Beyond the business case: a three-pronged

approach to equality action

Linda Dickens, Warwick Business School

M
y concern here is not with strategies for achieving equal opportunity (EO)
within organisations by those already predisposed to act but, rather, with
strategies likely to engender a preparedness to take EO action in the ® rst place.
In recent years the promotion of equality action appears to have rested primarily on one
strategy ± getting employers to see that equality is in the interests of the business, the so
called business case for equality. Arguments about the positive organisational bene® ts of EO
have always formed part of the armoury of those attempting to get some action but in the
1980s and early 1990s this became the dominant mobilising vocabulary. There was a shift
from equality arguments based primarily on appeals to social justice or morality, backed by
the need for compliance with anti-discrimination legislation, to arguments based on
pragmatic business self-interest as a rationale for equality action. Although business case
arguments may have a social justice/compliance dimension (Liff and Dickens, 1999), in
practice these approaches were often counterposed.
The business case strategy has provided the keystone for Opportunity 2000 ± the business-
led campaign to improve the quantity and quality of women’s employment ± from the time
of its launch in October 1991, and is at the centre of the Commission for Racial Equality’ s
promotion of its Racial Equality Standard (CRE, 1995). The Equal Opportunities Commission
(EOC) has funded research on the `economics of equal opportunity’ (Humphries and Rubery,
1995) in an attempt to demonstrate the cost effectiveness of equality action. As the apparent
emphasis on the economic imperative for equality action might seem less appropriate for
some public sector organisations, a parallel `quality case’ has been promoted.
This article discusses the context within which the business case strategy became the
dominant support for employers’ equality action and considers how changing contextual
factors might facilitate a broader-based approach in which regulation strategies, both legal
and social, play a part alongside the business case. Regulatory approaches can help
overcome the limitations inherent in the strategy and help provide a multi-pronged support
for equality action.

LIMITATIONS OF THE BUSINESS CASE STRATEGY

Achievements can be, and have been, secured through employers recognising that equality
measures can serve their interes ts in competing in the labour market, enha ncing
organisational performance/service delivery, and competing in the product market
(Dickens, 1994; Business in the Community, 1993; CBI, 1996). Nonetheless, the privatised
approach of leaving EO to individual organisations taking voluntary business case-driven
initiatives is an insecure foundation for general overall improvement in the position of
women and ethnic minorities (Dickens, 1994; Colling and Dickens, 1998).
The limitations arise from the fact that business case arguments are inevitably contingent,
variable, selective and partial, and often underplay the wider context within which business

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Beyond the business case: a three-pronged approach to equality action

case rationales are having to be pursued. This wider context is often one where short-term
market pressures are given priority. A further problem with the business case, as Forbes
(1996: 161) notes, is that `support for equal opportunities becomes associated with a set of
values unrelated to equality, difference, justice or diversity’ and, I would suggest, is
potentially as much in con¯ ict with, as supportive of them.
The contingent and variable nature of the business case can be seen in the fact that
business case arguments have greater salience for some organisations than others. For
example, salience may vary according to the competitive strategy of an organisation
(quality/innovation vs cost cutting), its labour market position or current workforce
composition (Dickens, 1994). There is no mechanism for generalising the piecemeal equality
gains delivered by those organisations which do recognise some business advantage in
taking equality action. Furthermore, organisation-based equality agendas can do little for
those outside organisations or only peripherally attached to them and, in effect, may
increase disparities within the diverse category `women’, for example privileging white
women compared to black or ethnic minority women (Coyle, 1995; Mason and Jewson, 1992:
109). The appeal of a particular business case argument can also vary over time as labour or
product markets change, giving rise to `fair weather ’ equality action.
Even within an organisation which appreciates business case rationales for action, the
approach will be selective and partial because, by de® nition, such arguments encourage
action only in areas where it is clear that EO and business needs coincide. Although they
may at times concur, there is no guarantee of a matching between the needs of disadvan-
taged groups and the particular business case equality interests of individual employers.
Business case action on equality is most likely in areas which can be tackled easily and
where business needs, often narrowly defined, are most apparently served by equality
measures. The business case agenda is not, for example, generally about low pay, or indeed
about pay at all, nor generally concerned with part-time workers’ rights, the sexual division
of labour, power differentials between men and women or revaluing work at the bottom of
the hierarchy (Coyle, 1995; Cockburn, 1991: 74). A number of business needs-drive n
initiatives (eg as reported by Opportunity 2000) show a greater concern for the glass ceiling
than the `sticky ¯ oor’.
Business case-driven equality measures have different purchase in respect of different
groups, re¯ ecting employers’ business considerations rather than the diverse needs of such
groups. While an organisation may bene® t from a selective approach to equality, targeting
particular groups or introducing EO measures in certain locations, a general universal
approach may be more costly, less relevant to the organisation’s perceived immediate needs
and less clearly in its interests ± indeed possibly even contrary to them. Attention to equality
issues becomes contingent, not necessary.
Once the debate is conducted in the language of what is in the interests of the business,
then a business case can be articulated against EO action. Individual organisations can and
do obtain cost bene® ts from, for example, the non-recognition ± but utilisation ± of women’s
skills, the undervaluing of women’s labour and the exploitation of women and some ethnic
minority workers as a cheap ¯ exible workforce (Dex and McCulloch, 1995). Also non-cost
benefits, eg in terms of management control or supporting a particular structure of the
labour process, can accrue from potentially discriminatory practices, such as closed or
biased recruitment systems.
Although EO measures can be cost effective for an organisation, this often calls for a long-
run assessment with account being taken of qualitative, less easily quanti® able gains which

