Flexible Organizations and the New Working Life

Flexible Organizations and the New Working Life

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Flexible Organizations and the New Working Life A European Perspective

Edited by Egil J. Skorstad Østfold University College, Norway Helge Ramsdal Østfold University College, Norway

© Egil J. Skorstad and Helge Ramsdal 2009 All rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise without the prior permission of the publisher. Egil J. Skorstad and Helge Ramsdal have asserted their rights under the Copyright, Designs and Patents Act, 1988, to be identified as the editors of this work. Published by Ashgate Publishing Limited Ashgate Publishing Company Wey Court East Suite 420 Union Road 101 Cherry Street Farnham Burlington Surrey, GU9 7PT VT 05401-4405 England USA www.ashgate.com British Library Cataloguing in Publication Data Flexible organizations and the new working life : a European perspective 1. Human capital 2. Organizational effectiveness 3. Industrial relations I. Skorstad, Egil J. II. Ramsdal, Helge 658.3 Library of Congress Cataloging-in-Publication Data Skorstad, Egil, 1945Flexible organizations and the new working life : a European perspective / by Egil J. Skorstad and Helge Ramsdal. p. cm. Includes index. ISBN 978-0-7546-7420-7 -- ISBN 978-0-7546-9151-8 (ebook) 1. Hours of labor, Flexible--Europe--Cross-cultural studies. 2. Organizational culture--Europe--Cross-cultural studies. 3. Organizational behavior--Europe--Cross-cultural studies. 4. Quality of work life--Europe--Cross-cultural studies. I. Ramsdal, Helge. II. Title. HD5109.2.E85S56 2009 331.25'724094--dc22  ISBN 978 0 7546 7420 7 eISBN 978 0 7546 9151 8 (ebook)

2008048575

Contents

List of Figures List of Tables List of Contributors   Preface  

1 Introduction   Helge Ramsdal and Egil J. Skorstad 2 The Ambiguity of Flexibility   Egil J. Skorstad

vii iv xi xv

1

17

3 The Impact of Flexibility on Employee Morale and Involvement: Large-Sample Findings for UK Workplaces   Michael Rose

43

4 Whose Flexibility? British Employees’ Responses to Flexible Capitalism   Harriet Bradley

79

5 A Package of Flexibility?   Birgitta Eriksson and Jan Ch. Karlsson 6

7

97

Protected, Firm-Specific, and Scarce: Explanations of Non-Standard Forms of Employment   R. Øystein Strøm

111

Combining Flexibility and Workers’ Motivation: Lessons from a Study on Italian and French Hospitals   Philippe R. Mossé

143

8 Striving for Flexibility, Attaining Resistance: Culture Clashes in the Swedish Rail Industry   Henrietta Huzell

163

9 The Re-Organization of Manufacturing and the Emergence of a Flexible Economy in the UK   Stephen Ackroyd

187

Flexible Organizations and the New Working Life

vi

10 The Quest for Flexibility and Governmental Regulations of Working Life: The Case of the 2005 Norwegian Worker Protection and Working Environment Act   Helge Ramsdal 11 What’s Special About the Nordic Countries? On Flexibility, Globalization and Working Life   Tor Claussen 12

Concluding Remarks: The Complex Dynamism of the Flexible Organization   Egil J. Skorstad

Index  

209

233

257

265

List of Figures

3.1 Number of flexibility practices and level of morale 4.1 Graduate destinations in 2003 6.1 The OECD (1999) ranking of member states according to the establishments’ costs related to individual or collective dismissals  6.2 Total labour force (left hand scale) in 1,000 persons and percentage of women and unemployment (right hand scale) in Norway from 1972 to 2006 6.3 The average working year (left hand scale) and total hours worked (right hand scale) in manufacturing and health in Norway from 1970 to 2004 6.4 Normalized full-time employment in major Norwegian industries from 1970 to 2004 6.5 Total and part-time employment for men and women in manufacturing and the health services in Norway from 1996 to 2007 6.6 Temporary work among men and women – 1,000 persons, from 1996 to 2007  6.7 The percentage of workers engaged in temporary employment in manufacturing, retail, hotels and restaurants (‘rethot’), education and health services in Norway from 1996 to 2007 6.8 The percentage of all and non-agricultural self-employed workers in Norway from 1970 to 2004 8.1 The management perspective and the resistance perspective in relation to change within the domains of legitimacy, restructuring and revaluating

69 93 114

119

121 122

127 131

132 133

172

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List of Tables

3.1 Numerical flexibility: Employers’ use of non-standard contracts, 1998 and 2004 3.2 Numerical flexibility, organizational commitment, perceived workplace relations 3.3 Numerical flexibility: Employers’ use of outsourcing, 1998 and 2004 3.4 Outsourcing, workplace climate and organizational attachment 3.5 Numerical flexibility: Jobs in workplace not guaranteed/exempt from compulsory redundancy and approval of management, perceived workplace relations and organizational commitment 3.6 Temporal flexibility: Overtime working, 1998 and 2004 3.7 Temporal flexibility: Overtime working, workplace climate and organizational attachment 3.8 Temporal flexibility, effect of having a 24/7 work schedule 3.9 Stretched contract working, manager informant agreed/ strongly agreed 3.10 Functional flexibility – Teamwork (definitions for 1998 and 2004, restricted 2004) 3.11 Training for job-switching, workplace climate and organizational attachment 3.12 Mean level (0–6) of largest OUG ‘formally trained’ do other job (fxfunc_trainedojb) 3.13 Actual job switching, workplace climate and organizational attachment (WERS 5 only) 3.14 Scope of flexibility practice in UK workplaces with five or more employees 4.1 Changing proportions of firms reporting usage of different types of flexible working 4.2 Percentage of firms in survey reporting availability of different types of non-standard contractual arrangements 4.3 Income levels by age group 5.1 Workplaces that have different types of flexibility (percentages) 5.2 Types of work environments according to Karasek’s model 5.3 Different types of working conditions at the workplace with various types of flexibility and various aspects of new management (percentages) 5.4 Employees in different types of work environments at flexible and non-flexible workplaces (vertical percentages)

48 50 52 53

54 57 58 59 61 63 65 66 67 68 83 84 92 99 103

104 105



Flexible Organizations and the New Working Life

5.5 Logistic regression analyses of the relationships between class, sex, type of workplace and quality of work environment (odds ratios) 5.6 Common conceptual pairs in research on the ‘new working life’ 6.1 The firm’s evaluation of flexible manning practices given labour flexibility and variability 6.2 The firm’s evaluation of flexible manning practices given labour flexibility and skill obsolescence 6.3 The female employment rate in EU15 and some selected countries 6.4 The male employment rate in EU15 and some selected countries 6.5 Total and part-time employment among men and women, the percentage of part-time employment, and the percentage of short part-time and total part-time employment 6.6 The percentage of part-time employment in Norwegian industries, 1996 to 2004 6.7 Per cent of part-time employment rate in Norway 1996 to 2004 distributed by gender and type of establishment 6.8 Female part-time employment as per cent of total female employment in some European countries 6.9 Men’s part-time employment as per cent of total male employment in some European countries 6.10 Correlations between temporary employment levels in manufacturing, retail, hotels and restaurants, education, and health services 6.11 The percentage of full-time employees working overtime (per cent), by industry 6.12 The relationship between labour participation and the extent of part-time employment in the European economic area 1993 to 2004 – Fixed effects estimation 6.13 Total full-time and part-time employment (1,000 persons) and part-time employment as primary activity as a percentage of total part-time employment 6.14 Total employment, part-time employment as per cent of total employment, and part-time work distributed by different age groups 6.15 The number of under-employed (1,000 persons) in total and in different part-time and full-time employment categories  6.16 The number of extra hours under-employed workers in different part-time and full-time employment categories would like to work 7.1 Main case studies data

106 107 116 118 123 124

125 126 128 130 130

133 134

137

138 138 139 140 151

List of Contributors

Stephen Ackroyd is Professor of Organizational Analysis at Lancaster University Management School. He is a fellow of the British Academy of Management, a founder member of the Society for Advanced Management Studies and a member of the editorial board of some of the leading British journals in the fields of management and organization. Ackroyd’s current research is concerned with the activities of the largest British companies engaged in manufacturing. Recent books include: Realist Perspectives on Management and Organisation (2000) (written and edited with Steve Fleetwood); The Organisation of Business (2002) and The New Managerialism and the Public Service Professions, Palgrave, 2004 (with Ian Kirkpatrick). Most recently he co-edited and co-authored with R. Batt and others The Oxford Handbook of Work and Organisations. This book was published by Oxford University Press in 2005. Harriet Bradley is Professor of Sociology at the University of Bristol, and is a specialist in the study of women’s employment. Her broader research interests are the sociology of gender, feminism, industrial relations and the sociology of work, along with a general interest in social divisions and inequalities. Recently her work has focused especially on issues of youth and employment. She is currently involved in a study of young ethnic minority workers in the old and new industries and a study for the Equal Opportunities Commission on work cultures and ethnic minority women. She has spent time in Norway and hopes to develop comparative work on gender and employment. Tor Claussen is Professor of Leadership, Management and Working life at Østfold University College. He is also a Head of Research, Business development at IRIS research, Stavanger. His specific fields of interest relate to organizational analysis, working life research, classic social science and philosophical issues. He has currently published an article reconsidering the basic position in critical theory and critics of positivism in The Norwegian Journal of Philosophy (3, 2006). With Kjersti Ørvig he has published a book on social dilemmas in modern society (Sosiale dilemmaer i det moderne, Unipub 2003). In addition he has written a book on classics in the working life tradition and their relevance in discussions and challenges in contemporary working life (Arbeidslivets klassikere og dagens arbeidsliv, Unipub 2001). Birgitta Eriksson is Associate Professor at the Department of Working Life Science, Karlstad University, Sweden. Her research interests include small businesses, organizations and working conditions.

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Flexible Organizations and the New Working Life

Henrietta Huzell is a Lecturer in Working Life Science and a research fellow at CTF – Service Research Centre at Karlstad University. Her teaching is mainly on organization theory and labour market issues in the European Union. Her research interests include resistance among workers, public sector restructuring and aesthetic labour. Jan Ch. Karlsson is Professor of Sociology in the Department of Working Life Science, Karlstad University, Sweden, and adjunct professor at Østfold University College, Norway. His publications are concerned with the concept of work, modern work organization, class and gender in everyday life, and critical realism and methodology in the social sciences. He is co-author of Explaining Society: An Introduction to Critical Realism in the Social Sciences (2002), Gender Segregation. Divisions of Work in Post-Industrial Welfare States (2005), and Flexibility and Stability in Working Life (2006). Philippe R. Mossé is an economist, Directeur de Recherche at the French National Centre for Scientific Research (CNRS). He has been Visiting Professor at Keio University, Tokyo, Japan and research fellow at Berkeley University. He was, until 2008, the Director of the LEST (Aix en Provence). His main research areas and topics are Health Economics, Hospital management and Labour economics. He is co-author of L’hôpital et la profession infirmière, une comparaison France Japon (Seli Arslan Publisher, 2008). Email: [email protected]. Helge Ramsdal is Professor of Political Science and Organization Theory at Østfold University College. He has held positions at the University of Bergen and as a senior researcher at Østfold Research Foundation. His research has focussed on developments in the public sector, particularly the relationship between professional work and managerial reforms in the health and social sectors. His current research is concerned with developments in mental health service provision. Recent publications include Psychic healthcare in the community. Some organisational and theoretical views (in Norwegian, 2004), Squaring the Circle: Psychic Healthcare Workers Meet Competitive Tendering (in Norwegian with Gunnar Vold Hansen, 2005), and Privatizations from Within – on the Amalgation of Public and Private Modes of Organisation (in Norwegian with Egil J. Skorstad, 2004). He is now participating in the SHP project on ‘An inclusive or excluding working life?’ financed by the Norwegian Research Council. Email: helge. [email protected]. Michael Rose is a Professorial Fellow at the University of Bath and Chair of the Board of the journal Work, Employment and Society. His doctoral research covered the history of industrial sociology in Britain, France and the US; his later work uses case-studies, oral history, participant observation, and secondary analysis of large data sets. He is a consultant to trade unions, companies, and government agencies. His current research is on the relations between skills, work orientations, and

List of Contributors

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careers. His best known books are Industrial Behaviour – Research and Control and Reworking the Work Ethic. Email: [email protected]. Egil J. Skorstad is Professor of Organizational Studies at the Østfold University College and adjunct professor at the Norwegian University of Science and Technology (NTNU). His main research include issues such as autonomy and democracy at work, technology and organization, flexibility and new patterns of organization such as lean production, flexible specialization, and so on and their impact on working conditions. His recent books include Forms of Production in the Twentieth Century (in Norwegian, 1999), Organisational Forms: Continuity or Change (in Norwegian, 2002) and Privatization from Within – on the Amalgation of Public and Private Modes of Organisation (in Norwegian with Helge Ramsdal, 2004). Most recently one of his articles on lean production is reprinted in Huw Beynon and Theo Nichols, The Fordism of Ford and Modern Management. Fordism and Post-Fordism (Edward Elgar Publishing 2006). Email: [email protected]. R. Øystein Strøm is Associate Professor of Financial Economics at Østfold University College. His main research activity is in corporate governance issues, mainly dealing with the role of the board. Recently he published the report ‘The value-creating board: Theory and evidence’ (BI research report No. 8, 2005). In the field of industrial economics he has published ‘Governance mechanisms in the liquid packaging industry’ in C. Karlsson, B. Johannson and R.R. Stough, Industrial Clusters and Inter-Firm Networks. His current interest is the effects of co-determination (employee board representation) upon firm performance, job growth, and labour productivity.

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Preface This book examines the dynamics of flexibility in organizational settings. Since the 1980s flexibility has evolved into a new orthodoxy for both private and public organizations. The idea of ‘flexible organizations’ is an inherent part of ‘the new working life’ discourse, embraced by politicians, bussiness leaders and researchers. Although the concept of flexible organizations is both ambiguous and contested, it has nevertheless become a catalyst of scientific research globally, not least in the European countries. This book is one of the results of a research project on organizational change, flexibility and working conditions in Norway. The main questions raised in the study are related to the increasing frequency and scope of changes occurring in organizational settings and the impact they may have on the employees affected. The changes studied are mainly confined to attempts at increasing organizational flexibility, both within the private as well as in the public sector. At the end of August 2005, we arranged a three-day workshop in Fredrikstad, Norway, involving invited scholars from France, Sweden and the United Kingdom to discuss questions related to the present project. Originally, the main intention of the arrangement was to glean comments on our research agenda and its design as well as creative ideas for further work; the question of a joint publication was not part of the original plan. During the workshop, however, the idea of such a product took form and was subsequently proposed and approved. The present publication, therefore, is the result of this approval. Several people have contributed to this book in addition to the authors themselves. In particular, we are deeply grateful for the qualified, constructive and committed contribution from Karen Patrick Knutsen and Frode Lundemo to our editorial endeavours in producing this book. We are also, of course, most grateful for the contributions from the authors themselves. The workshop itself turned out to be a very stimulating and pleasant experience as was the editing process that followed. All our contributors responded to our frequent questions, demands and deadlines in a friendly, fast and reliable way. Because of this the editing proved to be a unique and overwhelmingly positive experience; we are looking forward to profiting further from a very stimulating network of researchers. We are indebted to the Research Council of Norway for the funding that enabled us to experience this very positive and constructive collaboration. We are also very grateful for the positive response and support from Ashgate as well as for the constructive and helpful comments given by its two anonymous referees. Egil J. Skorstad and Helge Ramsdal Fredrikstad, August 2008

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Chapter 1

Introduction Helge Ramsdal and Egil J. Skorstad

The question of flexibility in organizational settings has become increasingly important during the last couple of decades. In particular it has been launched almost as a panacea for western producers facing growing challenges from new and highly competitive producers emerging on the industrial scene. Increased flexibility, it is said, will be conducive to the necessary pliability and dynamism of western establishments, something which is imperative in their new and turbulent environments. Those who learn the art of operating in a dynamic and flexible way may succeed; those who do not will face a gloomy future. The task before us in this particular publication is not to challenge these and similar statements about changes in the competitive environment. What we will do, however, is discuss the alleged proliferation of flexibility practices in order to master this environment and the probable impact such practices may have on working life in general and working conditions in particular. This is in itself a challenging task, not least because of the great controversy surrounding the question. The debate over the possible impacts of flexibility in this respect is still very heated and is, as Michael Rose points out later in this book, reminiscent of the earlier stages of the debate following Harry Braverman’s seminal work from 1974 on the degradation of work in the twentieth century. On the one hand there are those who understand flexibility in purely positive terms (Hammer and Champy 1995; Schonberger 1986; Voss and Clutterbuck 1989; Womack et al. 1990). Flexibility, they say, is not exclusively for the benefit of the enterprise. It is equally beneficial to the employees. To them it brings varied and challenging work, empowerment and improved employability; the changing environment is in itself conducive to the emergence of new forms of organization that are dependent on the skills and discretion of their employees. According to these advocates, the comparative advantages of traditional Taylorism or Fordism are definitively considered to be outdated. We have entered an era where changes are deemed necessary and ordinary employees are considered to be among the main beneficiaries in these processes. On the other hand there are those who argue against this position. These opponents tend to see flexibility mainly in negative terms while claiming that it will lead to more intensified work, less control and more precarious working conditions in general (Burchell et al. 2002; Quinlan et al. 2001; Sennett 1998). Such consequences, it is argued, emerge as logical results of increased competition and the changing nature of the environment in general. Increased competition, for



Flexible Organizations and the New Working Life

instance, is met by lean regimes where the quality of working time has become more important than before. Diminishing predictability in turn compels companies to let go of traditional regimes characterized by long term commitments regarding the duration and nature of work as well as its associated benefits, such as acceptable pay levels, regulated working hours, compensation insurance, protection and support of a union, pension systems, etc. In this context, it is argued, ordinary employees would be wise not to count on a life-long career with a single employer. Workers may realize that what was usually taken for granted has vanished or been transformed into an unreliable construction (Bauman 2001). Finally, there are those who reject both these standpoints while maintaining that there is nothing new as far as flexibility policies are concerned. Some of them claim that part of the working population has always been subjected to marginalization in the sense that they have had to put up with short term contracts, low pay and repetitive, routine work (Pollert 1988). Others claim that the purported massive quest for increased flexibility is a greatly exaggerated phenomenon, at least when it comes to trends regarding the use of non-standard employment, such as parttime work, temporary work, working from home or self-employment (Gallie et al. 1998; Karlsson and Eriksson 2001). The present publication is part of a research project where we have set out to examine some of the questions raised above: Is it possible to reveal particular trends regarding changes in the adoption of flexibility practices in organizational settings? Is there any evidence indicating that the question of flexibility has become more important or not, or has there been little change in this matter? And if changes have occurred; how have they affected working conditions, for better or for worse? These questions pertain to both the private and the public sectors, and are particularly portentous in times when public enterprises are expected to behave as if they were private undertakings and subjected to the logic of the market. To discuss these and similar questions related to flexibility we invited scholars from France, the United Kingdom and Sweden to Norway in August 2005 for a three-day workshop. Most of the presentations from this workshop are included in the present publication. In the following we will give a short presentation of each of them. The contradictory statements about flexibility and its alleged impact on working conditions outlined above form the point of departure for Egil J. Skorstad in Chapter 2. One important explanation of these contradictions, it is argued, might be found in the concept of flexibility itself. The main point is that the concept is conceived of in a myriad of ways, comprising almost everything that may lead to the desired quality. Flexibility may, for instance, just as easily be the result of dispositions made by autonomous employees as the result of behaviour enforced upon subordinates through administrative, technical or social control. Such different bases of flexibility may, of course, lead to contradictory consequences for those who are affected. It is therefore not surprising that there may be diverging descriptions of how working life is changing when the causes of change may be so diverse.

Introduction



The proposed solution to this problem in this particular context is outlined in the following way. First the general term of flexibility is replaced by ‘organizational flexibility’, indicating that the focus is on the pliability of the organization and not, for instance, on the range of possibilities offered to employees as to where, when and how they may work. Second, the nature of this flexibility may be affected in several ways, and the following four main dimensions are considered to be the most important ones. The first concerns ‘employment practices’; that is the use of nonstandard forms of employment such as part-time and temporary employment, hired labour from hire agencies, self-employed workers or subcontractors. The second dimension involves ‘organizational structure’, indicating that it is the division of work, the distribution of skills and authority, the nature of the technology involved, the character of communication, etc. that may have decisive impact on how the organization acts. The third dimension concerns ‘culture’; whether there is a climate characterized by opposition and resistance or by consent and commitment in the workplace. Finally, different ways of cooperation or collaboration between several individual organizations may influence the level of flexibility of each individual firm. Depending on its nature a ‘network’ may be equally beneficial to all the participants in a symmetrical way, as in the case of the ideal-typical industrial district (Best 1990), or it may mainly benefit a minority at the expense of the majority within the actual construction. In this case the nature of the network illustrates the importance of the constituting mechanisms when it comes to its impact upon the flexibility of the organization, and this is an important point to note in relation to the other three dimensions as well. The possibility of improving flexibility through employment strategies may, for instance, be heavily restricted by laws and regulations. Attempts at improving flexibility through structural arrangements may be hampered or facilitated by the qualities of the employees as well as the nature of the technology. Attempts at improving it through culture might be dependent on the level of trust produced and reproduced through experience. In a corresponding way the dimensions themselves are considered interdependent. Desired behaviour in accordance with structural provisions may, for instance, prove to be unattainable if the culture of the organization is dominated by reluctance or resistance. The level of commitment may in turn be affected by structural qualities, such as the opportunity for employee participation. Extensive use of non-standard employment may hamper the ability to reorganize at short notice. And extensive outsourcing followed by operations through asymmetrical networking may create a climate of resistance. Thus the relationship between organizational flexibility and its constituting mechanisms turns out to be very complex. Because of the interdependence of these mechanisms, attempts to change one of them in order to achieve improved flexibility may contrarily prove to have the opposite effect due to the unintended impact it may have on some of the others. The rest of the presentations in this book are organized according to the main dimensions outlined above. In Chapter 3, Michael Rose gives us a general, up to date presentation from the United Kingdom regarding non-standard employment



Flexible Organizations and the New Working Life

while asking how widespread these practices actually are in this country, and what the moral consequences of such practices might be. While noting that the heated debate referred to above is marked by a lack of empirical evidence, Rose sets out to disclose such evidence, at least when it comes to the case of the United Kingdom. The present analysis is based upon the Workplace Employment Relations Surveys of 1998 (WERS 4) and 2004 (WERS 5). These form part of a long running linked series of UK enquiries on UK management–employee relations. A preparatory work by Rose (2008) enabled a more precise empirical reference to be provided for defining associations between types of flexible employment practices and the outlook and morale of employees affected by them. The chapter adopts well-established distinctions between numerical (or ‘contractual’) flexibility, temporal flexibility, and functional flexibility. The UK Workplace Employment Relations Surveys of 1998 and 2004 (WERS 4, WERS 5) provide large sample data on the development of flexible employment practices and working procedures in Britain in the period from 1993 to 2004, covering the basics of numerical and functional flexibility in British workplaces. They are also sufficiently detailed to allow a few grounded inferences about the overall philosophy of management followed in the employing organization. The two workplace surveys were accompanied on each occasion by an employee survey providing linked data on employee subjectivity (work attitudes, sense of well-being) in the years 1998 and 2004 for two very large employee samples. In his detailed analysis Rose examines to which extent different types of flexible employment practices are adopted, and establishes a profile of temporal, numerical, and functional flexibility for UK workplaces in the early 21st Century. The analysis also shows the kind of effect flexibility practices, both individually and in consort, have on aspects of employee subjectivity relevant to workplace life. The analysis shows that virtually all UK workplaces with five or more employees now utilize at least two flexibility practices, and almost half utilize five or more. However, just as the scope of flexibility (number of practices adopted) varies greatly, so does the span (coverage in terms of employees) of application of any given practice. On the whole, flexibility in the UK emerges as probably having a lower incidence than might be thought: functional flexibility almost certainly does (Rose 2008). Whether they are regarded as modest in scale or not, nearly all distinct flexibility practices modify employee experience of the workplace employee relations climate, approval of line management, and organizational commitment. Together, these effects are clear and distinct in both WERS 4 (1998) and WERS 5 (2004). They are overwhelmingly negative; they are statistically significant, and for the most part highly so. In Chapter 4, Harriet Bradley sums up findings from several research projects dealing with the impact of ‘flexible capitalism’ on working life. Her aim is to demonstrate the different meanings and different implications of ‘flexibility’ for different groups of people. Bradley refers to the ‘flexibility’ debate over the extent and implications for working life of non-standard employment. This debate

Introduction



has especially revolved around the issue of part-time work as an indicator of the occurrence of ‘non-standard work’. Bradley argues that the fact that Britain now has the longest average working hours in Europe should be seen as another indication of the negative implications of non-standard work. Bradley illustrates how different attitudes to flexibility are represented within and between employers and managers, unions and employees. In many ways her findings, based upon in-depth interviews with representatives of these groups, reflect the ‘ambiguity of flexibility’, in the sense that all the usual arguments about the positive and negative aspects of flexibility in working life are represented within each of these groups. Among employers and managers there is universal support for the general idea of ‘flexibility’, yet on the other hand there is scepticism towards non-standard work, short-term contracts, part-time work and job-sharing in some sectors. For instance, in workplaces requiring more skilled and responsible workers, the problems of accommodation, coordination and discipline seem to leave managers sceptical towards ‘flexible manning’. Generally, Bradley et al. found that employers and managers (who do not necessarily share the same interests or views regarding for instance coordination and day-to-day work) seem to be in favour of numerical and functional flexibility, but not in favour of flexi-time. Particularly, multi-skilling is seen as a strategy for overcoming the negative implications of absenteeism, emergencies and changes in output. Among trade unions, functional flexibility and especially multi-skilling, are often regarded as a threat to custom and practice. Likewise, trade unions are generally sceptical to the erosion of the traditional work week, and protest against part-time, sub-contracted and temporary work. They often consider flexibility schemes as measures which will foster individualism and consequently undermine collectivism in industrial relations. These attitudes are, however, charged with being embedded in the traditions of male workers in manufacturing industries, and thus do not reflect the interests of young, female employees, working in the dynamic modern economy. Still, strategies of resistance against those aspects of flexible work life that are regarded to have negative effects upon working life seem to have union support in compliance with the assumed interests of employees. On the other hand, those aspects of flexibility, for example, non-standard, familyfriendly employment seem to create dissonance between unions and employees who see advantages in these arrangements. When it comes to employees, the interviews are primarily with young adults. For them, the prime meaning of ‘flexibility’ is ‘flexi-time’. For young women with small children, and for young male adults, flexi-time is generally considered as positive – some consider it a ‘godsend’ – a perfect way of adapting working life to private life. The opinions on flexi-time, according to Bradley, reflect new attitudes to work and life among young people. Here, a life-long job is not considered probable or desirable. Thus, young people seem to have adopted ‘the new rules of the game’ in flexible capitalism.



Flexible Organizations and the New Working Life

Again, Bradley’s discussion contrasts the divergence between the subjective opinions of individual employees on one hand, and the ‘objective’ data about the economic and social situation for the respondents taking part in the study on the other. Here, the respondents generally have low incomes and bad housing, and the work they are doing often does not correspond with their formal education. Bradley’s discussion invites us to see flexibility as a complex and ambiguous phenomenon, leading to divergent attitudes among the actors in working life. In particular, her discussion reflects the dilemmas of ‘subjective’ attitudes on the one hand, and the objective data about economic and social relations on the other. One possible interpretation of Bradley’s findings is that younger people tend to concur more with the rhetoric of the ‘here-and-now’ advantages of flexibility, while their long-term economic and social interests are under-communicated. In their chapter, Birgitta Eriksson and Jan Ch. Karlsson report from a study in Sweden where the issue of flexibility as ‘a new package’ in working life – differing from the old ‘all-in-one system’ of Taylorism, Fordism or bureaucracy – is addressed. The study revolves around some general statements about the new working life: that all workplaces are now flexible, and that the work environment of flexible workplaces is better for all employees than that of non-flexible environments. Well aware that these statements represent a simplification of the flexibility discourse, the authors suggest that the hypotheses tested empirically should be formulated in a more dynamic way – that there has been a development which has increased the number of flexible workplaces during the last decade. In their empirical analysis, Eriksson and Karlsson explicitly take the Atkinson model as their point of departure, and particularly the idea of a core and peripheral division between employees. Here, three types of flexibility are identified and operationalized: functional, numerical and financial flexibility. The idea of a ‘package’ of flexibility in working life enhances the developments of all these types of flexibility at the same time, and a flexible workplace according to this thesis possesses all three types of flexibility. The data were collected in 1994 and replicated in 2002, thus allowing for diachronic comparisons where the development of flexibility at workplace levels is analysed statistically. The analysis indicates that functional flexibility is the most common type. ‘Functional flexibility’ is measured in terms of the ‘firm-specific competence’ required and the occurrence of ‘on the job training’. More than 60 per cent of the workplaces studied reported this to be the case. When it comes to numerical flexibility, 70 per cent of the firms studied hired temporary workers, but only in a very limited fashion. Financial flexibility, operationalized as different wage systems for core and periphery employees, is only found in one fourth of the workplaces. The conclusions can also be stated negatively in relation to the flexibility hypothesis; the flexibility ‘package’ statement ‘does not seem to belong to the accounts of the new working life that have a sound empirical basis, and … the flexibility hypothesis does not hold’. The empirical findings thus indicate that there has not been a trend towards more ‘flexible’ workplaces.

Introduction



‘The good environment’ hypothesis loses some relevance as the main conclusion above makes it more difficult to compare ‘flexible’ and ‘non-flexible’ workplaces. However, through the elimination of financial flexibility, it becomes possible to develop an analytical approach which rests upon a model of the work environment on the one hand, and the Atkinson model of flexibility on the other. In the data, there is, however, no significant connection between the two models, indicating that there is no correlation between the quality of the work environment and the degree of ‘flexibility’ in workplaces. In other words, the analysis does not support the claim that flexible workplaces are better for employees than nonflexible. In contrast, the authors find that the ‘old’ variables of class and sex are more influential in creating good and bad work environments than the flexible and non-flexible organization of the so-called new working life. The extent of non-standard employment in Norwegian enterprises is examined by R. Øystein Strøm in Chapter 6. In his discussion, Strøm considers non-standard employment mainly in relation to regulatory regimes governing work relations, and the importance of firm-specific skills and labour shortages as measured by the rate of employment. In this context, non-standard employment is expected to be widespread when regulations are limited and the employers’ demands for firmspecific skills are low. The opposite is expected when regulations are extensive and the skills in demand are of a firm-specific kind. The rate of employment is supposed to have a tonic effect; the higher the rate of employment, the more use of non-standard employment arrangements. These hypotheses are supported by the empirical evidence presented in the chapter. Compared to countries in Western Europe, Norway scores very high on statistics regarding the rate of part-time compared to full-time employment. Temporary employment on the other hand is not widespread. The level of selfemployment is low and the use of overtime varies highly within industry, as does the utilization of part-time and temporary workers. Both practises are widespread in the public sector and in some parts of the private sector, such as the retail, hotel and restaurant industries. In these cases there is a gender effect as well; the statistics show that the share of part-time work among women is almost treble that of the corresponding share of part-time work among men. As with overtime the pattern is unmistakable; industries with a low proportion of part-time and temporary workers have a high proportion of employees working overtime, and vice versa. There is upon first examination little evidence in Strøm’s material which justifies unambiguous conclusions about particular trends towards more flexible employment practises in the Norwegian context. Part-time work among women for instance, is indeed extensive, ranking high in comparison to rates in other European countries, but this has been the case for the last decade. Because of this it might of course be argued that the lacking impetus towards increasing part-time employment is due to the high incidence of this type of employment to begin with; perhaps there is no need for more part-timers when the number already is as high as it is? Strøm argues correspondingly in discussing the practice regarding temporary



Flexible Organizations and the New Working Life

employment. The low percentage of this kind of labour in the manufacturing sector is for instance explained by the combined effects of the demand for firmspecific skills and the relatively low degree of dismissal protection in this industry. In contrast, a much stronger protection against dismissal in the public sector is used to explain the overrepresentation of temporary employees in this part of the economy. In his chapter, Helge Ramsdal examines how issues related to the flexibility discourse are addressed in the political process of the reformed Norwegian Worker Protection and Working Environment act of 1977 which was passed in Parliament in June and December 2005. The passing of the act represents the end result of a ten year consultative process, and caused political controversy on a level not usually found in the relative tranquility of Norwegian political life. At the outset, the dissension followed a right wing/‘neo-liberalist’ – left wing/‘interventionist’ division. The controversy accordingly centred on familiar issues such as the extent to which, and how, state regulation should relate to changes in international markets and new modes of work, and the way these changes are associated with the ‘inevitable globalization’ discourse. As is shown in the chapter, this is, however, a much too simple interpretation of the dilemmas facing law makers encountering the issues of globalization and flexibility. The Norwegian debate should first and foremost be viewed with the traditional, strong regimentation of labour relations in the country as a frame of reference. In accordance with the ideas of the prototypical Scandinavian welfare state there is a strong regulatory regime of worker protection. The 1977 act that was to be reformed, represents a highpoint in workers’ protection, with strict regulations concerning work hours, temporary work, hiring and firing, and psycho-social relations at workplace levels. Interestingly, the initiative to change the law in order to make it amenable to the ‘new’ challenges of ‘globalization’ and ‘flexibility’ was taken by the unions and a Labour government. In the ten-year period that followed, shifting Centrist, Centrist-Right and Labour – left governments related to the process in different ways. In terms of political science and theories of governance, two intertwined questions were addressed in the process: ‘What should the state do?’ which relates to the level of regulation, and ‘What can the state do?’ which relates to the issues of government control and implementation capabilities. During the process, the prevailing political focus gradually became more complex and ambiguous on both these questions. In contrast with the initial phase, this chapter indicates that the way these issues were addressed gradually modified the one-dimensional ‘neo-liberalist’ – ‘interventionist’ conceptualization of the debate. In general terms, there was agreement among the political parties to begin with that ‘globalization’, ‘flexibility’ and new modes of work were inherent aspects of the modern capitalist economy that had some advantages and some disadvantages for working conditions. While the right-wing political actors wanted to deregulate, the Social Democrats/leftists wanted to maintain a strong regulatory regime. Still, a ‘social policy’ argument concerning strategies aimed at

Introduction



avoiding worker exclusion from the labour market created a bridge between the opposing camps of left and right. Thus, the idea of relatively strong regulation and a predominantly optimistic approach to the governability of working life had strong support. However, during the process, the dominant ideas about what the state should do gradually shifted: the positive normative connotations of globalization and flexibility were replaced by critical connotations, and there was a belief that strong regulation of working life should be upheld. Furthermore the ‘globalization’ discourse became a limited discourse, in which the crux was nonstandard employment, particularly the (de-)regulation of temporary work. In the debate over what the state can do, the focus changed over time from an emphasis on frame laws and indirect governance – which were regarded as conducive to the advancement of globalization and flexible organizations – to the earlier, direct, detailed, regulation of the 1977 act. In December 2005 the new Labour – left government concluded this process by withdrawing the act formulated by the Centrist-Right government just six months before. However, although Norwegian working life is strongly regulated by legal means, the reorganization of public and private organizations still makes workplaces opt for flexibility, in much the same way as other western economies. These changes are obviously not easily contained by legal regulation alone. In Chapter 7, Philippe R. Mossé addresses the political and theoretical issues of flexibility based on a comparative study of Italian and French hospital organizations. The theoretical approach is embedded in the LEST tradition of ‘the societal effect theory’ originating from the influential study of Marc Maurice, François Sellier and Jean-Jacques Silvestre (1982). Mossé’s discussion is thus in line with new institutionalism, in which societal contexts and national peculiarities are taken into account in explaining the implications of organizational changes. The paper illustrates the fruitful combination of work life studies at a micro level and the political science and ‘transformation’ perspectives of organization theory in understanding the processes of change taking place in ‘flexibility’ reform strategies. The chapter reports from a three-year study of flexibility reform policies in the health sector of the two countries, showing how these policies were implemented and how they were experienced and perceived by management and employees at the hospital level. The overall reform measures in the two countries are strikingly embedded in the universal ideas of New Public Management. At some distance, these reforms seem similar to those of other European countries, including the United Kingdom and Scandinavia. Here, rationalization, contracting and flexibility in service provision are key words. The paper illuminates, however, that when these ideas are introduced, peculiarities in the history of the organization of health sector policies and present-day societal contexts transform the application of universal concepts at national and organizational levels. Within the broad concept of New Public Management hospital reform, there seem to be paradoxes and contradictions in the implementation process. Some of these are shared by the two countries in the study: On the one hand, the

10

Flexible Organizations and the New Working Life

involvement and participation of employees and professional groups were key elements in the rationalization process. On the other hand, workloads and work flexibility increased. Here, neo-Taylorist administrative techniques concerning quality assurance processes and control measures were important. The main objective of the study was to explain the way tensions in this area were addressed at the workplace level, comparing six hospitals which were equally distributed between the two countries. In our context, the findings relating to ‘flexibility’ issues are particularly interesting. Leaving the common features of work intensification and control referred to above aside here, the findings in the two countries differ significantly. The findings indicate that when employee participation and training takes place, professionals embrace functional flexibility as a means of achieving rationalization and increased productivity. The study shows how in the French hospitals, nurses undertook ever more bureaucratic and clerical work, leaving patient care to assistant nurses, while in Italian hospitals (and in the private French one) assistant nurses gained more training enabling them to undertake new tasks imposed by the new ‘flexibility’ regime. This reduced the number of short-term contracts and at the same time extended the tasks of the assistant nurses so that bureaucratic work was not exclusively a nurse responsibility. Thus, in accordance with the new institutionalism approach, the historical traditions of nurses’ (and assistant nurses’) education and task distribution in the two countries are regarded as primary explanations for the different outcomes of functional flexibility strategies. One paradox of reform strategies is that while professional practices are becoming increasingly complex and interconnected in networks with other societal actors within the health sector field, the formal institutions of conflict resolution have been inherited from the time when hospitals were ‘closed institutions’. In effect, as these institutions diverge between Italy and France, so does the accordance between strategies for flexibility at the hospital level and the degree of employee influence and autonomy in the implementation process of hospital reforms. The empirical findings indicate that in spite of the universality and complexity of reforms, there still seems to be a path dependency that can be identified in the strategies for flexibility, and that there is a ‘real consistency’ in each country between flexibility strategies, industrial relations and the impacts upon working conditions at the workplace level. In Chapter 8, Henrietta Huzell discusses organizational culture and the potential impact it may have on flexibility. She illustrates this by summarizing some of the main findings from a study of attempts at reorganizing parts of the Swedish Railway System, the Swedish National Track Authorities. In this case the reorganization has followed the dominant logic pervading western organizational life in general during the last couple of decades: the overriding belief in market mechanisms as the optimal way of regulating organizational behaviour. Based on a large number of in-depth interviews, Huzell shows how management and ordinary employees differ in their views about both the proclaimed necessity as well as the potential consequences of these changes. Managements subscribe to the logic

Introduction

11

indicated above; that growing competition and customer demands make change imperative, and that change must bring about a full-fledged, flexible, customeroriented organization that can replace the traditional one which is characterized as bureaucratic, rigid, alienating and unable to satisfy contemporary demands because of employees’ lack of skills and qualifications. This transformation is to be accomplished through the implementation of networks and process-oriented, flexible teams operating and staffed in accordance with emerging demands, supported by information and knowledge transmitted through networks based on ICT. Furthermore, individual attitudes, skills and qualities in general have to be changed. Employees operating in the original context were considered by management to be too passive, too rigid, too dependant and too united in their approach towards work. What is needed in the new structure is referred to as ‘the responsible co-worker’ who is independent, empowered, flexible, proactive, business-minded and skilful enough to meet the demands of the customer. The employees, on the other hand, disagree with both the diagnosis and the remedies recommended by their superiors. In their opinion, the management’s arguments for change are fictitious; the real motives behind their proposals are deemed to be familiar and traditional; further rationalization through downsizing and more efficient deployment of manpower according to current operational demands. They are also worried about the consequences regarding working conditions, social support and railway safety in general. Questions related to safety, for instance, used to be a collective responsibility, taught, discussed and shared among colleagues in a stable arrangement where peers might support each other when necessary. This has changed in dramatic ways, mainly because of the high turn-over of team-members which has had negative effects on the time and stability workers need to become sufficiently familiar with their co-workers in a professional sense. As a result, the management’s initiatives have been met with scepticism and resistance, and the irony of it all is that the strategy chosen by management to attain improved flexibility has proved to have the opposite effect. Employees are not willing to comply with the logic of the new solutions; they consider the changes not only to be detrimental to working conditions, but to the reproduction and distribution of skills, to safety and to services to the general public. Consequently they find it legitimate to reject the management’s demands for a docile and pliable workforce. Stephen Ackroyd widens the perspective in Chapter 9 in the sense that he focuses on what he refers to as ‘flexible economic systems’. Discussions about organizational flexibility should not be confined to considerations about mechanisms at one particular level, be it group, organization or the societal level in general. Flexibility at different levels interrelates in complex ways. In his chapter, Ackroyd addresses issues related to the reorganization of manufacturing and the emergence of a flexible economy in the UK. In particular, his contribution points to the issue of organizational levels in the analysis of flexibility: that development at plant level and ownership level needs to be analysed as different aspects of flexible economic

12

Flexible Organizations and the New Working Life

systems. The flexibility of the British manufacturing sector as it has now emerged has two dimensions, he claims. One is the new form of organization at plant level, which involves the use of relatively unskilled labour in self-organizing teams or ‘cells’. Each cell can itself be re-organized to produce a variety of closely related products. In addition, the costs of the operation can be calculated in detail and consequently the economic viability of the operation can be accurately calculated at any time. The ability to shut down or open up production capacity is also possible at rather short notice. Also, the traditional hold of the trade unions over some aspects of the labour supply and deployment has been undermined during this development. The traditional way of training and recruiting skilled labour is no longer utilized. The traditional demarcations between different types of skilled worker have disappeared, as have the preferential rates of pay and conditions for such employees. In their place we have workgroups which share tasks and skills in production. The skills required to perform well in self-organized cells, may be considerable, but they are not certified and are not transferable from job to job and do not command premium wages. At the same time disciplinary pressure is applied to such jobs by the ever-present threat that the employment itself may be terminated if work-performance does not meet expectations. Ackroyd then turns to a discussion of the second dimension of flexibility in manufacturing – the acquisition of considerable structural flexibility at the level of business group. This involves the willingness of strategic managers to adjust the size and composition of the whole construction by buying and selling businesses, finding cheaper sources by outsourcing supplies, or offshoring services and adjusting the size of the domestic workforce to match. Many, if not most British manufacturing firms today are owned and controlled by large business groups, and these have business goals and objectives of their own. He maintains that such firms are intent on the development of quite long-term trading relationships based on contracting which is the main mode of regulation between parties within supply chains. But such contracts suspend market relations for their duration and are often not equally beneficial to all parties. Thus, despite the rhetorical appeal of the importance of market relationships and the emphasis on the importance of competition which pervades public discourse today, in some obvious ways market relations are receding in favour of medium term relationships based on asymmetrical contracts. Hence what is in evidence is not a movement from hierarchy to market so much as the emergence of characteristic new forms of governance in which large firms extend their influence over wide areas of economic activity. The relationships between flexibility, globalization and work life underpin the discussion presented in most of the chapters in this book. In his chapter, Tor Claussen discusses these relationships explicitly with reference to the political and scientific debate. In particular, he refers to the ‘great transformation’ of globalization processes, and how the relationship between globalization and flexibility has been an important aspect in the debates over new trends in working life. First, the interconnection between ‘globalization’ and ‘flexibility’ is particularly important in neo-liberalist theories of economic development. Here, the argument goes that

Introduction

13

low-cost counties in the Third World have a competitive advantage due to the high extent of numerical flexibility, while on the other hand, high-cost countries in the Western world need to deregulate and increase organizational flexibility in order to improve competitiveness when the movement of capital is regarded as almost unrestricted. Globalization, it is claimed, will therefore be a driving force behind flexibilization in both low-cost and high-cost countries. These arguments are opposed in the chapter on the grounds that there is a need for basic collaborative structures in order to maintain social security and economic growth in the Western world where the complexity of specialized education and skills must be taken into consideration. Claussen outlines the competitive advantages of collaborative structures, using the competitiveness of the Nordic Model as an example. Here, the neoliberalist arguments are modified in several ways; the Nordic Model seems to support a highly competitive business environment. This argument also seems to be confirmed in analyses of EU assessments on economic development. Thus, Claussen maintains that neo-liberal deregulation, individualization, empowerment and the downgrading of collaborative structures are not justifiable as necessary moves in order to meet global competition. These strategies are therefore not the essence of flexibilitation. This argument is also in line with theories on human rationality, and it exposes the faulty presuppositions on which neo-liberalist arguments are based, he claims. Consequently, flexibility is not necessarily a matter of deregulation and downgrading as much as ‘changing some of the existing regulations and structures in order to facilitate the evolvement of new collaborative arrangements and arenas’. In the final chapter, Egil J. Skorstad synthesises some of the arguments and empirical findings in the preceding chapters in relation to the analytical approaches presented in Chapter 2. This is, of course, not an easy task given the differences in theoretical and methodological approaches and the contextual complexity of the phenomenon studied. However, taken together the chapters illustrate some of the main points of the discussion in Chapter 2. There are several roads that can lead to improved organizational flexibility; ingenious employment arrangements comprise only one such route. The findings as well as the discussion also illustrate that there are very complex mechanisms involved, occasionally leading to unexpected outcomes. Organizational flexibility may appear to be a straightforward and easily attainable goal at first glance, but prove to be very difficult to achieve in reality. Relying exclusively on employment strategies to improve the rearrangement capacity of an organization may thus be a futile strategy indeed. The model presented in Chapter 2 may therefore be instructive in the sense that it may give a better understanding of what organizational flexibility is all about. ***** The contributions, as they are presented above, indicate that ‘flexibility’ as a scientific concept is highly fascinating, attracting a wide array of political actors and researchers as well. The popularity of the concept does not, however, seem

14

Flexible Organizations and the New Working Life

to reflect its lack of clarity, and accordingly there is a danger that the concept will be less useful for analytical purposes – ‘if flexibility is everything, maybe it’s nothing’ – like so many other concepts that are popularly embraced in politics and science. As several of the contributors argue, the ambiguity of flexibility not only applies to the different normative views about whether flexibility is good or bad, but it also broaches the question of the validity of scientific approaches as well. These approaches reflect some of the general challenges to social science and organization theory: the scope and levels of analysis, instrumentalist and institutionalist approaches, and disagreements over flexibility’s significance and extent and its consequences for employees, employers and the economy at large. By pointing to empirical findings, the question of the validity of an analytical approach is broached: Firstly, to what extent is it possible to measure the developments of flexible workplace organizations statistically, through surveys? Here, the operationalization of ‘flexibility’, and the status given to the Atkinson model need discussion. Secondly, it seems as if case studies tend to emphasize the dynamics of organizational change, and the quest for flexibility at managerial and workplace levels, while national surveys seem to conclude that the development of a ‘flexible working life’ at the societal level is modest. It seems that there is a need to bridge these approaches, in order to substantiate which developments are actually taking place in working life, and which developments are merely rhetorical or symbolic. The ‘flexible firm’ discourse that followed in the wake of Atkinson’s 1984 article illustrates the need for a more comprehensive approach to flexibility in organizations. In this book we have based the discussion upon a model in which different aspects of flexibility are seen as interconnected, and where the lack of flexibility in one dimension might be compensated for, or even become a prerequisite for, flexibility in another. This makes it possible to go further than a discussion where flexibility is limited to pertain only to ‘non-standard’ manning strategies. Furthermore, it also helps to avoid the pitfalls of considering specific organizational forms – the bureaucratic archetype in particular – as ‘non-flexible’, while others – like adhocracy and team-work organizations – are regarded as ‘flexible’ organizational forms per se. The model introduced in Chapter 2 reflects a pragmatic view on the relationship between flexibility and organizational forms. The implications for working life should be subjected to empirical studies, and will be further elaborated in the continuing project that gave rise to these papers. References Atkinson, J. (1984), ‘Manpower strategies for flexible organizations’, Personnel Management, August. Bauman, Z. (2001), Community. Seeking Safety in an Insecure World (Cambridge: Polity Press/Oxford: Blackwell Publishers).

Introduction

15

Best, M. (1990), The New Competition. Institutions of Industrial Restructuring (Cambridge: Polity Press). Braverman, H. (1974), Labor and Monopoly Capital. The Degradation of Work in the Twentieth Century (New York/London: Monthly Review Press). Brusco, S. (1990), ‘The idea of the Industrial District: Its genesis’, in F. Pyke, G. Becattini and W. Sengenberger (eds) Industrial Districts and Inter-firm Co-operation in Italy (Genève: ILO publications). Burchell, B., Lapido, D. and Wilkinson, F. (eds) (2002), Job Insecurity and Work Intensification. (London/New York: Routledge). Gallie, D., White, M., Cheng, Y. and Tomlinson, M. (1998), Restructuring the Employment Relationship (Oxford: Clarendon Press). Hammer, M. and Champy, J. (1995), Reengineering the Corporation. A Manifesto for Business Revolution (London: Nicholas Brealy). Karlsson, J. Ch. and Eriksson, B. (2001), Fleksibla arbetsplatser och arbetsvillkor. En empirisk prövning av en retorisk figur (Lund: Arkiv). Maurice, M., Sellier, F. and Silvestre, J.J. (1982), Politique d’education et organisation industrielle en France et en Allemagne. Essai ������������������������� d’analyse sociétale (Paris: Presses Universitaires de France). Pollert, A. (1988), ‘Dismantling Flexibility’, Capital and Class 34, 42–75. Quinlan, M., Mayhew, C. and Bohle, P. (2001), ‘The Global Expansion of Precarious Employment, Work Disorganization and Consequences for Occupational Health: A Review of Recent Research’, International Journal of Health Services 31:2. Rose, M. (2008), ‘Functional flexibility in Britain. Full-strength, lite, slight, or token?’, Department of Social and Policy Sciences, University of Bath, Working Paper: . Schonberger, R. (1986), World Class Manufacturing. The Lessons of Simplicity Applied (New York: The Free Press). Sennett, R. (1999), Det fl������������������������������������������������� ��������������������������������������������������� eksible menneske. Eller arbejdets forvandling og personlighedens nedsmeltning (��������������������� Højbjerg: Hovedland). Voss, C. and Clutterbuck, D. (1989), Just-in-Time. A Global Status Report (Berlin: IFS Publications/Springer-Verlag). Womack, J.P., Jones, D.T. and Roos, D. (1990), The Machine that Changed the World (New York: Rawson Ass.).

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Chapter 2

The Ambiguity of Flexibility Egil J. Skorstad

Introduction During the last decades a great number of reports from research, newspapers and the media in general have left the public with the impression that working life is changing in profound ways. Indeed, the cases of change reported are so numerous that it has become common to speak of ‘the new working life’. The stories related are quite often success stories; new solutions have gotten rid of old problems and created new opportunities; rigid and self-centred organizations have turned into flexible, customer oriented systems; great losses have been turned into profit. Less often, changes are reported in a critical way, describing problems related to downsizing and changes in working conditions in general; more demanding work, increased intensification, diminishing predictability and a growing number of burnout cases among employees. In spite of this, change is most often considered both inevitable and imperative. Traditional solutions are no longer considered adequate, rather quite the opposite, they are most often considered unsuitable in coping with new conditions. In the particular case of Norway the importance of this interpretation even reached the level of the Conservative government in 2004, having as one of its most visible consequences the establishment of a new Ministry of Modernization. A great many commentators also seem to know why change proliferates. It is the process of globalization, it is claimed, which compels companies to abandon old regimes and take on new ones. Increased globalization has raised competition to a new, inexorable level; product markets have reached their point of saturation, customer demand is no longer fixed and predictable; it has become both transient and unpredictable. In such environments, the argument goes, companies can no longer cling to what they have always done, continuing to produce and offer the products they once were constructed to manufacture. To survive, they have to change in profound ways in order to deliver what the customers really want, not what they are supposed to want. This is one of the main reasons why efficient organizations to an increasing degree are being associated with flexibility. According to the above logic, modern producers have no choice other than to be flexible. When the needs of the customers

 Not surprisingly, this gave some scholars the opportunity to poke fun at the government’s ignorance regarding the meaning of the concept modern.

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Flexible Organizations and the New Working Life

and the environment in general are changing at an ever faster rate, the success or failure of companies depends on their ability to change as well. Those who learn the art of reorganizing themselves, quickly and efficiently, will be successful; those who are unable to carry out such manoeuvres are in deep trouble. While the latter may be efficient in doing what they have always done, the former are efficient in operating in new and unprecedented ways. In short, flexible firms are purported to be successful not only in terms of being effective, they are also successful in an efficient way, delivering exactly what is demanded. Flexibility, then, is increasingly being considered to be a key to success. Furthermore, it is not merely seen as an economic advantage that exclusively benefits the company. A great number of observers also consider it to be a contribution to the improvement of the quality of working life, especially among the rank and file. Flexible organizations, it is argued, are dependent upon skilled employees, and highly developed skills are usually considered an asset. Furthermore, flexibility is associated with redeployment, and redeployment means of course varied work. Finally, flexibility relies on the discretion of the employees actually doing the work, thus opening for some autonomy. In sum we are quite often offered the picture of the empowered worker whose importance, power and independence have been restored because of the need for a multifunctional, highly skilled local decision-maker who can change his course of action in a quick and efficient way. And the irony of it all, it has been noted, is that this is not a transformation that has emerged as a consequence of numerous attempts made by ideologically wellfounded or well-intentioned researchers or managers to improve the conditions of working life. The resurrection of the skilled and autonomous worker is seen as a transformation enforced upon management by the idiosyncrasies of the market. Fortunately, then, the blessings of the market are not confined to the realm of economics, but work in favour of labour as well. There are, however, some problems connected to these contentions, and several of them are related to the concept of flexibility. At first sight the concept itself gives the impression of something positive, quite in line with the statements referred to above. On a closer inspection, however, the picture becomes more complex, disclosing the ambiguity of the notion, and demonstrating not only its positive qualities but its negative qualities as well. Is, for instance, flexibility simply a matter of having the possibility to operate according to one’s free will, or is it a product of asymmetrical power relations and inexorable constraint? And why are some organizations obviously more flexible than others? Is it because they have developed some salient qualities during a long period of time, or is it because they have sufficient resources to buy themselves out of the problems? Moreover, what consequences does flexibility really have on working conditions? Does it make work more challenging, exciting and safe, or does it make it more fragmented, less challenging, more mind-numbing and more unsafe? Does it lead to the possibility  This is, for instance, an argument put forward by Charles Sabel in Work and Politics (1982).

The Ambiguity of Flexibility

19

of more autonomy or does it mean less freedom and more constraint? Does it lead to genuine commitment or does it feed the instrumental and calculating behaviour of the employees? The answer to these latter questions is of course in some ways dependent on the answer to the first ones; whether flexibility is a matter of having the possibility of deploying one’s free will, or rather that it is the effect of powerless employees being subjected to the authority of management? I will start here, by discussing in general what flexibility might involve. The ambiguity of flexibility Discussions concerning the relation between flexibility and efficiency in general and flexibility and working life in particular are not new. We may retrace the subject, for instance, in the traditional criticism of the ideal typical bureaucratic organization where one of the main deficiencies is claimed to be its inability to learn and to change; bureaucracy and rigidity are usually considered to be two sides of the same matter. Certainly, a bureaucratic organization may be considered to be efficient, but only as long as its environment behaves in a stable and predictable way. As soon as it becomes unstable, the bureaucratic organization runs into trouble. This contingency is also one of the main points in the classic study by Tom Burns and Gary Stalker (1961) where they claim that organic organizations usually are better off in turbulent settings. They are the most efficient, Burns and Stalker argue, precisely because they are able to operate in flexible ways. The solutions of organic organizations, then, appear as the antithesis to bureaucracy, primarily because they are characterized by the ability to re-deploy their employees, their information structure and their lines of authority on short notice, depending on the actual demand or work at hand. As part of the contingency tradition they demonstrate the rather widely held contention that the optimal way of organizing work depends on the surroundings of the organization. Consequently, organic solutions are not always superior; mechanistic solutions are considered to be preferable when the operations take place in familiar and predictable settings. In recent years, however, the question of flexibility has gained additional importance, especially because of changing business cycles in general and increasing competition from low-cost countries in particular. Recent recession tendencies have demonstrated the fragility of western producers; one of their strategies of survival has in some cases been to discard traditional regimes of fixed and life-long employment in favour of looser, more short-term arrangements, thus giving room for closer adjustments of costs to incomes. Moreover, increased internationalization has been conducive to the saturation of the market, rendering it difficult to compete in terms of business as usual. Organizational survival in such settings, it is argued, is becoming increasingly dependent on a company’s ability to adjust production according to demand, or having the power to work the market so thoroughly that demand is adjusted to comply with production. Both strategies require the ability to respond quickly, both regarding space and time.

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As a consequence of the developments mentioned above, some observers also claim that they can predict the emergence of a new kind of business in our part of the world. When producers in high-cost countries are challenged by their counterparts in low-cost countries, the former easily run into trouble, mostly because of their comparative labour-cost disadvantage. Their solution, it is argued, should be to turn to something new, and quite often this is referred to as the ‘knowledge industry’, that is business with a workforce dominated by highly skilled employees. In turn, it is added, such qualifications might be conducive to considerable changes in employment relations in the case of the individual firm. The qualifications are of a general kind, their possessors may in principle be employed anywhere, consequently they appear to be more attractive, more independent, more powerful and less vulnerable than their unskilled colleagues in traditional industry. Management, it is argued, cannot discipline these employees in traditional ways by relying on close supervision and direct control. To gain commitment they have to resort to systems of reward instead of punishment or to develop a company culture where employees are sufficiently socialized to be led by the inner conviction and self-interest that are considered optimal from the organizational point of view. These examples illustrate the ambiguity of flexibility. In some cases it is confined to the question of adjusting demands and capacity in a quantitative sense. In other cases, qualitative aspects are imperative, as in the cases where there is a pressing need to produce something new, voluntarily or under severe constraint. In short, as indicated above, the concept of flexibility is used in a notoriously ambiguous way, involving aspects such as organizational flexibility, production flexibility, labour flexibility, technological flexibility, financial flexibility, wage flexibility, marketing flexibility, and so on. No wonder, then, that the corresponding debate is very confusing. What’s more, confusion often increases further still because flexibility is often debated from a dual position, either from an individual or an organizational point of view. The resulting confusion of this attempt to embrace or grasp totally different phenomena in one single notion may of course lead to the conclusion that the concept is too general to explain anything at all. On the other hand, much descriptive and explanatory power or diversity would be lost if we abandoned the concept altogether. One way of dealing with this dilemma could be to choose a pathway in between, as I shall do in the following discussion. Instead of applying the general concept I will deconstruct it and use it in a more differentiated and distinct form. By making these distinctions I am aiming at structuring the discussion in a manageable and hopefully meaningful way. The consequence of such an approach is that the traditional notion of flexibility may very well entail contradictions without damaging the notion itself. Furthermore, it means that different kinds of  The problem connected to the use of the general concept is illustrated in an article by Anna Pollert (1988) where she starts out criticizing its malleability, then goes on to reject most of the existing studies while employing the very same concept herself.

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flexibility may be interrelated, either in a fortifying or an impairing way. Finally, different kinds of flexibility may be considered as belonging to different levels of analysis, meaning that a single or several kinds of flexibility may be part of the constituting mechanisms leading to other kinds of flexibility. I will give some examples of this later. My discussion in this chapter, then, is based on the following: The main issue to be handled is the question of organizational flexibility, or to put it briefly: What does it mean and in what way might it be influenced? My preliminary answer to these two questions is as follows: By organizational flexibility I understand an organizational ability to respond to variations and unexpected occurrences in a pliable and adaptable way. This ability may be thought of as varying from well developed at one end of the spectrum to nearly non-existent at the other. The nature of this flexibility may be influenced in several ways, among which I will concentrate upon those which appear most important and relevant: (1) employment practices, (2) organizational structure, (3) organizational culture, and (4) interorganizational relations. All these issues are considered to have some impact on organizational flexibility in one way or another. Each is in turn conditioned by other features of work in a particular way. For instance, the possibilities managers have of choosing among alternative practices of employment (1) will depend on the level of unemployment, employment regulation and the strength of the unions in relation to managerial prerogatives. The distinctiveness of a company culture (3) is affected by its history regarding employment relations, the experience of the workforce and the nature of work. The structure of an organization (2) may be altered by changing job demarcations, remuneration systems, ways of communication, relations of authority, and so on. Inter-organizational relations (4) are dependent on the content of relations as well as their form. In sum, all these relations form a hierarchy of means and ends constituting some elements of the mechanisms leading to the phenomenon to be studied. Additionally, there are interrelations between the seemingly independent conditions referred to above. Employment practices may, for instance, affect the culture of an organization as well as its structure. The culture, in turn, is not only affected by alternative modes of employment, but also by structural qualities as well as networking practices with other firms. Moreover, different structures may give room for alternative strategies both concerning inter-organizational and manning practices. Finally, business strategies focusing on obtaining flexibility through networking may of course have an impact on the structural qualities of each participating firm. In sum this adds up to a complex web of interrelations which disturbs the often over-simplified picture offered of the relation between the flexibility of the organization and each of its constituent elements. I will return to some further examples of this complexity at the end of this chapter. First I will concentrate on each of the main elements and their potential importance for organizational flexibility.  Based on both academic and management literature.

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Flexibility and employment practices Using employment strategies to achieve increased flexibility is a policy that was primarily supported by John Atkinson in his work from the mid-1980s and this may be an appropriate opportunity to recollect his main arguments and proposals for a new practise. Atkinson takes on a prescriptive role in that he advises business and industry on how to cope with future challenges. This advice is a logical consequence of his interpretation of contemporary society, and he pinpoints the following features as especially critical for the future of business in general. Firstly, Atkinson says, we live in a time (the 1980s) characterized by economic recession, compelling companies to lay-off and reduce their number of employees in order to cut costs. Secondly, he continues, the economic future of business is gloomy. There is no immediate improvement in sight, something that makes most companies reluctant to extend their workforce by employing new people in permanent full-time employment positions. Thirdly, technological change is taking place faster than ever before; what may be considered modern and efficient today may very well be regarded as both inefficient and obsolete tomorrow. Under such circumstances, Atkinson says, companies might also find themselves facing an additional problem since they may have a workforce that has qualifications which are only relevant for yesterday’s solutions. Finally, the length of the normal workday has been shortened in our part of the world, mainly because of economic growth and the efforts of trade unions. Permanent employees may of course find this development satisfying, but to the companies it just means another cost related problem, and a serious one as well, especially in times where various forms of production are gradually being transformed into technology intensive systems. Expensive equipment and machinery are not being used to their full potential, and this worsens the general picture when it comes to the total costs of production. In this way Atkinson constructs a reality that above all is characterized by uncertainty and unpredictability. The only thing that is certain is that costs will remain critical and that technology will change. Otherwise, the future appears to be unreliable, and this leads to the seemingly obvious and unavoidable conclusion: When future circumstances are unpredictable, firms have to avoid anything that may curtail their course of action. Their autonomy should be as great as possible, leaving them with the possibility to manipulate input variables freely in order to reach the optimal combination from an economic point of view. This is an accurate reflection of Atkinson’s argument. His advice is to cope with uncertainty by changing the rules of employment. Accordingly, traditional forms of life-long permanent employment ought to be replaced by a system that allows companies to adjust their manpower in an efficient way to the actual number needed. Consequently, some part of the workforce ought to be interchangeable in the sense that they may be easily hired and fired according to the companies’ needs. This gives companies what Atkinson refers to as numerical flexibility, that  This applies to work such as Atkinson (1984) and Atkinson (1986).

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is, an ability to match the relationship between customer demand, manufacturing capacity and manpower needed efficiently from a purely quantitative perspective. This quantitative adaptability, however, is not enough. (Post)modern companies also have to be able to adapt quickly in the functional sense of the concept, especially when demands change in a qualitative way. This is, for instance, the case when customers demand something new, either because of changing fashions or because technological innovations make it possible to raise product qualities to higher and more attractive levels. To handle such changes, companies must have the ability to reorganize themselves on short notice, and such reorganization, in turn, presupposes a workforce that is multifunctional, that is, which has sufficient skills to perform the variety of tasks in question. Quite often, these skills comprise a component specific to the company, consequently they can not be readily boughtin. Firms in general, then, have a need to establish and keep a core of employees of their own who have the necessary skills, sufficient experience and the appropriate behaviour to be able and willing to be redeployed easily according to management demands. The ultimate consequence, Atkinson argues, is that the flexible firm should abandon the principle of organizing work according to an orthodox hierarchical structure. Instead, the new structure ought to … involve the break-up of the labour force into increasingly peripheral, and therefore numerically flexible groups of workers, clustered about a numerically stable core group which will conduct the organization’s key, firm-specific activities. At the core, the emphasis is on functional flexibility; shifting to the periphery, numerical flexibility becomes more important. As the market grows, the periphery expands to take up slack; as growth slows, the periphery contracts. At the core, only tasks and responsibility change; the workers here are insulated from medium term fluctuations of the market, whereas those in the periphery are more exposed to them (Atkinson 1984, 29).

In this way the core is made up of workers who have high, firm-specific skills, and undertake varied and challenging tasks while enjoying a high level of job security. The periphery includes several groups. The first one is made up of full-time employees who carry out mind-numbing jobs, involving few learning possibilities, little autonomy and few opportunities to advance in a company career. The second peripheral group also belongs to the company’s regular employees, although not on a full-time or regular basis. They are typically part-timers, workers on some sort of contract, and so on. Finally, there is the possibility of hiring workers from job recruitment agencies, hire agencies or using self-employed workers and subcontractors. This is labour that can be hired to do both specialized as well as mundane jobs, thus it may contribute to company flexibility in a functional as well as a numerical way. In sum, then, this manning strategy may increase the company’s capacity to change. However, to be really successful at this, Atkinson says, companies also need to be flexible financially; that is having the ability to adjust wage levels according to the profitability of the company and the behaviour of the employees.

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For instance, he claims that there should be substantial wage differences between skilled and unskilled workers. Low pay for the latter would strengthen the negative effect of dead-end jobs, thus contributing to the desired level of turnover of personnel. In a similar way, pay levels should be attached to individual performance. Those who perform well should be well rewarded while those who contribute below expectations should be sanctioned through lower wages. In this way, the argument goes, both functional and numerical flexibility are sustained. If high skills, commitment, cooperation and creativity are well rewarded, it will serve to encourage those having these qualities while discouraging those who demonstrate the opposite. Eventually, and as a consequence of this differentiation, the number of desirable employees will increase while that of the undesirable will decrease as they will seek employment elsewhere because of what they may consider as unfair or preposterous treatment. In using such arguments, John Atkinson acts as a spokesman for a wage system based on individual performance rather than qualifications, seniority and position. In his opinion, it should pay off to act in accordance with what the management wants; being willing to adapt, making an extra effort, taking on a heavier workload or working at less popular times such as evenings, nights, weekends or holidays. And while managers usually are seen to be in a superior position that makes them the best judges of local needs, final pay should be determined locally, by management at the level of the individual firm. Consequently, the collective negotiation of wages accomplished at industry or branch level does not fit neatly into this system as it is considered a roadblock to optimal flexibility. In this way, then, if Atkinson’s recommendations were to be realized, the workforce of the flexible firm would prove itself to be a fragmented phenomenon, particularly regarding working conditions, employment relations and wages. Roughly speaking, employees would be polarized; some of them would be included in the privileged group, enjoying the benefits of permanent and fulltime employment, running few risks regarding the danger of being unemployed, receiving high wages and carrying out challenging and varied work. Others would end up in the more marginalized group where work is routine, wages low and the risk of being laid off relatively high. The rough picture drawn above is not, however, anything new. Nearly ten years before Atkinson made his recommendations scholars such as Andrew Friedman (1977) maintained that working life has always been characterized by polarization as long as capitalism has existed. At least this has been the case in Great Britain, Friedman says, where workers have been divided into a core and a periphery. The former has included workers who are wanted by management because of their high and attractive skills. The latter has included the unskilled workers, those who are disposable and interchangeable because of the simplicity of the tasks they perform. At the firm level, Friedman says, a corresponding duality may be found comparable with the dualism Atkinson is recommending. The core group workers are essential for the company’s competitiveness, exactly because of their qualifications, which are both company-specific as well as tacit. In spite of this,

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Friedman argues, these workers do not escape from management endeavours to control them in order to fully enjoy their knowledge and effort. However, because of their importance they are not likely to be controlled in a Tayloristic way but rather enjoy some autonomy in work as well as other privileges that may foster their loyalty and commitment to the company. Friedman speaks of this way of managing as ‘responsible autonomy’, a strategy that bears some resemblance to Flanders’ argument some years earlier when he expressed his concern about the impairment of management control in the following way: ‘We have to regain control by sharing it’ (Flanders 1970). The other group, however, which Friedman (1976) refers to as the periphery group, might be treated in quite a different way. This group comprises unskilled or semiskilled workers carrying out highly fragmented and consequently routine work. Because of the simplicity of this work, there is no need for general or company-specific qualifications in advance; the necessary skills in question might easily be acquired at the site of work. These workers, then, are disposable or interchangeable, they are easily replaced if necessary and there is no risk at stake on the part of the company in firing them or letting them go. Consequently, they might be controlled in a direct, and if necessary harsh, arbitrary and unfair way. If they choose to leave because of such treatment, their exit seldom leads to problems of any kind since they can easily be replaced. Andrew Friedman’s work has most often been associated with discussions of the application of different managerial strategies used to control workers, depending on the importance of their contribution to the process of production. One of the reasons for this differentiated treatment is connected with the question of flexibility. Modern enterprises, Friedman says, are becoming increasingly inflexible, partly because of the separation of execution from conception, and partly from the increasing power of organized workers who may disrupt production if they judge their working conditions as unacceptable. To cope with this problem, modern management has chosen to employ different strategies for controlling different groups of workers, or as Friedman puts it, ‘Splitting workers into various groups and applying different types of managerial strategies towards those groups represents a major method whereby flexibility is gained and the capitalist mode of production itself maintained’ (1997, 108). These strategies, then, are as we have seen mainly of the following two kinds: Responsible Autonomy is used to obtain loyalty and commitment from those who are considered by management to be of importance to performance, either because of their skills, their contribution to the exercise of managerial authority or their potential to mobilize concerted collective resistance towards unpopular management decisions. Direct Control, on the other hand, is employed towards peripheral workers; that is non- or semi-skilled workers lacking sufficient social ties to create a climate of solidarity embracing all their fellow workers at the bottom of the hierarchy. Consequently, applying Atkinson’s notions, numerical flexibility may be obtained through peripheral groups, while functional flexibility may be obtained   Quoted in Thompson (1989).

