The Impact of Wage Bargaining Regime on Firm‐Level Competitiveness and Wage Inequality: The Case of Ireland

This paper uses a linked employer‐employee dataset to analyze the impact of institutional wage bargaining regimes on average labor costs and within‐firm wage dispersion in private sector companies in Ireland. The results show that while centralized bargaining reduced labor costs within both the indigenous and foreign‐owned sectors, the relative advantage was greater among foreign‐owned firms. The analysis suggests that there are potentially large competitiveness gains to multinational companies that locate in countries implementing a centralized bargaining system. Furthermore, the results provide additional support to the view that collective bargaining reduces within‐firm wage inequality.     

Unraveling Home and Host Country Effects: An Investigation of the HR Policies of an American Multinational in Four European Countries

This article argues that the institutional "home" and "host" country effects on employment policy and practice in multinational corporations (MNCs) need to be analyzed within a framework which takes more account both of the multiple levels of embeddedness experienced by the MNC, and processes of negotiation at different levels within the firm. Using in-depth case study analysis of the human resource (HR) structure and industrial relations and pay policies of a large U.S.-owned MNC in the IT sector, across Germany, Ireland, Spain, and the United Kingdom, the article attempts to move towards such a framework.     

What is Alive and What is Dead in the Theory of Corporatism

The term ‘corporatism’ simultaneously designates a particular interest group structure, characterized by monopolistic, centralized and internally non‐democratic associations, and a particular policy‐making process, also known as ‘concertation’ or ‘social partnership’. This paper argues that structure and process may no longer be closely associated. By focusing on the Irish and Italian cases, it shows that concertation is perfectly compatible with a non‐corporatist structure of the interest representation system. Inter‐ and intra‐organizational co‐ordination remains important for the viability of concertation. However, it can be achieved, even in relatively fragmented systems like the Irish and the Italian, through alternative mechanisms relying on democracy and discussion.     

The Effects of Minimum Wages on Low‐Skilled Immigrants’ Wages,Employment, and Poverty

Raising the minimum wage has been advanced as complementary policy to comprehensive immigration reform to improve low‐skilled immigrants’ economic well‐being. While adverse labor demand effects could undermine this goal, existing studies do not detect evidence of negative employment effects. We re‐investigate this question using data from the 1994 to 2016 Current Population Survey and conclude that minimum wage increases reduced employment of less‐educated Hispanic immigrants, with estimated elasticities of around –0.1. However, we also find that the wage and employment effects of minimum wages on low‐skilled immigrants diminished over the last decade. This finding is consistent with more restrictive state immigration policies and the Great Recession inducing outmigration of low‐skilled immigrants, as well as immigrants moving into the informal sector. Finally, our results show that raising the minimum wage is an ineffective policy tool for reducing poverty among immigrants.     

Whither Solidarity? Transitions in Swedish Public-Sector Pay Policy

As part of a drive for efficiency and decentralization in government operations, Sweden is implementing a new system of pay administration in the public sector that is marked by a clear movement away from centralized wage negotiation and fixed salary increases towards more flexible and individualized pay rates. Despite rhetoric about performance and efficiency, the changes appear to be focused mainly on expanding wage differentials among occupational groups and offering market premiums to recruit and retain valued employees. Although the new pay system has not been integrated into a general management approach, it offers considerable challenge to the norms and values of solidarity that have traditionally been held so strongly in Sweden.     

Broadband adoption,jobs and wages in the US telecommunications industry

This article evaluates the impact of broadband adoption on wage and employment levels among the local exchange companies in the US telecommunications industry for the period between 1988 and 2001. Broadband is a general purpose technology and its adoption and diffusion is expected positively to impact wages because of the need for higher level skill in its deployment and usage, but can also lead to less human capital usage because of a scale effect. Using the extent of fiber adoption among the local exchange firms as a measure of broadband deployment, it was found that broadband diffusion within and between the firms over time has had a positive and significant impact on wage levels but its impact on employment has been negative. As broadband diffusion increases, with substantial scope available to do so given the low levels of deployment both among the local exchange firms studied and within the United States as a whole, the impact of such diffusion on enhancing wage levels in the sector can be profound.     

