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 desired combination of attributes in terms of price and quality of the product to be purchased has been integral to the Conservative Government's justification of privatization. However the practical import of giving effect to customer sovereignty was problematic if it was not accompanied 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 effect to its claims that customers would benefit, and to prevent over-charging and to protect standards of service, the Government had to introduce a new regulatory system operated by the Office of Water Services (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. This paper, drawing on Miller and Rose's analysis of Governing economic life, examines the attempts that have been made to give effect to this ''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 accountability, and how this new accounting for customer service has enabled the concept of ''the customer'' to be made operational within the newly privatized Water plcs, even though their monopoly status has remained unaltered. Central to this has been Ofwat's determination of performance indicators on levels of service to customers, its measurement of company performance against these indicators, and assessments based on these measures of companies' success in ''serving customers''. The paper seeks to demonstrate how these new accounts of organizational performance required of the Water plcs by Ofwat have only been made possible by rendering ''customer service'' a calculable and comparable entity. The paper also looks at some of the ways in which this accounting for customer service has been incorporated into other accounts of managerial and organizational performance. (C) 1997 Elsevier Science Ltd.