individual  site  or 
corporation  are  easy  to  rationalise.  Additional  0  & M engineers, 
personnel  officers  or  salesmen  may  enable  plant  to  be  used  more 
effectively,  increasing  output  per  operative.  On  the  other  hand  a  more 
efficient  labour  force  may  increase  output,  necessitating  the  use  of 
additional  managers,  administrators  and  salesmen. 
Thus  the  causal 
mechanism  may  operate  in  either  direction. 
If  in  addition  the  high 
operative  productivity  is  due  to  Large  amounts  of  capital,  this  in  itself 
will  require  additional  NPs  for  maintenance  etc. 
higher  productivity  of  a  given  number  of  Ps  is  associated  with  more  NPs, 
a  higher  NP  proportion,  and  a  greater  NP/P  ratio. 

In  either  case,  the 

341.  It  is  Less  clear  that  these  relationships  will  hold  equally  in  both 

single-region  and  multi-region  organisations,  or  that  they  may  be 
Intuitively,  one  would  expect 
considered  to  hold  at  the  regional  level. 
multi-region  organisations  to  have  more  control  over  plants  in  different 
regions,  and  more  scope  for  regional  comparisons,  than  single-region 
organisations.  They  should  therefore  be  more  able  to  maintain  a  certain 
consistency  between  region~  in  productivity,  the  age  of  their  capital 
stock,  and  the  expertise  of  their  management.  Single-region  organisations 
are  not  in  a  position  to  make  such  comparisons  and  therefore  if  there  are 
any  factors  that  can  create  regional  differences  in  production-worker 
productivity,  and  hence  NP  propo~tions,  they  are  more  likely  to  operate 
in  such  organisations.  But  it  is  fairly  easy  to  provide  such  regional 
factors;  differences  in  the  age  of  the  capital  stock  or  the  infrastructure, 
regional  variations  in  production-worker  absenteeism,  sickness  or  strikes, 
consistent  differences  in  the  quality  of  management,  would  all  produce 
regional  differences  in  P-worker  productivity. 

342.  Figure  9.1  tests  these  hypotheses  by  comparing  actual  net  output  per 

production-worker  (1)  (productivity)  with  ATC/non-ATC  ratios,  by  region, 
for  single-region  organisations. 

It  is  clear  that  there  is  a  strong 

(1)  These  figures  have  been  obtained  from  the  Regional  Abstract  of 

Statistics  1974  table  57.  Although  not  described  as  figures  for 
single-region  organisations  the  methods  used  in  their  compilation 
mean  that  this  is  Largely  the  case,  although  more  so  for  English 
regions  than  for  Scotland  or  Wales.  Neither  they,  nor  the  ATC/non 
ATC  ratios  in  Figure  9.1  are  adjusted  for  industrial  structure. 

- 136-

relationship  between  the  two  variables,  but  even  so  there  are  some 
considerable  deviations.  For  example,  the  North  and  North  West  appear 
to  have  a  level  of  productivity  that  is  greater  than  the  level  the  ATC/ 
non-ATC  ratio  would  indicate,  and  the  South  West  seems  to  have  a  Level  of 
productivity  below  that  indicated  by  its  ATC/non-ATC  ratio. 

343.  This  should  not  be  surpr1s1ng.  As  Chapter  3  shows,  it  is  known  that  NPs 
in  regions  differ  from  those  'expected'  on  the  basis  of  their  industrial 
structure  and  assuming  national  NP  proportions. 
If  these  differences 
arise  out  of  other  considerations  then  they  are  distorting  the  natural 
relationships.  Figure  9.2  therefore  relates  productivity  per  production 
worker  to  ATC/non-ATC  ratios  that  are  'expected'.  This  provides  a  better 
fit  than  the  data  for  Figure  9.1,  and  thus  gives  additional  support  to 
the  general  hypothesis  that  the  relationship  between  operative 
productivity  and  ATC/~on-ATC  ratios  that  operates  at  the  plant  or  industry 
Level  creates  a  similar  rel~tion~hip  at  the  regional  level. 

344.  This  analysis  does  nothing  to  explain  regional  disparities  in  NPs  in 

It  relates  NPs  to  regional  productivity 

single-region  organisations. 
directly  and  calls  in  the  still  unexplained  regional  excesses/deficits 
in  NPs  to  help  explain  the  variations  in  regional  productivity.  An 
alternative  procedure  is  to  start  from  the  hypothesis  that  both  national 
ATC/non-ATC  ratios  and  national  net  output  per  production  worker  is 
'given'  for  each  industry.  The  number  of  Ps  in  each  industry,  for  each 
region,  may  then  be  used  as  a  basis  for  both  'expected'  NPs  and 
'expected'  net  output  per  production  worker.  Differences  between  the 
actual  and  expected  productivity  may  then  be  compared  directly  with  the 
differences  between  actual  and  expected  NPs,  that  is,  the  excesses  and 
deficits  for  single  region  organisations. 

345.  This  procedure  is  carried  out  in  Figure  9.3,  using  proportional  variations 
in  productivity  and  ATC  excesses/d~ficits.  There  is  a  fairly  strong 
relationship  between  the  residuals  so  there  seems  to  be  something  in  the 
hypothesis.  For  single-region  organisations  there  therefore  not  only 
seems  to  be  a  general  relationship  between  NPs  and  productivity,  but 
there  are  also  indications  that  this  extends  to  the  deviations  from 
expected  productivity  being  related  to  the  deviations  from  expected  NP 
employment.  This  is,  if  single-region  organisations  in  one  region  have  a 
Lower  NP  proportion  than  expected,  then  they  are  also  Likely  to  have 
Lower  productivity,  measured  as  net  output  per  worker,  than  expected. 

346.  This  relationship  still  fails  to  provide  an  explanation  of  the  disparities 
in  NPs,  because  it  gives  no  indication  of  the  direction  of  causality. 
That  is,  it  is  not  clear  whether  productivity  is  Low  because  of  the 
relatively  few  NPs,  or  that  the  NPs  are  relatively  few  because 
productivity  is  low.  ~oreover,  there  is  no  evidence  as  to  why  the 
productivity  in  one  region  should  differ  from  that  in  another,  although 
there  are  many  possible  hypotheses,  such  as  the  age  of  the  capital  stock, 
the  education  or  ability  of  managers,  or  the  quality  or  input  of  the 
Labour  force.  The  productivity/NP  relationship  therefore  provides  an 
interesting  field  for  further  research,  which  would  need  to  look  at  the 
basic  reasons  for  regional  differences  in  productivity  existing,  but  it 
provides  no  explanation  for  regional  disparities  in  NP  proportions  in 
either  single-region  or  in  multi-region  organisations. 

- 137-

Chapter  summary 

347.  In  the  first  section  of  this  chapter  it  was  shown  that  the  concentration 
of  detached  corporate  head  offices  and  research  Laboratories  in  the  South 
East  are  an  important  factor  in  explaining  that  r~gion's  excess  NPs,  but 
in  almost  all  other  regions  they  are  of  Lesser  importance  and  it  is  the 
centralisation  and  aggregation  of  NPs  within  multi-region  organisations 
that  are  the  predominant  factor.  The  second  section  of  the  chapter 
provided  a  series  of  reasons  for  the  Location  of  corporate  research 
Laboratories  and  head  offices  in  the  South  East,  reasons  that  are 
fundamentally  concerned  with  the  contact  and  communication  advantages 
that  come  from  the  agglomeration  of  senior  executives  and  professional 
staff  in  the  Greater  London  area.  Using  data  for  single-region 
organisations,  a  third  section  then  showed  that  there  exists  a 
correlation  between  the  regional  productivity  of  production  workers  and 
NP  proportions,  although  it  did  not  prove  possible  to  specify  the  causal 
connection  between  the  two  variables. 

- 139-

CHAPTER  10 

IMPLICATIONS  OF  THE  ANALYSIS 

There  has  also  been  extensive  discussion  of  the 

348.  The  principal  theme  of  this  report  has  been  the  explanation  of  disparities 
in  the  regional  employment  patterns  of  NPs.  The  explanation  has  been 
based  on  three  main  instruments  -
industrial  structure  and  single  and 
multi-region  organisations  (1)  - whose  relative  importance  has  been 
assessed  in  Chapter  5. 
factors  underlying  the  effects  of  industrial  structure,  the  spatial 
allocation  of  NPs  within  multi-region  organisations,  and  the  Location  of 
corporate  head  offices  and  research  Laboratories.  Less  has  been  said 
about  single-region  organisations  although  an  intriguing  correlation 
between  NP  proportions  and  operative  producti~ity  has  been  spotlighted, 
using  single-region  organisation  data.  The  overall  impact  of  the  analysis 
is  that  the  causes  of  the  regional  disparities  are  complex  and  inter 
related. 
In  this  chapter  some  of  the  im~lications of  the  analysis  are 
considered,  concentrating  initially  on  the  implications  for  regional 
policy  before  consid~ring  some  more  general  questions  in  a  later  section. 