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 Linda Dickens, Warwick Business School

may be hard to evaluate and express in ® nancial terms. However British organisations tend
to have fairly short-term budgetry perspectives and in the short run EO costs money.
Narrow cost benefit analysis, especially if undertaken by line managers operating in
decentralised business units within tight ® nancial control and having to meet short-term
performance indicators, may block EO initiatives rather than promote them (The Wain-
wright Trust, 1997; Colling, 1997).
Persuasive economic arguments can be developed in support of employers taking
equality initiatives (Humphries and Rubery, 1995), but it is often only in the longer run or at
the level of the economy and society as a whole that the costs of inequality and wasted
human resources may be manifested. As Brugel and Perrons (1995: 168) observe:
There is a disjuncture between what is rational for some individual enterprises
within the pre-existing gender order, and what would collectively benefit
employers in their need for a highly productive workforce.
In such a case of `market failure’ it is the state which needs to act ensuring the universal,
collective provision of bene® ts. However, it is in part the state’s failure to act which helps
explain the ascendancy of the business case approach.

ASCENDANCY OF THE BUSINESS CASE APPROACH

The business case strategy relies on EO being seen as a matter of business need and
competitive advantage and it places employers, rather than the state as legislator, in the role
of key actor. As such, it ® tted with various contextual variables of the 1980s/early 1990s.
The Conservative governments from 1979, in¯ uenced by the `New Right’ ideology, saw
the free market as compatible with the promotion of equality (Forbes, 1996). The reliance on
the need for a business case for equality, with its focus on economic ef® ciency, ® tted in with
the neo-liberal market model. Rather than perceiving a business case for `Great Britain plc’ to
take equality action via state intervention, the government promoted a privatised route to
equality, with emphasis on individual organisations deciding what is in their interests.
In the public sector the articulation of a business case strategy ® tted with a move away
from the long-established model of the `good employer ’, the growth of cost-based rationales
as a basis for decision making and an increased focus ± for example via citizen’s charters ±
on the `customer’, with the importation of market-based values. It ® tted too with a more
general attempt to align HR interventions with business strategy and to move away from
bureaucratic personnel-driven EO initiatives which were seen to have had limited impact.
Increased reliance on the business case equality strategy arose also in the context of
acknowledged weakn ess of the legis lative compliance levers for equality and an
appreciation that these would not be strengthened by Conservative governments with a
policy of deregulation in the labour market and in employment law (Dickens and Hall,
1995). This ruled out the option of any enhanced legislation to support equality action and
also curtailed the strategy of promoting EO via contract compliance in the public sector.
Despite well-established critiques of the sex and race anti-discrimination legislation, both
in terms of its approach and operation, in practice the government refused to adopt
detailed proposals for change from the equality commissions (EOR, 1993).
There were some improvements in the legislative framework for equality during this
period because of the unavoidable need to comply with European law. The approach
adopted to comply with European equality obligations by the UK government, however,
was grudging and minimalist (Davies and Freeland, 1993: 583). Some action was taken

