Contextualizing the Globalization of Work

Marte F. Giskeødegård

Marte F. Giskeødegård

PhD Fellow Norwegian University of Science and Technology, Trondheim
Email: marte.giskeoedegard@material.ntnu.no

Acknowledging that capitalism must be contextualised, this paper seeks to understand how companies with branches worldwide are affected by varieties of capitalism. The emphasis is on how employees in the international organization make sense of their employment situation by drawing on experiences from their local context as well as their company’s national context of origin.

A company with branches worldwide is dependent on a corporate image that enables the customer to recognize it regardless the location in which his/her encounter with it takes place. Such a corporate image entails international policies that ensure similar practices worldwide in order for it to function as the same company regardless of the fact that it is spread across the world.

However, such companies do not operate in a vacuum and need to comply with national laws, rules and regulations in the countries in which they are located. This means that international organizations always have a “local flavour” in two senses – because they reflect both the national contexts they operate in and the national context from whence they originate. Several studies point to the continual influence of national context. One such example is that of the Emergence project - a large European study of the new international division of labour within e-work. Its report states with surprise the finding that even with great pressure to conform to international standards there was still a significant importance of national differences (Huws 2003). Also, in a study of call centre work in Colombia Weiss (2007) argues that there are unquestionable global similarities in call centres, but that these global forces are to some extent mediated by national differences. She points to certain characteristics of the working conditions in these call centres, which she attributes to the Colombian context, and argues that “the labour market is one of the strongest national institutions and explains many of the particular characteristics of the working conditions and employment relations…” (ibid: 151).

This interplay between international standards and national contexts is the starting point for this paper. I look at national differences in policies concerning work and the companies’ adjustments to these differences. My aim is to look at how this affects workers- sense-making of both the organization they work for and of their own work situation. My empirical data stems from fieldwork within a Norwegian company operating in the maritime industry. The company is represented in 115 countries around the world. In this paper I take a closer look at the relationship the American branch office in Texas had with the Norwegian company it worked for.

In regard to national differences concerning work the literature on varieties of capitalism is interesting. Common to this literature is the emphasis on the fact that capitalism varies depending on the context. Hall and Soskice (2001) distinguish between liberal market economies and coordinated market economies which they see as ideal types, while Coates (2007) distinguishes between liberal, welfare and developmental capitalisms. A common denominator in the authors’ distinctions is the degree of state involvement in investment decision. This is further linked to the level of industrial and social rights the state ensures the workers. Coates explains the different systems in relation to the historical development after the Second World War, the rise of the nation states, class struggles and the Fordistic economic system that marked the post war era. The different nations worked for the same goal, but with different means;

 “The Americans did it one way: high wages but low worker rights, low taxes and the thinnest welfare nets. The Western European did it another way: high job security and internal job flexibility, high taxes and a generous social wage. The Japanese did it differently again: long hours and guaranteed employment for core workers, big exports and only modest income growth at home”.

(Coates 2007:18)

From the description above the US can be described as liberal market capitalism while Norway as a Social Democracy falls into the category coordinated market capitalism or welfare capitalism. I introduce this literature because of the important point that capitalism does not have the same shape and form everywhere and that this variation is linked to national differences. This is an insight that is fundamental when studying the interplay between global standardized practices and local adjustments in a company that operates across national borders. In particular, it enables me to shed light on some of the major differences between the context of work in Norway and Texas1, especially as the literature also links the distinction to social and industrial rights. This is a vital framework to understand the employees’ sense-making of their organization and their place within it.

There are significant differences in the contractual bases of work. In Norway the legislation concerning work and workers rights is quite extensive. Companies are obligated by law to have a formal contract regulating the work relationship that has to be specific in the details of the contract. The law also states that in order to discharge a worker the employee has to be able to demonstrate justifiable cause. In Texas, on the other hand the guiding doctrine for employment relationships is the at will doctrine. The at will doctrine gives employers and employees alike, in the private sector, the right to end a working relationship without stating a cause. The few and minimal restrictions on this doctrine in the state of Texas reflect federal and state laws on fair employment. According to Roehling (2003) this in general concerns violation of discrimination laws and protection against retaliation. 

