WP 39 - Analysing employment practices in Western European Multinationals: coordination, industrial relations and employment flexibility in Poland

Despite the fact that multinational companies (MNCs) in Central Eastern Europe significantly contribute to employment growth in the region, qualitative knowledge about diffusion of employment practices in this region, and about coordination of MNCs with local labour market actors and institutions is still limited. This paper aims to fill this gap by underlining the coordination between MNCs, local actors, and international actors in shaping employment practices, their diffusion from headquarters to the workplace level, and their adaptation to local conditions in Poland. The goal is to explain MNC-driven adjustment to local conditions in employment practices of production workers and industrial relations through which this goal can be achieved. To explain this, we apply several coordination games between management and trade unions in the empirical part of the paper. We argue that the MNC’s corporate intention to utilise local conditions, the interactive coordination of the factory management with the local trade union, and an underdeveloped international coordination of trade unions within the MNC are the main factors explaining the specific local employment practices and industrial relations instead of their diffusion from MNC headquarters or other subsidiaries. Key words: multinational companies, coordination, applied game theory, employment practices, industrial relations, trade unions

One Company, Four Factories: Coordinating Employment Flexibility Practices with Local Trade Unions

This article reports a case study of employment flexibility patterns in four factories of a multinational company in western and central Europe. There is remarkable variation in these patterns, which structural and institutional factors alone do not explain. Rather, the interests of management and local unions, and the character of their mutual interaction, are central for workplace employment practices. In factories with cooperative industrial relations, unions are extensively involved in employment flexibility even if management lacks a legal obligation or economic incentives to do so. In consequence, the company policy is neither a straightforward adaptation to host country institutions, nor a simple diffusion of corporate ‘best practice’

Economic Interests, Company Values and Local Institutions: Shaping Soft Work Practices in a Multinational’s Subsidiaries in Western and Central Eastern Europe

"How can we understand similarities and differences between work practices in multinational companies’ (MNCs) subsidiaries in different host country conditions? The paper addresses this question by studying selected soft work practices, namely work systems and fringe benefits, in a Dutch MNC and its subsidiaries in Western and in Central Eastern Europe. Acknowledging institutional variation across the studied host countries, the paper explores how the MNC’s economic interest and company values interact with host-country institutions in shaping subsidiary work practices. It is argued that the MNC’s rational behaviour is contextualized in local socio-institutional conditions, as well as it is informed by company values. Interaction between the profit interest, values and institutions yields subsidiary work practices that are neither fully standardized across the subsidiaries, nor extensively adapted to local work standards. Instead, soft work practices are embedded in, but only selectively adapted to, host-country standards." (author's abstract)"Der Artikel analysiert die Unterschiede und Gemeinsamkeiten in „soft work practices“, d.h. Arbeitssystemen und freiwillig gewährten Nebenleistungen in vier europäischen Tochtergesellschaften eines niederländischen Unternehmens. Es wird gezeigt, wie die wirtschaftlichen Interessen des Unternehmens und die in ihm vorherrschenden Werte mit den institutionellen Unterschieden an den einzelnen Standorten interagieren. Das Zusammenwirken dieser Faktoren führt zu der Herausbildung von Arbeitssystemen und Nebenleistungen, die weder vollständig standardisiert sind noch ausschließlich lokale Standards widerspiegeln, sondern selektiv in die Standards der Gastländer eingebettet sind." (Autorenreferat

WP 87 - Emigration and labour shortages. An opportunity for trade unions in new member states?

The paper explores whether and how unions in the post-socialist EU member states have responded to the opportunity of improving their situation, offered by the increased emigration after the recent EU enlargements. Migration influences the labour force composition and unemployment rates, which could facilitate union organizing and bargaining position, and in consequence enhance union legitimacy and bargaining institutions. We adopt an actor-oriented framework to examine union strategies and actions, and we test the above hypotheses in the public healthcare sector largely affected by migration in Slovakia, Poland and Hungary. We argue that variation in union strategies depends mainly on the interplay of union capacities and state strategies. Slovak unions used migration-triggered labour shortages to obtain wage increases and to consolidate existing bargaining channels. In contrast, Polish unions responded to migration-induced labour shortages through industrial action, while Hungarian healthcare unions remained the least active in seizing migration-related opportunities to enhance legitimacy or bargaining institutions.