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through core groups. Andrew Friedman does not use the notions of flexibility referred to above, but he is certainly discussing the relation between different kinds of flexibility and different kinds of employees in the same way as Atkinson does. Flexibility and organizational solutions Flexibility is not, however, as initially indicated, confined to the question of practices of employment. It is also dependent upon the organization of work in a more general and encompassing way. One of the very reasons why flexibility became such an important issue at the end of the twentieth century was indeed the contention that the dominant ways of organizing work had proved themselves to be obsolete. Modern organizations were generally equated with Taylorism, and Taylorism, the argument went, had become too rigid, too slow, too inflexible to cope with an increasingly turbulent world. That is the main message conveyed by consultants and commentators in general. Even scholars such as John Atkinson (1984), Andrew Friedman (1977), Richard Edwards (1976), Michael Piore and Charles Sabel (1984) and Womack and colleagues (1990) subscribe to the contention. Their explanations of the rigidity are, however, somewhat different. For instance, Richard Edwards sees rigidity as a consequence of the growing size of most enterprises. Andrew Friedman explains it as a combined effect of the division of conception from execution and an increasing resistance towards change. Michael Piore and Charles Sabel simply state that producers of the Western World have to become more flexible to survive. If not, they will be out-competed by emerging competitors operating in regions where they benefit from comparative advantages such as low costs and few and trifling regulations. Finally, Womack and his colleagues claim that the rigidity of contemporary organizations stems from product-specific technology and deskilled workers. The obvious solution for them, then, is the construction of a new organization manned with skilled workers using multifunctional technology (preferably organized in a lean way). Size, technology, skill and flexibility Along with Richard Edwards (1976) I would certainly agree with the contention that organizational size does matter. At first sight it seems almost obvious; the possibility small firms have of operating in flexible ways is far greater than for large firms. Small firms typically enjoy multi-skilled employees, multilateral forms of communication, blurred distinctions between supervisors and subordinates and a high degree of transparency in general. Large firms, on the other hand, often suffer from unilateral communication, unskilled workers, a rigid division of work, sharp distinctions between workers and managers, frequent confrontations between conflicting interests and complexity and opacity in general. Consequently, small firms may rearrange and change direction on short notice. Large firms, on the other hand, are more like trains; the direction of movement is predetermined by the tracks and changing speed requires great effort.

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The small craft manufacturer may be an illustrative case. Craft workers are typically skilled workers; they may easily be redeployed on short notice according to changing needs and new demands. Thus they are polyvalent and flexible in the functional sense of the word. At the same time craft producers are most often equipped with general, multi-purpose technology, whether of the old-fashioned kind like hammers, saws, turning lathes or milling machines, or new kinds like computer-based information technology. These two features then, multi-skilled employees and multi-purpose technology, are the basic elements that lead to the flexibility of small firms, not their size. Modest size may of course facilitate any reorganization, but such reorganization would have been impossible without the flexibility of the people and technology involved. As indicated above, large organizations quite often demonstrate the opposite. They are slow in their movements and hard to change. Their large size in itself most often means that they have a (long) history of growth, and that very growth might explain some of their rigidity. William Abernathy’s excellent study of the history of the car industry in the US illustrates the point (Abernathy 1978). He demonstrates in a very convincing way the proliferation and the changing nature of innovations in this industry in its early developmental phase. At the beginning, product innovations dominated the picture completely, and this domination lasted until the beginning of the twentieth century. From then on this type of innovation started to decline and was successively superseded by increasing cases of process innovation. Eventually, the cases of both kinds of innovation began to fade away; the possibilities for further improvements seemed to have been exhausted. Abernathy explains this trajectory by referring to the incessant search for increased productivity. In the beginning, he says, car producers competed on the basis of the product itself; that is its design, technological solutions, finish and cosmetics. Those who were most successful in satisfying the needs and desires of the customer survived; those who were not went out of business. This kind of competition dominated and lasted until producers and customers alike had reached a point where they seemed to have arrived at a mutual agreement on what a car was actually about. Product development had during these processes led to a construction that Abernathy refers to as a ‘dominant design’, and from now on competition slowly turned into improvements focusing on productivity; hence the shift from product to process innovations. These latter innovations, in their turn, eventually led to a technology-intensive, highly interdependent production system where all parts were closely linked, both to each other and to the final product and its numerous components. The development of single-purpose or productspecific technology, for instance, was a part of this system, inhibiting or delaying, of course, the introduction of new solutions. Consequently, there was a dramatic drop in product innovations. Even process innovations faded away as a result of this development; isolated changes in the production system became increasingly   Process innovations included such examples as minute division of work, the introduction of interchangeable parts, the assembly line, and so on (Hounshell 1984).

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difficult as the system itself turned out to be increasingly integrated. Needless to say, rigidity was built into the system, not only regarding innovations but also regarding daily operations, leaving little room for diversified production. Organizational structure and flexibility As suggested above, rigidity stemming from technology ought not to be considered as a consequence of technology itself. Such an erroneous inference would be to subscribe to technological determinism (Nylehn and Skorstad 1982; Skorstad 1988). Technology, of course, should be considered as a social construction; consequently, the rigidity referred to in the case above should not be interpreted as a consequence of technology but rather as a result of an incessant search for increased productivity, primarily aiming at realising economies of scale. In that sense, technology and its impact ought to be seen in an economic, social and political context where dominant values, interests and priorities shape the outcome. Local procedures, rules and regulations implemented to govern organizational behaviour ought to be interpreted in a corresponding way. As with technology, they should be understood as materialized outcomes of social, economic and political processes occurring both inside and outside the firm. And like technology, such structures may open for quite opposite consequences as regards flexibility. For instance, if employers execute obsessive control it might lead to an organizational inability to respond adequately to changing conditions. Bureaucratic control, Richard Edwards says, is ‘… embedded in the social and organizational structure of the firm and is built into job categories, work rules, promotion procedures, discipline, wage scales, definitions of responsibilities, and the like. Bureaucratic control establishes the impersonal force of “company rules” or “company policy” as the basis for control’ (Edwards 1976, 131). Such structures or means of control might also trigger off unanticipated reactions on the part of the employees. They might, for instance, find it useful to stick to the formal procedures as a means of protest or protection. ‘Working to rule’ is a wellknown example of employee resistance, and it may very well paralyse planned operations, thus demonstrating the shortcomings of formal structures, regardless of their ingenuity. The outcome, then, is not only rigidity or inertia stemming from the formal structure in itself. Conflict of interests related to working conditions may further rigidity even more if workers find it expedient to resist. In such settings, even unions may contribute to the rigidity by concentrating their policy  Howard H. Rosenbrock gives a corresponding account of technological development when stating that technological choices reduce subsequent choices considerably, leading the process into a trajectory which becomes increasingly difficult to leave (the Lushai Hills effect) (Rosenbrock 1990). In general, manufacturing industries quite often follow a technological trajectory where they eventually develop into highly integrated technologyintensive systems leaving little room for changes in parts of the system because of their consequences for the rest.

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on the interpretation of implemented rules and procedures instead of questioning the rules and procedures themselves. In the US, James Womack et al. (1990) refer to this as a system of ‘job-control unionism’ when illustrating the problem of worker deployment stifled by the limitations of an enormously high number of categories of different jobs. In the mid-1970s, for instance, Richard Edwards (1976) reported that Polaroid operated with a system of eighteen different job families, three hundred job titles and fourteen different pay grades. Additionally, seven distinct pay steps for each job were possible, resulting in 2,100 individual slots for Polaroid’s 6,397 hourly workers at that time. No great imagination is needed to understand the embedded rigidity in such a system. External constraints may, of course, have a similar effect. Laws and regulations governing daily working life in general place restrictions on the strategic choices available to the individual firm regarding work time, wage level, pay systems, layoffs, the use of part-time and temporary workers, substitutes from temporary job-recruitment agencies, and so on. Even dominant traditions and practices occasionally referred to as socio-cultural characteristics may have a corresponding effect, which is demonstrated both in new institutional theory (DiMaggio and Powell 1983) and in the societal effect theory of Marc Maurice, François Sellier and Jean-Jacques Silvestre (1982). In this way, rules and regulations may appear to be roadblocks to flexibility. They may lead organizational behaviour in a certain direction and be conducive in keeping it there. On the other hand, as in the case of technology, we are not facing any kind of institutional determinism. If certain combinations of traditions, rules and regulations may lead to rigidity, other combinations may very well lead to the opposite. Or to put it in another way: if the incapacity to handle incertitude may be learned, why can’t the capacity to handle it also be learned? The classic work of Tom Burns and Gary M. Stalker (1961) quoted above illustrates the point. Organizations may be constructed in a detailed and rigid way, giving little room for discretion. They may also, however, be constructed in a loose or tentative way, giving ample room for quick responses to changing circumstances. Burns and Stalker claim that ‘organic’ organizations have this quality, characterized as they are by … the contributive nature of special knowledge and experience to the common task of the concern; … the adjustment and continual re-definition of individual tasks through interacting with others; … the spread of commitment to the concern beyond technical definition; … knowledge about the technical or commercial nature of the here and now task may be located anywhere in the network; … this location becoming the ad hoc centre of control authority and communication; … the lateral rather than a vertical direction of communication through the organization, communication between people of different rank, also, resembling consultation rather than command (1961, 21).

Admittedly, in some cases it might indeed seem as if we are facing a kind of determinism, for instance in the case of economy of scale. Conventional economic theory, for instance, maintains that minimum-cost batch sizes may be calculated

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on the basis of the costs related to production, components kept in stock and the setting-up of machines and equipment in order to switch to the required batches in question (Eilon 1962). For several decades this was a truism in manufacturing circles. No one objected to the calculations until Shigeo Shingo of Toyota entered the scene, challenging what had traditionally been regarded as an objective law of economics (Shingo 1984). The traditional contention, Shingo says, is false, simply because of the misunderstanding of set-up times as a fixed entity. Set-up times are not fixed entities, Shingo adds, they may be altered through innovative solutions and minimized to the point where they become irrelevant to the calculation of minimum-cost batch sizes. When that point is reached, one-size batches may turn out to be the best alternative, not only from a flexible point of view, but also from a production-economic point of view, mainly because of the reduction of work in progress. In fact, this very important comprehension is one of the main foundations of lean production. Lean production, Toyotism, Ohnism, just-in-time or world class manufacturing, is not primarily a question of implementing teams, as claimed by James Womack and his colleagues. The most important feature of lean production is rather a new system of production planning and control, a system where products are made in accordance with real demands.10 And the realization of such a real-time pull system is of course impossible without having a flexible system of manufacturing. In the case of a lean regime, this flexibility is obtained through minimized set-up times allowing for quick adjustments to changing demands. Teams, of course, support the flexibility, but the main contribution from teams in this case is to help balance the line, thus minimising the accumulation of buffers containing work in progress.11 In this way lean solutions emerge as a flexible system perfectly capable of handling changing demands. As such, it is claimed, the system combines two qualities traditionally thought of as incontestable opposites: mass production and flexibility. Consequently, it is often considered to be the very solution to one of the major crises of Taylorism: that is its rigidity stemming from single purpose technology and deskilled workers. The contention, however, ought to be considered with some reservation. Firstly, Taylorism should not be equated with complete rigidity. On the contrary, it is in fact a flexible system, precisely because of its technology and workers. Both are, as we have seen, interchangeable, and interchangeability might of course be understood as a kind of flexibility. Taylorism, then, is perfectly capable of coping with changing demands as long as it is confined to changes in volume.12 The  Expressions used respectively by Womack et al. (1990), Doshe et al. (1985), Coriat (1991), Voss/Clutterbuck (1989) and Sconberger (1986). 10 In contrast to expected demands, which were the traditional premises for planning and controlling the flow of production (Solberg 1989; Vollman 1991). 11  For a more thorough discussion, see for instance Voss and Clutterbuck (1989), Ohno (1990), Monden (1983) and Skorstad (1994/2006). 12 And as long as it may operate within generous regulations.

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problem, or crisis, arises when demand turns in a new direction, such as when customers ask for something new. In such cases, Taylorism is indeed in trouble because of the lacking multi-functionality of both men and machines. Taylorism, then, may operate in a flexible way, but only in the numerical and not in the functional sense of the word. Secondly, the flexibility of lean producers should not be equated with that of craft producers. Indeed Toyotism, in contrast to Taylorism, is flexible in a functional way, but only to a very limited degree. Its flexibility is mainly confined to the ability to produce variants that are basically cosmetic in their nature. The core of the variants is usually identical; it is the wrapping or appearance that might vary. The typical example of the production process at a lean manufacturer may be compared to the shape of a fork or a palm tree. In the beginning most of the production is devoted to manufacturing the main part of the components necessary for assembling the core of the final product. Variants are then produced at the end of the line, consisting mainly of minor differences in outer appearance. The flexibility of Toyotism, then, is mainly a consequence of interchangeable parts, production planning according to the pull logic and flexible technology minimising the set-up time necessary for changing tools. Flexibility and organizational culture The solutions referred to above would not, of course, function according to their embedded intentions if employees diverge from or resist what management sees as proper behaviour. The efficiency, as well as the flexibility of an organization, depends on a labour force which complies with the logic of the system. If they choose to oppose or resist, they are usually successful in doing so despite the ingenuity of the system. The degree of flexibility is, then, apart from being affected by the structure of the system itself, also dependent on the attitudes of the workers and the dominant culture of the firm; whether it is characterized by opposition or consent. Research is rich on examples illustrating worker resistance to increasing demands for labour effort, to unfair and arbitrary treatment or unacceptable conditions of work in general.13 Resistance is particularly effective when it displays itself in a collective way, based on mutual social bonds and a common interpretation of working conditions as its basic foundations. One of the main challenges for management, then, is to avoid the appearance of such resistance and preferably turn it into compliance and cooperation. Nothing would be better, of course, than to have a docile workforce acting in a compliant way, being committed and ‘self-directed’ in accordance with the internal and official logic of the firm. In his discussion of control, which we have elaborated upon above, 13 See for instance Ackroyd and Thompson (1999), Bideaux (1983), Edwards et al. (1995), Hodson (1995), Huzell (2005), Linhart (1981; 1982), Skorstad (2002), Whyte and Dalton (1977).

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Richard Edwards uses the concept of bureaucratic control in a way that might illustrate the point. Control is of course related to flexibility since those in total control may elicit compliance and cooperation from those who are controlled. According to Edwards, bureaucratic control may very well serve such objectives. Management, he says, need three principle types of behaviour.14 The first one is what he refers to as ‘rule orientation’, that is ‘… the awareness of the rules and the sustained propensity to follow them’ (Edwards 1979, 49). The second one is the behaviour trait referred to as ‘habits of predictability and dependability’. The behaviour in question here is not confined to that of eliciting rules but to be able to ‘… handle changes, new situations and emergencies with competence’, in other words: to be able to demonstrate flexibility if necessary. The third type of behaviour is the most sophisticated one. This concerns what Edwards refers to as ‘the internalization of the enterprise’s goals and values’ (Edwards 1979, 150). Because of this internalization, these workers are ‘self-directed’ or ‘self-controlled’ in the way referred to above. In such instances, there is little need for supervisors to monitor subordinates. Subordinates simply comply with the logic of the system on their own; they may be trusted to do their best in contributing to the goals of the company. Research is also rich in examples of measures employed by employers to achieve such behaviour. In his study, Richard Edwards illustrates the multiplicity of such initiatives, ranging from recruitment procedures, wage systems and promotion procedures to well known experiments involving job enrichment, job enlargement, worker self-management, worker-employer co-management and so on. In a similar vein, Gideon Kunda (1992) illustrates what he refers to as ‘the engineering of a culture’ in an excellent study of a computer producer in the US. The engineering devices in this case include the examples mentioned above, as well as the use of ‘… a steady stream of literature, training, group activities, public meetings, rituals, and supervisory and peer reinforcement’ (Handel 2003, 350). Several other studies could have been mentioned,15 but the two already mentioned are sufficient to illustrate the main point about endeavours to create employees who are willing to behave properly, that is, according to established criteria and management expectations in every respect. This involves discursive strategies aimed at furthering a common (and dominant) view of the world; it is about cosmetic changes veiling the fundamental contradictions embedded in work; it is about instrumental rewards offered on an individual employee basis. Together they may serve the original intentions of the firm in producing a docile workforce, completely committed to the goals of the firm. In this sense, these strategies may contribute in turning resistance into consent because they weaken what might be seen as the very foundations of concerted collective action: the process of interpreting or understanding the world, the process of identification and the process of interaction. 14 See Katz and Kahn (1978) for a similar categorization. 15 Such as Martin (1992) and Rose (1999).

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This may explain, for instance, the cooperative behaviour of production workers in (supposedly) lean manufacturing companies in Japan, as reported by James Womack et al. (1990). In spite of Womack’s own assurances of its positive impacts, the nature of the lean regime itself would normally justify worker resistance, especially because of intensified work and lack of breathing space (Nilssen and Skorstad 1986; Skorstad 1991, 1994/2006). However, among the Japanese manufacturers studied this is, surprisingly, not the case. Instead workers are busy furthering proposals that are meant to enhance improvements in productivity. In their study, Doshe, Jürgens and Malsh (1985) came to the same conclusions. Japanese workers in JIT-based manufacturing companies, they say, behave in a cooperative way, in spite of a regime characterized as even harsher and more ruthlessly remorseless than Taylorism. However, Doshe et al. ascribe the observed involvement to the very same system in concluding that ‘… Toyotism is, therefore, not an alternative to Taylorism, but rather a solution to its classic problem of the resistance of the workers to placing their knowledge of production in the service of rationalization’ (Doshe et al. 1985, 128). Japanese workers, they say, do not behave like this because of opportunism or cultural particularity; they simply do it because they are compelled to do it by a distinctive system characterized by transparency, constant understaffing, multi-machine tending and eliminated buffers. I believe they are wrong. That is, the increasing interdependency due to eliminated buffers, the pull logic represented by canbans and the frequent use of teams certainly may elicit increased adaptability from the workers. It is difficult to see, however, why this system, irrespective of its ingenuity, should turn subversive creativity into cooperative creativity. If there is no or little room for resistance, why don’t the workers just simply resort to resignation or passive adjustment? Why do they contribute actively to a process that might lead to further deterioration of working conditions and to the detriment of their fellow workers? To understand this, we have to move beyond the technological and organizational features of the manufacturing system itself. When doing so, other important peculiarities circumscribing the system appear. Three such peculiarities are of special importance here: the practicing of company level unions, the system of recruiting and the system of pay and promotion (Skorstad 1994/2006). The first peculiarity means that important questions related to conditions of work are decided upon at the level of each individual company. The second means that the career of each individual employee is largely confined to the possibilities within the company where he or she is first employed. The last two mean that wages as well as advancement are closely related to individual performance. Furthermore, performance is not primarily about quantifiable entities such as seniority or individual output. What counts most is attitude; whether you as an employee are docile, committed and creative or not. Those who are compliant and creative in a cooperative way are to be rewarded. Those who demonstrate the opposite, by behaving reluctantly or protesting, will be sanctioned in a negative way. Here we have, then, a reward system of a highly subjective nature that works in an

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environment freed from important restrictions; both internally and externally. No wonder, then, that Japanese workers behave as they do. The system cultivates and lures the self-interest of each individual employee, and it seems to have succeeded in doing that, just as American companies occasionally succeeded through their experiments with bureaucratic control: ‘The self-interest’ Richard Edwards says, ‘seems to have concurred compared to that of the collective’ (Edwards 1976, 145). At the turn of the century, we have for some time been witnessing processes of change that may have some of the effects referred to above. Collective bargaining is, for instance, increasingly being replaced by local agreements at the level of the individual firm. Management schemes bear increasing evidence of the faith in economic man as the optimal way of gaining success (Bradley et al. 2000). The distribution of power within the organization is increasingly being displaced in favour of management. It helps these processes that they take place in a context where unemployment is rising, unions are weakened and the role of the state has changed from a regulative to a de-regulative role. And it of course also helps that there seems to be a growing agreement about how to view the world. The changes referred to above are no longer mainly conceived of as means stemming from the strategies of insatiable managers in their incessant search for further productivity gains. To an ever-increasing extent, such means are considered necessary to satisfy a changing, powerful and demanding world. Globalization, it is maintained, and the increasing power and volatility of the customers, it is added, are changing the nature of the competition in a dynamic and unambiguous way. In order to survive in such an environment, the argument goes, flexibility is the only option. Out of deference to the contemporary nature of competition, organizations, in Richard Sennett’s words, have to move like a cat, fast and efficiently, in order to satisfy ever changing demands (Sennett 2002). This is not only the opinion of managers. A growing number of consultants, researchers, academics and commentators in general seem to share the view. Even labour unions seem to subscribe to the same interpretation. Alternative narratives have lost most of their momentum; the voices of their spokesmen have faded away. Those who still have a different opinion have been reduced in numbers; those who are exposed to the changes and want to resist them find themselves powerless and almost paralysed because they are confused and divided in their interpretation of the problem as well as its causes. As indicated above recent changes in our part of the world regarding the regulation of working time, use of temporary workers, part-time workers, hired workers on short-term contracts as well as changes in the level of bargaining, the introduction of individual pay-performance systems and the introduction of processand customer-oriented organizations may be considered part of the remedy for the dominant diagnosis put forward by the men in the driving seat. All these changes, it is argued, are of imperative importance if one is to succeed in meeting the everincreasing competition from abroad. And because the prescription is accepted and implemented (piecemeal), the changes may certainly lead to the promised

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and desired improvement in efficiency. But they will also most certainly lead to a division of the workforce, thus contributing to an individualization of the relations between management and their subordinates. This, in turn, means that the balance of power is shifted in favour of management since a divided workforce can be handled more easily than a unified and unanimous one. Collective resistance may fade away and give room for additional changes which may in turn have further individualising effects upon employment relations. In this way, such processes may be complementary and self-reinforcing, leading to what Sverre Lysgaard (1964) referred to as the ‘technical-economic ideal situation’,16 meaning that relations in the non-regulated realm of business are handled on an individual basis. If that state were to evolve, we would witness the advent of an organization which is flexible in the sense that the workforce willingly complies with the needs of management. Obtaining flexibility through cooperative creativity or creative involvement may, however, turn out to be quite another matter. This is a kind of flexibility that goes beyond the kind obtained through sheer obedience or compliance. It is about problem-solving and creative behaviour in general initiated by the employees themselves and based upon their experience as well as their discretion. Some of this behaviour may certainly, as we have seen above, be lured into existence by firm-specific means when employed in liberal settings. But if the full potential of this type of flexibility is to be realized, it will most certainly demand something more; instrumentality and calculability must be replaced by an organizational climate dominated by mutual obligation, loyalty and trust. Flexibility and inter-organizational arrangements Flexibility might, as illustrated above, be obtained through employment strategies, organizational solutions and attempts at creating an appropriate culture feeding commitment and consent. All this concerns the internal nature of the organization; different kinds and degrees of flexibility may be obtained through the manipulation of the properties of the organization itself. An organization may, however, also obtain flexibility though arrangements with its environment, either through mutual and concerted cooperation with other organizations in order to cope with a troublesome world, or simply by getting rid of the unpredictable and complex part of the business, leaving it to those who are willing to take over. According to Michael Piore and Charles Sabel (1984) industrial districts in the Third Italy operate according to the former arrangement mentioned above. Manufacturing in these districts, they claim, is dominated by small firms operating in the same line of business, specialising and cooperating in manufacturing the final product. Each of the firm specializes in a particular phase of the manufacturing process; then they operate as suppliers to each other. Furthermore, each of them is manned with skilled employees using flexible technology. By virtues of these qualities 16 In contrast to the ‘collective ideal situation’ where such relations are mediated by one or several (informal) representative(s) of the collective.

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– mutual cooperation, specialization, skilled workers and flexible technology – they are able to combine efficiency and flexibility.17 Piore and Sabel refer to this system as ‘flexible specialization’ where flexibility means the ability to handle changing demands while specialization refers to the particular business in question. In the literature flexible specialization is mostly referred to in positive terms, primarily because of the cooperative and humane nature of the system. A quite different characteristic is, however, attributed to those who resort to the latter strategy mentioned above, that is those who have the propensity to outsource everything considered too costly, too inconvenient or too complex to carry on in-house. At the most extreme end, several examples may be found of enterprises that do not have any manufacturing activity of their own (Klein 2001). Instead they just concentrate on activities such as design, marketing and contracting. The production part of the business is contracted out to whoever is willing and whoever wins the bidding competition. Usually this means manufacturers operating in low-cost countries in Eastern Europe, Africa or South East Asia who quite often operate in Export Processing Zones where unions are absent, working regulations few, wages extremely low and working conditions in general terrible. This does not, however, lead to any problem on the part of the ordering company; on the contrary it usually means huge advantages because of the resulting low price of the product. In addition, this leads to considerable flexibility. Suppliers may easily be replaced, either because of considerations regarding the price or other qualities of the product. These companies, then, have abandoned what some consider the most boring part of the business and turned its activities towards the more immaterial and dynamic aspects. Naomi Klein illustrates the point in the following way: ‘… as Hector Liang, former chairman of United Bisquits, has explained: Machines wear out. Cars rust. People die. But what lives on are the brands’ (Klein 2001, 196). In between these extremities, there is a multitude of variations representing different kinds of networks which have different consequences, dependent on the nature of the mutual ties. And the nature of ties may of course affect the level of flexibility since ties usually involve some kind of obligation as well as commitment. Loose ties, then, may mean high levels of flexibility, while close ties may lead to the opposite. The level of flexibility is not, however, exclusively determined by the closeness of the ties. Equally important is the nature of the dependency involved: whether it is a symmetrical or asymmetrical one as far as power relations are concerned. Manufacturers operating in an industrial district belong to a network where power is evenly distributed among its participants. The dependency is mutual, everyone is ‘equally’ dependent on each other, and we have a system which according to Michael Best works according to ‘coordination without hierarchy’ (Best 1990). 17 Something thought of as impossible by those subscribing to the logic of economy of scale. For further discussion of industrial districts, see Becattini (1990), Best (1990), Brusco (1990), Cappechi (1990), Lazerson (1990), Sforzi (1990) and Triglia (1990).

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In contrast, firms contracting out their manufacturing tasks operate in a network where power is unevenly distributed to a great degree. They operate, according to Bennett Harrison (1997), ‘within a logic of concentration without centralization’ meaning the ‘dispersal of production … under the technical and financial control of managers in a relatively small number of big multiregional, multisectoral, multinational corporations and their strategic allies’ (Harrison 1997, 206). In these networks the large actors determine the rules of the game; the small actors have no other choice than to adjust to the rules if they want to survive. Finally, we may find a similar imbalance of power within networks involving traditional assemblers and their sub-suppliers. We may find it in the case of the Japanese ‘keirestu’ networks employed for instance by car manufacturers like Toyota. And we may find it among garment producers like Benetton, which practise the principle of putting out a lot of their manufacturing activities, entailing not only the prospect of cost savings, but improved flexibility as well. The power to force one’s will upon others is also a matter of flexibility. The growing propensity to relocate and outsource business activities ought to be interpreted in such a context. It is not necessarily exclusively confined to a question of cost savings. It may also be a strategy for obtaining improved flexibility in a world perceived as becoming increasingly complex and unpredictable. Klein illustrates this by quoting John Ermatinger, the president of Levi Strauss America’s division, when he is explaining the shut down of 22 plants and the layoff of 13,000 North American workers between November 1997 and February 1999: … Our strategic plan in North America is to focus intensively on brand management, marketing and product design as a means to meet the casual clothing wants and needs of customers. Shifting a significant portion of our manufacturing from the US and Canadian markets to contractors throughout the world will give the company greater flexibility to allocate resources and capital to its brands. These steps are crucial if we are to remain competitive (Klein 2001, 195).

In this way, highly contrasting inter-organizational constructions may contribute to flexibility at the level of each participating organization. The nature and range of this flexibility will, as indicated, be dependent on the nature of the relations and the position of the particular participant in the actual construction. Accordingly, working conditions may be affected in a corresponding way; both position and relations may be decisive for its nature. In this sense, symmetrical relations will certainly give more favourable conditions for all participants compared to asymmetrical relations where a minority decides upon the terms of a minority. The interrelation of flexibility foundations Above, I have discussed how organizational flexibility may be influenced, and I have focused upon what I have considered to be the most important foundations; employment practices, organizational structure, organizational culture and network

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constructions. I have treated each of these foundations on their own, as isolated phenomena independent of each other. This is, of course, an oversimplification of the matter, since they are interrelated, having implications for each other one way or another. The most obvious example is the case where some parts of the business are being wound up, outsourced, and so on. Such changes have an immediate impact on the composition of the workforce as well as the structure of the firm. They might also affect its culture by introducing uncertainty and fear and consequently harm or even ruin what might have been invested in the building of trust. Correspondingly, changes in structures may be conditioned by changes in the nature of the workforce, blurring or displacing frontiers between the core and the periphery. Structural changes (teams, total quality groups, process orientation) may also blur the distinctions between management and workers and as such have an impact on processes of building and maintaining culture. Different manning practices may have a unifying or dividing effect on the workforce, thus affecting the nature of the culture in important ways. To rely upon peripheral workers as much as possible might for instance hamper the propensity for concerted action. Furthermore, it may very well affect skill levels and the ability to handle unexpected occurrences in a proper way. On the other hand, relying mainly on core workers may pave the way for collective resistance that would seriously hamper productivity. In order to avoid this, measures included in management strategies like responsible autonomy (Friedman 1977) might be implemented with the purpose of preventing or countering such reactions. We could have continued this discussion further, but the examples given are, I think, sufficient to illustrate the point mentioned above. The different foundations of organizational flexibility are often related to each other in multiple and complex ways. Changes in one of them might have an impact on the others. Changes in one of them may also be conditioned by certain qualities of the others. Occasionally these relations are obvious, most often they are not. The intention behind an action within an organizational setting may very well be realized, but it may just as easily prove to be the opposite because of organizational dysfunction(s) operating beyond human imagination. This is true in organizational behaviour and change in general, and it is certainly true when it comes to the question of flexibility. To believe that an organization will become more flexible by mainly relying on marginalized and interchangeable workers would be to ignore its complexity. Most probably, such a strategy would lead to rigidity instead of flexibility, and we would be facing what seems to be a contradiction: flexibility leading to rigidity – how is that possible? The answer is dual, and the first aspect is indicated above. Intentions should not be conflated with outcomes; what is expected to happen or is taken for granted may not be achieved simply because of the complex mechanisms involved that make it difficult and often impossible to judge what the results may be. The second answer is related to the concept of flexibility itself. As indicated, flexibility is a notion filled with ambiguity, both regarding content and meaning. Leaving the different associations aside, the concept of flexibility is employed to describe

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people, technology, time, space, wages, employment and organizations in general. Consequently, discussions about its nature and possible impact very often lead to confusion. This may, for instance, be the case in the frequent discussions about employment practices. Quite often such practices are equated with organizational flexibility, but the above discussion illustrates that they are not. On the contrary, used in a cynical way, non-standard employment may perfectly well lead to a rigid organization. In a corresponding way discussions about team organizations may be related to the same problem. Team organizations are often considered as the archetype of the flexible organization, but occasionally they are obviously not. Teams may very well at times impair the ability of an organization to respond to emerging challenges in adequate and efficient ways. The above attempts at clarifying the concept of flexibility by deconstructing it into several categories may therefore help in structuring the debate, both regarding what we are talking about and what it may mean for working conditions. References Abernathy, W.J. (1978), The Productivity Dilemma. Roadblock to Innovation in the Automobile Industry (Baltimore, MD: The Johns Hopkins University Press). Ackroyd, S. and Thompson, P. (1999), Organizational Misbehaviour (London: SAGE Publications). Atkinson, J. (1984), ‘The Flexible Firm and the Shape of Jobs to come’, Labour Market Issues 5 (Oxford). —— (1985), ‘Manpower strategies for flexible organizations’, Personnel Management, August. Becattini, G. (1990), ‘The Marshallian industrial district as a socio-economic notion’, in F. Pyke, G. Becattini and W. Sengenberger (eds) Industrial Districts and Inter-firm Co-operation in Italy (Genève: ILO-publications). Best, M. (1990), The New Competition. Institutions of Industrial Restructuring (Cambridge: Polity Press). Bidaux, J.M. (1983), ‘Le cycle et la chaine: les ouvriers manient le derailleur’, Economie et humanism 269. Bradley, H., Erickson, M., Stephenson, C. and Williams, S. (2000), Myths at Work (Oxford: Polity Press). Brusco, S. (1990), ‘The idea of the Industrial District: Its genesis’, in F. Pyke, G. Becattini and W. Sengenberger (eds) Industrial Districts and Inter-firm Co-operation in Italy (Genève: ILO publications). Burns, T. and Stalker, G.M. (1961), The Management of Innovation (London: Tavistock). Cappechi, V. (1990), ‘A history of flexible specialisation and industrial districts in Emilia-Romagna’, in F. Pyke, G. Becattini and W. Sengenberger (eds) Industrial Districts and Inter-firm Co-operation in Italy (Genève: ILO publications). Coriat, B. (1991), Penser à l’envers (Paris: Christian Bourgois Editeur).

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DiMaggio, P. and Powell, W. (1983), ‘The Iron Cage Revisited: Institutional Isomorphism and Collective Rationality in Organizational Fields’, American Sociological Review 48, 147–60. Doshe, K., Jürgens, U. and Malsh, T. (1985), ‘From Fordism to Toyotism? The Social Organization of the Labor Process in the Japanese Automobile Industry’, Politics and Society 14:2, 115–46. Edwards, P., Collinson, D. and Della Rocca, G. (1995), ‘Workplace Resistance in Western Europe: A preliminary Overview and a Research Agenda’, European Journal of Industrial Relations 1:3 (Sage Publications). Edwards, R. (1979), Contested Terrain. The Transformation of the Workplace in the Twentieth Century (New York: Basic Books, Inc. Publishers). Eilon, S. (1962), Elements of Production Planning and Control (New York: Macmillan). Flanders, A. (1970), Management and Unions (London: Faber). Friedman, A.L. (1977), Industry and Labour. Class Struggle at Work and Monopoly Capitalism (London: Macmillan Press). Hammer, M. and Champy, J. (1995), Reengineering the Corporation. A Manifesto for Business Revolution (London: Nicholas Brealey). Handel, M.J. (2003), The Sociology of Organizations. Classic, Contemporary and Critical Readings (London/New Delhi: SAGE Publications, Thousand Oaks). Harrison, B. (1997), Lean and Mean. Why Large Corporations Will Continue to Dominate the Global Economy (New York/London: The Guilford Press). Hodson, R. (1995), ‘Worker Resistance: An Underdeveloped Concept in the Sociology of Work’, Economic and Industrial Democracy 16, 79–110. Hounshell, D.A. (1984), From the American System to Mass Production 1800–1932. The Development of Manufacturing Technology in the United States (Baltimore/ London: The Johns Hopkins University Press). Huzell, H. (2005), Managenment och motstånd. Offentlig ����������������������������������� sector i omvandling – en fallstudie (������������������������������������� Karlstad University Studies 2005:45). Katz, D. and Kahn, R.L. (1978), The Social Psychology of Organizations, 2nd edn (New York: John Wiley and Sons). Klein, N. (2001), No Logo (London: Flamingo). Kunda, G. (1992), Engineering Culture: Control and Commitment in a High-Tech Corporation (Temple University Press). Lazerson, M. (1990), ‘Subcontracting in the Modena Knit Wear Industry’, in F. Pyke, G. Becattini and W. Sengenberger (eds) Industrial Districts and Interfirm Co-operation in Italy (Genève: ILO-publications). Linhart, D. (1981), L’appel de la sirène (Paris: Le Sycomore). —— (1982), ‘Au-dela de la norme’, Culture technique 8, 91–8. Lysgaard, S. (1976), Arbeiderkollektivet (Oslo: Universitetsforlaget). Martin, J. (1992), Cultures in Organizations: Three Perspectives (New York: Oxford University Press). Maurice, M., Sellier, F. and Silvestre, J.J. (1982), Politique d’education et organisation industrielle en France et en Allemagne (Paris: PUF).

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Monden, Y. (1983), Toyota Production System. Practical Approach to Production Management (������������������������������������������������������� New York: Industrial Engineering and Management Press). Nilssen, T. and Skorstad, E. (1986), Framveksten av en ny produksjonstenkning. Om sammenhengen mellom produksjonsstyring, lay-out og arbeidsvilkår (Oslo: Tano forlag). Nylehn, B. and Skorstad, E. (1982), ‘Teknologi og organisasjon. Om utvikling av teknologi og dens betydning i organisasjoner’, Tidsskrift for samfunnsforskning 23. Ohno, T. (1990), L’Esprit Toyota (Paris: Masson). Piore, M. and Sabel, C. (1984), The Second Industrial Divide (New York: Basic Books). Pollert, A. (1988), ‘Dismantling Flexibility’, Capital and Class 34, 42–75, Spring. Rose, M. (1975), Industrial Behaviour. Theoretical Development since Taylor (London: Allen Lane). Rose, N. (1999), Governing the Soul. The Shaping of the Private Self, 2nd edn (London: Free Association Books). Rosenbrock, H.H. (1990), Machines with a Purpose (Oxford: Oxford University Press). Sabel, C. (1982), Work and Politics (Cambridge/Mass.: Cambridge University Press). Schonberger, R. (1986), World Class Manufacturing. The Lessons of Simplicity Applied (�������������������������� New York: The Free Press). Sennett, R. (1999), Det fl������������������������������������������������� ��������������������������������������������������� eksible menneske. Eller arbejdets forvandling og personlighedens nedsmeltning (��������������������� Højbjerg: Hovedland). —— (2002), ‘A society of broken eggs’, New Statesman 17 December–7 January 2002. Sforzi, F. (1990), ‘The quantitative importance of Marshallian industrial districts in the Italian economy’, in F. Pyke, G. Becattini and W. Sengenberger (eds) Industrial Districts and Inter-firm Co-operation in Italy (Genève: ILO publications). Shingo, S. (1984), Den nya japanska Produktionsfilosofin (Lidingö/Göteborg: Svenska Managementgruppen/MYSIGMA). Skorstad, E. (1988), ‘Technology and Overall Control: An Example from the Process Industry’, in V. de Keyser, T. Quale, B. Wilpert and S.A. Ruiz Quintanilla (eds) The Meaning of Work and Technological Options (Chichester: John Wiley and Sons). —— (1991), ‘Mass Production, Flexible Specialization and Just-in-Time. Future development trends of industrial production and consequences on conditions of work’, FUTURES, December. —— (1992), ‘From Taylorism to Toyotism in the Norwegian Textile Industry?’, in Kasvio, A. (ed.) Industry without Blue-collar Workers – Perspectives of European Clothing Industry in the 1990s (University of Tampere: Work Research Centre).

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—— (1994/2006), ‘Lean Production, Conditions of Work and Worker Commitment’, Economic and Industrial Democracy 15, 429–55. Reprinted in H. Beynon and T. Nichols (eds) The Fordism of Ford and Modern Management. Fordism and Post-Fordism, vol. 1 (Cheltenham, Northhampton: Edward Elgar, 2006). Solberg, J.J. (1989), ‘Production Planning and Scheduling in CIM’, in I.G. Ritter (ed.) Information Processing 89 (Elsevier Science Publisher B.V. IFIP). Thompson, P. (1989), The Nature of Work (London: Macmillan). Triglia, C. (1990), ‘Work and politics in the Third Italy’s industrial districts’, in F. Pyke, G. Becattini and W. Sengenberger (eds) Industrial Districts and Interfirm Co-operation in Italy (Genève: ILO publications). Vollman, T.E. et al. (1991), Manufacturing Planning and Control Systems, 3rd edn (Homewood-Illinois: Irwin). Voss, C. and Clutterbuck, D. (1989), Just-in-Time. A Global Status Report (Berlin: IFS Publications/Springer-Verlag). Whyte, W.F. and Dalton, M. (1977), Money and Motivation. An Analysis of Incentives in Industry (Westport Connecticut: Greenwood Press, Publishers). Womack, J.P., Jones, D.T. and Roos, D. (1990), The Machine that Changed the World (New York: Rawson Ass.).

Chapter 3

The Impact of Flexibility on Employee Morale and Involvement: Large-Sample Findings for UK Workplaces Michael Rose

Introduction What can recent research tell us about the subjective effect of the spread of flexibility in the workplace and in employment practice? In particular, what can be said about how workplace employee relations are experienced, or about the kind of attachment to the organization expressed by workers? At the level of workplaces, this matter is important for HRM practitioners. For a society as a whole, the cumulative consequences of workplace outcomes help to condition and express its character. The present chapter will examine flexibility outcomes in the UK in such a perspective. It will offer a new type of evidence, relating to the subjective outcome of experience of flexibility by employees. The evidence is thought to be novel in the debate over flexibility. But such a claim must be evaluated in terms of the content of the debate itself. It is important, then, to start with a résumé of what are taken to be its main streams of discussion. Flexibility and social outcomes Definitional contention  The debate on flexibility is a multi-channel dialogue, plagued by the ambiguities examined in depth by Egil J. Skorstad in Chapter 2, and quite often a dialogue of the deaf. As Skorstad reminds us, there is an enduring difficulty over definitions. The argument that began soon after the initial delineation – if that was what it was – of an ideal typical flexible firm (Atkinson 1984), was complicated by a perhaps premature suggestion (Hakim 1987) that the UK might well be on the way to becoming a flexible economy. As Pollert (1988) commented in concluding her classic demolition of Atkinson’s own specification for the flexible firm, the terms ‘flexibility’, ‘core’ and ‘periphery’ were already starting to trap minds in a dualistic employment model resting on a ‘quagmire of confused assumptions’ (1988, 311). This was a somewhat harsh judgement, perhaps, but it has not so far been overturned, despite some valiant attempts to do so (Proctor et al. 1994). As Skorstad   Atkinsons’s first (1984) paper was little more than a rough sketch three pages long in a personnel management magazine. It was to become one of the most cited references ever in the social sciences of work and employment.

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notes, none the less, there was a certain irony in Pollert’s lengthy hesitations about the very utility of the term flexibility itself in her 1988 article, given the title (Farewell to Flexibility?) of Pollert’s (1991) major (and still valuable) collection of studies pressing the attack further, but not quite home. The still hesitant questionmark in the title proved to be well chosen. It has become a long goodbye. All the definitional difficulties have remained – indeed, they have multiplied – but the term itself has been resistant to all cries for abolition. So we are stuck with it. I see no alternative, either, to living with labels such as ‘numerical flexibility’ and ‘functional flexibility’. As Verdouris (2007) points out, many other approximate equivalents exist, such as internal versus external flexibility (DavisBlake and Uzzi 1993), clan and market (Ouchi 1980), dynamic and static (Deyo 1997) or organization-focused and job-focused employment relations (Tsui et al. 1995). But none has built such a following as the original two. For fieldwork oriented researchers they do require much further specification. For example, how far does the term functional flexibility confuse at least two distinct types of job enlargement (O’Reilly 1992, 370–73) and possibly four (Rose 2008, 17–18)? It certainly comes in very different types and sizes. It is also important to recognize that it is a long time since employers made all the running in the invention of new practices under the flexibility banner; as Harriet Bradley reminds us in posing the question ‘whose flexibility?’ in Chapter 4, an employee oriented flexibility problematic has gradually emerged, organized around the terms flexitime and flexicurity. Strategy versus improvisation Several contributors to Pollert’s Farewell to Flexibility? (1991) made short work of the idea that flexibility was a novel practice; historically speaking, it was easy to show that such an idea was indefensible. What these critics overlooked, Bradley argues, was the power of the term as an organizing concept – or as she says, myth – for employers, politicians, and theorists of a business model of society to rally, or constrain, support for globalized capitalism. But has formation of flexibility regimes, as a practical exercise, for the most part relied upon some such a central idea? Do employers or organizers actually need one? How far is implementation of flexibility to be viewed as calculative even in a narrow sense? On this, too, there has been vigorous debate over how far policy decisions affecting flexibility practice at organization or workplace level are careful, well structured, and pre-meditated. In the UK, the commitment to a strategic approach to employee relations (or technological and product innovation for that matter) has long been under empirical scrutiny (Hakim 1990; Proctor et al. 1994: Rose 1994). Ackroyd and Proctor (1998), in a well-targeted search in the UK for a strategic HRM approach linked to flexibility, comment: The ‘strategic planning’ type of firm, in which development is orchestrated within a general overview of planned development, and which may involve buffering constituent parts of a business from the rigours of the market-place in order to maximize market advantages in the medium to long term, fits only very few of the firms in our group of manufacturers (1998, 170).

The Impact of Flexibility on Employee Morale and Involvement

45

The current (uneasy) consensus with regard to flexibility regimes seems to be that a UK pattern of extemporization and pragmatism may prevail more widely than supposed. With regard to functional flexibility, at least, it appears that the management approach throughout Europe may be closer to this pattern than might have been expected (Friedrich et al. 1998). Choice of regime As noted, Pollert (1988, 311) had also questioned the longer-term utility of a distinction between numerical and functional flexibility. This has proved far less prescient. As research material accumulated the terms became established as the main constructs in empirical critique, with Kalleberg (2001) producing evidence, and some powerful arguments, in favour of regarding them as complementary rather than alternative modes of application. Since then Cappelli and Neumark (2004) have documented, at least for US manufacturing, some tendency for internal flexibility to reduce involuntary turnover; but in all industrial sectors, these authors found, parts of the permanent workforce were leached away in non-standard employment. The findings to be presented are, incidentally, relevant to this discussion, though this chapter does not seek to contribute to the empirical underpinnings of a complementarity/alternatives controversy. Critique of social implications Whatever the precise conceptual or empirical matter in contention, flexibility as a societal object is often under implicit examination even when workplace life is the explicit focus. Indeed, influential treatments from a social philosophy perspective have started at the societal level itself (Sennett �������������������������������������������������������������������� 2000). As often noted, a business oriented ������������������������� discourse of flexibility shifts effortlessly between description, prediction and prescription, and does so in a remorselessly optimistic tone.������������������������������������������������������ Wallace ����������������������������������������������������� (2002) has pointed out the cheerily sanguine tenor of most managerially oriented treatments, which are often undemanding in their expectations of evidence, and economical in supplying it. Since the 1980s the flexible firm, too often equated with the high performance workplace (de Menezes and Wood 2006), is typically viewed as something that will ‘deliver’, not just in terms of economic success, but in terms of moral consensus, both within firms and at a societal level. Many management oriented texts have commented favourably too on the eventual attitudinal consequences of flexibility; it is almost possible for two writers to document them without any overlap in the sources cited: see Kelliher and Riley (2003) for a problem oriented overview. Yet some academic writers close to everyday HRM practice have remained sceptical. Just how far workplace practices are ‘flexible friends’, producing the psychological effects claimed for them by management enthusiasts, has been   In preparatory work, the problems of measuring functional flexibility were examined in detail, leading to the conclusion that the UK has a great deal less than often imagined (Rose 2008). Though the logical argument in favour of seeing numerical and functional flexibility as alternatives is strong, the UK data is consistent with widespread combination.

46

Flexible Organizations and the New Working Life

disputed by organizational psychologists bidding for leadership of the Psychological Contract approach to HRM (��������������������������������������������� Guest 1998, 1997; Rousseau 1998, 1995, 1990, 1989)���������������������������������������������� : see especially the 1998 Special Issue of the Journal of Organizational Behavior. A sustained, research grounded critique in the UK (����������������� Guest and Conway 1997; Guest et al. 1998; Guest 2004a, 2004b)������������������������������������� , dating from the late 1980s, throws doubt on the psychological effects that are claimed for flexibility practices alone. A precondition for any positive effects seems to be a high degree of management commitment to traditional workplace practices such as pursuit of fairness. Any assertion that flexibility can, in and of itself, be the source of a new moral bond for contemporary capitalism has also been scrutinized, most interestingly, from the pespective of the legal assumptions underlying a purported new psychological contract; as such, it has been found confused (Collins 2006; Stone 2006). Incidence of flexibility in the UK Sociological analysis at the macro (‘whole society’) level must first establish how widely flexibility practice has spread. Although often seen – and certainly promoted by the UK government – as a European exemplar of flexible work practice, the incidence of flexible working in the UK is far from clear. No evidence exists that it is, overall, wider than in other large EU countries. The best available internationally comparative data (Brewster et al. 2000) are less help here than they might be. They are handicapped by low response-rates, the truncation of smaller workplaces, and a concern in publications primarily with interaction of new HRM styles with traditional models of the employment relationship. (In any case these data are not as yet available in the public domain.) While undertaking the present analysis the writer took steps to establish more exactly the extent of flexibility practice in the UK, as shown in the Workplace Employment Relations Surveys of 1998 (WERS 4) and 2004 (WERS 5). These form part of a long running linked series of UK enquiries on UK management– employee relations (Cully et al. 1999; Millward et al. 2000; Chaplin et al. 2005; Kersley et al. 2006; Whitfield and Huxley 2007). The preparatory work (Rose 2008) enabled a more precise empirical reference to be provided for defining associations between types of flexible employment practices and the outlook and morale of employees affected by them. Otherwise, this chapter will adopt wellestablished distinctions between numerical (or ‘������������������������������������ contractual’) flexibility, temporal flexibility, and functional flexibility. It will not be able to examine the effects of geographical flexibility (Vielle and Walthery 2003) or remunerational flexibility, for want of suitable evidence. The first three modes of flexibility are to be seen in combination as the core of a flexibility regime at workplace level; and in so far as it is productive to do so, at national level. (The term ‘regime’ as used here will be simply descriptive; it does not imply prior existence of any policies intended to produce flexibility as a system in line with some strategic plan.)

The Impact of Flexibility on Employee Morale and Involvement

47

For each type of flexibility, the examination will indicate the scale of penetration of practice in the UK using up to three separate measures. At each stage of analysis, a set of empirical associations will be presented, indicating whether a given practice may have positive or negative effects upon workplace employee relations climate, and upon employee commitment to the employing organization. An overall evaluation will then be made, suggesting the implications of the findings for wider debates within the overall flexibility of work problematic. Data The UK Workplace Employment Relations Surveys of 1998 and 2004 (WERS 4, WERS 5) provide large sample data on the development of flexible employment practices and working procedures in Britain in the period from 1993 to 2004, covering the basics of numerical and functional flexibility in British workplaces, and sufficiently detailed also to make a few grounded inferences about the overall philosophy of management followed in the employing organization. The two workplace surveys were accompanied on each occasion by an employee survey providing linked data on employee subjectivity (work attitudes, sense of wellbeing) in the years 1998 and 2004 for two very large employee samples. The degree of flexibility shown by the workplace surveys will be considered first. Numerical flexibility Non-standard employment contracts  A key indicator of overall flexibility is the form – and to some extent, the implied ‘spirit’ – of the contract of employment (Capelli 1995). To recapitulate, the original claim (Atkinson 1984) of a rapid move towards the flexible firm rested on a sharp contrast between relatively advantaged core employees on the one hand, and peripheral employees fated to employment disadvantage on the other; core employees would benefit from a traditional standard model employment contract; the latter would offer an explicit undertaking, or embody an underlying understanding, that the employee should expect steady and long-term employment. Together with such security of employment there would go a package of other benefits, guarantees, opportunities, and undertakings about the employee’s situation in the firm. Peripheral workers, on the other hand, would be obliged to accept non-standard contracts in which any expectation of long-term employment would be replaced by an association defined as, or tacitly recognized as likely to be, provisional, short-term, easily dissolved, and relatively distant in terms of personal involvement. There would be, it had been forecast, a very wide spread of such precarious employment, shown by a rise in the number of temporary employees – staff hired via employment agencies, or direct employees with limited term contracts typically of short duration – and a growing number of home-based workers who never came to the establishment in person.

Flexible Organizations and the New Working Life

48

An important base indicator of numerical flexibility is objective job security. Fully guaranteed job security for any group of employees was already quite rare in 1998; only 11 per cent of workplaces offered it for workers in any one or more of the nine main skill levels of the official occupational classification (Elias et al. 1999; Elias and McKnight 2001); by 2004, only 7 per cent of workplaces offered such contracts. Nor do the raw data suggest any reluctance of employers to enforce severance. In 1998, 27 per cent of workplaces had reduced the size of at least one or other work section in the previous 12 months, though not in all cases by means of compulsory redundancies; in 2004, when more detailed data on severances was collected, 27 per cent workplace reported actual redundancies, though only 5 per cent reported more than 25 redundancies; and no less than 43 per cent reported dismissals for other reasons. Table 3.1

Numerical flexibility: Employers’ use of non-standard contracts, 1998 and 2004 1998 Establishments Employees weighted weighted n % n %

0 1 2 3

1,082 706 301 93 2,192

49 33 14 4 100

644 653 525 369 2,191

29 30 24 17 100

2004 Establishments Employees weighted weighted n % n % 685 714 485 178 1,295

33 35 24 9 100

689 697 502 189 2,062

33 34 24 9 100

Table 3.1 shows the proportions of establishments with over 10 employees reporting use of agreed non-standard (NS) forms of employment contract, in particular fixed-term contract and temporary employees often hired through agencies, and often working part-time. Part-time work otherwise will not be regarded as a nonstandard employment practice here owing to the problems raised by Tilley (1992) and Doogan (2001, 2005); some of the part-time workers no doubt had jobs that were marginal and precarious, but this component cannot be identified in the data.  There was no way of distinguishing those part-time jobs possibly regarded by an employer as readily dispensable and other part-time jobs which are (for example) created to fill employee demand for them. Something may be lost by this but probably not much. Part-time work is quite often preferred to full-time work by people doing it. Any insecurity of tenure is not comparable to that of limited term contracts or agency ‘temping’. Part-time work has often been found to be positively associated with enhanced employee job satisfaction. Conceptual difficulties also plague the study of part-time work. Is a job calling for five or six hours of work per week conceptually identical with one calling for almost 30 hours? Doogan’s (2005) review of the evidence for Europe concludes emphatically: ‘The rise of long-term, part-time employment for women suggests that atypical employment does not lead to labour

The Impact of Flexibility on Employee Morale and Involvement

49

It will be noted that removal of small workplaces (5–9 persons) alters size of the samples; thus the sample for generalising to all UK workplaces with over 10 employees falls dramatically, to 1,295; the sample weighted for generalization to all UK employees in workplaces with 10+ falls, far less, to 2,077. Up to four specific practices could be reported, but so few workplaces had four practices that, to simplify presentation, they have been merged with those reporting three. The data simply indicate some use of a given practice at a workplace; they say nothing about the extent of use. However, some such data is available though not shown or used here; to a limited degree, using more forms of NS contract tends to be accompanied by more intense use of given practices. The simple count data might provide some guide to how far use of NS contracts was deliberate, systematic, and probably policy driven; for example, 75 per cent of establishments reporting no use of NS contracts said a strategic plan covered the workplace; 92 per cent reporting four NS practices reported having a strategy. Similarly, proportions of employees relate to those in workplaces with a given level of use of NS contracts. Inspection of the table shows that the proportion of employees not reporting any NS practices rose from 29 per cent to 33 per cent between the 1998 and 2004 surveys; meanwhile the proportion of those employed in workplaces using three or more NS contract forms fell from 17 per cent to 9 per cent. The actual proportions of employees with NS contracts must be estimated directly from the employee samples. This will be done here, and throughout this chapter, with managerial employees removed. In 1998 (2004 following in brackets) 91.7 per cent (91.3 per cent) of non-managerial employees considered they had permanent posts; 4.2 per cent (5.0 per cent) reported temporary contracts; 3.5 per cent (3.3 per cent) said they had fixed-term contracts; and in 1998 only a further tiny percentage reported other arrangements. (There is no discernable association with contract reported and level of the employer’s use of NS contracts.) A greater resort to use of NS contracts at the workplace might be expected, other things being equal, to depress sense of worth and support a more critical attitude on the part of non-managerial employees towards the workplace. Table 3.2 market detachment but its opposite in the mainstreaming of new employment practices that facilitate the long-term retention of labour’ (p. 86). Fevre (2007) develops Doogan’s critique of the misuse of data (more often, ignorance of it) by commentators. Part-time workers in WERS 5 were as a whole significantly more likely than those working 31 or more hours to agree with the statement: ‘I feel my job is secure in this workplace’ (p>=0.000).  The WERS 4 data of 1998 allow a weighting for the component of strategy which was specifically concerned with employment contract policy. This has little association with the use of NS contracts.  Managerial employees were excluded from the employee samples examined here because the focus of the questionnaire referred mainly to non-managerial employees. In particular, manager occupations could not be named as reference occupations by workplace informants when describing the extent of functional flexibility practices. In comparisons of the 1998 and 2004 employee samples, the employees of the workplaces with 5–9 payroll covered in WERS 5 were excluded. (In most cases, including them barely alters results.)

5.

4.

1. 2. 3.

5.85 3.37 3.63 3.53 3.42

5.86 3.46 3.64 3.50 3.38

-1.51 2.05 3.60

-0.22 -6.58

WERS 4 (1998) Two or more t non-standard forms used

ns * ***

ns *** 3.75 3.60 3.45

6.11 3.59

No or just one nonstandard forms used

3.71 3.62 3.48

5.75 3.45

-2.61 1.74 1.56

-7.00 -9.07

WERS 5 (2004) Two or more t non-standard forms used

** + *

*** ***

Sig. t

*** p<0.001, ** p<0.01, * p<0.05, + p<0.10. For t-test equal variances assumed; values for unequal variances assumed almost identical. N (1998); (2004) 17,652. Weighted, and excluding managers (SOC Major Group 1), and (2004) establishments with 5–9 employees. The unweighted WERS data for both years give inaccurate estimates for the whole UK. For employees, the employee weighted estimate (proportion of UK employees working in establishments with 10 or more persons) is relatively minor; for establishments, the weighted estimate is massively different because WERS over-samples larger firms and under-samples small firms. The schedules allowed reporting of up to 4 non-standard forms of employment. A small number of establishment (12 in 1998, 23 in 2004) reported using 4 forms; these cases have been aggregated to the 3 forms total. The WERS 5 (2004) sample is restricted to establishments with 10 or more employees, in order to achieve strict comparability with the WERS 4 sample. The full WERS 5 sample includes firms reporting 5–9 employees. This has a strong effect on the weighted sample, eliminating the equivalent of exactly 1,000 tiny employers. In the unweighted sample there are only 233 establishments with 5–9 employees.

Notes:

Managers’ responsiveness and communicativeness Climate, relations between management and employees Feel loyal to my organization Proud to tell people who I work for Share many values of organization

JOB FACET

No or just one nonstandard forms used Sig. t

Numerical flexibility, organizational commitment, perceived workplace relations

Effect of employing establishment’s use of non-standard employment contracts

Table 3.2

The Impact of Flexibility on Employee Morale and Involvement

51

shows the effect of more intensive use (two or more NS forms) on employee judgements of managers’ readiness to communicate and with them, and their view of the general tone of manager-workers relations in the workplace. In both years the effects were negative; in 1998 the effect was non-significant in the case manager’s communicativeness, but quite significant in the case of view of workplace climate; in 2004, the negative effect is far more apparent and significantly so. Yet in neither year were these evaluations carried over into clear or very significant effects on three measures of organizational attachment. Indeed, in 1998, there was a positive association for sharing the organization’s values and being proud to say one worked for it. There was a negative association with feeling loyal to the employer in both years, and this reached a mildly significant level (as indicated by absolute t-value) in 2004. However, overall, any impact of this variety of numerical flexibility is best described as slight or even marginal. Outsourcing of activities  Numerical flexibility may also be pursued by purchasing from other firms or contractors specialist services which in principle might be organized on an ‘in-house’ basis, that is, by employing staff directly. By their nature, such contracts commit the purchaser of the service for a limited duration only and may lead to keenly competitive tendering by service providers. Better terms may be sought periodically by inviting competitive tenders. Additionally, some firms resort to this form of contracted service provision after dismissing staff formerly employed in-house. Staff still employed in-house on services deemed to be on the ‘danger list’ may feel under constant threat of losing their jobs. Somewhat wider use of outsourcing has been made by British employers since the 1980s than of NS employment contracts. Table 3.3 shows the proportions of the WERS 4 and WERS 5 employers who outsourced up to eleven specialist services. Resort to outsourcing, in terms of the numbers of services outsourced, is distributed fairly similarly in both years; for example 59 per cent of establishments bought in three or fewer services in 1998, and 61 per cent in 2004; the projected proportion of employees in UK workplaces matched to the samples at both dates was 48 per cent. Putting things a different way, two-fifths of employers were heavy outsourcers (4+ services) at both dates, and an approximate half of UK employees at both dates would be found in such firms.  The statistical tests have used the t statistic. Strictly speaking, as the test variables are measured at ordinal level and cannot readily be shown to have interval level properties, this is not appropriate. From a formal point of view, a non-parametric test is required. All tests have been repeated using the Mann-Whitney U-test for rank ordered scores. The results replicate nearly all the results using t. Where they do not this has been noted. It is believed, at the same time, that in most cases the ranks or scores of the variables tested do fit points on a linear scale with good approximation, and that the positions on this scale can be thought of as lying at more or less equal intervals. Choice of a position involves loss of information, but does not result in systematic misallocation, and positions are fair approximations to an underlying true score. In addition, the t test is far better known and more commonly used than closely equivalent non-parametric statistics such as the Mann-Whitney U-test.

Flexible Organizations and the New Working Life

52

Table 3.3

Numerical flexibility: Employers’ use of outsourcing, 1998 and 2004 1998 Establishments Employees weighted weighted n % n %

0 1 2 3 4 5 6 7 8 9 or more

2004 Establishments Employees weighted weighted n % n %

273 330 324 346 304 208 138 148 67 53

13 15 15 16 14 10 6 7 3 3

181 214 306 354 298 264 219 171 99 84

8 10 14 16 14 12 10 8 5 4

182 163 196 240 193 118 86 63 32 21

14 13 15 19 15 9 7 5 2 1

207 208 257 327 317 237 189 174 75 85

10 10 12 16 15 11 9 8 4 4

2,192

100

2,192

100

1,295

100

2,077

100

An analysis of what services were outsourced at each date will not be undertaken here, but to summarize: on both occasions 60 per cent of workplaces said they bought in building maintenance and repair services; on the other hand, recruitment services were bought in almost six times more often in 1998, and just over four times as often in 2004. The likelihood of buying in a service varied slightly between the two years, with printing/photocopying falling slightly in 2004, but with very large proportionate increases in the likelihood of outsourcing security or training services. (The latter changes are also highly significant statistically.) There were also modest but statistically significant increases in the proportions of workplaces outsourcing cleaning, transport, ‘temp’ labour, catering, and pay roll preparation services in 2004. Predictably, perhaps, larger establishments were more likely to outsource more services; but the difference in mean number of outsourced services between the largest establishments (over 700 current employees) and the smallest establishments (12 or fewer employees) was not particularly striking (4.8 against 2.6). Still, use of outsourcing is far more common than NS employment contracts as a form of numerical flexibility. Moreover, 26 per cent of outsourcing workplaces in 2004 (1998, 17 per cent) stated that contractors were now doing work which five years earlier would have been done by employees of the establishment; yet in only 8 per cent of these cases were the people who were doing the outsourced work former employees. The association of outsourcing with view of managers’ responsiveness, workplace climate, and organizational attachment is shown in Table 3.4. In this case the cut-point for each year was set at four services: all establishments

5.

4.

1. 2. 3.

-3.24 -3.07 -4.12

3.62 3.50 3.38

** ** ***

ns ***

Sig. t

3.79 3.66 3.49

Three or fewer activities outsourced 6.29 3.61 3.69 3.56 3.44

5.81 3.49

-7.40 -7.23 -3.37

-7.82 -8.00

WERS 5 (2004) Four or more t activities outsourced

*** *** ***

*** ***

Sig. t

*** p<0.001, ** p<0.01, * p<0.05, + p<0.10. For t-test equal variances assumed; values for unequal variances assumed almost identical. N (1998); 23,992 (2004) 17,652. Weighted, and excluding managers (SOC Major Group 1), and (2004) establishments with 5–9 employees. The unweighted WERS data for both years give inaccurate estimates for the whole UK. For employees, the employee weighted estimate (proportion of UK employees working in establishments with 10 or more persons) is relatively minor; for establishments, the weighted estimate is massively different because WERS over-samples larger firms and under-samples small firms. The schedules allowed reporting of up to 4 non-standard forms of employment. A small number of establishment (12 in 1998, 23 in 2004) reported using 4 forms; these cases have been aggregated to the 3 forms total. The WERS 5 (2004) sample is restricted to establishments with 10 or more employees, in order to achieve strict comparability with the WERS 4 sample. The full WERS 5 sample includes firms reporting 5–9 employees. This has a strong effect on the weighted sample, eliminating the equivalent of exactly 1,000 tiny employers. In the unweighted sample there are only 233 establishments with 5–9 employees.

Notes:

-1.64 -4.48

5.83 3.40

WERS 4 (1998) Four or more t activities outsourced

Outsourcing, workplace climate and organizational attachment

Three JOB FACET or fewer activities outsourced Managers’ responsiveness and communicativeness 5.89 Climate, relations between management and 3.46 employees Feel loyal to my organization 3.66 Proud to tell people who I work for 3.54 Share many values of organization 3.42

Table 3.4

JOB FACET

5.

4.

1. 2. 3.

3.63 3.53 3.36

3.63 3.58 3.42

-0.05 -3.01 -3.55

0.19 3.36 ns ** ***

ns **

Sig. t

3.78 3.63 3.53

6.35 3.64

Security guaranteee

3.73 3.60 3.46

5.95 3.53

-2.06 -1.03 -3.25

-4.59 -3.74

WERS 5 (2004) No guaratee t of security

* ns **

*** ***

Sig. t

*** p<0.001, ** p<0.01, * p<0.05, + p<0.10. For t-test equal variances assumed; values for unequal variances assumed almost identical. N (1998); (2004) 17,652. Weighted, and excluding managers (SOC Major Group 1), and (2004) establishments with 5–9 employees. The unweighted WERS data for both years give inaccurate estimates for the whole UK. For employees, the employee weighted estimate (proportion of UK employees working in establishments with 10 or more persons) is relatively minor; for establishments, the weighted estimate is massively different because WERS over-samples larger firms and under-samples small firms. The schedules allowed reporting of up to 4 non-standard forms of employment. A small number of establishment (12 in 1998, 23 in 2004) reported using 4 forms; these cases have been aggregated to the 3 forms total. The WERS 5 (2004) sample is restricted to establishments with 10 or more employees, in order to achieve strict comparability with the WERS 4 sample. The full WERS 5 sample includes firms reporting 5–9 employees. This has a strong effect on the weighted sample, eliminating the equivalent of exactly 1,000 tiny employers. In the unweighted sample there are only 233 establishments with 5–9 employees.

Notes:

5.86 3.44

WERS 4 (1998) No guaratee t of security

5.85 3.37

Security guaranteee

Numerical flexibility: Jobs in workplace not guaranteed/exempt from compulsory redundancy and approval of management, perceived workplace relations and organizational commitment

Managers’ responsiveness and communicativeness Climate, relations between management and employees Feel loyal to my organization Proud to tell people who I work for Share many values of organization

Table 3.5

The Impact of Flexibility on Employee Morale and Involvement

55

reporting they outsourced three or fewer services were place in one group, and those establishments outsourcing four or more services placed in the second. In 1998, the higher resort to outsourcing group had lower mean scores for each of the five tests, and these were significant in four cases, though only clearly so in two cases. In 2004, the position is quite different. Not only were mean scores for the group in higher outsourcing firms again lower in all five tests, but in every case they were very significantly so in statistical terms. (The t-values values are much higher.) Constructive and subjective insecurity The UK economy does not apply a ‘hireand-fire’ principle with the same rigour as the US. Employment rights remain extensive, and there is vigorous competition between legal firms to contest unfair dismissals on a ‘no-win no-fee’ basis. Moreover, the average length of employment spells has not shortened drastically since the 1980s. However, employment protection is decidedly less extensive than in some other European countries; and it remains possible for employers so inclined to evade at least some legal provisions by drawing up an appropriate contract that some job candidates may be too anxious or inexperienced to challenge. Nor is protection automatic, but staged over time. In particular, there is almost no protection from redundancy in the first two years of service. However, it is open to employers to formally offer better job security than the legal minimum, and a minority do so. In WERS 4 (1998) 8 per cent of employers covering about 11 per cent of WERS employees, said they provided guaranteed job security, in particular a ‘no compulsory redundancy’ undertaking; in 2004 this again applied to 8 per cent of establishments and 9 per cent of employees. (The proportion for full-time employees is much higher in both cases.) Many (79 per cent) employers agreed that employees were in fact led to expect long-term job security. Still, unless some specific guarantee is provided, employees must assume that their jobs are very insecure. No warning is necessary for most labour market active people; they know the score. Table 3.5 shows that such ‘constructive insecurity’, which is perhaps the fundamental feature of labour market flexibility in the UK, has relatively little impact on employee morale. With the exception of view of the local employee relations climate in 1998, all the associations are negative; but the scale of difference in both years is quite small. It is slightly surprising that the morale of employees holding ‘guaranteed’ jobs did not differ more. On the other hand, UK employees might have grown habituated to the idea of a degree of fundamental insecurity, though only 16 per cent of WERS 5 (2004) employees felt certain or fairly certain that their jobs were insecure. This subjective evaluation has a dramatic effect on the mean scores of the test variables, sending them to a level equivalent to 20 percentage points lower. The most worried about their security were not the younger employees or people fairly new in their jobs; they tended to be older and by far the biggest group were those who had held their jobs over 10 years. It proved impossible to link this sense of insecurity as closely as might be

56

Flexible Organizations and the New Working Life

wished with flexibility in any specific form; but individuals who felt insecure were more likely, but not greatly so, to be employed at workplaces operating multiple forms of flexibility, as shown by a measure that will be discussed below. Temporal flexibility The 1998 WERS 4 survey provides less data relevant for examining temporal flexibility than does WERS 5 in 2004. In fact, there are no exactly common measures for both dates. However, the question JOVERTIM, which asked about overtime working, comes closest. Strict comparability is absent because the reference group for the enquiry altered. The reference group in 1998 was the largest non-manager Major Occupational Group (MaG) in the UK SOC 1990 classification; in 2004 it was the largest non-manager Occupational Unit Group (OUG) in the SOC 2000 scheme. The first is a far broader classification than the second, in terms of skill specializations and exact job content, though not in terms of skill level required. However, it can be shown, first, that the largest OUG is in nearly every case drawn from the largest MaG in most WERS workplaces (and therefore in the UK) and that the two amount to more or less the same thing within a given workplace (Rose 2008). They can therefore be compared with low risk of serious error. Table 3.6 shows, in fact, a great deal of similarity between the two years. Though it is not possible to show how many hours overtime per worker per week were worked, there is considerable evidence for a continuing problem of ‘overtime addiction’ in the UK: 45 per cent of workplaces in the employee weighted sample reported high levels of involvement in overtime work in 1998, and 43 per cent in 2004. Outside management and some professional circles, ‘presentee-ism’ – compulsive overtime working to prove commitment to the organization – becomes rarer. Overtime is more likely to be worked through personal choice, as a way of generating additional income, rather than through group pressures or some other moral constraint. Not surprisingly then, as Table 3.7 shows, neither in 1998 nor 2004 did people who worked in ‘high overtime’ workplaces have very significantly lower mean scores for workplace climate or management communication, though scores were lower and significantly so. However, there is virtually no effect at all on expressions of organizational commitment; in both years, once again, means for the higher overtime workplaces were slightly higher, though in only one case significantly higher – but then only narrowly so.  WERS 4 (1998) did not include a question about the proportion of employees expected to change jobs in the average working week. The reference group for flexibility information was the largest of the nine Major Occupational Groups (MaGs) in the UK 1990 Standard Occupational Classification present in the workplace. These include 30–40 unit occupations. In 2004 the reference group became the largest Occupational Unit Group (OUG). In fact, the change was less drastic than it might seem. On average, the largest unit occupation present in the workplace accounted for 50 per cent of all members of the largest MaG.

The Impact of Flexibility on Employee Morale and Involvement

Table 3.6 Proportion of reference group normally working overtime None Just a few Some Around half Most Almost all All

57

Temporal flexibility: Overtime working, 1998 and 2004 1998 Establishments Employees weighted weighted n % n %

2004 Establishments Employees weighted weighted n % n %

415 501 295 253 215 195 314 2,188

237 320 224 171 95 99 134 1,280

19 23 13 12 10 9 14 100

238 495 456 315 289 187 200 2,180

11 23 21 14 13 9 9 100

18 25 17 13 7 8 10 100

225 483 433 354 227 174 137 2,033

11 23 21 17 11 8 7 100

Note: The reference group in 1998 was the largest non-manager Major Occupational Group (MaG) in the UK SOC 1990 clasification; in 2004 it was the largest non-manager Occupational Unit Group (OUG) in the SOC 2000 scheme.

