I.Kozina
Corporations and trade unions –the Russian variant
Over the last 20 years the economy has undergone significant changes connected with globalization and the growing role of transnational corporations (TNCs).[1] The key mechanism of the process of globalization for national labour markets is a so-called social dumping by means of which TNCsreceive advantages, concentrating particular production in countries with low wages. Using the labour of different countries, TNCsarticulate a universal demand and, thus, play an important role in the internationalization of the labour market. In the sphere of the organization of work TNCsoperate on the principle of «the transmission belt», introducing their businesspractices into the economy, that, in turn influences the standards and system of regulation of labour relations.
Many publications are devoted to the problem of the relations of transnational companies with the trade-union movement but most of them are more ideological than analytical. The majority of trade-union specialists in the sphere of labour relations emphasize the antisocial character of globalization, frightening us with the gloomy prospects for Russians of integration into the global economy where the authority of the employer is boundless [1]. For Russia and the CIS countries, where new international tendencies have coincided in time with the transition from a planned economy, changes can be rather fundamental. The best way to evaluate it is by observing new tendencies at the moment of their origin, at the level of direct interaction of workers, trade unions and employers, that is at the level of the enterprise. In this article, based on materials of the research project devoted to studying actual trade-union practice at the enterprises,[2], a generalized analysis of the adaptation of the Russian "old" (traditional) and "new" (alternative) trade unions to work with corporations is offered. The focus of attention is the question of how the intra-organizational processes initiated by new owners are reflected in the position of workers and trade-union participation in the regulation of labour relations.
‘The culture of Pepsi-Cola’against the‘culture of methylated spirits’
At the present moment, according tospecialist estimates, 400 TNCs, having about1300 enterprises,operate in the CIS countries. When TNCsfirst came to Russia, expectations were quite optimistic: investments, and with them new technologies, would at last appear, working conditions would improve, new jobs would be created. In mass consciousness there was a pretty idealized image of work in transnational companies, when foreign corporations hired workers for their enterprises, competition was like for a prestigious university. For example, when the Ford car assembly enterprise opened, about ten thousand people applied for four hundred jobs. Now work in a TNCdoes not seem such an attractive prospect: Earlier selection was more rigid. Now everyone already knows, that pay here is 10 thousand, but it is necessary to work hard. People are not in such a hurry. People, despite pretty good earnings, find it difficult to get used to new working conditions: to the strict hierarchical order, intensification of work, toughening of disciplinary demands, achievement of production targets, quality of production, constant threat of redundancy. To put it briefly - the Russian system of work organization allowed for variability – it is possible to work less and to receive less - the new system practically completely excludes it. We shall try to characterize briefly those intra-organizational changes in the system of work which have been brought with new management.
The arrival of a foreign owner causes a lot of quite positive changes in the internal environment of the enterprise. Investments in productionincrease the technical capacity of the enterprise and modernize the equipment. Introduction of international standards of industrial activity and corporate management are accompanied by the centralized standardization of business-processes, production discipline and health and safety become stronger, working conditions improve. People are dressed in brand new work clothes, equipped with means of individual protection, workin repaired or reconstructed shops where there are no dirty corners and there is no place to sit around getting drunk. In the organization of work the key aspect is the strengthening of control over production that has put an end to the autonomy of workers in their workplaces and has led to a reduction of the authority of line managers - important characteristics of the pre-reform system of organization of production [2].
Payment and work intensity. Changes have also affected systems of payment. First, a significant differentiation of wages by groups of workers is established. Work of specialists, and especially managers, is evaluated much above the work of workers. Second, new systems of payment are based on an increase of the tariff part and a significant reduction of the system of bonus payments (the low level of the tariff part in the Russian piece-rate-bonus system of payment of workers was transformed from a system of bonuses into a system of penal sanctions). Work which does not provide any bonus for fulfilling and overfulfillingthe plan seems to Russian workers unnatural. At one of the enterprises included in the research, the reaction of workers to the new system of a payment reminded one of the Taylorist «phenomenon of loafing»: And he comes to work and knows that whether he work furiously or coolly, he all the same will receive 80 %. He has come, he ispaid.[3] But, management usually quickly establishes such control over working hours, and such performance standards which force workers to work at full capacity. In general, the duration working hours for workers is normalized (overtime becomes less), but simultaneously this has an impact on the possibility to earn. If there is no overtime, the intensity of work of workers who want to earn more reaches its physical limit … to earn - people live at the factory: they spend the week producing, on Saturday they leave. The conveyor machine squeezes everything out. Some people are pleased, stupid people, that there is an opportunity to earn. Yes, there is, but that is not the point: what do you do to your health for these three thousand extra. The high intensity of work at factories of transnational corporations forces out the older generation of workers as performance standards and standards of work are designed for healthy young people. At the same time retirement onto a pension for an ordinary Russian, if he is not a state employee or a deputy, as is well known, is a step into poverty. Therefore they work «to the end» and practically until they are «worn out».