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Beyond the business case: a three-pronged approach to equality action

only after infringement proceedings against the UK and there was some `levelling down’
for equality, for example on protective legislation, in an attempt to ® t equality within the
market order (Deakin, 1990). Where possible the UK acted to prevent any new European
measures being enacted, seeing them as interference with the operation of the labour
market, and ® nally the Conservative government `opted out’ of the Social Chapter in the
Maastricht Treaty, the provisions of which were designed to facilitate European measures
on, among other things, equal opportunities (Hall, 1994: 301).
Where not underpinned by European obligations, a number of legislative protections
were removed or their scope narrowed in the name of deregulation, to the detriment of
women. The abolition of the wages councils, which set minimum rates in some feminised
sectors of employment, is but one example.
Parliamentary suggestions for state action were also rejected. The negative response of
the government to the House of Commons select committee proposals on family-friendly
measures, such as parental leave and child care, embodies its distancing stance:
How parents combine their domestic responsibilities with their wish or need to
work is essentially a matter for them to determine in the light of their own par-
ticular circumstances... [The government] seeks to create an environment in
which such choices and decisions are possible without interfering unnecessarily
in people’ s personal choices and without placing unreasonable burdens on
employers and the taxpayer.
In this context developing individual, organisation-based business cases for action was
more or less the only strategy available to those wanting to promote equality.
The state stood back from regulating for equality but in other areas legislation was used
to help bring about change, notably in relation to trade unions. The legislative attack on
collective orga nis ation and collective bargain ing in the 1980s, togeth er with an
in hospitable economic env iron ment, weaken ed a potential source of pressure on
employers and helped clear the way for unilateral employer decision (Dickens and Hall,
1995; Brown et al, 1997). Case study and survey evidence suggests that the privatisation of
equality in the 1980s involved not only the state as regulator standing back, but equality
being edged out of the joint domain to be recaptured within management prerogative
(Colling, 1997; Millward et al, 1992).
The political context has now changed, however, with the election of a Labour
government in May 1997, opening a space for regulation strategies to play an enhanced role
in promoting equality action. Legal and social regulation can stimulate action in areas where
it has not been possible to construct a convincing business case for it ± or where appreciation
of a business case has failed to trigger action ± and can generalise and underpin the
contingent, selective and partial action which is generated by business considerations.
In the next section the prospects for increased legal regulation are discussed, followed by
a consideration of social regulation as a potential third leg of the tripod.

LEGAL REGULATION: PROSPECTS FOR CHANGE

It is important not to overestimate what equality legislation can achieve. But legal regulation
can play an effective role in, for example, setting and broadening employer equality agen-
das; in shaping the climate within which employer decisions are taken (a `symbolic’ function
of law); in providing universal standards and minima, thus generalising and underpinning
good practice; and in altering the costs of discrimination and employer inaction.

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 Linda Dickens, Warwick Business School

