Indusrial Relations and the Management of Flexibility Essay Example

skills through training and development. Numerical flexibility is achieved through approaches like "atypical" working, hire-fire policies, and subcontracting.

Temporal flexibility in labour deployment involves the ability to vary working hours independently of operating hours, while financial flexibility refers to the flexibility in labour costs through variable and contingent reward systems. These two aspects are becoming increasingly important in western economies. The focus of the debate has primarily been on the development of increased functional and numerical flexibility, with the distinction between 'offensive' (dual systems of 'permanent' labour) and 'defensive' (dual systems of 'contingent' labour) approaches. Temporal and financial flexibility can be associated with both offensive and defensive strategies.

However, the influence of capital-labour relations has been disregarded in distinguishing two broad 'ideal' types of labour flexibility. Therefore, a brief theoretical discussion is provided to highlight how the relationship between capital and labour may determine approaches to flexibility management. The study of Industrial Relations and its impact on specific flexibility strategies raises two theoretical issues groups: those raised by the institutionalist approach and those concerning the relationship between capitalism and the state. According to institutional theory (Ross and Hartman, 1960), industrial conflict leads to the development of regulatory institutions. Thus, it is suggested that institutionalization reduces open conflict.

There have been four main criticisms of the pluralism model, as discussed by Fox (1973), Goldthorpe (1974), and Hyman (1972). Firstly, the model assumes equal power relations between the primary parties, which legitimizes existing inequalities. Secondly, it assumes the state is neutral, disregarding its role in maintaining the capitalist system. Thirdly, by marginalizing conflict, important ideological issues are overlooked.

To conclude, open conflict has not decreased. Regarding the connection between capitalism

and the state, two perspectives are relevant: corporatism and labor movement theory. Theories of corporatism propose that as capital becomes more organized (such as through monopolies and oligopolies), market mechanisms become less efficient (Schmitter, 1974). As a result, the state takes on additional roles to compensate for this inefficiency, leading interest organizations to have a stronger desire to influence its actions. Consequently, increased economic or military conflicts prompt collaboration between the state and interest groups in order to improve the nation.

The integration of labor into the capitalist state is believed to be the cause of 'industrial peace'. However, this idea has been challenged by radical perspectives, such as Pontusson (1984). The counterargument argues that the institutions used to control labor eventually come to represent labor itself, leading to 'rationality crises' that pose a threat to the capitalist economy. Theories of Labour Movement focus on the concept that industrial rationalization and concentration accelerate capital growth and pave the path towards socialism (Lewin, 1975; Scase, 1976).

The text suggests that planning is a more effective method for expanding public control, allowing the state to gradually take on the functions of capital until capital becomes obsolete. This progression from political to social to economic democracy legitimates collective ownership as a means of democratizing society. It proposes that labor gaining political control of the state apparatus is crucial in achieving "industrial peace" and advancing its own interests. However, this approach has received criticism, as noted by Gamble and Walton (1976), who argue firstly that the state is ultimately reliant on the international capitalist system which limits its ability to act independently, and secondly it assumes that the conflict between the

labor movement's political reliance on labor and its economic dependence on capitalism can be resolved.

Austria and Sweden are two countries of similar size with strong labor movements and comparable industrial relations patterns. However, in recent years, their differences have become more pronounced. The next page provides a table showing important economic and employment indicators for both countries.

In 1998, Austria had a population of just over eight million and was one of the smaller EU states. Its total labor force exceeded five million, with around four million individuals employed (Employment in Europe, 1999). The country's high employment rate and low unemployment rate can be attributed partly to the traditional consensus approach of the social partners which helps mitigate the impact of business cycle fluctuations (European Economy, 1998).