Oxford Saïd Professor calls on governments to increase business regulation to stimulate economic growth

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Contrary to the prevailing wisdom, regulation is an under-utilised mechanism for encouraging economic growth argues Hiram Samel, Associate Professor of International Business at Saïd Business School, University of Oxford, calling upon industry regulators to take a more proactive role in using regulation to promote economic growth.

Saïd Business School

Too often we think that liberal markets with their associated labour flexibility, are the best mechanism for supporting companies and encouraging growth, but the reality is that too much labour market flexibility can actually have a dampening effect...

‘Too often we think that liberal markets with their associated labour flexibility, are the best mechanism for supporting companies and encouraging growth,’ says Samel, ‘but the reality is that too much labour market flexibility can actually have a dampening effect on productivity and economic growth, because it instils long-term management practices that, intentionally or not, promote worker turnover, rather than learning.’

Professor Samel urges policy makers to explore regulatory mechanisms to encourage companies to overhaul outdated management structures and practices to drive growth. ‘Clever regulation can be a powerful tool in encouraging industries to engage in specific practices which can have economically positive outcomes both for the firm and the wider economy. Regulation can help shape the way in which companies are managed, for example, and can encourage greater development of the workforce, building skills and learning from which we all benefit.’

‘In the UK, zero hours contracts have been championed as a means of giving companies much needed labour flexibility but their advantages are often outweighed by their tendency to reinforce low productivity, especially during the past few years when GDP growth has been positive,’ says Samel. ‘Instead of firms addressing low worker productivity through new practices or training, their inclination now is simply to hire and fire workers as needed, rather than address the underlying issues. The new workers are no more productive than their predecessors, and worse still, switching workers reinforces management’s belief that investment will not pay off and so the cycle repeats. Regulation and incentives designed to encourage firms to retain their workers and to develop them, would pay back to the bottom line.’

Professor Samel concedes that such regulation is not a quick or easy fix. ‘We need clever, nuanced regulation which is the result of a thorough knowledge of the particular industry and a clear sense of which levers can be pulled to bring about beneficial change to existing practices. I see this as the outcome of a collaborative process between the industry and regulator, rather than something which a regulator would impose upon an industry. We need exceptional regulators who are capable of stepping outside the mindset of regulation and to operate as an agent of change to bring about economic growth. At its best, regulation can create a system which advances the industry it serves. Even small changes at the margins of these sectors and organisations can have large-scale, demonstrable and valuable impacts.’

Professor Samel is co-author of a new book: Looking behind the label: Global Industries and the conscientious consumer, which makes the case for growth focused regulation. The book also highlights the role of governments in developing binding and enforceable regulation as the only effective mechanism to reduce negative environmental impact and increase fairness for participants in supply chains globally.

‘Following serious incidents such as the collapse of Rana Plaza consumers are increasingly conscious of the issues in the supply chain and weigh their purchase decisions accordingly,’ said Samel. ‘But our research indicates that purchase decisions have only limited impact in affecting the complex global supply chains which lie behind the products on our high streets. Governments have a fundamental role to play in overseeing and governing those supply chains if we are to prevent ongoing environmental damage and worker exploitation. Moreover, smart regulation will help companies develop their management practices beyond relying on flexible labour. Governments should not delegate that responsibility to consumers. Shopping with a conscience is at best only a small part of a much larger solution.’

For more information or to speak to Professor Samel please contact the press office:
Jonaid Jilani, Press Officer, Saïd Business School
Tel: +44 (0)1865 614678, Mob: +44 (0)7860 259996
Email: jonaid.jilani(at)sbs(dot)ox.ac.uk

Kate Richards, Press Officer, Saïd Business School
Tel: +44 (0)1865 288879, Mob: +44 (0)7711 000521
Email: kate.richards(at)sbs(dot)ox.ac.uk

Notes to editors

1    About the book

Looking behind the label: Global Industries and the conscientious consumer presents an informative introduction to global production and ethical consumption, tracing the links between consumers' choices and the practices of multinational producers and retailers. Case studies of several types of products—wood and paper, food, apparel and footwear, and electronics—are used to reveal what lies behind voluntary rules and to critique predominant assumptions about ethical consumption as a form of political expression.

The authors drew together a wide range of evidence including survey data, interviews with practitioners and workers across global brands, and international nongovernmental organisations, with data analysis on consumers, firms and industry.

Link to book

2    About the authors

Hiram Samel, Associate Professor of International Business at Saïd Business School, University of Oxford.

Hiram Samel is an Associate Professor of International Business and a Fellow of Lady Margaret Hall. His research draws on multiple disciplines including comparative political economy, technology strategy, the economics of innovation and labour studies. He is very interested in how firms and states manage in external environments characterised by a high degree of market, technological and/or regulatory uncertainty.


Tim Bartley, Associate Professor of Sociology at The Ohio State University

Sebastian Koos, Assistant Professor of Corporate Social Responsibility, Department of Politics and Public Administration, University of Konstanz.

Gustavo Setrini, Assistant Professor of Food Studies at New York University.

Nik Summers, PhD candidate in Sociology at Indiana University.

About Saïd Business School

Saïd Business School at the University of Oxford blends the best of new and old. We are a vibrant and innovative business school, but yet deeply embedded in an 800 year old world-class university. We create programmes and ideas that have global impact. We educate people for successful business careers, and as a community seek to tackle world-scale problems. We deliver cutting-edge programmes and ground-breaking research that transform individuals, organisations, business practice, and society. We seek to be a world-class business school community, embedded in a world-class University, tackling world-scale problems.

In the Financial Times European Business School ranking (Dec 2014) Oxford Saïd is ranked 10th. It is ranked 10th worldwide in the FT’s combined ranking of Executive Education programmes (May 2015) and 22nd in the world in the FT ranking of MBA programmes (Jan 2015). The MBA is ranked 7th in Businessweek’s full time MBA ranking outside the USA (Nov 2014) and is ranked 5th among the top non-US Business Schools by Forbes magazine (Sep 2013). The Executive MBA is ranked 2nd worldwide in the Economist’s Executive MBA ranking (Sep 2015) and 9th worldwide in the FT’s ranking of EMBAs (Oct 2015). The Oxford MSc in Financial Economics is ranked 14th in the world in the FT ranking of Masters in Finance programmes (Jun 2015). In the UK university league tables it is ranked first of all UK universities for undergraduate business and management in The Guardian (Jun 2015) and 2nd in The Times (Sept 2015). For more information, see http://www.sbs.ox.ac.uk/


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