Regional  policy  and  NPs 

349.  Regional  disparities  in  NP  employment  patterns  are  only  one  aspect  of  the 

general  regional  problem,  which  may  be  taken  to  include  regional 
differences  in  unemployment,  incomes,  social  class  and  the  availability 
of  social  capital,  as  well  as  the  existence  of  less  defined  feelings,  in 
areas  away  from  London,  of  being  remote  from  decision-makers,  whether  in 
government  or  industry.  Regional  policy  directed  at  NPs  could  be  expected 
to  alleviate  several  aspects  of  this  general  problem.  Measures  designed 
to  attract  NPs  to  the  Development  Areas  would  go  some  ·way  to  a llevi at i ng 
differences  in  unemployment. 
occupations  in  particular,  there  would  also  be  a  marginal  rise  in  the 
average  Level  of  incomes  in  those  areas,  as  well  as  slight  alternations 
in  the  class  structure. 
It  is  possible  that  there  ~ight  be  an  increase 
in  local  discretionary  powers  in  industry  and  government,  although  it 
must  be  noted  that  since  Development  Areas  already  obtain  more  than  their 
proportionate  share  of  manufacturing  investment  and  public  expenditure 
this  would  only  be  slight.  Finally,  because  NPs  have  greater  stability 
of  employment  over  the  course  of  short-term  business  cycles  than  Ps  do, 
although  this  is  now  far  less  the  case  than  it  was  ten  years  ago,  one 
could  expect  to  find  a  modest  improvement  in  the  overall  stability  of 
the  economic  conditions  of  the  recipient  areas. 

If  the  policy  were  to  be  aimed  at  the  ATC 

350.  On  the  other  hand  regional  policy  has  to  be  seen  in  dynamic  terms, 

especially  as  past  experience  has  shown  it  to  be  most  effective  in  an 
expanding  economy.  One  must  question  whether  the  present  time,  with 
employment  in  manufacturing  industry  continuing  to  decline  and  the 
overall  NP  proportion  tending  to  stabilise,  can  be  said  to  be  an 
auspicious  one  for  an  NP-oriented  policy.  Moreover,  it  is  known  that  the 
dispersal  of  offices  from  London  over  the  past  five  years  has  included 
those  of  several  Large  manufact~ring  organisations,  and  the  analysis  of 
Chapter  10  indicated  that  head  offices  in  the  London  area  were  probably 

(1)  For  definitions  of  the  terms  used,  see  the  Foreword,  paras.(xiii)-(xx). 

- 140-

near  a  minimal  size  already,  so  that  the  number  of  jobs  that  are 
potentially  mobile  in  that  one  area  has  already  been  reduced  and  is  now 
Limited. 
In  addition,  the  pool  of  potentially  mobile  NPs  is  declining 
as  the  attractions  of  the  London  are~  increase  because  of  the  additional 
contacts  now  taking  place  between  government,  the  trades  unions  and 
industry. 

351.  One  may  also  question  whether  a  regional  policy  for  NPs  would  necessarily 

have  the  desired  effects.  Until  recently  the  removal  of  large  offices 
from  the  London  area  has  been  to  Locations  within  one  hundred  miles  of 
CentraL  London  and  not  to  the  DeveLopment  Areas.  UsuaLly  such  moves  have 
involved  the  movement  of  senior  and  ~iddle management,  whereas  the  clerical 
and  service  workers  have  stayed  to  find  new  jobs  in  London.  The  recipient 
areas  have  benefitted  from  the  arrival  of  the  managers  and  executives, 
and  from  the  increased  demand  for  clerical  and  service  workers.  This  has 
helped  to  create  employment  opportunities  for  younger  members  of  the  Labour 
force  and  new  entrants  to  it,  as  well  as  Leading  to  a  slight  increase  in 
regional  incomes  and  expenditure.  But  such  moves  do  Little  to  help  the 
large  numbers  of  middle-aged  or  elderly  production  workers  who  are 
unemployed. 

352.  The  main  dynamic  factors  in  favour  of  a  regional  policy  for  NPs  at  the 
present  time  are  the  rapid  and  continued  improvement  in  the  road,  rail 
and  telephone  communication  systems  and  an  increasing  disenchantment  with 
Large  cities  on  the  part  of  professional  workers  and  managers  - although 
the  Latter  sentiment  can  hardly  be  said  to  be  favourable  to  Glasgow  or 
LiverpooL. 

353.  To  summarise  the  situation  it  may  be  said  that  although  there  are  points 
in  favour  of  extending  regional  policy  directly  to  NPs,  the  resultant 
benefits  would  not  be  as  great  a~  is  sometimes  supposed,  whereas  the  true 
costs  of  such  a  policy  are  unknown.  Moreover,  past  experience  has  shown 
regional  policy  to  be  most  effective  when  the  economy  is  growing  rapidly, 
and  this  is  not  the  case  at  th~ moment,  nor  is  it  Likely  in  the  immediate 
future. 

The  implications  of  the  analysis  for  an  NP-oriented  policy 

354.  Table  5.6  divided  the  components  of  regional  disparities  in  NPs  into 

three  components  ;  the  effects  of  industrial  structure,  and  the  effects 
of  single  and  multi-region  organisations. 
played  a  Limited  role  in  explaining  the  disparities,  except  in  the  cases 
of  Yorkshire  and  Humberside,  and  the  East  Midlands,  neither  of  whom  are 
the  worst  off  regions  in  unemployment  terms.  On  the  other  hand  two  of 
the  more  seriously  placed  development  regions,  the  North  and  North  West, 
have  a  marginally  advantageous  industrial  structure.  As  policies  to 
alter  industrial  structures  are  very  Long-term,  and  development  regions 
need  jobs  now,  there  is  no  point  in  considering  an  NP-oriented  regional 
policy  in  terms  of  regional  industrial  structure. 

Industrial  structure  only 

355.  The  effects  of  single-region  corporations  are  considerable  in  the  South 
East,  contributing  70,000  jobs  to  the  excess  NPs  in  1971,  but  otherwise 
they  only  played  a  substantial  role  in  Scotland  and  the  West  Midlands, 

141-

with  a  minor  but  significant  impact  in  Yorkshire  and  Humberside,  the 
North  and  Wales.  The  West  Midlands  has  not  been  considered  to  be  a 
problem  area  in  the  past  but  it  does  seem  to  be  in  a  deteriorating 
situation  as  far  as  NPs  are  concerned  Cc.f.  Figure  2.1).  The  other  three 
areas  are  Development  Areas  or  Intermediate  Areas. 

356.  Chapter  9  proposed  that  operative  productivity  and  NP  proportions  were 

related  and  that  this  relationship  was  likely  to  be  stronger  for  single 
region  corporations  than  multi-region  ones,  but  the  mechanisms  and 
direction  of  the  causal  relationship  could  not  be  ascertained.  They  could 
be  due  to  regional  differences  in  wage  Levels,  the  age  and  quantity  of  the 
capital  stock,  managerial  competence,  or  labour  problems  such  as 
absenteeism,  strikes,  alcoholism  etc. 
prescribe  a  policy  for  improving  productivity  that  discriminated  between 
regions,  and  the  effect  of  such  a  policy  could  be  to  create  increased 
production-worker  unemployment  without  increasing  the  number  of  NPs. 
it  were  to  be  established  that  regional  differences  in  productivity 
existed  and  were  the  result  of  speciiically  regional  prime  causes  then  a 
policy  directed  at  those  prime  causes  would  be  feasible,  but  without  such 
prior  knowledge  there  is  no  scope  for  affecting  regional  disparities  in 
NPs  through  working  on  the  Levels  of  operative  productivity. 