One aspect of temporal flexibility – a requirement to be available on any day of the week and to work in any period during during the 24 hours of the day – has a sharply negative effect, shown in Table 3.8. (No questions were asked about ‘24/7’ working in 1998.) It can be argued that 24/7 is not a practice most workplaces would wish to introduce, because it is linked so closely to certain services, notably in health, travel, and security industries; however, it has certainly been spreading in the retain and leisure industries, and effects even quite small workplaces, such as taxi companies. Functional flexibility The basic idea of functional flexibility – ready movement of workers from one ‘job’ to another – is essentially simple. Yet providing operational definitions and measures for it presents surprisingly severe problems. To begin with, does ‘job’ mean a simple detail task, of the kind common during the Fordist era? Or does ‘job’ mean a whole range of tasks associated with a given post? Temporary supplementary support for workers under pressure because of a production crisis (‘helping out’), or substituting for a colleague (‘standing in for’) unable to meet a client or take a class, can be defined as functional flexibility. It is clearly not the same thing as receiving training for a second fairly distinct set of tasks in anticipation of such emergencies, and still less moving from one major set of tasks

JOB FACET

5.

4.

WERS 4 (1998) Half or t more main MaG overtime regularly 5.75 -4.99 3.39 -4.84 3.65 1.66 3.53 2.26 3.40 1.07 *** *** ns * ns

Sig. t

None/less than half OUG work overtime regularly 6.03 3.58 3.72 3.59 3.44

WERS 5 (2004) Half or t more main OUG overtime regularly 5.94 -1.70 3.55 -0.96 3.76 2.91 3.63 3.24 3.49 3.28

+ ns ** ** **

Sig. t

*** p<0.001, ** p<0.01, * p<0.05, + p<0.10. For t-test equal variances assumed; values for unequal variances assumed almost identical. N (1998); 23,992 (2004) 17,652. Weighted, and excluding managers (SOC Major Group 1), and (2004) establishments with 5–9 employees. The unweighted WERS data for both years give inaccurate estimates for the whole UK. For employees, the employee weighted estimate (proportion of UK employees working in establishments with 10 or more persons) is relatively minor; for establishments, the weighted estimate is massively different because WERS over-samples larger firms and under-samples small firms. The schedules allowed reporting of up to 4 non-standard forms of employment. A small number of establishment (12 in 1998, 23 in 2004) reported using 4 forms; these cases have been aggregated to the 3 forms total. The WERS 5 (2004) sample is restricted to establishments with 10 or more employees, in order to achieve strict comparability with the WERS 4 sample. The full WERS 5 sample includes firms reporting 5–9 employees. This has a strong effect on the weighted sample, eliminating the equivalent of exactly 1,000 tiny employers. In the unweighted sample there are only 233 establishments with 5–9 employees.

Notes:

1. 2. 3.

None/less than half MaG work overtime regularly 5.94 3.46 3.63 3.50 3.39

Temporal flexibility: Overtime working, workplace climate and organizational attachment

Managers’ responsiveness and communicativeness Climate, relations between management and employees Feel loyal to my organization Proud to tell people who I work for Share many values of organization

Table 3.7

The Impact of Flexibility on Employee Morale and Involvement

Table 3.8

59

Temporal flexibility, effect of having a 24/7 work schedule

JOB FACET Managers’ responsiveness and communicativeness Climate, rels management/ employees Feel loyal to my organization Proud to tell people who I work for Share many values of organization

6.09

WERS 5 (2004) Has other t working times 5.72 -6.66

3.59

3.40

-10.95

***

3.75 3.61

3.69 3.60

-3.62 -0.67

*** ns

3.48

3.42

-3.47

**

Work on a 24-7 basis

Sig. t

***

Notes: 1. *** p<0.001, ** p<0.01, * p<0.05, + p<0.10. For t-test equal variances assumed; values for unequal variances assumed almost identical. 2. N (1998); 23,992 (2004) 17,652. Weighted, and excluding managers (SOC Major Group 1), and (2004) establishments with 5–9 employees. 3. The unweighted WERS data for both years give inaccurate estimates for the whole UK. For employees, the employee weighted estimate (proportion of UK employees working in establishments with 10 or more persons) is relatively minor; for establishments, the weighted estimate is massively different because WERS over-samples larger firms and under-samples small firms. 4. The schedules allowed reporting of up to 4 non-standard forms of employment. A small number of establishment (12 in 1998, 23 in 2004) reported using 4 forms; these cases have been aggregated to the 3 forms total. 5. The WERS 5 (2004) sample is restricted to establishments with 10 or more employees, in order to achieve strict comparability with the WERS 4 sample. The full WERS 5 sample includes firms reporting 5–9 employees. This has a strong effect on the weighted sample, eliminating the equivalent of exactly 1,000 tiny employers. In the unweighted sample there are only 233 establishments with 5–9 employees.

to another regularly and in accordance with a management strategy. Although it is not easy to see a way of doing so, given the data to hand, it seems highly probable that the four types of practice to be described vary not only in substance, but in their import and embodied intent. Then again, to evaluate the effects of flexibility of any sort we need to assess ‘exposure’, that is the likelihood of workers at a given workplace being involved in the practice concerned. Managers might call upon just a few workers in one particular section to learn other operations, but rarely call on them actually to perform the operations: for example, window dressers in a large store might be asked to learn and undertake product demonstration from time to time; mechanics in a large auto service department might have to be ready to help out, now and

60

Flexible Organizations and the New Working Life

then, at the spare-parts point of sale. Alternatively, all members of a key worker group might be given extensive multi-skills training and expected to switch jobs at least once a week or even more frequently: for example, all employees in a large bar-restaurant might be moved at any time from waiting at table, to serving drinks or ‘helping out’ in the kitchen. These complications make it very difficult to assess the overall degree of functional flexibility in many UK workplaces or in the UK economy as a whole. The problems of making such estimates using the WERS 5 data are discussed in Rose (2008). The 1998 survey asked about three different aspects of functional flexibility: ‘stretched-contract’ working; team working with job rotation; and training for job-switching. The 2004 survey repeated all three of these enquiries and added a further enquiry about actual job-switching practice. It also added an additional follow-up question about the content of team working, asking specifically whether it included the practice of job rotation. To some extent, these practices can be seen as being associated with broadly different levels of systematization by management of a functional flexibility regime. Contract stretching may be done on a very casual, extemporized basis; the ‘jobs’ rotated in team working are perhaps more likely to be tasks rather than posts; but to provide training for job switching implies an intention to introduce or facilitate it as normal practice; actually practising job switching on a regular basis bears witness to a plan brought to completion. Workplaces saying they had a definite strategy for human resources were no more likely to say they practised contract stretching than ‘non-strategist’ workplaces; but strategists were significantly more likely to operate team working with job rotation; and strategists were very much more likely to provide prior training for job-switching and implement actual job-switching. Each form of functional flexibility is examined in turn. Stretched-contract working Managers may often ask employees to do work not specified in their job description. Whether they do so, and how often they do so, provide at best a rough and ready guide to the degree of functional flexibility practised at a workplace. First, the question used in the WERS surveys suggests that the requests would be irregular, at short notice, and primarily on a voluntary basis, typically to deal with some emergency. Secondly, it is not clear that functional flexibility was always what was requested: the question used to elicit this information asked for agreement to the statement: ‘We frequently ask employees at our workplace to help us in ways not specified in their job description’. Helping  The supplementary teamwork questions were: CTEAMHOA (Do team members depend on each other’s work to be able to do their job?), CTEAMHOB (Are team members able to appoint their own team leaders?), CTEAMHOC (Do team members jointly decide how the work is to be done?), CTEAMHOD (Are teams given responsibility for specific products or services?) and CTEAMHOE (Do tasks or roles rotate among the members of the team?). However, on the (computer aided) interview schedule the ‘job rotation’ question was placed immediately after CTEAMHOA. Only ten establishments used teams for job rotation and for nothing else.

5.

4.

1. 2. 3.

** *** ns *** ns

Sig. t

Did not agree managers ask for ex-contract work 6.07 3.58 3.75 3.62 3.48

WERS 5 (2004) Agree/ t strongly agree often request ex-contract work 5.92 -3.18 3.52 -4.00 3.72 -2.27 3.60 -1.35 3.44 -3.04

** *** * ns **

Sig. t

*** p<0.001, ** p<0.01, * p<0.05, + p<0.10. For t-test equal variances assumed; values for unequal variances assumed almost identical. N (1998); 23,992 (2004) 17,652. Weighted, and excluding managers (SOC Major Group 1), and (2004) establishments with 5–9 employees. The unweighted WERS data for both years give inaccurate estimates for the whole UK. For employees, the employee weighted estimate (proportion of UK employees working in establishments with 10 or more persons) is relatively minor; for establishments, the weighted estimate is massively different because WERS over-samples larger firms and under-samples small firms. The schedules allowed reporting of up to 4 non-standard forms of employment. A small number of establishment (12 in 1998, 23 in 2004) reported using 4 forms; these cases have been aggregated to the 3 forms total. The WERS 5 (2004) sample is restricted to establishments with 10 or more employees, in order to achieve strict comparability with the WERS 4 sample. The full WERS 5 sample includes firms reporting 5–9 employees. This has a strong effect on the weighted sample, eliminating the equivalent of exactly 1,000 tiny employers. In the unweighted sample there are only 233 establishments with 5–9 employees.

Notes:

WERS 4 (1998) Agree/ t strongly agree often request ex-contract work 5.81 -3.01 3.39 -6.11 3.63 -0.05 3.56 3.64 3.37 -0.72

Stretched contract working, manager informant agreed/strongly agreed

Did not agree JOB FACET managers ask for ex-contract work Managers’ responsiveness and communicativeness 5.92 Climate, rels management/employees 3.47 Feel loyal to my organization 3.63 Proud to tell people who I work here 3.51 Share many values of organization 3.38

Table 3.9

62

Flexible Organizations and the New Working Life

might be interpreted as working overtime or at weekends, that is, as providing temporal flexibility as well as – or even, rather than – functional flexibility; and there are further difficulties of interpretation (Rose 2008, 8–9) which will be overlooked here. The enquiry certainly allows for functional flexibility, and the present writer believes it would in the great majority of cases be interpreted as referring to both functional and temporal flexibility. So it may be regarded as a measure of functional flexibility but it is a poor and weak one. The stretched-contract enquiry was put in both 1998 and 2004. In both years, just over one-third of employers said they did not make such requests ‘frequently’ – leaving open the possibility that many of them might still make such requests but only from time to time, or make them only very exceptionally. On both occasions, however, a majority of workplaces reported that they did make such frequent requests for flexible working on an ad hoc basis. Associations with the five ‘response’ measures are shown in Table 3.9. Once again, all results except one show a negative association with having a job in a higher flexibility workplace, though two of these results are not statistically significant and three are barely significant. In the 1998 sample, moreover, people located in higher flexibility workplaces were more likely to say they were proud to work there. Overall, then, the results for stretched contract working by and large add to the emerging overall picture of generally negative effects for flexibility practices of any kind. Team working  Teamwork might seem to lie at the heart of functional flexibility, but this is not necessarily so. Some team working seems to amount to little more than half-hearted imitation of the autonomous group working advocated from the 1970s by work reformers. One frequent effect of autonomous group organization is to shift some disciplinary functions from line managers or supervisors to the group itself. Thus teams built on such logic have at least as much to do with boosting productivity through the intensification of work as through functional flexibility. This was recognized when team working questions used in WERS 4 in 1998 were being redesigned for WERS 5. A follow-up question about what teams did was added in 2004, asking specifically whether they incorporated any form of job rotation. Thus, the results for the two years can only be compared fully if a clear link with functional flexibility is discarded. However, it is instructive to complicate the comparison somewhat: thus Table 3.10 is extended to include results for a second ‘filtered’ variable, for teamwork with job rotation; results from using it are set alongside the results for 1998 and 2004, where workplaces are classified simply by the span of team working they reported, without further qualification. The effect of an ‘unrestricted’ definition is clear. In workplaces making great use of team working (‘everyone is in a team’) in 1998, approval of employees for management responsiveness and the local employee relations climate, and expression of attachment to the organization, was massive. (This suggests that team working did not have the effect of intensifying work in most workplaces.) Approval was again clear, though far weaker, in 2004 using an identical definition

5.

4.

1. 2. 3.

13.00 9.94 9.20 9.44 13.33

6.18

3.52

3.71 3.62

3.47

WERS 4 (1998) All t employees in a team

***

*** ***

***

***

Sig. t

3.42

3.72 3.59

3.53

3.52

3.76 3.63

3.56

7.76

2.70 2.59

2.21

***

** *

*

3.46

3.73 3.61

3.54

3.48

3.74 3.61

3.57

1.61

0.37 0.28

1.72

WERS 5 (2004) Teamwork defined as in 1998 (no filter for job Teamwork with job rotation rotation) Fewer Fewer All All Sig. t t t than than employees employees 100% in in a team 100% in in a team a team a team 5.87 6.15 5.51 *** 5.92 6.18 4.54

ns

ns ns

+

***

Sig. t

*** p<0.001, ** p<0.01, * p<0.05, + p<0.10. For t-test equal variances assumed; values for unequal variances assumed almost identical. N (1998); 23,992 (2004) 17,652. Weighted, and excluding managers (SOC Major Group 1), and (2004) establishments with 5–9 employees. The unweighted WERS data for both years give inaccurate estimates for the whole UK. For employees, the employee weighted estimate (proportion of UK employees working in establishments with 10 or more persons) is relatively minor; for establishments, the weighted estimate is massively different because WERS over-samples larger firms and under-samples small firms. The schedules allowed reporting of up to 4 non-standard forms of employment. A small number of establishment (12 in 1998, 23 in 2004) reported using 4 forms; these cases have been aggregated to the 3 forms total. The WERS 5 (2004) sample is restricted to establishments with 10 or more employees, in order to achieve strict comparability with the WERS 4 sample. The full WERS 5 sample includes firms reporting 5–9 employees. This has a strong effect on the weighted sample, eliminating the equivalent of exactly 1,000 tiny employers. In the unweighted sample there are only 233 establishments with 5–9 employees.

Notes:

Managers’ responsiveness 5.67 and communicativeness Climate, relations between 3.37 management and employees Feel loyal to my organization 3.59 Proud to tell people who I 3.49 work for Share many values of 3.31 organization

Fewer than 100% in a team

Functional flexibility – Teamwork (definitions for 1998 and 2004, restricted 2004)

JOB FACET

Table 3.10

64

Flexible Organizations and the New Working Life

of teamwork. Yet if team working was filtered for practising job rotation this approval came close to disappearing. The results for tests along these lines in the 2004 employee sample show virtually no difference in one case, and none at all in three others, between the groups. Only the clearly positive effect on estimate of managers’ responsiveness remains. We are left in fact with two quite different, possibly interacting effects: firstly, between 1998 and 2004 team working per se became less likely to gain employee approval; secondly, once a job rotation control is introduced, such approval almost vanishes. It seems clear that any independent effect of authentic functional flexibility in team working tends to have mildly negative effects. Training for job switching If managers expect employees to switch from their own normal set of tasks to one or more other sets of tasks, then it is evident that it would be advantageous to provide customized training for the new assignments before an employee is involved in the job switching system. Workplaces were asked, in both 1998 and 2004, what proportion of the largest occupational group in the workplace had received training to do jobs other than those they did normally; 69 per cent of workplaces claimed to be providing such training for at least some employees in the reference group; 79 per cent of employees in 1998 worked at such workplaces. In 2004, the reference occupation became more narrowly defined, but 61 per cent of workplaces still reported training for job switching in their local reference group, while 76 per cent of employees worked at such establishments. Clearly, in both years, an appreciable amount of training was occurring. In both years, as Table 3.11 indicates, every test shows a negative relationship with being in a workplace where the training effort for functional flexibility is more ambitious, and all the tests bar one are statistically significant at the 5 per cent level or better. For both years, it is worth noting, the test groups have been divided to create two of more or less equal size; if the test is a straightforward one between workplaces providing training and those not providing training then the negative effect is far sharper and very significant indeed in every case.

 There are several further interesting features of the teamwork data. For example, without a control for job rotation workplaces either reported a great deal of team working (80 per cent or more employees in a team) or rather little (less than 40 per cent in a team). In 2004 only 10 per cent of employees worked in ‘non-teamwork’ workplaces, and almost four-fifths (77 per cent) in workplaces that made heavy use of it. When the job rotation filter is introduced, almost half (44 per cent) of 2004 employees were to be found in such workplaces; yet 40 per cent of employees were to be found in ‘heavy use’ workplaces. A final complication is that any ‘positive’ effect of working in teams is not directly related to a ‘culture’ of teams as shown by the proportion of employees organized in them. In particular, employees in workplaces reporting that 80–99 per cent of employees were in teams that practised job rotation have significantly lower mean scores on all five tests of association than employees attached to workplaces reporting that ‘all’ their workforce was organized in teams.

5.

4.

1. 2. 3.

WERS 4 (1998) No or little t formal training effort to support job switching 5.80 -2.98 3.40 -3.85 3.62 -3.20 3.48 -5.14 3.36 -5.54 ** *** ** *** ***

Sig. t

Higher formal training effort to support job switching 6.05 3.58 3.74 3.63 3.47

WERS 5 (2004) No or little t formal training effort to support job switching 5.93 -2.40 3.51 -4.44 3.71 -1.81 3.58 -3.27 3.42 -4.16

* *** + ** ***

Sig. t

*** p<0.001, ** p<0.01, * p<0.05, + p<0.10. For t-test equal variances assumed; values for unequal variances assumed almost identical. N (1998); 23,992 (2004) 17,652. Weighted, and excluding managers (SOC Major Group 1), and (2004) establishments with 5–9 employees. The unweighted WERS data for both years give inaccurate estimates for the whole UK. For employees, the employee weighted estimate (proportion of UK employees working in establishments with 10 or more persons) is relatively minor; for establishments, the weighted estimate is massively different because WERS over-samples larger firms and under-samples small firms. The schedules allowed reporting of up to 4 non-standard forms of employment. A small number of establishment (12 in 1998, 23 in 2004) reported using 4 forms; these cases have been aggregated to the 3 forms total. The WERS 5 (2004) sample is restricted to establishments with 10 or more employees, in order to achieve strict comparability with the WERS 4 sample. The full WERS 5 sample includes firms reporting 5–9 employees. This has a strong effect on the weighted sample, eliminating the equivalent of exactly 1,000 tiny employers. In the unweighted sample there are only 233 establishments with 5–9 employees.

Notes:

Managers’ responsiveness and communicativeness Climate, relations between management and employees Feel loyal to my organization Proud to tell people who I work for Share many values of organization

JOB FACET

Higher formal training effort to support job switching 5.91 3.45 3.66 3.55 3.43

Table 3.11 Training for job-switching, workplace climate and organizational attachment

Flexible Organizations and the New Working Life

66

Operating actual job-switching As noted, in 1998 workplaces were not asked to say whether they actually operated a job-switching system. If the informant’s estimates for the amount of both training for job switching, and proportion of the reference group actually making job switches are accurate, then they show a somewhat surprising situation. There is a considerable lack of congruence between the two. More surprisingly still, for a British sample, training effort exceeds application of the skills transferred. An index number reflecting the proportions of employees receiving training at each level was created, and a similar one for job switching actually reported; the switching index is only 0.81 of the training index. At the two lowest levels, there is quite close correspondence between scale of training effort and scale of application; but at each step upwards the ‘heteroscedasticity’10 of training with respect to switching steadily increases; three-quarters of workplaces reporting that all the reference group received training to enable job switching, reported fewer employees actually being switched. One implication of this is that skill discrepancy effects on work attitudes (Rose 2005), especially job satisfaction, directly linked to imbalance between training received and failure to apply it, may be found in the WERS 5 employee sample. However that possibility cannot be explored here. The effect of job switching on mean values for the test variables is apparent in Table 3.13; for employees in workplaces practicing skill switching, at any level of intensity, they are lower in all cases by a very clear margin in each case and the difference is highly significant in statistical terms: the effect is even stronger

10 As shown by standard deviation values: Table 3.12

Mean level (0–6) of largest OUG ‘formally trained’ do other job (fxfunc_trainedojb)

fxfunc_dotherjb Proportion of the largest OUG that actually does other jobs once or more frequently each week 0 0%

.52

5,910

.965

1. 1–19%

1.44

8,844

.981

2. 20–39%

2.58

3,668

1.349

Mean

N

Std. Deviation

3. 40–59%

3.49

1,399

1.377

4. 60–79%

3.19

873

1.640

5. 80–99%

3.80

903

2.020

6. 100%

3.36

854

2.672

Total

1.75

22,451

1.634

Note: The data are illustrative only. Strictly speaking the levels are not equivalent to interval scores, though it is believed that in practice they were interpreted by then informant in a ‘folk measurement’ context very close to interval level.

The Impact of Flexibility on Employee Morale and Involvement

Table 3.13

67

Actual job switching, workplace climate and organizational attachment (WERS 5 only)

JOB FACET

Managers’ responsiveness and communicativeness Climate, rels management/employees Feel loyal to my organization Proud to tell people who I work for Share many values of organization

WERS 5 (2004) Workplace Has this t does practice not not have this practice 6.38 5.87 -8.55

***

3.69 3.82 3.71 3.54

*** *** *** ***

3.51 3.70 3.57 3.41

-9.82 -7.07 -7.76 -8.32

Sig. t

Notes: 1. *** p<0.001, ** p<0.01, * p<0.05, + p<0.10. For t-test equal variances assumed; values for unequal variances assumed almost identical. 2. N (1998); 23,992 (2004) 17,652. Weighted, and excluding managers (SOC Major Group 1), and (2004) establishments with 5–9 employees. 3. The unweighted WERS data for both years give inaccurate estimates for the whole UK. For employees, the employee weighted estimate (proportion of UK employees working in establishments with 10 or more persons) is relatively minor; for establishments, the weighted estimate is massively different because WERS over-samples larger firms and under-samples small firms. 4. The schedules allowed reporting of up to 4 non-standard forms of employment. A small number of establishment (12 in 1998, 23 in 2004) reported using 4 forms; these cases have been aggregated to the 3 forms total. The WERS 5 (2004) sample is restricted to establishments with 10 or more employees, in order to achieve strict comparability with the WERS 4 sample. The full WERS 5 sample includes firms reporting 5–9 employees. This has a strong effect on the weighted sample, eliminating the equivalent of exactly 1,000 tiny employers. In the unweighted sample there are only 233 establishments with 5–9 employees.

than in the case of outsourcing. Actually operating a job switching system, is not good news for employee evaluations of managers’ responsiveness and workplace climate, and for organizational commitment. Subjective impact of flexibility practice The foregoing examination establishes grounds for expecting that, individually, the effect on employee morale of the most flexibility practices will often be somewhat negative and overall significantly so. The ‘flexibility discount’ on workplace morale of any given practice may be limited. But are these effects additive? When more than one practice is used, is there a steady increase in the effect?

68

Table 3.14

Flexible Organizations and the New Working Life

Scope of flexibility practice in UK workplaces with five or more employees*

Number of practices reported 1 2 3 4 5 6 7 8 9 Total

Weighted number of WERS 5 workplaces 18 (6) 100 (39) 237 (114) 395 (213) 471 (332) 570 (503) 327 (577) 162 (410) 14 (101) 2,295

Percentage of WERS 5 workplaces 1 (0) 4 (2) 10 (5) 17 (9) 21 (15) 25 (22) 14 (25) 7 (18) 1 (4) 100

Note: * Estimates for UK based on the establishment weighted data; unweighted WERS 5 sample distribution in brackets. Decimals rounded; 0<0.5.

The answer appears to be something like: Probably – but not in any simple linear way. One useful finding of the WERS data is that a ‘multi-track’ use of flexibility is widespread in the UK. Major reviews of the US data (Kalleberg 2001; Cappelli and Neumark 2004���������������������������������������������������������������� ) have concluded that there should be no prior expectation that several flexibility practices will be adopted together, as the Atkinson hypothesis suggested. In particular, it has been argued that the available US data (which are less comprehensive than those provided by WERS 2004) suggests that North American employers regard functional flexibility and numerical flexibility as strategic alternatives, not practices that normally will be applied in tandem. The WERS 5 data also show a weak negative association between the extent of job switching on the one hand, and outsourcing and/or use of non-standard contracts on the other; and it is statistically significant. Thus the question merits further examination. Otherwise the WERS material seems to count against a ‘narrow band’ approach. Many WERS 2004 workplaces made multiple use of flexibility practices. Table 3.14 shows proportions of workplaces reporting one or more of the nine practices considered in this chapter. All workplaces reported using one or more practice, and only six workplaces reported using just one in the unweighted sample, while the weighted sample suggests that less than one per cent of UK workplaces make such minimal use of flexibility. It needs to be remembered, however, that the weighted sample, besides compensating for the under-sampling of very small establishments and the over-sampling of very large ones, provides estimates for UK workplaces with five or more employees in 2004; many tiny workplaces (four or fewer employees) will have no formal flexibility arrangements at all. For workplaces in the sample range, the mean number of practices is estimated at 5.3, with almost half (47 per cent) workplaces adopting six to nine practices. It was much more common to use several practices than to use only a few.

The Impact of Flexibility on Employee Morale and Involvement

Figure 3.1

69

Number of flexibility practices and level of morale

A simple count of number of practices in use has evident weaknesses: it ignores the span of given practices, especially those relating to functional flexibility; and use of many practices does not imply coherence – one practice may apply to most employees, another to just some of a particular group, a third to only a few of some other group still. Yet all attempts to create a single index of flexibility, with each practice weighted where possible for its incidence, fails to show a clear and readily interpretable relationship with the variables relating to workplace climate and morale that are considered here.11 At the same time, and though it is in many respects a rough and ready measure, a simple count variable does reveal a clear but incomplete association between lower morale and extent of flexibility regime: see Figure 3.1. (As with the earlier analysis of means, employees in managerial occupations are excluded from this analysis.) To simplify interpretation, Figure 3.1 shows levels of positive morale as the proportion of scores above the mid-point of the scale used to measure them. All distributions follow essentially the same pattern – a relatively sharp initial drop between minimal use (one or two practices reported), followed by a relatively smooth and steady decline. The scale of this dwindling varies somewhat. Positive assessment of the quality of workplace relations, and of the responsiveness of managers, tumble almost 40 percentage points, while feeling loyal to the 11  The scope (number of forms of flexibility reported) variable weighted for span has 14 levels. Its (non-parametric) correlation is 0.67 with the straightforward scope measure to be used here. Both measures correlate negatively, and significantly (p>=0.01) with the key ‘response’ (workplace climate) variables, but those for the unweighted measure do so more closely.

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organization falls only 20 points, and being proud to say one works at the workplace only slightly more. Sharing many values with the employing organization shows a drop of 28 percentage points, but twenty of these are accounted for by moving from one to two or more practices. The ‘multiple use’ variable appears to show, then, that the incidence of flexibility in terms of the number of forms implemented, irrespective on the scale on which they are implemented, can have an appreciable effect on morale. Yet obvious problems arise. Firstly, the graphs themselves show that the association with any of the morale indicators can be considered a linear one in only a very approximate sense. Secondly, the variable ‘extent of flexibility usage’ is somewhat unreliable – inescapably so given known limitations in the data; the Correlation Alpha (0.52) of the underlying flexibility indicators, derived from an Optimal Scaling analysis, are already well below an acceptable level for presenting them as a scale in a technically correct sense. There is a third difficulty. An established structural effect in organization studies is that size of workplace can have a substantial effect on employee morale indicators (Idson 1990; Gazioglu ���������������������������������������������������������������������� and Tansel 2006���������������������������������������������� ). As it is reasonable to suppose that larger workplaces may also have more ambitious policies for flexibility, the effect shown here cannot be presented as a simple effect of scale of flexibility practice. But is the association nothing more than a size effect? It is not. There is certainly appreciable statistical collinearity between workplace size and scope of flexibility regime. Yet while the non-parametric correlation (Spearman) between a ranking for size of payroll and the scope of flexibility practice count is important (0.42), it is far from perfect. In correlations with morale variables, when the size replaces the scope of flexibility count, the fall in proportions of positive scores is less marked. Partial correlation analysis also suggests that number of flexibility practices may have up to four times more effect than sheer size on variance explained. A still further complication, important in view of Bradley’s remarks on the ‘alternative flexibility debate’ (Chapter 4 in this volume) needs mention. The erosion of employee morale was far less marked in those workplaces which operated some form of employee oriented time flexibility such as flexi-time, chances to switch from full-time to part-time and vice versa, sharing a full-time job, working at home by choice, and so on. The existence of such opportunities reverses the effects of wider scope flexibility.12 In sum, much further work is required to establish the independent effect of the extent of flexibility in the workplace on morale indicators, and to identify the most important variables moderating the effect. 12 The full list of time-shift advantages, followed by the sample proportion reporting them, were: flexi-time 48 per cent; job sharing (sharing a full-time job with someone else) 32 per cent; chance to reduce working hours (for example full-time to part-time) 47 per cent; chance to increase working hours (for example part-time to full-time) 45 per cent; working at or from home in normal working hours 17 per cent; changing working patterns including shifts 35 per cent; working the same number of hours per week across fewer days (for example 37 hours in four days instead of five) 27 per cent.

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Though the latter may not be as extensive as simple associations imply, there certainly is such an effect. There is one further, more complex but vital reason for believing this to be so. It seems likely that the data to hand may systematically understate the adverse effect on employee morale of flexibility practices. It is important to recall that the effects considered in this chapter, for the most part, must be viewed as indirect effects. Even in establishments making most use of flexibility practices, most employees were not directly involved in the flexibility regime. For example, we know for each workplace how many activities were outsourced, and the number has a definite negative association with morale indicators: we do not know which employees in the workplace sample were personally most affected by this practise. Surprisingly, it is almost impossible to identify with complete certainty employees who were directly affected personally by flexibility practices. The reasons for this are somewhat technical. Three of the functional flexibility enquiries were tied to the flexibility experience of the largest unit occupation present.13 The size of this ‘reference group’ component has been estimated at just under 29 per cent on average of the establishment payroll (Rose 2008). For all four functional flexibility practices, the manager informant was asked to estimate what proportion of the reference occupation involved in whatever flexibility practice was under consideration. Relatively few workplaces reported that more than four out of every ten of the members of their reference occupation were involved. In the great majority of cases, the chances of any employee being directly involved in a key functional flexibility practice in any way, let alone in a heavy way, was small: certainly no higher than a one in 12, and probably closer to one in 18. On average, then, just one or two individuals with direct involvement in a given functional flexibility practice will appear in most establishment samples – always provided a full 25 selfcomplete questionnaires were returned. (In fact the average was only about 16.) Attenuation of ‘flexibility effects’, thanks to the rarity of personal exposure to functional flexibility practices, seems likely to have occurred; however, its scale is a matter of guesswork; it cannot be estimated precisely. The latter remains to be established.

13  A revised version of the UK Standard Occuaptional Classification (SOC) was issued in 2000, with important detailed changes from the previous classification (SOC 1990). However, the same basic architecture was retained. Nine Major Groups (MaGs) of occupations, corresponding mainly to levels of skill, reflect the vertical division of labour, each decomposing into 6–8 Minor Groups (MiGs), each one of which decomposes in turn into Occupational Unit Groups (OUGs) which form horizontal division of labour (skill specialization) at its most detailed level. For example MaG 2 (Professional Occupations) embraces, among others, the MiG Educational Professionals, which in turn unpacks into several OUGs such as higher education teachers, secondary school teachers, etc.

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Conclusion: The flexibility mark-down on morale This chapter has examined data that a) establishes a profile of temporal, numerical, and functional flexibility for UK workplaces in the early 21st Century, and b) can show the kind of effect flexibility practices, individually and together, have on aspects of employee subjectivity relevant to workplace life. The analysis has shown that virtually all UK workplaces with five or more employees now make use of at least two flexibility practices, and almost half make use of five or more. However, just as the scope of flexibility (number of practices adopted) varies greatly, so does the span (coverage in terms of employees) of application of any given practice. Overall, flexibility in the UK emerges as probably having a lower incidence than might be thought: functional flexibility almost certainly does (Rose 2008). Whether they are regarded as modest in scale or not, nearly all distinct flexibility practices modify employee experience of the workplace employee relations climate, approval of line management, and organizational commitment. Together, these effects are clear and distinct in both WERS 4 (1998) and WERS 5 (2004).14 They are overwhelmingly negative; and they are statistically significant, and for the most part highly so. An important point made earlier bears repetition. WERS data allow workplace and individual employee data to be linked; thus, it is possible to specify, in particular, what kind of functional flexibility environment a given employee was experiencing. However, that is almost as far as causal tracking can go. Only in a very tiny number of cases is it possible to be certain that the employee was personally involved in, or directly affected by, the workplace functional flexibility regime in particular. There is a straightforward reason for this: employees were not asked whether they, personally, were directly involved in any functional flexibility arrangements – or in most others examined here. In the case of establishments with 25 or fewer employees, every employee was asked to complete a questionnaire. Thus, if a smaller establishment had adopted any kind of flexibility practice, then there is positive certainty that some at least of the employees completing questionnaires must have been affected directly by one or other flexibility practice. But this is a limiting case. Measurement of subjective effect is indirect and quite probably results in understatement of the negative effect on people directly affected. In a word, the estimates of effects provided above are conservative. Is this an effect limited to the UK? That seems most unlikely. However, little comment is possible on whether a ‘flexibility mark-down’ may occur in other countries. Earlier, it was pointed out that even the most elementary facts at the international level about the incidence of individual flexibility practices, or 14 Whole sample mean scores for the test variables of non-managerial employees rose, between the WERS 4 survey in 1998 and the WERS 5 survey in 2004, by up to 2 per cent. Given the huge employee numbers this change is significant and might be explained, for example, by rises in job security and real earnings between the dates. What is important for discussion of flexibility effects is that the latter remained: they are related to flexibility not general economic conditions or other contingent factors.

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distribution of types of flexibility regime, are not known with sufficient precision to reach definite verdicts. One partial exception is the multi-country comparison of numerical flexibility and non-standard employment in groups of European societies, where there have been a number of noteworthy studies (Yeandle 1999; Muffels 2002). Regrettably, O’Reilly’s (1992) examination of functional flexibility in the UK and France, focusing on the banking sector, is a rarity. O’Reilly shows a serious confusion in the literature available at the time between a) horizontal task expansion into similarly skilled areas, which usually involved little or no change in skills, and b) vertical job enlargement which normally did require skill enhancement; as she points out, this would obscure differences in job quality following technical change; however, apart from examining perceptions of work quality, her study does not explore the subjective consequences of change in tasks and jobs in any depth – her samples would have been too small, and tied to a single industrial sector, to enable many conclusions to be drawn from such an examination. There thus seems to be great scope for new comparative work of all kinds. International data comparable in quality to WERS are required for better grounded international comparison of the distribution of flexibility at societal level, and of the scope and span of flexibility regimes at workplace level. Even limited organizational data, provided it was directly comparable, would be valuable. The cost of such an exercise would be minute compared to that of collecting the detailed annual labour force data required by the European Union.15 But within societies other sorts of study are needed. The empirical evidence about subjective flexibility outcomes showed a persistent association between individual flexibility practices and broadly negative effects on employee subjective experience of workplace life; moreover, the effects appeared to be cumulative, increasing with the incidence of flexibility. The employee data could not take further a search for any chain of causality. Empirically, higher flexibility contexts were associated statistically with lower employee morale. Exactly why this might be so remains unclear, though many hypotheses can be put forward. It was not possible to identify with absolute certainty more than a few dozen employees directly involved in individual flexibility regimes; because of this it is impossible to say whether direct involvement in a flexibility practice results in still lower morale, and if so how much. The writer believes this would be so, resulting in a systematic understatement in this chapter of the negative effect, but has no way of showing it. So there is another lesson to be learned. A final degree of uncertainty that the scale of the mark-down of employee morale following adoption of a flexibility practice, and the obscurity of the process 15 In particular, the Quarterly Labour Force Survey in the UK, which collects highly detailed individual data about labour force participation, hours worked, training, and so on but very little about employment context such as the workplace or employing organization, and nothing whatsoever that is relevant to employee attitudes or well-being – although many labour economists have become pre-occupied with such questions.

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resulting in the mark-down, are the sort of limitations which must be accepted from cross-sectional surveys. True enough, cross-sectional work establishes a basic situation which no number of case-studies would allow; but inferences about organizational social relations remain largely ungrounded and conjectural. Case-study research, though not readily generalized, does reveal much about such processes and their apparent logic. It would help to define the processes producing a flexibility mark-down on the morale of employees, and start to answer such questions as ‘all employees or just some?’ or ‘does it affect the morale of some more than others?’, and above all the question of what transmits such effects. Such research should be supported in the strongest way by social scientists working mainly with quantitative data. Sennett (1998) is perhaps the most eloquent advocate of the view �������������� that, as they gradually accumulate, the social, psychological – and even moral – consequences of a drive towards flexibility are having deleterious if not calamitous effects on the social fabric of English speaking countries. However, such verdicts have mostly been delivered at a lofty level of discourse, leaving them open to damaging critique. In the view of Fevre (2007), these ‘nightmare’ forecasts from armchair or celebrity sociologists (he cites Beck and Giddens besides Sennett) simply proceed with insufficient reference to relevant data. As such, they might be positively damaging, aiding the very processes they purport to expose and contest by reinforcing employee fatalism. What is more, the alarmist cries are given credibility and resonance by working sociologists who uncritically repeat them. With the latter warning in mind, I hasten to conclude this examination by saying that I see no reason to believe that the existence of a flexibility mark down on employee morale is at all likely to attain unmanageable proportions in the foreseeable future. While the examination of possible causes must be taken up elsewhere, a quick review of the usual suspects fails to point to any simple, single cause. In particular, a greatly heightened sense of insecurity is unlikely to explain mark-down effects. In the WERS 5 data, feeling that one’s present job is insecure had no association with three functional flexibility variables: 13 per cent of people in workplaces reporting no regular job-switching in the reference occupation felt their job was insecure; so did 13 per cent of people in workplaces where every member of the reference occupation was involved in regular job switching, though there was a three percentage rise at the mid-point. Training for job switching, and teamwork with job rotation, produced a similar pattern. However, there is a significant increase in sense of insecurity with stretchedcontract working, and with the number of services outsourced by the workplace. Perception of increased insecurity is therefore likely to figure somewhere in any general explanation of the flexibility mark-down in employee subjectivity. It cannot explain all of this effect. We do not yet know what can. But we can now be quite certain that the effect is there.

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Friedrich, A., Kabst, R., Weber, W. and Rodehuth, M. (1998), ‘Functional flexibility: Merely reacting or acting strategically?’, Employee Relations 20:5, 504–523. Guest, D. (1997), ‘Human resource management and performance: A review and research agenda’, International Journal of Human Resource Management 8:3, 263–76. —— (1998), ‘On meaning, metaphor and the psychological contract: A response to Rousseau (1998)’, Journal of Organizational Behavior 19, 673, 677. —— (2004a), ‘Flexible employment contracts, the psychological contract and employee outcomes: An analysis and review of evidence’, International Journal of Management Reviews 5/6:1, 1–19. —— (2004b), ‘The psychology of the employment relationship: An analysis based on the psychological contract’, Applied Psychology: An International Review 53:4, 541–55. Guest, D. and Conway, N. (1998), Fairness at Work and the Psychological Contract (London: IPD). —— (2004), Employee Well-Being and the Psychological Contract (London: Chartered Institute of Personnel and Development). Guest, D., Conway, N., Briner, R. and Dickmann, M. (1996), The State of the Psychological Contract in Employment (London: IPD). Hakim, C. (1987), ‘Trends in the flexible workforce’, Employment Gazette, November. —— (1990), ‘Core and periphery in employers’ workforce strategies: Evidence from the 1987 ELUS survey’, Work, Employment and Society 4:2, 157–88. Kalleberg, A.L. (2001), ‘Organizing flexibly: The flexible firm in a new century’, British Journal of Industrial Relations 39:4, 479–504. Keliher, C. and Riley, M. (2003), ‘Beyond efficiency: Some by-products of functional flexibility’, Service Industries Journal 23:4, 98–113. Kersley, B., Alpin, C., Forth, J., Bryson, A., Bewley, H., Dix, G. and Oxenbridge, S. (2006), Inside the Workplace: Findings from the 2004 Workplace Employment Relations Survey (London: Routledge). Millward, N., Bryson, A. and Forth, J. (2000), All Change at Work? British Employment Relations 1980–98, as portrayed by the Workplace Industrial Relations Survey Series (London: Routledge). Muffels, R., Ton Wilthagen, T. and Van den Heuvel, N. (2002), ‘Labour Market Transitions and Employment Regimes: Evidence on the Flexibility-Security Nexus in Transitional Labour Markets’, Discussion Paper FS I 02–204, Berlin Centre for Social Science Research. O’Reilly, J. (1992), ‘Where do you draw the line? Functional flexibility, training and skill in Britain and France’, Work, Employment and Society 6:3, 369–96. Ouchi, W.G. (1980), ‘Markets, bureaucracies and clans’, Administrative Science Quarterly 25, 129–41. Pollert, A. (1988), ‘The flexible firm: Fixation or fact?’, Work, Employment and Society 2:3, 281–316.

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Chapter 4

Whose Flexibility? British Employees’ Responses to Flexible Capitalism Harriet Bradley

Introduction This chapter picks up and explores some of the issues identified by Skorstad and Ramsdal in their opening chapters. It deals with the ambiguity of the use of the term flexibility, as explored by Skorstad (Chapter 2) and points out that flexibility means different things to different people; moreover flexibility has very different implications if it is used in relation to an organization or an individual. Perhaps this very ambiguity and slipperiness in the meaning leads to the kind of polarization in debates that have evolved among academics about flexibility and the flexibilization of employment. As Skorstad and Ramsdal point out, some people see it in entirely positive terms, as removing the rigidities from the labour market and allowing increased productivity; while for others the implications are highly negative. Flexibility is equated with ‘flexploitation’, the removal of security and stability from employees, and the quest for cheap labour. A third group, state Skorstad and Ramsdal, adopt an historical perspective and argue that flexibility is nothing new, just one of an armoury of capitalist strategies for maximising profits (Pollert 1991). In this chapter I attempt to contribute to a more nuanced view, pointing out that there can be no overarching assessment of flexibility. How we interpret its effects will, for a start, depend on whose viewpoint we take as our starting point. It is suggested here that employers, unions and different groups of workers use the term and assess its impact very differently. In particular, I present the views of a sample of young adult employees, for whom the connotations of flexibility are by and large positive. However, I argue that, despite their own adoption of what can be called ‘internalized flexibility’, some of the long-term consequences may be extremely negative. Thus the effects and impacts of flexibility are indeed ambiguous. We have to ask, whose flexibility? What type of flexibility? Moreover, we need to acknowledge that flexibilization of work is neither wholly a ‘good thing’ nor wholly bad. This chapter differs from most of the others in the book in that its focus is not on the organization, but on individuals. It explores the impact of changes in employment relations on the lives and life-courses of young adults in Britain. It is not, then, a study of organizational flexibility per se but of some of its social consequences. Taking the perspective of a sociologist, I am concerned with the broader social processes

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and structures of what some have called ‘flexible capitalism’ (Sennett 1998). In terms of Skorstad’s typology, the aspects of organizational flexibility which are most relevant here are manning and culture. The need for flexibility in manning has led in the UK to the development of an array of forms of what have been labelled ‘non-standard’ employment. In implementing these contractual arrangements the employers have struck a bargaining arrangement with some employees in terms of ‘flexitime’, which then becomes a sought-after concession. This in turn affects the culture of the organization, with the individualized bond between employer and employee becoming a stratagem for obtaining worker commitment. At the same time the quest for ‘functional flexibility’ has important impacts on the content of jobs and the development of career paths. Thus, it may seem that employers and employees have negotiated their way to an accommodation which seems to have benefits for both parties. However, as we shall see, for employees there is a sting in the tail …. Flexibility in the UK In the UK during the past decades, the notion of flexibility has become a central and indeed essential term for any discussion of the labour market or work relations. The concept springs from Atkinson and Meager’s work on the ‘flexible firm’ (Atkinson 1984, 1986; Atkinson and Meager 1986) and was used as part of a debate surrounding the shift from Fordism to post-Fordist production systems; flexibility was needed to counter the supposed rigidities of Fordist production, the intransigence of trade unions in their attachment to ‘custom and practice’ along with their objections to workers crossing the boundaries of their job descriptions, and the supposed inability of bureaucratized companies to respond quickly to the demands of a more volatile customer-driven market. The flexible firm needed to have a type of suppleness – the ability to reorganize quickly if necessary. The term was then extended to the labour market through the concepts of ‘functional flexibility’ (the ability to move employees around between jobs and functions), ‘numerical flexibility’ (tailoring the size of the labour force to cope with fluctuations in demand) and ‘financial flexibility’ (the use of systems such as piece rates and bonuses which allowed payment to tally better with shifts in demand and output and the ability to adjust budgets rapidly according to need). These ideas were taken up by many other academics, especially in business studies and economics. Indeed, Richard Sennett, in his influential book The Corrosion of Character (1998), went so far as to typify the current phase of economic development as ‘flexible capitalism’. Subsequently, an additional meaning was added through the notions of flexible working and flexi-time which involve allowing employees to set and adapt their own working hours to fit with external obligations such as child-care. No sooner had flexibility been discovered than it was quite fiercely criticized, for example in the collection of essays edited by Anna Pollert (Farewell to Flexibility, 1991) (see also Pollert 1988a; 1988b). Critics argued first that not

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many firms were actually changing to employ these techniques of flexibility and secondly that all this was nothing new anyway and emphatically predated postFordism. Women’s part-time labour, for example, had long been used to achieve ‘numerical flexibility’. Despite this academic critique, the term continued to be used by managers, policy-makers and politicians and gained so much credibility that it entered the language of the popular media and thence of ordinary employees and members of the public. Indeed, one can state that it has now become a popular mantra, with significations both of desirability and inevitably. There is little challenge to the idea that flexibility must be a good and beneficial thing. In this sense it can be seen to be one of the ‘myths at work’ which I and colleagues discussed in the book of that title. By myths we meant taken-for-granted ideas about work relations which had become widespread throughout society and which were used both to explain and to justify ‘how things were’ and ‘how they ought to be.’ ‘Myths by this definition are ways that people in specific cultural contexts make sense of the worlds they inhabit and account for prevailing patterns of social interaction’ (Bradley et al. 2000, 2). Such myths were not necessarily false, but neither were they properly challenged or validated. In its popular use, flexibility is clearly an imprecise term. We have already seen that it has many diverse, if interrelated, aspects. As this chapter will demonstrate, it has different meanings and different implications for different groups of people. The purpose of the discussion is to begin to unpick or deconstruct those various meanings and thence to consider whether flexibility is indeed inevitable or desirable. Whose flexibility are we talking of: firms, employers or employees? And for what ends is it utilized? Data and research background In this discussion I draw upon data from three research projects with which I have been involved over the years. The first was a study of employees, gender and trade unions which was carried out in the North East of England in 1992–1993. The results of the study were written up as Gender and Power in the Workplace (1999). It involved case studies of five organizations, and interviews with about 20 matched male and female employees in each company, along with officers and shop stewards of all the relevant unions. It was funded by the Economic and Social Research Council (ESRC). The second project explored the labour market position of young minority ethnic employees in old and new industries and was funded by the European Social Fund. This involved 60 qualitative interviews with young people, plus interviews with agencies and unions. The major source of data, however, is another ESRC-funded project, Winners and Losers. This research investigated the work trajectories of young adults aged 20–35 in relation to their domestic and household circumstances. It was carried out in four zones in Bristol, a prosperous city in the South West of England which exemplifies the development of post-industrial global capitalist production. The research had three interconnected phases:

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a. Loosely ethnographic research comprising visits and interviews with employers, agencies and young adults. This was carried out largely in the four zones, but not exclusively, as we wanted to get some feel of the broader Bristol labour market. As part of this preliminary phase we carried out in-depth qualitative interviews with 45 young adults contacted through employers, agencies and acquaintances, chosen to represent the continuum of winning and losing. These ‘primary’ interviews were important in informing the content of the subsequent survey and secondary interviews. b. A household-based survey of 1,100 young adults carried out for us by NOP in the four zones, using CAPI (computer-aided personal interviews). c. Follow-up in-depth secondary interviews with a sub-sample of 75 young adults from the survey, chosen on the basis of zone, gender and level of education. Drawing on these projects, I briefly discuss what flexibility seems to signify to the three core groups: employers, trade unions and employees. I then look in more detail at the attitudes of the Bristol young adults to various practices of flexibility. Finally I consider some of the implications of what seems to be a general acceptance of flexible work relations as a desirable feature of the contemporary workplace. Before discussing my findings, though, it is worth considering some evidence of the extent of flexible practices in the British economy. Britain’s flexible labour market? This section considers the increase in flexible forms of manning. The existence of non-standard forms of employment has often been seen as one marker of an increasingly flexible labour market. These may include part-time work, shift work, temporary work, casual contracts, sub-contracting systems, home-working, agency or ‘bank’ work. These forms of contracts allow firms to achieve numerical and financial flexibility, and indeed functional flexibility, by, for example, contracting in specialist labour for a specific but short-term project. As an example, the University of Bristol when currently developing its job evaluation scheme employed a number of temporary staff to work on the establishment of the scheme and its implementation, including a highly expert project leader, who subsequently moved to another similar engagement. In 1997 Huw Beynon argued that these kind of jobs were increasing, notably in the service-sector where there had been a million increase between 1979 and 1995. A survey by Dex and McCulloch (1997) found that 25 per cent of men and 50 per cent of women held non-standard jobs in 1994, concluding that ‘the structure of employment in the early 1990s looks very different from its appearance at the end of the 1970s, with the most change having taken place in the early 1980s’ (1997, 173). This was the era of Thatcherite neo-liberal restructuring, particularly involving public-sector organizations. Currently 30 per cent of the workforce hold part-time jobs. However, Duncan Gallie (1998) has challenged the negative interpretations

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offered of these changes, which, like the accounts offered by Beynon and Sennett, see all this as leading to heightened work insecurity. Gallie argues that the increase in temporary contracts was minimal in the 1980s and early 1990s, holding stable at around 5 per cent of total employment. Although he concedes the rise of part-time employment, he shows that this is mainly in permanent jobs so it does not actually represent an increase in insecurity. Despite Gallie’s findings, there is evidence of a recent continued shift in the nature of employment contracts. This needs to be placed in context: Britain has the longest working hours in Europe at an average of 43.6 as opposed to a 40.3 European average: 20 per cent of employees work 50–59 hours. Moreover, only 44 per cent of employees use up all their annual leave and 65 per cent do not take their full lunch hour (Guardian 7 July 2005; Bunting 2005). Many commentators have noted the rise of the ‘long-hours culture’ or ‘culture of presenteeism’ in Britain and America, by which managerial and professional workers put in large amounts of voluntary overtime (see for example, Casey 1995; McDowell 1997; Wacjman 1998; Bradley 1999). Among manual male workers there is a continued high takeup of paid overtime to boost earnings. However, such workaholic timetabling does not suit all and especially not women with childcare responsibilities. In 2003 the New Labour government brought in legislation offering flexible working rights for those with a child under six years old or with a disabled child. These are not automatic; they have to be applied for and be judged acceptable by the employer. However, in the first year of the new legislation about 1m applications were made, with 80 per cent being accepted. Houstoun and Waumsley’s research (2003) among AEEU (Amalgamated Electrical and Engineering Union) members found that 72 per cent of employees said they would use flexible working arrangements should they become available. The new Equality and Human Rights Commission (EHRC) which replaced the separate equality bodies such as the EOC (Equal Opportunities Commission) is now calling for the legislation to be extended to all parents and also to people caring for elderly or disabled parents. The important WERS (Work and Employment Relations) surveys provide more evidence of change. For example, the WERS 2004 survey (of 3000 workplaces) found an increase in various forms of flexible working between 1998 and 2004 as shown in Table 4.1: Table 4.1

Changing proportions of firms reporting usage of different types of flexible working

Working at home Job-sharing Flexitime Term-time only working Source: WERS 2004.

1998 16 31 19 14

2004 28 41 26 28

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Indeed, considerable ingenuity is being used to create new types of contract, many of which, it must be said, may be beneficial to employers in allowing the contractees rather minimal employment rights. However, women workers in particular may welcome such arrangements if they are seen to facilitate their attempts to obtain a better work-life balance and accommodate their domestic needs. For example, many women with young children are attracted by term-time only working schemes. A recent survey by the Chartered Institute of Personnel Directors highlighted the range and wide availability of such schemes, though it also showed that in some cases some of the more popular options (such as flexitime and working from home) are only available to certain groups of staff. Table 4.2

Percentage of firms in survey reporting availability of different types of non-standard contractual arrangements

Flexible option

Availability

PT working Job-share Flexitime Working from home (reg) Career break Compressed hours Term-time working Secondment Annual hours Mobile working Time to work in community

86% 63% 55% 55% 42% 47% 38% 37% 28% 27% 22%

Availability to some staff only 43% 34% 34% 48% 17% 32% 23% 19% 20% 24% 7%

Source: CIPD 2004.

The degree of flexible arrangements varies considerably by sector; it is most likely to be found in ‘newer’ industries or service industries which rely very heavily on women’s labour. Purcell et al. (2005) in a study of flexibility found high levels in five sectors of this type: hotels and catering; further education; finance and telecommunications. This was deliberately done to cushion the companies against risk and pass it on to the employees. They also noted that the adoption of nonstandard contracts was linked to heightened competition (in FE, telecoms and finance) and that in highly-unionized companies where unions sought to protect full-time permanent jobs employers had responded by attempting to introduce flexibility within standard contracts, for example by using annual hours working, requesting variable hours within the week and lengthening standard hours to cut down on bonus and overtime payments.

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Differing attitudes to flexibility Employers and managers Purcell et al.’s work shows that employers can react differently in relation to different possibilities for flexibility. However, if we use the notion in its loosest and most popular sense it is for most employers a desideratum. To be a flexible firm, to have flexible workers, to respond flexibly is generally a good thing. As Bradley et al. argue, ‘Flexibility has become the driving concept behind the restructuring of work in recent years’ (2000, 31). Thus no progressive employer would want to seem ‘inflexible’. However, the drive for flexibility is very much linked to the search for efficiency and heightened profits, as one would expect, and as Purcell et al.’s case studies show. They do also state that some employers have a commitment to equal opportunities (EO) and to family-friendly policies; but this also relates to the desire to attract and keep highly-skilled or reliable workers. One can see this as a contract of mutual benefit. When talking to employers about flexibility, however, their focus is less on flexitime and more on numerical and functional flexibility. Flexible manning is achieved in some sectors, such as retail, by careful deployment of part-timers. In Bristol and other big cities there is also increasing use of employment agencies, especially for low-paid work in offices, call centres and care homes. Use of agencies cuts down recruitment time and costs and allows employers to test out whether the employee is competent before offering any kind of secure employment. However, in more skilled and responsible work, some managers are less keen to employ parttimers or casuals, because of the problems of accommodation, coordination and discipline. For example, there was general opposition to job–share among middle managers who were interviewed for the North East study because of the perceived complexities of managing two people rather than one and keeping track of the work. Their own preference was for stable full-time permanent employees. Du Gay (1996) found the same in his interviews with retail managers. This is an interesting example of the complexities that surround various forms of flexibilization. Toplevel managers may favour it as it cheapens labour costs, but middle managers dislike it as it makes their tasks more onerous, grappling with what has recently been called ‘contract chaos’ (Guest et al. 2007). By contrast most North East employers and managers showed strong support for strategies to develop functional flexibility. This involves training all workers to carry out the range of jobs in the organization, as was the case in the North East retail firm called ‘TradeFare’ in the North East study (Bradley 1999). Multi-skilling is seen as advantageous in terms of cover for absentees, dealing with emergencies or changes in output. Training offered by the firms is often very specifically geared to this kind of multi-tasking within the firm and managers prefer employees who show adaptability and are willing to move around the business at short notice.

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Trade unions Such strategies, however, are often seen by trade unions as a threat to custom and practice and to long established patterns of job demarcation. Where there is a strong union presence there may be resistance to multi-tasking, especially among older workers. Trade unions also are concerned about the erosion of the traditional working week, and some unions have tried to block the advance of part-time, sub-contracted or temporary work. In this, they are reflecting the dominance of skilled male labour within the union movement. In their interviews with AEEU shop stewards, Houston and Waumsley (2003) found that a fifth of them did not understand the term ‘flexible working’ and that those who did were often suspicious, seeing it as something that was in the employers’ interests. They state that stewards saw traditional patterns of working, such as overtime or shift-work, as being threatened by the growth of flexible working. By contrast civil service stewards in the North East were extremely favourable to flexitime, which they believed to be in the interests of the female members. This was in part because they had been involved in initiating the scheme, as opposed to it being imposed top-down, so they were able to portray it as a victory for the union. Those more traditional unions who do oppose flexible working and non-standard contracts are likely to lose the support of some members. Factory workers on temporary contracts interviewed in the North East were extremely bitter about being treated by the union as ‘second-class citizens’ (they had no union voting rights, for example). Houston and Waumsley conclude with some important observations: More should be done to establish that flexible working does not necessarily mean poor career prospects. This means making flexible working available at all levels of occupations and challenging the notion that working long hours means advancement. If this does not happen there is a risk that flexible working will further segregate men and women in the workforce (2003, 4).

On the other hand, there is a genuine risk to unions as employers move more and more to individualized contracts and more use of casuals and temps. In this way the old basis for worker solidarity and common goals could be undermined. This could pose a real threat to collective bargaining and weaken the perceived utility of the unions. Again the ambiguity and complexity of flexibilization is highlighted. This means that unions are faced with difficult situations and react in different ways. One strategy may be acceptance of flexible practices. Unions may buy in to the more appealing aspects of flexibility, such as flexitime, as was done by the civil services unions, but make sure the changes are introduced on their terms. Where less acceptable practices are at issue, then the union can seek a trade-off by demanding, for example, a pay rise in compensation for an agreed extension of job scope. If training is at issue, this can usually be presented in a favourable light, since, as we shall see, many workers have embraced the idea of training as a form of individual development. The appointment of ‘learning reps’ has been a positive one for many unions.

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The alternative is resistance and there have been notable instances of this, as for example the railwaymen’s strike over ‘flexible rostering’. As flexible strategies have become more universal, however, industrial action seems doomed to fail: it is King Knut against the tide! More successful may be what might be described as ‘bureaucratic spoiling’, a tactic used to good effect by the campus unions at some British universities when implementing the centrally agreed job evaluation scheme mentioned earlier. This was designed in part to eliminate waste and help managers to achieve functional flexibility. But the development of the scheme was subject to bureaucratic micromanagement so time-consuming and costly that it delayed the implementation of the scheme by more than a year in some cases; the unions insisted on a system of procedures and checks so labyrinthine that it impeded managers’ ability to utilize it for their own purposes. The unions also negotiated an agreement that any employee who was ‘red-circled’ (meaning that they were currently overpaid in terms of the new scheme) could remain at the current level for four years. What seems at issue, here, is that resistance can delay but not stem the march of flexibility; however, unions can ensure that change is introduced on their terms and ones that do not offer too much erosion to their members’ working conditions. Employees As will be demonstrated in the next section, the response of the young adult workers to the whole concept of flexibility was by and large favourable. This was perhaps because when asked about flexibility they tended to talk about flexitime and flexible working, which were considered extremely useful, especially by working mothers. However, some identified other meanings; a number saw it in terms of personal adaptability, the readiness to work at different tasks, while a few mentioned non-standard jobs and increased labour market mobility. It is notable that employees tended to understand flexibility in relation to its effects on their own working lives and not in terms of its strategic value to their employers. Their response to it was consequently in terms of whether they felt that it made things better for them. The other point to make is that responses varied according to workers’ age and sex. As noted, working mothers were particularly enthusiastic about flexitime. The older workers interviewed in the North East were much more sceptical and negative about all aspects of flexibility, especially the men. Retail and bank workers said they had been trained to do the range of jobs, but in fact they tended to be stuck in one job which might be boring. Factory workers deplored the growth of temporary and part-time work, which they saw (rightly) as a system of vetting new recruits for docility and effort. One male worker lamented the fact that with the spread of non-standard work the factory might become ‘an all-women workplace.’ Nurses disliked the variable shift scheme which had been imposed on them. There was a general suspicion of change and a fairly strong ‘us and them’ attitude towards managers across the whole sample. These attitudes were clearly related to the political culture of the North East, a traditional Labour heartland with strong trade union affiliations. There was little

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sense of common interests or shared objectives with organizations, employers or managers. Thus very few of the North East workers saw adaptability and flexibility as a cultural desirability. However, things were very different among the Bristol young adults, as will be described in this next section. ‘It’s a two-way thing’: Young adult workers’ views of flexible strategies As stated above the prime meaning of flexibility for the young adults was flexitime. For many of them, especially young women with small children this appeared a godsend: I don’t get in till about 9:30, depending on the traffic I could get in a bit later, but being that I’m a lone parent they’re OK with that – any problems I got, seeing as I’ve got a child they’re very flexible. … They’re brilliant, the council is brilliant to work for … child-friendly I’d say (Karen, administrative assistant). In both jobs I’ve got that. Being flexible … I always make it clear that I do have two kids and I do have a grandson. And obviously I’m a contact for Donnie if Sharon is unavailable. So if they ring me and say ‘Well Donnie ain’t very well, could you come and pick him up?’ you know, I have to go and pick him up. … I’ve always made that very clear in an interview that obviously my kids are very important to me and if they need me I do need to be there, and they’ve respected that. So you know … they are very flexible, it’s like yesterday I had to go and get an injection and I normally do a nine to five and I sort of said to them ‘Well can I do an eight till four?’ and they said ‘Fine’ (Cindy, customer services manager). I work part-time but I’m able to change my days and hours around the children at any school event (Linda, insurance clerk).

As the last quotation shows, many young mothers worked part-time. They presented this as a positive choice, not something forced upon them and there was no particular hostility to non-standard hours of work expressed by the interviewees in general. Young men and single women also liked flexible hours, as this seemed to offer them a feeling of control over their lives. It also afforded the freedom to do other things that were important to them: I’ve got really good, because I’m on a 20-hour contract at the moment, which is Monday to Friday, I flexi up till six, so I do ten to six Monday to Thursday so I get a short day on a Friday (Diane, retail). I find that four days a week full-time on a pretty minor wage is difficult you know, there’s just so many things to take care of anyway, in the social life. So I think I’d just like to go freelance, so that I can spread more, … be more flexible (Henry, media trainer).

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Henry, a Caribbean who wanted to make a career in music, was typical of a number of young adults who were prepared to sacrifice a ‘steady job’ in order to get a better work/life balance or improve their working lives. This made self-employment a popular option for quite a number: We work job till finish, … not ‘nine to five’. You have this much work to do in a month, you know what you have to do, and if you can do it in two days a week, well that’s fantastic. … Like last Friday the football’s on at midday, so we all knocked off at 12:00 (Anthony, self employed).

There was a general sense that a culture ambience of flexibility in an organization was a desirable thing from everybody’s point of view: From my point of view, it would be like not sticking to your rigid patterns of work. If they need you on the off-chance, you know at a random time of day, then you know, go in, help out. … The two sorts of jobs I’ve had, I mean like call centres are very rigidly run. Whereas bar work is pretty relaxed and pretty flexible (Nicola, student). That was one of reasons that I actually went on the bank, because it was a lot more flexible (Margaret, nurse).

Flexibility was acknowledged by a number of interviewees to be a two-way process. For example Cindy, whose praise for her employer was quoted above, was prepared to respond to the company’s needs by being ‘flexible’ herself: I’m flexible in the aspect of … really time doesn’t make any difference to me, but you know lately I have been the type of person, as long as I’m in the doors by sort of like half past nine in an evening workwise, I’m cool with that. If they come to me ’cos they’re stuck and they want me to do overtime, as long as I’m not physically tired I will do it, you know. So I’m very flexible in that. I’m flexible on days. The only days that I’m a bit unflexible with is a Saturday, and that’s only ’cos I have my grandson.

Others took a similar stance: If they need me in, then I’ll swap. … It’s good because it works both ways. They’re very good to me, and I’ll do the same if I can (Linda, insurance clerk). I think flexibility as an employee is a two-way thing. You can’t expect an employer to be flexible and you not to be. … But in terms of actual things, it’s the flexibility of things like time, working practices, working locations sometimes. All those sorts of little things that make a difference to quality of life. … This morning was a prime example. I had to see my doctor for a blood test, and working for someone who’s like, that’s fine, just adjust your hours appropriately in the rest of the week. … I’m prepared to take a lower-paid job if it offers me flexibility and, sort of humanity, if you like (Morris, NHS researcher).

There were, however, a few who resented the demands put on them in the name of flexibility, and notably the critics tended to be nurses:

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Flexible Organizations and the New Working Life Flexibility is a good thing from the employer’s point of view but not always from the employee’s because you can easily be taken advantage of (Sheila, nurse). I’m quite reasonably flexible. Not that I always want to be. But if it’s flexible about time, because we have to do nine to fives, one till nines and on the wards it used to be 24 hour rotational, so I had no choice but to be flexible (Alf, nurse).

Yet these responses were in a minority, and in the main, as we have seen, the young adults appeared to view flexibility in terms of an accommodation between their needs and interests and those of their employers. There is a sharp contrast here with the views of the older North East workers. This may in part be because the young adults at their stage in the life-course had fewer commitments and constraints on their time; it may partly be due to regional cultural differences; but it also appears to demonstrate a generational shift in thinking about the place of work in people’s lives and the culture of working. While the older workers appeared to want to maintain a rigid framework, with firm boundaries between working time and free time, as symbolized by the ‘nine-to-five’ the new generation seems to have a more fluid approach to the work-life balance issue. For them the boundaries between work, family life and leisure seemed much more permeable. Indeed, the other major meaning of flexibility identified by some young adults was adaptability and being open to change and new ways of doing things: It would be sort of flexible in the way you work, like you know, learn from other people, don’t just think that the way you do things is the only way it can be done (Nicola, student). I help out, I mean at work I’m the relief cover for the post. … I’ve been trained on how to do that so if someone’s off sick or on holiday, you know, there’s various people trained, because we all take it in turns if someone’s off. … I’m flexible in that way and you know I’ll help people out (Bharti, building society employee). To get on a career or a job, any sort of job, you’ve got to have commitment, flexibility to turn round and turn your hand from working, say, one minute you could be cooking steak, next minute you could be out the back, doing the dishes, prepping up veg, so you need that flexibility there, and communication, because you need to communicate with people (Anton, chef). It’s a lot to do with your communication skills. Employers want people they can get on with, they want people to be flexible but they also want people to be a personality, they don’t want a droid (Gary, docker).

These comments conformed to the views of the employers who were interviewed as part of the young adults project. They saw young people as less disciplined than older employees, but also more receptive to change, better at communication and at team work. These attributes again contrast with the older workers interviewed in the North East, who were more strongly attached to ‘the way we’ve always done it’. Young adult workers appeared much more at ease with roles that constantly shift:

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The company ask us to be flexible in that they can change our hours at a moment’s notice. That’s in our contract and that doesn’t necessarily bother me at all. They also want us to know different roles within the store. I’m a stock supervisor, I run a team of 20 people. Yesterday I was doing till supervision which I have no training in, but it’s mainly common sense, if you know a little bit (Kevin, retail).

But here again there was perception that the responsiveness must be mutual: It can mean flexibility being able to do different things within your job. It can mean being able to change your job or your role within the company easily. I think that’s the word – ‘easily’ you know. Whatever you do, it’s got to be easy to be able to do it. Also both sides, employee and employer, has to be giving and taking (Ailsa, dinner lady).

Comments like these suggest that this generation of employees, have generally accepted the new ‘rules of the game’ and are prepared to work within them in a way that is markedly different from their parents’ generation. We called this state of mind ‘internalized flexibility’ (Bradley and Devadason 2008). Nowhere was this more obvious than in their views concerning the idea of ‘a job for life’. Most agreed that this was a thing of the past but few of them seemed concerned about this: My generation, I see they enjoy what they do but if they don’t get on with their employer, certain aspects of the job, they can move on. … They can retrain if they have to (Dillon, retail). I like a bit more excitement. I’m quite willing to take a job that I can see that’s secure for six months or a year. I mean these days that’s pretty good. And then see what happens after that (Rod, electronics).

Rod’s attitude is shared by a number who positively welcome the potential for change and also the opportunities for training and retraining that come with it: The idea of a job for life scares me. Oh, I can’t handle that (Fay, engineer). I think the way the country is nowadays people don’t want a job for life very much. They want to be continually moving on, adapting and changing. Even if you work for the same company you want to be moving within that company (Ailsa, dinner lady). There isn’t necessarily a job for life because you are having to re-skill, retrain and do this and do that. … I’d like to get a lot of qualifications under my wing, so I can apply for multiple jobs and not be tied down to one (Anshu, charity worker).

This was also demonstrated in the answers of the survey respondents to a question about their future expectations. Only 36 per cent expected to stay in their current occupation, and nearly as many were anticipating a change in occupation: 21 per cent said they would retrain or study for a new occupation and another 14 expected to make a major occupational shift.

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The price of flexibility We have, then, a picture of a generation which appears to have adapted itself surprisingly well to the new conditions and ethos of the flexible labour market. This generation embraces change, prizes personal adaptability and is happy to develop individual ‘trade-offs’ with employers. This appears to offer them a sense of freedom and control over their work which they value (though it may be rather limited and illusory). There are, of course, a few sceptics and cynics who are suspicious of employers’ motives, but they are no way so numerous or so embittered as was the case among the older North East workers. Is everything in the garden rosy then? Unfortunately not. The most surprising finding to us from the Winners and Losers study was the low level of income and earnings among respondents as shown in Table 4.3. Table 4.3

Income levels by age group

N=1103 Low income – £12,000 Midddle income £12,000–18,000 High Income £18+ No answer

20–24 80%

25–29 45%

30+ 49%

13%

29%

20%

2% 5%

17% 8%

20% 10%

The table includes all respondents including those dependent on benefits and students which explains the large numbers in the low income group especially of the 20–24 year olds. But what is more surprising is the very low proportion to record themselves as having an income over £18,000 even among the 30 yearolds. Only one fifth of that age group are in the high income category. It appears that all but a minority of these young adults are trapped in a labour market which is not only flexible but low wage. That this is not just a Bristol phenomenon is born out by research from America which highlights relative decline in wages among younger employees in Britain and America (De Freitas and Duffy 2004; Ryan 2005); and by the finding that in Britain the proportion of young people buying their own homes is at the lowest for twenty years (Guardian 6 July 2005). Among our sample, those earning the most tended to be in a very narrow band of what one might call ‘traditional’ graduate jobs: engineers, lawyers, doctors and some ICT specialists (not all). But these jobs are in short supply. This finding is highlighted in the work of Purcell et al. (2005). They cite HESA (The Higher Education Statistics Agency) figures on graduate destinations. Six months after graduating, nearly two fifths were in non-graduate jobs, such as were held by many of our survey respondents:

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• • • • • Figure 4.1

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12% traditional graduate employment (professions, HE) 13% modern graduate employment (management, IT) 16% new graduate jobs (marketing, sales) 21% niche sector (leisure, entertainment) 38% in non-graduate jobs (call centres, retail) Graduate destinations in 2003

Source: Derived from Purcell et al. 2005.

