THREE ESSAYS ON LABOR-MANAGEMENT RELATIONSHIPS IN THE CHANGING WORLD OF WORK
KI-JUNG KIM
The world of work is constantly evolving, shaped by various factors that interact in complex ways. Globalized competition drives workplaces to strive for greater efficiencies and flexibility. The pace of technological advancement has accelerated, with automation and artificial intelligence transforming the way work is done. Political turbulence adds to the uncertainty, generating unpredictable changes in policies on work. Global health crises alter how and where work is done. Demographic changes, such as an aging and increasingly diverse workforce, present challenges in ensuring productivity and well-being at the workplaces while maintaining inclusivity and equity.
Against this backdrop, the role of labor-management relationships in organizations has been questioned. Some argue that labor-management relationships are losing their relevance in today's dynamic workplace. This argument sounds particularly plausible given that unions, which have traditionally been at the forefront of representing workers' interests, have been struggling to maintain their membership and influence over the past several decades. Furthermore, the emergence of gig work and casual employment have challenged traditional notions of employment and worker rights. Consequently, labor-management relationships seem to be deteriorating, intensifying societal concerns such as wage stagnation, income inequality, and job instability.
Have labor-management relationships really lost their relevance to the changing world of work? Three chapters in my dissertation address this question by studying the role of labor-management relationships in organizational flexibility and innovation—two essential components for organizational success. To provide a comprehensive understanding of the topic, I take an interdisciplinary approach, drawing upon theories and concepts from various fields such as employment relations, human resource management, and organization theory. By doing so, I provide a holistic view and practical implications of the complex interactions between labor and management, and how these relationships influence organizational outcomes.
The first chapter examines how unions react to employers’ attempts to increase labor flexibility, known as employment externalization. I demonstrate that the power of unions and the quality of union-management relationships are two employment relations dimensions that determine the level of externalization. I further show that unions differentiate their behavior toward externalization depending on the level of threats that external workers pose. These findings suggest that cooperative union-management relationships mitigate externalization, whereas conflictual relationships strengthen unions' resistance to both types of externalization. In the second chapter, the focus shifts to the role of labor-management relationships in the era of shareholder primacy, in which short-term profits and shareholder values are prioritized in organizational decisions. I contend that labor-management cooperation can counteract the power of short-term-oriented shareholders. And such cooperation can promote a more balanced approach to decision-making that considers various stakeholders of organizations. The study highlights the critical role of labor-management cooperation in mitigating the negative effects of short-termism and promoting long-term growth and sustainability. The third chapter investigates the role of worker representatives in promoting innovation in organizations. I uncover that worker representatives and high-performance work systems—two channels of worker voice—work in a synergetic way when worker representatives can meaningfully participate in managerial decision-making processes. In doing so, I emphasize worker representation's role in creating conducive environments for innovation.
For empirical evidence, I rely on the Workplace Panel Survey (WPS) in South Korea. The WPS is a nationally representative longitudinal survey that covers the period from 2005 to 2019. The WPS provides a unique context to study the dynamics of labor-management relationships in a hybrid system of liberal and coordinated market economies. The data also offer rich organization-level information on a range of variables, such as employment structures, human resource management practices, the nature of labor-management relationships, worker representatives’ participation in managerial decision-making processes, innovation among workers, and innovation in products or services. Furthermore, the panel data nature of the WPS allows for advanced econometric analyses, such as fixed-effects and random-effects models, to provide more rigorous and robust empirical evidence on labor-management dynamics. Hence, by using the WPS, I offer an in-depth and nuanced understanding of labor-management relationships in organizations.
Taken together, my dissertation underscores the continuing importance of labor-management relationships in the evolving world of work. The decline of unions and other worker representation mechanisms is a cause for concern, but opportunities exist to create more effective labor-management relationships that can benefit both workers and organizations. By promoting cooperative relationships between labor and management, organizations can achieve their goals while ensuring that workers are treated fairly and respectfully. As such, labor-management relationships are not only relevant but also essential to the changing world of work. Organizations that prioritize these relationships are likely to succeed in the long run.
Full manuscript available upon request (Ki-Jung.Kim@eku.edu)