In  any  event  one  could  not 

If 

357.  This  Leaves  only  the  effects  of  multi-region  corporations  to  be  considered. 
Table  5.6  showed  that  they  are  the  dominant  factor  in  three  out  of  four 
major  development  regions,  the  North,  North  West  and  Wales,  and  also 
accounted  for  the  greater  proportion  of  the  South  East's  excess.  For  the 
South  East,  out  of  a  total  excess  of  160,000  jobs  accounted  for  by  multi 
region  corporations,  about  half  appeared  to  be  attributable  to  the 
centralisation  of  NPs  in  corporate  head  offices  and  research  Laboratories, 
particularly  those  that  are  detached  from  any  production  site.  The  rest 
is  partly  the  result  of  the  spatial  allocation  of  NPs  at  sub-corporate 
levels,  with  an  unknown  additional  element  arising  from  f<lctors  that 
could  be  associated  with  both  single  and  multi-region  orGanisations,  such 
as  differences  between  regions  in  average  Levels  of  pro~uctivity.  A  small 
part  of  the  South  East's  excess  employment  is  a  conseqvence  of  the  relative 
concentration  of  sales  and  distribution  workers  in  sma~L  detached  offices 
and  ware houses. 

358.  Any  policy  intended  to  influence  the  distribution  of  NPs  within  multi 

region  corporations  needs  to  recognise  the  varied  roles  played  by  NPs  and 
the  differing  factors  that  tie  them  to  particular  Locations.  For  example, 
it  may  be  taken  that  the  distribution  of  sales  offices  and  warehouses 
follows  that  of  markets  and  communications  patterns  and  that  there  are 
only  Limited  possibilities  for  altering  those  patterns.  The  paragraphs 
below  are  therefore  restricted  to  corporate  head  offices,  research 
Laboratories  and  computer  centres,  plus  one  general  point  on  communication. 

359.  A policy  directed  towards  corporate  detached  head  offices  could  have  two 

points  of  focus.  Firstly,  Chapter  9  discussed  the  possibility  that  there 
is  a  'break'  point  in  ~he  hierarchical  structure  of  corporations  at  the 
point  where  policy  decisions  move  into  executive  action. 
immediately  below  this  'break'  point  that  some  firms  have  moved  into 
satellite  offices.  The  possibilities  for  the  dispersal  of  NPs  are 
increasing  as  improvements  in  transport,  telecommunications  and  data 

It  is  the  staff 

- 142-

transmission  have  the  effect  of  pushing  the  break  point  for  particular  NP 
categories  further  up  the  hierarchical  structure  of  firms.  There  might 
be  10,000  jobs  in  the  London  area  that  are  potentially  mobile  for  this 
reason  and  perhaps  double  that  number  in  the  South  East  as  a  whole. 
The  policy  instruments  needed  to  encourage  such  a  process  would  be  those 
of  the  familiar  'stick  and  carrot'  type. 

360.  A second  possible  course  of  action  would  be  to  aim  to  detach  entire  NP 
functions  and  Locate  them  away  from  the  South  East.  For  example,  the 
personnel  department  in  head  offices  undertakes  a  variety  of  tasks,  such 
as  advising  the  chairman  or  managing  director,  negotiating  with  trades 
unions  and  officials  of  the  Department  of  Employment,  advising  subsidiary 
companies  on  industrial  relations  problems,  visiting  sites,  administering 
management  career  and  development  programmes,  processing  the  arrival  and 
departure  of  executives  from  and  to  overseas  postings,  keeping  track  of 
new  Labour  Legislation  etc.  Of  these  activities  only  two  have  strong 
Links  with  London;  direct  contacts  between  the  personnel  department  and 
trades  union  and  government  officials,  indirect  Links  through  the 
personnel  function  needing  to  report  to  the  chairman  and  managing  director. 
To  move  the  personnel  or  any  other  NP  function  in  its  entirety  it  is 
necessary  to  cut  or  significantly  weaken  such  Links.  One  way  would  be  to 
persuade  the  firm  to  go  against  its  present  practice.  The  other  way  is 
to  move  the  contacts  on  which  the  function  depends. 
personnel  this  would  imply  first  moving  the  headquarters  of  the  trades 
unions  and  certain  sections  of  the  Department  of  Employment  - hardly  a 
popular  or  feasible  policy. 

In  the  case  of 

361.  The  scope  for  a  regional  policy  directed  at  research  and  development 

Laboratories  and  computer  centres  is  more  promising  in  that  their  Links 
with  the  South  East  are  Less  strong  than  those  of  head  offices. 
It  is 
difficult  to  envisage  a  policy  that  would  entail  interference  with  the 
present  distribution  of  such  establishments,  other  than  at  an 
unacceptable  national  cost,  but  it  would  seem  possible  for  any  new 
operation,  or  even  Large  extensions  of  existing  ones,  to  be  guided 
elsewhere,  according  t6  individual  circumstances.  The  advantage  of  such 
a  policy  would  be  that  the  more  skilled  and  better  paid  people  would  be 
involved  so  that  the  average  incomes  of  the  recipient  areas  would  be 
enhanced,  and  there  would  also  be  some  take-up  of  local  unemployment 
directly  through  the  technical,  maintenance  and  clerical  functions  as 
well  as  local  multiplier  effects.  On  the  other  hand  it  is  in  the 
scientific,  technical  and  service  worker  categories  that  the  development 
regions  are  relatively  better  off. 

362.  On  a  general  Level  there  appears  to  be  scope  for  the  dissemination  of  NPs 

by  continuing  the  past  improvements  in  communications  systems.  Central 
London  is  already  losing  its  position  as  the  focal  point  of  physical 
communications  in  the  United  Kingdom.  This  point  is  moving  west  to  the 
Slough,  Uxbridge  areas,  from  which  there  is  easy  access  to  three 
motorways  (M1,  M3  and  M4),  rapid  rail  services  to  Bristol  and  South  Wales, 
Birmingham  and  the  Midlands,  and  the  North  West,  and  proximity  to 
Heathrow. 

- 143-

363.  The  latter  plays  a  key  role  in  the  Location  of  many  head  offices,  sales 
offices  and  research  Laboratories.  Easy  access  to  a  wide  range  of 
international  air  connections  is  becoming  increasingly  necessary  for 
senior  executives  and  directors,  at  whose  behest  the  location  of  many 
NPs  is  determined.  At  the  moment  international  air  travel  from  the  UK 
is  dominated  by  Heathrow,  and  the  present  policy  appears  to  be  to  divert 
additional  capacity  to  Gatwick,  which  is  also  in  the  South  East.  There 
are  alternative  methods  of  obtaining  international  air  connections.  A 
local  businessman  from  Norwich  may  travel  internationally  by  taking  a 
place  from  Norwich  to  Amsterdam  and  travelling  on  from  there.  Similar 
two-flight  trips  may  be  taken  from  other  regional  airports  and  it  is 
possible  that  regional  policy  could  foster  such  connections- at  the 
probable  expense  of  the  balance  of  payments.  However,  this  would  be 
merely  a  palliative  as  direct  international  connections  would  still  be 
dominated  by  airports  in  the  South  East. 

Some  general  features  of  NP  activities  in  UK  manufacturing  industry  in  recent 
years 

364.  Because  this  report  has  concentrated  on  regional  disparities  in  NPs  Less 
attention  has  been  given  to  the  general  features  of  the  analysis  and  the 
considerable  amount  of  data  and  information  on  UK  manufacturing  industry 
that  the  research  team  acquired,  especially  from  the  Large  number  of 
interviews  that  were  carried  out.  The  following  paragraphs  pick  on  three 
main  topics  for  comment;  general  trends  in  NPs,  trends  within  the 
managerial  and  professional  workers  category,  and  the  corporate  structure 
of  UK  organisations.  Because  they  are  based,  to  a  great  extent,  on 
interviews,  these  paragraphs  are  more  subjective  in  nature  than  the 
preceding  ones  on  regional  implications. 

365.  (i) 

It  seems  clear  that  the  Long-term  growth  rate  in  NP  proportions  has 
slowed  down  over  the  Last  decade  and  the  structure  of  NP  occupations  has 
moved  in  the  direction  of  the  professional  and  technical  activities  and 
away  from  those  needing  Lower  qualifications.  One  of  the  major  factors 
in  these  changes  within  the  occupation  structure  has  been  the  delayed 
effects  of  the  introduction  of  computers.  However,  although  it  is  known 
that  computers  lead  to  reductions  in  the  demand  for  Labour  only  after  a 
period  of  years  (1),  it  is  not  generally  appreciated  that  their  effect  is 
to  reduce  the  relative  demand  for  such  diverse  occupations  as  draughtsmen, 
warehousemen  and  road  goods  vehicle  drivers,  as  well  as  Leading  to  the 
substitution  of  systems  analysts  and  programmers  for  clerks. 
In  addition 
the  introduction  of  new  capital  in  the  form  of  office  machinery  warehouse 
systems,  etc.  has  also  had  an  impact  on  the  number  of  NPs. 