State intervention is central to an equality agenda because the market tends to produce
discrimination, not equality. State action here goes beyond legislating on discriminat-
ion/equality to include other law and policy ± eg welfare and labour market policy ± which
affects such matters as the domestic division of labour and women’s participation in the
labour market. Improved regulation and protection of employment with universal
minimum standards are important for equality, as are general labour market measures,
including strategies for tackling low pay. As well as being an important independent actor,
the state can affect the formation and acceptance of business case rationales for equality.
The new political context is one which offers the prospect of a degree of re-regulation in
the labour market (IRRU, 1997) with action on the broader front indicated above, as well as
the likelihood of improvements in equality legislation. This arises from the Labour govern-
ment’ s own agenda and because its ending of the Maastricht opt-out allows greater inf-
luence to be exerted by the European agenda, where equal opportunities between women
and men has been in the forefront of social policy since the beginning of the European Com-
munity. National action on the broader front which will help promote equality includes the
childcare strategy indicated in the 1998 Green Paper, Meeting the Childcare Challenge, and the
introduction for the ® rst time of a national minimum wage (NMW). Three-quarters of the 2
million workers directly affected by the proposed NMW of £3. 60 are women (Metcalf, 1998).
Political change holds out the prospect for strengthening legislative support for employer
equality action, overcoming weaknesses in the current legislation. This could include a shift
from the present private law, individual legal model towards requiring action by those with
power (rather than by `victims’), to help achieve substantive ± not merely formal ± equality,
and legal provisions which recognise the collective, group dimension of inequality and
provide for effective means of enforcement as well as appropriate remedies and sanctions.
The EOC’s recent consultation paper Equality in the 21st Century: A New Approach (EOC,
1998) provides a guide to possible national legislative action and it seems reasonable to
assume this will receive a more favourable response from the government than did its
predecessors. Among other things, the EOC suggests a statutory employer duty to monitor
the composition of the workforce and a statutory duty to review pay systems and publish
the results to employees, with a programme for addressing any revealed inequalities.
European developments may provide additional impetus, not least in moving from liberal
(formal, equal treatment) to radical (substantive, equal outcomes) modes of implementation.
The European Court of Justice (ECJ) decision in the recent Marschall case (C-409/95)
con® rms that some positive discrimination is possible under the Equal Treatment Directive,
overcoming the difficulty posed by an earlier decision in Kalanke. The new Amsterdam
Treaty also permits, but does not require, positive action to aid the under-represented sex, as
well as broadening the scope to address discrimination on grounds other than, or in addition
to sex (EOR, 1997: 30).
European directives and decisions of the ECJ acted as a barrier against deregulation in the
area of equality law and occasioned some important improvements in the UK legal
framework, strengthening the legal compliance rationale for action, not least by removing
1
the statutory ceiling on compensation. The government’ s `opt-in’ to the Social Chapter
means the UK will now implement the parental leave directive, the directive on part-time
2
workers and that on the burden of proof in discrimination cases. Further, the 1998
Employment Guidelines, agreed at the Luxembourg `jobs summit’ , include `strengthening
equal opportunities’ as one of the four guidelines for member states’ employment policies.
This can be seen as in keeping with the Commission’ s emphasis on an integrated,

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Beyond the business case: a three-pronged approach to equality action

`mainstreaming’ approach to equality which is found in the Amsterdam Treaty and Fourth
Action Programme. This is intended to promote integration of equal opportunities in the
process of preparing, implementing and monitoring all policies, measures and activities at
Community, national, regional and local level.

SOCIAL REGULATION ± A THIRD STRATEGY?

The business case strategy for equality focuses on employers and unilateral employer action.
The question to be considered in this section is whether a joint regulation approach could
help overcome some of the limitations of the business case and whether trade unions might
3
play a role in promoting equality action through equality bargaining.
Joint regulation is a potential strategy for promoting and supporting employer equality
action which so far has been rather underdeveloped, but which offers potentially more than
is likely to result from relying on employer action alone. It offers the potential to extend
beyond employer-determined equality agendas which depend primarily on a business case
for equality and which, as argued above, will inevitably be contingent and partial. It can also
bring equality considerations to bear on narrow and potentially discriminatory agendas, for
example dealing with ¯ exibility (Colling, 1997), helping ensure that ¯ exibility initiatives are
designed to take account of the needs of workers and not simply to meet the operational
needs of employers (TUC, 1998).
Working within the business case logic, unions may affect an employer ’s cost/bene® t
analysis of taking equality action by increasing the cost of not doing so. Where equality
becomes an organising issue there is an additional incentive for employers to act. The
process of interest de® nition is a political one, not simply economic, and unions can help
de® ne what is in the employer’s business interest. Further, through collective bargaining, a
different logic for equality may be imported from that of the predominantly economic
business case. Potentially, it provides a way for a reassertion of the ethical principle and for
arguments based on fairness to be articulated.
Social regulation may perform a similar role to legal regulation in limiting employers’
ability to abandon equality measures introduced to meet particular labour market
conditions when these conditions change, and in generalising bene® ts to meet workers’
needs which otherwise would be individualised or narrowly targeted (for example, on
female `high ¯ iers’) to match market need. Although business case rationales have fostered
various `family-friendly’ measures, access to them is commonly restricted (Holterman and
Clark, 1992; Opportunity 2000, 1993). Collective bargaining provides organisational
underpinning for equality measures; it can extend and sustain business case-driven equality
initiatives, give them increased legitimacy and can help achieve a better match between
serving the needs of the business and the needs of women and ethnic minorities.
Social regulation offers something which legal regulation does not in that union
representation provides workers with a `voice mechanism’ . Thus, collective bargaining
potentially enables women and other groups to participate in shaping equality agendas and
promoting their own interests. Engagement with representative structures, rather than
employers acting unilaterally, means that women and other social groups themselves can
play an active role in de® ning, developing and sustaining equality initiatives (Colling and
Dickens, 1998). Such participation and empowerment might open the way for longer
equality agendas and more transformative approaches. It also ® ts with the emphasis on
`sharing ownership’ in the new Opportunity 2000 cultural change model described by