The differences in the contractual basis of work paints two distinct pictures of the local realities, as the branch in Texas can hire and fire employees much more easily than the Norwegian setting allows. One manager in the US told me that, basically, as long as you do it properly you can lay off as many people as you want, and added that ultimately it was a matter of how fast you could type the letters. Illustratively, one implication of the at will doctrine is that the employees in Texas do not sign a contract, but an offer letter. A signed contract undermines the at will principle and therefore the employers’ right to fire an employee without stating a cause or further obligations. The employee handbook for the company’s operation in the US therefore goes to great lengths to ensure the continuation of this right. It states several times that this handbook under no circumstances could be seen as a contract. This stands in contrast to the Norwegian version of the handbook that focuses on social aspects. In general, the company portrays itself in Norway as an employer focused on investing in the individual employee, stressing the social aspect and training. 

I was puzzled when I came to Texas that there didn’t seem to be much talk among the employees if someone got fired - there didn’t seem to be much fuss about these types of incidents. Indeed, they happened quite frequently and were regarded as part of the normal course of events, facts reflected in the tone of the company’s e-mail newsletter that announced “staffing updates”, characterised new staff as “new hires” and referred, euphemistically, to departed staff as “no longer with us”.

There were a few people that got discharged during my fieldwork. I recall one episode especially where the young woman who occupied the desk next to mine was fired. She was there when I left the office for a short meeting, and gone when I returned. And on my return, a colleague who was reading his emails declared, “HR can’t have much to do these days.” He was reading a communiqué that stated that the young woman in question was no longer with us. Moreover, just a short while later an “open position” email arrived. This all took place over no more than a couple of hours. The colleague who was reading the emails expressed the fact that he found all this to be “a bit harsh” - they could at least have waited a day before advertising her position! This was an aberration. In the days that followed, there was little talk or speculation about the incident. However, what made the incident all the more remarkable was something that happened a few days later. The woman who was fired was one part of a team of two women who worked together. A couple of days after the incident I asked the one that was left what had happened. She said she didn’t know. She said that she went out to lunch when her colleague was fired, and when she got back she wasn’t there anymore. She added that her manager had told her she would talk to her about the discharge, but she still had not been given an explanation. 

I found turnover to be higher in Texas than in my experience in Norway, and was surprised by the lack of reaction to this in Texas. Even so, I have to stress that I am not trying to paint a picture of a flux working environment where people simply come and go. There were, in fact, a lot of long term and stable staff in Texas. However, the managers said it was easier to hire and fire there. When it was easier to fire a person it became less risky to take a chance and hire someone – something they saw as a good thing to a certain extent. Hall and Soskice attribute much of the difference in the nature of employment relations between liberal and coordinated market economies to the difference in how companies relate to the market. In coordinated economies companies’ production strategies are related to high skilled labour, and wages are set through industry level bargains. To a large extent this protects companies from poaching by other firms, and training therefore tends to be more company specific or industry specific. Their employees enjoy a reasonable degree of security in their working conditions and protection from arbitrary layoffs in return for company or industry loyalty.  In market economies on the other hand the market regulates the relationship between the worker and the company, and this also controls wages and inflation. Here individuals are encouraged to invest in general skills as opposed to company or industry specific ones, making their own transferability between employees more likely (Hall & Soskice 2001).  Interestingly, in the Texas context several workplace frustrations were attributed to the company’s Norwegian origins and, more broadly, the mode of capitalism it is perceived to promulgate. Notably, staff complained of inefficient decision-making, a “decision by committee” mentality that led to endless unnecessary meetings, and the protection of incompetent staff.

The at will doctrine, and the tendency described in the literature towards a context of ‘hire and fire’ employment practices might, one would assume, always make for labour insecurity in liberal market economies such as Texas. However, I found that the fear of law suits to be of great concern in the company, especially because of the depressed financial climate that prevailed at the time of my field work at the moment. This fear was manifested in the time and effort the company invested in management training on this subject. In one of these training sessions, managers were, for example, shown statistically that when the  US unemployment rate went up by 1.5 percent, the number of lawsuits went up by 20 percent. It is somewhat paradoxical that lawsuits can have so much influence in at-will states, a paradox that led one of the European managers working in the US to refer to it as the land of contradictions. He told me a story to illustrate this:

“When I first came we had a coloured guy in the back, he was about 56/57, and he was a dangerous goods driver. So he drove the trucks with all the hazardous stuff on. And he couldn’t see. Honestly, it’s true. He used to wear these thick glasses, he bumped into things when he walked around. I said, “what are we going to do with this guy? He’s been with us for 10 years, he’s 55, and he goes into sort of this protective class.” So I said, “OK, send him to the doctors and get him an eye exam. Because he’s going to fail, and then we can let him go because he’s not capable of doing his job.” And he came back with a clean bill of health! Because the doctor was scared... If he turned around to a coloured guy over 55 and said that he’s not fit to go to work, he could have had a case”

