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This article critically analyses intersubjective negotiation in the context of the small firm employment relationship. Such employment relationships are acknowledged as largely ad hoc, contested and negotiated, producing mutual adjustment between owner-managers and employees. It presents detailed qualitative empirical material from three small professional service firms, arguing that explicit instances of formal or informal negotiations cannot be understood as discrete events disassociated from ongoing, everyday intersubjective negotiation. The employment relationship, especially in ambiguity-intensive small professional service firms, draws on the perception of the value or interests of other actors rather than on any direct engagement with them. This intersubjective guesswork underlying mutual adjustment is potentially dysfunctional as outcomes arise that satisfy neither owner-manager nor employee interests. The article suggests that understanding employment relationships in small professional service firms requires a greater focus on individual perceptions and the ways in which their relative positions are structured in intersubjective, mutual (mis)recognition

The unspoken side of mutual adjustment: Understanding intersubjective negotiation in small professional service firms