There is one more no less prominent aspect – the increase in the intensity of work ITR. The transition to new systems of payment directly stimulates the personnel to improvement of professional skill, their grade, increase of their educational level as increasing qualification and level of professional training is one of the criteria for increasing wages that, by and large, represents, certainly, a positive tendency. However, at many enterprises this stimulating mechanism turns out to be «superfluously effective». Managers and specialists of all levels in drawing up their individual plans voluntarily incur the maximal obligations as all of them are taken into account in the calculation of points on the basis of which the bonus is paid:ITRare interested, motivated not simply in working their working hours, but, to fulfill all their obligations –for the content of their work, and the tasks they set themselves. The overestimated obligations cannot be carried out during regular working hours. Overwork becomes a system, a way of life.
Social benefit.An important element of labour relations is granting to workers of additional benefits, services and social payments (the social package). Historically the inherited Soviet practice of granting of social services to workers was part of the system. The foreign owner, having bought the enterprise, as a rule, tries not to break with tradition, and at that stage measures significant for workers are kept. For workers who have often got tired of local Varangians, the social policy of the foreign owner seems even more weighed, tolerant in relation to workers and their national mentality:It became better. I do not want to say that there the company "Russian aluminium" is worse, but at least the Americans take a more human approach to such things as old age andwar veterans than our Russian. It is necessary to understand, that for the employer this is not just charity –the implementation of social programs provides advantages in the competition for manpower, provides a kind of stimulus to productive work, stabilization of the social climate at the enterprise and formation of a positive image of the company.
Thus there is a process of modernization of thepolicy of benefits which consists in a gradual transition from the historically developed model of collective benefits to a policy of individual benefits for workers chosen by the company [3]. These benefitsare no longer rights, they are personalised, that is they are given to each worker separately and assume the use of the principles of solidary participation of workers in financing rest, sanatorium treatment, provision of pensions and so forth. Simultaneously benefits-in-kind are replaced by a standard set of monetarybenefits. In the sphere of housing programmes there is a transition from the traditional Soviet model under which the enterprise provided the workers with housingthrough a queue, to a model of individual mortgage credit, transition to insurance principles in the sphere of care for the health of workers, transition to an individual share of workers in the corporate provision of pensions, etc. Accordingly, the majority of companies have refused to maintain the social and welfare apparatus as part of the company, selecting providers of social services on a competitive basis.
Employment.With a view to increasing flexibility ofpersonnel work and to lower labour costs, the administration of the companies started actively to use contract labour. Recruiting agencies select workers for the companies to carry our temporary work. According to leaders of the trade union committee, they are paid almost twice as much as a permanent worker with similar qualifications. To tell the truth, these workers are hired on temporary contracts, do not receive medical insurance, do not participate in professional advancement that is connected with increasing salary in connection with increasing grades. As temporary workers they cannot join the trade union.
The basic schema is outsourcing –removing employees of non-core divisions from the staff of the enterprise and simultaneously creating new market structures, already on principles of «business to business»services. Moreover they are actively introducingschemes of leasing of personnel: some of the workers are removed from the staff and transferred to a personnel agency which formally becomes their employer, but in fact they continue to work in the former company (outstaffing). This is a global tendency - in world practice more and more well-known and profitable companies prefer not to burden themselves with personnel, down to the creation of "weightless" corporations which have practically completely liquidated their own production. The exit of large companies from the labour market results in a real reduction of permanent jobs. And in Russia employment in the largest companies increasingly ceases to be stable and workers loose their feelings of security and stability. This entails serious problems, first of all, by way of reduction in the motivation and loyalty of the personnel. In fact it is impossible to dismiss the social motives of work which can be characterized by a psychological attachment to the labour collective, or, in other words, an attraction of a social network. Each person from the non-staff body subconsciously does not perceive the Company which is the actual employer as his own. And this breaks the carefully imparted corporate spirit. As a result employees work if not with coolness, but not with the burning eyes favoured by the employer.