What HESA define as ‘new graduate’ and ‘niche sector’ jobs were also common among our respondents and many of them are low-paid. We argue then, that despite their apparent contentment with the conditions of flexible capitalism young workers are the victims of a ‘flexibility penalty’. Conclusions The research has revealed a complex picture of responses to flexibility. In general, employers embrace flexible strategies as cost-cutting measures, although they also discern some kind of disadvantages in the employment of workers on nonstandard contracts. They more reluctantly accept flexitime, but have used it as a way to reward good workers and create employee loyalty. With younger employees this strategy has to a considerable extent succeeded. They welcome flexitime, especially women with children who find it facilitates their return to employment. Many young workers demonstrate ‘internalized flexibility’ appearing in the main to welcome the idea of change and variety during their work histories. Older workers are much more hostile to change and suspicious of management initiatives: they are often sceptical about flexible strategies. Unions have by and large seen flexibility as a major threat to their constituencies and to collectivism. They have in the past sought to defend long-established practices, trying to block the introduction of part-time, temporary and other non-standard employment contracts. In doing this they can be seen to be acting conservatively, taking the position of skilled male workers as the employment norm. In fact, many women, and some young male workers as well, actually prefer part-time or casual work. However, in another sense they are right to be worried. The world of this new generation of workers adapting to flexible labour markets is a highly individualized one. Along with internalized flexibility, most of these young workers have a strong sense of individual responsibility for their own labour market success and prosperity. Where individual contracts and deals are increasingly common, unions may fear for the future of collective organization and worker solidarity. Despite their embracing of flexibility the reality is that these young adults face insecure futures. Most are employed in a low-wage economy, which inhibits their ability to establish a family or household. Two people’s salaries are often

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needed to secure a mortgage in urban centres with soaring property values. The estimated income necessary to afford a mortgage in the South West of England is £30,000. Shifting between jobs and occupations and low pay means that few have established secure pension rights. A pension crisis of major proportions is building up in Britain. While flexibility may make employers more prosperous, for employees it may well mean poverty and housing problems at the end of their lives. Organizational flexibility, thus, is a highly complex business in itself and has complex and variable social effects. This chapter has explored what flexibility means to different actors in the workplace drama, focusing on flexible manning strategies and the culture of flexibility. Ironically it shows that a group who seem to be particularly receptive to the culture of flexibility are also its victims. Sociologically, it suggests that a gulf of experience and understanding may be opening up between generations, with older workers sceptical and resistant but fairly impotent, while younger workers’ ingenuity and enthusiasm is exploited within flexible capitalism but in a way which may allow some individuals to shape their working lives to suit themselves. Bibliography Atkinson, J. (1984), ‘Manpower strategies for flexible organisations’, Personnel Management 16, 28–31. —— (1986), ‘Flexibility planning for an uncertain future’, Manpower Policy and Practice, Summer, 26. Atkinson, J. and Meager, N. (1986), Changing Work Patterns: How Companies Achieve Flexibility to meet New Needs (London: National Economic Development Office). Beynon, H. (1997), ‘The changing practices of work’, in R. Brown (ed.) The Changing Shape of Work (London: Macmillan). Bradley, H. (1999), Gender and Power in the Workplace (London: Macmillan). Bradley, H. and Devadason, R. (2008), ‘Fractured Transitions: Young Adults’ Pathways into Contemporary Labour Markets’, Sociology 42:1, 119–36. Bradley, H., Erickson, M., Stephenson, S. and Williams, S. (2000), Myths at Work (Cambridge: Polity). Bunting, M. (2005), Willing Slaves: How the Overwork Culture is Ruining our Lives (London: Harper Collins). Casey, C. (1995), Work, Self and Society: After Industrialism (London: Routledge). De Freitas, G. and Duffy, N. (2004), ‘Young workers, economic inequality and collective action’, in M. Zweig (ed.) What’s Class Got to Do With It? (New York: Cornell University Press). Dex, S. and McCulloch, A. (1997), Flexible Employment (Basingstoke: Macmillan).

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Du Gay, P. (1996), Consumption and Identity at Work (London: Sage). Gallie, D. (1998), The Flexible Workforce? The Employment Conditions of Parttime and Temporary Workers (Paper presented at ESRC social stratification workshop, Essex University). Guest, D., Mckenzie Davey, K. and Smewing, C. (2007), Innovative Employment Contracts: A Flexible Friend (Birkbeck University, Department of Irganisational Psychology). Houston, D. and Walmsley, J. (2003), Attitudes to Flexible Working and Family Life (York: Joseph Rowntree Foundation). McDowell, L. (1997), Capital Culture (Oxford: Blackwell). Pollert, A. (1988a), ‘The flexible firm: fixation or fact?’ Work, Employment and Society 2:3, 281–316. —— (1988b), ‘Dismantling flexibility’ Capital and Class 34, 42–75. —— (1991), Farewell to Flexibility (Oxford: Blackwell). Purcell, K., Hogarth, T. and Simm, C. (2005), Whose Flexibility? The Costs and Benefits of Non-standard Working Arrangements and Contractual Arrangements (York: Joseph Rowntree Foundation). Ryan, P. (2005), School-to-Work Institutions in Comparative Perspective (Paper given at conference Youth Employment in the Global Economy, Hofstra University, Long Island). Sennett, R. (1998), The Corrosion of Character: The Personal Consequences of Work in the New Economy (London: Routledge). Wacjman, J. (1998), Managing Like a Man (Cambridge: Polity).

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Chapter 5

A Package of Flexibility? Birgitta Eriksson and Jan Ch. Karlsson

Introduction For more than two decades it has been claimed that working life has entered a new era, in which ‘flexibility’ is the main catch-word. A new all-in-one system – flexibility – has, it is argued, replaced the old all-in-one system – alternately referred to as for example Taylorism, Fordism, or simply bureaucracy. Instead of the old package, we now have the new package of flexibility. In this paper we report on a study in Sweden carried out to empirically evaluate two common statements connected to the idea of flexibility as a package. The first statement is that workplaces today have a new, flexible form of organization. The second statement is that this flexibility creates good work environments for all employees. These statement provide us with two hypotheses to test: 1) the flexibility package hypothesis: all workplaces are flexible; and 2) the good work environment hypothesis: the work environment at flexible workplaces is better for all employees than that found at non-flexible workplaces. It is easy to see that there is a potential contradiction between the hypotheses: If the flexibility package hypothesis is true, there is no way to test the good work environment hypothesis at the same point in time, as there are no non-flexible workplaces with which to compare the flexible ones. We can, however, reveal already at this point that there in fact are non-flexible workplaces in Sweden. Based on this fact we can formulate a more moderate version of the first hypothesis, namely 3) the flexibilization hypothesis: there has been a development which has increased the number of flexible workplaces. In order to test the hypotheses we need data that can throw light on them. We therefore start by describing the empirical material we use. Furthermore, we need models that reveal the characteristics first of the flexible work organization and second of the good work environment. We present the models which we take as our point of departure, drawing the empirical picture that emerges in connection with each of them. Since we have collected data on two occasions with an eight year interval, we can also say something about the development of flexible work organizations and work environments over time. In the terminology of this book, we, as will soon be apparent, deal with flexibility as a manning strategy. We define  The results come from the research project ‘Flexible workplaces and working conditions – replication of an empirical study’, financed by the Swedish Council for Working Life and Social Research.

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the flexible workplace in accordance with the model developed by Atkinson, already discussed by Skorstad (this volume). The data sets The data concern the Swedish labour market. Official statistics cannot, however, provide us with the information we need, so we have collected our own data. We first carried out a study in the middle of the 1990s and we have recently repeated it. The first investigation was based on data from two questionnaires in connection with the Labour Force Surveys carried out by Statistics Sweden. The first was sent to employees in the last quarter of 1994; it contained – among other things – questions about different types of jobs, based on the so called demand–control– social support model (Karasek and Theorell 1990). The second was subsequently sent to the managements at these employees’ workplaces; the questions mainly concerned aspects of Atkinson’s (1984) model of the flexible firm: numerical, functional and financial flexibility. The first questionnaire was answered by 1,928 persons and the second by 1,464 workplaces, comprising an answering per cent of 68 and 73 respectively. The replication was carried out in 2002 with the same questionnaires and procedure, but complemented with questions emanating from another flexibility model. This time we could not tie it to the Labour Force Surveys; however, Statistics Sweden managed the distribution of the questionnaires and the transformation of the answers into data files. In the replication the questionnaires were answered by 1,779 employees and 1,570 workplaces, comprising an answering per cent of 65 and 85 respectively. The flexibility package hypothesis and the flexibilization hypothesis: Flexible and non-flexible workplaces There are several models of the new work organizations; they also exist at different levels – from workplaces to production regimes across nations; they are built upon different traits and they vary in terms of influence in research and debates. The model we have chosen was developed by John Atkinson (1984, Atkinson and Meager 1986) and we have two primary reasons for this choice. First, the model is located at the level at which work takes place and where the work environments are, that is, the workplace. Second, the model has been very prominent and has strongly influenced ideas about how work is organized; one commentator says, for example, that ‘it has certainly had an effect as a policy model, and should be taken seriously as, potentially, a “self-fulfilling prophesy”’ (Pollert 1988, 301). Atkinson’s model is one of the foremost sources of inspiration to the flexibility statement, and by basing the empirical study of workplaces on it we give the statement as good a chance as possible to be shown to be true. According to the model, managements try to attain flexibility by dividing employees into two categories: core and periphery. In the core one finds

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permanently employed workers with favourable conditions; in return they must always be prepared to tackle quick changes and new tasks whenever the firm requires. Competence in this scenario is to a large extent firm-specific and this explains why the management takes care to hold on to the workers in the core. The core workers’ willingness to accept changes gives the work organization what Atkinson calls functional flexibility. The periphery is made up of many groups that in contrast give it numerical flexibility by making it possible to increase or decrease the number of workers according to the needs of the work organization. Temporary workers, publicly subsidized trainees and employees in other firms – such as security companies, cleaning firms, and agency temporaries – all belong to the periphery. Finally the management seeks financial flexibility through wage systems that support the other two types of flexibility; this mainly involves a mixture of pay systems, in which the core has a permanent wage and the periphery some kind of incentive pay. The basic point in the flexibility statement’s interpretation of Atkinson’s model is that the new, flexible organization is functionally, numerically and financially flexible simultaneously. The characteristics of the flexible firm have existed before; what is new is their purported systematic integration in a homogeneous work organization – and that is what the first flexibility statement is all about. Let us now go to the empirical picture (Table 5.1). Functional flexibility is empirically regarded in this way: a workplace must have at least some employees with firm-specific competence and there must be training at work. Numerical flexibility, on the other hand, requires additional employees from other firms, casually employed workers and publicly subsidized trainees. Financial flexibility is marked by the existence of the mixed wage systems mentioned above. And most important: the flexible workplace possesses all three types of flexibility. If we first look at the situation in 2002, we find that functional flexibility is the most common of the three types. Firm-specific competence is required at three fourths of the workplaces, and three fourths train at least some of the personnel. (Only 8 per cent of the workplaces train the whole personnel group.) Thus, both Table 5.1

Workplaces that have different types of flexibility (percentages) Flexibility type

Functional Thereof: Firm specific competence On-the-job-training Numerical Thereof: Temporary workers Publicly subsidized trainees External workers Financial All (flexible)

2002

1994

62 75 75 19 71 38 46 23 4

62 72 82 18 72 49 32 25 4

Percentage difference 2002–1994 0 3 -7 1 -1 -11 14 -2 0

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forms of functional flexibility are relatively widespread, and a combination of the two is not uncommon. Firm-specific competence as well as on-the-job-training were found at slightly over 60 per cent of the workplaces. Numerical flexibility means that there are temporary workers in the periphery, who have more flexible work contracts than the core workers. It is not very common to have external workers on the payroll, they are found in less than half of all the workplaces. Considering the current debate, one might have expected the use of external workers to be more widespread. Instead the use of temporary workers is much more prevalent. This is the case in more than 70 per cent of all the workplaces, and 38 per cent utilize publicly subsidized trainees. It is, however, not that common to find all three forms of numerical flexibility: less than a fifth of the firms are numerically flexible, making it the least common type of flexibility. Financial flexibility, finally, is a complex form of flexibility. Here we will stress only what we understand to be the foundation in Atkinson’s reasoning, namely that there are different types of wage systems for core and periphery workers respectively. Consequently, the question is whether there are employees who are permanently employed as well as those receiving incentive pay in one and the same workplace. This form of flexibility can be found at almost a fourth of the workplaces. In relation to the flexibility statement it is perhaps better to express the results negatively: about a third of the firms are not functionally flexible, four fifths are not numerically flexible and three fourths are not financially flexible. But it is flexibility as a system – a combination of these types of flexibility – that the flexibility statements and Atkinson’s model are actually concerned with. Here we find that only 4 per cent of the workplaces meet the criteria, while 96 per cent do not live up to them. The statement concerning flexibility does not seem to belong to the accounts of the new working life that have a sound empirical basis, and the flexibility hypothesis does not hold. What development has there been? Does the flexibilization hypothesis fare better? If we compare the different types of flexibility in 2002 and 1994 (the percentage difference in Table 5.1), we see that the changes are small or nonexistent. Thus we cannot even claim that there is a trend towards more flexible workplaces. The flexibility statement is not even close to verification. Without exaggeration we can say that it is empirically false. However, we can note a certain flexibilization concerning some aspects in Atkinson’s model. The number of workplaces employing an external workforce has increased considerably (14 percentage units), and a certain increase (three percentage units) can be registered in the workplaces that require personnel with firm-specific competence. At the same time there are some aspects that contradictorily indicate inflexibilization. This is the case regarding on-the-job-training and the use of publicly subsidized trainees. The number of workplaces where at least some in-service training takes place has decreased by seven percentage points during the period and the number that include publicly subsidized workers has declined by 11 percentage points. Hence, we conclude that flexible workplaces are not very common on the Swedish

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labour market, and that there is no clear trend indicating that flexible workplaces are on the increase. An objection to this conclusion can of course be that it all depends on how one defines flexibility and new trends: With a different model and other empirical indicators the results would have been different – and the statement about flexibility might have been verified. This is possible, but most of the evidence argues against such a result. In Sweden there have been two other empirical studies, that have tried to map the distribution of new work organizations and we can therefore compare our results with theirs. One of them (Edling and Sandberg 1996; 2003) has a design similar to ours, but the theoretical concept they use is ‘new management’, defined using traits discussed in management literature – and is thereby conceptualized in quite another way as compared to Atkinson’s model and our empirical interpretation of it. According to Edling and Sandberg, a number of different conditions must be fulfilled before we can declare that new management has been implemented. The conditions are grouped under three main headings: ideological control instruments, economic control instruments and work organization. Examples of economic control instruments are profit responsibility below the top management level and that a flexible setting of wage rates is used at least to some degree. This was found to be the case among 40 per cent of the firms; 20 per cent had also implemented ideological control, which means that there are quality circles or development groups, introduction courses for new employees, on-the-job-training and staff development interviews. Only 6 per cent of the workplaces used the new management strategies for organizing work, for example, the possibility for employees below the managerial level to participate in the decisions about what tasks were to be carried out and in what way, diminishing the difference between blue and white-collar workers. The general result is that no more than 2 per cent of the workplaces fit in the category of ‘new management’; a far more moderate definition of ‘the new trends’ results in about a fourth of Swedish workplaces being categorized as belonging to the new working life. Edling and Sandberg’s study is built on data collected in 1991. We incorporated their questions in our second study, thus making it possible to test whether their model indicates any increase in the new management concept. A comparison of the two results shows that the economic control elements increased during the 1990s (from 40 to 54 per cent). The same is true of the number of firms that also implemented ideological control (from 20 to 39 per cent). The number of firms using new management principles for work organization has also increased (23 per cent as compared with six). Consequently, the number of workplaces that fulfill all the conditions has also increased, but only from 2 to 4 per cent. Hence, the results indicate that there is only a weak trend in the implementation of new management concepts. At the same time we must remember that full implementation is quite unusual. The other Swedish study (NUTEK 1996) is exclusively concerned with private firms. There are two criteria used to judge work organizations as flexible:

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organized education for employees and a high degree of decentralization of work responsibility. (Theoretically there are further criteria, but they are not incorporated in the empirical investigation.) The definition of the new trends is, then, considerably more limited than the definitions that Edling and Sandberg or we operate with, but in spite of this the empirical result is that only slightly more than a fourth of the firms are deemed flexible – which is a somewhat smaller number than those that do not fulfil any of the criteria and are therefore termed ‘traditional’. We have not replicated this study. These three investigations – Edling and Sandberg’s, NUTEK’s and ours – use quite different models and empirical indicators, but none of them empirically finds any overwhelming presence of ‘the new trends’ – and they do not support the flexibility hypothesis which asserts that all workplaces now belong to this category. Furthermore, we do not find any strong support for the flexibilization hypothesis, based either on ‘new management’ or on Atkinson’s model. It therefore seems to us that our results are valid: a very small number of Swedish workplaces are new and flexible; and there is no unambiguous trend towards flexibility. Therefore we must also draw the conclusion that the flexibility statement lacks an empirical basis. The good work environment hypothesis: Working at flexible and non-flexible workplaces Going on to discuss possible differences in working conditions might seem a bit unnecessary after having found that there are very few flexible workplaces. But we are still interested in empirically testing the work environment statement through the hypothesis saying that the jobs are of a better quality for the employees at flexible than at other workplaces. In order to carry out such an examination we must, however, loosen up the criteria for flexibility; we simply need a larger number of flexible workplaces than is available to us in our data. After some statistical experimentation we have found that this pragmatic goal can be reached by eliminating financial flexibility from the operational definition that we have used so far and further by abolishing the variable publicly subsidized trainees in numerical flexibility. This, of course, is a strong limitation in relation to Atkinson’s model, but it is necessary to make it possible to study the empirical basis of the work environment statement. Furthermore, we need a model that can specify criteria for good and bad jobs. The most theoretically systematic and empirically fruitful model (van der Doef and Maes 1998; 1999) seems to be the model developed by Robert Karasek (Karasek and Theorell 1990). It is built up of three dimensions: the demands that work makes on the worker, the control the worker has in and over work, and the extent to which the worker gets social support from others. Each dimension can be attributed the values ‘high’ and ‘low’. In the empirical indicators, those workers who are not given adequate time to perform the work tasks, those who suffer physical

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symptoms and those with repetitious work are subjected to high demands; others are subjected to low demands. Work with a high level of control facilitates personal development; the worker can use his or her own ideas, knowledge and skill (skill discretion), and decide how the work tasks are to be performed (decision authority). Otherwise the worker’s control is low. Appreciation and feedback from colleagues and the management, and concrete cooperation in work entails a high level of social support; if not, social support is low. In combination these variables and their values in indices specify the different types of work environments defined. Table 5.2

High social support Low social support

Types of work environments according to Karasek’s model High demands High control Low control Collective active Collective high strain Isolated active Isolated high strain

Low demands High control Low control Collective low Collective strain passive Isolated low Isolated strain passive

For the worker a good work environment is ‘active’ when it involves high demands and high control; the very best jobs are characterized by such conditions, but also require a high level of social support: collective active jobs. When high demands are instead combined with a low level of control the result is bad jobs; in the very worst work environment there is in addition a low level of social support: isolated high strain work. By linking data from this model to data from Atkinson’s model of flexibility, we can empirically test the work environment hypothesis (Table 5.3). The table also shows the connection between work environment and new management according to Edling and Sandberg’s definition. As regards flexibility and work environment, we can argue that there is no significant connection between the two models. If we consider the various aspects that they consist of, there is a correlation between functional flexibility and control, which means that more workers experience a higher level of control in an environment with this type of flexibility. This is not strange since functional flexibility by definition means that the workers learn new things, an aspect of high control. Thus, functional flexibility can contribute to improving the work environment through higher control. As for the rest, there are no significant connections between the different types of flexibility at the workplaces and in the work environments. The table also shows that Edling and Sandberg’s model of the new working life does not indicate that there is any connection with the work environment as a whole, even though the results here also mark certain elements in the new management as important for the workers’ experience of control in the job. It is a question of ideological control and implementation of new management on the micro level.

Notes: *** p<0.001. ** p<0.01. * p<0.05. ns not significant.

Numerical Flexibility Yes No ns 82 81 18 19 ns 48 44 52 56 ns 68 65 32 35 ns 19 20 2 3 2 2 9 9 28 29 12 10 4 5 26 22

Functional flexibility Yes No ns 80 82 20 18 *** 48 39 59 61 ns 66 66 34 34 ns 19 22 3 2 2 2 10 8 26 33 10 10 5 3 25 20

Financial flexibility Yes No ns 81 81 19 19 ns 40 46 46 54 ns 62 66 38 34 ns 24 19 2 3 3 2 9 10 29 28 10 10 4 4 19 24

Flexible work places Yes No ns 80 81 20 19 ns 47 43 53 57 ns 63 66 37 34 ns 21 20 3 3 2 2 10 9 26 30 11 9 4 5 23 23

Ideological control Yes No ns 79 82 21 18 ** 47 40 53 60 ns 67 65 33 35 ns 19 22 3 2 2 3 9 8 27 31 12 10 5 4 24 20

Economic control Yes No ns 82 83 18 17 ns 41 40 59 60 ns 63 66 37 43 ns 24 21 2 2 2 3 10 8 28 32 10 8 5 4 21 22

Work organization Yes No ns 79 81 19 19 *** 53 42 47 58 ns 66 65 34 35 * 17 21 3 3 2 2 12 9 25 30 13 9 3 5 24 22

New management Yes No ns 78 81 22 19 ns 46 46 54 54 ns 62 66 38 34 ns 21 21 0 3 3 2 10 9 22 29 14 10 5 5 21 22

Different types of working conditions at the workplace with various types of flexibility and various aspects of new management (percentages)

Work demands High Low Self control High Low Social suport High Low Work environment Isolated high strain Isolated low strain Isolated passive Isolated active Collective high strain Collective low strain Collective passive Collective active

Table 5.3

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A Package of Flexibility?

Table 5.4

Employees in different types of work environments at flexible and non-flexible workplaces (vertical percentages) Non-flexible workplaces

20

18

21

20

Percentage difference 2002–1994 Non-flexible Flexible workplaces workplaces 2 1

2

2

3

2

0

1

2

2

3

2

0

1

9

8

10

14

1

-4

30

30

26

25

0

1

9

9

11

8

0

3

5

5

4

5

-1

-1

23

26

22

23

-3

-1

100

100

100

100

2002 (ns) Isolated high strain Isolated low strain Isolated passive Isolated active Collective high strain Collective low strain Collective passive Collective active Total

105

Flexible workplaces

1994 (ns)

2002 (ns)

1994 (ns)

Changes over time can be seen in Table 5.4. We will not go into detail, but restrict our comments to the very best and the very worst work environments. Collective active work is more common at non-flexible workplaces and isolated high strain work is more frequent at flexible ones – today and eight years ago. This is an empirical result that goes against the work environment statement. The differences are, however, small and statistically not significant. What we can say is, then, that the work environment hypothesis is not corroborated. We cannot claim that non-flexible workplaces are better for employees than flexible ones, but we must draw the conclusion that the work environment statement does not have a stable empirical basis. There is nothing that can substantiate the claim that flexible workplaces are better than others for employees. And this applies to 1994 as well as to eight years later. On the other hand, it has been empirically clear for a long time that both social class and sex covariate systematically with work environment. We will therefore make logistic regression analyses in which type of workplace, class (here regarded as ‘social-economic group’ in accordance with the definitions of Statistics Sweden) and sex are independent variables; the quality of the work environment is the dependent variable. We will, however, only show the results of the replication of the study which concern the very best and the (very worst jobs: collective active and isolated high strain work (Table 5.5).

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Table 5.5

Logistic regression analyses of the relationships between class, sex, type of workplace and quality of work environment (odds ratios) Collective active work

Class Unskilled blue collar workers (ref.) Skilled blue collar workers Lower white collar workers Intermediate white collar workers Higher white collar workers Sex Men Women (ref.) Type of workplace Flexible (ref.) Non-flexible R2 (Nagelkerke) N

Isolated high strain work

1.00 1.70 * 2.06 ** 4.08 *** 4.77 ***

1.00 0.61 ** 0.64 ** 0.31 *** 0.26 ***

1.26 * 1.00

1.37 ** 1.00

1.00 1.22 ns 0.08 1 534

1.00 0.82 ns 0.07 1 534

Notes: *** p<0.001. ** p<0.01. * p<0.05. ns not significant.

Let us first look at class. The result is very clear: The higher up in the social hierarchy, the larger the share of the very best work environments; the further down, the larger the share of the very worst conditions. The chances of a higher white collar worker having the best type of work are, for example, almost five times as high as for an unskilled blue collar worker. And when it comes to sex the chances of men having good work are higher than for women – but so is the risk of having a bad job. The differences between men and women are, however, not as marked as those between different classes. The relation between type of workplace and quality of work environment, finally, is not statistically significant. In sum we find, then, that class, but also sex, is of considerable, systematic importance for the qualities of work environments. The differences between flexible and non-flexible workplaces are in contrast inconsequential. We must therefore conclude that the ‘old’ variables class and sex are much more salient for good and bad work environment than the flexible and non-flexible organization of the so called new working life.

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Possible reasons for the popularity of the statements Why are the flexibility statement and the work environment statement so ubiquitous? They are obviously false. Our investigation was not designed to answer this question, but we would like to speculate a little. We can think of at least three reasons. The first one we would like to call the fun factor. It simply means that it is probably more fun to support the evangelism that everything is new and good than – as we do – to direct serious attention to the data, shake our heads and say: ‘These assertions are false, look at the data.’ It is not as fun – and we will never be gurus. The second reason is the old self-fulfilling prophesy. Prestigious people who want to spread positive images of new, improved work organizations and working conditions are spreading this evangelism. This has worked for quite some time when it comes to convincing people that they do not want permanent jobs – and is probably still working in spite of all the empirical evidence that invalidates their message – so why not in this case too? The third reason is a failure in logic, but it has also been called dualistic rhetoric (Sayer and Walker 1992, 193). In analyses of changes in working life there are a number of conceptual pairs that are often used: The development from mass production to flexible specialization, from Taylorism to Post-Taylorism, from ‘just-in case’ to ‘just-in time’, and so on. A collection of some common terms (from Sayer and Walker 1992, 193, with some additions) can be found in Table 5.6. Each of these conceptual pairs is probably fruitful for an analysis of certain specific transformations. The problem is that the theoretical point of departure for research – not to mention myths and rhetoric – is not only the horizontal dimension of the table; often the terms and concepts also become associated in the vertical Table 5.6

Common conceptual pairs in research on the ‘new working life’

Fordism Taylorism mass production large batch production standardized products mass markets rigidity large stocks just-in-case-production specialized machinery American/Japanese management conflicts labour–capital alienated workers deskilling

– – – – – – – – – – –

Post-Fordism Post-Taylorism flexible specialization small batch production differentiated products niche markets flexibility minimal stocks just-in-time-production flexible machinery European management

– – –

harmony labour–capital engaged co-workers enskilling

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dimension. And consequently a picture of two homogeneous systems is implicated – the rubric ‘the old working life’ is placed on top of the left hand side of the table and ‘the new working life’ above the right hand side. Thus we are left with an oversimplified picture of a transformation from the old rigid Taylorist and Fordist mass production of standardized products for stocks and a mass market, performed by alienated workers in an antagonistic social relationship (and so on) to the flexible, Post-Taylorist and Post-Fordist flexibly specialized production for niche markets, performed by engaged co-workers in a harmonious social relationship (and so on). We have been in – or perhaps are in the middle of – a process of a total change from the old to the new, a change that is good for all concerned parties and in which ‘the new’ is diametrically opposed to ‘the old’. Of course there can be additional reasons for the propagation of the empirically false flexibility statement and work environment statement. Our main suggestions are, however, the fun factor, the self-fulfilling prophesy and dualistic rhetoric. Summary Using data collected in 1994 and 2002 about the work environments of employees in the Swedish labour market and the organization of their workplaces, we have empirically tested common statements about ‘the new working life’. One of these we call the flexibility statement, which claims that all workplaces today are flexible. We label the second the work environment statement. It claims that the work environment is better at flexible than at non-flexible workplaces. We find that both statements are empirically false. Furthermore, we found nothing to support the flexibilization hypothesis that argues that the share of flexible workplaces is growing; there is no development in that direction. What is happening to the organization of workplaces and the subsequent consequences for employees seems to be much more complex than a straightforward, homogeneous transformation from the old to the new. References Atkinson, J. (1984), Flexibility, Uncertainty and Manpower Management. IMS Report No. 89 (Brighton: Institute of Manpower Studies). Atkinson, J. and Meager, N. (1986), Changing Working Patterns: How Companies Achieve Flexibility to Meet New Needs. (London: NEDO). Bradley, H., Erickson, M., Stephenson, C. and Williams, S. (2000), Myths at Work (������������������� Cambridge: Polity). Edling, Chr. and Sandberg, Å. (1996), ‘Är Taylor död och pyramiderna rivna? Nya former för företagsledning och arbetsorganisation’ (2nd edn), in C. le Grand, R. Szulkin and M. Thålin (eds) Sveriges arbetsplatser – organisation, personalutveckling, styrning (���������������� Stockholm: SNS).

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—— (2003), ‘New Management Systems and Worthwhile Work: The Swedish Experience’, in M. Gold (ed.) New Frontiers of Democratic Participation at Work (Aldershot: Ashgate). Furåker, B. (2000), ‘Marknaden för arbetskraft och den sociologiska forskningens uppgifter’, in M. Blomsterberg (ed.) Jubiléumsföreläsningar (Göteborg: Sociologiska institutionen, Göteborg University). Karasek, R. and Theorell, T. (1990), Healthy Work. Stress, Productivity and the Reconstruction of Working Life (New York: Basic Books). Karlsson, J. Ch. and Eriksson, B. (2001), Flexibla arbetsplatser och arbetsvillkor. En empirisk prövning av en retorisk figur (Lund: Arkiv). NUTEK (1996), Towards Flexible Organisations (Stockholm: NUTEK). Pollert, A. (1988), ‘“The Flexible Firm”: Fixation or Fact?’ Work, Employment and Society 2:3. Sayer, A. and Walker, R. (1992), The New Social Economy: Reworking the Division of Labour (Cambridge, Mass.: Blackwell). Van der Doef, M. and Maes, S. (1998), ‘The job demand–control(–support) model and physical health outcomes: a review of the strain and buffer hypotheses’, Psychology and Health 13, 909–936. —— (1999), ‘The job demand–control(–support) model and psychological well-being: A review of 20 years of empirical research’, Work and Stress 13, 87–114.

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Chapter 6

Protected, Firm-Specific, and Scarce: Explanations of Non-Standard Forms of Employment R. Øystein Strøm

Introduction The flexible-firm hypothesis (Atkinson 1984) says that firms will hire full-time and long-term labour for its core activities, and use non-standard forms of employment at its periphery, if these jobs are not outsourced. Non-standard forms of employment include part-time and temporary employment, overtime and the self-employed (Felstead and Jewson 1999, 2), in contrast to standard, or full-time, employment. Atkinson considers strategies at the company level. In this chapter I describe the employment pattern in Norway, a ‘flexicurity’ country, and discuss whether the pattern may be explained by regulation differentials across business sectors and types of non-standard labour contract, by the extent of labour specificity in sectors, and by labour market tightness. Finally, I investigate whether non-standard work is a voluntary choice. I test these possible explanations in the Norwegian context. In a ranking of OECD countries (OECD 1999), Norway proves to be one of the countries with the highest levels of labour protection. At the same time, part-time work is extensive, and labour market tightness is very high. In international comparisons, the Nordic countries have scored low on unemployment and high on economic growth, while at the same time the labour market regulations seem to be strict. This seeming paradox dissolves when we take a closer look at the regulations in Norway. It turns out that dismissal protection is higher in the public sector than the private. Thus, in addition to the cross-country evidence, comparisons of private and public employment patterns are also possible. The testing of these explanations will be low-powered, for the most part using tables and figures to reveal regularities across industries and across time. Aggregate data are from Statistics Norway and from Eurostat. Non-standard forms of employment are seen as an aspect of the numerical flexibility which firms aspire to. However, numerical flexibility may be obtained in traditional ways as well, such as hiring and firing at will, the increased use of overtime, and short-term leave. Furthermore, activities may be outsourced, firms may hire labour from manning bureaus, and foreigners who come to work in Norway can add flexibility to the domestic labour market. Weitzman (1984)

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proposes wage flexibility as a method of adjusting business cycles. Thus, nonstandard forms of employment are but one aspect of increased flexibility in the labour market, and indeed, the demand for flexibility in the labour market spills over into factor and product markets generally. It is beyond the scope of the present paper to consider all these aspects since we have chosen to concentrate on nonstandard forms of employment here. The question of non-standard forms of employment is of interest from three points of view. First, it has been claimed that numerical flexibility is on the increase due to the increased popularity of ‘shareholder capitalism’, that is, that shareholders’ value-maximising interests take precedence over workers’ interests in long-term, stable employment. Second, aging populations in western societies are directing attention to non-standard forms of employment that may bring out more of the ‘reserve army’ of workers. Third, the composition of different industries changes over time. More specifically, the growth in Government services has been particularly strong. I aim to consider the implications of these changing conditions for the use of non-standard forms of employment. The literature on non-standard forms of employment is too large to review in its entirety in this context. I can mention Olsen and Kalleberg (2004), who compare Norway and the US. However, they limit their study to temporary work. As this chapter will show, interesting interactions exist between regulations, the degree of labour homogeneity and the use of various forms of non-standard employment. These interactions are motivating factors in the present study. The chapter proceeds as follows. First, a brief overview of labour market regulations in Norway is given before we turn to labour market theories pertaining to the issue of numerical flexibility. The data used is briefly reviewed and supplemented with some background material on the Norwegian economy. Subsequently, the use of non-standard forms of employment, especially part-time and temporary work is reported. The following section discusses the relationship between the offered explanations and the empirical evidence. The final section contains concluding remarks. Institutional background This section gives some background information on important aspects of the use of non-standard forms of employment in Norway. Labour regulations Norway adheres to ‘flexicurity’ labour market policies (Schubert and Martens 2005), combining easy hire and fire with high unemployment benefits and retraining. The focus is not on job security, but on employment security. The general results of the policies are high innovation and job turnover combined with low unemployment.  A Norwegian government study was entitled ‘Can more people work more?’

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Let us look more closely at the Norwegian labour protection regulations. The regulations are based upon legislation and collective agreements. The legislation covers the work environment law (Arbeidsmiljøloven) for private firms and the municipalities, while the civil servants’ law (Tjenestemannsloven) covers those in government employment. The main points relevant for our discussion are summarized below (NOU 1999). We use a document from 1999, which is from the middle of the period under investigation. Furthermore, the Arbeidsmiljøloven has not undergone any considerable changes since its inception in 1977, although many incremental changes have been made, mostly strengthening the protection of labour. A summary of the main points follows: Employment The general rule is that the worker is hired for indeterminate tenure; the employer needs a good reason to dismiss a person. Hiring A 6 months’ trial period. The trial period may be extended. During this period, the employee may be dismissed for reasons having to do with the employer (for instance, less work than expected), and with the employee (for instance, lack of competence). Part-time No limitations. Temporary Temporary employment is only allowed when the work to be done is not part of the normal activity of the establishment, and is of limited duration. However, filling jobs to cover seasonal and unexpected variations in the workload is allowed within these limits. Exemptions exist for artists, sportsmen, and researchers. Also, in the government sector it is far easier to employ temporary workers than in other sectors. The Self-employed The law applies to these employees as well. Overtime The normal work year is 1,750 hours. The law allows 310 hours, or 17.7 per cent overtime. This may be extended, in accordance with individual or collective agreements. The more collective in nature these agreements are, the more likely it is that larger extensions will be allowed. Dismissal The firm may dismiss employees for economic reasons, or for reasons of negligence. No dismissal compensation is paid. The dismissal protection is stronger for government employees than for other employees.

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Thus, the regulations on temporary work may seem to be of primary importance. We note the symmetry in dismissal protection and temporary work. If dismissal protection is high (the government sector), temporary work is allowed. If dismissal protection is low (private sector and local government), temporary work is not allowed. The difference between the government sector and the rest of the economy makes it possible to see whether differences in regulatory regimes induce differences in the use of temporary employment. The law has a loophole regarding overtime. Management and high-competence workers are exempted from the 200 hours per year rule. No regulations exist for these groups regarding working time. In consequence, this is an incentive to increase the number of management positions, and also to redefine labour as highcompetence. Not surprisingly, these incentives have been used extensively. Norway is not considered the paragon of liberal labour legislation. In a survey of its member states, the OECD (1999) found Norway to be in the high end of labour protection from dismissal, individual or collective, see Figure 6.1. The OECD evaluated 22 indicators in three main areas: individual dismissal protection, the opportunities for using temporary labour, and protection against collective dismissals. The figure shows that Anglo-Saxon countries are at the low end of protection, while southern European countries and Turkey are at the high end. Excluding these latter countries, Norway is among the most regulated countries in Europe, by this measure. OECD 2004 shows that the scores have been remarkably stable for most countries from the late 1980s until today, with a small tendency towards more freedom in the use of temporary labour.

Figure 6.1

The OECD (1999) ranking of member states according to the establishments’ costs related to individual or collective dismissals

Source: OECD Employment Outlook, 1999.

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In view of the discussion above, we believe the assessment of Norway as one of the most regulated countries is too harsh. From the OECD’s background material it is obvious that Norway scores high on regulations on temporary work. But the opportunity to use temporary employees is important only when it is difficult to dismiss people. Without dismissal protection, the employer is indifferent to whether he is hiring for the long term or for the short. As just noted, it is fairly easy to dismiss workers in the private sector in Norway. The employer needs to give a reason, but an economic reason will suffice. Thus, although the letter of the law may seem strict, its practice is lenient. Fougner and Holo (2006) state that courts show more understanding of the firms’ views during distressed than in favourable economic conditions. This is further supported by very high inflows into and outflows from the labour market in Norway, according to the OECD (2004). In fact, Cahuc and Zylberberg (2004, 750 f.) show that Norway and the US share high short-term but low long-term unemployment rates, unlike other OECD countries. Furthermore, the index is a mechanical summary of points on independent scales. It does not consider the regulation differentials between either public or private employment, or between different forms of non-standard employment. Yet these differentials may result in very different employment patterns across different sectors. Why non-standard forms of employment? Why would some firms opt for more non-standard forms of employment? Atkinson’s three time specific explanations of recession, rapid technological change leading to skill obsolescence and a shorter work week (see Skorstad in this volume) should induce firms to pursue more flexible manning practices. But this does not necessarily mean that non-standard employment disappears when labour is scarce, when skill obsolescence is not a problem, or when institutional factors, such as a shorter working week, are absent. The level of firm-specific investments in human capital (FSIHC) may be important even though skill obsolescence is low. Furthermore, flexible manning practices may not depend as much upon the level of employment as upon its variability. In this section I look more closely into these explanations. Labour specificity, skill obsolescence and variability Several factors are important for the firm’s manning practices. I consider labour specificity, skill obsolescence, and employment variability in this sub-section. Labour specificity is high when the FSIHC is high. Human capital may be both general and specific (Becker 1964). It is general when it is productive both at the employee’s current firm and at other firms, and it is firm-specific when productive only within the current firm.

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Many theories emphasize the firm-specific nature of at least some human capital. Oi (1962) claims that the costs of firing and hiring mean that labour is not totally flexible, neither is it totally fixed, but ‘quasi-fixed’, that is, fixed within the limits given by the hiring and firing costs. Transaction cost theory (Williamson 1975; 1985) implies that if the employee believes that the employment contract is totally flexible, he will not invest in firm-specific knowledge, but instead will try to build up general human capital. In order to avoid this opportunistic behaviour, the firm will offer long-term contracts. The theory of implicit job guarantee, or an implicit contract (Azariadis 1975; Rosen 1985), predicts stable employment and relatively high wages to those employed, and unstable employment and low wages for those without permanent employment. Last, efficiency theory (Shapiro and Stiglitz 1984) builds the insurance promise into a wider theory of unemployment. The firm wants to keep its best workers. In order to do so, it offers higher wages than the market wage, and also longer tenure. The offered wage is called ‘efficiency wages’, efficient in the sense of keeping the workers in the firm. Since it is higher than the market wage, unemployment follows. Conversely, if the human capital is general, the firm will gain if it can scale employment to market demand. This is possible if no dismissal restrictions exist. The firms would then be able to hire and fire at will, giving the firm a real option, similar to the advantage of being able to increase or decrease production when market conditions change (McDonald and Siegel 1985). It turns out that this real option can be quite valuable. Thus, the firm has a clear incentive to try to tailor the use of labour to the specific needs for labour over the business cycle. From this perspective, hiring and firing at will is advantageous. Thus, the firm’s evaluation of flexible manning practices may vary with labour specificity and labour variability in the manner set out in Table 6.1. Table 6.1

The firm’s evaluation of flexible manning practices given labour flexibility and variability Labour variability

Labour specificity Low High

Low Some Low

High High Some

 Thorstein Veblen (1997, 66) made similar remarks: ‘So the common practice has come to be partial employment of equipment and man-power on terms satisfactory to the owners; often rising to something near full employment for a limited time, but always with the reservation that the owner retains his legal right to withhold his property from productive use in whole or in part. Plainly, ownership would be nothing better than an idle gesture without this legal right of sabotage.’ For Veblen, the exercise of the real option is clearly a case of sabotage.

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The upshot of the labour specificity theories is that the firm wants to keep at least some of the workforce on long tenure. These will be the core of employees in the Atkinson (1984) parlance. One implication is that adjustments in employment for this group will be ‘sticky’, that is, employment does not fluctuate with the ups and downs of the business cycle. Another implication is high investment and disinvestment costs with this kind of labour. Thus, hours worked may be used as an important regulator of the demand for labour over the business cycle. Accordingly, we would expect little change in employment and high variability in hours worked. Thus, in firms and industries with high firm-specific human capital, we do not expect to find part-time work, but overtime. Conversely, in firms and industries with general human capital, we expect to find more part-time workers, more temporary work, and less overtime. These will be firms and industries with either low education levels, or high. Simple service industries are in the first category, industries demanding professional training will be in the second. Thus, there will be a crosssectional difference in the use of standard or non-standard forms of employment. When the costs of hiring and dismissal are introduced, Bentolila and Bertola (1990) show that firms will be reluctant to hire in an upturn and to fire in a downturn. The option of firing becomes costly. They show that one implication of this is that companies will be loath to hire. The use of standard versus nonstandard work is affected, too. Specifically, industries with high barriers to the dismissal of employees tend to use more non-standard forms of employment than industries with low barriers. Thus, we expect to find more non-standard work in the public sector, where dismissal protection is higher than in the private sector. Labour market regulations and labour specificity interact. If labour regulations are in place, we expect these to favour full-time employment, whether labour is specific or not. When labour regulations are absent, we expect to find full-time employment in firms requiring firm-specific human capital, and different forms of labour contracts in firms requiring homogeneous labour. When regulations and labour specificity are differently distributed among sectors, we expect to find sector differences in the use of non-standard forms of employment. Atkinson’s theory says that skill obsolescence is important in understanding the use of non-standard forms of employment. Skills may become obsolete due to rapid technological change in existing industries or because of sector shifts. A sector shift may occur when the demand for the sector’s products is nearly constant, and when employment needs are falling. The reallocation of labour from agriculture to health services is a prime example. Globalization is another catalyst of sector shifts. Using the above arguments, it is easy to see that the firm’s evaluation of flexible manning practices when skill obsolescence is the case must be as in Table 6.2. Thus, when skill obsolescence and labour variability are both high, the value of flexible manning practices is also high, and their value is low when both are low. If the sector shifts towards industries with a higher demand for flexible labour, non-standard forms of labour should increase. This may happen in the service industries, see below.

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Table 6.2

The firm’s evaluation of flexible manning practices given labour flexibility and skill obsolescence Labour variability

Skill obsolescence Low High

Low Low Some

High Some High

Bringing out the ‘reserve army’ The employee’s need for employment protection is proportional to the tightness of the labour market. If dismissed, the worker may easily find a new job when the labour market outlook is good. But for part of the workforce, full-time employment leads to a working day that is much too long. This is the case for many women. In this section, we consider labour market tightness as an explanation of nonstandard forms of employment. Atkinson used recession as an explanation for the need for flexible manning practices. Here we shall see that full employment has the same effects. The willingness of firms to offer part-time jobs may depend upon the participation or the employment rate of the economy. The employment rate is defined as the number of employed people in a given age group divided by the total number of people in that age group. We use this as a measure of the tightness of the labour market. When the employment rate is low, it may be easy to attract workers into full-time employment. When the employment rate is high, firms may find it necessary to offer more non-standard forms of employment, since it then becomes increasingly difficult to bring out the last reserves of labour. Thus, the state of the macro-economy may determine the extent of part-time work and also other forms of non-standard forms of employment. If women prefer non-standard forms of employment more than men, there will be a gender effect determining nonstandard forms of employment as well. Furthermore, non-standard forms of employment are more likely to be used in industries that need more manpower. These will have to compete for labour, and therefore, need to adjust working hours to suit the needs of those most recently employed. This means that there will be an industry effect in addition to the gender effect just observed.  This theory is diametrically opposed to Marx’s (1969, 661) ‘labour aristocracy’/ ‘reserve army’ argument, since the ‘reserve army’ here is the last vestiges of labour remaining to be employed in the economy, while for Marx the reserve army was an everincreasing part of the labour force brought about by technological development. In recent history however, the labour needs of the factories, shops and offices were filled by recruits from the countryside Hobsbawm (1995). Now this source has dried out. So what I call the reserve army is not a case of an increasing ‘reserve army’ in the Marxian sense, but rather it denotes the mobilization of marginal members of the labour force.

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Data I use data from the Norwegian employment market in addition to some comparative statistics from other European countries. The public web pages of Statistics Norway and Eurostat are the main data sources. The Norwegian labour market data on non-standard forms of employment are collected by survey methods (Arbeidskraftundersøkelsen – AKU). This excludes a study of employment practices at the firm level. From the national accounts data I obtain the number of hours worked over an extended period, from 1970 till 2007 distributed by sector and gender, but not by standard and non-standard forms of employment. The big picture This section gives an overview of the main characteristics of employment in Norway, together with an international comparison of employment rates. We show developments in various sectors, and also the differences in the gender pattern of employment. The subsequent section is devoted to non-standard forms of employment. Figure 6.2 shows the labour force of men and women.

Figure 6.2

Total labour force (left hand scale) in 1,000 persons and percentage of women and unemployment (right hand scale) in Norway from 1972 to 2006

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Growth in employment and the large influx of women into the labour market characterize the series. The number of employees started at about 1,650 in 1972, with an unemployment rate of about 1.5 per cent of the workforce. Employment reached 2,439 in 2006, an increase of 49.6 per cent since 1972. The unemployment rate reached its highest level in 1993 at 6.0 per cent, dropping to 4.5 per cent in later years. As will become apparent, Norway’s employment rate is at the top level for both men and women in Europe. Figure 6.2 reveals the importance of women’s entrance into the labour market. The increase in female employment was 86.8 per cent from 1972 to 2006, compared to a 21.6 per cent increase for men. Thus, the increased employment in Norway during this 34 year period is to a large extent due to the influx of women. In 1972 women constituted 36.4 per cent of those employed; in 2006 the percentage was 47.0. They participate to a large extent as part-time employees. Firms may be expected to increase or decrease the number of hours worked during a year to meet the demand for its products. Figure 6.3 gives an overview of the variability in the hours worked over the years. In order to bring out contrasts between sectors, Figure 6.3 shows two selected industries, manufacturing and health. Obviously, the working year is much shorter in the health services than in manufacturing over the whole period. In fact, the difference has been increasing. While manufacturing workers on average worked 327 more hours than health workers in 1970, the difference was 505 hours in 2004. This difference amounts to almost exactly one third of the working year in manufacturing. Health services represent the extreme in terms of the short working year among the industries in Norway. Education is a close second to health, while business services run somewhere between manufacturing and health. Another notable feature of Figure 6.3 is that the working year has grown shorter. For manufacturing, this took place for the most part in the 1970s. In the health services we see a fall paralleling that found in manufacturing in the 1970s, but then the average working year continues to fall in this sector. This brings us to the two other series in Figure 6.3, the total hours worked in the two sectors. The figure shows the overall fall in hours worked in manufacturing and the rise in hours worked in the health services during these years. In fact, the number of hours worked in the health services exceeds those worked in manufacturing in recent years. This rise in the total hours worked in health services comes at the same time as the decrease in the average working year. The implication is that the number of people employed in health services has increased faster than the number of hours worked. Furthermore, in manufacturing we can observe how the number of hours worked varies noticeably from one year to another, while the average working year remains fairly stable. Therefore, the flexibility of hours worked has come about through hiring and firing in this sector. In fact, if we look at the employment figures, the ups and downs of this industry are clearly visible, see Figure 6.4. The level of 378,800 from 1970 was maintained in the 1970s. During the 1980s a steady decline set in, reaching the low level of 73.9 per cent of the 1970 level. Then a new rise in employment came about, reaching 84.8 per cent of the 1970

Protected, Firm-Specific, and Scarce

Figure 6.3

121

The average working year (left hand scale) and total hours worked (right hand scale) in manufacturing and health in Norway from 1970 to 2004

Note: ‘Manufact’ is the average working year in manufacturing, and ‘Health’ is the average working year in the health services. ‘Hoursmanu’ is the total hours worked in manufacturing during the year. ‘Hourshealth’ is the total hours worked in the health sector during the year. Source: Statistics Norway.

level in 1998. From this high level, a new low came in 2004, when only 70.4 per cent of the number employed in 1970 had work in manufacturing. In what manner has the employment within industries developed over the recent past? Figure 6.4 gives an overview of the major changes in employment since 1970. The industries are grouped into larger categories in order to show a clearer picture. The resource industries include those handling natural resources in Norway, such as agriculture and fisheries, but also oil extraction, mining and hydro-power generation. Likewise, in manufacturing the main manufacturing sectors are to be found. Only the publishing sector has increased normalized fulltime employment since 1970. Private and public services comprise the remaining services. Business services have had a formidable increase since 1970. The total increase in this sector has been 342 per cent since 1970.

122

Figure 6.4

Flexible Organizations and the New Working Life

Normalized full-time employment in major Norwegian industries from 1970 to 2004

Note: ‘Pserv’ is private service industry, ‘Resource’ is the resource industries (agriculture, fisheries, mining, petroleum, and hydro-power generation), ‘Manufact’ is the manufacturing sector, and ‘Govserv’ is public services. Source: Statistics Norway.

Figure 6.4 shows quite dramatic overall changes in employment by industry during the years since 1970. First of all, the resource industries loose a number of full-time employees, in fact 60,700. Second, manufacturing is losing employees as well, as many as 112,200. Third, the private services have increased employment during this period, with as many as 286,100 workers. Fourth, the government services are steadily increasing in employment, the increase comprises 384,500 new full-time employees during this period. In sum, this indicates a dramatic shift in the industrial landscape of Norway. Within one generation, the economy has moved from one dominated by manufacturing and resource industries to a service economy. With this marked sector shift, new opportunities have been opened up for more people. At the same time, the new service economy makes new forms of employment possible, and perhaps also necessary.

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123

How does the labour participation rate in Norway compare to other European countries? Tables 6.3 and 6.4 show the employment rates of females and males, respectively, in Norway and a number of other countries in the European Economic Zone. The tables have few statistics for Iceland and Norway, possibly due to late harmonization with the EU. The tables show, first of all, that the Norwegian employment rates for both males and females are among the highest recorded. This is especially true for women. In 2004, only Iceland had a higher proportion of women employed. For both women and men, the employment rate has been declining since 2000. Considering the fact that modern societies require a high level of school-based knowledge, the employment levels of both men and women may have reached their highest level in countries like Denmark and Norway.

Table 6.3

EU15 Belgium Denmark Germany Greece Spain France Ireland Italy Netherlands Poland Portugal Finland Sweden UK Iceland Norway

The female employment rate in EU15 and some selected countries 1993 49.2 44.5 68.2 55.1 36.6 30.7 51.5 38.5 35.8 52.2 : 55.0 59.5 69.7 60.8 : :

1994 49.3 44.6 66.9 55.1 37.3 30.7 51.6 40.1 35.4 53.2 : 54.4 58.7 68.5 61.2 : :

1995 49.7 45.0 66.7 55.3 38.1 31.7 52.1 41.6 35.4 53.8 : 54.4 59.0 68.8 61.7 : :

1996 50.2 45.4 67.4 55.3 38.7 33.1 52.2 43.2 36.0 55.8 : 54.9 59.4 68.1 62.5 : :

1997 50.8 46.5 69.1 55.3 39.3 34.6 52.4 45.9 36.4 58.0 51.3 56.5 60.3 67.2 63.1 : :

1998 51.6 47.6 70.2 55.8 40.5 35.8 53.1 49.0 37.3 60.1 51.7 58.2 61.2 67.9 63.6 : :

1999 53.0 50.4 71.1 57.4 41.0 38.5 54.0 52.0 38.3 62.3 51.2 59.4 63.4 69.4 64.3 : :

2000 54.1 51.5 71.6 58.1 41.7 41.3 55.2 53.9 39.6 63.5 48.9 60.5 64.2 70.9 64.7 : 73.6

2001 55.0 51.0 72.0 58.7 41.5 43.1 56.0 54.9 41.1 65.2 47.7 61.3 65.4 72.3 65.0 : 73.6

2002 55.6 51.4 71.7 58.9 42.9 44.4 56.7 55.4 42.0 66.2 46.2 61.4 66.2 72.2 65.2 : 73.7

2003 56.0 51.8 70.5 58.9 44.3 46.3 57.2 55.7 42.7 66.0 46.0 61.4 65.7 71.5 65.3 80.1 72.6

2004 56.8 52.6 71.6 59.2 45.2 48.3 57.4 56.5 45.2 65.8 46.2 61.7 65.6 70.5 65.6 78.8 72.2

Note: The employment rate is calculated by dividing the number of persons aged 15 to 64 in employment by the total population of the same age group. The indicator is based on the EU Labour Force Survey. The survey covers the entire population living in private households and excludes those in collective households such as boarding houses, halls of residence and hospitals. The employed population consists of those persons who during the reference week did any work for pay or profit for at least one hour, or were not working but had jobs from which they were temporarily absent. Source: Eurostat.

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Table 6.4 EU15 Belgium Denmark Germany Greece Spain France Ireland Italy Netherlands Poland Portugal Finland Sweden UK Iceland Norway

The male employment rate in EU15 and some selected countries 1993 71.0 67.0 75.8 74.9 72.1 63.0 67.3 64.8 69.3 74.6 : 75.8 62.5 73.0 73.9 : :

1994 70.4 66.6 77.5 74.1 72.4 61.8 66.8 65.9 67.7 74.5 : 74.5 62.0 72.0 74.5 : :

1995 70.5 66.9 79.9 73.7 72.5 62.5 67.2 67.1 66.9 75.3 : 73.5 64.2 73.1 75.1 : :

1996 70.4 66.9 80.0 72.6 72.7 62.9 67.0 67.5 66.7 76.5 : 73.9 65.4 72.6 75.5 : :

1997 70.6 67.1 80.5 71.9 72.1 64.5 66.9 69.1 66.5 78.8 66.8 75.5 66.2 71.7 76.6 : :

1998 71.2 67.1 79.9 71.9 71.7 66.8 67.4 72.1 66.8 80.2 66.5 75.9 67.8 72.8 77.3 : :

1999 72.1 68.1 80.8 72.8 71.1 69.3 68.0 74.5 67.3 80.9 64.2 75.8 69.2 74.0 77.8 : :

2000 72.8 69.5 80.8 72.9 71.5 71.2 69.2 76.3 68.0 82.1 61.2 76.5 70.1 75.1 77.8 : 81.3

2001 73.1 68.8 80.2 72.8 71.4 72.5 69.7 76.6 68.5 82.8 59.2 77.0 70.8 75.7 78.0 : 80.7

2002 72.8 68.3 80.0 71.8 72.2 72.6 69.5 75.4 69.1 82.4 56.9 76.5 70.0 74.9 77.6 : 79.9

2003 72.7 67.3 79.6 70.9 73.4 73.2 69.4 75.2 69.6 81.1 56.5 75.0 69.7 74.2 77.7 86.3 78.3

2004 72.7 67.9 79.7 70.8 73.7 73.8 68.9 75.9 70.1 80.2 57.2 74.2 69.7 73.6 77.8 85.8 77.9

Note: The employment rate – see Table 6.2. Source: Eurostat.

The increase in female participation is noticeable in all the European countries. For instance, Germany has had a reduction of about four percentage points in the employment rate for men from 1993 to 2004, while the female employment rate increased during the same period. The Irish and Spanish employment rates for women increased by almost 20 percentage points during this period. Thus, the conclusions to be drawn from this section are first, that women entered the work-force in large numbers. Second, the sector shift means that services now dominate the Norwegian economy. Third, in international comparison, the employment rate for both men and women is very high. Fourth, the variations in both hours worked and employment can be quite substantial. The extent of non-standard employment Let us now look in more detail at non-standard forms of employment in the Norwegian economy, and focus upon part-time, temporary work, and selfemployment. In addition, an indication of the amount of overtime worked in various sectors is included. I compare the extent of part-time work in Norway with that in other European countries as well.

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Part-time What is the extent of part-time work in Norway? Table 6.5 gives a preliminary answer. Table 6.5 first of all indicates total employment and the percentage of parttime work within the total workforce. Thereafter it differentiates between the same variables according to gender. It turns out that part-time work involves slightly more than a quarter of the workforce, and this figure has remained remarkably stable. Furthermore, there is a clear division in part-time work between men and women, and again, the percentages remain stable during this period. Men’s part-time work shows a slight increase, whereas there is a decrease in women’s part-time work. Table 6.5

Total All parttime All PT, % of total Short PT %

Total and part-time employment among men and women, the percentage of part-time employment, and the percentage of short part-time and total part-time employment 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2,132 2,195 2,249 2,259 2,269 2,278 2,286 2,269 2,276 2,289 2,362 2,443 560

572

581

593

579

587

597

599

613

606

644

653

26,3

26,1

25,8

26,3

25,5

25,8

26,1

26,4

26,9

26,5

27,3

26,7

49,6

48,3

48,2

47,7

47,8

47,5

47,9

48,1

48,6

48,2

47,5

47,2

Men All parttime All PT, % of total Short PT %

1,154 1,185 1,211 1,209 1,212 1,214 1,210 1,198 1,201 1,211 1,251 1,289

Women All parttime All PT, % of total Short PT %

114

115

117

125

126

134

134

143

151

149

160

164

9,9

9,7

9,7

10,3

10,4

11,0

11,1

11,9

12,6

12,3

12,8

12,7

56,1

57,4

58,1

57,6

60,3

59,0

59,7

60,1

58,9

57,0

57,5

57,9

978

1,010 1,037 1,051 1,057 1,064 1,076 1,071 1,074 1,078 1,111 1,154

445

457

464

468

453

453

463

456

462

457

485

490

45,5

45,2

44,7

44,5

42,9

42,6

43,0

42,6

43,0

42,4

43,7

42,5

47,9

46,0

45,7

45,1

44,4

44,2

44,5

44,3

45,2

45,3

44,1

43,5

Note: Full-time employment is defined as a working week of 37.5 hours. Short part-time employment is defined as a 1–19 hour working week, long part-time is a 20–36 hour working week. ‘PT’ means part-time employment. Source: Statistics Norway (AKU).

The statistics differentiate between part-time with a working week of 1 to 19 hours, and a long part-time working week of 20 to 36 hours. Women are evenly distributed between the two, while there is a higher incidence of men in the shorter alternative. In what sectors do we find part-time work? Table 6.6 gives an overview.

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Table 6.6

The percentage of part-time employment in Norwegian industries, 1996 to 2004 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

All industries

26,3

26,1

25,8

26,3

25,5

25,8

26,1

26,4

26,9

26,5

27,3

26,7

Primary ind

27,8

27,5

26,9

27,5

25,8

24,7

25,6

25,3

26,6

26,7

24,7

24,3

Petroleum

4,3

8,3

7,1

7,4

6,9

6,3

6,5

10,3

6,7

12,5

12,9

11,4

Manufacturing

12,9

13,1

12,9

12,5

12,5

12,8

12,3

12,8

13,5

13,1

11,6

12,1

Power/water

4,8

0,0

0,0

11,1

10,0

11,1

7,1

0,0

12,5

6,3

6,3

5,9

Construction

7,1

6,2

6,4

7,5

7,5

7,2

6,4

7,5

7,5

6,3

7,8

7,8

Retail, hotels

33,7

34,0

34,0

33,1

32,7

35,2

35,9

36,6

36,9

36,1

39,0

39,1

Transport

16,5

16,8

16,0

15,9

14,9

16,6

15,5

15,4

16,1

17,1

17,3

15,8

Financials

16,7

13,2

15,4

15,1

14,0

14,3

13,7

14,9

12,5

11,8

11,1

10,9

Real estate etc.

21,7

20,5

20,1

20,5

19,9

18,8

19,9

19,6

19,7

19,5

20,2

20,1

Public adm.

11,7

13,2

12,3

12,4

13,2

13,2

12,4

10,7

11,8

12,3

12,6

15,6

Education

29,7

29,6

30,4

32,4

30,4

29,5

29,3

29,6

29,2

28,9

30,1

28,8

Health/social

47,6

47,1

47,0

47,1

45,5

45,3

44,5

44,8

44,5

43,9

45,5

44,3

Other social

35,9

35,9

37,2

37,5

35,8

34,0

35,8

37,2

37,8

34,0

34,7

34,3

Source: Statistics Norway (AKU).

Table 6.6 gives the percentage of persons employed on a part-time basis in Norwegian industries during the period 1996 to 2004. It turns out that large differences between industries exist. The average is about 26 per cent. The industries which have a higher percentage of part-time employees than this are Retail and hotels/restaurants, Education, Health and social work activities, and Other social and personal services. Industries with less than half the average are Petroleum (Oil and gas extraction and services), Manufacturing, mining and quarrying, Power and water utilities (where small numbers make the percentages jump), and Construction. The high percentage of part-time work in agriculture is perhaps surprising, considering the fact that almost all agriculture in Norway is run by the farmer himself. The explanation is that the farmer often has a second job in some other sector. The cross-sectional differences are more obvious than the developments over time. In fact, the stability over time within industries is remarkable given the wide dispersion between industries. This indicates that the cross-industrial differences are due to some fundamental causes. I return to this question in a later section. Nevertheless, a small, but steady decline in the percentage of part-time work is noticeable in the Health and social work activities industry and in Financial services. Are there visible gender differences across industries? Figure 6.5 shows the pattern of employment for men and women and part-time work in two industries, manufacturing and health services.

Protected, Firm-Specific, and Scarce

Figure 6.5

127

Total and part-time employment for men and women in manufacturing and the health services in Norway from 1996 to 2007

Notes: Total employment – solid line, 1,000 persons on left hand scale; Part-time – broken line, percentages on the right hand scale; Men – left column; Women – right column; Manufacturing – top row; Health services – bottom row. ‘MMAN’ is the number of persons employed in manufacturing, ‘MMPT’ is the percentage of men working part-time in manufacturing, ‘MHEALTH’ is the number of men working in the health services, while ‘MHPT’ is the percentage of men in the health services working parttime. The two figures on the right show the corresponding variables for women. Source: Quarterly data, Statistics Norway.

The figure shows the employment of men and women in the two industries, together with the percentage working part-time. The percentage of part-time work is on the right hand axis, while employment is on the left. For ease of comparison, the employment numbers range from zero to 400,000, and the percentages from zero to 100 in all sub-figures. Clearly, part-time work is more prevalent in health services than in manufacturing. While part-time work for men in manufacturing comprises 6 to 8 per cent, it comprises nearly 25 per cent in the health services. The same applies to women.

Flexible Organizations and the New Working Life

128

Clearly also, women work more part-time than men. In manufacturing men work 6 to 8 per cent part-time, women roughly one third. In health services the figures are about 25 per cent for men, and half and sometimes more for women. Thus, the women seem to enter the workforce on the back of a rising service economy. With service industries providing more and more jobs, part-time work is expected to rise. We saw that part-time work for men was rising in Table 6.5. It now turns out that this is largely due to the rise in service industries. The gender differences are repeated in other industries as well. For instance, in business services the percentage of part-time work done by men is 12 to 13 per cent, while it is more than 30 per cent for women. These tables also show that short part-time (1–19 hours) comprises about half the cases. A third feature of Figure 6.5 is that no clear increasing or decreasing time trend in the use of part-time work emerges. The percentages are roughly stable during this period, with variations from quarter to quarter. Thus, if any time pattern is to be detected, it is one of short-time variability around a long-term stable level. Figure 6.5 also highlights the fact that the government is the larger part-time employer. Part-time employment in business services turns out to be lower than in health services. Thus, even though both are service industries, the privately owned businesses hire relatively fewer on a part-time basis than do their governmentally owned counterparts. The statistics on part-time employment point to clear gender and industry effects. To summarize, we may group the part-time employment rate by gender and by type of establishment. The establishment may belong to the market economy or the public services. This comparison is made in Table 6.7. Table 6.7

Per cent of part-time employment rate in Norway 1996 to 2004 distributed by gender and type of establishment Gender

Establishment type Market firm Public services Total

Men 10.8 12.7 11.1

Total

Women 43.2 45.2 44.2

14.8 35.5 26.5

Table 6.7 shows a clear gender and industry effect. Overall, 44.2 per cent of the women are engaged in part-time employment. The percentage is remarkably similar across type of establishment. In market firms only 14.8 per cent have part-time employment, while in public services the percentage is 35.5. It follows that most of the women work in the public sector, and they tend to have part-time jobs. Work in public companies is predominantly carried out by qualified personnel, such as nurses and teachers. Probably, these occupations come closer to labour homogeneity than occupations in, say, manufacturing. This may explain the prevalence of part-time work in the public sectors.

Protected, Firm-Specific, and Scarce

129

International comparison What is the extent of part-time work in Norway compared to countries in Europe? The next two tables explore this issue. Again, the strong segregation between men and women is obvious. While the EU15 part-time average for women is 35.2 per cent in 2004, it is only 7.2 per cent for men. In countries where the female part-time rate is high, there is a tendency for the male rate to be above average. Thus, this applies to the Netherlands, Sweden, the UK and Norway. However, the opposite is the case for Germany. It turns out that part-time employment for EU15 has increased for both men and women from the time of the first records in 1995 to 2004. But this general increase masks several distinct trends. For women it turns out that nearly all countries show an increase in the part-time employment rate. The Nordic countries are the exception; however, Finland is the exception to the exception. Iceland has the strongest reduction. At the other end of the scale, a few countries such as Belgium and Germany have shown a steady increase in the part-time rate, both achieving some of the highest rates in 2004. Likewise, Ireland has increased the part-time employment rate by some ten percentage points during this period. Other countries have increased as well, but not as strongly. Thus, we cannot find a parallel development in women’s part-time employment in all the countries in the survey. Apparently, some national characteristics determine the level and rate of change in part-time work. For men the average part-time rate of employment has increased by two percentage points as opposed to four for women. On the other hand, the rise in men’s part-time employment seems to be more even than for women. Only Iceland and Poland have seen a drop in the rate during the period. Since the starting levels of part-time employment were quite low in most countries, this evenly distributed increase is, perhaps, not surprising. Looking at Norway’s position in particular, we see that it has one of the highest part-time employment rates for both men and women. Temporary work Temporary work is here defined as a short-term contract, either full-time or parttime. The temporary work contract is important, especially when the regulations concerning the firing of full-time employees are strict. If the employer can hire and fire at will, there is no need for temporary contracts. High employment rates combined with few legal and financial hindrances to firing are perhaps the main reasons why temporary contracts are relatively rare in Norway. Statistics on this category were first recorded in 1996. Figure 6.6 gives a picture of temporarily employed men and women in Norway in the period from 1996 to 2007. Recalling that total employment in Norway in 1996 was about 2.15 million persons, the numbers are clearly very low. The lowest level was reached in 2000, and has shown only a small increase since then.

Flexible Organizations and the New Working Life

130

Table 6.8

EU15 Belgium Denmark Germany Greece Spain France Ireland Italy Netherlands Poland Portugal Finland Sweden UK Iceland Norway

Female part-time employment as per cent of total female employment in some European countries 1993 : 28.5 37.3 32.0 7.6 14.7 27.4 21.4 11.4 64.5 : 11.0 : : 43.8 : :

1994 : 28.3 34.4 33.1 8.0 15.1 27.8 21.8 12.6 65.9 : 12.1 : : 44.3 : :

1995 31.3 29.8 35.4 33.8 8.4 16.5 28.9 23.0 13.2 67.3 : 11.6 15.7 41.4 44.2 51.5 47.8

1996 31.5 30.6 34.5 33.6 8.9 17.0 29.4 22.2 13.0 68.3 : 13.1 15.6 39.7 44.8 49.2 45.6

1997 32.3 31.4 34.4 35.1 8.1 17.4 30.9 23.2 13.9 67.6 12.9 15.0 15.6 39.9 44.8 50.0 46.0

1998 33.0 33.1 35.7 36.4 10.5 17.1 31.5 30.4 14.4 67.6 12.4 17.3 16.9 39.0 44.7 50.7 45.1

1999 33.2 33.5 33.8 37.2 10.2 17.6 31.6 30.7 15.7 68.3 : 16.8 17.0 38.2 44.2 48.6 44.4

2000 33.4 34.4 35.1 37.9 8.0 17.1 31.0 30.8 17.4 70.6 13.2 16.5 16.8 35.1 44.3 46.6 43.0

2001 33.6 36.8 31.4 39.3 7.2 17.3 30.4 31.3 17.8 71.3 12.6 16.8 16.7 31.2 44.2 45.2 42.5

2002 33.3 37.7 31.3 39.5 8.0 17.1 29.7 30.7 16.7 72.8 13.4 16.5 17.1 31.3 43.9 45.2 43.2

2003 34.0 39.7 31.9 40.8 7.5 17.4 30.0 31.3 17.2 74.2 13.1 17.3 17.8 35.2 44.2 32.4 45.3

2004 35.2 40.9 33.7 41.6 8.7 18.3 30.0 31.9 24.8 74.8 13.4 16.1 17.8 36.3 44.2 33.8 45.8

Note: The employment figures from the second quarter each year have been used, except for France before 2002, when first quarter figures were not available.

Table 6.9

EU15 Belgium Denmark Germany Greece Spain France Ireland Italy Netherlands Poland Portugal Finland Sweden UK Iceland Norway

Men’s part-time employment as per cent of total male employment in some European countries 1993 : 2.3 11.0 2.9 2.6 2.3 4.1 4.8 2.5 15.3 : 4.5 : : 6.6 : :

1994 : 2.5 10.0 3.2 3.1 2.6 4.6 5.1 2.8 16.1 : 4.7 : : 7.0 : :

1995 5.2 2.8 10.3 3.6 2.8 2.6 5.0 5.5 3.0 16.7 : 4.2 8.0 10.5 7.7 12.2 9.9

1996 5.5 3.0 10.8 3.8 3.3 3.1 5.2 5.0 3.1 17.0 : 5.1 7.9 8.8 8.1 10.7 10.2

Note: See Table 6.7. Source for Tables 6.8 and 6.9: Eurostat.

1997 5.8 3.2 12.1 4.2 2.6 3.2 5.4 5.4 3.3 17.0 8.3 5.7 7.6 9.2 8.7 12.0 10.2

1998 6.0 3.5 10.9 4.7 3.4 3.0 5.7 7.8 3.5 18.1 8.0 6.3 6.9 9.1 8.8 11.5 10.3

1999 6.1 3.9 9.6 4.9 3.7 3.0 5.6 7.4 3.4 17.9 : 6.4 7.9 9.2 9.0 11.1 10.7

2000 6.3 4.9 10.0 5.0 2.7 2.9 5.4 7.3 3.9 19.3 8.4 6.2 8.0 10.5 9.1 12.0 11.2

2001 6.3 5.2 10.2 5.3 2.2 2.8 5.0 6.5 3.8 20.0 8.2 6.9 7.6 10.7 9.0 10.6 11.2

2002 6.6 5.9 11.0 5.8 2.3 2.6 5.1 6.5 3.7 21.5 8.3 7.2 8.0 11.2 9.5 13.3 10.9

2003 6.8 6.3 11.4 6.1 2.1 2.7 5.4 6.7 3.3 22.0 7.9 7.2 8.3 11.3 10.4 8.4 14.3

2004 7.2 6.8 12.5 6.6 2.2 2.8 5.2 6.1 4.9 22.5 8.1 7.0 8.7 12.4 10.6 7.2 15.0

Protected, Firm-Specific, and Scarce

Figure 6.6

131

Temporary work among men and women – 1,000 persons, from 1996 to 2007

Source: Quaterly data, Statistics Norway.

