Theories of Industrial Relations
– Existing Paradigms and New Developments
Paper to be presented at IREC conference 2008
London, Creenwich
by
Carsten Strøby Jensen
University of Copenhagen
Department of Sociology,
Theories of Industrial Relations – Existing Paradigms and New Developments
Introduction
In this article we will analyse and discuss theoretical developments in Industrial Relations (IR) research at the beginning of the 21st century.
Since Dunlop in the late 1950’s tried to identify the core of IR-research and argued for the necessity of a more theoretically embedded IR-research, questions about theory have been raised. In this article the theme is raised again and the aim of the article is to present and discuss existing theoretical traditions in IR-research and to identify breaks along with new tendencies in contemporary IR-research.
The aim of the article is thus to identify some major positions in traditional IR-theory and also to identify theoretical fractures and new tendencies in IR-research; and finally to identify and discuss some research problems that IR-theory could be expected to have to deal with in the coming years.
The starting point for this article will be a rather broad conceptualisation of what the subject of IR-research refers to. IR-research tends to deal with the (employment) relation between employers and employees and the ways in which these employment relations are institutionalised and regulated. In some periods the perspective used in IR-research has been oriented toward those types of employment relations that have been embedded in collective institutions (collective bargaining, trade unions, employers associations, actors representing governments and state officials) (Dunlop 1958, Kauffman 2008, Arckers & Wilkinson 2005). In other periods – and that is especially true today – focus has been oriented increasingly towards analysing individualised forms of employment..In this article industrial relations are – in line with Sisson (2007) – conceptualised broadly in the sense that the subject covers both the traditional collective institutions and systems of negotiation, and the more company oriented form of employment relations.
The concept of employment relation has, to a certain degree, substituted the concept of industrial relations in IR-literature (Kauffman 2004). The use of employment relations has two points. Firstly in most Western countries the employment structure is no longer embedded in an industrial but in a post-industrial society, meaning that the word industrial relations can seem rather anachronistic. Secondly it is also possible to identify tendencies toward individualisation and de-collectivisation of employment relations in the post-industrial labour market. In this article we shall still use the concept of industrial relations due to the fact that it more directly relates to a long tradition of research. However this does not imply that the concept of employment relation is rejected.
The theoretical core in IR-research is perhaps even more unclear than the empirical core. The use of theory in IR-research is rather eclectic in the sense that the research tradition draws on many different types of scientific traditions – e.g. economics, sociology, political science, law studies etc (Ackers & Wilkinson 2003, 2005. Simultaneously IR-theory is related to a number of different paradigms inside social science, for example critical theory, action theory, system theory, pluralism etc. It is however, in spite of the many different approaches in IR-research, possible to identify some theoretical areas that are related to social theory concepts like power and interests, collective versus individual, regulation versus market, centralisation versus decentralisation. Fundamentally the theoretical work in IR-research is thus oriented toward understanding and conceptualising the employment relation as a social order.
Later in this article a number of different existing theoretical traditions in IR-research will be delivered. Also new departures in the theoretical landscape will be presented and discussed and finally some concluding remarks will be used to sum up the points and suggest directions for further investigation.
Existing Paradigms and Theories
The purpose of this section is to set out and discuss some of the existing theories and major positions in IR-research as this research tradition has developed and changed in the period following the Second World War.
The starting point for examining which of the many paradigms within IR-research are important can be seen as related to four characteristics. Firstly it should be possible to argue that a paradigm or a theory is characterised by a number of original and independent statements about the IR-area. Secondly a paradigm or a theory should have a certain durability, meaning it should have played a role in international IR-research for a suitable period of time. Thirdly a paradigm or a theory should directly or indirectly offer some kind of coherent theoretical conceptualisation of the field of industrial relations. We will only look into positions that – in their own self-perception – intend to offer concepts that can explain major parts of the IR-field and not only specific sub areas. Finally the paradigms should still, to a certain degree, be actively used in IR-research today.
The following six paradigms or theories that will be presented later in this section are: 1) traditional system theory (Dunlop), 2) Institutional, IR-theory (British pluralism), 3) theories regarding strategic choices, 4) Critical IR-theory, 5) theories relating to individual versus collective forms of action, and 6) Human Resource Management (HRM).
Before we present the individual paradigms however it is important to gather observations about these different theories and their statuses.
The first observation is the fact that theories and theoretical traditions can be looked upon as competing or complementary. In IR-research we find competing theories and paradigms the same as in other parts of the social sciences. That is, theories dealing with the same subject, but offering different types of explanations and interpretations of a given set of characteristics in the IR-field. One example of competing paradigms in the IR-area is critical theory versus traditional system theory. However it is also possible to identify paradigms and theories that are more complementary than competitive in their explanations or interpretations of empirical reality. Such is often the case when some theories focus on some aspects of the empirical world while other theories focus on different aspects. Classical institutional IR-theory focuses mostly on the collective actors and on the collative institutions in the IR-field, while HRM focuses on individual relations between employees and employers. In that sense one can argue that these theories or paradigms are complementary.
The second observation is that of the well-known distinction in social sciences between theories that are related more to structural types of explanations and theories that are more interested in action based explanations. This structure/actions dichotomy is also recognised within the IR-research field and among the mentioned paradigms it is mostly system theory, critical theory and institutional theory that are related to structural types of explanations. Theories about strategic choice, theories about individual versus collective action, and theories about HRM are mostly related to action based types of explanations. The structure/action theme is in this way also present in the IR-theoretical field and is one example that general themes or problems in social science are also recognised in the IR-field
In the following section there will be a short presentation of some of the main concepts in the above mentioned theoretical positions. In connection with each paradigm or theory there will also be a short outline of some of the problems related to each position.
