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Indusrial relations and the management of flexibility - Factors shaping developments in Austria and Sweden.

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Introduction

MSc in Human Resource Management 'Employment Relations in the EU' (Professors Peter Turnbull and Paul Blyton) INDUSTRIAL RELATIONS AND THE MANAGEMENT OF FLEXIBILITY Factors shaping developments in Austria and Sweden Peter J Samuel Cardiff Business School May 2000 Introduction Labour flexibility has been heralded as 'the way forward' in the response to the challenges of the global economy in general and the European Union (EU) in particular (Baglioni, 1990; Casey et al, 1997). However, the EU comprises member states with different societies, institutional structures, cultural traditions and historical contexts, that give rise to both similarities and differences in their respective approaches (Cousins, 1999; Ferner and Hyman, 1998). Thus to facilitate the identification of patterns, the focus is upon two member states: Austria and Sweden. Following a discussion on the interpretation of 'flexibility' as it shall be used throughout this paper, two groups of theoretical issues concerning industrial relations (IR) are introduced to assist comparative analysis. The current context of each state in terms of current flexibility trajectories and key economic and labour market indicators is then examined, followed by an exposition of Dunlop's (1958, 1993 update) systems framework to explore the interactions giving rise to these outcomes. Finally, it will be argued that the fundamental relations between capital and labour is the bedrock from which flexibility trajectories are launched. Defining Flexible Labour Labour flexibility is a value-laden term, especially when linked to phrases such a 'improved economic growth' (Casey et al, 1997). Its synonyms have few negative connotations: adaptability, responsiveness, adjustability and so on, and is invariably described as 'a good thing'. The wealth of literature on labour flexibility suggests it can be defined in many different ways (Boyer, 1988). Four sources of labour flexibility can be identified (Blyton and Morris, 1992): 1. Functional or task - internal flexibility in labour deployment across tasks through job design, and adaptability by multiskilling through training and development; 2. ...read more.

Middle

The strength of the system was based upon intimate links between party and union movement, providing a two-way 'influence conduit' thus making labour legislation largely unnecessary. Employers also came to use informal channels of influence rather than support conservative parties and openly challenge social democracy for fear of a lurch towards socialism. Thus, confrontation gave way to co-operation under 'free corporatism' (Heckscher, 1963, cited in Fulcher 1991). Since the 1960s, however, the model came under increasing pressure. Self-regulation was ultimately abandoned and labour legislation introduced to increase union influence. In tandem with the election of the conservatives in 1976, employers launched a strong ideological and political counter-offensive with the result that the balance of power shifted gradually in their favour. The peak employers' association, the SAF, viewed the dismantling of the corporatist system as a way of reducing union influence over the state apparatus. However, the labour movement successfully resisted attempts to introduce neo-liberal reforms by the conservatives, and increasing social unrest led to the return to power of the social democrats in 1982, with the rejection of the austerity policies of the previous six years, albeit with a more neo-liberal agenda tha before (Kjellberg, 1998). Sweden has long been exposed to competition on the global level, with products and processes differentiated on the basis of 'flexible specialisation' for many years (Kjellberg). Consequently, there is little evidence of recent major labour market reforms to increase flexibility (indeed there appears to be little scope for such reforms save a dramatic shift to overt neo-liberalist deregulation). However, working time has been targeted as creating labour market rigidity and a committee established to investigate the reduction of working hours and the incorporation of flexible hours into labour legislation (Tableau de Bord, 1996). Part-time and fixed-contract work, also highly regulated by law, are at a higher level than Austria. Part-time work availability encourages female labour market participation, as does the provision of appropriate childcare (ibid). ...read more.

Conclusion

the capitalist state is facilitating reform and modification towards increased temporal flexibility, predominantly from the perspective of labour need in the context of increased global competition. Organised labour in both states appears able to contest employer demands for flexibility of labour use, shifting bargaining towards social democratic notions of equality and harmonisation, skills investment, workplace justice and employment security, all of which echo the 'high road' of functional flexibility. Given the long-standing social democratic traditions of both states and the relative power of organised labour through integration into the state apparatus, it is not surprising that functional flexibility is not an issue in either country, whereas numerical flexibility and its exploitative connotations most certainly would be. Nevertheless, since the 1980s, the Swedish model has confounded theoretical prediction with increasing conflict and state intervention, whereas the Austrian model has remained relatively stable. The case of Austria supports theories of corporatism (low levels of industrial conflict, consensual macroconcertation, with predominantly temporal workplace flexibility), while the case of Sweden suggests an oscillation between corporatist and labour movement models (fluctuating levels of industrial conflict, 'virtual' political control of the state by labour, with predominantly skills-based functional workplace flexibility). While Sweden teeters on the brink of full blown socialism, as described by labour movement theory, it appears that labour engages in pragmatic brinkmanship, using political power to suppress the economic superiority of employers and constrain the underlying neo-liberal tendencies of the state. Austria, on the other hand, requires little such manouevering. Its highly regulated system of social partnership, and correspondingly high level of industrial peace, appears to 'buffer' the effects of an apparent global shift towards neo-liberalism. What this analysis has served to underline is the need to recognise the wider relationship between capital and labour which will fundamentally influence employers' management of labour. Thus in Austria and Sweden, differeing degrees of corporatism, in tandem with strong and organised labour institutions, tend to successfully resist employer-led calls for increased flexibility unless such reforms advance the collective interest of labour. ...read more.

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