366.  The  result  of  these  trends  is  that  it  can  no  Longer  be  assumed  that 

manufacturing  industry  will  be  a  plentiful  source  of  Lower-grade  'white 
collar•  and  semi-skilled  jobs,  unless  total  employment  in  manufacturing 
is  expanded  steadily.  The  implications  for  education  and  manpower 
planning  are  evident. 

367.  (ii)  Within  the  category  of  managers  and  professional  workers  two 

particular  trends  have  been  at  work  within  recent  years.  One  the  one 
hand  a  period  of  acute  financial  stress  has  Led  some  firms  to  question 

(1)  cf.  P.  Stoneman,  op.cit. 

- 144-

the  value  of  some  of  their  departments,  such  as  R & D,  market  research  or 
publicity,  the  work  of  which  is  not  directly  concerned  with  current 
production  or  future  orders  but  is  of  a  longer-term  nature.  The 
Organisation  Survey  obtained  some  evidence  that  in  some  cases  this  had 
Led  to  the  virtual  abolition  of  individual  departments.  On  the  other  hand, 
there  has  been  a  considerable  increase  in  the  demands  on  firms  made  by 
government.  Little  quantitative  work  has  been  carried  out  in  this  field 
(1),  but  the  effects  of  the  Health  and  Safety  at  Work  Act,  Credit  Control 
Act,  pensions  Legislation,  the  introduction  of  VAT  and  the  work  of  the 
Prices  Commission  can  only  have  imposed  an  additional  Load  on  NP  functions, 
especially  in  the  finance,  pensions,  health  and  welfare,  personnel  and 
company  secretary's  departments. 

368.  The  net  effect  of  these  different  factors  has  been  to  shift  the  attention 

of  senior  management  towards  the  financial  and  Legal  activities,  whilst 
those  connected  with  production  and  the  longer-term  have  been  relatively 
reduced  in  importance.  Given  that  international  comparisons,  even  in  the 
1960s,  indicated  a  relative  lack  of  technical  expertise  in  UK 
corporations,  and  the  evidence  of  the  Head  Office  and  Organisation  Surveys 
is  that  this  is  still  the  case  if  UK-owned  corporations  and  the 
subsidiaries  of  US  corporations  are  compared,  it  seems  unfortunate  that 
there  have  been  few  attempts  to  support  the  technical  side  of  management 
in  a  direct  way. 

369.  (iii)  A  surprising  feature  of  the  interviews  carried  out  for  the  two 

surveys  was  the  extent  to  which  the  corporate  structure  of  UK-owned 
corporations  was  based  upon  the  financial  control  of  subsidiary  companies 
from  a  small  central  head  office,  whereas  the  subsidiaries  of  US 
corporations  of  similar  sizes  had  higher  proportions  of  the  more  technical 
NP  occupations,  in  Larger  head  offices  that  ran  a  number  of  branch 
factories,  rather  than  subsidiary  companies. 
domination  of  the  'subsidiary-type'  corporate  organisation  in  t~e  UK  is 
in  part  responsible  for  some  of  the  deficiencies  of  UK  manufacturing 
industry.  For  example,  running  six  subsidiary  companies  that  operate  in 
one  industry  and  produce  similar  but  not  identical  products  makes  it 
difficult  to  acquire  the  Long  runs  needed  to  take  advantage  of  full 
economies  of  scale  - and  this  is  one  factor  that  recent  research  has 
shown  to  be  associated  with  the  relatively  low  Level  of  productivity  in 
UK  manufacturing  industry  (2).  Similarly,  purchasing,  sales  etc.  cannot 
be  centralised  easily  in  such  corporations  (3). 

It  is  possible  that  the 

(1)  There  has  been  extensive  correspondence  in  the  press  on  this  subject. 

See,  for  example,  the  letter  from  Mr.  Anthony  Grant  M.P. 
Financial  Times,  February  22nd  1977.  The  only  academic  work  is  by 
R.  Evely.  op.cit. 

in  the 

(2)  C.F.  Pratten  "Labour  productivity  differentials  within  international 

companies"  Cambridge  University  Press,  1976. 

(3)  On  the  other  hand,  small  size  and  adaptability  are  essential  in 

industries  for  whom  short-term  changes  are  common,  such  as  fashion 
goods. 

- 145--

370.  In  addition  it  has  been  suggested  that  British  management  Lacks 
professional  expertise  and  that  this  is  partially  the  result  of 
executives  being  unable  to  acquire  experience  in  Large  executive 
headquarters  where  'high-fliers•  can  both  exercise  responsibility  at  an 
early  age  and  obtain  the  benefits  of  passing  through  a  variety  of 
departments,  prior  to  entering  head  office  (1). 
is  concerned  with  control  in  the  financial  sense,  and  perhaps  dominated 
by  people  with  relatively  narrow  financial  and  Legal  backgrounds, 
whereas  technical  expertise  is  dissipated  through  a  Large  number  of 
subsidiary  offices. 

Instead  the  head  office 

371.  This  domination  of  the  subsidiary-type  corporate  structure  may  also  help 

to  explain  why  the  Large  number  of  mergers  and  increased  concentration 
in  the  United  Kingdom  does  not  seem  to  have  brought  concomitant  economic 
benefits.  The  full  economies  of  scale  are  never  achieved  because  the 
individual  constituents  of  the  mergers  carry  on  their  previous  activities 
with  relatively  minor  alternations. 

(1)  D.  Granick  "Use  of  Corporate  and  Divisional  Headquarters  :  A peculiar 
Americal  innovation",  Michigan  State  University  Business  Topics. 
No.  22  (4). 

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- 147-

CHAPTER  11 

SUMMARY 

General  review 

372.  Non-manufacturing  activities  in  UK  manufacturing  industry  now  account 

for  more  than  one  third  of  total  employment  in  the  sector,  their  share 
having  increased  steadily  over  at  least  the  Last  50  years. 
years  the  rate  of  increase  in  their  share  of  total  employment  has  slowed 
down,  because  of  a  decrease  in  the  growth-rate  of  the  proportion  of 
total  employment  taken  up  by  clerical  workers,  managers,  draughtsmen, 
warehousemen,  sales  staff  and  road  goods  vehicle  dr-ivers.  On  the  other 
hand  there  has  been  a  continued  increase  in  the  growth-rate  of  the 
proportion  of  total  employment  accounted  for  by  professional  staff,  and 
scientific  and  technical  workers. 

In  recent 

373.  NP  proportions  vary  widely  between  industries,  the  major  differences 

being  attributable  to  concentrations  of  scientific  and  technical  workers 
in  the  chemicals  and  engineering  industries,  and  sales  and  distribution 
workers  in  the  consumer  goods  industries.  Compared  with  other  similar 
countries,  UK  manufacturing  industry  employs  more  service  workers,  but 
fewer  sales  and  educationally  qualified  professional  and  technical 
workers. 

374.  The  growth-rate  in  output  per  NP-worker  has  accelerated  steadily  over 

the  Last  twenty  years,  but  even  so  it  remains  less  than  the  growth-rate 
in  output  per  production  worker.  The  acceleration  in  NP  productivity 
has  Largely  resulted  from  the  widespread  application  of  computers  and 
this  may  also  have  been  responsible  for  the  stabilisation  in  the  relative 
proportion  of  total  employment  accounted  for  by  clerical  and  secretarial 
workers,  warehousemen  and  draughtsmen. 

The  regional  distribution  of  NPs 

375.  The  distribution  of  NPs  is  correlated  with  distance  from  London. 

In 
the  Greater  London  area  NPs  comprised  45.7%  of  total  employment  in 
manufacturing  industry  in  1971,  but  this  proportion  declines  to  41.9% 
in  the  Outer  Metropolitan  Area,  36.5%  in  the  rest  of  the  South  East, 
31.6%  in  the  Midlands,  31.5%  in  the  North  West  and  Yorkshire  and 
Humberside,  29.8  % in  the  North  and  28.9%  in  Wales,  but  rises  to  31.0% 
in  Scotland.  Within  regions,  conurbations  tend  to  have  proportionately 
more  NPs  than  their  hinterlands. 

376.  In  general  the  distribution  of  individual  NP  occupations  follows  that 

for  total  NPs,  the  main  marked  divergences  being  that  scientific  and 
technical  workers  tend  to  form  a  slightly  higher  proportion  of 
manufacturing  employment  in  hinterlands  than  in  conurbations,  and  that 
service  workers  are  distributed  relatively  uniformly  across  the 
country,  but  with  a  tendency  towards  higher  proportions  in  the  north. 