1) Traditional system theory. An important and central starting point for a major part of the IR research was J.T.Dunlops book: “Industrial Relations System” (Dunlop 1958). This work has in many ways defined the IR-research area. The book was written in a period where Parsons and structural functionalism dominated American sociology and social sciences. In the book Dunlop tried to put the industrial relation research into the system theoretical framing that Parsons had developed. Industrial relations were – using Parsons – seen as a special subsystem in modern society where special actors and certain codes of conduct dominated (Piore & Safford 2006). According to Dunlop the core of IR-research is the study of relations between management (along with their organisations), employees (along with their organisations) and the governmental actors; and also those agreements (collective agreements) that these actors enter into and which lead to more or less institutionalised relations between the actors. In any IR-system we can identify rules that regulate the relations between labour market parties and it is these rules that are studied in Dunlop’s theory of the IR-system. If we examine this theory of the IR-system it is obvious that it - as a united theory - must be considered quite problematic. The structural functionalism of Parsons was – as is well know – highly criticised during the 1960’s, especially in relation to the idea that social order or social systems were fundamentally constituted by functional needs, and that society is based on some common values (or ideologies as it is formulated by Dunlop) (Mills 1959, Gouldner 1970, Coleman 1986).
However it is remarkable that Dunlop – and his IR-system theory – still appears as a central reference when topical trends in industrial relations are discussed. The reason behind this is probably that although many researchers disagree with the overall mood of explanation that Dunlop uses (structural functionalism), Dunlop did manage to give the IR-research field an explicit frame and conceptualisation. It is this frame which is still used when contemporary researchers try to explain what IR-research is actually dealing with. Thus in a certain sense Dunlop created the scientific field of industrial relations (Bellemare 2000, Kaufmann 2008).
2) Pluralism and Industrial Relation research in Britain. This tradition focuses on collective bargaining and on the organisational setup that is related to collective negotiations. The tradition has been especially dominating in the British context and the main representatives of this tradition have been Clegg and Flanders (Ackers 2007). A major perspective of this tradition is related to explaining and conceptualising industrial relations in the light of the institutional structures related to the collective bargaining system.
In a number of analyses Clegg focuses on the interdependence between the collective bargaining system and the system of organisation in the labour market (Clegg 1976). In his analysis the collective bargaining system deals with characteristics relating to the bargaining structure of the IR-system. Subjects dealt with are: is collective bargaining performed on a centralised or a decentralised level, which subjects are dealt with in the bargaining process (wages, working time, pension, parental leave etc.) and what is not subjected to the process of bargaining. The organisational system relates to the organisational characteristics of the bargaining system. It is also deeply connected to the organisational structure of the trade unions and the employers’ associations. This tradition has played an important role e.g. in the many studies that have been oriented toward explaining organisational tendencies among trade unions.
If we make an overall evaluation of the tradition today, one might argue that the tendencies toward decollectivisation of different IR-systems in Europe have put this tradition in a weak position (Kaumann (2008).
3) Theories of strategic choice and industrial relations. This perspective has been stressed by IR-researchers such as Poole in the 1980’s (Poole 1984, 1986) and Kochan (Kochan 1998) in the 1990’s. The fundamental position in strategic choice and industrial relations theories is that the formation of IR-systems must be related to the IR-actors and to the strategic choices made by those IR-actors. Using an actor based conceptualisation of the social world; this tradition tries to explain IR-institutions as a result of choices made by the IR-actors. For example Poole writes:” Employers “ managers, workers and their representatives, and officials of the state and various of its agencies are essentially social ‘actors’ who shape the institutional arrangements in which they operate” (Poole 1986: 11). Poole tries to explain IR-institutions and IR-systems by referring to the actors and their choices, and not to the functional effects of IR-systems as Dunlop does.
Kochan et al. (1994) have also argued that an actor based theoretical framework is most suited for explaining developments in different IR-systems. One perspective stressed by Kochan – but also by others (Child 1972, 1997; Jensen 1998, Jensen 1999) – is that the formation of IR-institutions (such as collective bargaining institutions) depends upon the strategic choices made by the IR-actors. The thesis is that in certain situations IR-actors make choices that have a formative and structuring influence on the forms of institutionalisation that characterises IR-systems (Bellemare 2000). “The central thesis of the strategists affirms that industrial relations behaviour and the outcomes produced by the IR system are determined by the interplay between the environment and the strategic choices made by the actors.” (Bellemare 2000: 385). The point is that trade unions, employers associations and state agencies are continually in a position where they make choices that result in different types of institutional structures. The central theoretical weakness in this tradition is that it is difficult to identify the precise relation between the importance of structure and action. The theory argues – using the concept of strategic choice – that organisations like trade unions can in some way make choices that are independent of the environment. But the question is what does this mean in relation to empirical reality? When is a certain choice independent of the structures that the actors are part of? And can’t we always identify some relation between an organisation/actor and the environment?
4) Rational choice and theories of collective action. A number of specific theories inside IR-research take as a starting point the so called ‘problem of collective action’. These positions argue that social action should be analysed using a rational choice perspective (Olson 1965, Hechter 1987, Elster 1989, Traxler 1995, Coleman 1990, Hagen 2006). This tradition has many similarities with the strategic choice positions dealt with in the former section and the tradition could be presented as part of an action based tradition. The reason why this is not done here is that the collective action tradition is explicitly oriented toward conceptualising the ‘free-rider’ problem in social science. The question raised in the collective action tradition (Olson 1965) relates to the difference between individual and collective action and to the question of how we can explain the establishment of collective actors (Traxler 1995).