Countervailing Power Research Articles

The missing link: The significance of institutional interdependencies and dynamics of action for transnational labour regulation in multinational companies

AbstractIn recent decades, both academic research and industrial relations practice have been increasingly concerned with whether, and to what extent, transnational forms of labour regulation might constitute a countervailing power to globally operating companies. And although numerous studies have analysed the various instruments and institutions of transnational labour regulation – such as Global Framework Agreements, trade union networks and European or World Works Councils – as yet there has been little in the way of exploration of their dynamics or interconnections. Against this backdrop and based on a comparison of three case studies of multinational companies, we focus on what we consider to be the ‘missing link’ between the dynamics of social action and the interdependencies of institutions in order to explain how transnational institution building can contribute to the development of transnational labour regulation. Specifically, we investigate how different pathways to transnational labour regulation have been the outcomes of actions taken by actors in a multinational corporation and how, in turn, these developments shaped the dynamics of subsequent action. The study underlines that those pathways can only be properly understood when seen in terms of social actors, their power resources and their willingness and capacities to deploy them.

Unfair trading practices and countervailing power

This paper investigates whether countervailing power of collective initiatives (cooperatives, producer organizations, associations) can mitigate unfair trading practices in agricultural markets. The study hypothesis is that collective initiatives exerting countervailing power can attenuate the imbalance in the distribution of bargaining power that is considered one of the main causes of unfair trading practices. Our findings suggest that in a multidimensional bargaining setting where all contract terms are negotiated at once, there is no theoretical expectation that exerting countervailing power necessarily results in a mitigation of unfair trading practices. To investigate the topic empirically, we used a data set measuring fairness perception of a sample of Italian kiwifruit producers. The data support the hypothesis that membership in collective initiatives increases the probability that a farmer perceives a transaction as fair. However, countervailing power does not counter all unfair practices in the same way. While patrons of collective initiatives perceive benefits in price and quality determination practices, no such effect was found for contract renegotiation. The analysis compares two policy approaches: supporting countervailing power and banning specific practices (such as EU Directive 633/2019). We conclude that countervailing power is less effective in targeting specific unfair practices, but it is less likely to determine efficiency loss because it does not impose constraints on contractual negotiations.

BENJAMIN SACHS INTERVIEWED BY MARTHA MINOW

BENJAMIN SACHS INTERVIEWED BY MARTHA MINOW

Economic perspectives on the future of academic publishing: Introduction to the special issue

Economic perspectives on the future of academic publishing: Introduction to the special issue

International mega-corruption Inc.: the structural violence against sustainable development

PurposeThis paper aims to determine the underlying structural foundations that explain why mega (large-scale) corruption exists in an ever-more sophisticated form and how and why the phenomenon remains an intractable threat to global socio-economic stability and sustainable development.Design/methodology/approachPost-colonial theory is used along with critical perspectives on corruption in international business. The paper privileges the decolonization of the current paradigm where “hegemonic orthodoxy” is maintained and enforced through domesticated criticism of corruption in academic literature and in the media.FindingsThe author explains the foundations of “International mega-Corruption Incorporated” (ImC Inc.) and concludes that apart from being the results of greed and criminal intent, it is a designed and weaponized violent instrument for undermining human progress. ImC Inc. occurs through resource control and the manipulation of institutions. Thus, the same theories, the same analyses and the same media exposés on the “pandemic of ImC Inc.” are followed by the same inactions or lacklustre interventions that ignore the powerful international financial institutions serving as the major facilitators.Social implicationsThe nature of ImC Inc. as an existential threat requires mass awareness about its historicity and deep-seated influence on institutions, in order for stakeholders to form a countervailing power to proactively disrupt it in its complexity and in contextually meaningful ways.Originality/valueThis paper provides useful clarifications about specific factors that determine how ImC Inc. exists and thrives in its current form and how to deploy sweeping, corrective and pre-emptive interventions rather than reactionary policies against ImC Inc.

Pricing and Coordination in a Dual-Channel Supply Chain With Product Variety Under the Countervailing Power of the Retailer

To investigate pricing strategy and coordination mechanisms of the dual-channel supply chain with a retailer that has countervailing power to the manufacturer, we consider the effect of product variety in developing decentralized and centralized dual-channel supply chain game models. By solving these modes and comparing the results, we find the following: (i) The retailer's offline retail price is greater than the online retail price of the manufacturer when the retailer's market share is greater than the online market shares of the manufacturer under the centralized model. (ii) Online and offline product demand in a centralized supply chain increases with product variety. (iii) The relationship between offline retail price, wholesale price, and product variety depend on the threshold of the offline channel's market size. The wholesale price decreases with the countervailing power of the retailer. (iv) The relationship between offline retail price and demand in centralized and decentralized supply chains is related to the product variety threshold. Furthermore, manufacturer and total supply chain profit first rises and then declines, whereas the retailer's profit steadily increases with the degree of product variety. Two-part tariff pricing contracts can coordinate a decentralized model to obtain the same profit as that in a centralized model.