- 148  -

The  role  of  industrial  structure 

377.  The  regional  distribution  of  NPs  is  heavily  influenced  by  the  industrial 
structure  of  each  region,  because  NP  proportions  vary  widely  between 
industries  and  industries  tend  to  be  concentrated  in  particular  regions. 
The  industrial  structure  of  the  South  East  is  favourable  to  NPs,  and  this 
helps  to  explain  the  relatively  high  NP  proportions  found  there. 
Industrial  structure  is  also  relatively  favourable  in  the  North,  North 
West  and  Scotland,  and  in  these  cases  it  slightly  improves  the  situation 
of  regions  that  are  relatively  Lacking  in  NPs.  When  industrial  structure 
is  taken  into  account  the  general  decline  in  NP  proportions  with 
distance  from  London  is,  if  anything,  accentuated. 

378.  These  general  trends  also  hold  for  the  particular  categories  of 

managerial  and  professional  workers,  secretarial  workers,  and  scientists, 
general  engineers,  and  technicians.  On  the  other  hand,  clerical  workers 
and  sales  and  distribution  workers  are  more  evenly  spread,  and  in  the 
case  of  service  workers  the  general  trends  are  reversed;  the  industrial 
structure  of  the  south  is  unfavourable  whereas  that  of  the  north  is 
favourable. 

Reasons  for  industry  variations  in  NP  proportions 

379.  The  number  of  NP  workers  in  an  industry  can  be  considered  to  be 

In  practice  it  appears 

dependent  upon  certain  characteristics  of  that  industry,  to  depend  upon 
the  numbers  in  other  occupation  groups  in  the  industry,  or  to  be 
determined  by  a  combination  of  these  factors. 
that  only  the  clerical  workers  and  typists/secretaries  are  dependent 
upon  the  numbers  employed  in  other  NP  occupations.  Scientists, 
technologists,  engineers  and  draughtsmen  are  associated  with  industry 
characteristics  such  as  expenditure  on  R & D,  or  capital  per  workers, 
and  the  relative  numbers  of  sales  and  distribution  workers,  together 
with  professional  workers,  also  appear  to  be  determined  by  an  industry 
characteristic  in  the  form  of  productivity,  or  output  per  production 
worker. 
The  occupation  groups  that  appear  to  be  dependent  upon  both 
industry  characteristics  and  the  numbers  employed  in  other  NP 
occupations,  are  managers,  computer  and  other  technicians,  and  service 
workers  (including  maintenance). 

Accounting  for  residual  regional  variations  in  NPs 

380.  When  regional  industrial  structures  have  been  taken  into  account  the 

South  East  remains  the  only  region  with  substantially  more  NPs  than 
expected,  whereas  all  other  regions  are  deficient  in  NPs,  the  extent  of 
the  deficiency  increasing  with  distance  from  London. 
hypothesized  that  these  regional  disparities  in  NPs  can  be  considered 
to  be  the  result  of  the  spatial  allocation  of  NPs  within  multi-region 
organisations  (1),  plus  regional  differences  in  the  relative  number  of 
NPs  in  single-region  organisations. 

It  is 

(1)  For  definitions  of  the  terms  used  see  the  Foreword,  paragraphs 

<xiii)  - {xx). 

- 149-

381.  Using  Census  of  Production  figures  for  ATCs  as  the  best  approximation  to 
data  for  single  and  multi-region  organisations,  it  is  shown  that  single 
region  organisations  are  an  important  factor  in  accounting  for  the 
relative  deficits  in  ATCs  in  the  South  West,  East  Anglia,  West  Midlands 
and  Scotland.  They  are  also  responsible  for  about  one  quarter  of  the 
relative  deficits  in  ATCs  in  Yorkshire  and  Humberside,  Wales,  and  the 
North  region.  On  the  other  hand  multi-region  organisations  account  for 
the  greater  part  of  the  ATC  deficits  in  Wales  and  the  North,  North  West 
and  West  Midland  regions,  as  well  as  being  responsible  for  over  60  % of 
In  addition,  they  play 
the  relative  excess  of  ATCs  in  the  South  East. 
a  considerable  role  in  East  Anglia  and  Scotland. 

NPs  at  sites 

382.  The  Larger  a  site  is,  the  more  likely  is  it  that  specialised  forms  of 

NP  activity  will  be  found  there,  except  that  certain  activities,  such  as 
public  relations;  data  processing;  legal,  insurance  and  pensions; 
research  and  development;  market  research  and  sales  are  not  found  at 
normal  production  sites  but  are  detached  into  separate  head  offices, 
sales  offices,  computer  centres  etc.  For  production  sites,  average  NP 
proportions  increase  with  size  but  stabilise  at  some  Level,  as  declining 
proportions  of  the  managerial  and  administrative  functions  outweigh 
increasing  proportions  of  the  scientific  and  technical  ones.  There  may 
be  a  decrease  in  NP  proportions  at  large  sites  of  factories,  as  certain 
functions  are  moved  into  separate  detached  head  offices  etc. 

383.  Although  consistent  regional  variations  in  the  average  size  of  factories 
do  exist  they  appear  to  be  insufficient  to  account  for  anything  other 
than  a  minor  proportion  of  the  regional  disparities  in  NPs. 

NPs  in  organisations  and  corporations 

384.  The  larger  an  organisation  is,  the  more  Likely  is  it  that  specialised 

forms  of  NP  activity  will  be  found  in  it,  so  that  by  the  time  it  employs 
2000  or  more  workers  most  NP  functions  will  be  present.  On  the  other 
hand,  it  appears  that  average  NP  proportions  decline  slightly  with 
increasing  corporate  size,  because  the  economies  of  scale  in  management 
and  administration  are  greater  than  the  increases  in  the  NP  proportions 
of  scientific  and  technical  workers. 
In  addition,  organisations  whose 
production  is  concentrated  on  a  few  products  use  fewer  NPs  than  those 
whose  production  is  more  diversified,  and  subsidiaries  of  US 
corporations  use  proportionately  more  NPs  in  general  than  UK-owned  ones; 
particularly  in  the  more  professional  activities  such  as  data 
processing;  accounts  and  finance;  personnel;  sales;  and  production 
oriented  activities. 

385.  NPs  tend  to  be  clustered  at  particular  places  within  organisations, 

especially  in  head  offices.  This  is  particularly  the  case  for  branch 
type  corporations  as  opposed  to  subsidiary-type  ones.  The  evidence  of 
the  Organisation  Survey  carried  out  by  the  research  team  is  that  this 
clustering  helps  to  explain  the  regional  disparities  in  NPs  and  that 
this  is  partly  attributable  to  the  location  of  detached  head  offices. 

- 150-

NPs  in  head  offices 

386.  The  main  head  offices  of  Large  corporations  do  not  necessarily  contain 

a  wider  variety  of  NP  functions  than  those  of  small  ones  because  several 
of  the  more  administrative  functions,  such  as  accounts,  pensions,  sales, 
or  the  computer,  may  be  hived  off  to  satellite  offices  with  increasing 
head  office  size,  or  increasing  corporate  size. 
employment  declines  as  a  proportion  of  total  corporate  employment,  with 
increasing  size  of  corporations,  and  the  head  offices  of  the 
subsidiaries  of  foreign  corporations  are  larger  than  those  of  UK-owned 
ones. 

In  general,  head  office 

387.  The  population  of  Large  UK  corporations  known  as  the  'Times  1000' 

included,  in  1974/5,  581  that  could  be  said  to  be  in  manufacturing 
In 
industry,  of  which  122  were  subsidiaries  of  foreign  corporations. 
general,  the  larger  the  corporation,  the  more  likely  it  is  to  have  a 
detached  head  office.  These  are  very  much  concentrated  in  the  London 
area,  but  more  so  for  the  DHOs  of  subsidiaries  of  foreign  corporations, 
which  have  a  strong  representation  in  the  London  area,  than  for  the 
DHOs  of  UK-owned  corporations. 
are  distributed  much  more  in  accordance  with  their  total  employment,  but 
here  again  the  subsidiaries  of  foreign  corporations  are  concentrated  in 
the  London  periphery. 

The  NDHOs  for  UK-owned  corporations 

388.  Employment  in  detached  corporate  head  offices  accounts  for  some  50,000 
NP  jobs  in  the  South  East,  30,000  of  them  being  in  Central  London.  On 
the  other  hand  only  7000  jobs  can  be  accounted  for  in  this  way  in 
Central  and  Southern  England,  and  Less  than  6000  jobs  in  the  development 
regions. 

389.  Employment  in  corporate  detached  research  laboratories  appears  to  amount 
to  some  20,000  jobs  in  the  South  East  whilst  Central  and  Southern 
England  have  only  3500  and  the  development  regions  about  4000. 