“Squeezing R&D”: A Study of Organizational Slack and Knowledge Creation in NPD,Using the SECI Model

During new product development (NPD), functional areas such as marketing, R&D, and manufacturing work together to understand customer needs, create product concepts, and solve technical issues. NPD is dependent on the creation of new knowledge and the interplay between tacit knowledge (knowledge that is difficult to articulate and codify) and explicit knowledge (knowledge that can be codified and documented). Knowledge creation requires time and resources, and the dichotomy facing senior management is how much spare capacity in NPD teams—so‐called organizational slack—is appropriate. Too much organizational slack and precious development resources will be wasted; but when slack is eliminated, there is a danger that knowledge creation will be severely hindered. There have been very few studies of organizational slack at the project level, and so the aim of our research was to examine the impact of changes in organizational slack on knowledge creation in NPD projects. Six projects were studied at two companies, over a two‐year period. Multiple sources of data were used to determine how changes in organizational slack impacted knowledge creation, which was operationalized using Nonaka's socialization, externalization, combination, and internalization (SECI) model. It was found that the creation of knowledge in NPD projects is susceptible to changes in organizational slack. A significant finding was that every time there were changes in organizational slack, there was always some impact on knowledge creation. Increased slack enabled knowledge creation; but, importantly, the impacts of decreasing organizational slack were often very negative and disrupted the work of NPD teams, particularly at the end of projects. Managers who feel that “squeezing R&D” is important should think again—their action might disrupt knowledge creation and compromise innovation.     

Transferring hybrid maize technology : The role of the private sector

Developing countries have tried a variety of policies concerning new technology as a source of agricultural growth; there is still much debate on which is the most efficient. More study of private methods of technology transfer is needed. This article presents some preliminary statistical tests of the relationships among seed imports, private research, public research and yield. Seed imports and private research are found to be important potential sources of improved technology. Countries which restrict imports and activities by multinational seed companies may impose costs on their farmers and consumers in terms of foregone productivity.     

Incomes Policy for Europe? or Will Pay Bargaining Destroy the Single European Market?

With European economic and monetary union, pay bargaining encounters a new set of constraints: devaluation is no longer available to compensate for inflation, and economic restructuring for the Single Market will place great strain on wage structures. The article analyses the problems posed to pay bargainers, and argues that, instead of pressing for more centralized bargaining, greater encouragement should be given to pay systems that favour more flexible use of labour and reduce the tendency to transmit inflationary pressures from one group to another. Joint regulation has a critical part to play in the effectiveness of these systems.     

Top management incentive compensation and knowledge sharing in multinational corporations

Growing interest has emerged in viewing the multinational corporation as a knowledge creating and diffusing entity. The importance of sharing knowledge across organizational and national boundaries has been established in previous research. However, the question of which organizational policies lead to knowledge sharing between multinational units is still not fully understood. In particular, the link between compensation mechanisms and knowledge sharing has not received attention in previous studies. By studying 164 foreign‐owned subsidiaries located in Finland and China, this article attempts to identify the relationship between subsidiary bonus pay based on MNC‐wide performance and knowledge sharing between different units of the MNC. In line with the knowledge‐based perspective of the firm, the results suggest that incentive pay based on the collective performance of the MNC leads to greater knowledge sharing. Copyright © 2008 John Wiley & Sons, Ltd.     

High‐Performance Work System and Organizational Turnover in East and Southeast Asian Countries1

In this paper, we examine the impact of high‐performance work systems (HPWSs) on both voluntary and involuntary organizational turnover rates. Most research on this topic has been done in the United States. Given the global competitive pressures confronting many of the countries of East and Southeast Asia, companies in this region are seeking to become more flexible and often adapt HPWSs practices. We explore the impact of HPWSs in both locally owned companies and subsidiaries of multinational corporations in Korea, Taiwan, Singapore, and Thailand. These countries have significantly different national cultures from the United States and most other Western countries and HPWSs effects in relation to turnover might vary from the studies based in the United States. Our findings are, however, somewhat consistent with U.S.‐based studies. In fact, HPWSs were found to be more effective in reducing turnover in locally owned companies than in subsidiaries of Western and Japanese multinational companies.     

Automation,skill requirements and labour‐use strategies: high‐wage and low‐wage approaches to high‐tech manufacturing in the automotive industry

In light of debates about advanced manufacturing and concepts like Industrie 4.0, this article compares labour‐use strategies in highly automated automotive supplier plants in a high‐wage country (Germany) and a low‐wage region (Central Eastern Europe). It shows considerable differences regarding skill requirements on the shop floor and the use of precarious employment contracts and examines three potential factors that explain them: national institutional frameworks, the power of employee representatives and the role of the plant within the companies and value chains. The analysis shows that the labour‐use strategies depend less on process technologies per se, but rather on the institutional framework and the role of the factory in the rollout and ramp‐up of new products and new process technologies. Such a role requires close cooperation between employees in the manufacturing areas and in product development, which in turn requires particularly high skills. The role of employee representatives in influencing labour‐use strategies proves less important. The article uses quantitative data from a survey of employee representatives, as well as qualitative data from in‐depth company case studies.     

Pro-poor agricultural biotechnology: Can the international research system deliver the goods?