Recently introduced, laxer regulations were withdrawn when the new Social democratic government assumed office in 2005, with no apparent effect. Women are more likely to be temporarily employed than men. For temporary work, as with part-time, a clear gender effect emerges. Is there an industry effect as well? We have graphed the percentage of workers with temporary contracts for four interesting industries in Figure 6.7. These industries were chosen because temporary contracts are likely to be found here. Especially hotels and restaurants are likely to have seasonal variations, and they are thus likely to take advantage of temporary contracts. Furthermore, firms are allowed to enter into temporary contracts if the work is project based, that is, in cases when a clear start and finish can be ascertained. Such work is likely to be found in government services such as education and health. Manufacturing is included as a benchmark.

 Swedish waiters are said to migrate to Norway’s mountain resorts in winter and to its coastal resorts in summer.

132

Figure 6.7

Flexible Organizations and the New Working Life

The percentage of workers engaged in temporary employment in manufacturing, retail, hotels and restaurants (‘rethot’), education and health services in Norway from 1996 to 2007

Source: Quarterly data, Statistics Norway.

Figure 6.7 clearly shows that temporary employment is more prevalent in government services than in private firms. Both education and health services use more temporary employment contracts than either retail, hotels and restaurants or manufacturing. Thus, the same pattern found for part-time employment is repeated for temporary employment. Of the two private sectors included, manufacturing is the sector with the lowest share of temporary employment, as expected. Thus, an industry effect is present in temporary work, as it is in the case of part-time work. Another notable feature of Figure 6.7 is that the percentages of temporary employment seem to move in tandem. This is certainly the case for the two private sectors. To investigate further I ran a simple correlation analysis for the four time series, see Table 6.10. The analysis does show a very high correlation between the two private sectors, 85 per cent, but also a high correlation between these and health services. On the other hand, education has almost zero correlation with the private sectors, and less than 50 per cent with health. Bearing in mind that health and education services are mostly state provided, the high correlation between health and the two private sectors is something of a puzzle.

Protected, Firm-Specific, and Scarce

Table 6.10

Rethot Manufact Education Health

133

Correlations between temporary employment levels in manufacturing, retail, hotels and restaurants, education, and health services Rethot 1,000 0,850 -0,043 0,691

Manufact 1,000 -0,021 0,750

Education

1,000 0,324

Health

1,000

The self-employed Self-employment may be an alternative when a worker is struggling to find a permanent job. The historical development of self-employment in Norway is depicted in Figure 6.8.

Figure 6.8

The percentage of all and non-agricultural self-employed workers in Norway from 1970 to 2004

Source: Annual data, Statistics Norway.

134

Flexible Organizations and the New Working Life

The figure shows the percentage of self-employed workers out of all employees in Norway from 1970 to 2004. Evidently, the percentage has fallen considerably since 1970. The figure also shows the proportion of self-employed workers outside agriculture. Since most of Norwegian agriculture has been and is run by the farmer himself, it is necessary to remove this group in order to elucidate the time pattern in the other industries. The proportion of non-agricultural self-employed workers has remained mostly stable over the years, with a falling tendency. However, this reduction seems to have stopped after the year 2000, when the percentage of self-employed workers increases again. The level of self-employment is low in Norway. In comparison, the percentage of self-employed workers in the UK has hovered around 15 per cent during the last 20 years or so, based on numbers from UK National Statistics. As mentioned, a noticeable increase in the proportion of self-employed workers has taken place after the year 2000. This could be seen as evidence of higher flexibility. Yet it is remarkable that nothing seems to have happened after 1990, when many workers were made redundant. This does not suggest that selfemployment is an automatic consequence of being fired. The overall conclusion is that the number of self-employed workers is low, and that little has changed over the years. Overtime Overtime is another way of coping with flexibility. It has the advantage of keeping hiring costs low, since no additional firm-specific knowledge is required. Table 6.11 shows the percentage of employees working overtime in some sectors in Norway. Table 6.11

The percentage of full-time employees working overtime (per cent), by industry

Industry All industries (including not reported) Manufacturing, mining and quarrying Oil and gas extraction, incl.serv. Construction Retail trade, repair personal goods Hotels and restaurants Transport and communication Financial intermediation, real estate and business activities Education Health and social work activities

2001 21

2002 21

2003 20

2004 20

2005 21

24 22 25 20 19 21 27

25 33 23 18 18 22 27

21 31 24 13 16 18 27

23 25 25 19 13 20 27

25 29 21 21 21 21 28

12 14

13 13

12 14

10 14

13 16

Source: Second quarter, Statistics Norway (AKU).

Protected, Firm-Specific, and Scarce

135

Comparing Table 6.11 with Table 6.6 on part-time employment in various industries, a clear pattern emerges. Industries with a low proportion of part-time and temporary employees have a relatively high proportion of employees who work overtime, and vice versa. In fact, a simple correlation analysis of the two series shows a correlation of ‑0.80. A high level of part-time employment implies a low level of overtime, and vice versa. No causal chain is intended here, since both are probably decided simultaneously, within the restrictions laid by law and agreements. One interpretation is that industries where part-time employment is used have less need for the flexibility that overtime offers and vice versa for industries with little part-time employment. Why non-standard forms of employment? In the first, theoretical section of this chapter we noted three explanations for the use of non-standard forms of employment: dismissal protection, labour specificity, and the tightness of the labour market. These explanations may account for the use of standard (full-time) and non-standard forms of employment. In this section, the various explanations are discussed in relation to the evidence in the previous section. Dismissal protection and labour specificity From the previous section it is obvious that non-standard forms of labour are primarily manifested in part-time employment in Norway. Temporary work and self-employment are, in comparison, uncommon. Compared to European countries, the incidence of part-time employment is high in Norway for both men and women. Part-time and temporary workers are mainly found in public services such as health services and education. Dismissal protection is highest in government services. This is where women work. Women are more likely than men to work part-time. Part-time and temporary work has increased greatly with the rise of the service sectors in the economy. The findings support the hypothesis that strong dismissal protection favours the use of non-standard forms of employment. Conversely, manufacturing shows little use of non-standard forms of employment, but a high incidence of overtime. This supports the idea that when labour is quasi-fixed, the full-time contract combined with overtime is preferred over non-standard forms of employment. Thus, we see differences across sectors in the use of non-standard forms of employment. The differences in dismissal protection and firm-specific investments in human capital determine different usages of non-standard forms of employment.

136

Flexible Organizations and the New Working Life

Part-time and the employment level Now we turn to the third explanation, labour market tightness. In the previous section large differences between countries have been observed, both for men and women. Now I will carry out a simple, partial test of the hypothesis that labour market tightness may lead to the increased use of non-standard forms of employment, in particular, part-time work. When participation increases, it becomes increasingly harder to find people willing to work full-time. Therefore, the employers have to offer more flexible work arrangements to attract the workforce they need. However, the success of such an effort depends upon circumstances that are peculiar to the country. For instance, the availability and price of kindergartens and nurseries are important when two persons in a household decide to work. Taking these country effects into consideration, the relation to be tested is: Part-time = C + B(Employment rate) + G(Country effects) + Error where C, B and G are constants.

I estimate with the fixed effects methodology (Woolridge 2002). This means that the country effects are assumed to be fixed over the estimation period. We noted earlier that labour market regulations change little, that is, the assumption of country fixed effects seems reasonable. Since they are fixed, the transformation of the original data can remove the country effects, and estimation may continue with an ordinary least squares (OLS) method. In this way, the heterogeneity between countries, whatever their origin, is controlled for. Thus, the estimating equation becomes d(Part-time) = B d(Employment rate) + d(Error) where the d indicates demeaning.

Data from Eurostat for all countries with observations on both participation and part-time employment for both men and women enter the estimations. Table 6.12 displays the results. The overall statistics are very satisfactory. The coefficients are both positive, indicating that an increase in labour participation increases the proportion of parttime work. Thus, if women’s labour participation increases by one per cent, the percentage of part-time work increases by half a per cent. Again, we notice the large difference in gender. The male coefficient is only 0.128, about one-fourth of the female rate. Thus, increased labour participation means that gender differences are upheld. In fact, the coefficients represent the

 Technically, yet loosely, for each variable and each country, an overall mean is calculated. This average is subtracted from each year’s observation, that is, the variables are demeaned. Since the country effects are fixed by assumption, the average and each year’s observation are the same, and so the country effects disappear.

Protected, Firm-Specific, and Scarce

Table 6.12

137

The relationship between labour participation and the extent of part-time employment in the European economic area 1993 to 2004 – Fixed effects estimation

Dependent Female part-time Male part-time

Coefficient 0.500 0.128

R2 0.982 0.949

N 252 252

Source: Eurostat.

long-term proportion of part-time work for men and women. Thus, if all countries had a high employment rate, the part-time employment rate would be expected to be 50.0 per cent for women and 12.8 per cent for men. Comparing these coefficient values with the records for the countries with the highest employment rates in Tables 6.3 to 6.9 confirms this. This model is of course a simplification. Yet it does capture an important relationship. The tightness of the labour market clearly influences the overall rate of part-time work in the country. Desired or imposed? The high incidence of part-time employment in Norway could be an undesirable result for the part-timers. This could be the result if employers deny willing and potential full-time employees the opportunity to work more. If this is so, we would expect the part-timers not to be of prime working age. In this way, this section is a robustness test of our earlier conclusions. Who works part-time? Let us look at the part-timers themselves. Do the part-timers categorize their employment as their main activity, or does it supplement some other major activity? If it is not their primary activity, few would come from the main age groups of the labour market. Furthermore, many of the part-time employees would state that they would have preferred longer working hours. First we consider the distribution of part-time workers between short and long part-time work. The upper part of Table 6.13 shows the total numbers of workers employed by year, while the lower part gives the percentages of total part-time employment per year. The table shows that part-time employment has steadily increased over the years. Furthermore, it turns out that the part-time employees consider their employment to be their primary activity. About two-thirds of the total number of part-time employees consider themselves to be in this category. The other large group is people who are getting an education, at about 20 per cent. This group probably uses part-time employment partly to finance their studies, partly to

Flexible Organizations and the New Working Life

138

Table 6.13

Total full-time and part-time employment (1,000 persons) and part-time employment as primary activity as a percentage of total part-time employment 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

Total employment Total parttime Employed

1,902 1,999 2,057 2,063 2,068 2,074 2,073 2,055 2,061 2,082 2,136 2,205 560

572

581

593

579

587

597

600

613

606

645

653

60,9

67,0

68,2

67,8

66,7

67,1

66,3

66,2

66,6

67,0

65,7

64,3

In education

13,9

17,1

20,0

20,9

21,9

21,6

21,6

21,7

21,9

21,8

22,5

23,1

Housekeeping 6,1 Early 1,6 retirement/ disabled Retired 1,4

6,1 2,1

5,5 2,4

5,2 2,7

4,8 3,3

3,7 3,9

3,5 4,7

3,0 4,5

2,8 3,9

2,6 4,0

2,5 4,0

2,3 4,9

1,2

1,5

1,3

1,4

1,5

1,7

2,0

1,8

1,7

1,7

2,1

Other/ Unspecified

6,6

2,4

2,0

1,9

2,0

2,2

2,5

2,9

3,0

3,6

3,4

16,3

Source: Statistics Norway (AKU).

acquire work experience. The remaining groups are small. Housekeeping has not developed into a major category, and even though the political attention directed at early retirees and disabled persons has been considerable (see St. meld. nr. 19 2003–2004), the absolute number of workers in this category is small, but rising. Overall, the percentages are fairly stable throughout this period. Are the part-time employees young or old? Table 6.14 gives an answer. Table 6.14

Total employment, part-time employment as per cent of total employment, and part-time work distributed by different age groups 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

Total part-time

560

572

581

593

579

587

597

600

613

606

645

653

16–19

9,5

9,6

10,5

10,8

11,1

10,7

11,1

10,8

11,1

10,7

12,9

13,2

20–24

11,4

11,2

10,7

10,3

10,7

11,1

11,4

11,8

12,1

12,4

12,2

12,3

25–54

62,5

63,1

62,5

62,4

61,0

58,8

57,5

56,8

57,3

56,6

54,3

52,8

55–66

14,5

14,0

14,1

14,3

15,5

17,4

17,4

17,7

17,1

17,8

18,3

18,8

67–74

2,3

1,9

2,2

2,2

1,9

2,0

2,5

2,8

2,6

2,5

2,3

3,1

Source: Statistics Norway (AKU).

Table 6.14 demonstrates that the part-time workers are mostly in their prime, that is, between 24 and 55 years old. Although the percentage has fallen over the years, it still accounts for more than 50 per cent of all part-time employees. Yet, if one  A government report to the Parliament, the Storting.

Protected, Firm-Specific, and Scarce

Table 6.15

139

The number of under-employed (1,000 persons) in total and in different part-time and full-time employment categories

Hours Total

1996 1997 1998 1999 Both 75 78 77 69 sexes Men 18 18 17 16 Women 58 60 60 53 1–19 Both 6 8 7 7 sexes Men 2 3 2 2 Women 5 5 5 5 20–36 Both 30 31 32 27 sexes Men 4 4 4 3 Women 26 27 28 23 37+ Both 40 39 38 35 sexes Men 12 11 11 10 Women 27 28 28 25 Per cent of all employees who want to work more Part-time 6.3 6.8 6.7 5.7

5.7

6.1

6.7

7.0

7.7

Full-time

2.3

2.2

2.4

3.0

3.5

3.0

2.7

2.6

2.4

2000 67

2001 68

2002 75

2003 86

2004 98

16 51 6

15 53 7

19 56 7

23 63 8

26 72 9

2 4 27

2 5 29

2 5 32

2 5 34

2 7 38

4 23 34

4 25 32

5 27 35

6 28 44

6 32 51

10 24

9 23

11 24

14 30

18 34

Source: Statistics Norway (AKU).

instead looks at the ten-year intervals, the youngest category (16–24) constitutes about 25 per cent of the part-time employees at the end of the period. The percentage has been rising. The same trend applies for the older age groups. Both are probably a reflection of a very strong labour market in Norway since 2003. Last, let us investigate whether part-time employees actually would prefer longer working hours. These underemployed workers represent a ‘labour reserve that should be mobilized’ (St. meld. nr. 19 2003–2004). Table 6.15 shows the number of persons in different employment categories who want to work longer, while Table 6.16 reports how many extra hours they desire. I will comment on Table 6.15 first. The table indicates that the number of employees who want to work longer is quite small. The lower part of the table shows that 6–7 per cent of the part-time employees want to work longer, while about 3 per cent of the full-time employees would like to work more. Another striking feature is that the number of part-time employees is about the same as the number of full-time workers in this regard. Furthermore, those who work short part-time do not want to work longer to the same extent as those who work long part-time. Table 6.5 showed that nearly half of the part-timers were in short part-time. In Table 6.15 on the other hand, the percentage of short part-timers who want more work is about 20.

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Thus, the potential for bringing out a reserve army of part-timers into more employment seems to be negligible. This is underlined further when we investigate how much longer these workers would prefer to work. We turn to Table 6.16. Table 6.16

The number of extra hours under-employed workers in different part-time and full-time employment categories would like to work

Hours Total Total

33

32

32

32

32

32

32

32

33

33

33

33

Men

34

32

32

33

33

33

32

33

34

34

34

33 33

1–19

20–36

37+

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

Wom.

32

32

32

32

32

32

32

32

32

32

32

Total

15

14

14

14

15

14

14

13

14

14

13

14

Men

13

12

13

13

14

13

14

12

13

12

12

13

Wom.

15

15

15

14

15

15

14

14

15

15

13

14

Total

29

29

29

30

29

30

29

30

30

30

31

31 31

Men

30

28

29

28

28

29

28

28

29

30

30

Wom.

29

29

29

30

29

30

30

30

30

30

31

31

Total

38

38

38

38

38

38

38

38

38

38

38

38

Men

39

38

38

39

39

38

39

38

38

38

39

39

Wom.

38

38

38

38

38

38

38

38

38

38

38

38

Source: Statistics Norway (AKU).

The table shows the number of hours desired by the under-employed, given the various categories of part-time and full-time employment they are in. It turns out that short part-time employees would prefer 15 hours more, while in the long part-time category the desired working week would be twice as long, 30 hours. Differences between men and women are small, and the percentages are stable over the years. Thus, both in terms of numbers and stability the part-time groups are probably satisfied with the number of hours they produce. Again, the potential for finding a labour reserve among the part-time employees seems negligible. Conclusion The starting point of this chapter is Atkinson’s (1984) model which claims that the use of more non-standard forms of employment is the result of firms’ greater need for flexible labour. This need leads to an employment pattern that comprises a core of permanently employed workers, and a periphery which includes temporary and part-time workers. All in all, I cannot confirm Atkinson’s hypothesis in the case of Norway. Instead, there is a higher incidence of non-standard forms of employment in government services. Furthermore, a gender dimension is evident, since about half of the women work part-time, and they do so to a large extent in government services.

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Part-time employment is the most important kind of non-standard employment in the Norwegian economy. Furthermore, its rise coincided with the expansion of the public and private service sectors. Compared to European countries, the employment rate for both sexes is high in Norway, as is the incidence of parttime work. A simple panel data regression analysis performed for men and women separately shows that a higher employment level explains the higher incidence of part-time work in European countries. Temporary work is not allowed in Norway, unless it is related to work which is not a part of the normal business of the firm. Yet, firms in the private sector are allowed to compensate for this inflexibility through the use of relatively lenient dismissal procedures. Thus, the need for temporary work is not important for this part of the economy. Furthermore, it appears that manufacturing industries use overtime to cope with shifting demands rather than temporary contracts. On the other hand, in government services dismissal protection is high. Here, manning flexibility is achieved through part-time and temporary work contracts. References Atkinson, J. (1984), ‘The flexible firm and the shape of jobs to come’, Labour Market Issues 5. Azriadis, C. (1975), ‘Implicit contracts and underemployment equilibria’, Journal of Political Economy 83:6, 1183–202. Becker, G. (1964), Human Capital (New York: National Bureau of Economic Research). Bentolila, S. and Bertola, G. (1990), ‘Firing cost and labour demand: How bad is eurosclerosis’, Review of Economic Studies 57, 381–402. Cahuc, P. and Zylberberg, A. (2004), Labor Economics (Cambridge, Mass.: The MIT Press). Feldstead, A. and Jewson, N. (1999), ‘Flexible labour and non-standard employment: An agenda of issues’, in Global Trends in Flexible Labour chapter 1, pp. 1–20 (Basingstoke: Macmillan Press). Fougner, J. and Holo, L. (2006), Arbeidsmiljøloven. Kommentarutgave (The work environment act) (Oslo: Universitetsforlaget). Hobsbawm, E. (1995), Age of Extremes. The Short Twentieth Century 1914–1991 (London: Abacus). Marx, K. (1969), Das Kapital. Kritik der politische Ökonomie, vol. 1 (Friedrich Engels’ 1890 edn) (Berlin: Dietz Verlag). McDonald, R.L. and Siegel, D.R. (1985), ‘Investment and the valuation of firms when there is an option to shut down’, International Economic Review 26:��� 2, 331–49. NOU (1999), Nytt millennium – nytt arbeidsliv? NOU 1999: 34 (Oslo: Statens forvaltningstjeneste). OECD (1999), OECD Employment Outlook (Paris: OECD).

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—— (2004), OECD Employment Outlook (Paris: OECD). Oi, W.Y. (1962), ‘Labor as a quasi-fixed factor’, Journal of Political Economy 70:6, 538–55. Olsen, K.M. and Kalleberg, A.L. (2004), ‘Non-standard work in two different employment regimes: Norway and the United States’, Work, Employment and Society 18:2, 321–48. Rosen, S. (1985), ‘Implicit contracts: A survey’, Journal of Economic Literature 23, 1144–75. Schubert, C.B. and Martens, H. (2005), The Nordic Model: A recipe for European success? (European Policy Centre Working Paper No. 20, September 2005). Shapiro, C. and Stiglitz, J.E. (1984), ‘Equilibrium unemployment as a worker discipline device’, American Economic Review 74:3, 433–44. St. meld. nr. 19 (2003–2004), Et velfungerende arbeidsmarked (A smoothly functioning labour market) (Oslo: Statens Forvaltningstjeneste). Veblen, T. (1997), Absentee Ownership. Business Enterprise in Recent Times: The Case of America (originally published in 1923) (New Brunswick: Transaction Publishers). Weitzman, M.L. (1984), The Share Economy (Cambridge, Mass.: Harvard University Press). Williamsen, O.E. (1975), Markets and Hierarchies, Analysis and Antitrust Implications (New York: The Free Press). —— (1985), The Economic Institutions of Capitalism (New York: The Free Press). Woolridge, J.M. (2002), Econometric Analysis of Cross Section and Panel Data (Cambridge, Mass.: The MIT Press).

Chapter 7

Combining Flexibility and Workers’ Motivation: Lessons from a Study on Italian and French Hospitals Philippe R. Mossé

Introduction The growing flexibility of working life is both a political issue and a theoretical challenge. Short-term contracts, part-time work, flexible working time, polyvalence, outsourcing and downsizing are among the most quoted characteristics of what may be identified as the modern, flexible capitalist economy. From an academic point of view, this flexibility is seen as a symptom of a changing economy as well as an indicator of the way firms and countries are coping with the new challenge of globalization. For most observers what is identified as the ‘new paradigm’ is characterized by a growing uncertainty of demand and dramatic changes in production processes. However, despite the apparent convergence of developed countries, many evolutionary paths are actually possible. From a ‘conventionalist’ perspective, which recognizes the role of culture in human affairs, diversity, and the coexistence of several ‘worlds of production’ (Salais and Storper 1997) is only to be expected. At a microeconomic level it has been suggested that dislocation can arise from internal problems. For example, inconsistencies between such things as the type of human resource management utilized, the nature of the product and the type of competition faced by the firm can be the main reasons for firm having problems and being under threat. More generally, recognition that there are ‘varieties of capitalism’ (VOC) (Hall and Soskice 2001), indicates there will be problems of adaptation between national institutions and global systems. Adaptation has to take place according to the existing institutional and historical context and culture; and hence the way this is made effective will vary from one country to another. Only one thing is certain: that the need for adaptation is a constant feature of all economies at all levels. In the 1980s this sort of recognition led to the analysis that wage differences between France and Germany could be explained by the way industrial relations and the division of labour – and especially training systems – were differently combined in these two countries. Today, the main theoretical as well as political issue is that of convergence. Thanks to the work of Esping-Andersen this approach includes historical and institutional analysis of welfare states in the context of

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evolving capitalism (Esping-Andersen 1990). Indeed, the current period is one where welfare states are thought to be in jeopardy. The globalization of economies and the end of the Keynesian/Fordist era as the basis of ideological and political decisions, has led to a questioning of the role played by the State in the regulation of economies. As far as public expenditures are concerned, the Maastrich Treaty gave reasons to rationalize and constrain the public sector in Europe. As a result, in most fields in the public service sector, new management tools have been implemented. Indeed, the Treaty may be considered as accepting and embodying the broad philosophy usually referred to as new public management (NPM). Even if, as has been persuasively argued (Bach and Della Rocca 1999), NPM is a label covering a large range of practices, it relies on one central proposition: this is that it is not only possible but necessary to import within public services some of the recipes used in the private sector to improve efficiency and limit loss. Of course, profit is not the goal of the public services (and will never be). Therefore, NPM aims to combine the values of the public sector (such as equality in the access to service) with performance improvement. Given the evolution of modern firms, however, flexibility is currently seen as a tool to cope with global change and as evidence of changing capitalism: ‘There is an ongoing international debate over the way globalization and intensified international competition are leading to restructuring of management practices in Europe in order to achieve greater flexibility and cooperation at the workplace’ (Lorenz and Valeyre 2004, 2). According to this view, flexibility cannot be seen as wrong or right per se. One may conclude that there is a matching required between the type of flexibility (external or internal, qualitative or quantitative) and the organizational form adopted by a given firm. However, in the private sector, the general trend is clear: transaction cost considerations explain the adoption of outsourcing policies and, eventually, the size of a firm. If this happens sufficiently, adaptation can and does ultimately shape the objectives a firm actually pursues. From this one may fear that, if followed too closely, the logic of private sector change might cause a given public sector service to lose its core value of public well-being or welfare. Such dangers appear realistic considered from economic as well as from a human resource management (HRM) point of view. However, in practice, things are not changing so mechanically. The move towards applying private sector, market-thinking to the public sector is neither inevitable nor is it possible to an unlimited extent within ‘coordinated market economies’ (to use the wording of the VOC typology). In such economies, each type of organization – public and private – produces its own type of flexibility. In this perspective, the way flexibility policy matches (or does not match) with the other dimensions of working life is a key point. Furthermore, variables that are outside the work itself can also be decisive.   For example, the Danish model, or the so-called ‘flex-security’, seems to work as it realises at the same time economic efficiency and social welfare. However the flexibility

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Recent reforms launched by the governments of developed countries to increase the efficiency of hospital systems seem, at first sight, to be similar and converging. For instance, financing systems went almost everywhere from a per diem basis to a global budgeting procedure and, since the 1990s, to another mechanism first implemented in the US under the name of Diagnosis Related Groups (DRG). In this process, health insurance allocated a priori resources based on a given ‘price’ for each identified diagnosis. This formula has been implemented with some minor differences in almost all developed countries to make the resources of each hospital closer to actual activity costs. At the same time, similar management tools inherited from the private sector have been introduced into the hospital as well as the whole health care delivery system. In some countries this has resulted in relatively high levels of competition between hospitals combined with the decentralization of decision-making processes. Meanwhile, work flexibility (short-term contracts, polyvalence, heavy workloads, and so on) has increased. After some years of this new regime, it is possible to say that the success of such formulae does not rely on the efficacy of the reform per se, but rather on its capability to maintain consistency amid evolving actors’ strategies and their institutional contexts. This perspective challenges convergence theory which suggests that all developed countries are following the same track towards liberalism (from a political as well as from an economic point of view). The contradiction between high levels of flexibility and increased worker cooperation can be resolved in two ways. For some observers the contradiction can be overcome by the creation of a culture, or the generation of feelings of belonging to a particular institution. In short, the organization is seen as a big family. For utilitarian theorists, by contrast, the contradiction can be resolved by an effective system of incentives. New institutional theory, however, combines many of the strongest points of both of these perspectives. For example, it has demonstrated that any incentive mechanism has to be consistent not only with the individual interest but with the institution, the societal context, and national history. Theoretical and methodological matters The theoretical background of the present study is derived from this last school of thought. As is well-known, neo-institutionalists have shown that, at the level of political economy, to explain the rise and fall of institutions, one has to take into account interactions between institutional and individual behaviours as well as the consistency between those interactions and macro-social structures in history (North 1990). To apply this approach to health care reforms one needs to look at the intended goals of those reforms and, at the same time, at implementation processes. As Commons stated nearly a century ago (1917), institutions are but sets of ‘working rules’ whose main effect is to settle a balance between cooperation is made acceptable thanks to an actual welfare policy and a rather high level of equality among citizens.

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(towards similar goals) and conflict (around scarce resources). Applying this broad view to the level of the hospital, while taking into account an accelerating specialization process since the 1970s, one may see that the interdependence of the parts of the organization has had an increasing impact on performance. Therefore, at the hospital level, it is more and more necessary to organize a high degree of coordination. To explore such issues it is necessary to settle some methodological matters as well as stating the theoretical approach. This chapter will report some comparative research, comparing and contrasting aspects of the public sector in two, similar European countries. It will by doing so assess the effects of some of the social, economic and political dimensions of the ways in which flexibility is realized. In countries where the dynamics of the changing context can be seen to be similar (for example technical changes, financial constraints, internal and external competition, and so on) and where countries can be identified as having similar constraints, the analysis can focus on the differential effects of actors’ strategies. Taking advantage of a European funded research grant, research was undertaken to compare French and Italian hospitals. This chapter focuses on questions relating to flexibility at work and, in particular, on the effects of participation, incentives and efficacy. The empirical research undertaken to challenge the theory took place over a three-year period in a total of six hospitals. Three of the hospitals were French and three Italian – all but one of them belonging to the public sector. The study looked into: first, flexibility policy and how it was implemented; and, second, how such policy was experienced and perceived by employees. In many aspects, the study does not rely on statistical analyses but rather on the interpretation of qualitative data from case studies. To collect the empirical material, the study methodology involved trade unionists working along with researchers. In the first part of the chapter, the context of the research is presented. Describing the reforms and the changes in the industrial relations system, an explanation is attempted of the extent and nature of flexibility. The second part concentrates on the flexibility and in particular how an incentive scheme worked, in conjunction with the organization and division of labour. Comparing French and Italian hospitals In Italy as in France, since the beginning of the 1990s, the dynamic of rationalization of services increased dramatically. As new actors and new institutions entered the regulation game (see page 147), the main hypothesis was that the quality of industrial relations at the macro as well as the micro-level, would be decisive (see page 149). Comparison of the French and Italian type of regulation has been conducted mainly to understand how and why, although they were facing the same type of challenge (increasing efficiency, while maintaining public sector values), actors of the two countries followed different strategies and the institutions of which they were part followed different tracks of change (see page 151).

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Rationalising, contracting The French health care system is largely based on a national system of health insurance, known as the ‘Social Security’ system. Patients have complete freedom to choose their health care providers. Physicians are free to choose their place of work and their type of practice. Furthermore, the public-private mix in health care supply sustains the principle of pluralism: ambulatory care is mainly private, and is financed on a fee-for-service basis, whereas the public sector is mainly responsible for hospital care, since it accounts for two-thirds of hospital beds. Since the 1990s many changes have occurred: adopting a more economic approach, introducing incentives and taking outcomes into account, as opposed to the former short-term accounting balance system. This new attitude underlies most of the measures included in the 1996 Ordinances – the so-called Juppé Plan, named after the Prime Minister responsible for reforming the French system of health care and health insurance funding (Bellanger and Mossé 2005). As for the French hospital system, the 1991 and 1996 laws implemented a renewed planning process grounded on active cooperation between the state and the National Health Insurance system. Those laws created a new actor at the regional level (named the Regional Hospital Agency) whose aim was qualitatively and quantitatively to regulate hospital supply. The main tool was the contract that links every single hospital with the agency. This contract (actually, a deal) is a guarantee. If the hospital conforms to the regional plan it receives the resources it needs to develop its activities. At the same time a national agency was created to organize a quality assurance process, named accreditation. The aim of this process is that it has to be consistent with the ‘establishment plan’ defining medical and social priorities for the next five years. Therefore, quality assessment relies on what the hospital itself sees as important. Of course this assessment also relies on national standards. As a result the autonomy of the French hospital can be seen as real despite the fact that it is bounded by national and regional procedures. A recent financing reform in 2006 introduced a mix of DRG and fee-for-service, which also served to reinforce this autonomy. As a whole, this rationalization process accelerated the reduction of bed supply, the diminution of the average length of stay and the development of emergency units as well as external visits (out-patients clinics). To cope with this dramatic move from a closed and bureaucratic hospital to an open public service or ‘quasifirm’, total staff numbers have been maintained and, in some cases, increased. Today more than a million people work in French hospitals (either private or public). If the composition of the staff has changed during the last decades, the total number did not. However, the number of short-term contracts workers has increased.  Named ANAES for Agence Nationale d’Accréditation et d’Evaluation en Santé, this agency is now called ‘HAS’ for Haute Autorité en Santé and its functions have been extended.

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In Italy the main reform occurred in 1978 with the creation of the National Health Service. Since then Italy has a national health service based on principles of universalism, comprehensiveness and solidarity in funding. Roughly, 70% of the health care expenditure is public, funded through general taxation. … The bulk of publicly financed care is delivered in public ambulatory clinics and hospitals using salaried personnel and by independent family doctors paid mainly on a capitation basis (France and Taroni 2005, 169).

The 1978 reform was followed by two other reforms in 1992 and 1999. Roughly it can be said that the path followed by the Italian health care system resembles the one followed by the UK. As France and Taroni have suggested reform occurred: ‘… with quite considerable borrowing from the 1998 English White Paper (the New NHS)’ (France and Taroni 2005, 177). However, maintaining core public service values (for example equity and equality) was the main objective of the 1999 reform. Starting from 1978, reform created the ‘Local Health Authorities’ (USL) responsible for supplying hospital services. The funding was still organized at the national level (mainly according to the number of inhabitants of the area covered by the USL). However, unlike in France, Italian regions could decide to increase the funds devoted to hospital care if necessary. This regional autonomy has of course precursors in the history of the Italian Republic, where provinces always had more power than in France. According to France and Taroni: The prime goals of the 1992 reform were macroeconomic stabilization and microeconomic efficiency. The instruments used were of two types: the health care powers and responsibilities of sub-central governments were re-engineered, and policies were adopted to promote managerialism and competition. The municipalities were sidelined in the running of the [Italian NHS], whereas regions were given still greater power in the administration and organization of health services in exchange for their accepting harder budget constraints on health care expenditure. An internal market of sorts was to be introduced (France and Taroni 2005, 176).

To that end, hospitals (as many public services institutions) have been transformed into aziendas (firms) as well as the USL transformed into ASL (Azienda sanitaria locale). This move made explicit the introduction of NPM within the health care sector. The same reform also introduced an agreement process to enhance the quality of services on a competitive basis between the private and public sectors. Furthermore, since 1999, the regionalization process and the move towards more autonomy have been reinforced. Each year every hospital has to report the number and the type of activities it is able to provide, then, on the basis of nationally defined standards, an agreement procedure is activated. This rationalization led to a decrease of hospital short-term beds supply (around 15 per cent between 1990 and 2000). Furthermore, unlike in France where the number of public hospitals did not decrease, the number of Italian hospitals (specially the smallest ones) went down during the period. One has to note the traditional difference between the North (high bed density) and the South (low density and high level of private hospitals).

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Industrial relations: Defining a new field of action In French hospitals the industrial relations system relies on two separate mechanisms. In the public sector, regulations and agreement are negotiated by the so-called ‘social partners’ – mainly workers and professional unions; then the government decides on such matters as wage increases or qualification schemes. Generally it grounds its decision making in the informal agreement (if any) reached by the social partners. This mechanism has existed since the creation of hospital civil servant status in 1986 by the socialist government. In this highly politically oriented context the strength of worker unions depends mainly on the State and government who let them play a role in the negotiation game. For instance it was decided at the national level to give bonuses to workers operating at levels of specialization (for example nurses in surgical units) or to workers in risky environments. In the for-profit sector the State only gets involved when the unions (workers and employers) are not able to reach an agreement. Otherwise the collective agreement signed at the national level is the main regulatory device. At the beginning of 2000 the two main collective agreements were combined to facilitate mobility of workers from one private hospital to another. As a result, merger within the private sector, which was mainly undertaken for financial reasons, has been made easier from a human resource management point of view. In both sectors, these reforms enhanced the role of workers under the name of ‘modernization’ or ‘direct participation’. The reforms gave more decision power to the workers as individuals but less to unions as institutions. These developments makes some unionists reluctant to accept any form of human resource change as they feel they will not otherwise have the opportunity to counter the effect of those changes on working life or working conditions. That is the reason why French hospital unionists push towards the creation of internal representative bodies (such as the health and safety committee or the new nursing care service commission) and are less in favour of direct participation tools (such as the unit council – conseil de service) or even some quality assurance processes that rely on individual involvement rather than collective action. In Italy one quarter of civil servants work in the hospital system and hence all rules and agreements are the same as in the whole public sector. However, at the hospital level some managers may benefit from an individual contract acting as a complement to the nationally defined agreement. The mechanism used to settle wages is illustrative of this two-level regulation. At the hospital level, negotiation takes place every four years. Even if bargaining at this micro-level does not cover the topics tackled at the national level, pay increases may vary according to economic results such as productivity, quality or competitiveness. It is quite significant when compared to the French situation, that this part of the wage is called the ‘participatory component of pay’ and may represent 15 per cent of revenue.

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At the national level the creation of ARAN (Agenzia per la Rappresentanza Negoziale delle Pubbliche Adminstrazioni) in 1993 was a landmark in industrial relations history. First, it is an independent agency. This device is one of the most often used in New Public Management institutions. It aims at building a wall between the government and the citizens by virtue of its independence. Different Ministries may give guidelines to ARAN but this agency is the sole representative body for the whole public function in Italy (Bach, Bordogna et al. 1999). Since 1998, following the passing of the ‘Bassanini Law’, collective bargaining has been more and more inspired by private human resource management practices. At the local level, the existence of the RSU (rapprensentanze sindicali unitary) makes it possible to discuss and co-ordinate the positions that unions should jointly adopt with respect to management. This pragmatic alliance does not abolish differences in strategy but, at the hospital level, it may act as a kind of local think-tank. Differences are discussed at national level and hammered out with a view to reaching a consensus, which is then expressed at local union level (Mossé 2003, 136–7).

During the 1980s and the early 1990s the high number of unions (mainly professional organizations) made the industrial relations system very complex. On the one hand, almost 200 organizations gave opportunities to every professional ‘segment’ to enter the negotiation game, on the other hand, this ‘balkanization’ made a unitary view of the workforce difficult. The RSU has been reformed to counter-balance this tendency. Now only the relatively strong unions may take part in the RSU at the local level. In this regime, collaboration, if not cooperation, between unions, local politicians and USL managers has been evident since the 1990s. As a result, a deal has been established according to which insiders (namely hospitals workers) succeeded in keeping their bargaining power, while supporting the rationalization process. Unions are more involved in HRM and, in some regions, unions agree to hospital closure plans so long as workers are able to maintain their jobs and may even earn more thanks to a ‘mobility bonus’. Since the 1990s, the public sector can be considered as a laboratory for the invention and the implementation of innovations which aim to improve work organization and worker productivity, including New Public Management devices. Even more, since a general law voted in 1993 instituting the ‘privatization of the social relations’ in the whole public sector, industrial relations rules as well as HMR tools have been shared by the social partners and negotiation plays a major role in this process (Carieri 2004). Here again the difference with the French situation is quite clear. In France competition, if not open conflict, is the rule amongst unions and the best way to be active in the negotiation process is to make a union strategy very distinctive (Mossé and Bouteiller 2004). By contrast, thanks to the RSU, Italian unionists are, at the same time, stronger in the decision process and closer to management (Rehfelt 2000). In France, the 1990 laws collude with the rationalization dynamic, reinforcing the importance of the formal negotiation setting (establishment plan, councils, and so on). In Italy hospitals are transformed into quasi-firms and have gained real management autonomy within a renewed health care system.

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In sum, to respond to these changes, unions organized themselves in different ways: conflict and distinction in France, consensus and pragmatism in Italy. As a result of these differences of strategy, the type and intensity of flexibility is quite different in French and Italian hospitals. A cooperative study grounded on direct observation Given the context and the actors involved in reform as outlined in the last two sections, it only remains to be stated how the empirical study was conducted. This was on a cooperative basis, with researchers and unionists working together towards one main objective: to analyse the implementation of changes in French and Italian hospitals, and to consider their consequences for the industrial relations system and economic and social relations. The starting point in both countries is that involvement and participation seem to be the key elements of the rationalization process. On the other hand, workload and work flexibility are increasing. As already seen, in Italy this change is embraced by the unions, while, in France it is not. To explain the way tension is addressed at the workplace level was the main objective of the chosen methodology of this study. To analyse developments, and test the hypothesis of a link between efficiency and participation, the study relies on the findings from six case studies (conducted in three Italian and three French hospitals). These case studies have been written with the help of unionists at the national or at the local level who were active in the research. In order to facilitate comparison, all case studies have been focused on two specific topics: working time and quality assurance processes. The research was financed by the European Community as a part of the TSER research programme. It took place from 1999 to 2002. The study gathered four main partners: two unions (CFDT in France, CGIL in Italy) and two academic teams (the French one in Aix en Provence, the Italian one in Milano). Questionnaires, focus groups and many meetings were necessary; first, to organize the study on a practical

Table 7.1 Hospital ‘nickname’ Fracou Fralev FraPriv Itapa Itasud Itato

Main case studies data Number of Stays 30,462 70,000 9,816 57,428 54,245 70,936

Number of Beds 1,028 2,004 197 1,908 1,274 1,950

Staff *

Stays/Staff Staff/Bed

1,845 3,573 268 4,578 2,763 4,641

16.5 19.6 36.6 12.5 19.6 16.6

1.8 1.8 1.4 2.4 2.2 2.4

Nurse/ Care Ass. 0.97 1.10 1.50 11.20 7.8 5.5

Care Ass/ Ash ** 2.5 5.7 1.5 0.7 0.4 1.5

Notes: Hospital names have been changed but the first three letters indicate the country where the hospital is based. Frapriv is the only private hospital of the sample. * Physicians excluded. ** Ash: Agent des Services Hospitaliers (ancillary staff).

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basis; second to find the best cooperative ways of working; third to analyse and comment on the results. In each of the six hospitals, unionists acted as academic collaborators, dealing with the questionnaire and coorganizing meetings. To give some details of the settings for the case study research, Table 7.1 shows some key quantitative data describing the six hospitals. For the research itself, original materials were mainly the outcome of a survey based on a questionnaire given to 250 hospitals workers. First analysis of the survey has shown that four relations were decisive: financing/work organization; staff structure/division of labour; local competition/activities; union strategies/ management. From the analysis conducted in the six hospital settings, three main points transpire: •

•

•

Workload has effectively increased during the recent period for almost all workers. Nurses and nurse assistants are more than others exposed to this increase and the worsening of working conditions. For around two third of total staff and three quarters of nurses, hours flexibility has been increased following the work re-organization and changes in the patient case mix and flows. For most of the hospital worker respondents, quality assurance processes are seen as being opposed to actual professional practices. In effect, in hospitals as in others economic sectors, quality assurance and control go along with a new form of Taylorism based on procedures that are not always defined by the workers but by external experts. Furthermore, this dynamic is contradictory with the professional specialization that is the main logic within the medical sector as a whole. Direct participation by most of hospital employees has actually been enhanced. As this participation is based on a high level of individual autonomy, unions and unionists have been marginalized.

If these three points have been found in every setting, national peculiarities and local specificity are combined to define particular trajectories for the different hospitals – that cannot be explained by one unique factor (rationalization, flexibility, downsizing) but rather must be explained by the coherence of a set of factors. The study shows that, among them, work organization, the division of labour and incentive policies are the most important (Mossé, Bordogna and Ponzellini 2001). Furthermore, the study shows that, in the face of New Public Management, the cohesion and the values of the hospital are often at stake, if not in jeopardy. In effect, in all of the six hospitals it has been necessary to mobilize individual energy especially in hospitals traditionally oriented towards public service missions.

 A study released in December 2004 shows that in France 43 per cent of the nurseassistants have irregular hours and that this percentage went up from 36 per cent in 1995 (Dares 2004).

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In the two countries these characteristics shape outcomes differently, but their effects are decisively different in relation to flexibility, where they have differential effects on the different aspects or ‘faces’ of flexibility. The faces of flexibility To address the flexibility issue and test the hypothesis that flexibility cannot be said to be wrong or right without referring to the organizational context and its evolution, first, some examples observed in the case studies will be given below. From page 155 some general considerations will be developed pointing to the importance of institutional context. From page 158 the motivation issue will be addressed linking incentives and participation policies. Some examples of flexibility In all six hospitals except at Francou, reform and organizational change led to a decrease of the number of beds. At the same time, however, the number of stays increased resulting in a reduction of the average length of stay. Thus, care is more and more intensive, and images drawn from industry seem more and more relevant. Amongst nurse for example there is talk of ‘patient flows’. Nevertheless these developments allow the more intensive use of equipment and buildings, and also imply a change in work organization. In the three French hospitals as well as in Itapa, the workload increased because of a new working time policy. In response these changes, the mobility of workers (especially nurses and care assistants) in particular hospital sites has greatly increased. At Itasud (and to some extend at Itato), it was decided that the staff would be expected to be more mobile and may be shifted from one unit to another if it is required by variations in work intensity. From an organizational point of view this change was necessary at Itasud because two units had to merge, mainly to achieve economies of scale. Despite this economic reason, nurses think that the situation favours knowledge exchanges and, therefore, they appreciate this – otherwise imposed – mobility. This example shows that, under some conditions (for example participation and training), flexibility can be not only acceptable, but welcomed. In France such practices ran up against traditions, according to which, staff regarded themselves as belonging not only to the hospital but to a given unit and, sometimes to a given head of unit (chef de service). For instance, in Francou, where laboratory units have been reorganized, technical staff regretted that the direct link with the physician in the medical units had been broken. Therefore, they perceived the new practices as being more standardized and less related to physician habits. Furthermore, they complained about the lack of staff (see Table 7.1). This example shows that, at least in the French context, quantitative solutions should have been found (increasing budget and/or staff) to sustain the new type of flexibility. Since this was not the case in most French hospitals, quality assurance

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was seen exclusively as resulting in an increase of clerical work without any clear consequences for quality, whether perceived from a professional (technical) point of view or from the view of the patients themselves. Because of this change in their function, and unlike in Italy, French nurses delegated tasks related to care to the nurse assistants, in the meantime they undertook more and more clerical and bureaucratic tasks. This shift has been accelerated by the reforms and most of the French nurses saw this change as detrimental and even wrong. But this oriented polyvalence preserves the core of the nurse professional identity, namely, proximity to the physicians. However, this functional flexibility is not the only one developed in French hospitals. In this study, flexibility modalities vary according to ownership status. In a public hospital, Francou, the number of days worked by interim staff went from 18 in 1995 to 565 in 1999. This shows a strong move towards external flexibility, mainly for logistical tasks. By contrast with this, at Frapriv, the permanent staff increased thanks to the reduction of the working time (the ‘35 hours a week’ law) and help from the Regional Agency. As a result, at Frapriv, the number of short-term contracts slightly decreased during the same period. The same tendency was observed in one Italian hospital in the study (Itato). Here the reason was that, as activities changed with the development of intensive care and the like, specialization increased. Therefore it was necessary to recognize the position of the care assistant by giving them more qualifications and responsibility. That is the reason why the number of short-term contracts was reduced. Care assistants developed more competencies; as a result the traditionally high turnover of this category of staff decreased. Functional flexibility resulted in greater stability of staff and created a path for higher quality of specialized services. In consequence, Itato gained in this specific field a quasi-monopolistic position, the financial benefits of which could be returned to the permanent staff. This will be available for distribution at the next negotiation. Overall, the six hospitals are familiar with the difficulties in responding to the new patterns of work (creating new activities, quality assurance, economic rationalization, and so on) and they well-understand the competencies and the status relations inherited from the previous period. Taking into account the opening up of hospital activities and the networking it demands, internal organization and worker flexibility are considered as a matter of worker adjustment. That is why the quality of worker involvement is a crucial issue in hospitals as in most modern organizations.

 During the study, the very notion of ‘quality’ has been questioned in different ways by French and Italian unionists. The former mostly thought that quality has to be assessed mainly by the professionals themselves focusing on the ‘given quality’. The rationale was that, because of information asymmetry, nurses and physicians are more able to consider, monitor and evaluate treatment accuracy as well as its outcome. For the Italians, quality had to be assessed by the patients because they have to be more and more seen as ‘clients’.

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The example of the Italian laboratory unit gives a good picture of the conditions under which flexibility can be seen as right at least by some staff. At Itapa it was decided, in order to increase productivity and hospital resources, to transform the laboratory unit in a quasi-independent small firm. This re-organization went along with a strategy aiming to place Itapa as a reference hospital for several pathologies. To achieve this objective, it was decided, by the head of the unit, with the agreement of the local unions, to enhance financial autonomy; more than one hundred workers were involved in this fairly dramatic change. A new accreditation device was put in place by means of an external and independent agency. Continuous assessment was implemented including a questionnaire on perceived ‘satisfaction’ to be completed by the client/patient with feedback on work organization. As a result, the whole production process was accelerated. As a direct result, test results were afterwards given to the patient within 24 hours. Most of the changes were decided collectively (including the participation of technicians, nurses and physicians). Every worker became more self-reliant and benefited from an enhanced status as an independent worker. Almost all of them also worked for outside clients, as well; the numbers of whom increased in five years. Today, laboratory technicians define for themselves their opening hours and their division of labour. Before the change, the laboratory was open to external clients (that is, those not being hospitalized) for no more than two hours a day. As a result of the new and open organization, the laboratory was now available all day long. Furthermore, specific hours were dedicated to specific populations (elderly, children, disabled, and so on). To make the changes effective, a financial incentive was implemented on a contractual basis: wages were, to some extent (around 20 per cent of salary) calculated by taking into account the whole laboratory revenue; thus individual bonuses were calculated on a collective basis. This negotiated formula diminished the risk of competition among staff and, therefore reinforced social cohesion within the teams. It made easier the acceptance of increased workloads as well as control over working time and quality. However, some difficulties appeared between, on the one side, the technicians working in the laboratory and, on the other, the staff of the medical units and services. Actually, their raisons d’être were diverging, for example, competition as in the laboratory versus public service as in the rest of the hospital. Flexibility: Polyvalence or exploitation? The research clearly shows that in the six hospitals the major impact of reform was to shorten the average length of stay. This decrease (from around ten days to five) is, to some extent, due to the new financing method (shifting from global budget to a DRG mechanism). It resulted in acceleration of patient flow and of technical content of every single stay. In some cases, this increase was dramatic. Therefore it is not surprising that for 42 per cent of workers in the six hospitals, working conditions were seen as worse than in the previous period. In the two hospitals where the reorganization was most effective the percentage was of course higher.

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The new financing system was also the cause of change in the nurse profession. In France there is a real trend towards task shift (glissement de tâches). As professional practices become more technical, the relational dimensions of activities are left to the care assistant (aide soignante). In Italy the phenomenon is the reverse. As shown in Table 7.1, the ratio of nurses to care assistants is much higher than in France. Therefore one may conclude that, ceteris paribus, some tasks performed by French care assistants are, in Italy, carried out by nurses. This situation results from the fact that Italian nurses resist the creation of a care assistant profession (OTAA). As a result, this professional strategy, combined with the search for more flexibility, leads nurses to undertake more and more tasks that would be suitable for care assistants. In most of the six hospitals, this configuration increases the internal mobility of workers from one unit to another on an individual basis. But the creation of large units (due to the search for economies of scale) may lead to the mobility of larger teams on a temporary basis; what Italian colleagues, quite pejoratively, refer to as ‘fare i tappabucchi’. However this function can go along with real polyvalence that, in some cases, can result in new skills. As a whole, the research shows that increased flexibility may be positively perceived, as organizational conditions are fulfilled. Among those conditions, the most important is the control and monitoring, by the workers themselves, of the reasons and consequences of flexibility. More precisely, flexibility can be accepted and efficient if workers participate to define flexibility modalities (and/or counterparts). In Italy, thanks to the RSU, the feeling is that it is possible to find an agreement that involves all staff and build a compromise between worker and manager interests. In France, despite the existence of representative bodies within hospitals, there is little room for actual co-gestion, while much time is devoted to inter-union competition. In this context, French unionists and workers are not ready to look at flexibility as a positive tool to enhance their skills; rather they see flexibility as a tool manipulated by the hierarchy and the management to exploit them. Even if no quantitative study had been conducted comparing wages in the two countries, it is clear that in Italy flexibility is well perceived because, at the same time, it is possible to make extra money because of flexibility. Indeed, the reward system is one of the main issues to be addressed when talking about flexibility. From this perspective, it has to be noted that segmentation theory, as described by Atkinson (that is, the existence of a border between the primary and the secondary sectors within the firm itself), is confirmed by the study. Furthermore, it has been demonstrated that, at least in the French case, the main variable is the  The same kind of reluctance exists in France where nurse professional organizations are strongly against the possibility of care assistants being ‘independent workers’ (profession libérale). For the nurses the goal of this strategy is to keep a monopolistic position in the ambulatory sector.

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number of years the individual stays in the hospital (seniority). On the whole, most staff belonging to the secondary market are newcomers. However, as studies on temporary (interim) workers in the general economy show, some who work in such a precarious positions adapt to it and even take advantage of it, and stay many years in this situation. By contrast, most of the ‘baby boomers’ (socialized in a Fordist economy) would have seen it as exploitation. While polyvalence and specialization have developed in some areas of work quite strongly, this is not true for all hospitals workers. In France nurses are pushed towards more specialization while care assistants are more and more polyvalent. In Italy, nurses tend to be more polyvalent while some technical professional are more specialized. This task shift (from one category to another) may be perceived as an improvement of work insofar as people higher in the hierarchy formerly did the tasks. In Italy, however, the boundaries are quite strong between nurses and care assistants; as a result, nurses have the feeling they are a profession. This context makes them less reluctant to change in workload and functional flexibility. But the research also shows that pursuing efficiency may lead to reorganization that goes against flexibility. For instance, more and more activities are standardized, as is evidenced specifically in the laboratory units of the sample where quality assurance procedures were strongly implemented. Complying with norms, rules and quality standards leads most workers to adopt quasi-industrialized practices. Linked to civil servant status, this organizational constraint leads to a pattern of organization close to neo-Taylorism. In this case, external flexibility (sub-contracting, short-term contracts, and so on) do not involve care and nursing activities but rather laundry, cleaning, cooking and, in some cases, clerical tasks. As a result, the size of establishment may shrink and that, in turn, causes the need for even more flexibility. Regarding these routinization and industrialization processes some effects of scale have been noted. As Skorstad points out in Chapter 2, the size of the firm can be one of the conditions making possible (or not) the implementation of an offensive flexibility policy: ‘[the] possibility for small firms to operate in flexible ways is far greater than for large firms’. However, examples of flexibility, both functional and organizational, have been found at both Frapriv (200 beds) and Itato (2,000 beds). The magnitude of flexibility, and its perception by hospital workers, bears no relation to the size of the hospital. This may be due to the fact that each hospital is an element of a broad network made up of several providers. If one assumes that most firms are like this, the study proposes, as an hypothesis, that the amount as well as the type of flexibility has to be taken into account along the whole production process and not only at the individual firm. Another explanation could be that hospitals are but sets of independent small ‘firms’ (that is, the medical units). Strangely enough, examples of organizational flexibility are working against this traditional tendency and tend to weaken boundaries between units. Thus, in conclusion, in what may be called a transition era (from balkanized and closed organization to open and integrated organization) work flexibility in

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hospitals has to tackle a new contradiction: flexibility that might improve efficiency is more easily implemented in small units than reform based on the effectiveness of large departments defined as a collection of former units. Incentives and participation: Looking at the motivation issue The Italian cases give evidence that flexibility is acceptable to employees under two conditions. First, the type of flexibility (external, functional, quantitative) has to be in line not only with the division of labour but also with the goals that the organization explicitly wants to achieve through new HRM. Second, flexibility has to go along with the recognition of greater professional autonomy and responsibility. That is why the incentive issue has to be addressed simultaneously with other work dimensions: confidence, collective organization, participation. The relativity of responses by workers was revealed graphically in the course of the research in the way participants from different countries reacted to the use of the term ‘paramedical’. In France, this expression is commonly used, and its use is not controversial. The fact that nurses and care assistants are seen as depending on the medical profession is not a big deal. On the one hand, nurses may enjoy a very clearly defined set of functions. Some of the tasks are clearly their own responsibility. On the other hand, nurses may improve their qualifications and acquire technical specializations. By contrast, in Italy, unions fight strongly against the use of the word paramedical, which is seen as an archaism from the time when nurses were dominated by the physician, and were denied having any kind of proper role. In Italy, the union strategy aims at developing, at the same time, autonomy, flexibility and emancipation vis à vis medical power. This multi-dimensional strategy is seen as the best way to improve professional skills, organizational efficiency and social identity. When one adds to those developments the opportunity to partially determine wages on an individual basis, the landscape is quite consistent. In Italy as everywhere, hospitals are not firms. However, as in industrial firms, workers’ involvements are more and more needed. As Lorenz and Valeyre state: A basic idea in [the] literature is that forms of work organisation requiring considerable discretion and problem-solving activity on the part of employees are more likely to be effective if they are supported by particular systems of pay, training and employees’ representation. It can also be argued that firms will have an interest in adopting forms of pay linking employees’ compensation to their effort and to company performance. The quite plausible hypothesis is that employees will be more likely to commit themselves to the goal of improving the firm’s capacity for problem-solving and product development if they are promised a share of the quasi-rents which derive from their enhanced effort (Lorenz and Valeyre 2004, 18).

However, as far as flexibility is concerned, this HRM strategy when applied to public services workers may encounter problems. From an empirical point of view, these difficulties have something to do with the way unions see the new

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HRM tools. For them, wage individualization jeopardizes their bargaining power and at the same time exposes workers to manager’s discretionary power. Indeed, the French cases show that, to some extent, these difficulties can be overcome if insiders can benefit from the change. The theoretical problem raised by some economists in the late 1970s and analysed by Kreps or by Bénabou and Tirolle, is more complex. In effect, in the standard model of agency theory (where information asymmetry is in favour of the employee) introducing extrinsic incentives, such as linking employee’s compensation to performance, cannot lower effort level. Furthermore, ‘what is called intrinsic motivation [such as enjoying the job or adopting organization values] may be, at least in part, the worker’s response to fuzzy extrinsic motivations (such as the fear of being dismissed, censure by fellow employees, etc.)’ (Kreps 1997, 361). But as Kreps also states: shifting to extrinsic (sharp) incentives may signal a change in plans to workers, who may respond with greater levels of opportunism … Specifically, if an employee undertakes some efforts without the spur of some extrinsic incentive, he will rationalize his effort reflecting his enjoyment of the task. But if extrinsic incentives are put in place, he will attribute his effort to those incentives, developing distaste for the required effort (ibid., 362).

Thus, the implementation of an extrinsic incentive may be counterproductive: ‘Indeed a substantial body of experimental and field evidence indicates that extrinsic motivation (contingent rewards) can sometimes conflict with intrinsic motivation’ (Bénabou and Tirolle 2003). Furthermore, pay systems grounded on contingent rewards initiate a ratchet effect and introduce irreversibility that jeopardizes the otherwise positive consequences of performance-related pay. The solution given by Bénabou and Tirolle may seem rather strange from a HRM point of view, but is quite consistent with economic theory. As they demonstrate, thanks to a sophisticated model, under certain conditions mainly related to agent and principal rationality, ‘discretionary’ extrinsic incentives may be more effective and efficient than a reward system included explicitly in a contract. Having looked at what is going on in French and Italian hospitals in the early 2000s, it appears that the efficacy of the pay system relies on the ability of workers to define – on a collective basis – the way bonuses are calculated and allocated. As seen in the case studies, to keep civil, moral and social values related to any public service is a shared desire among French and Italian hospitals workers. Therefore flexibility can be, at the same time, socially acceptable and economically efficient. But this is only true if it is defined within a renewed industrial relations system including HRM and taking into account what is called in French ‘l’intérêt general’.

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Conclusion This research reveals that some important inherited issues are shaping the responses of groups to managerial initiatives on flexibility. However, in general, almost all formal institutions for conflict resolution within the hospital systems of different countries have been inherited from a time when hospitals were closed organizations. While professional practitioners are included in networks that are more and more complex, the actual responses to the requirement for increased flexibility are nonetheless linked to the ways groups have sought to develop their professional autonomy. On the one hand, New Public Management demands more and more personal initiatives, on the other hand, modern institutions have to be more and more organized as specialization develops. Therefore the answer to the question ‘is flexibility right or wrong?’ depends on the capacity of actors to monitor the tension between the quest for autonomy and the cohesion necessary in any institution delivering a public service. In sum, the main challenge facing hospital actors may be summarized as a tension between autonomy of the hospital versus autonomy within the hospital. On the one hand, hospitals acting as autonomous ‘firms’ must develop highly specialized activities in order to obtain a quasi-monopolistic position within a given area; on the other hand, the same hospital desperately needs a strong network of providers acting in its environment (long term care, rehabilitation, laboratories, and so on) in order to achieve its monopolistic objective. As far as flexibility is concerned, this contradiction creates a conflict of logic among workers. In effect, high specialization does not only require high level training, it also reduces opportunities to move from one hospital to another (specific skill). Specialization (which is the main strategy adopted by the medical profession) is not compatible with flexibility (which is the main human resource response). Flexibility at the work place has also been increased because the place of the hospital in its environment has been changed. As a result of the reforms, each hospital has to define its own strategy in a changing environment, taking into account the partner’s strategies (in terms of activities, investment, case mix and – more recently – physician recruitment). Since the 1990s the relationship between a given hospital and the competition/cooperation it is able to build has many consequences for the skills and type of staff it needs. Downsizing and externalization is not only the result of calculation (such as transaction costs) or individual interests. It is also a matter of institutional identity. From this point of view, international comparison shows that, despite the magnitude of the observed changes, a real continuity continues to exist in each country. A kind of path dependency is identifiable in the types of flexibility used in French and Italian hospitals. The opinion of the workers, specially the nurses and the nurse assistants, are at the same time evidence of this phenomenon and an element of this consistency. If French nurses are more negative towards flexibility than Italian ones, it is mainly because French flexibility is contradictory with (the unchanged) status of hospitals workers as civil servants. In Italy, by contrast, change has occurred in several spheres at the same time and specifically in work contracts.

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By transforming hospitals into azienda (firms) but retaining industrial relations within the public sector, the Italian government has changed the landscape and made possible the implementation of NPM tools and philosophy. This is not the case in France. To address this issue, a new reform has been launched in 2004 under the name of hôpital 2007. Its aim is to implement new internal governance as well as a new financing system. However, the Italian experiment suggests that French hospitals will not improve their efficiency without a consistent mix of higher worker participation and some extrinsic incentives implemented on a collective and negotiated basis. Yet the economic literature on incentive and motivation suggests that HRM tools have to be redefined every now and then in order to avoid opportunistic behaviour. That is the reason why the re-invention of policies, including reforms of NPM itself, has to be seen as a continuous and, indeed, a never-ending process. References Bach, S., Bordogna, L., Della Rocca, G. and Winchester, D. (eds) (1999), Public Service Employment Relations in Europe (London: Routledge). Bach, S. and Della Rocca, G. (2001), The New Public Management in Europe, in C. Dell’Aringa and B. Keller (eds) Strategic Choices in Reforming Public Service Employment (New York: Palgrave). Bellanger, M. and Mossé, P. (2005), ‘The search for the holy Grail: Combining decentralised planning and contracting mechanisms in the French health care system’, Health Economics 14, 119–32. Bénabou, R. and Tirolle, J. (2003), ‘Intrinsic and extrinsic motivation’, Review of Economics Studies 70, 489–520. Carrieri, M. (2004), ‘Les relations professionnelles dans la fonction publque italienne’, Revue de l’IRES 45, 75–92. Commons, J. (1917), Labor and Administration (New York: Macmillan). Dares (2004), ‘L’exposition aux risques et aux pénibilités du travail’, Premières synthèses, December, 52:1. Esping-Andersen, G. (1990), The Three Worlds of Welfare Capitalism (Cambridge: Policy Press). France, G. and Taroni, F. (2005), ‘The evolution of Health-Policy making in Italy’, Journal of Health and Politics, Policy and Law 30:1–2, February, 169–87. Hall, P. and Soskice, D. (eds) (2001), Varieties of Capitalism (Oxford University Press). Kreps, D. (1997), ‘Intrinsic motivation and extrinsic incentives’, AEA papers and proceedings 87:2, 359–64. Lorenz, E. and Valeyre, A. (2004), ‘Organisational change in Europe: National models or the diffusion of a new one best way’, DRUID Summer Conference, June.

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Mossé, P. (2003), ‘French and Italian Hospitals: the Long Road Towards Autonomy’, in M. Gold (ed.) New Frontiers of Democratic Participation at Work, 126–47 (Aldershot: Ashgate). Mossé, P., Bordogna, L. and Ponzellini, A. (2001), ‘Autonomie de l’hôpital; autonomie dans l’hôpital. Une �������������������������������� comparaison Italie–France’, Alass meeting, Lyon, September (abstract published in Epistula 43, September 2001). Mossé, P. and Bouteiller, J. (2004), ‘Gli ospedali tra “New public management” e gestione participativa’, in L. Bordogna and A.M. Ponzellini Qualità del lavoro e qualità del servizio negli ospedali, 161–77 (Roma: Carocci). North, D. (1990), Institutions, Institutional Change and Economic Performance (Cambridge University Press). Rehfeldt, U. (2000), ‘Italie. La représentativité syndicale: un miracle à l’italienne’, IRES, Chronique internationale 67, November. Salais, R. and Storper, M. (1997), The Worlds of Production: The Actions Frameworks of the Economy (Harvard University Press). Skorstad, E. (2009), ‘������������������������������� The ambiguity of flexibility’, in this opus.

Chapter 8

Striving for Flexibility, Attaining Resistance: Culture Clashes in the Swedish Rail Industry Henrietta Huzell

Introduction The relationship between the managerial drive for flexibility and employees’ resistance to the same is a hitherto neglected but important aspect of contemporary workplaces. This chapter discusses resistance among workers in a public sector organization in relation to managerial attempts to create a culture characterized by flexibility. This raises an interesting question; is a collective culture the veritable or only foundation of a resistance culture? This chapter will demonstrate how a resistance culture may actually grow out of management’s attempts to instil a flexible and compliant culture. A flexible culture can thus neither be created or manipulated by management since organizational culture is a contested terrain. This question is addressed by drawing on data from a study of a public authority undergoing processes of change which are described in terms of managerial attempts to increase flexibility. Flexibility is part of a variety of practices used to re-shape both labour markets and organizations and it is argued here that flexibility, as a managerial strategy within organizations, is compatible and coherent with, and occasionally the same as, cultural management. The chapter is structured as follows; firstly, I give a brief account of the concept and analysis of culture in organizations and remind the reader of the relationship between flexibility and culture. The relationship described as both flexibility and culture represents conditions and/or variables that can be achieved, controlled and changed by management. This is, however not done without some degree of worker participation, and workers do not always wish to participate. Instead, previous organization studies have shown how workers often engage in resistance activities, which are described in the subsequent section. Finally, a case study is presented that demonstrates how the managerial drive for flexibility may elicit resistance among workers. Organizational cultures What has been described as escalating global competition has driven organizations to explore new methods of increasing productivity and enhancing flexibility. This, together with the now historical success of Japanese companies, has led to an

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increased focus on organizational cultures. In addition, the growth of the service industry has given further impetus to the culture movement; a movement which posits employee attitudes and beliefs as pivotal in organizational performance (Normann 1984). It is believed that the idea of the customer-oriented service company must dominate the thinking of the entire organization, and lead to the development of a culture characterized by a constant endeavour to deliver superior customer value (Schneider and Bowen 1995). In conjunction with these trends, there has been a change in emphasis from the control of output measurements to the control of employee attitudes and commitment; the latter are considered crucial for employee service-mindedness, which in turn determines the level of customer satisfaction. During the early 1980s Peters and Waterman’s (1982) introduction of the idea of excellent organizations sparked an enormous interest in organizational culture. Together with other influential writers at this time such as Deal and Kennedy (1982) and Ouchi (1982), they developed a concept of organizational culture which is still accepted today. During the same period, flexibility was introduced as the solution to many problems in the labour market and in organizations (Atkinson 1984; Piore and Sabel 1984). When managements for example downsize and outsource to achieve greater flexibility, the culture of the workplace gains significance as the ‘glue’ that holds the organization as a whole together. Furthermore, gurus and consultants instruct managers to use this cultural glue to tie workers closer to the organization and to management by encouraging greater commitment to organizational goals. As the authors in this volume (Skorstad; Karlsson and Eriksson) and others have argued, the concept of flexibility is ambiguous. The concept of organizational culture is unfortunately no less ambiguous. Prior to the mid-1990s, academics with an interest in culture and organizations focussed on deconstructing the concept of culture. During this period scholars made an important distinction between two diverse approaches in the field of organizational cultures. Smircich (1983) argued that organizations could be understood as cultures with reference to the term’s original anthropological meaning. Based on Burrell and Morgan’s (1979) framework on culture, she pointed out that the hitherto dominant approach views culture as something that organizations have, as opposed to the second approach which views culture as something organizations are. The fundamental distinction between these approaches is that culture in the first approach is depicted as a critical variable, and is thus treated as an objective variable that can be measured and changed like any other variable in an organization. In this perspective, phenomena such as ‘culture change’ and ‘culture management’ are widespread in the management literature. Change in this sense is concerned with, for example, attempts to strengthen organizational culture in order to increase employee commitment, motivation and involvement, or to inculcate standardized behavioural patterns in employees through a common corporate identity, and so on. This perspective has been widely questioned by scholars not least because of its failure to address the historical and traditional values and class based sub-cultures that constitute workplace cultures. One might also question why the management

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is perceived as the sole agent of change with regard to the culture variable. If culture is a manageable variable in organizations, one would naturally assume that workers also had an impact upon it. Contrarily, in the second perspective, culture is not regarded as a manageable variable in the organization but rather as a ‘root metaphor’ often used to analyse and understand organizations as cultural or sub-cultural phenomena (Smircich 1983; Maanen and Barley 1985). In this approach, the culture metaphor can be used to help identify the central values and significant symbols which constitute the organization. Research along these lines has therefore engaged in identifying and interpreting organizational symbols, myths, rites, artefacts and shared values (cf. Geertz 1973; Kunda 1992). The first approach, in which culture is seen as a variable which can be managed, manipulated and measured, has undoubtedly had the strongest impact and gained the most attention in management literature and among practitioners, whereas the second perspective, organizations as cultures, has mainly attracted scholars. Hence, ideas about strengthening and altering organizational cultures now permeate diverse reformatory programmes, including those introduced primarily as a means of improving quality, flexibility and customer orientation. The pervasive idea of organizational culture is also stressed by Willmott (1993, 516) who argued that the practice of ‘corporate culturism’ is more than a passing fad or a repackaging of old ideas. One argument for this is that culture in both of the above mentioned approaches has become closely associated with shared values and interpretations. Willmott continues by arguing that in the move towards more flexible structures in organizations, culture is a key feature since flexible structures require employees who internalize the new values of ‘quality’ and ‘flexibility’; they must adopt them as their own. In this context, increasing managerial interest in culture can be motivated by broader concerns than the traditional issues of paying and employing workers. One such concern is, as previously mentioned in the introductory chapter in this book, building up a compliant work force willing to work under flexible conditions. Willmott argues that in their struggle to create a strong corporate culture managers look for or prefer employees who devote themselves to the organization’s values. These employees see that job security is dependent on their contribution to organizational success. Thus, from a managerial perspective ‘responsible’ co-workers in a flexible organization are those who are compliant with managerially instigated change (Huzell 2005). Despite the common concern with values and interpretations, relatively little attention has been given to conflicts and disputes over divergent values and interpretations in organizations. As a consequence, studies of culture have tended to overlook asymmetries of power and conflicts in organizations. Davis (1985) noted that organizational culture had generally been treated as a unitary entity, and   This insufficiency�������������������������������������������������������������������� ��������������������������������������������������������������������������������� has, �������������������������������������������������������������� however,������������������������������������������������������ to a certain extent been reduced by scholars with no particular focus on cultures in organizations, but rather on subordination and exploitation (for example Lysgaard 1961).