The  explanation  of  regional  disparities  in  NPs 

390.  Industrial  structure  only  explains  a  small  part  of  the  excess  NPs  in  the 
South  East,  but  is  a  more  substantial  factor  in  explaining  the  deficits 
in  Yorkshire/Humberside,  and  the  East  and  West  Midlands.  The  industrial 
structure  of  the  North,  North  West  and  Scotland  is  relatively  favourable 
to  NPs. 

391.  After  industrial  structure  has  been  taken  into  account,  single-region 

organisations  are  only  a  major  factor  in  Scotland,  the  South  West,  West 
Midlands  and  Yorkshire/Humberside.  For  the  other  regions,  the  effects 
of  multi-region  organisations  are  of  greater  importance.  The 
distribution  of  NPs  within  Large  multi-region  corporations,  at  the  sub 
corporate  Level,  plays  a  considerable  role  in  accounting  for  the 
relative  deficits  in  NPs  in  all  the  Development  Areas,  and  it  is  also 
an  important  factor  in  explaining  the  excess  NPs  in  the  South  East 
region,  amounting  to  some  60,000  jobs.  Two  reasons  for  this  are  that 
the  Large  detached  head  offices  of  subsidiary  companies  tend  to  have  a 
southern  Location,  and  a  considerable  proportion  of  the  non-detached 

- 151-

head  offices  of  subsidiaries  and  divisions  are  also  located  in  the  South 
East,  often  for  historical  reasons. 
In  addition,  the  South  East  region 
has  50,000  jobs  in  detached  corporate  head  offices  and  20,000  in 
corporate  research  laboratories,  whereas  no  other  region  can  muster  more 
than  7000  jobs  in  both  categories  taken  together. 

392.  Detached  head  offices  are  located  in  the  South  East  because  of  : 

Ci)  the  positive  advantages  of  agglomeration  that  accrue  to  chairmen 
and  managing  directors  because  of  the  potential  for  extensive 
contacts,  at  a  senior  Level,  with  personnel  in  other  companies, 
government,  finance,  and  from  abroad; 

Cii)  the  need  of  finance  directors  to  be  near  the  City; 

Ciii)  internal  linkages  within  firms  that  make  it  desirable  that  head 

offices  should  include  a  minimum  number  of  NP  functions  that 
require  extensive  contacts  with  the  chairman,  managing  director, 
and  finance  director.  Many  of  these  functions  also  derive 
benefits  from  the  possibility  and  ease  of  contacts  with  experts 
in  the  London  area; 

(iv)  the  span  of  responsibility  of  senior  personnel  dictating  that 
immediate  subordinates  should  be  close  at  hand,  except  in 
situations  such  that  there  is  a  break  between  control  and 
executive  action; 

(v)  the  superior  facilities  provided  for  both  UK  and  international 

communications. 

393.  The  relative  concentration  of  corporate  research  Laboratories  in  the 

South  East  can  be  explained  by  : 

Ci)  the  region's  industrial  structure  favour1ng  high  R & D industries 
whereas  that  of  other  regions  is  either  biased  towards  low  R & D 
industries  or  towards  industries  whose  R & D has  to  be  located  at 
production  sites; 

(ii)  the  existence  of  a  Large  potential  supply  of  scientific  and 

technical  personnel  in  the  South  East; 

(iii)  the  contact  advantages  of  being  near  head  offices  and  scientific 
centres,  and  having  easy  communications  both  to  production  sites 
and  abroad; 

(iv)  the  past  history  of  the  acquisition  of  suitable  sites. 

394.  Using  data  for  single-region  organisations  a  strong  correlation  between 

output  per  production  worker  and  average  NP  proportions  was  found  at 
the  regional  level  although  this  cannot  be  used  to  explain  regional 
disparities  in  NPs  attributable  to  either  single-region  or  multi-region 
organisations  because  the  mechnaism  and  direction  of  the  relationship 
between  the  two  variables  cannot  be  identified. 

- 152-

Implications  of  the  analysis 

395.  Although  it  is  clear  that  measures  to  disseminate  NPs  from  the  South 

East  could  be  a  useful  addition  to  regional  policy  there  can  be  no 
guarantee  that  they  would  necessarily  have  the  desired  effects. 
addition,  the  continued  decline  in  employment  in  manufacturing  industry, 
the  tendency  for  the  overall  NP  proportion  to  stabilise,  and  the  recent 
exodus  of  head  offices  from  London,  all  imply  that  at  the  present  time 
conditions  for  introducing  regional  measures  are  far  from  ideal. 

In 

396.  Of  the  three  components  considered  to  account  for  regional  disparities 

in  NPs  only  one,  their  distribution  within  multi-region  corporations, 
offers  much  scope  for  policy.  Policies  directed  at  corporate  head 
offices  are  not  Likely  to  move  many  higher-grade  jobs,  nor  are  they 
Likely  to  go  to  the  Development  Areas.  The  more  practical  policies 
appear  to  arise  for  functions  such  as  research  or  data  processing,  for 
whom  contacts  are  of  Less  importance,  or  for  the  head  offices  of 
subsidiary  companies  or  divisions. 
communications,  especially  international  air  Links  from  areas  outside 
the  South  East,  could  also  play  a  Long-term  role. 

In  addition,  general  improvements  in 

397.  On  a  more  general  level,  it  is  clear  that  NP  functions  in  manufacturing 
industry  no  Longer  provide  a  pLentiful  source  of  semi-skilled  and 
unskilled  'white-collar'  opportunities,  and  that  there  is  an  increasing 
need  for  professional  and  technical  personnel.  At  the  present  time  the 
pressure  on  senior  executives  is  diverting  their  attention  towards 
financial  and  Legal  activities,  rather  than  technical  and  production 
oriented  activities.  The  relative  dearth  of  fully  experienced 
executives  may  be  due  to  the  domination  of  the  'subsidiary-type'  of 
corporate  organisation  in  British  industry. 

- 153-

Appendix  A 

Questionnaire  used  in  the  Organisation  Survey 

Strictly Confidential 
SURVEY  OF  NON-PRODUCTION EMPLOYMENT 
IN  MANUFACTURING  INDUSTRY 

(This survey  is being carried out by  the  University of  East  Anglia  (Norwich)  under the sponsorship of the  U.K. 
Government and  the  EEC.  It is  attempting to identify the  major influences on  the  types,  numbers and  locations 
of non-production workers  in  industry.) 

ALL QUESTIONS  REFER  TO: 

COMPANY 

SITE 

A- PRODUCTS 

A knowledge  of the products, processes used,  and  markets served  by this factory  will help us  to  identify broad 
links between  these characteristics and  non-production employment. 

THE  FOLLOWING  QUESTIONS REFER  TO  TYPES  OF PRODUCTS RATHER  THAN  SPECIFIC  BRANDS, MODELS  OR  DESIGNS 

MAIN PRODUCT TYPE  ......................................................................................................................................... . 

SECOND  PRODUCT TYPE  (if applicable! 

1. 

2. 

Approximately  what  proportion  of the total  output of this factory is  contributed  by each 
product type (in per cent I? 

Is  the dominant type of process  of production at this factory 

PLEASE TICK 

Individual  units or small  batches 

Large batches,  mass  production or continuous flow 

Both types used  extensively 

or 

or 

3. 

Using the code:  A  = over 90%  B = 60-90%  c = 40-60%  D = 10-40%  E = less  than  10% 
How much  of the output of this  factory  goes  for further processing to:-

(i) 

Other factories  within your company  or group 

(ii) 

Factories not within your group 

4. 

If this factory  is  responsible  for selling  its own  products,  are  they  sold:-

PLEASE  TICK 

(i)  Mainly  in a few large  orders? 

(iii  Mainly  in  many small  orders? 

(iii)  Neither  (il  nor  (ii),  (ie  intermediate or mixed situations)? 

(iv)  Not applicable,  (ie  sales  not a local  responsibilityl? 

5.  Would  you  describe the  major markets for your products as: 

[A)  Highly competitive 

[B)  Quite competitive 

[C)  Not very competitive 

6. 

Approximately  what proportion  of the output of each  product types  is  exported? 

7. 

Approximately  what proportion  of the turnover of this factory  is  accounted  for  by  the  merchanting 
of goods  produced  outside your company  or  group? 

Survey  Code  Number  ..................................... . 

