Making Companies Safe - what works? (CCA ... - Unite the Union

management of ‘core business’. They do not appear to believe that the one reflects on the
other, and are more concerned with senior managers’ ability to effectively manage the crisis.
Therefore major disasters – even those involving loss of life – do not necessarily have
long-term (or even medium-term) negative impacts on shareholder confidence, and in some
cases actually offer senior managers an opportunity to enhance their reputations in the eyes
of shareholders. Following Hopkins (see above), it is clear that we also need to ask in relation
to reputational damage: ‘for whom does safety pay’? These cases show that senior decision
makers do not necessarily suffer reputational damage following a major catastrophe and may
even benefit from it. Interestingly, Knight and Pretty class Union Carbide as a ‘non-recoverer’
six months after the Bhopal disaster. However, as we have seen, senior management
benefited from the disaster in monetary terms, despite the loss of shareholder value (see
above). So even when there is a negative shareholder reaction, there is no guarantee that
management will be affected by this.
Customer and Supply Chain Pressure (4): Here again, the evidence suggests that customers
rarely exert a positive pressure on employers to improve their OHS performance. Only 1% of
respondents cited customer pressure as a main prompt for improvements in a recent survey
of 1,902 organisations in the UK. 38 Similarly, Brazabon et al. report that:
“Pressure from stakeholders to improve health and safety is considered to be
relatively low for most [construction] companies.” 39
And Smallman and John report that:
“Customer influence is not a direct source of pressure for improvements in health
and safety management.” 40
Whilst there has been some consumer pressure exerted on brand name companies in relation
to working practices and conditions within subsidiary companies or amongst their suppliers, 41
these consumer campaigns have not tended to address working conditions or health and
safety practices within companies located in the UK. Consumer awareness and concern about
corporate health and safety performance is really only likely to become an issue within a
limited range of contexts – for example in sectors where services may pose a risk to public
safety, such as the rail, road or air transport industries. And even here, the extent to which
consumers or customers can directly impact on business activities will be further limited in
relation to public sector or monopoly operators. Wright points out that in these contexts any
negative impacts on business will be dependent upon regulator intervention. 42
Wright also points out that the extent to which ‘stakeholders’ can exert customer or supply
chain pressure by withdrawing their demand for a particular service will be circumscribed if
supply of and demand for a service are ‘inelastic’. For example, supply of a service may
be inelastic if the service depends on a large, costly infrastructure that takes long periods
to construct, such as rail services, or services that are difficult to substitute such as law
enforcement services. 43 Here again, stakeholders will depend upon regulator or direct
government intervention to impact upon the business. In inelastic markets, services cannot be
readily substituted, but regulator and government action can nevertheless impact on business
through, for instance, the imposition of additional costs (by introducing new regulations or
imposing additional safety requirements), or through restrictions on operational/commercial
freedom. 44
In relation specifically to supply chain pressure, there is no evidence that it currently acts
as a general driver for improved OHS performance amongst employers. 45 For instance, no
respondents to the survey referred to above cited competitor pressure as a factor motivating
improved OHS performance, 46 and a study of health and safety in the construction industry
reported that interviewees considered that the health and safety practices of competitors
had the least influence over health and safety out of a number of possible influences. 47
This evidence suggests that, in general, employers do not believe that having a better health
and safety record than their competitors will put them at an advantage in winning work, and
this is consistent with Smallman and John’s 48 finding that even amongst large firms, British
directors do not believe that good OHS performance gives firms a competitive advantage.
In fact, there is some evidence that supply chain pressure can, and in certain sectors commonly 75