46880 bamber ch 1 introduction slides

5/28/2018 46880 Bamber Ch 1 Introduction Slides

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5TH EDITION

INTERNATIONAL

& COMPARATIVEEMPLOYMENT RELATIONSGlobalisation and change

Edited by Greg J Bamber,

Russell D Lansbury and Nick Wailes

Allen & Unwin, 2011. These slides are support material for International and Comparative Employment Relations 5th edition . Lecturers using the

book as a set text may freely use these slides in class, and may distribute them to students in their course only. These slides may not be posted onany university library sites, electronic learning platforms or other channels accessible to other courses, the university at large or the general public.

CHAPTER 1

International and comparative employment relations:

An introduction

Nick Wailes, Greg J. Bamber and Russell D. Lansbury


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2 Chapter 1:Introduction

Internat ional & Comparat ive

Employment Relations5thedition


Russell D Lansbury & Nick Wailes

Copyright Allen & Unwin, 2011

Lecture outline International and Comparative Employment Relations

Definitions

Objectives of the field of study

Research challenges

Theories of convergence and divergence in employment relations systems

Views on the impact of globalisation and employment relations (ER)

The Varieties of Capitalism (VoC) approach Main features of the approach

Applying the VoC approach to ER

VoC, globalisation, and the convergence/divergence debate

Limitations of the approach

Transnational employment relations

Capital and labour as transnational actors

International labour organisations

International employer organisations

Multinational corporations (MNCs)

Transnational regulatory bodies

International Labour Organization (ILO)

World Trade Organization (WTO)


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What is employment relations?

Employment relations (ER) can be seen as encompassing the

study of all aspects of people at work.

It is concerned with the relationship between employers and

employees and their interaction at the workplace.

It is also concerned with employers and employees

representative bodies, such as trade unions and employer

associations, and with how they interact at the workplace,

industry, national and international levels.

It encompasses both industrial relations and human resource

management.


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Industrial relations and human

resource management

Industrial relations (IR) traditionally focuses on

formal and informal institutions of job regulation.

Human resources management (HRM) focuses on

the level of the individual organisation and is

concerned with issues such as recruitment, selection,

pay, performance and human resource development.


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Key elements of industrial relations The Parties include:

Employers

Employees

Unions and professional associations

Government and state agencies

The Processes include: Collective bargaining between unions and employers or employer associations

Industrial disputes and dispute resolution mechanisms

Employee participation at the workplace

The Outcomes include:

A collective agreement between employees (and their unions) and employers

(and their associations)

A decision by a tribunal or conciliation committee that resolves a dispute

An agreement between employees and an employer on an issue at the workplace


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What is international and comparative ER?

International ER Transnational:institutions and phenomena which cross

national boundaries, e.g. multinational corporations

(MNCs); international labour movement; European Union;

International Labour Organization (ILO)

Foreign:studying employment relations systems in other

countries

Comparative ER A systematic method of investigating ER in two or more

countries which is analytic rather than descriptive


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Objectives of international and comparative

ER as a field of study

To learn about ER in different countries

To provide insights into our own system of ER

To develop theories and explanations for differentpatterns of ER

To guide policy-making by learning from successful

ER systems


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Challenges in comparative ER research

There are important international differences in ER The meanings and significance of key ER terms differ across countries

(e.g. differences in the nature and role of unions)

Data is collected in different ways (e.g. differences in how industrial

disputes are defined, categorised and how their incidence is recorded)

Therefore, effective comparisons require detailed

understanding of each national context

Researchers choose a comparative research design:

Most similar cases: two or more countries that are similar in as many

respects as possible except for phenomenon under study

Most different cases:two or more countries that differ in almost every

respect except the phenomenon under examination


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Convergence and divergence in

national patterns of ER

One of the most enduring debates in

international comparative ER is:

whether national patterns of ER are converging (becoming

more similar) whether they are diverging (becoming more different)

whether a more complex pattern of convergence and

divergence is taking place


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Convergence theories of comparative ER

Convergence theories assume that there are common

pressures across societies to adopt a particular (best

practice) ER system

Original convergence thesis was developed by Kerr et al. in

Industrialism and Industrial Man (1960)

Logic of Industrialism: industrialisation creates pressures across societies to

adopt a certain, American-style ER system.