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at that time, only a few articles examined sub-cultures or counter-cultures within organizations. Furthermore, he noted that the study of organization culture is incomplete when it fails to take into account the prevailing culture that influences employees in non-managerial positions. Workers often view both their jobs and the experience of working quite differently from those in managerial positions. In addition, workers are often united in a common distrust of management actions and ideas (Ackroyd and Thompson 1999). Alvesson and Berg (1992) argued that the simplified assumption that management culture is identical with employee culture ignores the possibility of several competing cultures in an organization. In their analysis of organizational culture, they suggested that sub-cultures are the typical form in which cultural processes are manifested in organizations. Workplace cultures can for example centre on antagonism toward the managerial culture. In recent years scholars have linked culture with control, and some of them argue that it is possible to attain a totalizing corporate culture with self-disciplined and self-controlling individuals (for example Deetz 1992; Sewell and Wilkinson 1992). Others argue that culture management is probably not applicable to any levels in the organization other than the middle management level (Watson 1994, for a similar discussion see also Thompson and Findlay 1999, 172–4). In other words, there seems to be a gap between those who claim corporate culture includes and engages all members of the organization and those who claim corporate culture includes and engages only a small number of members (Thompson and McHugh 2002, 198–200). Consequently, what can be achieved through the manipulation of organizational culture is still a subject of dispute. According to Thompson and Findlay (1999, 167), one of the dominant strands of the organizational culture debate hinges on the link between culture and control; that is, if it is possible to manage, change and manipulate a culture, then culture needs to ‘be analysed as part of management’s armoury of control’. Such an analysis was previously carried out, for example, by Ray (1986), who described different types of managerial control strategies and argued that cultural control or ideological control is simply an addition to ‘bureaucratic’ forms of control (Edwards 1979). As mentioned earlier in this book, Edwards (ibid.) saw systems of work control developing through stages as workers resisted control and employers countered resistance. Initially, only direct control was needed, but as workplaces grew and technology became more complex during industrialization, the desire for control of what was actually being done in the workplace (technical control), and for bureaucratic control in the form of rules and policies, increased. These expedients have been labelled external control strategies, where ‘the hands matter, but the head and heart do not’ (Ashforth and Mael 1998, 92). Internal systems of work control have become known as ‘normative control’ systems (Etzioni 1961) and include attempts to control both ‘the head and the heart’ (Warhurst and Thompson 1998). Normative control strategies attempt to direct the efforts of workers by controlling the underlying thoughts and feelings that influence their actions. A normative control system is said to encourage workers to believe in and try in practice to reach the goals of their work organization as

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espoused by management through visions, goals and value statements. It implies that workers need to discard their own opinions and values, where these are not in line with those of the organization. A worker able to commit to these values will supposedly feel that he or she belongs, and thereby become a productive coworker of the organization. The idea was taken up by scholars who argued that normative control was not simply a control strategy like any other, but the ultimate form of individualized control. According to Willmott (1993, 523), the addition of the concept of culture to former control typologies, explains how control can be achieved by shaping and regulating the thoughts and the unconscious drives of employees. Using cultural control, managers were now said to be able to ‘design employees’ (Casey 1995), that is, shape appropriate thoughts and feelings toward work and the organization so that employees became self-disciplined. And the way workers were supposed to feel, think and act at work was of course in accordance with the established goals and expectations of the organization. This entails workers aligned to organizational goals, who accept the reality and values propagated by management. Under these conditions, alienation will purportedly be replaced by an enthusiasm for work, and the cost of this enthusiasm is an intensification of work for a number of workers. This view concurs with other contemporary literature on work-based cultures, in that the employment relationship is increasingly presented as individualized and identity-based (for example Rose 1988; du Gay and Salaman 1992; Casey 1995, 1999; du Gay 1996; O’Doherty and Willmott 2001). Such accounts stress the trend towards more fragmented and individualized workplaces, where workers become responsible for their own careers. For managers, part of the attraction of this type of individualization lies precisely in the fact that it destroys collective responses and opposition to the managerial agenda (see Storey 1992). du Gay (1996) is critical of the individualization trend and describes the employees as ‘losers’ in this new environment and the victims of the ‘cult(ure) of the customer’. In this approach management appears to be almost all-powerful and omnipresent, able to construct workplace cultures as well as workers as they wish. Conflict at work is assumed to have been resolved or oppressed by a cocktail of TQM, HRM, JIT and employee involvement strategies, amongst other remedies, and replaced by commitment. The result is a situation where the workplace is effectively given up as a ‘contested terrain’ (Edwards 1979). This is also essential in the clash between the critical academic poststructuralist perspective and the optimistic practical management oriented view. The latter claim that organizational culture can and should be effectively managed and the former produce alarming reports on the power and success of managerial actions in managing organizational culture, and thereby gaining control over the workers’ hands and souls (see for example Rose 1990). Such warnings about the end of the ‘contested terrain’ should not be dismissed, but they are perhaps somewhat exaggerated, at least according to scholars who argue that conflict and resistance are still pervasive features of current workplaces (for example Thompson and Ackroyd 1995; Ackroyd and Thompson 1999;

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Taylor and Bain 2003). Thompson and Ackroyd (1995) criticized the abovementioned perspective, which has led to a situation characterized as ‘All quiet on the workplace front’. In their opinion, the arguments of those who claim that resistance has disappeared may be contested on both empirical and theoretical grounds. For example, the decline of unions cannot be taken to be ‘synonymous with the disappearance of workplace resistance and conflict’ (Ackroyd and Thompson 1999, 146) and interviews that deal exclusively with managers say very little about workers’ experiences. They, and many others, claim that resistance and other forms of related organizational ‘misbehaviour’ still exist, and it may be that resistance is even more common in connection with issues of culture change. Summing up, efforts to change the values and norms of employees have become a key dimension of organizational change, and form a fundamental link between the concepts of flexibility and culture. Flexibility, as a managerial strategy within organizations, is thus compatible and coherent with, and occasionally the same as, the management of cultures. Flexibility is part of a variety of practices used to re-shape both labour markets and organizations. Of particular interest in this chapter is management’s need for a flexible work force that is willing to comply with and adapt to flexible arrangements. From a managerial standpoint, the drives for flexibility and culture change may be seen as concurrent, that is, one gains flexibility by altering the culture of an organization. Karlsson and Eriksson (2000) distinguish between having flexibility and being flexible. If workers are to have flexibility, employers must be flexible; for example if workers are to have flexibility in accumulating leave, management must be flexible in working time arrangements. If, on the other hand, employers strive to have flexibility, workers must be flexible; for example if the organization wants to attain functional flexibility, workers must be flexible in accepting constant re-training and be prepared for continuous changes in work tasks, work environment and work groups. The managerial drive to gain flexibility through culture management seems, at least superficially, to be the perfect strategy. That is, if it were not for a rather unwilling and resistant workforce. Workplace resistance The majority of early empirical research on resistance within the field of organization studies has concentrated on the organized responses of blue-collar workers in factory settings in the private sector (for example Roy 1952; Edwards 1979; Beynon 1980). Discussions of workplace resistance in general also emphasize a difference between formal and informal resistance (Hodson 1991; Nord and Jermier 1994). The former refers to any kind of organized collective opposition that typically takes the form of strikes, grievances, output restrictions, and so on. Informal resistance, on the other hand, refers to less visible and more indirect forms of opposition that occur within the everyday life of organizations. Unlike most types of formal resistance, informal resistance can be unplanned

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and spontaneous; it may occasionally even be covert in nature. Scholars studying informal resistance, however, emphasize that it is actually likely to be more pervasive in organizations even though it is much less obvious than formal resistance (Nord and Jermier 1994). Ackroyd and Thompson argue for example that ‘ironic, sardonic and satirical commentary on managerial initiatives … have become significant forms of misbehaviour’ (1999, 103). The mainstream tradition of research on formal resistance in factory settings has changed during the past decade to include both informal resistance and other organizational settings and actors such as the health care sector (for example Prasad and Prasad 2000; Hebson et al. 2003) and call centres (for example Bain and Taylor 2000; Callaghan and Thompson 2002; Van den Broek 2002; Mullholland 2004) and even managers (Young 2000). Hodson’s (1995, 79) contribution to the work on informal resistance formulates four basic agendas of resistance: deflecting abuse, regulating the amount and intensity of work, defending autonomy and manipulating participation. Hodson relates each of these agendas to systems of control: direct control, technical control, bureaucratic control and modern participative ways of organizing work. Within each agenda of resistance, Hodson builds up different categories. For example, the ‘alternative value systems’ category within the ‘deflecting abuse’ agenda is portrayed as a symbolic rejection of ‘the definition of the situation provided by those in power’ (ibid., 84). Actions aimed at de-legitimating management are considered to be a crucial form of resistance, and require social affirmation for their continued vitality. Hodson (1995, 80) defines worker resistance as ‘any individual or small-group act intended to mitigate claims by management on workers or to advance workers’ claims against management.’ Such claims are for example that workers need to be flexible if the organization is to have flexibility. Resistance, then, can involve proffering an alternative value system, for example, arguing for the necessity of stability in order to serve customers properly, or redefining the presuppositions underlying the need for flexibility, i.e. increased global competition. Another typology of resistance or way of classifying worker behaviour is outlined by Ackroyd and Thompson (1999, 25). They make a distinctive contribution to the debate about informal resistance through the concept of ‘misbehaviour’. The concept refers to everything people do at work that is not expected and/or appropriate, ranging from ‘classic’ resistance strategies such as output restriction and sabotage to more recently recognized resistance strategies such as subversive humour, sexual misconduct and cynicism. The term ‘misbehaviour’ is used ironically, since the authors take the position of managerial authority and then undermine its foundation by portraying workers’ behaviour as legitimate behaviour from a subordinated group. Subordination in this sense drives workers to organize and to maintain or produce self-determination. According to the authors, the basis of resistance and misbehaviour is the struggle between workers and management over the degree of workers’ autonomy. This is illustrated in a model of dimensions of misbehaviour, whereby workers regain control over some aspects of their working lives. The authors classify four interrelated areas or ‘appropriations’ of

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misbehaviour. These are concerned with conflict over the appropriation of time (for example time wasting, absenteeism), work (for example effort bargaining, soldiering), product (for example theft, fiddling) and identity (for example joking, class solidarity). The area ‘appropriation of identity’ is defined as the ‘disagreement over the extent to which employees identify with their work activity and employers’ (ibid., 25) and is fundamental to other forms of misbehaviour. Ashforth and Mael (1998) concur with this description and regard resistance as ‘sustaining valued identities’. Resistance strategies and expressions in this area are for example ‘resistance through distance’ (Goffman 1961; Collinson 1994), humour as subversion (Taylor and Bain 2003), formation of sub-cultures and counter-cultures (Ackroyd and Thompson 1999), occupational cultures (Karlsson 1983, p. 189) and collective cultures (Lysgaard 1961). Resistance in the area of identity is ‘becoming more rather then less important’ (Ackroyd and Thompson ibid., 27), since today’s managerial strategies target the very integrity of workers by trying to subsume their sentiments. And these attempts are made via corporate culture in an effort to become, for example, the flexible firm. The employees’ willingness to identify with management and the organization is, however, not easily obtained or as Ackroyd and Thompson put it: ‘[it] is no more nor less than a startling piece of wishful thinking’ (ibid., 27). The following section demonstrates how conflict between management and workers is embedded in the managerial drive for flexibility. This is done by delineating two opposing cultures in an organization – a culture of management and a culture of resistance. The study described below is informed by the structured antagonism between management and workers (Thompson 1990), expressed in conflicts over the appropriation of time, work and identity. Conflicting cultures – The management perspective and the resistance perspective The empirical data presented in this chapter stem from a previous study on recent transformations within the railway industry in Sweden (Huzell 2005). In particular, reforms were studied in two divisions of a Swedish public authority, the Swedish National Track Authorities (hereafter referred to as Banverket). As in other parts of the Swedish public sector, the management of this authority is planning and executing ‘marketization’ reforms in terms of deregulation. Deregulation of the rail industry is an important issue in European transport policy, and as in other countries, the Swedish railway industry has been subjected to radical restructuring. The change process was initiated in 1988 when the Swedish State Railway, monopoly holder of all railway activities since 1939, was divided into two parts. The management and maintenance of the rail track system (the infrastructure) was turned over to a new government authority, Banverket (BV). A large group of railway workers, university graduates, blue-collar workers, and white-collar workers, were transferred to the new authority. The present model for railway traffic in Sweden, introduced after the 1988 transport policy decision, implies that

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the government through BV is responsible for providing, constructing, maintaining, and operating the infrastructure; in short, the state makes infrastructure available on payment to different traffic operators. As a first step, a ‘market structure’ with buyer-seller arrangements was implemented throughout the organization in the late 1990s. These measures, however, were deemed insufficient and a largescale reform programme was introduced in 1999. Like other managers in public sector organizations, the management at BV was influenced by the call to make the organization more business-oriented and enterprising. The goal was to turn the former railway bureaucracy into a fully-fledged, flexible, customer-oriented business. My research project at BV involved semi-structured interviews with 31 employees who were selected according to hierarchal position, gender, age, geographical location, and whether they were employed doing white or blue-collar work. The interviews centred mainly on these employees’ experiences of changing working conditions, such as working hours, social support, pay systems, influence, training and general experiences of change. In addition, the study involved observations from meetings, seminars and courses and finally, examination of official documents. Based on the empirical data, three interrelated domains were identified, each domain containing managerial ideas about change and worker responses to these changes (see Figure 8.1). The domains respond to a simple question; what do managements actually do when they implement change? The domains form a matrix of all the change initiatives that occur over time and constitute a public sector organization in transition. The first domain, the legitimacy domain, illustrates managerial attempts to change from monopoly to market conditions in order to become a legitimate business competitor. Here, the management attempts to legitimize what they consider to be necessary changes, not only in this domain but also in the following two domains. The key word in this domain is competition and the management aims to become competitive by, for example, determining and refining the core business and implementing key financial figures. The second domain, the restructuring domain, illustrates changes in the work organization’s structure and form, described as a move from bureaucracy to flexibility in order to enhance and diffuse skills among workers. The key word in this domain is competence and the management practices which aim to enhance and broaden skills and competence are for example new organizational forms and increased functional flexibility through teams, networks and projects. The last domain, the revaluating domain, illustrates managerial attempts to change the corporate culture from a culture of technology to a culture of customers in order to change workers’ attitudes towards work and the organization in order to serve the customer properly. The key words are customer and culture, and management strategies for attaining customer orientation and a flexible work force involve culture change processes such as training and business education. The key words competition, competence, culture and customer orientation are conveyed by management to workers as the motivational drives for actual change.

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Figure 8.1

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The management perspective and the resistance perspective in relation to change within the domains of legitimacy, restructuring and revaluating

The research questions concerned how these changes were perceived, not only from the management’s point of view, but also from the divergent and critical perspective of the workers. By way of example, workers countered the key words and the associated practices with whistle-blowing statements; they claimed that competition threatened safety on the track, competence diffusion or functional flexibility were compared with de-skilling actions due to work intensification, and culture and customer orientation were said to weaken professional conduct and considered a waste of tax payers’ money. Based on the empirical data, two ideal categories were established, based on the opposing views of the ongoing changes: the management perspective and the resistance perspective. These ideal categories

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illustrate how conflict between two dominant cultures is manifested within the domains. The conflicts between the two perspectives are expressed in six different discourses, three of which represent the management perspective and three the resistance perspective. The three discourses put forth in the resistance perspective correspond with Hodson’s (1995) alternative value systems, that is, the rejection of the definition of a situation provided by management. To sum up, the domains are the areas and targets of change within the organization, the two perspectives are ideal categories which illustrate divergent sub-cultures within the organization and finally, the discourses illustrate the actual conflict between the perspectives in each domain. The legitimacy domain As regards the legitimacy domain, one of the most important ideas in the railway industry over the past decade has been the privileging of market logic over a public service tradition, often referred to as New Public Management (see for example Hood 1995). Such developments can be interpreted as part of a trend within both the public and the private sectors towards a more market-driven approach (see for example Pollitt 1993). From a management perspective, this change is illustrated as the transformation from a monopoly to a market-oriented system in order to enable the organization to become a legitimate business competitor. The managerial change discourse in this domain is therefore designated as ‘The Inevitable Market’, implying that the organization has to be more efficient and effective to be a competitive actor on the market. In various ways management used a constructed image of the past as a contrast to the new vision of the organization. Creating a history of failure allowed them to present their organizational strategies and policies in a progressive light. The legitimacy domain had an increased focus on economy, profit and core business activity. From the resistance perspective, the changes were met with questions of credibility; workers were hesitant to accept the necessity of becoming a ‘real enterprise’, and sceptical about whether or not the railway market was actually facing competition. In the resistance perspective the notion of the ‘Repudiated Market’ made workers interpret the changes as rationalization and down-sizing. These alternative understandings mobilized resistance against the managerial ideas, which was expressed in the demonstration of a strong workplace ethos dominated by ‘working for the public good’ and safety concerns. This domain was fundamental for the other two domains because it legitimized further and more direct changes concerning employment relations, working conditions and control strategies. The notion of the Inevitable Market suggests that no other opinions about its existence and logic are viable, and consequently that it is absolutely necessary that public sector organizations change dramatically in order to survive in the future. However, the legitimacy domain has no evident connection to flexibility as such, and is therefore only briefly mentioned here.

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The restructuring domain Many of the problems in the railway industry were seen as being due to its hierarchical structure. In particular, it was considered to be rigid, restraining the transmission of knowledge and skills. Functional flexibility was seen as the main critical factor in the transformation process and the source of future success as a fully fledged service enterprise. It was decided that a network based organizational structure was needed in order to sustain and develop skills. Functional departments and hierarchical structures were dissolved and the employees were spread geographically throughout six regional offices responsible for carrying out projects within their part of the country. Managerial change attempts in the restructuring domain are influenced by the ongoing ‘flexibility revolution’ (Grönlund 2004) in workplaces, especially with reference to the dismantling of the old bureaucratic organization. The change attempts in the domain are therefore described as a move ‘from bureaucracy to flexibility’. In the management perspective, these changes can only be implemented through the removal of existing boundaries between departments, groups and occupations. The managerial change discourse in this domain is therefore designated ‘the boundary-less organization’. The aim was to create a boundary-less, project-based organization with a smaller or non-existent middle management level, flexible enough to live up to the demands of the market. Professional support and specialist skill development was to be ensured through the nation-wide ‘virtual’, functional ‘centres of excellence’, also called ‘competence networks’. Skill development within the various technical specialist fields was therefore formalized and transferred to these national competence networks such as signalling networks and construction networks. The goal was to create an organization that allowed its employees to work closer to the customer with the support of a nation-wide web of experts, available through a sophisticated technical network structure (e-mail, intranet, databases, video conference systems, and so on). The idea was to provide a flexible structure where different skills were combined with temporary configurations, meaning that functional departments and hierarchical structures were dissolved and replaced by temporary networks, projects and teams. In order to make the new, flat, integrated, and temporary structure function, workers needed not only to broaden their technical skills, but also to increase their social skills, enabling them to work in a new, flexible, and temporary manner. This process is in line with the ongoing discourse on knowledge societies and national economic competitiveness. On the national level governments are exhorted to stimulate various conditions that will support the knowledge-driven economy (see for example OECD 2001). This is echoed on the organizational level, and in this case is expressed in explicit terms and actions when it comes to organizational structure. The managers’ task is to facilitate the development and transfer of the employees’ skills in the organization in order to maintain and enhance competitive advantage. The structural affiliation with the competence network was seen as the solution to two problems; firstly, the geographical

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diffusion of employees might lead to a reduction of knowledge because of the distance between colleagues. Secondly, and somewhat contradictorily, there was the problem expressed by managers as the inability and unwillingness among staff members to share knowledge in the old organization. In the network structure, transfer of skills would be formalized via ICT and for some individuals even rewarded. The notion of the boundary-less organization firstly outlines management attempts at replacing the old bureaucratic and rigid organization with a new and flexible model, and secondly maintains that management is not responsible for the new conditions and the flexibility demands placed upon the organization. Again, the demands are related to the Inevitable Market but in addition, the new skills demanded in a so called knowledge-based society are said to be conditioned by the force that demands a more flexible organization. A prerequisite for the boundary-less organization is that employees not only possess superior technical skills compared to probable competitors and a broadened technical skills base that allows them to respond to the desired functional flexibility, but also new social skills. In the former bureaucratic organization, the lack of social skills among employees was unproblematic, but in the flexible organization it is a requirement for getting a job at all, since the new fluid form is dependent on the individual’s ability to communicate and collaborate with others. The idea of the boundaryless organization, as used in the management perspective, involves neutralising opposing or alternative suggestions and solutions to what were determined to be the problems within the old work organization. In the name of flexibility, management has the authority to do whatever it takes to adjust the organization to meet future demands, including changing the patterns of habitual interaction among employees and replacing them with temporary relations within the organization, and altering the previous specialized technical skill base and replacing it with more generalized technical skills. The new temporary structure had profound effects on working conditions in the organization, although those effects were not always those expected by the managers. It is important to note that the trade unions in the beginning exhorted the incorporation and market orientation, since this was considered a way of securing employment and bringing new capital to the industry. In the same way, trade union representatives were positive to the network structure in itself due to workers’ enhanced possibilities of developing additional skills through on-the-job training. The reaction from the interviewed employees was that the union was no longer fully on their side. From a resistance perspective, these changes were met with an alternative interpretation of the boundary-less organization, namely ‘the insatiable organization’, which clearly indicates that managerial attempts to create a flexible organization were met with negative responses. The notion of insatiability alludes to the fact that the changes involve work intensification – with fewer workers doing more work. Respondents expressed scepticism or even open hostility in some cases. The critique implied that managers had a hidden agenda about the changes, which even the trade unions had not recognized.

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Flexible Organizations and the New Working Life My first thought [about the network structure] was that it was a way of increasing responsibility and workload without giving people more pay. And, I guess, that’s probably why people simply don’t do what is expected of them (Administrative support).

In the resistance perspective, the initiatives taken by management in the restructuring domain are perceived as camouflaging the deterioration of working conditions, and as such, the transition of skills is put at risk. In particular, the respondents reported increased workloads and lack of social support due to the diffusion of skills in the organization. A relatively stable structure is arguably necessary, not only for the transmission of technical skills, but also for a range of tacit skills and knowledge, which can not be transferred in a fluid and temporary structure. Workers also argued that specialized technical skills should be the competitive advantage in a deregulated market. The management’s accusation that workers lacked social skills and their associated efforts to enhance these skills were interpreted in the resistance perspective as attempts to ruin well-established working relations. This also encouraged workers to take control of time and work, for example, ‘sticking to the status quo’ to ensure that traditional technical skills were not undermined. Other signs of misbehaviour were for example expressions of irony, the open ridicule and questioning of managerial ideas or even the sabotage of these. I don’t care about this crap talk about the customers. I mean, we don’t even have a real customer yet. … The customers are my old colleagues and the difference is that I have to send them a lot more paper than I used to. They contact me if they want to order anything, simple as that. And then we fill in the Customer Satisfaction Index together over a cup of coffee (laughter) (Technical consultant).

Other employees expressed concerns about the efficiency of the network structure. Most importantly and contrary to management expectations, the facilitation of knowledge sharing and development deteriorated in the network structure. How can a competence network be managed? Who can possibly know everybody’s skills, and know what skills we will need? It is impossible. Our status, our technical expertise and skills have already suffered (Signal man).

By way of summary, from the resistance perspective, employees not only demonstrated an apparent lack of enthusiasm for the new structural arrangements, they also produced an alternative description of the changes. This interpretation allowed workers to distance themselves from management, to display a wide range of resistance tactics and not least to build alliances with like-minded colleagues. This is a pattern that becomes even more obvious when we turn our attention to the revaluation of the employees. In order to develop the knowledge-driven, flat and flexible network organization the employees themselves needed to change. Working towards the boundary-less organization in a competitive market, management found that changing the work organization was not sufficient. In order to move from bureaucracy to flexibility it was also necessary to create a new type of employee.

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Management was indeed aware of the need for an alternative way of controlling work. The need for an alternative control strategy was due firstly to new employment relations in the public sector as a whole and secondly to the new functional flexibility within the organization. Employment in the public sector is historically associated with secure and stable conditions. In exchange for this security, management has relied on a certain degree of loyalty and trust from workers. With the weakened and deregulated public sector and the idea of the boundary-less organization with its mobility and temporality, this relation of mutual trust is no longer assured. Management is no longer able to provide stability and security, and therefore, the reliability of workers is at stake. Consequently, the management perspective expresses an increased need for new control regimes in terms of obtaining ‘desired work behaviour from workers’ (Edwards 1979, 17). This new control, in so-called post bureaucratic organizations, is described in the literature as indirect, internalized, cultural and ideological (Heydebrand 1989, 345). In the management perspective this was expressed as ‘strengthened common goals’, ‘cultural restructuring’ and ‘value change’ and to implement these aspirations an image of a new type of worker was created. The revaluating domain In the third and last domain, the changes implicitly refer to the market and to the flexible organizational structure, but in more explicit terms the changes are due to the requisite of customer orientation. In order for a business to become successful in a competitive market and for workers to be able to work in the new flexible structure, the workers themselves needed to change, that is, they needed to be more competitive, accountable, employable and adaptable. In the management perspective workers were considered deficient in commercial skills due to the monopoly situation and the historical railway culture. These ideas are informed by a variable approach to organization culture, and management encourages moving from ‘inhibited cultures to liberated cultures’. The inhibited culture was mainly described negatively in terms of solidarity between classes or professionals, solidarity with the public good and with environment-friendly transport issues. In this culture questions concerning, for example, financial matters, internal customers and time pressure were subordinated to technical interests and traditional matters such as pay, work time and workload. This culture was said to create worker identities that were passive, bureaucratic, rigid, and without vision, responsibility or power. The liberated culture is diametrically opposed to the inhibited culture. In the revaluating domain, the prescribed change therefore involves shifting workers’ attitudes towards work and their identities, and switching ‘from technique to tactic’ in order to serve the customer properly. The managerial change discourse in this domain is thus designated ‘the responsible co-worker’, aimed at instilling a new identity of employability and commercial professionalism in individuals. This was not considered possible without changing the culture(s) dramatically. The ambition was to create a monoculture which was basically the same as the managerial

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business culture with its focus on profit and customers. One manager described the problem of different cultures and suggested how it should be solved: We can’t have those three cultures [the historical railway culture, the shop floor culture and the new business culture] within the organization. They are not compatible and they each guard their own interests. They don’t understand each other. We want one culture and we can pick the best parts out of each culture in creating the new culture. Sticking together and finishing the job from the construction section, profitability from the business section and from the shop floor there’s … well, for example just-in-time.

Management put great emphasis on creating ‘The Responsible Co-worker’ and an extensive training programme encompassing all employees was introduced. One aim of the programme was to teach both management and workers a new way of thinking about the organization and about themselves. The new railway worker was to be profit-generating, flexible, creative, independent, proactive, extroverted, willing to take risks and willing to share his/her knowledge with the rest of the organization. The main theme was the necessity of erasing the old identity of employees, an identity described as passive, bureaucratic, and rigid, without vision or power. The management consultants leading one session stressed how important it was for the new co-worker to be employable and to resemble a real businessman. As one of the consultants put it: ‘don’t blame the system or the managers or the Government if the company has no orders, blame yourself; how could you as an individual have contributed to a better situation?’ Management had issued a philosophy of values such as ‘independence’, ‘accountability’, ‘employability’, and ‘businessman-ship’. These values shaped the project of transforming the workplace culture on which management had embarked. The values became part of the inherent tension between ideals and the social practice that was evaluated in the light of those ideals. This is because the articulation of values makes the direction in which the transformation of organizational culture is headed more transparent. Emphasizing certain values and constructing descriptions of the ideal worker indicated that these had not been a sufficient part of organizational practice. If these values had been fully realized, it would hardly make sense to idealize them. In this manner, they exposed a defect; in the existing culture workers had apparently not been reliable, independent and employable enough. The explicit intention of the empowerment programme can be understood as the replacement of the former direct control strategy with ‘responsible autonomy’ (Friedman 1977) and to make this possible the managers simply needed to help the workforce to internalize the prescribed values and interests of the organization. This meant higher levels of discretion and accountability rather than the previous focus on confidence in technical skills. To be able to handle the new labour process with the customer in focus the employees needed to develop the necessary behavioural profiles. Since work was to become more creative and demanding due to the interaction with both colleagues and customers the workers would have more autonomy, more responsibility and more control in and over their work. The managers presented this as a new and challenging task:

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This is very exciting! And actually totally new knowledge for us. The ability to develop people will be one of our most important competitive tools in the future. To make the small human being grow bigger and realize its value and its share of responsibility for the whole. It is a challenge!

The managers’ message about a new co-worker for a new era, employable in the new network organization did not escape anybody, mainly because management introduced a new policy through which employees were made ‘responsible’ for their own working time. This meant introducing a new time measurement system where ‘billable time’ was the critical unit, i.e. not hours actually worked but hours sold to the customer. Time not billable was considered ‘wasted time’. As in the case with structural arrangements, this strategy was met with scepticism, ridicule and open resistance. In particular, employees questioned the novelty of the social and commercial competencies, and furthermore, the importance of these to all members in the organization, that is, those without customer contact. Again, there were serious concerns regarding how technical competence would be sustained. As long as social competencies could be viewed from and kept at a distance, the concept was met with humour and/or cynicism, but when reality revealed that social and commercial competence was an economic hindrance to technical training, the humorous tone disappeared. You know, I felt they were trying to brainwash me! It felt like we were in a religious revival meeting, 400 people and a management consultant with three of his disciples and … I can tell you we laughed. But seriously, it was pretty scary and the most frightening thing is that this brainwashing program has used up all the money needed for real training which some of the younger guys really need. That means that those of us who are more experienced have to solve these problems, and we don’t have time (Technical consultant).

An important device for creating the empowered co-worker was the new time measurement system. This was again met with great scepticism and considered to be a disguised means of increased control and therefore perceived as something that could be legitimately ignored. They don’t want us to talk about working hours any more; instead they’re using ‘billable time’, which is the working time we get paid from the customer and is supposed to be the only time that counts. Since its introduction my fellows and I haven’t reported once into the time system (Technical consultant).

Several respondents objected to the businessman as a role model for railway workers; this was seen as a serious threat against important traditional railway values, such as the previously mentioned technical skills, but also against safety on the track, which was especially emphasized. We [the workgroup] were called ‘troublemakers’. Whenever the boss brought up the discussion about competition and customers we took England as a frightening example.

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Flexible Organizations and the New Working Life We said; is that what we want, more accidents, both for passengers and workers. … That’s probably one reason they have split up the old gangs, but they haven’t admitted it (Signal man).

Creating the responsible co-worker turned out to be a more difficult task than expected, not least because the employees did not agree with the description of the old organization as rigid and bureaucratic, and the old railway worker as being passive, bureaucratic and rigid, without vision or power. From the resistance perspective the changes were again met with an alternative explanation expressed through scepticism, mockery, and highly ironic comments. In the resistance perspective, the importance of commercial skills is questioned since neither the market nor the customer is perceived as being authentic. The hidden agenda in this domain is, from the resistance perspective, therefore presented as increased control of the individual. Instead of interpreting the changes as designed to lead from direct control to responsible autonomy the movement for change seemed to go in the opposite direction: from a type of responsible autonomy framed as a public service technical professionalism to a more individually controlled entrepreneurial customer-oriented flexibility. The changes taking place in this domain are dismissed as ‘infantilization’ of the workers, that is, management treats them as naïve – unable to see the actual aim – which is increased control over work and time. The alternative interpretation results in management actually confronting the very workers they want to transform, since the competing notion of ‘the irresponsible counter-worker’ is launched to query the changes deemed necessary for the creation of ‘the responsible co-worker’. The notion serves first to undermine the management ideas, and second to prevent workers from actually changing their attitudes and values. The consequences of the new individual and commercial identity are again said to jeopardize traditional skills and safety. Safety used to be a collective responsibility, taught and shared among staff, in a robust arrangement where peers could compensate for each other’s shortcomings. Workers felt they already had ‘good relations’ with the ‘customers’, although the very term customer was seldom used, and with good relations already existing, the prescribed commercial skills were met with suspicion. The question arose as to whether this was a cover up for turning established professional relations into profit-driven exchanges. The staff believed that such a development could threaten a long recognized tradition of railway safety. In the new organizations safety had become the responsibility of the individual, empowered railway worker. In the resistance perspective it is pointed out that employees are no longer valued for their technical skills, but for the attitudes and personal characteristics most useful for company profitability (see also Grugulis et al. 2004). The commitment required in the past – to the railway, to citizens, to the good of society – was now replaced by a demand for commitment to the company (Smith and Thompson 1999, 207), to customers, and to making a profit. Summing up, the forms of resistance could be described as rebellious, involving a total rejection of the norms and values promoted by the management, as well

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as the necessity of change implied in the rhetoric. Rules and requirements were loudly ridiculed with irony and cynicism in the interviews. However, all resistance did not take the form of open rebellion. Another strategy was more covert and sophisticated. By contrasting the new managerial rhetoric and its organizational expressions with a serious alternative, the strategy was to sustain and even develop what had historically been of importance to the railway, namely the railway ethos with its focus on collective values, on skills and on safety. Hence, this type of resistance actually uses the weaknesses, ambiguities and inaccuracies in the management rhetoric as a counter weapon. The term railway ethos is here taken to mean the spirit of providing service to the citizens. Knights and Willmott (1999, 94) state that ‘defining reality for others is an exercise of power’. This exercise of power is however not exclusive to management, but as we have seen in this chapter, is also feasible for employees. But, on the other hand, the struggle to create flexible workers, that is, attempts to instil a culture of flexibility, seems to elicit resistance in various forms among workers. Discussion In this chapter I have briefly reported evidence from a workplace undergoing a range of flexibility reforms. These reforms were explicitly concerned with market orientation, increased competition, new flexible structures, and were also concerned with altering the values and attitudes of those involved in delivering public services in attempts to generate responsible co-workers. This struggle for flexibility shows that management is more likely to attain resistance than commitment from workers. This is illustrated in the way workers draw upon and/ or create a culture, the resistance perspective, which is diametrically opposed to the managerial culture or the management perspective. In this sense, culture may be seen as a variable which can be manipulated as previously described in this chapter, but it is important to note that management is not the only agent with the power to manipulate this variable. The central control components of the management perspective are increased competition, competence diffusion expressed in functional flexibility and customer orientation, that is, having a flexible and docile workforce. To achieve these goals workers must develop at least some acceptance of and consent in these ideas; that is, they must to some extent behave, think, and act like managers. In the resistance perspective, the components prove instead to induce mobilization against management, since the components are perceived as reducing the time needed for work and disrupting work locations as well as harming working habits and work relations and decreasing workers’ autonomy. This could also be understood as workers’ attempts to achieve more flexibility, and as the unwillingness of management to be flexible (cf. Karlsson and Eriksson 2000). A recurring theme amongst interviewees across the empirical data was that it is not change itself that organizational members were trying to resist, but the ideas behind it, and what they

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considered as disguised, tightened control. The central components of the resistance perspective are therefore the appropriation of time, work, and identity expressed in counter-discourses, where the strategy was to sustain and even develop what had historically been of importance to the organizations, namely the railway ethos with its focus on, for example, the collective, skills and safety. The term railway ethos is here taken to mean the spirit of providing service to the citizen (see also Pratchett and Wingfield 1996). Findings from the case study confirm the view that contemporary workplace irony and humour may often have a ‘corrosive content’, as they are consistently targeted at the management. However, the use of railway ethos also suggests an alternative to the humorous misbehaviour that has yet to be fully acknowledged. Here, workers consciously built a serious alternative agenda in opposition to management. This type of resistance, like humour and irony, draws upon the weaknesses, ambiguities and inaccuracies of the management rhetoric. But the portrayal of the managerial struggle for flexibility as a serious risk to a range of aspects may not be dismissed as easily as ironic comments. Whether this traditional ethos is a genuine, pre-existent part of railway worker identity, or rather a rhetorical device used against the management, is an interesting, but unanswered question in this study. But as a strategy of resistance its purpose is to demonstrate divergent opinions, help workers to find like-minded colleagues and put the focus in the debate back on ‘track’. In this sense, postulating a railway ethos in the resistance perspective can be understood as a strategy of mobilization for resistance against management. Mobilization can be described in terms of the possibility of defining a shared problem and its consequences, and the possibility of facilitating an identification process based upon those consequences. In this case the overriding, shared problems are manifested in the resistance culture and the consequences are their negative outcome. The identification process is not based upon working class identity, but on being a subordinate in a public sector utility. Hence, this study does not confirm other research which claims that management has gained more opportunity to control and construct workers’ individual identities. As sketched out in an earlier chapter in this book, we may well analyse the present and future nature of workplaces as having reached what Lysgaard (1961) labelled the ‘technical-economic ideal situation’, that is, where the workplace is cleansed of protectionist and subversive collective cultures and identities. However, the present chapter posits that there is something missing in such a dark and pessimistic picture, namely the workers’ collective or individual struggle for autonomy at work. Management’s struggle to attain a flexible and docile culture is as ‘natural’, historical and actual as workers’ struggle to attain flexibility, that is, by resisting becoming flexible, but striving for autonomy at work. The success of either part is not yet assured or lost; instead there is an ongoing struggle over the future of the workplace.

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Chapter 9

The Re-Organization of Manufacturing and the Emergence of a Flexible Economy in the UK Stephen Ackroyd

It is widely held today that there have been considerable changes in organizations, especially the development of new patterns of flexible production, which have been greatly beneficial both economically and socially. It is certainly true that the organization of manufacturing in the UK has become more flexible in recent times; and, in a number of important ways, it is now much more responsive to changing economic conditions than it was in the past. However, in the British case, there is room for considerable doubt whether these changes have been mostly in directions which represent general improvement. Among the most often repeated suggestions, for example, is the idea that the economy as a whole has moved away from a hierarchically organized pattern towards a cooperative one (Child et al. 2005), the basis for which is neither hierarchy nor market, but a network pattern of organization (Castells 1996; Thompson 2004). But there is a major puzzle here. This is that when the changes in the organization of manufacturing that research has revealed are conscientiously assessed, it is difficult to see either the network qualities envisaged or the positive benefits arising from them that theorists are apt to claim. Much more flexibility in production has been contrived in the UK, that is sure; but it has been achieved in particular ways, some of which can be seen as imperilling the long term future of manufacturing. The best that can be said is that manufacturing has been continued on a profitable basis in some areas, but whether this can and will continue is by no means clear. In this chapter, the thesis that change has occurred towards a network pattern of organization will be assessed through a discussion of the manufacturing  Sincere thanks are due Prof. Stephen Procter, my erstwhile research collaborator, for his permission to rework research finding and material that were originally produced by him. Almost equally important was the assistance given by the participants in the first workshop on flexibility, held in Fredrikstad, Norway in Summer 2006. Their comments on my work on the flexibility of organizations in the UK, was sympathetically received but also conscientiously analysed. Special thanks are due in this regard to Prof. Egil J. Skorstad whose scrupulous attention to detail exceeded what can be reasonably expected from a colleague, and led to the avoidance of some error of fact and emphasis. Egil subsequently invited me to be a visiting Professor at Østfold University College in early 2008, so extending to me the opportunity to extend the insights from the original paper prepared for Fredrikstad.

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sector in the UK as it has developed in recent decades. It will be shown, first, that there was a thorough re-organization of factories and plants in the UK, a process which began to gather momentum in the 1980s, and continued into the 1990s. These developments amounted to the realization of a new type of flexible manufacturing capability at plant level, and were associated with the emergence of new patterns of decentred manufacturing involving extended supply chains. In the new manufacturing organization developed in the UK, productive plants were progressively reduced in size, and the batches of products they made were on average smaller. In addition, in place of individualized piecework incentives, new methods of labour utilization and regulation were introduced, featuring team-working and the self-organization of work by teams. Traditionally skilled labour was not entirely dispensed with, but it became very much less central in its contribution to production; and these changes were only possible because of the progressive weakening of organized labour. However, second, reorganization at plant level was associated with broader changes involving the structural reorganization of business groups. Moves towards flexibility at the level of the manufacturing plant were accompanied by the structural reorganization of the large firms that owned them. These changes may also be described as increasing flexibility, but of a very different kind. Here we can see firms and business groups acquiring the flexibility to move into and out of areas of manufacturing activity as they decide. Since British industry was – and is – highly concentrated, meaning that large firms own or control a high proportion of total productive capacity, the actions of such firms to reorganize themselves were widely influential (Hannah 1983; Ackroyd 2002). Thus, it was the combination of two very different but related kinds of reorganization – one at the level of the plant and the other a feature of the business group – that have to be considered together to see what has happened to render British manufacturing more flexible. Indeed, it was the combined effect of these changes that allowed the manufacturing sector  It is sometimes suggested that manufacturing collapsed in the UK in the 1980s (Williams et al. 1990), when it did not. The actual process of decline has been much more extended than such observations suggest, and it is still not entirely clear that Britain is no longer a significant manufacturing nation. The reason that such a position is superficially plausible is because employment in manufacturing in UK fell precipitately from roughly 40 per cent of the employed population in the middle of the 1970s, to less than half that level (about 19 per cent) a decade later (Ackroyd and Whitaker 1989). This drastic reduction of manpower did not have such bad effects as might be assumed. It did not reduce manufacturing output proportionately, for example. This was because the employment shakeout involved large numbers of indirect employees as well as some of those directly involved in production. With the introduction of IT, it was possible to greatly reduce administrative overhead. Another reason was that manufacturers were beginning to outsource non-productive activities, and, as a result of that sort of exercise, labour was not so much lost to industry as reclassified as no longer in the manufacturing sector. Manufacturing employment plateaued in the 1990s, falling precipitately again from around 20 per cent to around 10 per cent of the employed population between 1997 and 2007.

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in Britain to change remarkably quickly, and to move to new a pattern of flexible organization comprising both intra and inter-firm relationships. However, as will be argued in the conclusion to this chapter, it is difficult to see such changes as benefiting all parties and indeed as succeeding because they realize the benefits of the network patterns of organization so prized by analysts. The British economy today is, in some ways, performing well in the new era of globalized relationships, despite the increasing withdrawal of government from involvement in the economy and its relative lack of willingness to mitigate the effects of economic change through welfare policy and spending. Indeed, precisely because the UK government’s laissez-faire policies have not led to obvious disasters, the British case offers itself as a model that is tempting for politicians and business leaders in other societies to adopt and to see no harm in attempting to emulate. On the other hand, as we shall see when we consider the changes to be observed in British manufacturing in detail, flexible manufacturing has been secured on the basis of an increasing intensity of work for many people, the widespread loss of the skilled status of manufacturing workers, not to mention a general decline in job security. There is also a dramatically widening gulf in income and status between the managers and owners of manufacturing firms and those who work in them. Despite this, finally, there is also a lack of commitment on the part of the owners of manufacturing capital to their long-term involvement in the British economy. The emergence of low investment, labour-centred flexible manufacturing in the UK Although there was significant reduction in British manufacturing capacity in the 1980s, and, especially, reduction in the levels of employment in the sector (Ackroyd and Whitaker 1990; Hirst and Zeitlin 1990; Coates 1994), the organizational responses of significant numbers of the remaining British producers were effective enough to ensure the survival of a sizeable domestic manufacturing sector. British manufacturing did not collapse, despite predictions that it might do so at that time (Williams et al. 1990), and large firms continued their high level of ownership of manufacturing companies. As late as 1996, there were more than sixty very large British firms still extensively involved in manufacturing in the UK (Ackroyd and Procter 1998). Despite the involvement of large firms in the sector, however, the development of flexible production in Britain was not led by technological innovation. Most of the research undertaken in the 1980s and 1990s suggests that the levels of investment in new technology were and remained quite low. For example, Northcott and Rogers (1984) found the spread of numerically-controlled and computer-numericallycontrolled machine tools, by that time a proven technology in manufacturing, to be very limited. Such machine tools of this kind they found in less than a quarter of British manufacturing establishments. Technically sophisticated types of flexible

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manufacturing were difficult to find. According to the respected researcher, Bryn Jones (1988), assembly and automated welding robots were found in only 22 per cent of firms. Of the elements of a fully computer-integrated manufacturing (CIM) system, he found computer-aided design (CAD) and computer-aided manufacture (CAM) both to be rare. The most advanced British firms of the period, such as the firms chosen by the Government’s Department of Trade and Industry as ‘demonstration’ firms; that is, firms that supposedly exemplified good practice, were well behind their continental rivals in technical innovation. Only 66 per cent of the demonstration firms had CAD, and only 36 per cent had both CAD and CAM systems. Webster and Williams’s (1993) report on the adoption of computer-aided production management (CAPM) in the United Kingdom, claims that in the places it was adopted it failed to provide the benefits expected from it, and was modified or withdrawn. Indeed, it seems that CIM, in anything approaching its ideal form, could not be found by researchers. In 1985, Ingersoll Engineers simply gave up in their attempt to study the diffusion of CIM, though some examples of companies which aspired to it did exist. (Jones 1988, 1989; Rowlinson et al. 1994). Technically much simpler manufacturing systems were adopted by British firms instead. More often than not, the solutions devised to meet the challenge of competition made the reconfiguration of old technology, and the intensified use of labour, central. Thus, the methods actually adopted were at the other end of the scale to CIM in terms of their technical sophistication. In particular, cellular manufacture, sometimes called ‘cell technology’, was a widely adopted form of organization at plant level. By contrast to CIM, cellular manufacture involves nothing more than the re-grouping of existing machine tools and/or other equipment into ‘cells’, each of which is a small group of related machines and activities formed for the purpose of producing related ‘families’ of products or subassemblies to be manufactured in relatively small batches (Alford 1994; Procter et al. 1995). It is true that, with the introduction of cellular manufacture, existing capital might be supplemented by limited investment in new machine tools – even extending to the use of small numbers of CNC machines. In this way, investment in new technology – carefully placed in particular locations – accompanied the introduction of new manufacturing practice. In 1990 the Ingersoll Engineers consultancy surveyed engineering companies with turnovers in excess of £10M (Ingersoll Engineers 1990) and found a ‘quiet revolution’, in which 51 per cent of their sample had introduced some form of cellular manufacturing in the previous few years. This finding was supported by Oliver and Wilkinson (1992), whose 1991 survey of the extent of the adoption of new manufacturing practices in this country showed that 50 per cent of their sample of large companies was using cellular manufacturing, nearly all of them having started doing so since 1983. By 1993, Ingersoll found that the proportion of engineering companies using cellular manufacturing had increased to 73 per cent (Ingersoll Engineers 1994). Cellular manufacturing and related techniques appealed to management for various reasons, not least of which was that they were economical and their cost could be accurately monitored. Cellular manufacturing allowed the introduction

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and use of company-wide stock inventory and cost analysis. As it was used in many firms, cellular manufacture involved a de-centred pattern of organization identifying cells as cost centres. It is fairly obvious that this would work with the kinds of small batch production of components already described. However, a version of the system was in fact applied to all areas of productive activity – including any complex manufacturing processes a firm undertook (Alford 1994). Integrated manufacturing processes involving the completion of numerous operations in sequence, were notionally divided up into different elements, each one becoming a separate cell to which labour was allocated and for which costs were calculated. For example, for production activities using flow lines, the application of cellular manufacture involved the line as a whole being analysed into discrete sections, to each of which labour was allocated. Each resultant ‘cell’ was then treated on a modular basis and supervised as a team. Costs of production were attributed to each cell. In this way, technically quite complex production processes were operated and managed using cellular manufacturing. The point to underscore here is that, even large companies undertaking manufacturing, were using a cost-limitation approach to their activities. Their aim was to be able to calculate very precisely the costs of continuing in production, and in particular to develop ways of pinpointing potential problem areas where the costs of production were excessive. They were not seeking a high-technology and/or high investment solution to increased competition in manufacturing. Their willingness to invest in new areas of activity was restricted, and their willingness to continue was always contingent on the strict assessment of costs. But perhaps the key point to note about the new ways of organizing production was the place now allocated to labour. Cellular manufacture and related procedures involved some new ways of utilising people. Labour was allocated to cells as teams, in which skilled and unskilled workers were included. Teams were expected to be flexible in the allocation of tasks to group members, and to be, to a considerable extent, self-organizing. Skilled workers in cells were not, therefore, expected to concentrate on their traditional activities or to exercise job-demarcation. On the contrary, if skilled workers were included in teams, they were expected to pass on elements of their skill to other members, so that all team members would acquire the capacity to do all the tasks in their area of work. Labour was therefore required to act in ways quite different from traditional expectations, which involved strict demarcation between the work of skilled and unskilled operatives. The extent and significance of the changes in the utilization of labour only gradually became apparent, however. Many commentators assumed at the time, wrongly as it has turned out, that the development of manufacturing would involve traditional skill demarcations being broken down in order to produce a worker with generally higher levels of skill, combining the skills formerly the preserve of different skilled groups. This was certainly an assumption built into the influential model of the flexible firm put forward by Atkinson and others in the mid-1980s (Atkinson 1984; Atkinson and Meager 1986; NEDO 1986). The Atkinson model, of course, involved the idea

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that firms would require numbers of very highly skilled ‘polyvalent’ employees as central to a firm’s activities. However, the research investigating the extent to which Atkinson’s propositions were being realized, showed that labour utilization in firms was not, actually, occurring as the model envisaged. For Atkinson, flexibility was to be provided by labour, but was to be contributed in two very different ways by two very distinct kinds of employee. A central proposition of the model was the division of a firm’s workforce between a ‘core’ of highly skilled employees and the ‘periphery’ of much less skilled workers in less continuous and secure employment. Core workers were supposedly multi-skilled and would display high task adaptability, capacities referred to as contributing ‘functional flexibility’. The peripheral workers by contrast, had fewer skills but contributed to the flexibility of the firm by being pulled into or pushed out of employment as demand for products fluctuated. While Atkinson’s work helpfully draws attention to the importance of labour in securing flexibility, which was and is true for many British firms, it is also clear, from research undertaken at the time, that basic features of the Atkinson model were not in evidence. It was particularly difficult to find the highly skilled, ‘polyvalent’ employees envisaged by the model. Also, little was found to support the idea that increased output would be met by drawing in unskilled labour from the labour market. Both propositions follow from an unexamined assumption of the Atkinson model, that firms actually had an essential core of activities which would require to be built up or scaled down according to the sales of their products. On the contrary, because they increasingly earned their profit from participating in supply chains to which they contributed production of components and sub-assemblies in small batches, manufacturing firms were not any longer centrally concerned with their own final products. They were, instead, contractually bound to deliver particular amounts of products at given intervals and because of this, the scale of their activities was unlikely to change very dramatically as the Atkinson model envisaged. On the other hand, with the use of cellular manufacturing, if it was required, the activities of any firm could be increased in number and variety relatively easily without the use of much skilled labour, simply by adding new cells. With cellular manufacture, the extent of a firm’s involvement in any activity is likely to be relatively small-scale and a matter for continuous appraisal – through the calculation of costs and the use of ‘make or buy’ studies. In such circumstances, functional and numerical flexibility are combined, in that all workers are required to be functionally adaptable by moving between positions in their activity cells, and, if necessary, by moving between cells. Production itself is flexible because activities will be added to or discontinued – and cells created or disbanded – as business conditions change. In such an arrangement – and directly contrary to the assumptions of Atkinson – there are no longer privileged or protected positions. If what they produce ceases to be sold at a profit, any cell and any group of employees may become redundant. Alternatively, if new profitable activities are found, they will be undertaken. New cells will be devised to make the products concerned,

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and an appropriate mix of labour will be recruited in order to produce the new component or assembly. Thus, the distinction between functional and numerical flexibility made by Atkinson was wide of the mark. Traditional skills were being diluted and, increasingly, all labour was being treated as numerically flexible. Any idea that there was significant skill enhancement amongst retained manufacturing employees was not substantiated by research into labour utilization. Hunter et al. (1993) concluded that there was little evidence of employers using horizontal segmentation by levels of skill. The evidence pointed consistently in the opposite direction – to the widespread breaking down of traditional skill demarcations, and to the decline in status of skilled labour. Around half of the manufacturing firms in the 1988 ACAS labour flexibility survey reported relaxed demarcations between direct and indirect workers in production. Sisson (1989) argued that task flexibility has featured strongly in workplace change. He suggested that a wide range of initiatives have been consistently reported: the combination of jobs formerly securely demarcated, the systematic elimination of differences within crafts, the introduction of team working involving inter-changeability within jobs, and so on. Employers bargained for changes in working practices throughout the 1980s (Ingram 1991), a tendency that was conceded to consistently by trade unions and traditional job control was bargained away in the process. In addition, there has been continued decline in traditional ways of recruiting and training skilled workers (Gospel 1995). Evidently, the relaxation of traditional job demarcations has been used to introduce functional flexibility which allows the employment of semi-skilled or unskilled labour. What evidence there was of new forms of training, points towards the use of cut-down, ‘on the job’, companybased, skill appraisal and training schemes (Poole and Jenkins 1997). These have the effect of making labour more useful to employers without enhancing the market value of their skills or contributing to trade union power. There are many indications that contemporary factory regimes do not involve the simple continuation of features of managerial control that have been important traditionally; but, at the same time, there is actually little to support the idea of the introduction of radically new practices. The 1980s seem to have been a turning point here. During that decade the continued decline of payment by results and the rise of group incentive payments, indicated only the removal of complete reliance by management on the close supervision of individual work activity. Because of their familiarity with work study methods, managers knew well what level of output to expect from a given group of workers and type of machinery, and they used this knowledge as a basis for assessing the expected output of work from given groups of employees when cellular manufacture was introduced. However, cellular manufacture and kindred systems lend themselves to group incentives and, within certain limits, to allowing employees to organize their own work. Managers now have the option to raise output by manipulating group incentives to the extent of enlisting the participation of the members of workgroups in designing their own work tasks. This new emphasis seems to have taken hold in the majority of workplaces by the middle of the 1990s. Poole and Jenkins’s (1997) survey,

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for example, records that more than 80 per cent of manufacturing managers in their sample reported at least some involvement of employees in their own job design activities, whilst 75 per cent, 70 per cent, and 59 per cent had at least some involvement in their own work scheduling, inventory control and budgeting respectively. This sort of evidence not only suggests movement between tasks within workgroups but also a broadening of roles and responsibilities. Widespread evidence for the inclusion of responsibility for quality in job specifications also points in a similar direction. However, the breakdown of traditional skill demarcations suggests that this is not the re-emergence of responsible autonomy – at least in its original conception (Friedman 1977). Thus, for the British flexible firm, flexibility in output is secured not through high levels of investment in flexible manufacturing systems, nor through superior technical integration of production, nor yet through the acquisition of a highly trained labour force. The core of the arrangement for retained production is the re-configuration of standard technology and its use by teams of self-regulating (and, usually, formally unskilled) workers. Flexible output is achieved in part by the reconfiguration of machinery, but more significantly by heavy dependency on the flexible use of labour. In an earlier paper (Procter and Ackroyd 2001), the distinction was made between ‘technologically-centred’ and ‘labour-centred’ production systems, suggesting that the British system of manufacture has mostly relied on flexibility arising from the use of labour rather than technology. As we have seen, work teams are given the opportunity to organize their own activities – within clear limits – and with the knowledge of basic benchmarks for output. In addition, each of the work groups or cells is periodically assessed in terms of its costs and benefits, and this feature shapes most aspects of management organization and activity. The threat of employment being terminated – if the required level and quality of production is not maintained – is often an explicit aspect of workplace discipline. Thus, the willingness to envisage other sources of supply through outsourcing, and indeed, to envisage rolling up the whole of a firm’s manufacturing activity if it should become unprofitable, is an integral part of the managerial outlook at the strategic level, as we shall see. This is well understood at local level too, and if calculations of costs arising from ‘make or buy’ studies suggest that it would be more economical to outsource them, then it is done. The segmented character of the organization for production connects the technical, labour-use and managerial aspects in this form of manufacturing. The changes in emphasis in the utilization of labour have to be seen in conjunction with broader changes in management and organization which will now be considered. As has been said, cellular manufacture is linked with accounting controls of costs, and the capacity to monitor costs on an ongoing basis. The system recommends itself because of the ease with which calculations of marginal costs and benefits can be made (Ezzamel and Willmott 1996) and the consideration of these is a crucial aspect of overall managerial policy. The capacity to monitor costs has become progressively more rather than less important over time, especially to those firms that are part of large business groups. As we have seen, involvement

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for large firms in manufacturing continued until the end of the last century as a significant area of business. However, what they were doing can be traced through different phases and these are given consideration in the following sections of this chapter. It will be argued that the ownership of many manufacturing firms by large businesses allowed the flexible organization at the level of the firm that has been discussed here to be augmented by what we shall now identify as the structural flexibility of business groups. As we shall see, the policies of the large firms also made a significant contribution to the overall pattern of flexibility found in British manufacturing. The local managements of the numerous firms owned by large businesses, had available to them information systems concerned with production scheduling, inventory monitoring and cost-allocation through which the performance of their units would be monitored and assessed at head office. Large firms took an active interest in the data available to them about the performance of the businesses they owned, and bought and sold them, according to their estimates of their continued contribution to group profits. Thus, managers were able to both adapt their capacity to produce goods of different kinds at local level and to augment this capacity for flexible production with structural flexibility at the level of the business group. British firms, in fact, pioneered a system of organizational mobility later labelled ‘agile production’. The contribution of this, which we identify as the structural flexibility of business groups, is an important feature of the flexible production system developed in the UK. The structural flexibility of business groups It is not unusual to consider manufacturing firms as independent units, as has been done in much of the discussion in this chapter so far. In organization studies and economics alike, firms are often thought of as being independent economic actors, simply responding to their market situation or their unique context more generally conceived. However, firms that are subsidiaries will be profoundly affected by the policies and outlook of the company that owns them. Indeed, the outlook and desires of an owning group may be more important for a subsidiary than the market conditions they face. Recognition of this is germane because it was and is usual for British manufacturing firms to be owned by a larger firm or business group. Indeed, in the second half of the last century, a higher and higher proportion of British manufacturing capacity came into the hands of a relatively small number of large companies. The economist’s term for this is industrial concentration. The acquisition and merger of manufacturing firms accelerated in the decades following the Second World War. The annual number of firms disappearing because of takeover and merger, for example, was more than 500 in most years between 1961 and 1975 (Hannah 1983). As a result, by the late 1970s, Britain exhibited the highest industrial concentration of any economically advanced country, more so indeed than the US, and any of the other major European economies (Chandler

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and Deams 1980). According to Hannah (1976, 216), the share of net output produced by the 200 largest British firms rose to more than 40 per cent by the end of the 1960s. Williams et al. (1983, 32) suggest that the percentage was even higher in the 1970s, with around 50 per cent of UK manufacturing output and employment being contributed by the 100 largest companies alone. The available evidence suggests that these trends continued into the nineties, deepening rather than weakening (Ames and Gourlay 1999). By the last decade of the twentieth century, there were few entirely independent manufacturing firms of any size. Predatory reorganization – The invention of structural flexibility The increase in industrial concentration levelled off in the 1980s, however. During that decade, divestment activity also became prevalent (Shutt and Whittington 1984, 16; Wright et al. 1989, 116; Chandler 1990). One important reason for this was that the companies that owned large numbers of manufacturing firms in the early post-war period were not very efficient or well-organized, and they were themselves becoming takeover targets. They were being acquired and reorganized. Many of the large manufacturing groups that were now targeted had remained profitable because they had been without significant domestic competitors and dominated the markets they served. Also prevalent were companies that were in fact loose federations of formerly competing companies. Many of these had constituted themselves as legal cartels using a holding company, which, needless to say, typically exercised little control over its subsidiaries. By the 1980s, groups such as these were ripe for rationalization, and this was undertaken by conglomerates and other large firms which took a predatory stance towards them. Conglomerates such as the Hanson Trust, Williams Holdings and F.H. Tomkins, which were very active in the eighties and early nineties, bought up relatively unprofitable medium-sized and large British manufacturing groups amongst other types of firm. As with all the businesses they acquired, the new owners extensively rationalized their new holdings after acquisition. Some unprofitable activities they simply closed down and stripped out for their asset value. Other businesses that were not very profitable they reorganized and sold on as going concerns, often to other large companies. Predatory large firms typically retained a residue of profitable firms as owned subsidiaries of their businesses. Such exercises were usually highly rewarding in themselves for the acquiring companies. It was often possible for corporate predators such as the Hanson Trust – simply by stripping out and selling on some of the businesses in an acquired group – to realize more than the sum paid for the entire acquisition (Diggle 1990). Despite the image of this era as one of rampant profit-orientated capitalism, however, only a few of the large businesses acquiring British manufacturing groups were entirely uninterested in manufacturing as an activity. Many acquiring firms already had a substantial number of subsidiaries in related areas to the companies they bought. Business groups such as Williams Holdings and BTR, although undertaking a lot of takeovers, were substantial manufacturing groups themselves;

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and saw what they were doing as building large manufacturing businesses. Of course there were predatory conglomerates whose interest in manufacture was less obvious. Lord White, joint managing director of The Hanson Trust with Hanson, was, like him, an accountant by background; and he used to evaluate takeover targets on the basis of their balance sheets alone. He boasted that he never went to many of the companies that he bought (Cowe 1993, 297), and clearly had little interest in what (or indeed whether) they produced any products, so long as they met his criteria as potential acquisitions. The Hanson Trust was a true conglomerate, and retained within its portfolio a diverse range of businesses until it was voluntarily disaggregated into three more focussed businesses in 1996. Subsidiaries in the Hanson Trust manufactured items as different as bricks, cigarettes and paper flowers. This is not to mention other subsidiaries as diverse in activities as mining and electricity generation. By contrast with this, most other firms taking over and rationalising ailing British manufacturing groups were committed to the idea that they could make the firms they acquired efficient manufacturers by doing so; above all, by putting superior management into them. A firm like BTR (formerly British Tyre and Rubber) became a massive diversified engineering group by the 1980s, owning several hundred other companies, and it continued in this form until it merged with another engineering group, Siebe, in 1999. Firms like BTR and even very orthodox large engineering businesses such as GEC, were not averse to taking over other businesses in order to turn a quick profit. But they also thought they were modernising and rationalising the operation of the firms they acquired. What such large firms were doing in taking over and reorganizing manufacturing firms was something quite specific: the modernization referred to, meant some things and not others. Essentially, it meant making subsidiaries capable of two things: first, to be independent of the owning organization; and second, to be able to return to the centre a certain level profit from their activities. The stripping out of the administrative side of these industrial organizations reduced overheads dramatically, and it was accompanied by the stipulation that companies utilized standard IT packages featuring strict procedures of cost allocation which allowed close and continuous assessment of their performance. Insistence on limiting any drain on capital and ensuring a continuous contribution to group profits, were, of course, particular emphases. They do not fit comfortably with the idea that British companies were trying to secure organic growth by high investment and by nurturing nascent technologies. It is also clear that such policies do not square with the proposition that British manufacturing companies were trying to copy the structures and strategies of the multi-divisional organization, or ‘M’ form of company (Chandler 1962, 1977; Whittington and Meyer 2002). In the ‘M’ form company, the basic structure was that a firm had several major divisions which segmented its chosen market, each with a substantial management hierarchy of its own, whilst the well-staffed head office directed the overall activities of the divisions. Indeed, an important rationale for the development of the ‘M’ form was supposedly that it comprised a relatively large but highly effective

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managerial echelon. By contrast with this, the British firms considered here, though large in aggregate, had small management hierarchies at both the centre and the locality. Their development coincided with a long-term decline in the size of the manufacturing plants. UK Government figures suggest that the size of manufacturing establishments fell steadily over the thirty years from 1970 until the end of the century. The policies pursued by many of these companies suggest an important reason why this occurred. By contrast with the ‘M’ form company’s divisions, British subsidiaries were not only small but also were given operating autonomy. The fashion for focus – Structural flexibility Mk II The slash and burn policies of the conglomerates could not continue indefinitely and, by the mid-1990s, their effectiveness in profit-taking from breaking up business groups had come to an end and their influence declined. In their place, a new type of strategy for the leading large firms in manufacture emerged. By one route or another, in the longer term, the conglomerates converted themselves into versions of a new dominant type of firm. This new type of firm was much more focussed on what corporate executives considered to be the firm’s core business. In the nineties, partly in reaction to the excesses of the conglomerates, the doctrine emerged that firms should focus on those activities in which they had well-established competences – and hopefully also a dominant market position from which to earn high profits. However, reaction to conglomerate policies was not the only reason for the ‘fashion for focus’ as it was called, and some of the characteristic attitudes and practices of the conglomerates continued. Focussing a firm on its core business dictated that companies first had to decide what their core activity actually was, and then, second, to reduce drastically the scope of what they undertook to that activity alone. This gives the clue to another important reason for focussing, which was the increasing influence of activist investors and private equity funds on the policies adopted within companies (O’Sullivan 2000; Lazonick and O’Sullivan 2000; Lazonick 2005). Among other things, stripping out non-core activities from firms realized value to be used in special dividend payments and share buybacks and other practices aimed to satisfy such investors or defend a company against their intentions. Thus, although British firms progressively focussed on the activities they selected as their core business, which often did include extensive manufacturing operations, the preference for profit continued and, hence, their posture towards their manufacturing subsidiaries did not change substantially. Large firms would continue to regard what they did in manufacturing primarily as a source of profit, and they were willing to move out of areas of manufacture where they could not see the possibility of good profits, and to move into areas where the opposite was true. It has been noted already that the size of manufacturing units was in decline in the UK. The willingness to buy and sell companies was helped by the fact that manufacturing units were, by this point in time, quite small,

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and not so difficult and costly to buy or sell as they once were. Indeed, by this time too, very large firms were made up, as they are now, of a very large number of quasi-independent subsidiaries – it can be several hundred – loosely coordinated from the centre. Indeed, unsurprisingly, this compelling structural feature of the new type of firm has been used to identify it. The name given to similar firms that appeared in the US in the 1990s, for example, was the multi-subsidiary firm or MSF (Prechel 1997; Zey and Swenson 1999). In earlier publications discussing the type of firm that arose in Britain at about the same time, the present author has used the label the capital extensive firm or CEF (Ackroyd 2002, 2006). This label draws attention to the way the capital owned by the firm is spread out in a very large number of subsidiaries and affiliates. Like the conglomerate, the CEF spreads out what capital it has between many sites and locations and so puts little capital at risk in any one place. Such an organizational design is consistent with the idea that the organization is relatively focussed, because it owns only subsidiaries in the same or similar production areas of business. However, it is also a feature of this organizational design that the business group has considerable structural flexibility. This is because corporate executives are both willing and able to sell subsidiaries (and to buy them) in pursuit of greater profitability. However, in pursuing this sort of policy, the managements of many firms were not so passive as those of conglomerates had been. They would be marginally more willing to support capital investment for example. If they noted a profitable line of production in one of their subsidiaries, they could well be willing to encourage the transplantation of that activity to other places, such as another mature market, and invest in that activity. Thus, in much the same way as the conglomerates were, many British CEF’s were able and willing to shift their assets about. They are willing to sell subsidiaries if they do not contribute to profitability, and indeed to withdraw from a whole area of activity if they did not consider there was a sufficiently profitable future. Similarly, if firms could see ways of economically entering new and potentially profitable areas, they will readily buy their way in by acquiring subsidiary companies already in that line of work. They would do this much more willingly than to set up a new business and to make the requisite investment for themselves. Thus, a corporate policy lying behind the extension of considerable operating autonomy to manufacturing firms owned by these business groups, involved an implicit threat of the business being sold off if they did not come up to expectation. Although the CEF, unlike the conglomerate, is focussed on a given area of activity, this definitely does not mean that its strategic managers would be committed to that type of business come what may. In a way that is comparable with the outlook of the conglomerates, there was a vigilant concern for profitability. There were (and are) some important differences of emphasis in this respect, of course, amongst different companies. Some large engineering firms such as Rolls Royce, GKN and Smiths Industries were willing to invest quite heavily to remain competitive in the areas of manufacturing in which they were engaged. However, Rolls Royce and B.Ae. stand out as the only examples of British companies willing

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to undertake the manufacture of large, complex, high-technology products (in the shape of aero engines and planes respectively) in their entirety. However, respect for their commitment must be qualified by the fact that they are protected by the British Government’s retention of what are called ‘golden shares’ which prevent these companies from being sold. The consequent invulnerability to takeover was clearly a very important factor in their willingness to make long-term investment decisions. By contrast, GKN, which does not have state protection, withdrew from the manufacture of helicopters with the takeover of Westland by Agusta in 2000. The commitment to continuing to manufacture any type of goods is a policy constantly under review by many companies. One of the many possible illustrations of this is the sale by Smiths Industries of all it defence-related businesses to General Dynamics of the US in early 2007. By contrast with Rolls and B.Ae., then, many large British companies have behaved with much less commitment to continue with the manufacture of any given type of goods, and have acted much more like conglomerates in their willingness to buy and sell subsidiary companies. In the long term, however, the main effects of this type of structural flexibility, has been the staged withdrawal from significant manufacturing by many British companies. This can be seen as a consequence of the consistent policy of strategic managers towards their subsidiaries, that they should not be a drain on an owning group’s capital, but, instead, regularly contribute to the profitability of the parent. In this, the attitude of the strategic managers of CEF’s towards their manufacturing subsidiaries was very similar to that of the conglomerates. These managers too tended to insist that existing capital should be used as effectively and for as long as possible, with only a minimum of new investment, and crucially, to utilize labour as a means of improving productivity as well. In this way, as was by now habitual, a greater flexibility in both the variety and amount of production was obtained at very little additional capital cost. Fairly clearly, however, this sort of emphasis in policy was unlikely to ensure the long-term competitiveness of the manufacturing activities of major companies. To the extent that remaining competitiveness depended on high levels of investment, British firms were ill-equipped to compete. Indeed the strategy of such groups was to move out of areas of manufacturing if they could not be pursued profitably, rather than invest heavily to keep up with the competition. The willingness to change activities and to move capacity was an important element of flexibility contributed by corporate groups. However, this, combined with a chronic unwillingness to invest at the requisite levels to ensure British companies could compete, ensured their progressive withdrawal from many areas of manufacturing. Since the mid1990s, in the process of the continuous buying and selling of companies, it now seems clear that there has been a steady withdrawal of large British Companies from many areas of manufacturing since the 1990s.

