When territory matters: Employer associations and changing collective goods strategies

• Published date: 01 January 2019
• Author: Raoul Nacamulli,Peter Sheldon,Edoardo Della Torre
• Date: 01 January 2019
• DOI: http://doi.org/10.1111/1748-8583.12201

SPECIAL ISSUE

When territory matters: Employer associations and

changing collective goods strategies

Peter Sheldon

1

|Edoardo Della Torre

2

|Raoul Nacamulli

3

1

School of Management and the Industrial

Relations Research Centre, University of New

South Wales, Sydney, NSW, Australia

2

Department of Management, Economics and

Quantitative Methods, University of Bergamo,

Bergamo, Italy

3

Department of Human Sciences for

Education, University of Milano‐Bicocca,

Milan, Italy

Correspondence

Peter Sheldon, School of Management and the

Industrial Relations Research Centre,

University of New South Wales, Sydney, NSW

2052, Australia.

Email: p.sheldon@unsw.edu.au

Abstract

Recent research shows employer associations strategically

responding to external challenges, from collective bargaining

decentralisation, by altering their offerings of “selective”

goods (to directly address threats to membership levels)

and of “elective”goods (to revenues). Implicit is that

traditional “collective goods”are irrelevant for achieving

sustainability. That literature also suggests that territorial

associations are more vulnerable than sectoral ones. In this

qualitative, longitudinal comparative case study, we explore

why and how two territorial associations, the largest each

in Italy and Australia, have pursued sustainability by also

innovatively enlarging their collective goods activities. This

has involved shifting from bargaining leadership to

promoting economic dynamism within their territories. Using

metaorganisation theory and the resource‐based view, we

explain how these associations realised their strategic advan-

tages. Our evidence suggests that innovatively developing

new collective goods may be another important way associ-

ations can improve their competitive positions.

KEYWORDS

collective goods,employer association, metaorganisations, resource‐

based view, territory

This article forms part of a project that received University of New South Wales, Sydney, Human Research Ethics approval on

4 November 2016, under number HC16867.

Received: 17 January 2017 Revised: 13 April 2018 Accepted: 15 May 2018

DOI: 10.1111/1748-8583.12201

Hum Resour Manag J. 2019;29:17–35. © 2018 John Wiley & Sons Ltdwileyonlinelibrary.com/journal/hrmj 17

1|INTRODUCTION

Employer associations (“associations”) are membership‐based business associations with an involvement in labour

market issues. Therefore, they are metaorganisations, having organisations (here firms), rather than individuals, as

members (Ahrne & Brunsson, 2005, 2008). In many countries over recent decades, associations have successfully

led policy campaigns to increase employers' autonomy from industrial relations (IR) constraints such as multi‐

employer collective bargaining or, indeed, any collective bargaining; legislation assisting union organising and recog-

nition; and regulation of how employers use employees' working time and effort. There has alsobeen removal of pro-

hibitions against lockouts and the weakening of the right to strike (Hyman, 2015; Sheldon, Gan, & Bamber, 2014).

Using forms of persuasion like public relations, lobbying, and expert submissions, they have taken aim at institutions

protecting employee rights: statutory regulation, union strength, and multi‐employer collective bargaining. However,

their campaign successes have also produced unintended consequences that undermine their raison d'etre among

member firms (or potential members), contributing to heavy losses of membership and revenue that threaten their

financial sustainability (McKinlay, 2011; Sheldon & Thornthwaite, 1999, 2004; Silvia & Schroeder, 2007; Traxler,

2004). This product market vulnerability appears more marked for territorial associations—with their memberships

defined by geographical area—than for sectoral ones (by industry), where multi‐employer bargaining and union

strength have declined less (Sheldon, Nacamulli, Paoletti, & Morgan, 2016).

Traditionally, associations use selective goods (Olson, 1971) as their principal mechanism for enhancing

“associability”: membership recruitment and retention (Traxler, 1993, p. 677). Selective goods are standardised,

expert services that associations provide for free but exclusively to members. Among selective goods member firms

most value are IR functions that also assist with member firms' HRM: call centres providing employment law advice

to member firms, circularised research on labour market and legal developments, and seminars on, for example, work-

place health and safety.

Associations often create selective goods from organisational capabilities they developed providing collective

goods: non‐exclusive, non‐market responses to challenges facing a particular group. However, being non‐exclusive,

collective goods also assist non‐members: free‐riders (Olson, 1971). For associations, the need to develop collective

goods—or “(collective) representation”—arose with class‐related challenges to employers—mostly from unions and

pro‐employee legislation. Such representation, typically taking the form of collective bargaining leadership, lobbying

governments, or public campaigning, can also involve pressuring employers whose activities threaten association

members' interests. Representation is mostly the original source of an association's organisational purpose, identity,

policies, and professionalised structure (Windmuller & Gladstone, 1984).

Bargaining decentralisation has particularly undermined the value, to larger firms, of bargaining‐related represen-

tation. Yet, associations rely heavily on large member firms for dues revenue, profile, and influence. Some associations

have increased their lobbying and public relations activities, broadening them beyond IR (Barry & Wilkinson, 2011;

Traxler, 2004). However, this appears insufficient for improving associability among large firms who also have much

less need, because of their internal resources, to access selective goods. Many have therefore renounced their mem-

berships (McKinlay, 2011; Sheldon & Thornthwaite, 2004; Traxler, 2004). A particularly significant example was FIAT

leaving Confindustria, Italy's dominant national association. Yet historically, FIAT's senior executives had repeatedly

led Confindustria through deep crises facing Italy's employers (Tomassetti, 2013).

To improve associability, some associations have widened their selective goods portfolio beyond IR/HRM.

Selective goods, while directly targeting associability, can also indirectly improve association revenues. To directly

improve revenues (and surpluses), another strategy has been to develop elective goods (Sheldon & Thornthwaite,

2004): commercially priced, expert services marketed to non‐members, and with discounts to members. Elective

goods can therefore also indirectly enhance associability. For similar purposes, associations also commercialise

traditional IR representation as elective goods. This can involve customising assistance to individual firms engaged

in enterprise‐level bargaining. Associations have also repackaged as elective goods selective goods such as advising

firms on employment law.

18 SHELDON ET AL.