Navalny, politics and morals

Russia’s political future will be decided by what happens to Navalny. The Putin regime has destroyed the state as a public institutional structure and has privatised it for its own purposes. It controls and sterilises the political space itself and through increasingly harsh repressive measures attempts to deny citizens and society their rights. Alexei Navalny is the only politician who despite this situation was able to act publicly and develop a countervailing power, and who attempted to win back the political space for society. His decision to return to Russia, despite an attempt on his life and the threat of incarceration, is an act of enormous ethical and political significance. Navalny demonstrates utter courageousness at a time in which the regime is trying to break up protest, intimidate society and disseminate fear once again.

Contested terrain: International development projects and countervailing power for the excluded

• “Countervailing power” enables accountability. • The “positive outlier” approach identifies instructive exceptions to dominant patterns. • This comparison of five outlier projects shows that unlikely aid agencies can contribute to openings, but with mixed results. • Ostensibly pro-participation projects had contradictory effects; the same intervention can enable both power from below and elite capture. • Measuring contradictory effects poses the methodological challenge of determining variation, relative weights, and interaction effects. Conventional international development project approaches to enable participation of the excluded often fall short of building countervailing power, which is key for accountability. This study analyzes possible exceptions to identify causal pathways, as well as long-term effects beyond projects. The methodology combines the identification of positive outliers, process tracing and comparative analysis of five World Bank projects from the 1990s that were also the focus of subsequent academic research. Tangible openings from above that enabled countervailing power took two main forms: 1) institutionalized power-sharing over allocation of social funds — at local, subnational and national levels and 2) support for autonomous, multi-level social organizations, including collective titling of ethnic territories. Over the longer term, projects lacked strong national allies and their most innovative contributions were reversed, watered down or at best contained - though these differences mattered to social actors on the ground. The most analytically significant finding is that projects can have not only contested and uneven outcomes (“mixed results”), but also contradictory interaction effects. This poses the methodological challenge of how to measure and explain the relative weights of both countervailing power shifts and elite capture.

John R. Owen and Deanna Kemp: Extractive relations—Countervailing power and the global mining industry

John R. Owen and Deanna Kemp: Extractive relations—Countervailing power and the global mining industry

Mcdonald’s versus NLRB: The End of Franchising, or an Overdue Restoration of Countervailing Power?

AbstractFollowing a series of national protests in support of an increase in the federal minimum wage, many fast food workers faced retaliation by their employers when they returned to work; schedules were changed, wages and hours were reduced, and some employees were terminated. These retaliatory actions resulted in a number of complaints being filed with the National Labor Relations Board alleging violations of the National Labor Relations Act. Several of the complaints were found to have merit and, additionally, in several instances both the immediate employer, the franchisee, and the corporate organization of which it was a part, the franchisor, were named as co‐defendants. This ruling—that franchisors like McDonald’s USA—could be held jointly responsible for the labor violations of independent franchisees reversed a long‐standing precedent, whereby franchisees were regarded as independent contractors solely responsible for day‐to‐day labor practices, including compliance with federal and state labor statutes. Critics of the ruling argue that it will open the door to unionization and may well spell the end of the service‐sponsor franchising format. Supporters of the NLRB argue that the ruling is just and reflects new “industrial realities” in retail labor markets. Further, a case can be made that the NLRB’s position represents a step in the direction of the restoration of more equitable balance of power between labor and management.

Monetary Policy as Compensatory Power? An Institutionalist Approach to the Eurozone Crisis

:In this article, we study the relationship between monetary policy and the socio-institutional framework. Specifically, we examine the economic policy response to the debt crisis of the Eurozone, applying institutional economics from two perspectives: the theory of social power and the endogenous money supply. The research question is whether monetary policy can be characterized as a countervailing power exercised by European institutions with respect to the member countries. Fiscal and monetary policies have been interpreted through these sources and types of power, as proposed by Galbraith, by distinguishing between those types of power that have had a permanent versus a conjunctural character. We conclude that European Quantitative Easing can be characterized as having been a countervailing power. All of this has strengthened European institutional power despite having been manifested in the context of an economic and financial crisis.

Corporate Governance and Countervailing Power

The analysis of corporate governance has been a one-sided affair. The focus has been on “internal” accountability mechanisms, namely boards and shareholders. Each has become more effective since debates about corporate governance began in earnest in the 1970s but it is doubtful whether this process can continue. Correspondingly, it is an opportune time to expand the analysis of corporate governance. This article does so by focusing on three “external” accountability mechanisms that can operate as significant constraints on managerial discretion, namely governmental regulation of corporate activity, competitive pressure from rival firms and organized labor. A unifying feature is that each was an element of a theory of “countervailing power” economist John Kenneth Galbraith developed in the 1950s with respect to corporations, an era when external accountability mechanisms did more than their internal counterparts to keep management in check.