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Recapitulation There are some superficial similarities between the flexible manufacturing system that emerged in Britain in the last decades of 20th century and the one on which the country’s initial prosperity was based. One is that there has been a significant reduction of direct control and the use of piecework in factories. The workgroups that feature in cellular production are, to a considerable degree, self-organizing. They typically share tasks and skills. Each cell can itself be switched to produce a variety of related components or sub-assemblies, all of which are features of early workshop production. The downside of this is that the traditional way of training and recruiting skilled labour is no longer utilized and the traditional demarcations between different types of skilled worker, which kept the wages of skilled workers relatively high, have gone. Thus the traditional hold of trade unions over some aspects of the labour supply was broken as an accompaniment to the development of these new flexible arrangements. Whilst the skills required to perform well in self-organized cells, are sometimes extensive, the bearers of them do not have qualifications to prove their competence and so cannot move their skills from job to job and their work does not command premium wages. At the same time, disciplinary pressure is applied to such jobs by the ever-present threat that the employment itself may be terminated if work-performance does not come up to expectation. Another point of continuity is that there are now, as there were in the early nineteenth century, numbers of relatively small manufacturing units working in conjunction with others to produce a variety of goods. However, today, the small units of production in manufacturing are not densely interconnected with similar units in the same localities, but dispersed in supply chains which extend across the world. Today, in short, there is little approximation to the industrial districts identified in Britain in the nineteenth century by Alfred Marshall (1890) and which clearly also inspired the US analysts Piore and Sabel (1984). The ‘flexible specialization’ idea of these authors is recognizably, of course, a reworking of the Marshallian concept of the industrial district. But little or nothing approximating this has emerged in the UK. In the UK at least, industrial districts have not become the dominant force in contemporary manufacture that Piore and Sabel suggested they might. Far from large firms fading in importance, the way of manufacturing goods that emerged in the UK in the last twenty years, was largely developed under the auspices of some new kinds of large firm. This is hardly surprising given the importance of large firms in the past. However, to understand the extent of the likely continued commitment of large firms, it is necessary to understand them historically. In Britain, as is well-known, there was only a slow and incomplete realization of the system of mass production that is now almost universally known as Fordism in the early 20th century. British manufacturing firms did come under the ownership of large firms, but these firms were themselves anything but unified, and they were also unwilling to invest on the scale that would have been necessary

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to produce the large, integrated and centralized manufacturing pioneered by Ford in the United States. Nor did the successor to the centralized Fordist company, the so-called multi-divisional or ‘M’ form company, develop in the UK to the same extent as it did in the US. Instead, as has been argued here, the development and rationalization of manufacturing capacity in the UK occurred in three phases. First, there was the early phase (1930–1980) in which manufacturing firms were acquired by the relatively few large, but poorly-organized firms already discussed. In the second phase, which lasted from 1975 or so until 1995, and which was described in some detail in the present chapter, there was considerable stripping out of the assets of underperforming large organizations, the rationalization of individual productive units and their re-allocation amongst other large firms. In this process, conglomerates, and many other large firms which copied their methods, were active. Thirdly and finally, there was the emergence of the capital extensive firm, in the period 1990 to date. The cellular pattern of organization for productive units, discussed in earlier sections of this chapter, was particularly utilized in this third phase of corporate restructuring, under the auspices of the capital extensive firm. Thus, in the British case, large owning firms have presided over a reorganization of manufacturing units that have taken a distinctive, relatively low technology and undercapitalized route to their present form. Although large firms have not followed a high investment route which would have been necessary for the longterm survival of manufacturing, the response to the problem of manufacturing that it did allow the survival of this sector for a fairly long time. In the period in which the capital extensive firm became dominant, that is, 1985–1995, the proportion of the working population of Britain in manufacturing employment stabilized at around 20 per cent. Only in the last ten years has it plunged further to around 10 per cent. Hence the strategic objectives of corporate managers, their willingness to adjust the size and the composition of their business group by buying and selling constituent businesses, was their dominant concern, and there was clearly little long-term commitment to manufacturing as such. This is indicated by the readiness of corporate managers to move business abroad, to seek out and to find cheaper sources of components in overseas companies (that is to off-shore supply), and, when required to simply terminate domestic production reducing the size of the domestic workforce accordingly. Conclusion: Where is the network? The proposition that there are special benefits flowing from the acquisition of network structures is the key idea informing much theorization of contemporary change (Castells 1996; Thompson 2004). Organizations and their inter-connections today are often held to be networks and they are, as a result, supposed to be more effective than either markets on the one hand or hierarchies on the other. Such networks are said, amongst other things, to involve more efficient communication,

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and to feature greater reciprocity and trust (Adler 2001). Networks also supposedly make it possible for alternative flows of goods and services to appear should existing ones prove inefficient or fail. The acquisition of such benefits is desirable, but to what extent are they actually realized in the arrangements so far revealed as characteristic of flexible manufacturing in Britain? The question of whether a given set of relationships exhibits network properties is not wholly, or even mainly, a matter of qualitative judgement. In graph theory, any set of relationships can be resolved into its elements – as having a number of positions (or points) and ties (or connections) between them; and the proportion of these that exist by comparison with the connections that are logically possible (the network density) may be calculated. Considered thus, any set of economic relationships is a network. A market is a network because it is a set of relationships between identifiable parties involved in the sale of goods and services. Similarly, a bureaucracy or any other kind of formal organization, can be considered as a set of positions and ties, and so is also a particular form of network. But, obviously, markets and hierarchies specifically do not have the particular network properties that theorists see as having high value and contributing the kinds of benefits attributed to the network forms they prize. Indeed, markets and hierarchies serve as benchmarks to define structures that specifically do not have significant network properties. Considered in this way, networks have significant network properties only when they reach a certain level of density and quality of interconnected positions. If we can say that both markets and hierarchies are not networks (or, more accurately, have a low score in terms of their network density) we have some benchmarks by which to compare the structures we have so far considered as having emerged in the UK in recent decades. Markets do not have dense or high-quality interconnections – and so lack network properties – because they involve shortlived relations, are typically non-recurrent and lack social meaning. Even when a consumer repeatedly returns to the same supplier, the attachments between buyer and supplier are brief and tend to lack social meaning. Similarly, bureaucracies and other traditional hierarchies may have large numbers of positions in them, but the numbers of connections between them are deliberately restricted to a specific subset of what is possible. Only vertical relationships between managers and particular sets of subordinates are featured. More specifically, both markets and hierarchies lack lateral connections (in markets between buyers) and in hierarchies (between employees on the same level in different departments). Considered in terms of these reference points, of all the developments discussed in the foregoing account of flexible manufacturing in the UK, the arrangements now made for team-working in cellular manufacturing obviously involves increases in the recurrent connections between members. However, all that is being suggested by this model is that employees within work teams are expected to be marginally more interactive than was so in orthodox types of organization for manufacture, in which contact, discussion and self-organization was rigorously discouraged. The model does not specify that the density of relationships should be generally

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increased beyond certain kinds of contact within production teams, however. Cell workers are not encouraged to interact with workers in other cells and indeed, little other than their relationships with their own team members are expected to change. As in most firms the hierarchy remains more or less intact, with relationships of authority exclusively reserved to management. The structure does not envisage participatory decision-making on anything except narrow operational issues. Elsewhere – and especially regarding inter-organizational linkages – the properties usually listed as the attributes of networks seem to be absent from the structures now found in British manufacturing. Many if not most significant remaining British manufacturing firms today are, as has been argued, owned and controlled by large business groups, and for many of them, their long-term survival is clearly in doubt. There is, in fact, very little reason to believe that these particular firms have survived because they are incorporated into network forms of organization. There do not seem to be dense interconnections between firms, nor do the connections between them allow flows of goods and services to take alternative routes. One obvious point to make here is that small firms are usually not able to enter into relationships with trading partners as and when they choose. On the contrary, what they do is largely controlled by the policies and priorities of their owners. Owning businesses, of course, actively attempt to coordinate economic activity in the industrial sectors in which they are engaged. So far as these large firms are concerned, they would prefer, if possible, not to be subject to market relationships as the mechanism for the coordination of economic exchanges. They aim not simply to participate in economic activity, but to involve themselves in economic relationships on favourable terms to themselves. To do this such firms utilize various expedients. They are usually intent on occupying key positions in supply chains, for example, such as the supply of indispensible high-value added components, and in developing favourable medium-term trading contracts. Contracts, of course, suspend market relations for their duration and are often not equally beneficial to all parties. Thus, despite the rhetorical appeal to the importance of market relationships and the emphasis on the importance of competition which pervades public discourse today, in some obvious ways, market relations are receding in favour of medium-term relationships based on asymmetrical contracts. Because they are unequal, such relationships represent the extension of hierarchy. Thus, it is not an exaggeration to say that, by pursuing the policies they do, large firms seek to extend hierarchy beyond their own organizational boundary to their own advantage. Hence what is in evidence is not a movement from hierarchy to market so much as the emergence of characteristic new forms of governance in which large firms extend their influence over wide areas of economic activity. The new kinds of inter-organizational relationships described in the body of this chapter do involve a higher level of articulation between business units than was expected or required in the past. Such linkages between businesses are robust, contractually-based connections, that allow only for some very limited variation in the terms of exchange between them. They involve a flow of goods/services

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in one direction and recompense in the other. Thus, considered analytically, the relationships here are specifically not densely interconnected, and in fact resolve into a series of linear linkages, such as the links in a chain. Rather than there being multiple links between organizations, in which there is relative equality between them; actually, in the organizational structures now adopted by business groups, the connections remain quite few and not only have directionality, they are directed. Here again also, there is an almost complete absence of lateral connections. The point about the new economic structures is precisely that they are flexible, that is, capable of some movement and not capable of unlimited adaptation. Despite the popular belief that economic relations today are net-like and, in virtue of this, unlike anything seen before, when they are closely examined, as has been undertaken here, no very great differences are actually found between the new arrangements and the old. It is certainly the case here that there is a relative absence of multiple links between firms, and the possibility of the flow of goods and services taking new routes may be easily exaggerated. Thus, it is specifically not claimed here, as is sometimes done, that the changes seen in the economy are such that a new kind of analysis is required to clarify them. On the contrary, it seems much more accurate and helpful to say that the new configuration of relationships found in UK manufacture is a different combination of market and hierarchy than has been commonly seen before; that is all. In this consideration of the manufacturing sector in the UK it has been shown that both markets and hierarchies continue, but their spheres of operation are no longer so separate as they once were. In some ways markets are the most obvious structures. Ideologists and apologists of capitalism certainly emphasize their importance. On the other hand, as has been argued, hierarchies continue to exist also. As we have seen, however, hierarchy is now routinely extended by large firms outside their organizational boundaries and so hierarchical principles are more important than they once were as supplementary means of economic coordination. Bibliography Ackroyd, S. (2002), The Organization of Business (Oxford: Oxford University Press). —— (2006), ‘The Large Corporation and the Emergence of Flexible Economic Systems: Some Recent Developments in the UK’, in B. Furaker et al. (eds) Flexibity and Stabilty in Working Life, 83–102 (London: Palgrave). Ackroyd, S. and Procter, S. (1998), ‘British Manufacturing Organization and Workplace Industrial Relations: Some Attributes of the New Flexible Firm’, British Journal of Industrial Relations 36:2, 163–83. —— (2001), ‘Analysing Advanced Manufacturing Technology: Labour Centred and Technology-Centred Manufacturing’, International Journal of Technology Management vol. 11 no. 4/5, 366–80.

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Ackroyd, S. and Whitaker, A. (1990), ‘Manufacturing Decline and the Organisation of Manufacture in Britain’, in P. Stewart, P. Crowther and P. Garrahan (eds) Restructuring for Economic Flexibility, 9–32 (Aldershot: Avebury). Adler, P.S. (2001), ‘Markets, Hierarchy and Trust: The Knowledge Economy and the Future of Capitalism’, Organization Science March–April 21, 4–34. Alford, H. (1994), ‘Cellular Manufacturing: the Development of the Idea and its Application’, New Technology, Work and Employment 9, 3–18. Amess, K. and Gourlay, A. (2000), The Dynamics of UK Industrial Concentration, 1993–1997 (unpublished research paper, Department of Economics, Loughborough). Atkinson, J. (1984), ‘Manpower Strategies for Flexible Organisations’, Personnel Management August, 28–31. Atkinson, J. and Meager, N. (1986), ‘Is Flexibility Just a Flash in the Pan?’ Personnel Management September, 26–29. Castells, M. (1996), The Rise of the Network Society (Oxford: Basil Blackwell). Chandler, A.D. (1962), Strategy and Structure (Boston: MIT Press). —— (1977), The Visible Hand: The Managerial Revolution in American Business (Cambridge, Mass.: Harvard University Press). —— (1990), Scale and Scope: The Dynamics of Industrial Capitalism (Boston: Harvard University Press). Chandler, A.D. and Daems, H. (1980), Managerial Hierarchies: Comparative Perspectives on the Rise of the Modern (Harvard University Press). Child, J., Faulkner, D. and Tallman, S. (2005), Cooperative Strategy (Oxford: Oxford University Press). Coates, D. (1994), The Question of UK Decline: The Economy, State and Society (Brighton: Harvester). Cowe, R. (1993), The Guardian Guide to the UK’s Top Companies (Cambridge University Press). Diggle, B. (1990), Hanson (unpublished business report of Credit Suisse/First Boston). Friedman, A. (1977), Industry and Labour (London: Macmillan). Gospel, H. (1995), ‘The Decline in Apprenticeship Training in Britain’, Industrial Relations Journal 26:1, 32–44. Hannah, L. (1976), Management Strategy and Business Development (London: Macmillan). —— (1983), The Rise of the Corporate Economy (London: Methuen). Hirst, P. and Zeitlin, J. (eds) (1988), Reversing Industrial Decline (Oxford: Basil Blackwell). Hunter, L., McGregor, A., MacInnes, J. and Sproull, A. (1993), ‘The Flexible Firm: Strategy and Segmentation’, British Journal of Industrial Relations 31:3, 383–407. Ingersoll Engineers (1990), Competitive Manufacturing: The Quiet Revolution (Rugby: Ingersoll Engineers). —— (1994), The Quiet Revolution Continues (Rugby: Ingersoll Engineers).

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Ingram, P. (1991), ‘Changes in Working Practices in British Manufacturing Industry in the 1980s: A Study of Concessions Made During Wage Negotiations’, British Journal of Industrial Relations 29:1, 1–13. Jones, B. (1988), ‘Work and Flexible Automation in Britain: A Review of Developments and Possibilities’, Work, Employment and Society 2:4, 451–86. —— (1989), ‘Flexible Automation and Factory Politics: the United Kingdom in Current Perspective’, in P. Hirst and J. Zeitlin (eds) Reversing Industrial Decline?, 95–121 (Oxford: Berg). Lazonick, W. (2005), ‘Corporate Restructuring’, Chapter 24 of S. Ackroyd et al. (eds) The Oxford Handbook of Work and Organisation (Oxford: Oxford University Press). Lazonick, W. and O’Sullivan, M. (2000), ‘Maximizing Shareholder Value: A New Ideology for Corporate Governance’, Economy and Society 29:1, 13–35. Marshall, A. (1890), Principles of Economics (London: Macmillan). NEDO (National Economic Development Office) (1986), Changing Working Patterns: How Companies Achieve Flexibility to Meet New Needs (London: NEDO). Northcott, J. and Rogers, P. (1984), Microelectronics in British Industry: The Pattern of Change (London: Policy Studies Institute). O’Sullivan, M. (2000), Contests for Corporate Control: Corporate Governance and Economic Performance in the United States and Germany (Oxford: Oxford University Press). Oliver, N. and Wilkinson, B. (1992), The Japanization of British Industry (Oxford: Blackwell, 2nd edn). Piore, M. and Sabel, C. (1984), The Second Industrial Divide: Possibilities for Prosperity (New York: Basic Books). Poole, M. and Jenkins, G. (1997), ‘Developments in HRM in Manufacturing in Modern Britain’, International Journal of Human Resource Management 8:6, 841–56. Prechel, H. (1997), ‘Corporate Form and the State: Business Policy and Change from the Multidivisional to the Multilayered Subsidiary Form’, Sociological Inquiry 67, 151–74. Procter, S., Hassard, J. and Rowlinson, M. (1995), ‘Introducing Cellular Manufacturing: Operations, Human Resources and Trust Dynamics’, Human Resource Management Journal 5, 46–64. Rowlinson, M., Procter, S. and Hassard, J. (1994), ‘CIM and the Process of Innovation: Integrating the Organisation of Production’, International Journal of Production Economics 34:3, 359–69. Shutt, J. and Whittington, R. (1987), ‘Fragmentation Strategies and the Rise of Small Units’, Regional Studies 21:1. Sisson, K. (1994), ‘Personnel Management in Transition’, in K. Sisson (ed.) Personnel Management in Britain (Oxford: Blackwell). Thompson, G. (2004), Between Hierarchies and Markets: The Logic and Limits of Network Forms of Organization (Oxford: Oxford University Press).

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Webster, J. and Williams, R. (1993), ‘The Success and Failure of Computer-Aided Production Management: The Implications for Corporate and Public Policy’, PICT (Programme on Information and Communication Technologies) Report 2 (University of Edinburgh). Whittington, R. and Mayer, M. (2002), The European Corporation: Strategy, Structure and Social Science (Oxford: Oxford University Press). Williams, K., Williams, J. and Haslam, C. (1990), ‘Facing up to Manufacturing Failure’, in P. Hirst and J. Zeitli (eds) Reversing Industrial Decline (Oxford: Basil Blackwell). Williams, K., Williams, J. and Thomas, D. (1983), Why are the British Bad at Manufacturing? (London: Routledge). Wright, M., Chiplin, B. and Coyne, J. (1989), ‘The Market for Corporate Control: The Divestment Option’, in J. Fairburn and J. Kay (eds) Mergers and Merger Policy (London: Oxford University Press). Zey, M. and Swenson, T. (1999), ‘The Transformation of the Dominant Corporate Form from Multidivisional to Multisubsidiary’, The Sociological Quarterly 40:2, 241–67.

Chapter 10

The Quest for Flexibility and Governmental Regulations of Working Life: The Case of the 2005 Norwegian Worker Protection and Working Environment Act Helge Ramsdal

Introduction In this chapter I discuss how the concepts of ‘flexibility’ and ‘the new working life’ were addressed during the planning and preparation of the new Worker Protection and Working Environment act which was passed by the Norwegian Parliament in June and December 2005. The initiative to change the law was taken some ten years before that. The process caused political controversy on a level not usually found in the relative tranquillity of Norwegian political life. At the outset, there were clear cut divisions between employers and employees, and between political parties along what seemed to be a ‘neo-liberalist’ and ‘social democratic’ divide. The controversy was accordingly related to well-known issues about to which extent, and how, state regulations should be adapted to changes in international markets and new modes of work. As my discussion will show however, describing the debate as a simple clash between right and left wing political proponents is a reductive approach if we are to grasp the peculiarities of the debate. In the process, the issues of ‘easy hiring, easy firing’ and temporary work regulations gradually garnered most of the attention in the public debate. In this respect, the discussion resembles those triggered in other European countries, in particular by the CPE legislation in France. The Norwegian debate, however, never unleashed the level of protest against the government as the issues did in France, where the history of industrial relations and political culture is different from that of Scandinavia. The debate over the new Employment act in Norway must be understood as embedded in the tripartite cooperative tradition of the Nordic welfare state model, even though those opposing the ‘easy hiring, easy firing’ proposals claimed the reforms comprised a severe attack on that model. Here, I will study the process in some detail, following the arguments of employee and employer organizations, and governmental responses to the   This is the official English term. Here, I usually prefer the abbreviation ‘Employment act’, but I will discuss the significance of the name given to the act later on.

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arguments. For reasons of simplicity, I will discuss the process in three phases. The first phase was concerned with the definition and scope of the problem, that is, the way actors defined the challenges facing the Norwegian economy and working life in a time of globalization and international deregulation. Interestingly, the initial idea of a comprehensive legal reform came from a Labour government with the full support of the main labour union organization, the LO. In the second phase, a Centrist-Right government proposed the new act, instigating the controversy contained in the ‘neo-liberalist’–‘regulatory’ divide. The third phase refers to the withdrawal and modification of some of the sections of the law, particularly those on the de-regulation of temporary work. Here, the Centrist-Right government formulated a compromise which was later rejected by the new Red-Green government. During the parliamentary elections in 2005 the controversy over the new act played an important role – in fact, some considered it to be the main determinant of the victory of the Red-Green coalition. As one of its first decisions, the new government proposed to withdraw the Employment act of June 2005, and Parliament did so in December 2005. Thus, the present legal situation on this issue reflects a political process going ‘one step forward and one step back’ in the deregulation of Norwegian working life (Stortinget 2005d). Why and how are legal regulations relevant to the discussion of ‘flexible’ organizations? Since the introduction of the ‘flexible firm’ model in 1984 (Atkinson 1984), the flexibility discourse has gone through increasingly complex and ambiguous developments. Several authors have pointed out the shortcomings of the Atkinson approach, partly because of empirical findings, partly by introducing new dimensions and organization variables into the ‘flexible organization’ model (Ackroyd and Procter 1998). Much in line with the latter authors, the model of organizational flexibility presented by Skorstad (Chapter 2) reflects the dynamics of flexibility by emphasising the interdependency of several organizational dimensions. In discussions of the governmental regulation of working life, however, only some of the dimensions presented in the model normally engender attention; first and foremost ‘employment practices’, particularly the extent of non-standard work (Bradley et al. 2000). It should be noted that even strong legal regulation on this dimension might be compatible with a high degree of flexible organizational measures on other dimensions. Likewise, the model also indicates the interdependency of variables within the individual dimension. As several observers have ascertained, there is a dynamic relationship between for example the regulation of temporary work contracts on the one hand, and the regulation of dismissals on the other. The easier it is to dismiss employees, the less need there is for the deregulation of temporary work contracts in order to make the enterprise ‘flexible’ (Olsen 2005; Strøm 2005). In sum, the extent to which an organization is ‘flexible’ will be the end result of combinations of interdependent organizational

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measures on the dimensions and variables at stake, and only some of these normally warrant governmental regulation in capitalist countries. Consequently, a comparatively strong regulatory regime is not necessarily counterproductive to the development of ‘flexible’ enterprises. On the contrary, some authors have argued that strong regulation regimes and universal and generous welfare benefits makes the risks of loosing income less important for the individual worker, and thereby opens up for flexibility at the work place level (Rønning and Teigen 2007). Regulatory regimes and the concepts of ‘flexibility’ and ‘new working life’ To a certain extent, the controversies in the Norwegian debate reflect the multiplicity of theoretical and political approaches to labour market strategies and workplace developments, and illustrate the dilemmas facing regulative politics at a time when the ideas of globalization and market adaptation have gained ideological hegemony. Two questions related to these dilemmas deal with the very foundations of the idea of the Nordic welfare state: ‘what should the state do’ – comprising the ideological and normative aspects of regulating working life by legal means, and ‘what can the state do’ – which comprises the instrumental aspects of policy making and implementation (Rothstein 1994). As indicated above, these questions are not easily separated from each other in policy analysis. Theoretically, the ideological disagreements between political actors might be structured as a one-dimensional dividing line between those who think state (including local government) intervention in economic and social life should be kept at a minimum, and those who think it should be maximized. Of course, this is a simplistic approach to ideological differences between for example political parties, but it still embraces fundamental aspects of present-day political debates over the future of the Nordic welfare state model. The other question relates to the instrumental aspects of political life – how can political goals be achieved? Here, the issue of efficient implementation is addressed. While implementation research (or other related labels) has often been marked by a nihilist approach obsessed with policy failure this has not made much impact upon policy makers. Recently, implementation research has shifted to a ‘constructive’ mode, focussing upon preconditions for successful implementation. Usually this has taken the shape of appealing to rationalistic organization theory – in which a combination of clear and unambiguous goals, and a selection of steering instruments, based upon comprehensive knowledge of the societal problems addressed have been recommended (Offerdal 1992; Rothstein 1997). In the law-making process, a vital issue is how to select legal means (in combination with for example economic incentives and normative appeals) that will be implemented according to the ambitions and intensions behind the texts. To a large extent, ‘optimistic’ and ‘pessimistic’ views on what the state can do seem to  This of course, rests upon a perception of legal steering as something more than symbolic politics. It should be noted that Norway according to an EU survey in 2005 is

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overlap with differing views of what the state should do. But this is not always the case; you will of course also find actors who believe that the state should do more but that the appropriate steering instruments to ensure implementation are not at hand, or actors who think the state should do less, who still believe the instruments for political steering are available (but should not be activated). Normative points of view notwithstanding, organization theory tends to emphasize that peculiarities of cultural, social and other ‘field characteristics’ are vital for the degree of successful implementation (Offerdal 1992). Even though there are a large number of variables which different authors claim are important, they seem to agree that degrees of organizational stability and task complexity respectively are among the most important variables and that implementation strategies should be differentiated accordingly. The challenges facing law makers are particularly formidable when they intend to intervene in complex and changing societal situations – the dynamics of ‘flexible organizations’ and ‘the new working life’ create a case in point (Grönlund 2004). In brief, the steering question here is: how does one hit a running target? Generally speaking, political theorists recommend frame laws and local discretion as the most adequate responses to these challenges (Rothstein 1994). Here I will discuss the issues facing the regulative regime of the new act. My point of departure will be some of the peculiarities of the Norwegian economic, social and political context that influenced the debate related to the concepts of ‘flexibility’ and ‘the new working life’. I will then turn to the law making process, in which governmental bodies, political parties, employees’ and employers’ organizations played a major role. Then I will present the most important proposals that were debated in the process. In this connection, I will concentrate on the proposals put forward by the Centrist-Right government (2003–2005) in the process ending with the Red-Green government take-over at the end of 2005, as this period represents the climax of the debate. Finally, I will discuss the issues of governance related to the two questions of ‘should’ and ‘can’ as postulated by the actors above; to what extent should the law adapt to the ideas of globalization, flexibility and the ‘new working life’? The Nordic welfare state model and interventionist policies The Nordic Welfare State Model is generally regarded as an interventionist model, in which state and local authorities play a major role through comprehensive regulation of economic, social and cultural spheres within the frames of a capitalist economy (Esping Andersen 1990). Today, many social scientists point out that the Nordic countries are ‘high trust societies’ (Rothstein 2003). One aspect ranked as the second most ‘law abiding’ country in Europe, reflecting the great trust in political institutions found in this country (EU survey 2005).   As you see this ends up with a four-field table (which to some confirms that political analysis is after all a science of some maturity).

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of the ‘model’ is the tripartite cooperation between employers, employees and state authorities in establishing economic policies, labour market regulations and working life environments (Engelstad et al. 2003). Norwegian working life is characterized by a high number of small businesses, some large multinational corporations, a large public sector and a large number of people who are out of work, receiving welfare benefits and disability pensions. There are 2,276,000 employees in Norway (2004), approximately 1.5 million in the private sector and approximately 740,000 in the public sector. There are also 430,000 enterprises; among these more than 266,000 had no employees (one-man-companies). Eighty-seven per cent have fewer than 20 employees, and 98 per cent have fewer than 100 employees. Participation in working life is approximately 10 per cent higher than the EU/OECD average, primarily due to the higher participation of women in the workforce. Unemployment figures are lower than in the EU; in 2003 4.4 per cent were unemployed (European OECD countries had an average of 9 per cent). For people older than 60, work frequency was reduced from 36 per cent in 1980 to 31 per cent in 2003. The proportion of those between the ages of 55 and 64 years old who are employed is 70 per cent in Norway, contrasted with a 55 per cent average in the EU countries. 74 per cent of the employees work full-time, while 26 per cent work part-time. Especially women with part-time work report they would prefer full-time work. Ninety per cent of all employees work on permanent contracts, and more than 70 per cent during ordinary day-time working hours (NOU 1999: 34). The big political issue for the last ten years has been the high, and until recently, increasing number of people on (long term) sick leaves and on health insurance – 882,000 people aged between 16 and 74 do not work, thus putting heavy pressure upon the public insurance system. In 2003, 16 per cent of the total population received old age pensions, early-retirement pensions, or disability insurance pensions. This is regarded as a major challenge to the insurance and old age pension system, and subsequently to the future of the welfare state itself. In 2000 a campaign for an ‘inclusive working life’ (‘IA’) was launched, and has been a major strategy for successive governments in the attempt to reduce the number of sick leaves. On the one hand, the expanding number of sick leave/ health insurance recipients is explained by the extravagant public welfare system, while on the other, as research on working life indicates, it is explained by the fact that while standards of living have increased significantly during the last 20 years, working conditions have become worse (AFI 2004b). As we shall see later on, these developments and the ‘social policy’ strategy of an ‘inclusive working life’ played an important role in the debate over the new Employment act. The concepts of ‘flexibility’ and ‘the new working life’ in the Norwegian debate To many, the growing need for flexible organizations in a global economy is the result of free markets, and is thus to everyone’s benefit: shareholders, senior

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management, employees, customers and the social system at large. The doctrine of neo-liberalism suggests that many of the regulations intended to protect the health and well being of workers are self-defeating because they damage the ultimate guarantor of economic security, namely the productivity and competitiveness of the employers for whom they work. In order to become ‘flexible’ organizations have to obtain maximum freedom from organizational restraints. The win-win situation between employers, employees and customers thus makes it in the interest of all to create as few obstacles to the competitive development of flexible organizations as possible, the argument goes. Consequently, in principle, the politics of deregulation should be stimulated. And, the stronger government regulation has been, the stronger the deregulation policies should be, it is maintained (Burchell et al. 2002). In the Nordic countries, with their longstanding tradition of governmental regulation of working life this message cannot be misunderstood: in order to cope with the rules and demands of the global economy, deregulation should be comprehensive, making individual companies more open for flexible solutions. On the other hand, social scientists point to the fact that these countries have experienced highly successful economic development. To some, this economic success has in fact been linked to the stable and relatively balanced employer– employee relations in these countries. Whether strong regulative governmental policies are regarded as a problem for economic development or the contrary, both neo-liberalists and social democrats recognize that ‘flexibility’ and ‘the new working life’ produce challenges and dilemmas for future governmental policies – whether this involves establishing strong deregulation policies or maintaining a strong regulatory regime. In some ways, both these responses to these challenges and dilemmas triggered the initiatives for changing the 1977 act. On the one hand, Conservative parties (the Conservative Party and the Progressive Party) argued that globalization put the Norwegian economy in a particularly difficult situation (on-shore export industries in particular). The Progressive Party and segments of the Conservative Party argued in accordance with the predominant neo-liberalist view on governmental regulation. For these politicians, deregulation was a necessary and desirable development. On the other hand, social democrats (in the Social Democratic Party and the Socialist Left Party) regarded legal adjustment as the proper response in adapting the act to the challenges of ‘the new working life’. In addition, governmental policies used to implement international agreements (GATT, WTO, EU-regulations) were regarded as a prime reason for legal adjustment by all parties except the Socialist Left Party (which opposed these agreements in the first place). In many respects, the debate which took place in relation to the new Employment act reflected the 1980s debate on deregulation in the UK. Here, the argument was that the changeability of markets is the supreme challenge facing management, and its solution was found to lie in the flexibility and adaptability of labour, both in the workplace and in the labour market (Pollert 1986). Piore (1986, 146) maintained that ‘in Europe, the proponents of flexibility in the public policy area seem to be

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arguing for some kind of social anarchy which is tenable – if it is tenable at all – only in the short run’. Smith and Morton (1991) discussed the 1979 Conservative government’s policies as a ‘union exclusion’ strategy, and Thompson and Ackroyd (1995) maintained that ‘the impact of the legislative deregulations were sustained legislative assaults on union organizations, employment rights and collective bargaining’, and thus aimed at denying workers access to the traditional sources of collective bargaining. Undoubtedly, the accusations levied in the Norwegian (or Nordic) debate over these issues were not as outspoken and bitter as those of the Thatcherist era in Britain. The economic, political and social context is different, and in Norway, the influence of other Nordic countries, Sweden in particular, plays an important role. What the Norwegian and British debates seem to have in common is primarily the quest for changes in the system, and that the manifold conceptualizations of ‘flexibility’ and ‘new working life’ played an important role in the process. However, while issues relating to the concept of flexible workplaces and the flexible firm had been discussed for at least a decade in the EU countries, it was not until the mid-nineties that the Norwegian debate took off. Here, this debate was related to the ‘modernization’ of the 1977 Employee act, which in turn was embedded in the much wider and more comprehensive discussion of ‘flexibility’ and ‘the new working life’. The ‘New Working Life’ report of 1998 maintained that the changes in work organizations were comprehensive and deep-rooted, and that the Norwegian economy would inevitably force work organizations to become more flexible. This, it was argued, would create economic gains as well as more interesting work for those involved in the global ‘new working life’. In addition, flexible workplaces would make them more family friendly. Many of the arguments were based upon theoretical assumptions (and Castells 1989 in particular). On the other hand, the ‘New Employment Act Committee’ of 1999 reflected a more ambiguous approach. Here the ‘globalization’ argument prevailed, but there was also a perspective built upon an empirical approach that insisted that most workplaces were still ‘traditional’ in work organization and employee-employer-relations. In sum, there seemed to be several approaches to the concept of ‘the new working life’: On the one hand, there was a theoretical construction which intended to prolong the present-day situation into the near future. On the other hand, there was a strictly empirical approach, which used variables related to a ‘micro-perspective’ on work organizations. Here, several international studies indicate that ‘traditional’ work still dominates (Gallie et al. 1998; Pollert 1988; Eriksson and Karlsson 2000). In Norway, it is estimated that 13 per cent of the employees work in ‘new working life’ organizations (NOU 1999: 34).

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The law making process In June 2005 the Norwegian Parliament passed the new ‘Worker Protection and Working Environment act’, replacing the former law of 1977. This earlier act was regarded as one of the most comprehensive regulations of working life in a capitalist economy, and also considered a great success in its time, by employees as well as by employers. So why not leave well enough alone? The first initiatives to change the 1977 act were taken by the Labour government in 1996. In advance, the Labour Organization (LO) – by far the largest employee organization with more than 800,000 members, and closely connected to the Labour party – launched a campaign to discuss ‘the new working life’ amongst its members. 70,000 people took part in the process to sort out initiatives/suggestions aimed at coping with modern working life. Based upon these initiatives, the government appointed an expert committee – chaired by a professor of sociology/economy, and with members representing a broad range of employers’ and employees’ organizations and academic institutions. The report – entitled ‘A New Working Life’ – was published in 1999 (NOU 1999). The report gave a comprehensive description of the Norwegian economy and working life with a comparative perspective, and contained a broad discussion of the emergence and necessity of flexible organizations in order to cope with developments in the global economy. The concept of ‘flexibility’ was outlined in some detail, much in line with social and economic theories where the win-win-argument was elaborated. The report did not give any suggestions for a new Employee act, but the arguments pointed in the direction of deregulation in order to create new, ‘dynamic’ workplaces (Colbjørnsen 2003). In 2001, following the ‘New Working Life’ report, the Labour government established a new committee with a mandate to propose changes in the Employee act – replacing the 1977 act. The mandate focused on the need to protect workers from insecure, unhealthy and non-stimulating work, and seemed to reiterate the ideology of the 1977 act: ‘In a working life marked by fast changes it is vital to give employees the assets needed to master reorganization. High levels of participation and local cooperation between the parties in enterprises are preconditions for achieving the goal of a sound, inclusive working life and avoiding exclusion from working life’ (NOU 2004: 2). The government emphasized that the proposal for a new act was supposed to contribute to the regulation of workplace conditions in relation to issues such as increased mobility (of work and capital), flexibility, new forms of ownership, ambitions concerning further education (‘life-long learning’), and family considerations on the part of the employee.

 In spite of its employee-friendly image, in a national survey in 2000, 90 per cent of employers and senior managers in the largest enterprises in the country answered they were generally ‘satisfied’ or ‘very satisfied’ with the implementation of the Work Environment act.

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The committee recruited members who were lawyers with expertise within labour law, representatives of the major employer and employee organizations, and representatives from several ministries and directorates. In short, the mandate as well as the composition of the committee reflected the well-established tri-partite cooperation in working life relations between employers, employees and government that has become the hallmark of the modern Nordic welfare state. Soon after the committee had started working, a Centrist-Right government came into power. As one of the first actions of the new government, the mandate for the ‘Working Life Act Committee’ was changed. The new government stressed the need for an act where the goal was to take into consideration economic growth issues as well as the protection of employees. It also said that employment acts must balance different values and considerations. Consequently, the targets were formulated in four articles: to attend to the interests of the enterprises, the workers and the ‘needs of society in general’, to contribute to an inclusive working life, to make the act an adequate tool in times of restructuring, and to modernize the legal texts. Twelve subtexts gave detailed instructions about aspects of governmental regulation that the committee was to evaluate. Amongst these were: the regulation of working hours, procedures in relation to dismissals, the regulation of the coordination and cooperation between the parties, psycho-social aspects of the work environment, and a definition of the concept of ‘employee’ that would enhance modern ownership forms and the responsibilities inherent in employer– employee relations (NOU 2004: 5, 3ff). The committee then experienced a high level of conflict in their work for two reasons: first of all, the renewed mandate modified the original impression that the act was mainly aimed at protecting the rights of employees. Those who represented employees were particularly provoked by the issues of integrating economic growth and the somewhat obscure ‘interests of the society in general’. In addition, the new Minister of Modernization (who at that time was also in charge of employment issues), decided to delete the issue of part-time work from the committee’s mandate, and proposed deregulation measures in an amendment of the 1977 act directly to the Storting. This led to the resignation of all representatives of the employee organizations from the committee. The reactions of the employees’ representatives were also in part a response to the provocative statements of the minister, who was a professor in economics and one of the foremost ‘rational expectations’ proponents in Norway.  The Minister’s actions were in accordance with the idea that governmental change proposals should be fast and tough – like the ‘King’s Hit’ of Thatcher and public sector reforms in New Zealand (Walsh 1991). One – explicitly stated – intention behind these strategies was to strike before the ‘veto groups of the welfare state’ (the unions in particular) succeeded in their efforts to maintain the status quo, an argument obviously relating to Milton Friedman’s descriptions of US federal politics under the Reagan administration (Friedman and Friedman 1985). These actions and the provocative statements made by the Minister were by many observers seen as proof that the minister was an academic ‘moderniser’ without political experience.

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The row over the part-time question first and foremost illustrated the cost of breaking the tri-partite cooperative political balancing of the welfare state, and the minister left his post shortly thereafter – as a trade-off, it was said, in a ministerial reorganization. The governmental proposal on part-time work was withdrawn and the union representatives returned to the committee work after an agreement between the government and the Labour Party in Parliament in the autumn of 2003. The responsibility for reforming the act was now given to a new ‘super ministry’ incorporating employment and social policy and led by the chairman of the Christian Party. Thus, the ensuing work with the act was embedded in a ‘social policy’ tradition which differed significantly from the New Public Management doctrines of the Ministry of Modernization, and contrasted sharply with the political style of the former minister in charge. Back on track, the committee’s report was released in 2004, but now the split was obvious. Employee and employer representatives disagreed on many of the proposals dealing with ‘flexibility’ and ‘the new working life’. Ministerial representatives and labour law experts variously supported proposals from the two sides, but in issues related to ‘new working life’ and ‘flexibility’ tended to favour the ‘employee’ proposals. There was thus majority support for new article proposals on some of the strategically important questions relating to these issues. The hearings Between 130 and 140 organizations (and some individuals) gave statements in the hearings following the Committee’s proposals for the new act. Most of these statements were given by sub-organizations of the large main organizations representing the employee and employer sides. In addition, universities and research institutes and public administration, for instance ministries, gave statements. Here, we shall take a closer look at the statements of the main organizations. On the employers’ side the NHO (Confederation of Norwegian Enterprises) is the main organization for Norwegian employers, and organizes more than 16,000 enterprises in the private sector. The NAVO (the organization for state employers) as an independent employers’ organization for the public sector, represents public authorities in their capacity as employer for about 165,000 employees, and the KS (Norwegian Association of Local and Regional Authorities), represents local governments in negotiations with approximately 370,000 municipal and county employees. On the employees’ side, I will focus upon the LO (the Norwegian Confederation of Labour Unions), which is a national labour organization with approximately 830,000 workers in both the private and public sectors who are affiliated with national unions which in turn are affiliated with the LO. In their general comments the NHO emphasized that there were many positive proposals, but that the proposals did not sufficiently foresee the need for permanent changes that will be imminent in all sectors of Norwegian trade and industry in the years to come. The proposals were regarded as a ‘compromise’ which on many

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issues were acceptable, but did not adapt sufficiently to the need to decentralize decisions to local levels (that is, employees and employers at the workplace). The NHO also wanted to formulate the targets of the act so that it not only took the interests of the enterprise and ‘society at large’ into consideration, but also so that it could be used as an instrument for economic growth in society. On the controversial issue of temporary work, the NHO supported the proposals on the deregulation of temporary work, referring to more liberal regulations in the other Nordic countries. The NHO wanted the legal period allowed for temporary work to be extended from six to twelve months. The NHO supported the majority’s proposals on the general regulation of work hours, and particularly the proposals which gave new opportunities for local negotiation on work place regulation. Likewise, the NHO supported the extension of the responsibility of organizing health, environment and security issues at local levels (that is, enterprise level), and the somewhat more liberal options concerning work on Sundays. On other proposals, the NHO had only a few minor objections, but generally supported the majority’s suggestions. Interestingly, the NAVO was much more critical than their counterparts in the private sector. In their general comments, the NAVO said that the committee’s descriptions of working life conditions did not reflect the working life either of today or of tomorrow. This, they said, was particularly the case in the artificial split between ‘traditional’ and ‘new’ work, and they insisted that since 1977 we have seen continuous, comprehensive and fundamental changes in all fields of working life. By putting too much emphasis on ‘traditional’ working life, the committee had continued in the old tradition which focussed on the production sectors of manufacturing industry: ‘The proposals are not sufficiently adapted to modern working life, and to the extent they relate to the need for flexibility and change, regulating the quest for change and restructuring seems to have first priority’ (NAVO 2004, 1–3). When it came to the controversial concept of ‘flexibility’, where enterprises must change in order to meet the demands of the customers on the one hand and the employees’ concern with welfare and family-friendly flexibility on the other, they wrote that ‘the laws of the economic system do not allow any options, the needs of the enterprises must take priority over other needs’ (ibid.). Accordingly, they believed that the new act needed to be much more precise in describing targets; the needs of enterprises and society should be emphasized, and the act could not simply be a ‘protection’ act on behalf of the workers. The NAVO further maintained that the committee’s description of deteriorating working conditions in specific sectors (in the health sector particularly) were based upon myths without documentation. In accordance with these general comments, the NAVO supported the majority proposals. They argued for comprehensive deregulation in the articles about temporary work, working hours, part-time work, dismissals, and they generally argued for the decentralization of responsibilities to the workplace in these issues. In its general statements, the KS asserted that the law should be named the ‘working life act’, to emphasize that it was not exclusively an act aimed at

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protecting employees but that it concerned all aspects of working life. The KS maintained that the proposed act represented an improvement compared to the 1977 act, and generally supported the majority proposals. Particularly the KS supported the deregulation of working hours, temporary work and part-time work, and – like the NHO – proposed an extension of temporary work contracts from six to twelve months. KS also supported the proposal to extend the employer’s right to dismiss employees during sickness periods longer than twelve months. The employees’ organizations generally maintained that the proposals were far too liberal – and that they represented radical deregulation as a way of accommodating the enterprises’ needs for flexibility and restructuring. The LO, by far the largest national employee organization, with strong roots in the tripartite welfare state, in their detailed, 140 page hearing statement expressed ‘disappointment’ about the majority of the committee not being able to respond to the challenges that originally initiated the new employee act: how to strengthen the regulation of working life in accordance with the ideas of ‘flexible’ work and ‘the new working life’. In their view, the committee majority’s proposals had to be read primarily as a ‘political document’ in which the need for employee protection was watered-down by formulations which emphasized the needs of the enterprises and ‘society in general’: ‘A new act must be based upon the intentions of the 1977 act; it aimed at protecting workers, as the weaker part, in a balance between the interests of both the employees and the employers’ (LO 2004, 3). The majority proposals weakened the employees’ and the unions’ position in that relationship, and put the longstanding democratic traditions of workplace organization in the country at risk. The idea of replacing a ‘protection act’ with an act that focused more on economic growth was in particular ‘a fundamental break with this tradition’ they said (ibid.). The LO maintained that the need for ‘flexibility’, based on international developments, new technology and more demanding customers was treated more like ‘a natural law rather than a man-made construction’ in the majority proposals. The consequences of the proposals for temporary work, working hours, part-time work and so on would be the decentralization of responsibility, increased pressure on enterprise restructuring, with more competition and more precarious working conditions in the quest for ‘flexible’ solutions. Power and influence would be pushed downwards; there were signals that national protection would decrease and that the focus on the perspective of the customer and flexibility would increase, it was maintained. The individual employee would be left paying the costs: more job insecurity and more stress. The LO also questioned the committee’s legitimacy, as the proposals were permeated by minority proposals on almost every detail. The LO also maintained that the overall direction of deregulation was in contradiction with both international and national research on working life. The LO concluded by saying that ‘the committee’s majority proposals on vital issues such as the goal of the act and the regulation of dismissals and temporary work fundamentally contradict the basic principles of employee acts throughout history and the principles that the labour union movement represents. The government would be wise to disregard these proposals, and adjoin to the proposals of the committee’s minority’ (LO 2004, 5).

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The Centrist-Right government’s proposals to Parliament In accordance with parliamentary procedure in decisions on legal reforms, the Government proposed that the new act be treated in Parliament based upon the committee’s report and the hearings. This first took place in the Storting committee on Labour and Local Government, and it was subsequently finalized by Parliament in a plenary session. In the governmental proposals, some of the committee’s majority proposals were modified, obviously to reduce tensions in the parliamentary debate. In particular, the ‘social profile’ of the act was emphasized, especially the need for measures for advancing an ‘inclusive’ working life. The disagreements that coloured the hearings were also strongly reflected in the proceedings in the Storting committee on Labour and Local Government. Here, the opposition parties (Labour, the Socialist Left Party and the Centre Party) formed a majority. On practically every page (of the 133) there were separate statements from the opposition and the governmental parties. The disagreements followed the general conflict lines of the process in advance. The government coalition parties (the Conservative Party, the Christian Party and the Liberal Party) supported the governmental proposals, and the Progressive Party (which supported the Centrist-Right government) argued that the need for economic growth and flexibility in workplace organizations indicated that the act should not be associated with ‘welfare policies’, and that as much as possible should be decentralized to employee – employer relations in the workplace. The Social democratic/Left parties argued that the proposals were not in accordance with the intentions originally formulated when the process started, and that the act should primarily be a continuation of the 1977 ‘protection’ act, with less decentralization of responsibility in its implementation. They suggested a number of specific alternatives concerning different articles of the act. The ‘majority’ (that is, the opposition) also argued that, given the high level of conflict the parliamentary proceedings should be postponed until after the parliamentary elections in September 2005. If the governmental proposals were passed by Parliament now, a new Red-Green government would demand a renegotiation of the act soon after victory, they maintained. In the Storting assembly proceedings on 5 June 2005 the government’s proposals were approved. This was supposed to finalize the process, and the new act would be authorized on 1 January 2006. However, there was now agreement among Labour, the Socialist Left Party and the Centre Party to form a ‘Red-Green’ coalition government if they were to gain majority support in the parliamentary elections in September 2005. One of the issues agreed upon by the coalition parties was to change the Employee act. This would be an explicit break with customary governance in Norway. Normally, a new government accepts the laws and regulations that have been decided upon by the former – as part of the lowintensive conflict structures of national politics. As mentioned above, the act was withdrawn in December 2005.

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The Centrist-Right proposals – Deregulation or stronger regulation? The discussion above presents a fairly broad description of the ideological issues underpinning the process up to June 2005. Even though the act was not put into effect as the Centrist-Right government was overthrown a couple of months later, the ‘flexibility’ and ‘new working life’ discourse discussed here mainly took place in connection with the process leading up to the June 2005 decision. The June 2005 act dealt with (de-)regulation in different spheres of working life, reflecting many of the themes and paragraphs in the 1977 act. First of all, the actual controversies and disagreements were not exposed in a simple, linear fashion. On the contrary, the process was complex and ambiguous for several intertwined reasons. Firstly, the ideological issues were not structured along a straightforward left/social democrat vs. right/neo-liberalist divide. In the debate, there was agreement to make the act an instrument for social policy – or more precisely: a tool for implementing the strategy for ‘an inclusive working life’. This strategy was initiated by the social democrats, but all parties and the successive Centrist-Conservative governments adhered to the plan. Here, one of the major problems in Norwegian society, the galloping increase in sick leaves and people leaving working life on health insurance, was addressed. During the reorganization of ministries in 2003, the new ‘super ministry’ for Work, Employment and Social Welfare reorganized important ministerial responsibilities; they were now to deal with the integration and coordination of employment and social security policies through comprehensive administrative reforms. Appointing the chairman of the Christian Party as the new minister was a strong signal; in contrast to the approach of the former Conservative minister, the new approach would be a compromise based upon ‘social policy’ issues. These issues would thus be vital to the employment act as well. In his presentation in May 2005, the new minister accordingly introduced the proposals by insisting that the main objective of the new act was to ‘tear down the hurdles that hinder the young, the handicapped and immigrants from joining working life, and to build up the hurdles that prevent people from leaving working life’ (Stortinget 2005c, 2). Although there was no disagreement about this general goal, there was controversy over whether the proposals for (de-)regulation in some of the articles in the act would actually have these effects or not. Thus, three perspectives may be relevant in order to fully understand the deep-rooted divisions in the process: the neo-liberalist ‘deregulation’ doctrine, the leftist ‘protection’ doctrine, and the ‘social policy’ integration doctrine. The ‘social policy’ perspective was to a certain extent a bridge between the opposing perspectives of left/right. The weight that the Centrist-Conservative government gave to each of these doctrines, may be discerned in the proposals for a new act given to Parliament, in particular the issues concerning the regulation of work hours, part-time work, temporary work and dismissals.

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Proposals for the regulation of work hours, part-time work, temporary work, new ownership/restructuring processes and dismissals It is striking how much the approaches to working life issues in the proposals resemble those of the 1977 act. The general impression is that ideological considerations and specific regulations from the former act are integrated into the new one. Most of the paragraphs were retained (although rephrased). However, there were clear cut disagreements based upon ideological perspectives on several issues. Here, I will go into some detail about the content of the proposals. The relevant issues that the act addressed regarding ‘the new working life’ relate to five regulatory mechanisms in particular: work hours, part-time and temporary work, new ownership/restructuring processes, and dismissals. Work hours  The general regulations concerning work hours were confirmed. In the new act, overtime work was differentiated in some detail, stating that in short periods more overtime would be allowed than before. On the other hand, tighter regulation of overtime work lasting longer periods would be necessary. This, it was argued, would meet the enterprise’s needs for flexible manning for shorter periods of time. However, the proposal emphasizes that long periods of overtime are unhealthy, and undermine the goal of avoiding exclusion from work, with reference to the ‘inclusive work’ strategy. Furthermore, there are strict regulations about the length of time overtime can be accepted. The proposal also explicitly states (in contrast to the 1977 act) the right of all employees to have flexible work hours in connection with family responsibilities if this is not a ‘substantial disadvantage’ for the enterprise. The 1977 regulations on work on Sundays would be continued – and a sharp distinction between workdays and free-time was to be drawn (this is one of the Christian Party’s favourites). One of the controversial issues in the process was to what extent and how shift work should be regulated. Here, a system of transparent and comparable systems for regulating shift work is introduced, while the regulation of shift work in different sectors is not changed. The right to paternal leave in connection with births (two weeks) is extended to also embrace adoptions and hospital stays for children. Temporary work Temporary work was the most controversial issue, as was the case in other European countries as well. In the proposal, there was a statement (in the legal text) that ‘normally, work should be permanent work’. However, in order to ease entrance into working life for young people, immigrants and the handicapped, the opportunity to engage in temporary work was extended. In addition, it is maintained, this will also reduce companies’ need for overtime work and hiring new, full-time workers. And as in the case of overtime work, the proposal involves a differentiation in the regulatory regime on the one hand, between de-regulation – extending the six month temporary contracts allowed in the 1977 act to twelve months – and on the other hand, stronger regulation – stipulating that the employee has a right to permanent work after this period of temporary work. This, it was said, would ensure that employees were not forced onto a ‘merry-go-round’, moving from one temporary contract to another.

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Part-time work Here as well, the proposals can be interpreted as strengthening regulation. It has been reported that more than 100,000 employees – mostly women – work part-time but want full-time work. To cope with this, employees with temporary work are supposed to have first priority for full-time employment when jobs are announced in the enterprise where they work. This is supposed to be the general rule unless it causes ‘substantial damage’ to the enterprise. New ownership forms and enterprise restructuring The governmental proposal stated that new ownership forms and restructurings will be ‘realities employees have to cope with everywhere’, and that ‘the ability to reorganize is vital if we are to maintain full employment’. However, it goes on, restructuring has proven to increase health problems and the number of exits from working life into the insurance system. In order to reduce these problems, regulation strengthening the employee’s right to information about new ownership and reorganizations is essential. Likewise, proposals safeguarding this right include the employee’s right to keep the same pensions as under the former ownership or after reorganizations, unless the new owners or enterprise have already established a pension system for their employees in advance. In addition, it was stated that all employees who had a local tariff agreement would retain it under new owners. The proposal also included a strengthening of employees’ freedom of speech and the right to ‘whistle blowing’, and increased the work against harassment in the workplace – it even adds that colleagues are obligated to inform either management or union representatives when harassment is observed. The issue of ‘whistle blowing’ was, however, subject to a separate process which will not be dealt with here. Dismissals As part of the strategy for an ‘inclusive working life’, obstacles aimed at reducing exits from working life were to be set up. First of all, protection from dismissal because of illness was extended to twelve months, and if the enterprise has signed the inclusive work – ‘IA’ – agreement it is obliged to take part in a process to find flexible solutions so that the employee avoids full transference to insurance, for example by allowing part-time work. If the enterprise has new owners, the general rule was that salaries should not be reduced or working conditions worsened after the takeover. The employees’ right to refuse to work for new owners is also written into the act proposal. On the other hand, if dismissals were taken to court by any of the parties, the right to continue working in the meantime was reduced. Discussion – What should and can the state do? In the introduction, I listed the challenges and dilemmas facing the Nordic welfare states in a time when ideas of globalization, ‘flexible organizations’ and a ‘new working life’ are predominant. These issues were constantly addressed in the process of renewing the Employment act. As a point of departure two questions vital to policy analysis were presented: what should the state do? And what can the state do? As outlined above, the first question – and the outspoken ideological

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controversies it engendered – definitely dominated the debate in comparison to the instrumental/technical aspects of the second question. These latter aspects may be considered to lie at the heart of the matter, but this was not the case in the debate. The political process In the political debate related to the ten-year process described above, a controversy over state regulation of working life gradually emerged. At first glance this controversy gives an impression of deep-rooted conflicts between leftist and rightist positions. A closer look at the arguments and specific points of views modifies this picture substantially. In general terms, there was agreement among the political parties that ‘globalization’, ‘flexibility’ and new modes of work are inherent aspects of the modern capitalist economy that have some advantages and some disadvantages for working conditions. The initiative to renew the act was taken by the LO and the Labour government, and here the motives were primarily to adjust the law in order to strengthen regulations related to new economic and workplace challenges. It is, however, worth noting that the initiatives taken had a ‘defensive’ character, in the sense that there was a need to adapt to the forces of ‘globalization’, ‘flexibility’ and the ‘new working life’. When the Centrist-Right government seized power the Conservatives wanted to deregulate at least some of the articles in the act – particularly those related to temporary work. Here, some ‘neo-liberalist’ ideas were at work for a short period of time. In the wake of the turmoil caused by these efforts, governmental proposals were modified. In some ways, these modifications indicated how little room for manoeuvre there was as long as the government adamantly protected the tripartite welfare state idea. Increasingly, sentiment changed, and the ‘new working life’ was looked upon as a ‘necessary evil’ even by the Centrist-Right government in the final phases of the process. There was agreement among the Social democratic/Left and the Centrist/Right sides that legal measures should be taken to avoid the excesses of neo-liberal developments. The Centrist-Right government ended up with a compromise proposal, but this was not good enough to win the support of the employees’ organizations and the Social democratic/Left parties. In the act proposed by the Centrist-Right government it was emphasized that the law primarily was a ‘Workers’ Protection’ act. The idea that the act should concentrate on comprehensive, but watered-down goals for economic growth and considerations of what would be to the benefit of ‘society in general’ was generally rejected. Even the Progressive Party gave its approval in the final Storting proceedings, and like the Centrist-Conservative parties referred to the tri-partite cooperation of the Nordic welfare state as an ideal which should be upheld.  Interestingly, while the NHO, the employer’s organization for private enterprises supported the compromise strategy of the government (but thought the proposals did not go far enough in the direction of deregulation) (Bergesen 2005), the state employers’ organization (NAVO) was by far the most ‘neo-liberal’ advocate in their statements.

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What should the state do? The disagreements about what the state ‘should do’ gradually focussed more and more on a single issue: the deregulation of temporary work. The Norwegian proposals dealing with this were relatively moderate, if seen in a European perspective. To a certain extent, this reflects the tendency to rationalize political and organizational controversies in order to simplify the decision process (March 1988). As in several other European countries, the issue of temporary work seemed to become the symbolic crux of the discourse on ‘flexibility’ and ‘the new working life’. Here, the Centrist-Right government gradually changed to a ‘social policy’ approach, leaving neo-liberalist arguments behind. Thus, three perspectives are relevant in understanding the level of conflict in the process: the neo-liberal doctrine of deregulation, the leftist ‘protection’ doctrine, and the ‘social policy’ integration doctrine. The ‘social policy’ doctrine bridged the gap between the opposing perspectives of left and right – the ‘IA’ strategy was supported by all parties. Eventually, the proposals of the Centrist-Right government conceded that ‘flexibility’ and new modes of work would have predominantly negative consequences for employees’ job security and health, much in accordance with the leftist arguments. As a consequence, the act proposed by the Centrist-Right government reproduced, to a certain extent, the regulatory regime of the 1977 act. The high level of political conflict was first and foremost due to the fact that the Social democratic/Left parties thought that the regulation of temporary work did not go far enough. The government believed that the proposals included differentiation: a certain amount of deregulation would enable firms to obtain flexibility in the short-term perspective, and stronger regulation would affect the long-term perspective. It was believed that this compromise would allow companies to obtain flexibility for employees (family-friendly arrangements) and employers (fast changes in technology or customers’ demands) on the one hand and to strengthen the ‘inclusive working life’ strategy on the other hand. What can the state do? As mentioned above, there was political agreement that the development of ‘flexible’ work organizations and ‘the new working life’ have some negative consequences for employees. Still the steering questions remain: how can legal measures be designed in order to have regulatory effects upon these developments? Here, several dilemmas appear for political authorities: if the regulatory regime is too detailed and centralized it will not hit ‘the moving target’ of flexible work organizations. On the other hand, if regulation is taken care of through general guidelines, leaving implementation to local (workplace) discretion, it risks unforeseen consequences, for example that the unbalanced power relations which This must be seen in the light of the comprehensive ‘modernization’ of the public sector during the last twenty years (Ramsdal and Skorstad 2004).

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favour employers will undermine the regulatory effects, or even that organizational rigidity increases as a result of ‘workplace unionism’ as illustrated by the Kodak experience (Skorstad 2005). Interestingly these dilemmas were not explicitly debated in the law-making process. However, one can identify several issues that reflect these dilemmas. On the one hand, one can identify clusters of arguments that reflect a divergence between those advocating: • • • • •

a frame law with extensive local discretion that the law be named the law of ‘working life’ a balance between the protection of workers’ rights, economic growth, the interests of the enterprise and ‘society in general’ a ‘conservative’ definition of ‘employer’ (in which corporate ownership structures were not addressed) deregulation in some areas – particularly temporary work

and on the other hand those advocating: • • • • •

detailed regulations and centralized decisions keeping the name of the 1977 act (‘workers’ protection and work environment’) that the target was a workers’ ‘protection’ law an expanded definition of ‘employer’ enhancing new ownership structures stronger regulation of temporary work, part-time work, and work hours

The arguments presented in the first cluster were not merely of the ‘globalization’ and ‘new working life’ kind; they also maintained that the peculiarities of Norwegian working life, with the predominance of small businesses, made it necessary to simplify regulations. These arguments had general support, however, the Centrist-Right and the Social democratic/Left side responded to the dilemmas in different ways. The former had a mixed strategy of ‘short-term’ deregulation and ‘long-term’ regulation. The leftist side eventually responded either by denouncing the very existence of ‘flexible’ workplaces, or by pressing for the preservation of a detailed and centralized regulatory regime. In sum, these responses indicated that Norwegian working life still was and would continue to be comparatively strongly regulated – in accordance with the tripartite cooperative model of the Nordic welfare state. Flexicurity? The issues raised in the process of legal reform discussed above, have later become increasingly related to the debate over ‘flexicurity’: involving the combination of flexible workplaces in a dynamic economy on the one hand, and the extensive governmental regulation of work on the other (Berget 2006; Bye 2006). Some

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actors argue that ‘flexicurity’ is the successful hallmark of the Nordic welfare states, a hallmark that should be adopted by the EU countries as well (Kok 2003). In the process described here, the deliberations over how to ensure a high degree of workers’ protection and still adapt to a dynamic global economy were at the core of the discourse. However, the concept of ‘flexicurity’ did not enter into the debate. Furthermore, the problem of how state regulation should and could ‘hit the running target’ of flexibility is central. In a national survey in 1998, employees were asked about changes in their workplaces that had occurred during the last two years. Here, the results indicated a high level of workplace change and the changes described are recognizable as typical of ‘flexible’ working life situations: Which changes have taken place in your workplace during the last two years? 57 % have new tasks 54 % have new management 48 % are confronted with higher performance standards in their work 33 % have changed working hours and/or wage systems 25 % have new positions in the same enterprise 22 % have new jobs in another enterprise (NOU 1999: 34, 74)

As indicated in the discussion above, these workplace changes indicate the dynamics of flexible organizing and workplace developments in a number of ways within the framework of the regulations of the 1977 Employment act. Referring to the model of ‘flexible organizations’ in Chapter 2, these changes seem to delineate the limits of legal instruments in relating to workplace changes that might have severe consequences for the quality of working life for management and employees as well. Here it is the development of a ‘new working life’ through changes in organizational dimensions and variables other than those embedded in the ‘employment practices’ dimension that changes working life. In the European debate over the status and role of legal procurements these issues are addressed in different ways. In France, the row over ‘easy hire – easy fire’ policies caused a national political crisis. In Germany, on the other hand, the development of a new working life seems to be following a different course. On paper, Germany still has one of Europe’s most regulated – or ‘rigid’ – labour markets and the second-highest labour costs in the world after Norway. However, beneath the surface, Germany has gone through profound change; a second, cheaper and far more flexible labour market has developed. This hire-and-fire, low-wage working life is now more than half the size of its mainstream equivalent – and in some segments of the service sector it is about to eclipse traditional employment (Financial Times/Gulf News 2006). Such developments can also be found in Norway as well, although in a more modest form. As indicated above, legal regulation can only partially obstruct the development of ‘flexible’ work organizations, given the conceptualization of ‘flexibility’ adopted here.

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Grönlund, A. (2004), ‘Organisationerna och flexibiliteten – behov, hinder ock strategier i tre branscher’, Arbetsmarknad och arbetsliv 10:1. Gulf News (16 April 2006), Business Feature. Innst. O. nr. 100 (2004–2005), Innstilling fra kommunalkomiteen om lov om arbeidsmiljø, arbeidstid og stillingsvern mv. (arbeidsmiljøloven). Kok, W. (2003), Jobs, Jobs, Jobs. Creating more employment in Europe. Report from the Employment Taskforce, chaired by Wim Kok (European Commision, November). KS (2004), KS Høringsuttalselse til Arbeidslivslovutvalgets innstilling NOU 2004: 5 (21 June 2004). LO (2004), LOs høringssvar til Arbeidslivslovutvalget, vedtatt i LOs sekretariat 14 June 2004. March, J. (1988), Decisions and Organizations (Oxford: Blackwell). NAVO (2004), Høring av NOU 2004: 5 – Arbeidslivslovutvalgets innstilling (16 June 2004). NHO (2004), NOU 2004: 5 – Innstilling fra Arbeidslivslovutvalget – Høring (10 June 2004). NOU (1999), Nytt millenium – nytt arbeidsliv. Trygghet og verdiskapning i et fleksibelt arbeidsliv. Innstilling fra Arbeidslivsutvalget. NOU 1999: 34. —— (2004), Arbeidslivslovutvalget – Et arbeidsliv for trygghet, inkludering og vekst. Avgitt til Arbeids- og administrasjonsdepartementet 20 February 2004. NOU 2004: 5. Offerdal, A. (1992), Den politiske kommunen (Oslo: Samlaget). Olsen, K.M. (2006), Inside Out. Non-standard Work, Employment, and Diverse Interests (Department of Sociology and Human Geography, Faculty of Social Sciences, University of Oslo). Ot. prp. nr. 49 (2004–2005), Ny arbeidsmiljølov (Arbeids- og sosialdepartementet 2004). Ot. prp. nr. 24 (2005), Om lov om endringer i Lov av 17. juni 2005 nr. 62 om arbeidsmiljø, arbeidstid og stillingsvern mv. (Arbeidsmiljøloven) (Arbeids- og sosialdepartementet). Piore, M.J. (1986), ‘Perspectives on labour market flexibility’, Industrial Relations Journal 2:2, 146–66. Plattform for regjeringssamarbeidet mellom Arbeiderpartiet, Sosialistisk Venstreparti og Senterpartiet 2005–2009 (Soria-Moria-erklæringen). Pollert, A. (1988), ‘Dismantling Flexibility’, Capital and Class 34, 42–75. Ramsdal, H. and Skorstad, E. (2004), Privatisering fra innsiden. Om sammensmeltningen av privat og offentlig organisering (Bergen: Fagbokforlaget). Rønning, R. and Teigen, H. (2007), En innovativ forvaltning? (Bergen: Fagbokforlaget). Rothstein, B. (1994), Vad bør staten göra? Om velferdsstatens moraliska och politiska logic (Stockholm: SNS forlag).

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Chapter 11

What’s Special About the Nordic Countries? On Flexibility, Globalization and Working Life Tor Claussen

Introduction Neo-liberalists claim that socialist regimes are inflexible, bureaucratic structures which inhibit dynamic change, democracy and prosperity (Martinez and García 2000). They argue that these bureaucratic structures produce rigid, inappropriate supportive social arrangements which discourage creativity and innovation (Mydske, Claes and Lie 2007). This chapter presents a modified version of this picture. Contrary to the neo‑liberalist point of view, I will argue that certain collaborative arrangements can facilitate flexibility and encourage creativity and innovation in work life. These specific collaborative arrangements have been categorized as inherent aspects of ‘The Nordic Model’ (���������������������� Kettunen and Rissanen 1995; Kettunen �������������������������������������������������������������������������� 1998). This chapter discusses features of the Nordic Model which have possibly contributed to the success of the Nordic countries measured by such indicators as the Eurobarometer and European Commission (2007a and b). Examples at different levels (enterprise/national) of work life practices prevalent in the Nordic countries will be presented and analysed in order to illuminate the advantages of basic collaborative structures that promote flexibility in organizational cultures (Egil J. Skorstad ‘The Ambiguity of Flexibility’ in Skorstad and Ramsdal 2006), and contribute to the recognized economic success of these countries. The Nordic countries are usually categorized as socialist countries. It has been argued that socialist systems foster inflexible bureaucratic structures, which hamper innovation, democracy, prosperity and welfare in the long run. Furthermore, neo‑liberalists argue that a necessary condition for the development of innovation and prosperity is a government which practices non-interference in relation to business organizations. At present, the Nordic countries rank highest in terms of economic performance indicators that, according to (neo-)liberal economists, presuppose liberal arrangements, contrary to the specific profile of the Nordic Model. Paradoxically, then, some of the socialist bureaucratic structures common in the Nordic countries seem to promote creativity, innovation, welfare and competence building. These countries also appear to be economically successful, when judged by indicators commonly used to measure the success of liberal free market arrangements.

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Contrary to expectations, then, bureaucratic structures with strong government interference in economic development and work life practices seem to promote, rather than hamper, favourable development in these countries, compared to other countries considered more liberal. Based on these and similar observations, even liberals are asking themselves; ‘What’s special about these Nordic countries?’ The Nordic Model Norway as a high-cost country purportedly faces flerce competition and serious threats from low-cost, newly industrialized (NIC) countries. Many believe that these challenges must be tackled through the introduction of greater flexibility in customary work life arrangements (NOU 1999: 34). A number of work life arrangements traditionally found in the Scandinavian countries have been incorporated in the so-called Nordic (or Scandinavian) Model of work life. The model is closely associated with the policies and organization of the Nordic welfare states. The Nordic Model of work life (Kettunen and Rissanen 1995; Kettunen 1998) is characterized by: •

• • • • • • •

A high degree of employee organization within the public as well as the private sectors, among both white‑collar and blue‑collar workers, and among female as well as male employees. A high degree of employer organization. The absence or insigniflcance of organizational divisions within workers’ unions. Relatively centralized national organizational structures. The strong presence of trade union organization at the workplace level. A national, hierarchical system of collective bargaining. Giving high priority to collective agreements in directing statutory norms in the regulation of work life. Tripartite cooperation between trade unions, employers’ organizations and government, promoted by the strong position of Social Democracy in the political system as well as in the trade unions (Kettunen 1998, 43–4).

 There are considerable differences among the Nordic countries regarding work life arrangements and practices. Some commentators are in fact sceptical about the existence of a common Nordic Model (Kettunen and Rissanen 1995). Despite critical arguments, we still regard it appropriate to speak about a Nordic Model, as there are some identifiable common features among these countries. In this chapter the focus is on arrangements and practices identified in the Norwegian national context, though they are recognizable in the other Nordic countries as well.  Recently, a similar tripartite arrangement was labelled ‘The Triple Helix’ in the literature on innovation (Leydesdorff and Etzkowitz 1997 and 1998).

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The model is founded on concepts of industrial and economic democracy (Dahl 1992/1985). This applies on the level of the individual enterprise, as well as on the regional and national levels. The democratic aspect is important because it secures basic rights, and clarifies the duties and obligations of the social partners. This is one of the key elements of the welfare model in social democratic economies (Dahl 1992/1985). Social aspects are balanced between the short-term economic objectives of individual actors in the market on the one hand, and the more longterm social objectives of society on the other hand (Johannesen 1970, 1982 and 1983). A third element is the structure of representation regarding employee/employer relations. Local representation and powers of negotiation are balanced by common requirements and interests on the national level. There is a balance between local negotiations and centralized negotiated frameworks in order to prevent specific, monopolist interests from dominating the labour market. This is an aspect of unions as representative structures. Responsible and cooperative structures are thereby developed and maintained on different levels, from the enterprise to the national/international level (Claussen 1999 and 2001). Another important feature of the Nordic Model addressed above is the participatory nature of work life in these countries; we find both direct and indirect participation. Structures exists that secure representation (indirect participation) at the work place level. Representing employees, union representatives are key actors who give legitimacy to change processes implemented in work life practices. Negotiating change in organizations is legitimized both through collective bargaining and in shop floor practices. Individuals and groups of employees have diverging opinions, interests and individual career plans (‘life plans’, Habermas 1981). These concerns must be taken up in negotiations involving different employees in order to reach an overlapping agreement (‘overlapping consensus’, Rawls 1987) on how to cope with change initiatives imposed on the work place, both from management/owners and from the external environment. When changes are necessary, this representative apparatus aids employees in facing these challenges. The Nordic Model incorporates such structures both on the national and the local enterprise levels. Potentially this structure creates opportunities for employee engagement. Through ‘authentic’ employee involvement, change processes may be recognized as the ‘property’ and product of this engagement, rather than being viewed as initiatives forced upon the organization by the management/owners or external initiatives. Without this engagement, change is more likely to be met with resistance than with commitment and collaboration. Employees who experience ‘real participation’ (Pateman 1970) are generally active and engaged. They are motivated to take part in implementing change and innovation using their special skills and knowledge (Thorsrud and Emery 1964 and 1969). When employees are not included in innovation processes, they may remain passive and unengaged or actively resist change. In the following I will illustrate how these collaborative structures can give firms flexibility, facilitating

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change and organizational innovation. I present cases where resistance to change was turned into active collaboration and elicited a common commitment to the goals of the firms from both employees and management/owners. My examples may partially demonstrate what is special about the Nordic Model and explain the success of these countries in the face of fierce international competition and globalization. Faced with the growing globalization, liberalization and individualization of economic and social life, the rules and regulations present in the Nordic Model of Work Life could be viewed as outdated (Reve 1992 and 1995; Reve and Jakobsen 2001). It has indeed been argued that the strong involvement of the government and other social partners in economic life and market relations, so prominent in the Nordic Model, is old-fashioned. This strong involvement is presumed to hamper the functioning of the market. It prevents market forces from functioning as a drive for economic prosperity. A properly functioning capitalist market makes the strategic role of government with its regulatory and interventionist behaviour obsolete (Porter 1990a and 1990b). The failure of communist and socialist experiments is seen as decisive evidence of the success of the market economy (Friedman 1980). These arguments are in line with the neo‑liberalist philosophy. The Nordic Model is believed to be inappropriate for the requirements of contemporary working life due to signiflcant changes in the ‘old’ industrial society. Today’s society and current work life are characterized by a number of developments: •

•

• •

Knowledge society (Nonaka and Takeuchi 1995; Nowotny, Scott and Gibbons 2001). The skills and competence of the labour force require new arrangements and structures in order to enhance functionality. Networking society (Castell 1989). Relationships today break out of traditional structures of cooperation, collaboration and professions. They are less stable; instead they are changeable and virtual. Union and labour movement structures are not appropriate for the functioning of this virtual economy. A society based on information- and communication-technology (Castell 1989). Societies in a globalized and flexible work environment.

The transformation of post-industrial society and the resultant changes in work life signal a strong need for liberalization and increased flexibility. In this transformation, the fundamental characteristics of the Nordic Model are no longer appropriate. Summing up, the industrial democracy of the Nordic Model seems to be faced with:

 In this respect one might ask how some of today’s most prosperous countries, such as communist China and Vietnam fit into this picture.

