1. Globalisation, organisational change and working conditions
NES 2009: Globalized Ergonomics, The Consequences of Globalization
Roma, 8 – 9 October 2008
Globalisation, organisational change
and working conditions
Jörg Flecker | FORBA, Vienna

2. Globalisation Liberalisation of trade and of capital flows
Relocation of work and changing international division of labour
Stock market capitalism or ‚financialisation‘
Spread of global value chains and production networks

3. Globalisation and working conditions
International division of labour  externalisation of health&safety risks  better working conditions in leading OECD countries
Growing competitive pressures  increased job insecurity, concession bargaining, informalisation of work
Financialisation  Pressures to yield high returns on investment  downsizing  intensification of work
Dynamic restructuring through mergers and acquisitions  growing insecurity, continuous organisational change

5. Clothing Design:
„We have very quick dates and it is always a lot of pressure on our back. You can‘t relax in this department. Everything is very fast and if we have a problem we have to solve it very quickly. I never relax.“ (Fashion designer, Portugal)

6. Restructuring of global value chains and the quality of work
Global value chains and networks
Fragmentation of employment
Externalisation of risks along the value chain
Do central units and their workers benefit?

7. 1. Global Value Chains and Networks
Global Value Chains (e.g. Gereffi et al.): Linear, sequential transformation of inputs into outputs in the production of goods and services (in inter-firm relation, cross-border)
Global Production Networks (e.g. Henderson, Dicken et al.): different layers of inter-relationships – ties in the same layer (horizontal relations) and between layers (chain relations)
Governance: Power relations, control, focal firms‘ strategies
Dynamics: Restructuring, upgrading, downgrading

8. Drivers of value chain restructuring
Access to markets
Cost saving (wages, taxes, energy etc)
Bypassing labour regulation
Access to knowledge and skills
Capacity utilisation, capital costs
Ecological dumping
Weakening labour

9. Governance division of labour and power in inter-firm networks
centralisation and control within multinational companies
relative autonomy and bargaining position of units
different types of value chains (Gereffi et al.): - modular - relational - captive

10. Dynamics Mergers and acquisitions, divestments
(Cross-border) relocation of units and activities
Outsourcing
Insourcing
Changing division of labour
Upgrading (‚moving up the value chain‘), downgrading

11. … and what does that mean for work and employment?

12. … and the quality of work
Work Organisation and Restructuring in the Knowledge Society (WORKS)
Work Organisation and Restructuring in the Knowledge Society (WORKS)
Restructuring…
Restructuring
Relocation
Outsourcing
Offshoring
Relocation
Outsourcing
Offshoring
… and the quality of work

13. 2. Fragmentation of employment

14. Information Technology / Software

15. Information Technology / Software
Relocation abroad within international companies
Outsourcing within the country and cross- border
Internationally big differences in terms and conditions
From ‚extended workbenches‘ to upgrading

16. Clothing industry

17. Clothing Industry Buyer- and retail-driven, “captive” value chains
Spanning labour market segments within countries
Big regulatory differentials between countries
Informal work at the bottom of the chain

18. Public services
Big differentials between public sector and private service providers in customer care
Working on customers‘ premises in IT services

19. Subsidiary of National Post (Gavroglou 2007)
Employees by employment contract:
15 management
98 workers under National Post collective agreement
120 workers under subsidiary company collective agreement
80 seasonal workers – national minimum wage
temporary agency workers

20. Fragmentation of employment
multiple
single
different
outsourcing
relocation
same
agency work
internal segmentation
Employer
Place

21. 3. Externalisation of risks

22. Impact on working conditions
Differences in regulation between companies, sectors and countries as drivers of outsourcing and relocation
Costs and risks are passed on to suppliers, subcontractors, service providers, agency workers ...
... and supplier companies hand the risks down to their workers …
… made easier by weaker labour protection in other sector or country

23. Value chains, networks and the quality of work 1/2
Quality of worklife depends on position within value chain or network
increasing inequalities – fragmentation plus asymmetries between organisations
less differences in Nordic countries
Contractual relations between organisations directly impact on workers

24. Value chains, networks and the quality of work 2/2
peripheral workforce of one firm is the core workforce of another …
… but only some attempts at harmonising terms and conditions and seizing opportunities of an internal labour market
growing opportunities to compete on labour costs, less pressures for ‘high road’ strategies
combination of ‘high road’ and low labour standards

25. Regulation and responsibilities
limited regulation at international level: ILO core labour standards, OECD guidelines for multinational companies, NGOs` campaigns
Corporate Social Responsibilities (CSR): Limited effect of monitoring (UN Ruggie Report)
but: supplier companies under direct control and close supervision regarding product quality

26. 4. Do central units and their workers benefit?

27. Processes of restructuring
contested positions within value chains, increased competition between units
changing roles of units in headquarters and core companies
continuous organisational change, insecurity
Learning from out there: repercussion effects

28. Work Organisation

29. Work organisation upskilling and job enlargement after outsourcing
changes in work roles not always welcome - and badly accompanied
boundary spanning roles: ‚transaction work‘
increasing demands for flexibility and mobility
rising time pressures
increasing standardisation and formalisation
working across organisational boundaries: cooperation&competition

30. Labour regulation and enforcement
differentials and competition  bargaining position of workers
benchmarking against external units
concessions regarding terms and conditions
non-compliance with regulation (e.g. working time)
precarious working conditions creep into core units

31. Conclusions Globalisation and working conditions
Global value chains and networks
Fragmentation of employment
Inequality, passing down risks
Competition, pressures for concessions
 induces ‚race to the bottom‘ in labour regulation
 endangers enforcement of extisting regulation

32. Thank you!