The evolution of employers' organisations in the United Kingdom: Extending countervailing power

AbstractThe concept of countervailing power has been used to suggest that the power of unions explains the origins and development of employers' organisations (EOs). However, unions have declined since the 1970s, but EOs continue to play an important role in employment relations. If pressure from unions is not sufficient to explain continuing employer organisation, what does account for it? This article pursues this question by examining the evolution and activity of UK EOs between the 1960s and 2016. Our countervailing power argument goes beyond a sole focus on unions to include changing pressures and demands on EOs caused by the state such as individual rights legislation and campaigns by civil society organisations. The changing force exerted by these societal pressures helps to explain the shift of EOs' focus from collective bargaining, nowadays only pursued by a minority of EOs, to lobbying, provision of services, legal support, and training.

The Countervailing Power Hypothesis when Dominant Retailers Function as Sales Promoters

We consider a downstream oligopoly model with one dominant and several fringe retailers who purchase a manufacturing product from a monopoly supplier. We then examine how the supplier's disagreement payoff influences the relation between the dominant retailer's bargaining power and the equilibrium retail price. If the market demand shrinks due to a breakdown in bargaining between the supplier and the dominant retailer, who works as a sales promoter for the product, there is a negative relation between the bargaining power and the retail price. We also find that an increase in the number of fringe retailers is more likely to increase the retail price if their number is large.

Exploring the Dynamics of Alternative Countervailing Power in Collaborative Governance : A Case Study of ‘Gwanak Community Organization’ in Seoul

Exploring the Dynamics of Alternative Countervailing Power in Collaborative Governance : A Case Study of ‘Gwanak Community Organization’ in Seoul

Eco‐labelling by a for‐profit certifier: Countervailing power and its consequences

AbstractFor‐profit certifier's eco‐labelling is common in industries where firms have some “countervailing power” on sharing gains from labelling. We show that the certification standard for an environmental quality is lowered when firms have strong “power.” A certifier with too low bargaining power will prefer to sell to the best offer rather than bargain. This switch in the selling mechanism also thwarts his incentives in setting the standard. This is consequential for evaluating policies. The dimensions and even signs of welfare changes induced by taxes and subsidies depend upon the mechanism used, and ultimately upon firms’ countervailing power.

Vertical Bargaining and Retail Competition: What Drives Countervailing Power?

This article investigates the effects of changes in market concentration on the equilibrium prices in a supply chain. Results are derived from a theoretical model of bilateral bargaining between upstream and downstream firms which allows for general forms of demand and retail competition. Whether countervailing buyer power arises, in the form of lower input prices following greater concentration downstream, depends on the pass-through rate of input prices to retail prices. Countervailing buyer power generally does not translate into lower retail prices because of heightened market power at the retail level.

The Countervailing Power Hypothesis When Dominant Retailers Function as Sales Promoters

We consider a downstream oligopoly model with one dominant and several fringe retailers, who purchase a manufacturing product from a monopoly supplier. We then examine how the supplier's outside option influences the relation between the dominant retailer's bargaining power and the equilibrium retail price. If the market demand shrinks due to a breakdown of bargaining between the supplier and the dominant retailer, who works as a sales promoter for the product, there is a negative relation between the bargaining power and the retail price. Furthermore, retailers' efficiency improvements increase the retail price if the dominant retailer's bargaining power is strong.

Consumer Policy as a Countervailing Power? On the Failure of a West German Grass-Roots Consumer Movement in the 1960s

In recent research, Hugo Schui’s “German Consumers’ Association” (GCA, Deutscher Verbraucherbund) has been called an outstanding example of a “more activist approach” on West German consumer politics in the 1960s. Scholars have pointed out that Schui’s early success suggests that a grass-roots consumer movement such as in France might have been possible in Germany, too. However, this never happened and Schui’s success was short-lived. Only a few years after founding the GCA he had not only lost his job at the Ministry for Nutrition, Agriculture and Forestry, but also his faith in consumer sovereignty and the power of the people. Unlike contemporary mainstream, in his point of view consumers should practice their power foremost through strikes and boycotts. Nevertheless state initiatives and state funded consumer organizations proved more successful than any attempt of forming a consumer countervailing power. Exploring what exactly caused the GCA’s failure only after a few years, this paper examines leading concepts and institutions of West German consumer politics in the 1960s.

Vertical Bargaining and Retail Competition: What Drives Countervailing Power?

Vertical Bargaining and Retail Competition: What Drives Countervailing Power?