- 154-

8- EMPLOYMENT 

A  knowledge of the numbers employed in individual  no!'l-production departments and  of links with other sites 

will  help us  to understand the  relative size  of your non-production labour force 

1.  EMPLOYMENT 

(if the headings below are  inapplicable please amend them or add new ones) 

DEPARTMENT lor function) 

GENERAL SERVICES 

a.  General  Management  (including  Assistants 

and Secretaries) 

b.  Public  Relations and Information 

c.  Data  Processing 

d.  General  Office Services  I not tied  to 

specific departments eg  Typing Pool, 

Filing,  Records,  Telephonists) 

SPECIALIST FINANCIAL AND 

LEGAL SERVICES 

e.  Wages  and  Salaries 

Accounts and  Financial  Services 

g.  Legal,  Insurance,  Pensions 

h.  Purchasing 

PERSONNEL, WELFARE  AND SAFETY 

i.  Personnel  (including Training) 

j.  Health,  Welfare,  Canteens etc. 

(including hourly-paid workers) 

k.  Safety  and Security,  Factory  Maintenance 

!including hourly-paid workers) 

NUMBERS 
EMPLO'I'ED 
(Excluding all 
shop-floor 
employees other 
than managers) 

DEPARTMENT  {or  function) 

PRODUCTION-RELATED DEPARTMENTS 

Product Design  (including  Draw1ng  Office) 

Artists etc 

m.  Production  Plannmg  &  Management 

NUMBERS 
EMPLOYED 
I Excluding all 
shop-floor 
employees other 
than managers) 

-··-······----·-·· t----.:...-----..;._--'------+------1 

n.  Quality  Control  (Inspection) 

o.  RESEARCH  AND DEVELOPMENT 

MARKETING AND DISTRIBUTION 

p.  Market Research,  Advertising,  Sales  Promotion 

q.  Sales 

r. 

Installation,  Servicing of Sales  (including 

hourly-paid  workers) 

s.  Transport,  Warehouse  and  Stores  (including 

hourly-paid workers) 

OTHER  OR  OWN  CATEGORIES 

----··------------ +----------------+------i 

TOTAL EMPLOYED  (including operatives) 

2.  SERVICE  LINKAGES 

('services' refers to those activities listed above and does  notinclude public services) 

(i) 

INCOMING SERVICES 

i.e.  services  provided  to  this factory  from elsewhere  (whether  from  sites  within  your 
company  (group).  or from companies  outside your group). 

Please  indicate such  services  in  the appropriate spaces  below,  using the identifying letters  for the  individual  services  as 
in question  1.  For example,  if Data Processing  is  provided  totally from elsewhere  insert  a 'c'  on  the  first line. 

Totally provided from elsewhere: 

Largely  provided from elsewhere: 

Partially provided  from  elsewhere: 

(ii)  OUTGOING SERVICES 

i.e.  services  provided from  this factory  to  elsewhere  {whether  to  other sites  Within 
your -company  {group). or  to companies  outside your group). 

Please  indicate such  services  in the appropriate  spaces  below,  using  the  identifying letters as  before 

Large amount of the  department's work  is  for use  elsewhere: 

Small amount of the department's work  is  for use  elsewhere: 

Name  of  Respondent: 

Position  in  Company: 

R.E.  Crum 
Director.  EEC/DI  Project 
University  of  East Angl1a 

Norwich  N R4  7T J 

(PLEASE USE  THE  PRE-PAID ENVELOPE- IT NEEDS NO STAMP) 

Telephone:  56161  ext:  263_9 

MANY THANKS  FOR  YOUR  KIND HELP IN  THIS  RESEARCH 

- 155-

Appendix  B 

Questionnaire  used  in  the  Head  Office  Survey 
Strictly Confidential 

SURVEY  OF  HEAD  OFFICE  EMPLOYMENT  IN  MANUFACTURING  FIRMS 

I This survey  is being carried out by the University  of East  Anglia  (Norwich)  under the sponsorship of the  U.K. 

Government and the  EEC.  It is  attempting to  identify the relative  importance,  in employment terms, 
of the various departments within  Head  Offices, and  also  the factors  that  influence the location  of those departments) 

ALL QUESTIONS  REFER TO 
THE  HEAD OFFICE  OF 

I - SITES 

Please give  the address  of the  Head Office of the above company. 
If  Head  Office functions  are carried out at several  addresses,  including separated group service departments, 
please give each  address. 

Site A:  Head  Office or Main  Office  --------- _______ -------- ____________________________________________________________________ ---------- _______________________ _ 

Site B:  Other Office  --------------------------------------------------------------------------------------------------------------------------------------------------

Site C:  Other Office  --------------------------------------------------------------------------------------------------------------------------------------------------

Site  D:  Other Office  --------------------------------------------------------------------------------------------------------------------------------------------------

Please  indicate those of the above  Head  Office sites that are situated  on or adjacent to a  production site,  and  those  that are 
physically  separated from  production sites by at least two  miles. 

At production sites  ---------------------------------------------------------

Away from  production sites--------------------------------------------------

II- EMPLOYMENT IN  HEAD OFFICE DEPARTMENTS 

Please complete the  table below, using your own departmental descriptions 

DEPARTMENT 

Site 

Numbers 
(A, B, C  Employed 
etc.  from 
I Staff plus 
I above)  hourly-paid) 

DEPARTMENT 

Site 

Numbers 
(A, B,  C  Employed 
etc.  from 
!Staff plus 
I above)  hourly-paid) 

2. 

3. 

4. 

5. 

6. 

7. 

8. 

9. 

10. 

11. 

12. 

13. 

14. 

15. 

16. 

17. 

18. 

(if necessary continue overleaf) 

Total  Employment in-----------------·---------------· 

U.K. 

Overseas 

Total  Head  Office  Employment  (including 
hourly-paid employees) 

Survey Code  Number  ------------------------------------------

PTO 

- 156-

IIA 

(Continuation Space for  II  overleaf! 

DEPARTMENT 

Site 
(A, B,  C 
etc.) 

Numbers 
Employed 
(Staff plus 
hourly-paid) 

DEPARTMENT 

Site 
lA, B,C 
etc.) 

Numbers 
Employed 
(Staff plus 
hourly-paid) 

19. 

20. 

21. 

22. 

23. 

24. 

25. 

26. 

27. 

28. 

29. 

30. 

Ill- MANAGEMENT SERVICE COMPANIES 
It may  be  possible that some employees in  the group, whose main 
responsibility  is  administration or  management services for the group as  a whole,  have  not been included in  the figures  above 
because they are  on the payroll  of subsidiary companies within the group whose main  function  is  the provision  of such  services 
(e.g.  Sales,  Export,  Marketing or Technical  Services companies).  Could you  please list such  companies below, giving their location 
and total employment. 

IV- DIVISIONS AND SUBSIDIARIES 
Offices that are physically separated from a  production site  by  at least two miles,  could  you  please list them below, giving their 
name, address and  Head  Office employment 

If any of your divisions or subsidiaries have  Head Offices or Administrative 

We  realize that it may well be misleading to  try to capture  the complexity of Head Office activities by sole reliance on a postal 
questionnaire.  In many cases we are making a formal request to a company for an interview, but for all companies approached !!f2Y 
relevant additional information  will be welcome. 

Name of Respondent: 

Position  in  Company: 

(PLEASE USE  THE PRE-PAID ENVELOPE- IT NEEDS NO STAMP) 

R.E.  Crum 
Director,  EED/D I Project 
University of East Anglia 
Norwich  NR4 7TJ 
Telephone:  56161  ext.  26;39 

IY!ANV  THANKS FOR  YOUR  KIND HELP IN THIS  RESEARCH 

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Figure  3.4  Actual  and  expected NP/P  ratios: 
scientific  and  technical  workers 

OMA 

Regions  are  arranged  in  approximate 
rank  order  of  distance  from  London 
Letters  are  explained  in  Fig  3.1 

0·22 

1-

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1-

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I ACTUAL 

EXPECTED 

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Figure  6.1 

ATC 1  employment  as  a  proportion  of  total  employment, 
by  size  of  establishment? by  SIC  industry  order:1968 

a  For  some  industries  the  ATC  proportion 

rises  fairly  steadily  as  the  size  of 
establishment  increases 

.!: 
.... 
c: 
GJ 
E 
> 
0 a. 
E 
Q) 

20 

50 

100 

500 
Size  of  establishment  (employment) 

1000 

5000 

10000 

b  whilst  in  others  it 
increases  but  at 
a  declining  rate 

- - - - - - - Ins t rumen t  
engineering 

c: 
0 
't: 
g_  35 
e c. 