Another reason for the reservation is, according to employees and management alike, the Norwegian origin of the company. I was told that even if the company might be perceived as cut-throat from a Norwegian or even European perspective, it is quite lenient for a company in the US. Clearly then, while the company changes the form it takes in the mother country as it adapts to the labour realities of the context it is in, it still differs, nevertheless, from other American companies. Managers and employees alike felt that the company agonised longer over decisions about whether or not to let someone go. Several of the employees stated that they felt that this company ‘recognises’ the person to a greater degree then do other American companies. This was attributed to the Norwegian or European influence. Specifically, it was attributed, at least in part, to the influence of the European central management team in North America, and also to what they saw as a certain level of standard imposed by the central organization.

This calls for some further explanation. In addition to the legal contractual differences between the two countries there are also significant differences in the legal social rights of workers, as the literature on varieties of capitalism also emphasises. Norway is, together with the other Scandinavian countries, one of the countries where these rights provided by the state are most extensive. The most evident example is leave of absence. In Norway a person is entitled to 12 months paid, job protected, leave in the case of maternity or illness. In both cases the state covers the actual costs for extended leave, but the company cannot discharge the person. In Texas, a person that fulfils the requirements is, according to the Family Medical leave act (FMLA), entitled to 12 weeks of unpaid, job-protected leave.2 The company in which I conducted fieldwork chose, on the other hand, to turn this into a paid leave, provided the worker fulfilled certain requirements. They described it as a Norwegian sort of style package, with good medical, good pension, or as the vice president said “it’s overall very good”.

Concerning welfare and social benefits there are also significant differences between the two countries in the governmental social security net desgned to help a discharged worker. The unemployment benefits are of quite different scales. This is important because what it means to work will be formed also on the basis of what it means not to work in the setting one is in. But even if the American workers were seen as more flexible, I was told that the fact that you could get fired more easily also lead to a higher degree of insecurity for the employees. This was especially due to the lack of a social security net in the US compared to countries in Europe. This lack of security net made the job very important because of the benefits and insurances connected to it. In fact, when you received all your insurance packages through work, this meant that if you lost your job you lost your dental plan, life insurance and so forth. It was also costly to go out and buy private ones, which placed a discharged person in a vulnerable situation. As one American manager told me about the US; “It’s a very slim line between under the bridge and under the covers”.  This to me truly is a paradox. The American market economy is structured so that people can move more easily from one job to the other – which is mirrored in focus on general training and the close to legislational carte blanche companies have in matters of hiring and firing. Yet, at the same time American workers’ benefits and social security net are tied to their work. This, in turn, means that work has, in fact, developed an added importance in the US. This was reflected, for example, in the fact that the managers with experience from Europe said it was easier to manage in the US, as people were tended to have greater respect for formal authority.

At the heart of this paper is the assumption (a reality) that capitalism is practiced differently in different contexts. My aim has been to shed light on how employees make sense of their work situation, and to do this it was vital to illustrate the differences in the two national contexts this paper addresses. It is not my intention to make value judgements about the respective systems I have considered. Rather, I seek to point to the fact that when a company moves from one national context to another its operation changes in order to adapt to the new context. Nonetheless, the company also brings with it some elements that have shaped it in its original national context. For example, in this case employees were, though on mediocre salaries, offered good benefits of a type atypical in the US. This is important because the employee draws on both settings, becomes aware of the differences, and evaluates the company and his/her situation in light of this. The employees I worked with in Texas did not see themselves as working for an American company per se, but an international one, and they evaluated their situation in light of both national contexts. 

Footnotes

1. I refer to the State of Texas because, although subject to federal law, the different states in the US have their own legal system. For this reason policies differs from state to state.

2. Among other things the requirements included 12 months employment

 

References

Coates, D (2007): Capitalist flattening or flattening capitalism: class forces and political choices in the global knowledge economy. In Work organization, labour & globalisation Vol.1 (2): 15-19

Hall, P & Soskice (2001) ‘Introduction’. In Hall & Soskice (eds.): Varieties of capitalism, the institutional foundation of comparative advantage, Oxford University Press

Huws, U. (2003): ‘When Work Takes Flight: Research results form the EMERGENCE Project’. IES Report 397, Brighton: Institute for employment studies

Roehling, M. V. (2003): The employment at-will doctrine: Second level ethical issues andanalysis. Journal of Business Ethics, 47(2), 115-124.

Weiss, A: (2007): “Global forces and national institutions: call centre work in Colombia”. In Work organization, labour & globalisation Vol.1 (2): 131-154