Critique of this argument: technological determinism; American perspective

Later revised by Clark Kerr: convergence as a tendencyamong democratic

industrialised societies

Dore (1973) suggested convergence may be towards the

Japanese ER model rather than an American one. He argued

that countries which industrialised at later stages were able to

develop ER institutions that are well suited to industrialisation


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Divergence or partial convergence theories

Comparative ER research has found that: Some country differences persist and some even increase

But overall there may be convergence towards 2 or more

patterns of ER

Some aspects of ER are converging while others are

diverging

Common trends dont necessarily result in common

outcomes

There is increasing variation in ER practices within

countries


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Globalisation

Globalisation is used to characterise changes in theinternational economy

It normally refers to growing interconnectedness of the

international economy

It is associated with growth in: Cross-national trade

Foreign direct investment (FDI)

Growth in international financial transactions

It is argued that globalisation has created a common set of

economic pressures across all markets (products and factors)

which may impact on ER


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Globalisation and ER

Two views on how globalisation impacts on employmentrelations:

1. Simple globalisation approach economic pressures associated with globalisation will result in a convergence

of employment relations policies and practices

race to the bottom in terms of wages and labour standards as mobile capitalseeks lowest labour costs

governments lose autonomy in policy making and can no longer guarantee labourrights

Instead, legislation to accelerate decentralisation and deregulation of the labourmarket and to attract capital investment

2. Institutionalist approach Despite common economic pressures associated with globalisation, diversity

in national patterns of ER will persist

existing ER institutions mediate and filter those pressures, and will do sodifferently in different countries


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The Varieties of Capitalism approach

Main features of the approach


VoC, globalisation, and theconvergence/divergence debate

Limitations of the approach


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Main features of VoC 1

There are two ideal-typical forms of capitalism Liberal market economies (LMEs)

Coordinated market economies (CMEs)

Each of these forms of capitalism include a set of

complementary institutions that form the basis of a

countrys economic competitiveness and lead to good

economic outcomes

The firm is at the centre of their analysis

In order to develop, produce and distribute goods and

services profitably, a firm must effectively coordinate with a

wide range of actors e.g. investors, employees, unions, the

state, suppliers, buyers.


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Main features 2

A firm must coordinate with other actors in 5 spheres: Industrial relations

Vocational training and education

Corporate governance

Inter-firm relations

Relations with its own employees

The relations with actors in these spheres are problematic

Firms can resolve coordination problems

Internally within the firm (hierarchies)

Externally (market or non-market institutions)


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Main features 3

National institutions shape how firms resolve thesecoordination problems

In LMEs, firms resolve coordination problems mainly through hierarchies

and marketsi.e. arms length relations and high levels of competition

In CMEs, firms resolve coordination problems not only through

hierarchies and markets but also through non-market institutionsi.e.strategic interaction

Both these solutions to coordination problems form

institutional equilibria which have comparative advantage

In LMEs, the comparative advantage arises from the flexibility of thesecoordination arrangements

In CMEs, the comparative advantage arises from cooperative behaviour

among actors, based on information exchange, monitoring and

sanctioning of defections


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Liberal market economies

Classic example: United States Corporate governance:outsider shareholder dominated;

performance represented by current earnings and share

prices; management agency controlled by shareholder exit

Employee relations:short term, market relations between

employee and employer; top management has unilateralcontrol of the firm

Industrial relations:employer organisations and unions

relatively weak; decentralised wage setting; insecure

employment (hire and fire; fluid labour markets)

Vocational training/ education:vocational education offeredon market; labour force has high general skills

Inter-firm relations:market relations, competition; use of

formal contracting and subcontracting relationships.


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Coordinated market economies

Classic example: Germany Corporate governance: long-term bank-dominated insider

systems; cross-directorships; cross-shareholding; management

agency controlled through network reputational monitoring

Employee relations:long term, formalised participation of

employees; consensus decision-making with management Industrial relations:trade unions and employers organised;

industry-wide collective bargaining and pay determination;

employment relatively secure

Vocational training:elaborate industry-based training schemes;

labour force has high industry-specific and firm-specific skills Inter-firm relations:development of collaborative networks;

cooperation among firms in diffusing technologies


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20Chapter 1:

Introduction






Institutional complementarity Complementarity occurs where the presence of one institution enhances

the returns from another institution

In this way comparative advantage arises from the bundling of

complementary institutions

Hence, countries cluster around bundles of complementary institutions

two distinct clusters are LMEs and CMEs

This important departure from comparative IR studies which sought to link

single features (e.g. collective bargaining structure) with economic

performance

The effect of single institutions may be misleading as performance may

arise from a constellation of institutional arrangements

Implications for bolt on policy responses

Comparative institutional advantage: the institutional frameworks (either

LME or CME) provide nations with comparative advantages in performing

certain activities and producing certain kinds of goods and services


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21Chapter 1:

Introduction







ER concerns are a central feature of the VoC model (e.g.

collective bargaining, unions and employer associations,

skill development, relations with employees at the

workplace)

VoC approach places ER in a broader political economy

context

Focus on institutional complementarity overcomes

tendency to treat ER institutions in isolation

VoC approach brings firms and employers into the

centre of analysis


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22Chapter 1:

Introduction






VoC, globalisation, and the

convergence/divergence debate

VoC approach emphasises the importance of institutions

(institutions matter)

Different sets of institutions will mediate and refract the

pressures associated with globalisation in different ways

Regarding ER:

in LMEs, we can expect deregulation and a race to the bottom as

outlined in the simple globalisation approach

in CMEs, we can expect firms and workers to resist deregulation as

that threatens comparative institutional advantages This results in a bifurcated response to globalisation;

globalisation will have a different impact on IR in LMEs than in

CMEs


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23Chapter 1:

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Limitations of VoC approachThere is a large literature criticising the VoC approach, in part

because it has been so influential.