While global investment in agricultural research by the private sector is increasing with growth in developing country markets and the emergence of new technologies, complementary public sector investment is stagnating or declining in many developing countries. This review argues that the changing roles of the public and private sectors in generating new scientific knowledge may adversely affect the diffusion of explicitly pro-poor technologies—technologies that are simultaneously yield-enhancing and poverty-reducing. Comparing historical evidence from the Green Revolution with recent evidence from the emerging era of agricultural biotechnology, this review argues that a more pluralistic international system for agricultural research will be more responsive to poverty only if the strategic leadership role of the public sector is strengthened, certain research functions are reallocated to the private sector, and new policy and organizational mechanisms are used to stimulate pro-poor research in and for developing-country agriculture.     

Organizational processes in formulating marketing policies

A thorough understanding of the processes used to formulate policy can help a marketing manager develop more creative and effective marketing policies for his organization. In this article the authors outline the different processes that may be used by companies to formulate their marketing policies and describe the main characteristics of these processes. The impact that the process may have upon organizational behavior and performance is also discussed to help the marketing manager understand the implications of using a particular process.     

Firm‐Level Collective Bargaining and Wages in Greece: A Quantile Decomposition Analysis

This article analyzes the effect of firm‐level contracting on the wage structure in the Greek private sector. Using a matched employer–employee dataset for 2006, unconditional quantile regressions and relevant decomposition methods, we identify a wage premium associated with firm‐level contracting, which follows a hump‐shaped profile across the wage distribution. Further, the wage differential between workers under firm‐level and broader‐level collective agreements can be primarily attributed to the differences in the regime‐specific wage setting structure, for those below the median of the unconditional wage distribution, and to differences in worker and firm‐specific characteristics for those in the upper tail.     

The Productivity-Enhancing Impacts of the Minimum Wage: Lessons from Denmark and New Zealand

This article adds an international comparative perspective to the reflection on 100 years of minimum wage legislation in Britain by exploring the impact of minimum wage regulations and institutions in Denmark and New Zealand. In particular, it looks at the question of whether minimum wages can raise productivity through the 'shock effect'. It argues that while they will play a role, a supportive institutional framework is more important in providing coordinated solutions to issues of market failure, such as inadequate levels of training. The article suggests that sectoral bargaining institutions in low-paid sectors may have the potential to facilitate such coordination and enable the high-productivity model to emerge.     

Political Entrepreneurs and Co‐Managers: Labour Transnationalism at Four Multinational Auto Companies

This article examines labour transnationalism within four multinational automakers. In our sample, we find different forms of labour transnationalism, including transnational collective bargaining, mobilization, information exchange and social codes of conduct. We explain the differences through the interaction between management and labour in the context of the company structure; of particular importance are transnational coercive comparisons by management and the orientations of worker representatives as political entrepreneurs or co‐managers. We conclude that, although intensified worker‐side cross‐border co‐operation has not prevented wage‐based competition in general (due to the lack of between‐firm co‐ordination), it has reshaped employment relations within these multinational corporations.     

The Dominance Effect? Multinational Corporations in the Italian Quick‐Food Service Sector

This paper is based on a study of the employment practices of one Italian‐owned multinational corporation (MNC) and one US‐owned MNC in the Italian quick‐food service sector and examines such issues as work organization, unionization, employee representation and pay and conditions. The paper focuses on the concept of ‘dominance’ and the related convergence and divergence theses. The findings suggest that dominance can not only be interpreted as a mode of employment or production emanating from one country, but could also be associated with one dominant MNC in one sector. Consequently, it is argued that while the effect of host and home country influences may be significant factors in cross‐border employment relations practices, more attention needs to be paid to organizational contingencies and the sectoral characteristics within which firms operate.     

Internal Wage Structures and Organizational Performance

This paper considers whether a hierarchical or compressed wage structure is positively associated with relatively high levels of organizational performance. To date, there has been little empirical research in this area (especially in the UK). Thus we present an operational measure of a compressed/hierarchical wage structure, using UK manufacturing micro–data in five industrial sectors, and examine its relationship with labour productivity. We find that the wage compression argument holds in one sector but not for the majority of sectors and that taking into account other, intra–industry characteristics, namely size and ownership differences, further weakens the relationship.     

The Politics of Social Pacts

The paper develops an analytical framework for the politics of negotiated voluntary wage restraint in the context of social pacts. It argues that, in contrast to earlier political exchanges, tripartite negotiations on wage restraint under restrictive economic policies are not based on a political exchange whereby governments had to compensate trade unions for wage restraint. Rather, governments can threaten trade unions with tight monetary policy and trade unions can either engage in negotiated adjustment or suffer restrictions. Social pacts are therefore an instrument of adjustment by governments to a new economic environment, and not a tool of economic policy.