Cooperative Corporate-Level Strategies and Divergent Labor Relations Outcomes: An Institutional Analysis

Abstract

Since the late 1970s, firms in most American industries have experienced increasing pressure from domestic and foreign competition. This pressure has generated changes in product markets, which, in combination with changes in technology, have forced them to rethink traditional ways of doing things. The result has been the restructuring of industries and companies and significant changes in the nature of work organization and industrial relations systems [Kochan and Cappelli 1983; Kochan, Katz, and McKersie 1986; Kochan, McKersie, and Cappelli 1984]. An important component of these changes is the belief that labor-management cooperation is an effective strategy for solving competitive difficulties and responding to change. Cooperation, it is argued, potentially benefits organizational performance through improved productivity, product quality, organizational flexibility, and responsiveness to changes in the external environment [Kochan, Katz, and McKersie 1986; Delaney, Ichniowski, and Lewin 1988; Arthur and Dworkin 1991; Konzelmann Smith 1995]. The role of strategic choice as an important determinant of industrial relations, and organizational performance has received widespread attention. In fact, industrial relations research is now dominated by use of a strategic choice theory that focuses on the choices available to parties subject to economic and technological constraints [Kochan, McKersie, and Cappelli 1984; Kochan, Katz, and McKersie 1986; Arthur 1992; Cappelli and Singh 1992]. As Kochan, Katz, and McKersie explain, Industrial relations practices and outcomes are shaped by the interactions of environ-