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 Linda Dickens, Warwick Business School

Hammond (1997) who notes that `organisations are generally poor at asking women for
their views or listening to them’ (21). Involving employee representatives in equality
initiatives is one way to help overcome the problem Hammond identi® es of organisations
wrong-guessing what it is that women need.
Joint regulation also provides an instrument for mainstreaming equality in industrial
relations. Employer-initiated and controlled equality structures and policies are often
separated from IR structures and processes; they may concern themselves with areas within
managerial prerogative ± such as management training and selection procedures ± but leave
untouched the core issues of joint regulation, such as pay. The concept of equality bargaining
extends beyond agreeing provisions of particular interest or bene® t to women and/or likely
to facilitate gender equality ± `special measures’ ± to include also `equality awareness’ on the
part of negotiators in handling commonplace or mainstream bargaining agenda items such
as pay and pay opportunities, and the injection of an `equality dimension ’ into the
negotiation of change, for example reforming a grading structure, restructuring or work
reorganisation (Colling and Dickens, 1989).
The joint regulation strategy connects to the legal regulation strategy in that it can
provide a mechanism for the positive mediation of the legal framework to bring about
substantive change at the level of the organisation. Unions can play a role in translating
formal legal rights into substantive outcomes, using law as a lever in negotiation, while joint
regulation provides a means of addressing polycentric issues, such as equality, where the
legal route of individual rights enforcement has been found wanting. Unions have used the
law, for example, to challenge discriminatory outcomes of compulsory competitive
tendering (CCT) (Colling, 1995; McColgan, 1995) and as a lever to secure fairer pay systems
and improve the pension position of part-time workers. Union co-ordinated instigation of
equal pay cases has resulted in major renegotiations of grading structures in some sectors,
for example in the National Health Service (NHS) and electricity supply (Gilbert and Secker,
1995; Donaghy, 1995).
The emphasis in the discussion has been on the positive potential of joint regulation for
promoting equality. What has to be acknowledged is that joint regulation can be, and has
been, negative for equality. Trade unions historically have helped shape the contours of
inequality. Differential collective bargaining coverage and strength and traditional, white
male-biased, union bargaining priorities have meant that collective bargaining has often
served to perpetuate rather than challenge inequalities (Rubery and Fagan, 1995; Dickens et
al, 1988). Some employers seeking to take what they saw as equality action have faced
opposition from local union representatives. A joint regulation strategy requires collective
bargaining and equal opportunity to come together in a way which marks a break with the
common experience, not just in the UK but throughout Europe (Kravaritou, 1997) and
presents a considerable challenge to existing trade unionism (Cunnison and Stageman, 1993;
Dickens, 1998).
However, there are signs that the necessary transformation may be starting. The British
union movement, faced with a series of internal and external challenges, has begun to
acknowledge and, to some extent, seek to address this problem as part of a wider
reconsideration of its role and strategies. Labour market change means that embracing
women and other previously marginalised groups in membership, empowering them
within union structures and addressing their concerns in bargaining is a necessary part of
the transformation of unions which is seen as essential for their revitalisation and long-term
survival. Furthermore, the legitimacy of unions as social partners rests on their ability to

