Collective bargaining towards mutual flexibility and security goals in large internationalised companies—why do institutions (still) matter?

• Date: 01 July 2020
• Author: Paul Marginson,Valentina Paolucci
• Published date: 01 July 2020
• DOI: http://doi.org/10.1111/irj.12301

Collective bargaining towards mutual

flexibility and security goals in large

internationalised companies—why do

institutions (still) matter?

Valentina Paolucci*and Paul Marginson

ABSTRACT

This paper examines the potential of collective bargaining to generate mutually

advantageous flexibility and security outcomes at firm level. By focusing attention

on actors’negotiating capacity at sites in Denmark and Italy of four large

chemical-pharmaceutical companies, it provides a nuanced, comparative explanation.

The findings demonstrate that, across countries, differences in actors’capacity and

negotiated outcomes are attributable to the stability and depth of collective bargaining

institutions. Within country differences are accounted for by the organisational

resources (internal democracy, external links and pro-activity) of local trade unions,

which condition their capacity to induce management to negotiate outcomes which

benefit both parties.

1 INTRODUCTION

By exploring the role of collective bargaining (CB) in addressing flexibility and

security in large, internationalised companies, recent studies demonstrate that

the ability of social actors to pursue their interests in ways that translate into mutually

advantageous outcomes is shaped by both institutional arrangements and firm-specific

structural characteristics (Pulignano and Keune, 2015). In countries and sectors

where multi-employer bargaining provides comprehensive workforce coverage, clear

articulation mechanisms govern the relationship between bargaining levels, and the

presence of shop stewards is widespread across companies, firm-level actors are

found to be better equipped to participate in the regulation of both flexibility and

security (Marginson and Galetto, 2016; Paolucci, 2017). Concerning companies’

characteristics, low international competition in product markets, differentiated

products and high skills and technological requirements reduce the ability of global

management to inject flexibility through a top-down approach. In this context, local

managers can use flexibility to meet the financial expectations of global headquarters

(GHQ) while shop stewards can exploit institutional resources to negotiate compensating

forms of security (Pulignano et al., 2016).

❒Valentina Paolucci, UCD School of Business, University College Dublin, Dublin, Ireland and Paul

Marginson, IRRU, University of Warwick, Coventry, UK. Correspondence to: Valentina Paolucci,

UCD School of Business, University College Dublin, Dublin, UK.

Email: (valentina.paolucci@ucd.ie)

Industrial Relations Journal 51:4, 329–350

ISSN 0019-8692

© 2020 Brian Towers (BRITOW) and John Wiley & Sons Ltd

How HR managers and shop stewards mobilise organisational resources and

exploit institutional opportunities towards negotiating flexibility and securityoutcomes

remain underexplored. By focusing comparative attention on actors’negotiating

capacity within large, internationalised companies in chemicals and pharmaceuticals

in two countries with differing multi-employer CB arrangements, Denmark and Italy,

this paper adds a power explanation to the literature on flexibility and security in

CB. It aims to comprehend variation in the agenda and outcomes of CB on these issues

both across and within countries. We demonstrate that, across countries, differences in

actors’capacity can be attributed to the properties of CB institutions. Within country

differences are explained at the fir -level, by the capacity of shop stewards to engage

with the strategic interests of management (Locke, 1992). It is concluded that where

multi-employer CB has depth and its institutional arrangements are stable, and where

trade unions (TUs) draw on a broad range of organisational resources (Lévesque and

Murray, 2002), union power takes the form of ‘power to’(Lukes, 2005) facilitating

CB outcomes that are mutually advantageous.

2 THEORETICAL FRAMEWORK

Following Lukes (2005), the extent to which both institutional (Ibsen and Mailand, 2011)

and structural (Pulignano et al., 2016) resources can be mobilised to negotiate flexibility

and security trade-offs depends on the power capabilities of actors. Lukes distinguishes

between ‘power over’, when one party’s room of manoeuvre is severely restricted by

another and which is by nature asymmetrical; and ‘power to’, when actors realise

outcomes they could not achieve alone, founded on interdependencies between parties

(Lukes, 2005). This dual notion recalls Walton and McKersie’s (1965) distinction

between ‘distributive’, the parties goals are in conflict and gains by one can only be

achieved at the expense of the other, and ‘integrative’bargaining, the nature of the

problem and the approach taken permit solutions that benefit both sides.

While conflict remainsan underlying feature of negotiations, in capitalist economies,

the compromises that such negotiations entail ‘constitute the most advantageous

context for the improvementof the material interests of ordinary people’(Wright, 2000,

p. 958). Doellgastet a l.(2018)recastWright’s work and contend tha tw hen unions have

sufficient power resources—institutional, organisationaland structural—they can set in

motion a virtuous circle of employment stability and security across the economy.

Accordingly, our main objective is to explore the conditions under which unions

mobilise their (power) resources to achieve mutually beneficial flexibility and security

outcomes in CB. To this end, power has to be understood in its institutional context,

within which groupswith differing interests can exercise their powercapabilities to both

contest (power over) and produce shared solutions (power to).

2.1 Accounting for power capabilities of bargaining actors: an analytical framework

Drawing on the literature on unions’power resources (Doellgast et al., 2018;

Lévesque and Murray, 2002; Wright, 2000), our analytical framework identifies three

kinds of power resource: structural, institutional and organisational.

2.1.1 Structural resources

While recognising a role for institutions in framing action, Pulignano et al.’s (2016)

analysis of CB over flexibility and security privileges the company-specific factors that

conditioned the nature of the compromises reached between the parties. They found

330 Valentina Paolucci and Paul Marginson

© 2020 Brian Towers (BRITOW) and John Wiley & Sons Ltd