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Corporate Restructuring and Employment Flexibility

Corporate Restructuring and Employment Flexibility. Sandra Lundin Paul Wymenga. Table of Content. Corporate Dimensions of Restructuring Dual Economy Theory Flexible Labour and Geographical Strategies. Corporate Dimensions of Restructuring. Labour Production and Technology Organisation

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Corporate Restructuring and Employment Flexibility

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  1. Corporate Restructuring and Employment Flexibility Sandra Lundin Paul Wymenga

  2. Table of Content • Corporate Dimensions of Restructuring • Dual Economy Theory • Flexible Labour and Geographical Strategies

  3. Corporate Dimensions of Restructuring • Labour • Production and Technology • Organisation • Product Markets

  4. Dual Economy Theory • Averitt and Galbrait • Fordist Sector • Competitive Sector

  5. Dual Economy Theory (2) • Doeringer and Piore • Primary Segment • Independent Segment • Dependent Segment • Secondary Segment

  6. Dual Economy Theory (3) • Atkinson • Core Workers • Peripheral Workers

  7. Flexible Labour and Geographical Strategies • Four Strategies • Example: GM and Volvo

  8. Peripheral workforces in new locations: the importance of women • peripheral workforce: passive, low-waged, hard working and stable • suburbanization • non-metropolitan industrialization • offshore leaps to poor countries • search for female workers (some cases child labour)

  9. the importance of women cont. • Female labour: • lower wages • less likely to be unionized • easier to control • Women play a bigger role in jobs that are considered numerically and financially flexible

  10. Married women and the suburbian option • WWII-> women could perform the same tasks as men • 1950s-1960s: labour shortages. • Factory-skilled and low-cost women were available • Society’s values: • men= breadwinners • women’s labour= secondary/temporary • Support firms to pay less to women

  11. Married women and the suburbian option cont. • Why the Suburbs? • land costs • land availability • taxes • find supply of married and single women (jobs within walking distances)

  12. Married women and the suburbian option cont. • Spatial entrapment hypothesis • Women are entrapped within peripheral labour markets and spatially entrapped within distinct female labour markets • Critics: -more complex view?

  13. Single women and the Export Processing Zone option • Developing countries: • greater availability of female workers • lower wages and non-wage benefits • Export Processing Zone (EPZ): provides low-cost labour and tariff-free imports for export activities • workers generally female, young and single • the rights of the workers in EPZs are limited -> unprotected by unions • extremly low wages: (1991) Mexico: US$ 1.10-1.25 per hour • Small non-wage benefits

  14. Tapping child labour • largest amount in India, official count: 15,5 million (in reality: 50-100 million) • Pakistan: 20 million • wages: as low as $8 /month • Hand-stitched soccer balls • Begin work at the age of 6 • usually employed by local organizations • MNCs tap into child labour through subcontracting linkages

  15. Nike’s overseas leaps • virtually all of Nike’s production has been subcontracted in pursuit of numerical and financially flexible labour • Developed Partners • Volume Producers • Developing sources

  16. In Situ change and flexible labour • more difficult process than at new locations, especially in unionized factories where fordist labour relations are entrenched in tradition and law • Examples: • NUMMI • MacMillan Bloedl’s sawmill in Chemainus

  17. Maintaining peripheral workforces in situ • economic-wide increases in part-time and temporary workers in the US and UK • flexibility is a cause of declining union power

  18. Skill formation of doubly peripheral workforces • Entreprise-specific skills: • acquired by workers over time • increases in worker skills= increases in worker productivity • worker experience • ability to deal with problems • on-the-job-training (OJT)

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