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• • • •

237

the diffusion of power and decision-making structures laws and regulations that are losing their grip employee participatory structures which are losing their importance the dissolution of cooperative structures

An important force behind this transformation is globalization. Globalization then, demands the liberalization and flexibilization of the Nordic Model, on the enterprise level as well as on the regional and national levels. The forces of globalization are grounded on the world-wide flexibility of economic life and work conditions. On the other hand, the successes of the Nordic countries seem to challenge these postulates. Globalization, neo‑liberalism and flexibility The term globalization refers to a number of processes world wide. They signify a ‘great transformation’ at the end of the 20th century (Altvater and Mahnkopf 1999). Globalization processes have considerable impact on enterprises at the local/regional level, as well as nationally and internationally. Relations between flexibility and globalization have been an important aspect of a recent controversy about present and future challenges in Norwegian work life (NOU 1999: 34; NOU 2004: 5; Helge Ramsdal ‘The Quest for Flexibility …’ in Skorstad and Ramsdal 2006). This ties in directly with the Nordic Model of work life: particularly the possibilities and obstacles inherent in the model in terms of the competitiveness of the Nordic countries in a global context (Kettunen and Rissanen 1995; Flemming (ed.) 1998; Glimstedt and Lange 1998). The flexibilitation of the Nordic Model is regarded as an important response to globalization. One common conceptualization of flexibility distinguishes different components of the ‘Flexible flrm’ (Atkinson 1984; Olberg (ed.) 1995; NOU 1999: 34; Skorstad 1999; Skorstad and Ramsdal 2004; Bath and Ringdal 2005). In this conceptualization, four major aspects of flexibility are considered: numerical, functional, financial, and distance flexibility. The financial and distance aspects can be associated with wage elasticity and outsourcing (NOU 1999: 34). Functional flexibility is based on a core group of employees. These employees encounter greater variation in jobs (job rotation), and experience greater empowerment, knowledge and competence building, greater job satisfaction and more secure job arrangements. Their jobs require greater skills and knowledge and this makes the company more dependent on these workers. They are as such harder to replace. The term internal flexibility incorporates some of these characteristics. Numerical flexibility encompasses groups of workers associated with seasonal work arrangements. Greater variations in work hours, work arrangements and jobs indicate this type of flexibility. Employees carry out work that requires fewer skills and less knowledge. Jobs are regarded as simpler and more routine. The company is less dependent on the individual worker and workers are thus easily replaced or dismissed.

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These conceptualizations of flexibility appear to have an impact on perspectives on globalization. One important aspect of globalization is the new international division of labour (Frübel, Heinrichs and Kreye 1977). A division can be made between high-cost industrial nations and low-cost developing countries. Work in high-cost nations is knowledge intensive with highly skilled labourers who enjoy greater job satisfaction and more secure job arrangements. Work in lowcost developing countries is simpler and more routine; these jobs require fewer skills, less knowledge and less competence. In high-cost countries the specialized, well-educated workforce makes enterprises more dependent on the speciflc skills and competence of their employees, compared with the situation in low-cost countries. There seems to be a certain parallel here between globalization and flexibilitation. In a global perspective high-cost countries seem to have a work life that exhibits the characteristics of functional flexibility. Low-cost countries on the other hand seem to have more numerical flexibility in work life. It is argued that the global, international division of labour is a major cause of present-day concern with outsourcing possibilities and the competitive cost advantages that favour low-cost countries. Neo-liberals in particular claim that the deregulation and numerical flexibilitation of work life in high-cost countries is necessary in order to meet the demands of globalization. Globalization in this respect is forcing companies to increase their flexibility in order to meet the competition from low-cost countries that are already more numerically flexible than their highly industrialized counterparts. Is this argument valid or are there arrangements and practices in high cost countries, like the Nordic countries, that counteract these tendencies and produce competitive advantages contrary to the conditions in low cost countries? Globalization is one major determinant of the recent focus on flexibility in Norwegian work life (NOU 1999: 34). The need to focus on flexibility in work life, on the national, regional and enterprise levels, is closely connected to globalization processes. National governments strive to create favourable conditions in order to attract foreign investment. On the regional level a competitive business environment is an important objective in order to attract foreign companies and investors, as well as to promote the region’s products and services. There is a need for new collaborative structures, markets and investments to increase the nation’s ability to compete internationally (Claussen 2004). The global infrastructure of transportation and information presents opportunities as well as threats. A global infrastructure is considered to affect us all. It places about 20 per cent of the members of the world community within a context of flexibility and freedom of choice, and enslaves the remaining 80 per cent. This phenomenon has been referred to as the ‘globalization trap’ (Martin and Schumann 1996). The globalization trap introduces an exclusively negative perception of globalization. This perspective can be modifled by drawing attention to the more ambiguous aspects of globalization On the one hand individualization and deregulation are at the core of the neo‑liberalist perception of globalization.

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According to this view there is an inevitable movement towards more flexible work life arrangements and business opportunities. On the other hand new forms of collaboration, solidarity and reflexivity are emerging (Beck, Giddens and Lash 1994). Some take the shape of global neo‑republican protest movements (Habermas 1992 and 1993/1990) or a new revolutionary union of world citizens (Beck 1999). Together, these perspectives indicate ambiguous, contradictory and/or supplementary processes. Such ambiguous processes lead to a diversity of responses, conceptualizations and solutions. ‘Neo-liberalism’ is closely associated with globalization and is a set of economic policies that have become widespread during the last 25 years or so. Although the word is rarely heard in the United States, one can clearly see the effects of neo-liberalism as the rich grow richer and the poor grow poorer. ‘Liberalism’ can refer to political, economic, or even religious ideas. In the US political liberalism has involved strategies aimed at preventing social conflict. It has been represented to the poor and to working-class people as progressive compared to conservative or right-wing policies. Economic liberalism, however, is different. Conservative politicians who say they hate ‘liberals’ – meaning the political type – have no real problem with economic liberalism, including neoliberalism (Martinez and García 2000). Neo‑liberalism revolves around conceptions of freedom and independence. It involves the downgrading of control structures, collaborative arrangements and other bureaucratic barriers in economic life, as well as in other aspects of social interaction. It has its origin in Adam Smith’s version of political economy in his famous work The Wealth of Nations. ‘Neo’ means we are talking about a new kind of liberalism. So what was the old kind? The liberal school of economics became famous in Europe as Adam Smith published his book in 1776. He and others advocated the abolition of government intervention in economic matters. They demanded the removal of restrictions on manufacturing and they wanted to get rid of trade barriers and tariffs. Smith argued that free trade was the best way of developing a nation’s economy. Such ideas were ‘liberal’ in the sense that they abhorred any type of control. This application of individualism encouraged ‘free’ enterprise, ‘free’ competition – which came to mean that the capitalists were free to make as high proflts as they wished (Martinez and García 2000). Or is this perhaps an oversimplification of classical liberalism? Neo‑liberalism can be construed as a twisted conceptualization of Adam Smith’s theory of political economy. In Smith’s view a liberal economy was guided by an ‘invisible hand’. His major concern was to transform this ‘invisible hand’ into a speciflc structure and moral codex. This structure and moral code made independent and free producers possible. The main objective of this structure and moral code (or ‘invisible hand’) was to prevent anarchy and uncivilized arbitrariness. It was supposed to replace the old feudal control structures that prevented economic   ‘Weltbürger aller länder – vereinigt euch!’ (Beck 1999, 182).

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prosperity based on production, trade and commerce. This was an important objective that was supported by other classical social scientists, such as Durkheim in his The Division of Labour in Society (Durkheim 1964/1893). The basic point here is that independence and freedom require a specific structure, ethic/moral, laws and regulations as an alternative to restrictive feudal arrangements. Furthermore, they require a new kind of trust with new contracts, solidarity and collaborative arrangements. Neo‑liberal interpretations of the invisible hand seem to emphasize uncivilized arbitrariness and anarchy, rather than the structured freedom and independence emphasized by the classic thinkers of political economy and social science. Neo-liberalists view globalization as a civilising process. Contact across national borders stimulates cultural diversity, economic choice, freedom of travel, and new migration. Traditional roots are thus no longer as important. Instead the local/ regional becomes an important source of identity which creates a web of common unity and universal destiny through global connections (Norman 1998/1999). It is paradoxical that both those who are enthusiastic about the civilising forces of globalization, as well as those who criticize these forces, regard this inevitable development as directed by the policies of neo-liberalism. Emphasising only the positive, civilising aspects of globalization, or the uncivilized, negative aspects of neo‑liberalism, disregards the ambiguity and dilemmas inherent in globalization. The inherent dilemmas are rooted in the classical dichotomy between the individual actors and the systems and structures required to guide the interactions between social beings (Luhmann 1997 and 2000). Both are necessary aspects of social life, also in the lives of globetrotters and ‘flexi-humans’. These two aspects are present in the debates on the contemporary, as well as the future, challenges of work life (NOU 1999: 34). Collaborative structures are essential in every aspect of social life in modern society. As already pointed out, even Adam Smith, the ‘Godfather of liberalism’, emphasized the importance of a moral code of collaboration (Smith 1977/1776). The division of labour in modern society requires new collaborative structures in order to prevent anarchy and disastrous malfunctions (Durkheim 1964/1893). The inevitable individualization of work life is raised due to the evolvement of the knowledge society with its specialization, its service industries and selfemployment. It is claimed that this ‘new society’ requires flexibility, which may be achieved through deregulation and local empowerment, as well as through the downgrading of collaborative structures and the role of social partners (NOU 1999: 34). Opponents of this argument emphasize the need for basic collaborative structures. Although individualization could undermine core aspects of work life, such as workers’ support for unions, there are several indications of opposite trends (NOU 1999: 34). First of all, professional interests and other diverging interests among educated groups could increase in the future. Diverging group interests, both among professions and other educated groups, as well as general conflicts of interests

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among all actors in society, are hard to handle individually. As the number of people who have completed higher education in society grows, and education and society both become more specialized (Piore and Sabel 1984), the need for collective and collaborative structures may increase proportionally. Second, the interests and integrity of the individual need to be protected. As the importance of individual integrity grows, workers are more vulnerable to backbiting and malicious rumours; both can foster destructive competition among workers. Management, unions and shop stewards have an increasingly important role to play in order to prevent such dysfunctional competition, manipulation, strategic and instrumental behaviour (Habermas 1981 and 1992). A third point to be made, addresses the need for cooperation between highly educated and specialized producers. New collaborative structures are needed to enable specialized and individualized producers to manufacture products and services covering more diversifled needs. This applies to products, services and maintenance. Innovative products, services and solutions which disrupt traditional values and relations between customers and suppliers demonstrate the need for collaborative structures. The emphasis on networking, empowerment and regional innovation systems does the same (Sengenberger 1990; Asheim 2000; Claussen 2008). A paradox of the knowledge society seems to be that the increased individualization and specialization of the workers, makes the same workers more dependent on the deliveries and services provided by different specialists in order to do their jobs. Greater individualization and specialization thus paradoxically lead to a greater need for cooperation. A certain generosity regarding the sharing of knowledge and experience among individual workers and specialists is necessary in order to smooth cooperation and collaboration. Solidarity and collective solutions are necessary in order to create the required generosity. A fourth point to be made, is that highly educated, individualized and specialized workers can be more vulnerable to staff reductions and cuts in the workforce. Collective strategies might be a way of reducing this vulnerability. Fifth, individuals may need to be protected against exploitation. The empowerment and individualization of society may increase the competitive forces facing each actor. This could lead to increased exploitation in order to gain competitive advantages. To prevent the overall destructiveness of such tendencies, collective arrangements and regulation are essential. Collective arrangements and regulations can in the long run give competitive advantages to those markets, work environments and nations that succeed with such arrangements (Claussen 1999). To sum up, those who demand empowerment, individualization and the liberalization of work life and the business environment face criticism for not taking into account the necessity of preserving collaborative structures, and taking into account the development of new forms of solidarity and cooperative arrangements. Some illustrations of the advantages of collaborative structures prevalent in the Nordic Model (and the Norwegian national context) will be presented below.

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In the cases that follow, employees were called on to carry out changes, which were legitimated by arguments related to globalization. Radical changes were demanded, for example, in the Norwegian oil industry. There were threats that jobs would be outsourced, it was claimed that the industry was losing its competitive edge and was no longer attracting investment. The source of these problems was deemed to be government policy/regulation/taxation and the framing of activities on the continental shelf, the core source of income and business activity for the national and international actors involved. The competitive advantages of collaborative structures There are several arguments that contest the neo-liberal philosophy of deregulation as a way of creating flexibility and competitiveness in a global economy. A significant number of arguments are linked to the conception of a Nordic Model. Among these arguments the following will be illustrated in the subchapters that follow: a. Competitive work life practices, from national arrangements to the shop floor. The general agreement between employers/employees, laws and regulations make up a coherent formal system of collaboration regarding major aspects concerning public and private enterprise development. Employees are expected to play an important role in decision-making. Instead of acting solely through resistance, employees and their organizations are invited to play a crucial role in strategic decisions, work place development and other change processes, as well as most other functions of the enterprise, through these collaborative arrangements. Some examples of how this is practiced will be given in the illustrations that follow. Particular attention will be given to a case where conflict and resistance to change was turned into collaboration and commitment in order to produce alternative outcomes in a specific organizational change process. The collaborative arrangements were applied carefully and flexibly in order to create collaboration and consent to proposed changes. This is a notable illustration of some of the core practices of the Nordic Model, which unveils some of the essential ‘secrets’ of the Nordic countries. b. The competitive advantages of collaborative structures in a national context��������������������������������������������������������������������� .�������������������������������������������������������������������� The Norwegian work environment has proven to be highly competitive in its ability to attract oil investments. In spite of skeptical claims that high costs, government regulations and work life arrangements would scare away investors, the Norwegian continental shelf seems to be remarkably competitive. c. EU integration and social dumping. During the debates concerning the Maastricht Treaty and the creation of a common EU market, concern arose that capital would flow to the less developed countries in southern Europe from the  This refers to something like a constructional agreement made between employers and employees dating back to 1935. It has been continuously revised and covers the main principles and procedures for work life practices in the Norwegian context.

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more advanced countries in the north. Correspondingly there were great fears that the ‘social dumping’ caused by cheap labour would destroy work life and welfare arrangements in northern Europe. These concerns have not been validated by later developments, and contra arguments seem to outweigh these fears. This is especially evident in the rankings achieved by Nordic countries compared to countries in southern Europe, as indicated above. d. Competitive advantages of highly industrialized countries.������������� The flow of capital, investments, trade and commerce is most intensive between the most developed industrialized countries. These are the countries with the most regulated economies, highly developed collaborative structures and advanced welfare state provisions. The points listed are elaborated on below. Competitive work life practices, from national arrangements to the shop floor Globalization brings national enterprises into contact with companies, consultants and research which convey impulses from the international community. International practices are thereafter adopted and utilized locally. These impulses and practices motivate processes of change in organizations and work life practices both nationally and locally. Examples of common international management concepts that have been adopted are Total Quality (TQ), Business Process Reengineering (BPR) and Lean Production (LP). In the context of Norwegian work life practice, several enterprises have implemented organizational change and innovation processes through the adoption of international management concepts. TQ was a popular concept in the mid1990s. Occasionally competing and sometimes merged with BPR, these concepts were adapted to local work life practices and incorporated into specific change programmes introduced in local organizations. One such programme was launched in a division of a huge Norwegian company. This was an oil company with strong international affiliations. The programme was based on both TQ and BPR. Some of the main features of this programme were: • •

• • •

Continuous improvement and quality enhancement. Collaboration and communication – all parties were expected to function as both customer and supplier, internally and externally. Respect, ethical conduct and trust were emphasized. Competence building among the company’s employees. The improvement of purchasing routines. Employees on all levels were exposed to (‘positive’) competition in order to increase efficiency.

 The following is based on Claussen (1999).

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• • •

Cooperation and alliance building with other market actors who were previously competitors. The extensive use of outsourcing. Cost reduction: One major task was to reduce stocks in order to encourage capital rationing.

The programme was created by an internal expert group. These experts were in the staff division of the central corporate administration. They were highly influenced by TQ/BPR and adopted these models to implement their programme of change. Employees on different levels were invited to organize change agencies locally in their departments in the hope that they would act in accordance with the intentions of the expert team, top management and the owners. The expert team and the management identified the major objectives and the activities to be carried out prior to implementation of the programme. Employee unrest soon arose in the organization. The programme was perceived as a way of downsizing the organization. The focus on core activities seemed to downgrade production and value creation activities in what was viewed as an attempt to transform the company into a pure financial actor and administrator of production/ exploration activities. It was argued that the emphasis on core activities was in line with Porter’s philosophy. The intensification of core activities, collaboration/fierce competition and the building of strong supplier/customer relations were important features of this philosophy, as shown in the bullet points listed above (Porter 1990a and b; Reve et.al. 1992, 1995; and Reve and Jacobsen 2001). The company had several strong and well organized unions. Union representatives had not been invited to participate at any stage in the development and implementation of the programme. When the employees became aware of what was going on in the organization, the unions soon reacted. First the unions claimed that the programme and the way it was being implemented were in violation of the main agreement between employers/ employees (see footnote 5) and Work Environment act. Both stipulate that in the event of major changes, the unions and employees must be informed at a very early stage before plans, programmes and processes are launched. Unions and employees also have the right to participate in the initial framing and implementation of such programmes. This is an essential aspect of the Nordic Model’s participatory culture and is regarded as a way of encouraging work place and enterprise development (Thorsrud and Emery 1964 and 1969). Furthermore, such participation aims to create flexible and acceptable change processes in situations that might otherwise produce resistance and conflict. After the initial negative reaction, the unions’ next step was to engage counter expertise (research) in order to start a critical debate about the programme and to reveal its overall objectives. This critical debate uncovered several contradictions and counterproductive arrangements in the programme. The outsourcing aspects of the programme were specifically questioned by the union. They directed attention to several weaknesses inherent in the different

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objectives, suggestions and solutions outlined in the programme documentation. Support from external expertise enabled them to question the feasibility of the changes and the validity of Porter’s underlying philosophy. Instead they created alternative perspectives and carried out alternative feasibility studies. The following examples illustrate some of the weaknesses registered in the suggested outsourcing plans: •

• •

The supplier had access to the competence and skills of the customer’s employees and could apply this knowledge for free in order to supply the contracted services to the customer. Extended use of supplier and outsourced activities to replace in-house resources could disguise costs related to necessary competence and knowledge transfer between customer and supplier. Economic calculations in feasibility studies did not cover these costs which in the current case were significant and would produce doubt regarding the economic outcome of the outsourcing strategy. Suppliers free use of customer’s equipment and material. Utilization of the customer’s personnel in order to solve tasks contracted as the supplier’s responsibility.

The critical review of such weaknesses revealed increased transaction costs between customer and supplier following outsourcing activities. BPR was associated with outsourcing and many reported outcomes demonstrated that its results were counterproductive. The unions’ critical reflections and internal debate produced widespread employee resistance. Faced with the accusation that they had violated agreements, laws and collaborative cultural practises, top management and the expert team were soon drawn into the internal debates. During these debates several weaknesses and counterproductive solutions were addressed. The programme was stopped. Change activities were reformulated and agreed upon. Several of the new agreements had results that were considered to be favourable and advantageous by both the management/owners as well as by the unions/employees. Although the parties did not agree on all points, the critical reflections and debates produced a workable consensus (Rawls 1987) on change and innovation that most of the organization regarded as favourable. This example illustrates how the main agreement between employers/ employees (footnote 5) and laws were used to reframe a process that elicited resistance to change in the organization. Reframing the programme produced new perspectives and alternatives that in the long run were viewed as favourable. National collaborative arrangements led to innovation in the organization facilitated by the critical reflections and dialogues that took place in the public arena of the enterprise (Habermas 1992). The unions/employees responded more positively when they were actively involved; a potentially destructive atmosphere of conflict was transformed into a workable arrangement. This illustrates how collaborative structures on the shop floor level can combine with national structures to facilitate local change. It also demonstrates the expedience of the Nordic Model

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of collaboration and reveals some of the many processes at the local level where flexible responses lead to positive processes of change. The employees and unions had a system which enabled them to rally the workers’ commitment in tackling the changes affecting their interests and the work life practices they were involved in. This case also exemplifies the collaborative nature of the Nordic Model and thus sheds light on what is special about the Nordic countries. In the following we shall look at further examples of collaborative structures in a more general national and global context. The competitive advantages of collaborative structures in a national context In a political paper from the Norwegian government, the competitiveness of the nation’s oil and gas industry is analysed (St. meld. nr. 46 1997–1998). The paper identifies serious competitive disadvantages regarding the Norwegian continental shelf and the nation’s main industries. These competitive disadvantages relate to taxation, ownership structure (strong government ownership), high costs, regulations, and so on. Compared to the Mexican Gulf, the Indian Ocean and other continental shelves, the Norwegian shelf is regarded as less attractive because of its costly business and work life environment. Unless Norway deregulates and makes the business environment more flexible, it is feared that the Norwegian shelf will lose its attractiveness to more competitive, less costly and less regulated shelves (St. meld. nr. 46 1997–1998). Underlying many of these reflections is a neo‑liberal philosophy arguing for the increased flexibility of government policy and regulations in order to increase the competitiveness of the Norwegian shelf. These are not new arguments. The same arguments were advanced by international oil companies in the early phase of the development of the Norwegian oil resources. Philips characterized Norway as a backward communist country, where it was impossible for democratic capitalism to act. Laws, regulations, taxation, work environment policies and industrial relations were counterproductive. Philips claimed that it would be impossible for any company to do business in such an environment. After more that 15 years of experience with the exploitation of oil resources in the Norwegian context, the same company stated that Norway was an exceptionally attractive environment to do business in. These multinational companies considered factors such as the predictability of governmental policies, regulations and social partner cooperation to be highly favourable in Norway (Karlsen 1982). This example indicates that the business environment of a high-cost social democratic welfare state like Norway can be viewed as highly competitive. Competitiveness in the global economy has been demonstrated more or less continuously during more than 30 years of oil and gas production. Despite strong fluctuations in oil prices and the availability of oil reserves in competitive, exploitable resources elsewhere, the Norwegian oil and gas resources and the national business environment have continued to be competitive. The Nordic Model seems to have been a competitive advantage in this respect.

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The accusation that communist structures prevailed in the Norwegian business environment, attracts attention to many aspects of the Nordic Model. Collaborative structures and employee participation, specifically representative structures, have been regarded with suspicion. This also applied to practises within the Norwegian Democracy Project (Thorsrud and Emery 1964 and 1969) and to employee board membership. Several management representatives were sceptical and attacked these ‘socialist’ arrangements. However, after employee participation on the board had been practiced for several years, some of the same management representatives found the arrangement to be a highly appreciated aspect of work life democracy (Claussen 1999). Thus, within the oil industry and within historical accounts of management attitudes in Norway, we find, contrary to neo‑liberalist claims, that collaborative arrangements can be flexible and regarded as favourable by both management/owners and employees. EU integration and social dumping Prior to the ratification of the Maastricht Treaty and the creation of the European common market, impact assessments were made of the consequences. In an impact assessment of the consequences for Germany, Klaus Busch noted several factors of major concern (Busch 1992). The flow of capital from north to south might increase. Cheap, low-standard products would flow from south to north. Cheap labour, which was less organized and regulated, might put pressure on the standard of work conditions in the north – a mechanism which has been labelled social dumping. The fear of social dumping was of major concern. Greater flexibility through deregulation was purported to be the proper neo‑liberal response to these threats. Contrary to this picture, Busch advances an alternative perspective (Busch 1992). The most industrialized nations in northern Europe possessed advantages due to: • • • • • •

political stability competent and experienced workforces highly developed networks of suppliers high levels of standardization regulated and predictable social environments advanced infrastructures

These are factors of great importance to the competitive advantages of highly industrialized nations (Busch 1992). The flow of capital, goods and services primarily takes place between the most industrialized nations. As newly industrialized countries emerge, these countries seem to become more attractive as they acquire the competitive advantages listed above. In addition, OECD states that domestic markets are the most important markets for multinationals, industry and services (Dølvik 1999; NOU 1999: 34).

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These arguments challenge the claims of neo‑liberalism, questioning its emphasis on flexibilization through de‑regulation, less government intervention and the loosening of collaborative structures as necessary responses to globalization. Contrary to neo‑liberal arguments it might be argued that regulation, government intervention and collaborative structures increase the predictability, flexibility and competitiveness of the business environment. Standardization and regulation seem to create predictability and flexibility and encourage competitiveness in a European/international context. Competitive advantages of highly industrialized countries The expansion of the modern world system began in southern Europe. Mercantile capital created trade relations. Trading companies from Europe were established all over the globe. This was an earlier version of globalization (Wallerstein 1978). Business and commerce have spread from the industrialized world to developing countries throughout history (Wallerstein 1980). Simultaneously a division has evolved between rich developed countries and poorer developing countries. The gap between the developed industrialized countries and the developing countries has grown steadily due to exploitation, speciflcally from monopoly capital (Baran and Sweezy 1966). A new international division of labour has been created where cheap, unorganized labourers working under poor conditions compete with the labourers and working conditions of the highly industrialized world (Fröbel, Heinrichs and Kreye 1977). The emergence of this world system and its international division of labour is of great concern. This scenario produces the fear that the competitiveness of labour and the business environment in the highly industrialized countries will be lost in competition with developing countries. Neo‑liberalists, as well as some of their critics, fear this picture of the modern world system. Although well-documented (Fröbel, Heinrichs and Kreye 1977), this is not the whole story. Important evidence modifies this picture. As Busch pointed out (Busch 1992) trade between countries in the developed northern part of Europe, with its great flow of capital and commerce, appears to have retained its attractiveness. Social dumping and other dangerous signs of sinking competitiveness in northern Europe needn’t have been feared according to his analyses (Busch 1992). Later analyses have supported this point of view (see for example OECD in Dølvik 1999). The facts seem to verify Busch’s perspective on the global economy. The greatest flow of investments, trade and commerce is taking place between the most industrialized countries. Capital appears to flow to a greater extent between countries with well developed regulatory environments, strong government control and intervention, well developed health, safety and environment regulations (HSE), highly skilled and experienced labour, political stability and predictability,

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and so on (Neusüß 1972; Busch 1974; Schoeller 1976). This is reflected in the foreign exchange rates (Altvater 1969). Fears that the creation of an internal market in Europe would divert the flow of capital from North to South, and create a flow of cheap, poor quality merchandise from South to North, as well as leading to social dumping, have been questioned in impact assesments and refuted by empirical flndings. Similar analyses can be made regarding the global economy and the modern world system. Foreign exchange rates indicate which countries have an advantage economically and socially. Perspectives exclusively based on cost effeciency cannot account for the whole picture of competitiveness globally. Cost effeciency perspectives have to be supplemented with perspectives from the social sciences in order to highlight aspects of the embeddedness of economy in social life (Granovetter and Swedberg 1992; Swedberg 2000; Dobbin and Baum 2002; Dobbin (ed.) 2004). Collaborative structures are important aspects of social as well as economic life. The individual is embedded in interactional orders, systems and structures (Goffman 1986; Luhmann 1997). This applies to economic considerations as well as perspectives on work life (NOU 1999: 34; Skorstad 1999; Skorstad and Ramsdal 2004). On the enterprise level, systems of control structures modifly the independency of autonomous teams (Skorstad and Ramsdal 2004). Such control structures present in social relations and work life are embedded in the bodies and souls of individuals. Even though individuals may appear to be isolated islands, as they are perceived in neo‑liberal philosophies, control structures, obligations and duties are internalized (Foucault 1985) helping to integrate individuals into a coherent societal structure. Focusing on collaborative structures framing work life practices at enterprise level, reveals examples of practises of resistance transformed into flexible attitudes and critical reflections that produce alternative perspectives, solutions and outcomes. How this can be manifested in a specific shop floor context was exemplified above. In this example resistance and preconditioning collaborative structures were utilized to create a collaborative critical reflective dialogue on possible changes for the future of a work place. This whole collaborative culture encouraged flexible and innovative outcomes in close dialogue and collaboration between management/experts and union/employees. Both the collaborative culture and an organizational collaborative structure contributed to the framing of these flexible and innovative responses by the major actors. On a different level the division of labour requires cooperative structures and a guiding moral (Durkheim 1964/1893). This was regarded as essential even in the classical theory of the liberal tradition (Smith 1977/1776). A society without collaborative structures and regulatory regimes will not fullfll the requirements of  This is though, not neccessarly the whole story behind differences in exchange rates. Monopoly tendencies within certain industries, for example the production of military equipment in the US, can be an important factor in deciding the exchange rate and position of the dollar globally.

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a competitive and predictible economy. This is true in both theory and practice, and it is in accordence with empirical flndings. A neo‑liberalist standpoint arguing that flexibility can be gained through simple deregulation, for example through the downgrading of collaborative structures and welfare state provisions, leaves out essential factors that determine a society’s long-term competiveness in the context of globalization, as my examples have indicated. Concluding reflections Numeric flexibility is a central characteristic of work arrangements in less developed countries (Fröbel, Heinrichs and Kreye 1977). Neo‑liberalists argue that this kind of flexibility gives these countries competitive advantages. Furthermore, they believe that developing countries, particularly those practising a Nordic Model of work life, require deregulation, the downgrading of collaborative structures and a restructuring of welfare state arrangements in order to compete successfully. This flexibilization is necessary if they are to meet global competitiveness (NOU 1999: 34). There are several possible modiflcations of this picture. We have highlighted the following: •

•

•

The Nordic Model seems to support a highly competitive business environment. One indication of this is the attractiveness of the Norwegian oil and gas resources on the North Sea continental shelf. The Norwegian business and work environment was initially judged by multinationals to be an obstacle for business, although the opposite opinion has been expressed on later occasions (Karlsen 1982). In preliminary debates on a new judicial act on work life in Norway (NOU 2004: 5; Helge Ramsdal ‘The Quest for Flexibility …’ in Skorstad and Ramsdal 2006) it was argued that collaborative structures and a well developed regulatory scheme were essential, in contrast to the neo-liberal opinions expressed in this controversy. Analyses, empirical investigations and impact assessments on the implications of the creation of a common market for EU members, gave similar results (Busch 1992; Dølvik 1999). The social dumping that was expected to arise did not have a significant impact on the further integration of EU countries into a common market. Worker migration has not increased to a notable extent. The flow of capital into less developed areas has not increased comparatively as feared. Neither has the flow of cheap, poor quality merchandise from less developed to more developed areas increased to the extent feared in advance. Results from EU assessments are corroborated by the global development of the world economy as well. The domestic market is still the most important market for multinationals (NOU 1999: 34). The major movements of capital, commodities and services take place between the most developed countries

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•

251

(Neusüß 1972; Busch 1974; Schoeller 1976). Infrastructure, collaborative structures, regulatory regimes, HSE requirements, political stability and predictability, as well as welfare state arrangements, are important national competitive advantages in the long run. Flexibilization through neo‑liberal deregulation, individualization, empowernment and downgrading of collaborative structures are not justiflable as necessary moves in meeting global competition. Enterprise development programmes are inspired by global/international management concepts. They are mainly based on individual employee participation where change programmes are often shaped and implemented by change expertise based on the initiative and decision of management. In Norway examples indicate that collaborative structures can be utilized to encourage employee participation, both direct and indirect, and frame or reframe basic conditions for change processes. A structure and culture for collaboration can create a process where differences of opinions are reframed to create alternative perspectives, solutions and outcomes. Processes of flexible responses can turn inflexible resistance to flexible and creative participation in change and innovation processes.

The anarchic individual is not an accomplished social human. Individual economic actors do not yearn for and are not satisfied by a utilitarian economy. Even a utilitarian view of social life must rely on collaborative structures, laws and regulations. This was the case with Adam Smith (Smith 1977/1776), but it also affected the more extreme position of ‘the father’ of utilitarism, Jeremy Bentham (Bentham 1996). Flexibility interpreted as the absence of laws, regulations and collaborative structures is a neo‑liberal flction. For Adam Smith a regulatory regime and moral codex were necessary requirements in order to make independence and flexibility among producers possible. The market was regulated by an imagined, invisible hand. Durkheim expressed a similar position regarding the moral codex deemed necessary for the smooth functioning of the division of labour in modern society. Independence and flexibility are made possible through collaborative arrangements, laws and regulations. Collaborative arrangements, laws and regulations lead to a kind of independence or freedom that is more valuable than the simplistic freedom that allows arbitrary clashes between disinterested or unstructured individuals. Democratic arrangements in work life (and society as a whole) satisfy the requirements of industrialized societies and can safely replace the traditional controls of authoritarian structures (Weber 1985/1921) with structures that encourage consent and commitment and create a workable consensus between actors possessing differences of interest and opinion. As the discussion above indicates, flexibility is not necessarily a matter of deregulation or the downgrading of collaborative structures. Instead, it involves utilising (and possibly changing when appropriate) existing regulations and structures in order to facilitate change and development. In this respect, a pragmatic

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NOU 1992: 20, Det gode arbeidsmiljø er lønnsomt for alle (Oslo: Norges offentlige utredninger). NOU 1999: 34, Nytt millennium – nytt arbeidsliv? (Oslo: Norges offentlige utredninger). NOU 2004: 5, Arbeidslivslovutvalget. Et arbeid for trygghet, inkludering og vekst (������������������������������������� Oslo: Norges offentlige utredninger). Nowotny, H., Scott, P. and Gibbons, M. (2001), Re‑Thinking Science: Knowledge and the Public in an Age of Uncertainty (Cambridge: Polity Press). Østerud, Ø. (1999), Globalisering ����������������� og nasjonalstaten (��������������� Oslo: Ad notam Gyldendal). Pateman, C. (1970), Participation and Democratic Theory (Cambridge: Cambridge University Press). Piore, M. and Sabel, C. (1984), The Second Industrial Divide (New York: Basic Books). Porter, M. (1990a), The Competitive Advantage of Nations (London: The Macmillan Press Ltd.). —— (1990b), ‘The Competitive Advantage of Nations’, Harvard Business Review (Boston: Harvard Press). Ramsdal, H. (2006), ‘The Quest for Flexibility and Governmental Regulations of Working Life – the Case of the 2005 Norwegian Worker Protection and Working Environment Act’, in E. Skorstad and H. Ramsdal Facets of Flexibility (Halden: Østfold University College). Rawls, J. (1987), ‘The Idea of an Overlapping Consensus’, Oxford Journal of Legal Studies 7:1. Reve, T. et al. (1992), �������� Et konkurransedyktig Norge (Oslo: Tano). Reve, T.���������������� et al. (1995), Internasjonalt konkurransedyktige bedrifter (Oslo: Tano og Norges eksportråd). Reve, T.�������������������������� and Jakobsen, E. (2001), Et verdiskapende Norge (Oslo: Universitetsforlaget). Ricardo, D. (1977/1817), The Principles of Political Economy and Taxation (�������������� London: Dent). Schoeller, W. (1976), Weltmarkt und Reproduktion des Kapitals (Frankfurt am Main: Europäische Verlagsanstalt). Schumpeter, J. (1983/1934), The Theory of Economic Development (New Brunswick, N.J.: Transaction Books). —— (1987/1943), Capitalism, Socialism and Democracy. With a new introduction by Tom Bottomore (London: Unwin Paperbacks). Sengenberger, W. (1990), Industrial Districts and Inter‑firm Co‑operation in Italy (��������������������������������������������������� Geneva: International Institute of Labour Studies). Skorstad, E. (1999), Organisasjonsformer. Kontinuitet eller forandring? (Oslo: Gyldendal akademiske). —— (2006), ‘The Ambiguity of Flexibility’, in E. Skorstad and H. Ramsdal Facets of Flexibility (Halden: Østfold University College).

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Skorstad, E. and Ramsdal, H. (2004), Privatisering fra innsiden (Bergen: ���������������� Fagbokforlaget). Skorstad, E.������������������������������� and Ramsdal, H. (eds) (2006), Facets of Flexibility (Halden: Østfold University College). Smith, A. (1977/1776), The Wealth of Nations (New York: Random House). St. meld. nr. 46 (1997/98), Olje- og gassvirksomheten (������ Oslo). Swedberg, R. (2000), Entrepreneurship (Oxford: Oxford University Press). Thorsrud, E. and Emery, F. (1964), Industrielt demokrati: representasjon på styreplan i bedriftene? Noen norske og utenlandske erfaringer (Oslo: Universitetsforlaget). —— (1969), Mot en ny bedriftsorganisasjon: eksperimenter i industrielt demokrati (Oslo: Tanum). Wallerstein, I. (1978), Det moderne verdenssystem (Oslo: �������� Fakkel). ——��������� (1980), The Capitalist World-Economy: Essays. Studies in modern capitalism (��������������������������������������� Cambridge: Cambridge University Press). Weber, M. (1985/1921), Wirtschaft und Gesellschaft. Grundriss der verstehenden Soziologie (Tübingen: J.C.B. Mohr).

Chapter 12

Concluding Remarks: The Complex Dynamism of the Flexible Organization Egil J. Skorstad

The main issues addressed in this book have revolved around inter-related questions concerning flexibility in organizational settings; what are the main arguments for its importance; how is it manifested, and; what kinds of impact might it have on the working conditions of ordinary employees? These questions have been the subject of discussion on numerous occasions for some time, but in spite of the expended effort, the general picture remains vague. There are still no unambiguous answers to the questions posed, we are often left with mixed and contrasting impressions of what flexibility is all about. One reason for this confusion is, as we have indicated, the political dimension attached to the concept. The relentless pursuit of flexibility may, as illustrated by Helge Ramsdal in Chapter 10, be linked to the alleged globalization affecting the world economy, and as such it may be interpreted as a part of the neo-liberal turn which has swept over most of the world during the past two or three decades. This is a turn, as we now know, which involves deregulation for the benefit of the free flow of products, labour and capital. Furthermore it involves the creation of institutional frameworks to secure and support this flow, and a shift in power from the level of managing directors to the level of shareholders or corporate headquarters operating anywhere in the world (Harvey 2005). All this, it is argued, benefits ordinary citizens who may find themselves empowered – with the freedom to choose according to their individual needs and preferences. Flexibility is argued to be imperative in this scenario and the quality of the argumentation in its favour is likewise important since it determines whether the quest for flexibility will be met with opposition or consent. Consequently, advocates of neo-liberalism are inclined to portray flexibility in a favourable fashion, as is commonly seen in management-oriented literature. Here, flexibility is usually described in positive terms; it allegedly benefits all the involved parties, both the individual firm as well as its employees. The potential negative implications are often glossed over or simply suppressed in the attempt to gain support for what are considered to be higher objectives. Another explanation for the confusion lies in the concept itself. Flexibility is, as we pointed out in Chapter 2, used in a notoriously ambiguous way. In the literature on organizations and working life in general it may be used to describe virtually anything: the quality of the labour market, the character of the

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organization, technological properties, the capacity and the competence of the workers, the functioning of the wage system, the quality of the marketing system, the production and planning system, and so on. The resulting confusion of such a conceptual practice should not come as a surprise; when flexibility, as it were, may mean anything, the effect of it may of course also prove to be anything. In order to deal with this problem our theoretical discussion has mainly concentrated on what we refer to as ‘organizational flexibility’, meaning ‘the ability of an organization to respond to variations and unexpected occurrences in a pliable and adaptable way’. Furthermore we have perceived this particular ability as the outcome of the (mutual) interaction between four constituting dimensions; employment practices, organizational structure, organizational culture and network arrangements. According to this logic it is the complex interactions between these dimensions that produce flexibility, not their individual contributions in an isolated or additive sense. One of the consequences of such an approach is that each dimension may have unanticipated impacts and occasionally lead to quite contrary effects compared to what may have been expected in the first place. Henrietta Huzell illustrates this in a convincing way in her discussion of the reorganization of the Swedish Railroad in Chapter 8. Her case study mainly describes the attempts made to transform selected sectors of this organization into flexible systems through structural change. The introduction of temporary, project related teams supported by national centres of competence was the primary measure used to reach this goal. Furthermore, to ensure proper functioning, the management also considered it imperative to change employee attitudes in order to attain a culture which would be supportive of and compliant with the new formal arrangements. However, as it turned out, the management was not particularly successful in their endeavours. Neither the arguments for changes, nor the changes themselves, were accepted at face value at the level of production. Those exposed to the experiments judged them simply to be new rationalization attempts; they even considered them to be detrimental to the quality of their work. Consequently, they perceived resistance to be quite reasonable; the proposed measures were conceived of as a step in the wrong direction. Thus what was meant to improve flexibility through structural measures turned out to have the opposite effect because of the cultural turn it provoked among ordinary rank and file workers. Similarly, the extensive use of non standard employment in order to obtain flexibility may prove to be counterproductive, either because of the subsequent shortage of adequately qualified workers in the handling of daily operations, or because of the opposition such practice may foster if it is conceived of as cynical and unacceptable. To be sure, we have no example of such effects at the organizational level in the present anthology, but the interrelation is illustrated in a more general sense by Michael Rose and Harriet Bradley in Chapters 3 and 4 respectively. Younger workers may, for instance, be inclined to demonstrate ‘internalized flexibility’ in the sense that they welcome variety and change in general. Older workers, on the other hand, may be more apt to prefer stability and tradition and demonstrate hostility towards flexibility schemes, in particular if

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they live and work in areas characterized by strong industrial traditions. There are obviously some cultural differences in evidence here, which may trigger off quite contrasting attitudes towards the actual measures, dependent on the intentions ascribed to them. The difference in attitudes and opinions described in Chapter 7 is also illustrative when it comes to the antagonism at the level of the nation. Even more illustrative of the differences of opinion was the struggle over the CPE (Contrat Première Embauche) in France in 2006, when workers and students alike took to the streets in loud, angry protests against the attempts made by the government to extend the time of probation for first entrants into the French labour market. These cases are, needless to say, examples of conflicting interests which may be manifested both at the national as well as the organizational level. At first glance the battle over the regulation of non standard employment arrangements appears to have been fought out by parties of equal power. At least this may seem to be the case if we look at the statistics for such working arrangements during the past decades. Birgitta Eriksson, Jan Ch. Karlsson, Michael Rose and Øystein Strøm, demonstrate that the figures are not characterized by any signs of significant change in any direction. Indeed there are differences, but these are confined to differences between nations, between industries and between female and male employees. The statistics on non standard employment within each of these categories are quite stable, at least for the countries studied in these cases. There is no obvious trend in either direction, and this may, of course, support the assumption about the balance of power mentioned above. This general stability may, however, also be interpreted in other ways, for example as an indication that sufficient flexibility has already been acquired, or simply as a demonstration of the invalidity of the hypothesis put forward by John Atkinson in the middle of the 1980s. In other words, the crux of the matter may be that there is no further need for increased flexibility; its alleged importance is highly exaggerated. This, however, would be a premature, possibly erroneous, conclusion, and the reason for this is embedded in the phenomenon itself. Organizational flexibility is not, as we have demonstrated in this anthology, exclusively attainable through ingenious non-standard employment practices. Such practises may turn out to be of minor importance compared to what may be obtained through structural, cultural or network arrangements. Furthermore, they may even hamper the attainment of flexibility if used extensively, guided by some narrow minded obsession with attuning the cost of manpower to the level of production. When asked, managers seem to be aware of this potential danger (Skorstad 2002; Ramsdal and Skorstad 2008). They are not necessarily that eager to treat parts of the workforce as interchangeable components. They are not that eager either, to draw any fixed line between core and peripheral workers. Instead their primary concern seems to be having a deployable workforce capable of operating in a compliant, pliable way. Consequently, the idea of obtaining different kinds of flexibility through the segmentation of the labour force into a core and a periphery may prove to be a relic of the past. Today, as Stephen Ackroyd notes in Chapter 9, there is ample evidence of

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a contrary trend implying that traditional arrangements based on job demarcations have been replaced by teams (or cells) of multiskilled employees operating in a multifunctional fashion. In many discussions of flexibility, one important issue is often forgotten. Organizational flexibility should not be considered an end in itself. Its prospective importance rests in its potential to improve profitability, and its contemporary advantage rests in its facilitation of the adjustment of organizational processes to meet current challenges and demands. In this sense the compliant, multifunctional employee emerges as the ideal worker in the flexible configuration. Compliance may, however, evolve along different paths, and one of these paths is characterized by consent and commitment, where workers are cooperative and creative of their own, free will. This is often said to be the comparative advantage of the Scandinavian model, as demonstrated by Tor Claussen in Chapter 11. The participative and presumed democratic approach embedded in this particular construction is said to foster favourable working conditions and widespread satisfaction among ordinary employees (Thorsrud and Emery 1970). For this reason they are expected to cooperate in a creative way, and studies have also demonstrated that they actually do, even though there may be examples of the opposite, as we have seen in Henrietta Huzell’s case study in Chapter 8. At any rate, if workplace democracy is taken seriously, surveys investigating the prevailing situation in the Norwegian manufacturing industry illustrate that the parties involved express their satisfaction with such arrangements (Skorstad 2002). Their satisfaction is, however, related to different objectives. Ordinary blue collar workers consider participation mainly as an instrument for improving their influence and avoiding unfavourable management decisions. Managers, on the other hand, relate their approval to the question of flexibility. Participation, they say, produces responsible and cooperative workers; existing conflicts of interest and potential resistance recede in favour of a climate of consent and cooperation, and this, of course, is an asset for any manager. In other words, change and cooperative creativity may thrive under such conditions. This effect is also demonstrated in Chapter 4 where Harriet Bradley illustrate that flexibility schemes imposed on workers in a top-down fashion are apt to foster hostility, while solutions produced by management in some sort of agreement with the union may lead to acceptance from their union members. The latter is also a point to take note of in Philippe R. Mossé’s description of the differences found in the restructuring of Italian and French hospitals. Compliance may, however, also be reached along a completely different path; a path which contains threats as well as severe constraints. This may especially be the case when employees are confronted with growing job insecurity. One of the distinctive features of contemporary capitalism is said to be the transient nature of existing constructions (Bauman 2002; Sennett 2006), and one of the major contributors to this growing state of transience is the proliferation of network constructions as illustrated by Stephen Ackroyd in Chapter 9. These are constructions characterized by asymmetrical relations when it comes to authority and power. Small firms that are parts of large business groups

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belong to this category; they are run strictly in terms of profitability and the staff at the headquarters may easily get rid of those who are not contributing to this overall goal. On the other hand new firms may be acquired if they fill the prescribed standards. As we can see, these constructions differ completely from the ideal typical industrial districts commented upon in Chapter 2, where one of the salient feature is their cooperation on equal footing; none of the participating companies holds a dominant position, the network is characterized by symmetrical relations as opposed to the asymmetrical ones dominating in the constructions mentioned above. Another contributor to the growing transience is the neo-liberal turn in general, with its exhortation of the free flow of capital. One of its effects is, as noted above, the gradual transfer of power from management to shareholders, and these shareholders most often prioritize whatever maximizes their returns on their investment. As demonstrated in the case of the asymmetrical network, those in a dependant position have no guarantee whatsoever for the terms of their employment or the viability of the firm. Consequently, firms and employees alike may find it expedient to be more pliable and flexible than they otherwise would have been. The threat in both cases comes from outside the exposed organization, and is profoundly real. It can no longer be dismissed as merely a strategic ingredient of management discourse that aims to increase productivity or elicit obedience from the workers. These different paths will, of course, have quite contrasting impacts on working conditions. In the first case, which is characterized by participation and compliance through voluntary commitment, working conditions are approved of by those who are affected. This is evident; if working conditions were not deemed favourable, there would not be any cooperative commitment. Furthermore, these working conditions tend to be characterized by those features usually considered to be positive in work life studies; changing tasks and the variation and the learning possibilities that accompany them, the worker’s autonomy and the attendant possibility of employing personal discretion in the planning, organizing and completion of a particular job (Thorsrud and Emery 1970). It goes without saying that this is not only a preferable situation for the employees. It may also be beneficial to the organization as this kind of behaviour may contribute to its performance in a creative and flexible way. This is, as has been noted, said to be one of the important aspects of the Scandinavian model. Working conditions under regimes characterized by insecurity and constraints may include some of the same properties as those discussed above, but there is a decisive difference separating the two, hinging on the question of autonomy. In the first case, workers are allowed some freedom to follow their priorities and choose what they judge to be the best solution. In the second case, this is a freedom that is heavily restricted; workers may use their discretion as long as the outcome benefits the powers that be, and this may prove to be a challenging situation indeed. Workers may easily find themselves in a demanding, vulnerable and even humiliating position, where they have to make some extra effort, tolerate unfair

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treatment and follow orders that infringe upon the limits that otherwise would have sparked off protests and resistance. The ultimate result is intensification of work. Resistance might, of course, have limited the potential damage, but worker resistance under these conditions might turn out to be a double-edged sword. Shareholders and managers at corporate headquarters have not proved to be particularly patient when it comes to the question of profitability; they have no mercy with those who don’t live up to their expectations. Under such conditions, employees may find themselves in a permanent state of insecurity, and this state exacerbates the already existing disciplinary effects described above. Today, examples may be found of both practises, and the crucial question, then, is what working life will be like in the future and whether constraint or commitment will emerge as the dominant way of realizing the coveted adaptability. At present, there is obviously a development in the wrong direction. Working life is, as Richard Edwards (1979) puts it, a ‘contested terrain’, and so far constraint seems to be prevailing over commitment. This is not only the case in the private sphere, where some sort of constraint has always been embedded in the nature of competition. It has also slowly but surely gained a foothold in the public sphere, as political considerations have been sacrificed to economical priorities (Ramsdal and Skorstad 2004). In this sense this sector has also, as demonstrated by Henrietta Huzell and Philippe R. Mossé in their chapters, been plagued by the neo-liberal turn, in spite of the presupposed importance of democratic considerations in the public sector. ‘Neo-liberals’, David Harvey says, ‘are profoundly suspicious of democracy’ (Harvey 2004, 66). They see it mainly as a time and cost consuming activity that should be replaced by governance by experts or elites the sooner the better. We have witnessed such changes for some time now, and even the Scandinavian countries, who love to boast about their democratic institutions, seem to have been seduced by the rhetoric of the spokesmen of the new logic. There are, however, several reasons for suggesting that the neo-liberal victory may have been declared too soon and that its successful advancement so far may have come to a halt or is approaching a turning point. One such reason is related to the artificial introduction of market mechanisms into public affairs. In many cases within this sector there is no competition at all, the employees are normally aware of this, and they run little or no risk in resisting tentative attempts at turning these operations into business like systems. This is an important lesson to be learnt in the case study presented by Henrietta Huzell in Chapter 8. The workers in this organization knew that there were no real competitors around, there was no threat that they would lose their jobs, they were confident that their original organization format was preferable in matters such as safety on the track lines. Consequently they found it both expedient as well as safe to resist the changes they conceived of as faulty. Their situation is exemplary in terms of some of the qualities of the public sector. Employees in this part of the economy usually run fewer risks when

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protesting and resisting than do their counterparts in the private sector. In other words, neo-liberal experiments instigated to increase flexibility within public organizations may prove to have contradictory effects because of the reactions they may provoke among ordinary employees. Another reason for postulating a potential turning point is related to the growing awareness of what is often referred to as externalized liabilities (Harvey 2005). The most serious liability is that of increased pollution which respects no borders and may randomly affect any location and any population in serious ways. There are other liabilities as well, such as the increasing relocation of companies and industries, the resulting growth in unemployment and the negative effects in general accompanying predatory reorganization and other kinds of organizational misbehaviour made possible within the non regulated sectors of the economy. Such effects may, if they become serious and obvious enough, reverse the present unfavourable image of regulation, reinstating its former glory. If such a change were to happen, it would certainly benefit ordinary employees whose situation in flexible regimes inspired by the neo-liberal logic is occasionally referred to as flexploitation (Bourdieu 1998). In the meantime, disciplinary constraints seem to be on the offensive compared to autonomous commitment as a strategy for developing flexible operations. This may, as we have indicated, be considered to be a serious problem for those who are affected, but it may also be considered a problem for the organization itself. The latter follows from the extra efforts and the commitment it may miss because employees are treated in an intolerable fashion. Contented workers may, as we have argued, display their creativity in cooperative ways. Discontented workers do not. They tend not to use their creativity at all, in the worst case scenario they may use it in subversive ways unless they are subjected to the disciplinary restraints embedded in the permanent risk of losing their jobs. Both kinds of behaviour are, of course, to the disadvantage of the firm, in an economic sense as well as in terms of flexibility. References Bauman, Z. (2002), Fællesskab. En søgen efter tryghed i en usikker verden (København: Hans Reitzels Forlag). Bourdieu, P. (1998), Acts of Resistance. Against the Tyranny of the Market (New York: The New York Press). Edwards, R. (1979), Contested Terrain. The Transformation of the Workplace in the Twentieth Century (New York: Basic Books, Inc., Publishers).

 This is also, as shown by R. Øystein Strøm in Chapter 6 one of the reasons why temporary workers are more numerous in public compared to private organizations. Troublemakers or otherwise unwanted labour may not be disposed of as easily in the first as in the second case.

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Harvey, D. (2005), A Brief History of Neoliberalism (New York: Oxford University Press Inc.). Ramsdal, H. and Skorstad, E.J. (2004), Privatisering fra innsiden. Om sammensmeltingen av offentlig og privat organisering (Bergen: Fagbokforlaget). Ramsdal, H., Skorstad, E.J. and Strøm, Ø. (2008), Fleksible virksomheter i privat og offentlig sektor (Halden: HiØ). Sennett, R. (2006), The Culture of the New Capitalism (New Haven/London: Yale University Press). Skorstad, E.J. (2002), Organisasjonsformer. Kontinuitet eller forandring? (Oslo: Gyldendal Akademisk). Thorsrud, E. and Emery, F. (1970), Mot en ny bedriftsorganisasjon. Eksperimenter i industrielt demokrati (Oslo: Tanum).

Index

24/7 schedule 57–9 1979 Conservative government policy in UK 215 Abernethy, William 27 ACAS flexibility survey inUK 193 accreditation inFrance 147 adult workers, young 88–91 AEEU see Amalgamated Electrical and Engineering Union age groups and income levels 92 Agenzia per la Rappresentanza Negotiale delle Pubbliche Administrazioni (ARAN) 150 ‘alternative flexibility debate’ 70 Amalgamated Electrical and Engineering Union (AEUU) 83, 86 ambiguity concept of flexibility 18, 20, 38–9, 164, 257–8 flexibility 17–42 America see US ARAN see Agenzia per la Rappresentanza Negotiale delle Pubbliche Administrazion Atkinson, John aspects of flexibility model 237 core employees 117 flexible firm model 7, 22–6, 43, 98–9, 111 legal regulations 210–11 UK manufacturing 191–2 attitude of employees 33–4 autonomy in French and Italian Hospitals 160 azienda sanitaria locale (AZL), Italy 148, 161 bank workers 87 Banverket (Swedish National track authority) 10, 170–1

behaviour of management 32 Benetton company 37 Beynon, Huw 82 BPR see Business Process Re-engineering brands 36 Britain adult workers 88–91 capital extensive firm 199 economy 189 flexible firms 194 flexible labour market 82–4 manufacturing 12 BTR company 197 bureaucratic control concept 32 ‘bureaucratic spoiling’ 87 business groups flexibility in UK 195–200 Business Process Re-engineering (BPR) concept 243–4 CAD see computer-aided design CAM see computer-aided manufacturing CAPI interviews (computer-aided personal interviews) 82 capital extensive firm (CEF) 199–200 CAPM see computer-aided production management car industry (US) 27 care assistants in French and Italian hospitals 154, 157 careers of employees 33 cars and ‘dominant design’ concept 27 CEF see capital extensive firm cellular manufacturing in UK 190–2, 203 centrist-right proposals to Norwegian government 221, 222–4, 225 CFDT union, France 151 CGIL union, Italy 151 Chartered Institute of Personnel Directors 84 chef de service inFrench hospitals 153

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choice of regime 45 CIM see computer-integrated manufacturing cooperative advantages of highly industrialized countries 248–50 collective bargaining 34 competitive advantages of collaborative structures 242–50 computer manufacture in US 32 computer-aided design (CAD) 190 computer-aided manufacturing (CAM) 190 computer-aided production management (CAPM) 190 computer-integrated manufacturing (CIM) 190 concept of flexibility ambiguity 18, 20, 38–9, 164, 257–8 components of flexible firm 237–8 description 2–3 Norway 213–15 regulatory regimes 211–12 Confederation of Norwegian Enterprises, (NHO) 218–19 conflict at work 167 constructive insecurity 55–6 ‘contested terrain’ concept 167–8, 262 contradictions 2 Contrat Premiere Embauche (CPE) 259 ‘coordination without hierarchy’ 36 core workers 98–9 ‘corporate culturism’ 164–5 CPE see Contrat Première Embauche craft manufacturers 27 culture organizations 21, 31–5 Swedish railways 163–8 working life 3 definitional contention 43–6 demographics of workplace 106 desirability of employees 24 Diagnosis Related Groups (DRG) mechanism 145, 147, 155 dimensions of ‘organizational flexibility’ 3 Direct Control 25 disciplinary constraints and flexible operations 262 dismissals legislation inNorway 135–6, 224

distance flexibility 237 ‘dominant design’ of cars 27 DRG see Diagnosis Related Groups dualistic rhetoric 107 dynamism of flexible organizations 257–63 ‘easy hire – easy fire’ policy inFrance 228 economic advantages of flexibility 18 Economic and Social Research Council (ESRC) 81 economy flexible 43 UK 187–208 Edwards, Richard 32, 34 efficiency organizations 35 theory 116 EHRC see Equality and Human Rights Commission employees attitude 33–4 careers 33 desirability 24 flexibility 71, 79–95, 87–8 flexitime 5 morale 43–77 permanent 22 ‘red-circled’ 87 self-interest 34 work environments 105 employers and flexibility 85 employment Norway 7, 119–24 practices 3, 21, 22–6 engineering firms inUK 190–1 enterprise flexibility 24–5 restructuring inNorway 224 environment and workplaces 106 Equal Opportunities Commission (EOC) 83 Equality and Human Rights Commission (EHRC) 83 Ermatinger, John 37 ESRC see Economic and Social Research Council EU see European Union Europe management practice 144

Index European Union (EU) economic development 13 flexible firm concept 215 flexicurity 228 incidence of flexibility 46 integration 242–3, 247–8, 250 Norway 123 Export Processing Zones 36 externalized liabilities and pollution 262 fare i tappabuchipolicy (Italian hospitals) 156 Farewell to Flexibility 44, 80–1 ‘fashion for focus’ concept 198 female employment inNorway 123, 127–9, 129–31 financial flexibility 6–7, 23, 81, 99–100, 237 ‘firm-specific competence’ 6 firm-specific investments inhuman capital (FSIHC) 115–16, 117 flexibility see concept of flexibility ‘flexibility, globalization and workplace’ relationships 12–13, 233–56 flexibility package hypothesis 97, 98–102 flexibilization hypothesis 97, 98–102 ‘flexible capitalism’ 4–5 ‘flexible economic systems’ 11 flexible economy (UK) 11–12 flexible firm Atkinson model 7, 22–6, 98–9, 111, 210–11 concept 43, 45, 237 discourse 14 European Union (EU) 215 ‘flexible manning’ 5, 97 ‘flexible’ organizations inNorway 210–11 ‘flexible rostering’87 flexicurity inNorway 227–8 flexitime 5, 70, 88, 93 ‘flexploitation’ 79 Ford Motor Company, US 202 Fordism 1, 6, 57, 80–1, 201 foundations of flexibility 37–9 France accreditation 147 autonomy inhospitals 160 care assistants inhospitals 154, 157

267

CFDT union 151 chef de service in hospitals 153 Contrat Première Embauche 259 CPE legislation 209 ‘easy hire – easy fire’policy 228 flexibility inhospitals 153–9 glissement de tâches inhospitals 156 health care system 147 hôpital 2007 reforms 161 hospitals 143–62 hospitals research study 146, 151–3 incentives for hospital workers 158–9 industrial relations inhospitals 149 Juppé plan 147 nurses 10, 154, 156–7 polyvalence inhospitals 155–8 ‘Social Security’ System 147 unions 150, 151 Friedman, Andrew 24–5, 26 FSIHC see firm-specific investments inhuman capital full-time employment inNorway 122 fun factor 107 functional flexibility 4, 25–6, 57–67, 98, 99, 237 GEC company 197 Gender and Power inthe Workplace 81 geographical flexibility 46 German labour market 228 glissement de tâches (task shift) inFrench hospitals 156 globalization 8, 34, 237–42 ‘good environment’ hypothesis 7 good work environment hypothesis 97, 102–6 government role inNorway 209–10 graduate destinations (2003) 92–3 ‘habits of predictability and dependability’ 32 Hanson trust 196–7 health care system France 147 Italy 148 Health, Safety and Environment regulation (HSE) 248 health sector inNorway 120–1, 127, 132–3

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HESA see Higher Education Statistics Agency high performance workplace 45 Higher Education Statistics Agency (HESA) 92–3 ‘hire-and-fire’principle 55 hôpital 2007 reforms inFrance 161 hospitals flexibility 153–9 France 143–62 French/Italian comparison 146–53 human resource management 144, 150, 158–9 Italy 143–62 research study inFrance and Italy 9–10, 151–3 HRM see human resources management HSE see Health, Safety and Environment regulation human resources management (HRM) 43, 45–6 inhospitals 144, 150, 158–9, 161 implicit job guarantee theory 116 incentives for hospital workers inItaly 158–9 incidence of flexibility European Union (EU) 46 UK 46–7 ‘inclusive working life’ (IA) campaign inNorway 213 income levels and age groups 92 industrial districts Marshall concept 201 industrial relations inFrench and Italian hospitals 149 insecurity 55–6 integration of Nordic countries with EU 242–3, 247–8, 250 ‘internalization of goals and practices’ 32 ‘internalized flexibility’ concept 79, 258 interventionist policies inNordic Welfare State model 212–13 Italy autonomy inhospitals 160 azienda sanitaria locale 148 care assistants inhospitals 154 CGIL union 151 fare i tappabuchi policy 156

flexibility inhospitals 153–9 health care system 148 hospitals 143–62 hospitals north/south comparison 148–9 hospitals research study 9–10, 146, 151–3 incentives for hospital workers 158–9 industrial relations inhospitals 149 laboratories inhospitals 155 ‘Local Health Authorities’ 148 manufacturing 35–6 nurses 10, 154, 156–7 polyvalence inhospitals 155–8 unions 150, 151, 155 Japan ‘keiretsu’ networks 37 lean manufacturing 33 workers 34 JIT see just-in-time ‘job-control’ unionism 29 job-switching operating 66–7 practice 60 training 64–5 Juppé plan inFrance 147 just-in-time (JIT) manufacturing 30, 33 Karasek, Robert 102–3 ‘keiretsu’ networks inJapan 37 ‘knowledge industry’ 20 knowledge society 236 KS see Norwegian Association of Local and Regional Authorities laboratories inItalian hospitals 155 labour force inNorway 119–20 Labour Force Surveys inSweden 98 labour markets Britain82–4 flexibility 93 Germany 228 Norway 7–9, 118, 136–7 Sweden 98 Labour Organization (LO), Norway 216, 218, 220, 225 labour regulations inNorway 112–13, 117

Index labour specificity inNorway 115, 135 law making process inNorway 216–20 Lean Production (LP) concept 30, 33, 243 legitimacy domainand public sector organization 171–3 LEST tradition 9 Levi Strauss company 37 LO see Labour Organization ‘Local Health Authorities’ Italy 148, 150 low-cost countries and manufacturing 36 LP see Lean Production Maastricht Treaty 144, 242–3, 247 Major Occupational Group (MaG) 56 male employment inNorway 123–4, 127–9, 129–31 management behaviour 32 European practice 144 flexibility 85 manufacturing flexibility inBritain12 Italy 35–6 low-cost countries 36 Norway 120–7, 132–3, 260 UK 187–208 Marshall concept of industrial districts 201 Ministry of Modernization (Norway) 17, 217 ‘misbehaviour’ concept 169 mobilization strategy inSwedish railways 182 morale employees 4, 43–77 flexibility 72–4 levels 69–70 workplace 67–8 motivation of workers 143–62 NAVO see Organization of State Employees neo-liberalism inNordic countries 238–42, 261–2 networking society 236 networks 3, 36, 202–5, 260 ‘new package’ term 6 New Public Management (NPM) 9–10, 144, 148, 161

269

‘new working life’ concept 107–8, 211–12 Norway 213–15, 216 NHO see Confederation of Norwegian Enterprises non-standard (NS) employment contracts 2, 47–51, 84 Norway 7, 111–12, 112–15, 115–18, 124, 135–7 UK 3–4 NOP (National Opinion Polls) 82 Nordic countries 233–56 cooperative advantages of highly industrialized countries 248–50 competitive advantages of collaborative structures 242–50 European Union 242–3, 247–8, 250–1 flexibility 237–42 globalization 237–42 model of flexibility 233, 234–7, 246–7, 250, 260 neo-liberalism 238–42 Nordic Model of Work Life 236 Nordic Welfare State model 212–13 ‘normative control systems’ 166–7 Norway centrist-right proposals 221, 222–4, 225 concept of flexibility 213–15 Confederation of Norwegian Enterprises 218–19 dismissals legislation 135–6, 224 employment 119–24 employment statistics 7 enterprise restructuring 224 European Union 123, 247–8 female employment 123, 127–9, 129–31 ‘flexible’ organizations 210–11 flexicurity 227–8 full-time employment 122, 127–9 government role 8–9, 209–10 health sector 120–1, 132–3 ‘inclusive working life’ campaign 213 labour force 119–20 labour market 136–7 Labour Organization 216, 218, 220, 225 labour regulations 112–13, 117 labour relations 7–9

270

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labour specificity 115, 135 law making process 216–20 male employment 123–4, 127–9, 129–31 manufacturing 120, 132–3, 260 Ministry of Modernization 17, 217 ‘new working life’ concept 213–15, 216 non-standard employment 7, 112–15, 115–18, 124, 135–7 OECD 111, 114–15, 213 oil industry 242, 243–4 Organization of State Employees 218–19 overtime 134–5 part-time employment 125–6, 137–40, 224 Philips company 246 political process 225 self-employment 133–4 sick leave 213 state policy 224–7 Storting Committee on Labour and Local Government 221 temporary work 129–35, 141, 223 work hours 223 ‘Working Life Act Committee’ 217 Norwegian Association of Local and Regional Authorities (KS) 218–20 Norwegian Worker Protection and Working Environment Act (1977) 8 (2005) 209–31 NPM see New Public Management NS see non-standard numerical flexibility concept of flexibility 237 employment 4 morale inUK 47–56 non standard employment 111 peripheral groups 25–6, 99–100 quantitative perspective 22–3 research 98 underdeveloped countries 250 nurses French and Italian hospitals 10, 154, 156–7, 160 shifts 87

Occupational Unit Group (OUG) 56, 66 OECD 111, 114–15, 213, 247, 248 oil industry inNorway 242, 243–4 ‘old working life’ statement 108 ‘organic’ organizations 29 Organization of State Employees inNorway (NAVO) 218–19 organizations culture 10–11, 31–5, 163–8 efficiency 35 flexibility summary 3, 13 relations 21 size 26–8 structure 3, 28–31 OUG see Occupational Unit Group outsourcing 51–5 overtime 56–8, 134–5 package of flexibility 97–109 part-time employment inNorway 125–6, 137–40, 224 pay and promotion 33 periphery workers 98–9 permanent employees 22 Philips company 246 Polaroid company 29 political process inNorway 225 pollution and externalized liabilities 262 polyvalence inFrench and Italian hospitals 155–8 price of flexibility 92 private firms inSweden 101–2 promotion 33 public sector organization legitimacy domain171–3 restructuring domain171–3, 174–7 revaluating domain177–81 rail industry inSweden 10–11, 163–85, 258 rappresentanze sindicali unitary (RSU) 150 recruitment agencies 23 ‘red-circled’employees 87 regime choice 45 regulatory regimes and concept of flexibility 211–12 relations inorganizations 21 remunerational flexibility 46

Index resistance inworkplace (Swedish railways) 168–81 Responsible Autonomy 24–5 restructuring domainand public sector organization 171–3, 174–7 retail workers 87 revaluating domainand public sector organization 177–81 RSU see rappresentanze sindicali unitary ‘rule orientation’ 32 self-employment Norway 133–4 UK 134 self-fulfilling prophesy 107 self-interest of employees 34 sick leave inNorway 213 size of organizations 26–8 skills 26–8 Smith, Adam 239–40, 251 social implications critique 45 social outcomes of flexibility inUK 43–6 ‘Social Security’ System, France 147 ‘societal effect theory’ 9 state policy inNorway 224–7 statements flexibility 107–8 work environment 107–8 Storting Committee on Labour and Local Government 221 strategy versus improvisation 44–5 ‘stretched-contract’ working 60–2 structural flexibility 12, 195–8, 198–200 structure of organizations 21, 28–31, 38, 70 subjective impact of flexibility inUK 67–71 subjective insecurity 55–6 survival of organizations 19 Sweden flexibility 6 Labour Force Surveys 98 labour market 98, 100–1 mobilization strategy inrailways 182 National Track Authority (Banverket) 10, 170–1 organizational culture inrailway industry 163–8 private firms 101–2 rail industry 10–11, 163–85, 258

271 workplace resistance inrailway industry 168–81

Taylorism 1, 6, 26, 30–1 ‘technical economic ideal situation’ 35 technology inorganizations 26–8 temporal flexibility 4, 56–7 temporary work inNorway 129–35, 141, 223 Thatcherism 215 The Corrosion of Character 80 ‘The Responsible Co-Worker’ concept 178, 180 The Wealth of Nations 239 ties and networks 36 Total Quality (TQ) concept 243–4 Toyota company 37 Toyotism 30–1 TQ see Total Quality trade unions see unions ‘TradeFare’ 85 training 64–5, 86 transaction cost theory 116 turbulence inorganizations 19 UK 1979 Conservative government policy 215 ACAS flexibility survey 193 BTR company 197 business groups flexibility 195–200 cellular manufacturing 190–2, 203 computer-aided design 190 computer-aided manufacturing 190 computer-integrated manufacturing 190 economy 187–208 emergence of flexible manufacturing 187–95 engineering firms 190–1 flexibility study 81–2 GEC company 197 Hanson trust 196–7 manufacturing networks 202–5 prosperity and manufacturing 201 self-employment 134 structural flexibility 195–8, 198–200 see also Britain UK workplace flexibility 80–1

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flexible economy 11–12 functional flexibility 57–67 incidence of flexibility 46–7 non-standard employment 3–4 numerical flexibility 47–56 social outcomes of flexibility 43–6 subjective impact of flexibility 67–71 temporal flexibility 56–7 unemployment levels 21 unions AEEU 83, 86 attitudes to flexibility 86–7, 87–8 company level 33 France 150, 151 functional flexibility 5 individual protection 241 Italy 150, 151, 155 strength 21, 34 threat of flexibility 93 US car industry 27 computer manufacture 32 wages 92 USL see ‘Local Health Authorities’ ‘varieties of capitalism’ (VOC) 143–4 wages 24, 92 WERS see Workplace Employment Relations Surveys Winners and Losers 81, 92 Womack, James 30 work

conflict 167 environment statements 107–8 hours inNorway 223 workers conditions 28–9 core 98–9 Japan 34 motivation 143–62 periphery 98–9 resistance 31 ‘Working Life Act Committee’ (Norway) 217 working life culture 3 workplace conditions 261–2 demographics 106 environment 106 flexibility 99–100, 102–6 high performance 45 morale 67–8, 69–70 non-flexible 102–6 resistance inSwedish railways 168–81 UK flexibility 68–9 WERS 56 Workplace Employment Relations Surveys (WERS) (1998) 4, 46–7, 51, 55, 62, 67 (2004) 4, 47, 51, 55, 62, 66–8, 83–4 workplace 56 young adult workers inBritain88–91