Metal 
manufacture 

Timber &  furniture 

Clothing  &  footwear 

~---~-

Size  of  establishment  (employment) 

1000 

5000 

10000 

- 169-

Figure  6.1 

(Continued) 

c  and  in  two  cases, the  ATC 
proportion  reaches  a  peak 
and  then  falls 

Chemical  &  allied  industries 

45 

40 

+-' 
1: 
~ 35 

Q) 
0. 
c: 

20 

co 
+-' 
0 
+-' 

50 

100 

500 
Size  of  establishment  (employment) 

1000 

5000 

10000 

d  but  coal  and  petroleum 

products  is  just  perverse 

co 

(/) 
co 

(/) 
(.) 
I 
<: 

20 

15 

20 

500 
Size  of  establishment  (employment) 

1000 

Source:  Census  of  Production,1968:  Analysis  of  manufacturing  industries  by 

employment  size  of  establishment:  Business  Statistics  Office  1973 

1  Strictly  speaking  'non-operatives'  and  therefore  including  working  proprietors 
2  See  paragraphs  176  and  177 

- 170-

Figure  6. 2  The  effects  of  the  location  of  decision-making 

on  average  NP  proportions  at  sites,1974 

All  NPs 

..... 
c: 
Q) 
28  ~ 
Q) 
c. 

Clerical 

•••••••• 

••••••••• 

••••• 

' 

, 
....... ,  , 
..., 
Managerial 

•• •• 

•• • 

•• •• •• •• 

•• ••• ••• •••••• •• ••• 

Decisions 
m·ade  locally 

Shared  decisions 

Decisions 
made  externally 

Independence 

~ 

External  control 

. 

Source:  Site  survey 

- 171  -

Figure  6.3  Size  distributions  of  manufacturing 

establishments1  by  region,  1971 

SE ·South East 
GB ·Great  Britain 
EA ·East  Anglia 
SW·South West 
YH  ·Yorkshire  and  Humberside 
EM-East Midlands 
NW· North West 
W  ·Wales 
N  ·North 

SE 
GB, EA,SW, YH, EM 
NW 
w 
N 

lines for  West  Midlands  and  Scotland 
lie  between  those  of  North  West  and 
Great  Britain 

~ 99 
c: 
G) 
E 
.r::. 
.!! 
.Q 
.... (I) 
al 

G) 

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0 

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G) 
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E 
j 
c: 

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Cl) 

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c: 
.Q 
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0 
Q. 
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~ 
Q. 

CD 

.~ .... 

aJ 
j 

E 
::::J 
u 

1L-----~--~~~~~~~~~~~~~~~_.~ 
10 

200  300 

500 

1000 

per  establishment 

Source:  Census  of  Production, 1971 

1  See  paragraphs  176  and  177 

- 172-

Figure  8.1 

Selected  head  office  functions  by  ownership 
size) 1976. 
and  corporate 

For  a  few  functions  U.K.  corporations'  head  offices  have  a  greater 
proportion  of  total  corporate 
employment  than  U.S.-owned  ones, 
for  any  size  range:-

Company  secretary's  office 

'!  Example  1 
~ 1·2 
>. 
0 
Q. 
E 
Cl) 
CP0•8 
fti ... 
0 
... 
0. 
0 CJ 
-0·4 
ftl s 
0 
~  o~----~-------L------~--~----~ 
3500 

,.--. 
' 
' 
' 

.. _  ---.,/u.s.-owned 

1000 
Total  corporate  employment 

/ 

/ 

/ 

12000  30000  80000 

But  in  some  of  these  cases  as 
types  of  corporation  arrive  at  similar  proportions:-

corporate 

size  increases  the  two 

Example 2 

Top  management 

2·4 ....-------1111------------------------. 

2·0 

c 
Cl)  1·6 
E 
>. 
0 
Q. 
E 

Cl) 

Cl) 

1·2 

fti 
0 
0. 
0 
CJ0·8 
(ij 
:§ 

~ 
\ 
\ 
\ 
\ 
\ 
\ 
\ 
\ 
U.S.- owned\ 
\ 
\ 
~--- ..... 
\ 

\ 

\ 

o~---~------L------~-~~-~ 
12000  30000  80000 

3500 

1000 

Total  corporate  employment 

- 173-

Figure  s.  1  (Continued) 

This  is  also  the  case  for  a- number  of  functions  where  U.S.-owned  head  of.fic 
have  larger  average  function  proportions  than  U .K .-owned  ones:-

Example  3 

Total  finance 

4·0r---.-------------------------, 

Example  4  Sales 

\ 
\ 
\ 
\ 
\U.S.-owned 
\ 
\ 
\ 
\ 
~--~ 
\ 
\ 
\ 
\ 

i  3·0 
E 
>-
0 a. 
E 
Gl 
Gl  2·0 
«i 
0 
a. 
0 
u 
iii  1·0 
2 
0 
*  o~~~------~--~~L---~----~ 

1000 

3500 

12000  30000  80000 

2·0 

1·0 

' ' ' ,u.s. -owned 
' ' ' \ 

\ 
\ 
\ 
\ 
\ 
\ 
\ 
\ .... 

', 

1000 

3500 

12000 

30000 

Total  corporate  employment 

Finally.  for  some  functions  U.S .-owned 
-owned  ones  in  all  size  ranges:-

corporations  employ  more  than  U .K · 

Example  5 

Computer 

1·2r----------------------------, 

.. - - - - - - ...!J.S.-owned 

--.... ........ 

o~~~------L------~--~--~ 

1000 

3500 

12000  30000  80000 

Source: 

Head  Office  Survey. 

Total  corporate  employment 

- 174-

Figure  9.1  Net  output  per  operative  and  ATC/non-ATC  ratios 

in  single  region  organisations  1971:  actual  data 

0 
0 

0 -c... 

1: 

~ 
4) 
~ 
~ 

0 
~ 

(.) 
~ 4·0 
• 
1: 
0 
r::: 

North • 

Scotland • 

E.Mi&land 

W.Midlands 

eSouth West 

eWates 
Yorks & Humberside 
•East Anglia 

i 
z  3·0~~~----------~~----------~· 

0·4 

0·5 

• 
0·3 

ATC/non-ATC  ratios 

Source: 

Census  of  Population,  1971,  and  Census  of  Production,  1971. 

- 175-

Figure  9.2  Net  output  per  operative  and  ATC/non-ATC  ratios 
in  single-region  organisations,  1971:  adjusted  data 1 

0 
0 

0 -""' 
·= .... 
~ ... 

CD 

0 
~ 
u 
~ 4·0 
I c 
0 
c 
.... 
CD c. 
..... 
:::J c. 
..... 
:::J 
0 

•  South West 

eWales 

..... 
~ 3·0L-....u..._-------=o~·4=--------

•Yorkshire  &  Humberside 
•East  Anglia 

ATC/non-ATC  ratio 

Source: 

Census  of  Population,  1971,  and  Census  of  Production,  1971,  plus 
research  team  estimates. 

1. 

'Actual'  net  output  per  production  worker  together  with  'expected'  ATC/non-ATC 

ratios. 

See  paragraph  343. 

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1

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
STUDIES 

published  so  far  in the  Regional  Policy Series(1). 

8419- No.1 
The development of Flemish economy in the international  perspective 
Synthesis and  options of pol icy 
1973,84 p.  (DA, DE, EN, FR, IT, NL), BFR  170 

CB-NS-77-002-EN-C - No.  2  (in preparation) 

( 1) The  abbreviations  after each  title indicate  the  languages  in which the documents have been  published:  DA = Da 

nish,  DE= German, EN= English, FR =French, IT= Italian, NL =Dutch. 

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Sverige 

Librairie  C.E.  Fritze 

2,  Fredsgatan 
Stockholm  16 
Postgiro  193,  Bankgiro  73/4015 

Espana 

Libreria  Mundi-Prensa 

Castello  37 
Madrid  1 
Tel.  2754655 

Andre  Iande  ·  Andere  Lander  ·  Other  countries  ·  Autres  pays  ·  Altri  paesi  ·  Andere  Ianden 

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Luxembourg 

5,  rue  du  Commerce 

Boite  postale  1003 

Tel.  490081 

·  CCP  19190-81 

Compte  courant  bancaire  BIL  8-109/6003/300 

BFR 
100 

DKR 
17,60 

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6,45 

FF 
14,50 

LIT 
2750 

HFL 
7 

UKL 
1.60 

USD 
3.10 

OFFICE  FOR  OFFICIAL PUBLICATIONS 
OF  THE  EUROPEAN  COMMUNITIES 

Boite postale  1003 - Luxembourg 

Catalogue  number:  CB-NS-77-003-EN-C