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Trade Association Strategy and Management TRADE ASSOCIATION STRATEGY AND MANAGEMENT MARK BOLEAT 1996 [Published by the Association of British Insurers in 1996. Now out of print. This online edition may differ very slightly from the published book.] www.boleat.com CONTENTS Preface vi Section A - The nature of trade associations 1. The role of trade associations 1 2. Types of trade association and other industry bodies 6 3. Trade associations in the United Kingdom 10 4. The Confederation of British Industry 20 5. Associations of trade associations 27 6. International trade associations 37 Section B - The functions of trade associations 7. The representative function - government and regulatory agencies 43 8. The representative function - influencing the climate of opinion 54 9. Representation at the European level 66 10. The service function 79 11. Influencing the market 90 Section C - The business of trade associations 12. Government policy 100 13. Structure and management 107 14. Finance 127 15. Strategic planning 146 16. Analyzing the effectiveness of trade associations 162 17. The evolution of trade associations 177 (i) ANALYTICAL TABLE OF CONTENTS Preface Section A - the nature of trade associations 1. The role of trade associations The nature of trade associations The need for trade associations Representation Services Employment services Influencing the market Promoting the industry 2. Types of trade association and other industry bodies The industry association The multi-industry association The specialised association The company association The federal association The national association The European association The international association Professional bodies Chambers of commerce Overlapping trade associations 3. Trade associations in the United Kingdom History The major industrial sectors The trade association industry 4. The Confederation of British Industry History Structure Functions Finance The CBI in the context of the trade association industry generally 5. Associations of trade associations Theoretical issues Trade association organisations The Society of Association Executives The European Society of Association Executives The American Society of Association Executives Other international associations Publications on trade associations Appendix: Trade association organisations and publications (ii) 6. International trade associations Theoretical issues Functions Management Finances Evaluation Section B - The functions of trade associations 7. The representative function - government and regulatory agencies Segmenting the representative function The importance of government and regulatory agencies Decision-taking in government The art of representation Responding to consultation and policy documents The role of members 8. The representative function - influencing the climate of opinion The importance of opinion formers and influencing the climate of opinion An overview of opinion formers An overview of influencing opinion formers The media Opposition parties Members of Parliament and Peers Universities and research bodies Pressure groups Trade associations Organisation of the public affairs function 9. Representation at the European level History of the European Union Institutions of the European Union Types of European legislation The single market - theory and practice Why trade associations should be involved at the European level How trade associations influence activity at the European level The organisation of European work in a trade association European trade associations Structure of European associations 10. The service function Criteria for providing services The information service Seminars, conferences and exhibitions Statistical schemes Technical services Professional and consultancy services Employment conditions Marketing Promoting competitiveness (iii) Financial aspects Management issues The extent to which services are provided 11. Influencing the market Theoretical issues Restrictive practices regulation Regulatory issues Section C - The business of trade associations 12. Government policy The legislative framework Government policy - the Heseltine speeches The M90s programme An evaluation of government policy 13. Structure and management The special nature Corporate structure Governance Committee structure Role of the secretariat Management structure Staff requirements Contracting out management Appendix 1: Constitution of the Council of Mortgage Lenders Appendix 2: Association of British Insurers' senior management requirements 14. Finance Overview Policy Budgeting Monitoring Subscriptions Service Income Management accounting Accounting issues 15. Strategic planning The need for planning The planning process in trade associations Opportunities and threats Organising the planning process in trade associations Appendix: Case studies (iv) 16. Analyzing the effectiveness of trade associations The need to measure performance Difficulties in measuring trade association performance Criteria for assessing the effectiveness of trade associations Government policy, trade associations and competitiveness The DTI model trade association The American example Appendix: A best practice guide for the model trade association 17. The evolution of trade associations The changing environment Changing attitudes Restructuring larger associations Special problems of small associations Conclusion (v) PREFACE Trade associations play an important part in the formulation and implementation of public policy in the United Kingdom. They have grown substantially in importance and influence over the last few years. As a group of institutions, however, they remain somewhat mysterious including to many of their members and to some of the staff who work in them. There are no authoritative studies of trade associations, and it is difficult to find even basic information on the number of associations, their size and the way that they operate. This book seeks to provide a brief, but comprehensive, text on all aspects of trade association work. It is in three parts covering, respectively, the nature, functions and business of trade associations. The book is designed to be of interest to those working in trade associations and those working with them. The book is based largely on the author's experience of over twenty years in working for three trade associations in the United Kingdom, the Building Societies Association, the Council of Mortgage Lenders and the Association of British Insurers, and also as chief executive of two international associations, the European Federation of Building Societies and the International Union of Housing Finance Institutions. My knowledge of trade associations and how they work has benefited greatly from the many people with whom I have worked in those organisations. The book also draws heavily on published annual reports of trade associations and other information, some published and some unpublished, which has been made available to me by colleagues in trade associations. I am grateful to a number of people for commenting on an earlier draft of this book and for help in other ways. They include my colleagues at the ABI: Tony Baker, Brian Hudson, Richard Regan, David Leighton, John Parker, Paul Smee and Jenny Frost; my former colleagues at the Building Societies Association: Adrian Coles, Ronald Armstrong, Chris French, Peter Williams and Michael Coogan; Harald Kraus, Director of Bipar; Mike Hudson, Senior Partner of the Compass Partnership; Tim May and John McHugh of Manchester Metropolitan University; Tom Machin, Director General of the British Printing Industries Federation; and Leslie Rocker, Secretary of the Society of Association Executives. Finally I am grateful to my wife, Elizabeth, with whom this book has been a joint venture. She has acted as research assistant, computer operator and in some respects co-author. Mark Boleat February 1996 (vi) CHAPTER 1 THE ROLE OF TRADE ASSOCIATIONS Trade associations are established by a number of organisations, operating in the same market and often in competition with each other, to represent them and provide them with services. They exist because they can provide these services to their members more efficiently than the members can provide them individually. The two basic functions of trade associations are representation and the provision of information to members. Some trade associations are involved in other activities including collective bargaining and seeking to influence the market, in particular by regulation. The nature of trade associations Trade associations have their own distinct characteristics which differentiate them from industrial and commercial organisations including those which they represent. They cannot exist in a vacuum but rather their role, size and importance depend crucially on the sector which they represent and government policy towards that sector. A trade association is set up by a number of organisations to provide representative and other services to them. The members of the association provide the governing body and finance. They are primarily responsible for the policy and general strategic direction of the trade association, although in the larger associations full time staff are responsible for implementing policy and to a large extent also for developing it. They are not profit-seeking organisations, although increasingly they are expected to be run on businesslike lines and to be subject to the same financial disciplines as organisations with more commercial objectives. Trade associations cannot plan their activities with great precision.
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