1. Not enough variety

LME/ CME distinction doesnt capture all of the diversity of market economies

(several OECD countries that dont fit)

2. Ignores differences within varieties Especially among CMEs

3. Static and Determinist

Compares two countries at the same point of time

Only 2 varieties of capitalism are viable; change to other category is impossible Makes it difficult to explain change

Downplays role of agency, conflict, power, politics

4. Downplays or ignores international factors

Neglects linkages between nation states


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24Chapter 1:

Introduction






International industrial relations

Capital and labour as transnational actors International labour organisations

International employer organisations

Multinational companies MNCs

Transnational regulatory bodies International Labour Organization ILO

World Trade Organization WTO

Edit d b G J B b


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25Chapter 1:

Introduction






Labour internationalism

Labour as a passive victim of globalisation oras a global actor?

International union confederations Global confederations e.g. International Trade Union Confederation ITUC (was

ICFTU)

Regional confederations e.g. European Trade Union Confederation ETUC

Global union federations which link together national unions from a particular

trade or industry e.g. International Metalworkers Federation IMF

European works councils

I i l & C i Edit d b G J B b


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26Chapter 1:

Introduction






Activities of international union organisations

Representational activities at ILO and otherinternational forums

Services to member unions, especially in less

developed and newly industrialising countries

Information sharing

International campaigns

International Framework Agreements IFAs on

minimum labour standards between global unionfederations and MNCs

I t t i l & C ti Edit d b G J B b


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27Chapter 1:

Introduction






Employersinternational dimensions

International Employers Associations, e.g. International Organisation of Employers IOE represents employers at

ILO

BUSINESSEUROPE (formerly Union of Industrial and Employers'

Confederations of Europe UNICE) represents employers in EU

institutions Multinational companies

Country of origin/home country effectand host country effectshape

ER practices in subsidiaries

Current questions about ER in MNCs:

Do ER practices of MNCs spill overinto other (local) companies in the

industry?

Is there any reverse diffusion, i.e. transfer of ER practices from foreign

subsidiaries to the headquarters of MNCs?

I t t i l & C ti Edited by Greg J Bamber


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28Chapter 1:

Introduction






The International Labour Organization (ILO)

Established in 1919 in association with the League of Nations

In 1946 became first UN agency

Has a unique tripartite structure - government, employers and

union representatives

Key contribution is a series of Conventions andRecommendations which set international labour standards

Major source of international labour law: 181 conventions,

188 recommendations

Important role in technical advice and assistance to lessdeveloped countries (LDCs) and newly industrialising

economies (NIEs)


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29Chapter 1:

Introduction Copyright Allen & Unwin, 2011

International Core Labour Standards

Source: Hughes, S (2005) The International Labour

Organisation, New Political Economy, 10 (3): 413-

425.

Ratification of conventions by

member states of the ILOcreate binding obligations to

put their provision into effect

(181 conventions ratified so

far).

Internat ional & Comparat ive Edited by Greg J Bamber


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30Chapter 1:

Introduction






Criticisms of the ILO

Bureaucratic structures and procedures which are resistant toreform

Inadequate monitoring of compliance and policing of

conventions

The tripartite model of governance of the ILO is outdated andimpotent.

The governing body of the ILO is dominated by the advanced

industrialised economies although less developed economies

comprise the majority of ILO members

It has lower status and is weaker than many other

international bodies, e.g. WTO and the World Bank (which are

competing with the ILO is some areas)



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31Chapter 1:

Introduction






Proposals for reform of the ILO The adoption of more innovative and pragmatic

approaches to issues (e.g. the current campaign for

Decent Work)

Focus on fewer issues on which it can have a major

impact Build stronger linkages with other international

bodies e.g. non-governmental organisations (NGOs)

Place more emphasis on technical assistance to theless developed economies

Provide for greater representation of third world

countries on the governing body of the ILO



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32Chapter 1:

Introduction






World Trade Organization

Established 1996 United Nations agency

Aim is to promote free trade and provide

mechanisms for the resolution of tradedisputes

There was debate around whether labour

standards should be included in the rules ofthe WTOnot included



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Allen & Unwin, 2011. These slides are support material for International and Comparative Employment Relations 5th edition . Lecturers using the

book as a set text may freely use these slides in class, and may distribute them to students in their course only. These slides may not be posted oni it lib it l t i l i l tf th h l ibl t th th i it t l th l bli





Conclusion

Globalisation is having a profound influence on theway that work is regulated.

Studying internationally comparative employment

relations allows us to develop an understanding of

our own and other employment relations systems.

The Varieties of Capitalism approach is a useful

framework for studying internationally comparative

employment relations. It allows us to studyemployment relations within a broader institutional

context.

46880 bamber ch 1 introduction slides

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