ACCOUNTING FOR ORGANIZATIONAL PERFORMANCE - THE CONSTRUCTION OF THE CUSTOMER IN THE PRIVATIZED WATER INDUSTRY

The concept of the customer exercising market power to obtain the desi red combination of attributes in terms of price and quality of the pro duct to be purchased has been integral to the Conservative Government' s justification of privatization. However the practical import of givi ng effect to customer sovereignty was problematic if it was not accomp anied by an increase in competition and choice for customers. This is particularly true of the recently privatized Water industry, where the monopoly character of the industry has remained unaltered. To give ef fect to its claims that customers would benefit, and to prevent over-c harging and to protect standards of service, the Government had to int roduce a new regulatory system operated by the Office of Water Service s (Ofwat). In pursuing these objectives the Director General of Ofwat has stated that his aim is to secure for the customer a place that he/ she would have were the companies operating in a competitive market. T his paper, drawing on Miller and Rose's analysis of Governing economic life, examines the attempts that have been made to give effect to thi s ''place for customers''. In doing so much of the analysis focuses on exploring how notions of ''the customer'', and ''customer service'', have been constructed through new forms of accounting and accountabili ty, and how this new accounting for customer service has enabled the c oncept of ''the customer'' to be made operational within the newly pri vatized Water plcs, even though their monopoly status has remained una ltered. Central to this has been Ofwat's determination of performance indicators on levels of service to customers, its measurement of compa ny performance against these indicators, and assessments based on thes e measures of companies' success in ''serving customers''. The paper s eeks to demonstrate how these new accounts of organizational performan ce required of the Water plcs by Ofwat have only been made possible by rendering ''customer service'' a calculable and comparable entity. Th e paper also looks at some of the ways in which this accounting for cu stomer service has been incorporated into other accounts of managerial and organizational performance. (C) 1997 Elsevier Science Ltd.