The rise of the dual labour market: fighting precarious employment in the new member states through industrial relations (PRECARIR)

PROJECT GOALS This project investigated the role of industrial relations in addressing precarious work. It focused on the initiatives and responses that trade unions and employers’ associations developed to deal with precarious work in Croatia, the Czech Republic (hereafter Czechia), Greece, Hungary, Latvia, Lithuania, Poland, Romania, Slovakia and Slovenia since 2008. In each country, the study analysed developments in five sectors, namely public healthcare, the metal industry, construction, retail and temporary agency work (TAW). The project used a qualitative approach to examine the dimensions of precarious employment, including low pay, irregular working hours, low job security and limited representation of workers’ rights. DUAL LABOUR MARKETS Apart from an increase in the share of non-standard work contracts since 2008, findings suggest that all forms of employment were exposed to more precarious conditions following various degrees of labour market deregulation across the 10 countries. In a context of weak law enforcement and decreasing unions’ role and influence, employers were able to use (and sometimes abuse) their enlarged prerogatives to increase the workload, the use of irregular working time and sometimes, to reduce the income of workers on all types of contracts. Still, workers in the informal market and dependent self-employed have the most precarious working conditions across the countries. These vulnerable groups are most prevalent in the construction and the retail sectors, often doing work for small domestic firms. In contrast, large (often multinational) firms, particularly in the construction and metal sectors use more frequently outsourcing to reduce labour costs. The share of agency workers, fixed-term and part-time employees has risen across the countries but less than expected in some countries (e.g. Croatia and Romania) due to labour shortages associated with massive emigration and the fact that employers have sufficient leverage to demand employees on full-time open ended contracts to work irregular hours contingent on companies’ needs. RESPONSES OF SOCIAL PARTNERS TO PRECARIOUS EMPLOYMENT Social partners focused primarily on legal initiatives to regulate precarious work at the national level, while additional initiatives, such as collective bargaining were used at lower levels. Employers’ initiatives generally sought to deregulate the labour market and they have been quite successful, in most countries. Unions’ initiatives to improve precarious employment conditions through legislation often failed, which sometimes resulted in innovative or ‘recombined’ old and new strategies to fight against precarious work. In some countries, unions managed to organise the most vulnerable workers, such as self-employed and outsourced employees. Nevertheless, unions’ strategies varied across countries from aiming to transform precarious work arrangements into standard employment in Slovenia to supporting the economic rationale of precarious work forms in Latvia. POLICY IMPLICATIONS Periods of crisis throw new light on the role of the social partners. The labour market deregulation has shifted the initiative in industrial relations from unions and employers’ associations to individual employers by widening their prerogatives to set employment conditions, which in turn, increased the dualization of the labour markets. Furthermore, there is evidence of precarious work practices being exported by multinationals across their subsidiaries, prompting convergence of management practices. Trade unions need to be aware of the international dimension of precarious work, as they could also use their international networks, including their positions in European Works Councils, to fight against spreading precarious work by multinationals and a ‘race to the bottom’ in labour standards. Nevertheless, social partners cannot fight against precarious work, unless governments guarantee, at least, the fundamental union rights and ensure the effective implementation of labour law

Shaping return to work policy: Current involvement and future potential of EU social dialogue. CEPS Project Report 04 Feb 2021.

This working paper examines the European Union policy framework on return to work after chronic disease and the potential for EU industrial relations actors to contribute to shaping policy in this area. It is part of the “Negotiating return to work in the age of demographic change through industrial relations (REWIR)” project

Power resources and successful trade union actions that address precarity in adverse contexts: The case of Central and Eastern Europe

Is it possible for trade unions to fight precarity in an adverse global context? Although existing research suggests this is possible, there is limited understanding of the interplay of resources that enable unions to address precarity in deregulated markets. This study employs a power resource approach to investigate how unions overcome their external constraints. It draws upon 130 in-depth interviews with key informants across nine Central and Eastern European countries to investigate successful and unsuccessful union actions in sectors with differing external resources. In each sector, unions that mobilise their internal resources have been able to reduce various precarity dimensions, such as low wages, lack of voice, and irregular working time. The results reveal that unions whose objectives are based on convincing win–win discourses can make strides, acting as drivers of change in precarity patterns even in unfavourable conditions. Moreover, the study introduces a multi-dimensional conceptualisation of union success, identifying union actions that result in measurable improvements in precarity dimensions for all worker types. To deepen understanding of the role unions play in fighting precarity in adverse contexts, future research could investigate union actions that improve a wider range of precarity dimensions for all workers

Economic Interests, Company Values and Local Institutions: Shaping Soft Work Practices in a Multinational's Subsidiaries in Western and Central Eastern Europe

