Minding the gap between employers and employees: The challenge for owner‐managers of smaller manufacturing firms

The empirical evidence which underpins and illustrates labour management theory has been drawn from a range of case studies across industrial sectors sited, usually, within the corporate sector. This fails to recognise the importance of the smaller firm as an employer. At present, the study of the employment relationship is grounded within a segment of the economy that no longer employs the majority of private sector labour within the UK. To reflect contemporary change within modern developed economies, the manner in which labour is managed in smaller firms must be explored. This paper considers why smaller firms might be excluded from this debate and reviews some of the limited literature pertaining to managing the employment relationship in such firms. One area in particular is then focused upon in more depth, the manner in which labour compliance and control is addressed in smaller manufacturing firms. On the basis of empirical evidence drawn from a study of the impact of employment regulation on smaller manufacturing firms, it is suggested that there are blurred divisions between employers and employees. Through necessity or choice, when the owner of the firm also takes the role of co‐worker this can create shared social relationships and group working which is advantageous to the owner, but has implications for managing labour discipline.