It seems that in the change of the structure of employment a certain contradiction between the interests of shareholders and the interests of hired managers is concealed. Shareholders are interested in reduction of costs through changesin the structure of expenditure (accounts with an agency come under the heading of business development). However, for the direct heads the removal of personnel from the staff significantly complicates the management of labour because any manager wants to deal with a person, whose behaviour is predictableand who is easily incorporated into the existing social structure.
Corporate culture. The transnational companies offer an attractive model of corporate solidarity within the framework of which the common interests of the owner, managers and workers in the competitive struggle of the Corporationstand in the foreground. But, when a high intensity and a strict work regime is not compensated by high payment, the cultivation of the idea of corporate solidarity and all the corresponding rhetoric - «the purpose of the company», «the mission of the company», «the motto of the company», only irritate Russian workers: Understand, western companies coming here, try to veil all this as team work: «we are members of one team … Come on!» They operate with slogans, the same as in "McDonald's": you know, we do not payyou a fig, but all of you are members of one team, the "McDonald's"team! Everywhere is the same. But while in "McDonald's" they are young boys andgirls, here already everywhere are adult people and these slogans are good only at first, when you have got in to the western company and are glad, well they were nothere earlier, and now they are, and I am with them, and we are members of one team … After a while you come to see that all this is only words to not pay money.
The consequences of the introduction of international standards in production and management is the aggravation of contradictions in the labour sphere of the enterprise between new demands and established labour practices, the conflict of labour cultures, increase of expectations from the trade unions.
Crisis of trade unions
The general tendencies of change of the organization of work and business must influence trade-union participation in the regulation of labour relations. Trade unions which quite suited an epoch of hard class antagonism and an industrial system of work organization, cease to correspond to new conditions. The development of the economy leads to the personalisation of labour relations. The increase of personal responsibility for protection against risks creates a problem for trade unions which are more used to protecting the interests of their members than taking on their individual responsibility. Under the influence of technological conditions there are shifts in the social-class structure – the share of the traditional "traditional" industrial and production personnel, and sectors in which the trade unions have been strongest and most clearly structured, and have faced the most severe economic competition,has decreased. Thus, all over the world the process of marginalisation oftrade unions has begun [4].
Certainly, all these tendencies are also seen in Russia, but the Russian trade unions are also burdened by their own problems. The nature of their crisis condition is part of a wider process – the destruction of the system of social protection developed in Soviet times, first of all institutionalconditions and mechanisms of their realization. Within the framework of state socialism they actually executed the function of social patronage over workers [5]. After all the social and economic and political transformations, in Russia, as in the majority of countries with a transition economy, the trade unions have survived, having preserved their structures across the whole countrypractically completely. Tothis day the trade union is the largest mass public organization, uniting about 30 million members that amounts to about 45% of the total number employed in the economy and working at enterprises of all forms of ownership. Thus the Soviet past has inevitably left traces on their activity and on the character of the mutual relations between workers and the administration. Movement towards an understanding of their independent role as the representative of the interests of workers occurs extremely slowly. To this day, trade unions in Russiahave not become really independent organizations, able to negotiate with employers about the best working conditions.
Transnational companies all over the world, in essence, implement a model of strategy of economic survival in conditions of strong competitive struggle and changing conditions, based on a joint responsibility for the fate of the company. In this there is no place for trade unions. But, TNCscome to Russia - a country where the national system of labour relations is focused on social partnership at all levels and is proclaimed as the leading principle of regulation of the labour sphere (in this case it is not so important how far this system really operates). Trade-union rights (to the creation of trade unions and conducting collective negotiations) are protected by the law that it is impossible to ignore. At Russian enterprises TNCmanagement has faced two types of trade unions. Sometimes, they are new (alternative) rather small organizations which arise in response to an aggravation of contradictions in the labour sphere, carry the torch of class struggle and try to operate within the framework of classical trade unionism. More commonly, management deals with "old" trade unions which do not look like trade unions according to western standards, they appear massive, but work in ways inherited from past Soviet life. However, even in this case, the arrival of a western owner aggravates the conflict between the practice of a conformistsocial partnership and challenges of the environment. The consequences of the introduction new management practices for the trade unions is a reduction of trade-union membership among higher professional groups and management, a reduction in the role of trade unions in the management of work and social programs and the need to become more active in the protection of the rights of workers. The traditional content of trade-union work, which concentrated on the distribution of social services and moderate information interchange with workers, appears insufficient and demands urgent adaptation to changes.