Abstract -How can we understand similarities and differences between work practices in multinational companies' (MNCs) subsidiaries in different host country conditions? The paper addresses this question by studying selected soft work practices, namely work systems and fringe benefits, in a Dutch MNC and its subsidiaries in Western and in Central Eastern Europe. Acknowledging institutional variation across the studied host countries, the paper explores how the MNC's economic interest and company values interact with host-country institutions in shaping subsidiary work practices. It is argued that the MNC's rational behaviour is contextualized in local socio-institutional conditions, as well as it is informed by company values. Interaction between the profit interest, values and institutions yields subsidiary work practices that are neither fully standardized across the subsidiaries, nor extensively adapted to local work standards. Instead, soft work practices are embedded in, but only selectively adapted to, host-country standards. Wirtschaftliche Interessen, Unternehmenswerte und lokale Institutionen: "Soft work practices" in ost-und westeuropäischen Tochtergesellschaften eines Multinationalen Unternehmens Zusammenfassung -Der Artikel analysiert die Unterschiede und Gemeinsamkeiten in "soft work practices", d.h. Arbeitssystemen und freiwillig gewährten Nebenleistungen in vier europäischen Tochtergesellschaften eines niederländischen Unternehmens. Es wird gezeigt, wie die wirtschaftlichen Interessen des Unternehmens und die in ihm vorherrschenden Werte mit den institutionellen Unterschieden an den einzelnen Standorten interagieren. Das Zusammenwirken dieser Faktoren führt zu der Herausbildung von Arbeitssystemen und Nebenleistungen, die weder vollständig standardisiert sind noch ausschließlich lokale Standards widerspiegeln, sondern selektiv in die Standards der Gastländer eingebettet sind

Embedding Multinationals in Postsocialist Host Countries: Social Interaction and the Compatibility of Organizational Interests with Host-Country Institutions

The internationalization of postsocialist countries brought about by the activities of multinational corporations (MNCs) has produced a growing diversity of actors capable of shaping work standards in these countries. The organizational and institutionalist literature on MNCs has concentrated only on the outcomes of such internationalization processes in terms of diffusing MNCs’ organizational practices or adapting them to host-country conditions. This paper offers a theoretical and empirical scrutiny of the process through which MNCs establish and reinforce their position in host-country labor markets and societies. In particular, the focus is on how MNCs become legitimate actors in changing work standards in host-country labor markets, and how host-country actors (i.e., workers, trade unions, and the local society) become capable of shaping MNCs’ organizational practices in postsocialist subsidiaries. This process is referred to as MNC embedding. Building on a qualitative case study of a Dutch MNC and its subsidiaries in Hungary and Poland, the paper theorizes and empirically documents how embedding occurs and what conditions facilitate it. It is argued that particular interaction dynamics in each MNC subsidiary studied account for the extent to which MNC embedding occurs via unilateral managerial decisions or with the involvement of local actors. Moreover, social interaction between MNCs and host-country actors facilitates institution building from below. This means that through social interaction MNCs become legitimate actors contributing to institution building in environments where broader institutional underpinnings of work practices and traditions of collective bargaining are less extensive than in continental Western Europe. Die Aktivitäten multinationaler Unternehmen forcieren die wirtschaftliche Internationalisierung postsozialistischer Länder. Hierdurch wächst in diesen Ländern die Vielfalt an Akteuren, die in der Lage sind, Arbeitsstandards zu entwickeln. Die organisationssoziologische und institutionalistisch orientierte Literatur zum Thema hat sich vor allem mit den Auswirkungen von Internationalisierungsprozessen auf die Verbreitung organisatorischer Praktiken der Unternehmen oder ihrer Anpassung an die Bedingungen des Aufnahmelands beschäftigt. Dieses Papier bietet nunmehr eine theoretische und empirische Untersuchung der Prozesse, durch die multinationale Konzerne ihre Position im Arbeitsmarkt und in der Gesellschaft des Aufnahmelandes finden und festigen. Das Hauptinteresse liegt auf der Frage, wie multinationale Unternehmen zu legitimen Akteuren werden, die Arbeitsstandards in postsozialistischen Beschäftigungsmärkten verändern können und wie die Akteure des Aufnahmelandes (Arbeiter, Gewerkschaften und die lokale Bevölkerung) in die Lage versetzt werden, die Praktiken dieser Unternehmen mitzugestalten. Dies wird als Prozess der Einbettung multinationaler Unternehmen gedeutet. Anhand einer qualitativen Fallstudie zu einem niederländischen Konzern und seinen Niederlassungen in Ungarn und Polen analysiert das Papier, wie es zu einer solchen Einbettung kommt und welchen Bedingungen sie unterliegt. Die Analyse zeigt, dass bestimmte Interaktionsdynamiken in allen untersuchten Niederlassungen auf unilaterale Managemententscheidungen oder die Einbeziehung lokaler Akteure zurückzuführen sind. Darüber hinaus erleichtert die soziale Interaktion zwischen Unternehmen und lokalen Akteuren die Institutionenbildung von der Basis aufwärts. Im Ergebnis werden multinationale Unternehmen durch soziale Interaktionen vor Ort zu legitimen Akteuren, die zur Institutionenbildung in einem Umfeld beitragen, in dem die Verankerung von Arbeitsstandards und Traditionen der Mitbestimmung weniger verbreitet ist als im Westen Kontinentaleuropas.Introduction 1 A theoretical framework for embedding Actors and their attributes Social interaction Social interaction forms as means of MNC embedding 2 Case study and research methodology 3 Embedding through social interaction in MNC subsidiaries Outcomes of embedding Process of embedding 4 Conditions of social interaction: How compatible are organizational interests with host-country conditions? 5 Embedding as institution building from below 6 Conclusion