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Beyond the business case: a three-pronged approach to equality action

claim representativeness. This brings to the fore issues of coverage and democracy, not least
gender democracy, within unions (Cockburn, 1995). Although there is still a long way to go
and progress is often extremely slow (SERTUC, 1997), positive developments can be seen in
union organising, governance and representation structures which can be expected to help
foster a preparedness on the part of unions to initiate and engage in equality bargaining
(Dickens, 1997; Heery, 1998; Colgan and Ledwith, 1996). Employers’ interest in engaging in
equality bargaining, where they have a choice, may be found in the flexibility it offers
compared to universal legal measures and in the legitimacy and acceptability of its
outcomes, helping to reduce resistance to equality initiatives.
The suggestion that social regulation may have a role to play alongside legal regulation
and business case rationales may appear problematic, given the decline in coverage of
collective bargaining which fell from 71 per cent to 54 per cent over the period 1984-1990
(Millward et al, 1992). The potential for collective bargaining to support equality clearly
would be enhanced by policy measures supportive of union organisation, recognition and
collective bargaining. A number of legislative supports were removed during the 1980s
when collective bargaining came under attack but there are now signs of some reversal in
public policy under the present Labour government. A statutory recognition procedure and
an individual right to representation are to be enacted, for example. These are proposed in
the recent White Paper Fairness at Work in the context of an increased emphasis on social
partnership which, with social dialogue, is a key feature of the European agenda which
acknowledges a role for collective employee representation (O’Hara, 1996).
The European level social partners (unions and employer bodies) were given an
increased role in policy making at European level after Maastricht, a role re-emphasised in
Amsterdam. The Parental Leave and Part-time Workers directives are outcomes of this
European regulatory mechanism. European works councils are required for information and
consultation purposes in transnational companies operating in Europe and similar bodies
are now proposed for companies at national level. The UK has also been required to address
its `representation gap’ by providing for elected worker representatives where unions are
not present to engage in consultation on such issues as redundancy and transfer of
undertakings (Hall, 1996). Both the national and European agendas thus appear to offer
prospects for some revival of joint engagement and social regulation in the UK which could
be harnessed to support equality action.

BUILDING THE TRIPOD: A MULTI-PRONGED STRATEGY

The limitations of the business case strategy as a means of promoting equality action have
been indicated. This has become the predominant approach but a changed political context
presents the possibility of regulation strategies playing a greater role and helping address
these limitations. Legal and social regulation strategies also have limitations but the three
approaches are not to be seen as alternatives. What is suggested is not three separate poles
but a tripod where the three strategies are complementary and mutually reinforcing.
Responsibility for promoting equality at the workplace would be shared rather than leaving
employers to bear the sole responsibility. Such a tripod is likely to provide a sounder basis
for supporting equality action than balancing on a single pole.
Acknowledgement
Warwick Business School’s RF2000 fund facilitated my having time to write this article.

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 Linda Dickens, Warwick Business School

Notes
1 European-driven changes also included equal pay for work of equal value; the removal of
the small employer exception from the original SDA; enhanced rights regarding
pregnancy/maternity; and the removal of the hours threshold for access to employment
protection rights.
2 The requirements of the parental leave directive for a right to three months’ parental leave
for men and women and for time off for urgent family reasons are re¯ ected in the `family-
friendly’ proposals of the recent government White Paper Fairness at Work (Cmnd. 3968).
Equality of treatment for part-time workers was already being promoted through ECJ
decisions (Dickens, 1995) but will be underpinned by implementation of the directive.
Adjusting the burden of proof in discrimination cases may go some way to improving the
success rates ± around a third ± of those who seek to challenge alleged discrimination
through the Employment Tribunals.
3 Some of the ideas in this section have been developed in joint work with Trevor Colling of
De Montfort University (Colling and Dickens, 1989; Colling and Dickens; 1998), and
through my involvement with a project exploring Equal Opportunities and Collective
Bargaining in Europe funded by the European Foundation for the Improvement of Living
and Working Conditions (Dickens, 1998).

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