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Marta Kahancova. AIAS Lunch Seminar.

Event details of One company - three factories: an embedded response to local employment flexibility
Date 15 December 2005
Time 13:00 -14:00

Marta Kahancova

One company - three factories: an embedded response to local employment flexibility

Empirical evidence shows a remarkable variation in employment flexibility patterns across four factories of a Dutch multinational company (MNC) in Poland, Hungary, Belgium and France. The paper explains this diversity by studying the impact of both corporate and local factors on MNC behavior in local labor market settings in the four host-countries. The focus is especially on how workplace coordination between the factories' managements and workplace trade unions and works councils in each host country facilitated the development of employment flexibility practices that differ not from other factories of the same MNC, but also from common practices in each host country. The observed variation in employment practices is explained by the MNC’s local embeddedness. In contrast to standard theory on MNC behavior, implying corporate control and diffusion of best practices, it is argued that the MNC is embedded in varying local conditions and industrial relations; and that its investment in social relations with trade unions and other local actors in each host country even beyond legal requirements is a tool of becoming a locally responsive actor with customized employment practices. Evidence is found on several dimensions of embeddedness: the company’s willingness to coordinate flexibility issues with trade unions beyond the obligatory framework for collective bargaining, investment in trust relations, and conclusion of informal workplace agreements.

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