Flexibilizing organizations: Consequences for worker participation?

Jan Kees Looise, University of Twente

Since about the 1980s we experience an ongoing shift from bureaucratic to more flexible organizations. Indications of this shift are:

  • breaking up of conglomerates into more focused and flexible companies
  • outsourcing of parts of production and services to other organizations, including those in low cost countries
  • growing accent on return on investment
  • strengthening of the position of shareholders (viz. top management)
  • replacement of forms of vertical command and communication by lateral relationships within organizational networks and alliances
  • growing role of information technology in production, services and organization
  • growing accent on smart production and agile (teal) organizing
  • replacement of permanent labor by flexible labor

This list is not exhaustive, but is long enough to give an indication of the amount and impact of the changes that are taken place since about the 1980s. Given the fact that these changes will continue to take place in the future it is impossible to give a definite picture of where this organizational change will end. The only thing we can do is trying to understand how the ongoing and possible new changes impact organizational forms, corporate governance and the arrangement of work. And in line with that the position and form of worker participation as it exists now.

Worker participation (WP) as we know it is a product of bureaucratic capitalism that mainly developed from about 1890 and lasted till about the 1980s. During this period most organizations – and especially large ones – became bureaucratized while industrial relations became institutionalized and bureaucratized as well. Trade unions became recognized as legitimate representatives of and negotiators on behalf of workers at different levels (organizations, industries, regional and national) and in most European countries WP at company level was institutionalized, be it legally or by collective agreement. In this institutionalization of WP two main lines developed: WP via worker representatives in works councils and/or trade unions delegations aimed at company policies and WP via worker representatives in supervisory boards aimed at corporate governance. From the 1980’s both lines have been extended to the European level via the Directives on Employee Involvement, on European Works Councils and on Employee Involvement in European Companies (European Company Statute). Besides these formal and representative forms of WP in most European companies informal and direct forms of WP have developed as well. According to the Third European Company Survey (2015) in more than half (56%) of the company establishments there are `extensive and supported’ forms of direct employee participation, so this is quite substantive. As most of the formal arrangements for WP were developed in relation to bureaucratic organizations, it can be questioned whether these arrangements are still actual and effective in relation to the ongoing flexibilization of organizations. And if this is no longer the case, what should be done to make WP actual and effective again? Can new forms of representative WP be developed? Or should informal direct participation - be it partly - take over the role of formal representative WP? These questions have been debated already for quite some time, but not yet in a very thorough way. Both advocates and opponents of change in the existing WP-arrangements seem mainly driven by ideological or political motives - either led by the wish to get rid of trade unions and or works councils or by the conviction that we need to keep them as they are - though an in depth analysis of the place and role of WP in flexible organizations is missing. This is also due to the fact that, although overall characteristics of these organizations become gradually better known, it is still not yet very clear what the characteristics of flexible organizations are. Therefore this paper will try to bring some clarity using a historical and differentiated approach

Flexibilization may be an important trend since the 1980s, this does not mean that - as some authors seem to expect - everything is or will be flexibilized in the same way and amount. In general flexibilization can be seen as a trend that takes place already since long in Western Europe – perhaps even since the Middle Ages – comparable with and in relation to trends like individualization, economization, rationalization and so on. And it is true that this flexibilization trend influences most elements of our societies – especially since the acceleration of it since the 1980s. This justifies the use of terms like `the flexible age’ or `flexible capitalism’. But in practice there are large differences in the way and amount flexibilization influences existing institutions and organizations. Some institutions and organizations are only limitedly affected, while others are heavily influenced. Regarding the flexibilization of organizations we can see large differences in form as well as amount between e.g. international and national organizations; profit and non-profit organizations; industrial and service organizations; technology intensive and extensive organizations and so on. In the context of this paper it is not possible to distinguish between all these variations in organizations. Therefore we focus on three main historically dominant types of organizations, namely: large (international) organizations, middle-sized organizations work and small organizations and one recent new organizational form: the platform organization (although still has to been whether this form will hold as a really new type of organization or will assimilate to one of the existing forms). In the paper the flexibilization of all four types organizations will be evaluated in combination with the consequences for WP. Basis for the evaluation is the conceptual and historical literature on the different types of organization and the way they have been flexibilized and the available empirical data about WP in these organizations (mainly from the Netherlands and the EU). As empirical evidence is only limited available, the paper will have a rather explorative character. The results of the paper will contribute to further theory development on the differentiated flexibilization of organizations over longer periods and the effects on WP and to more extensive follow-up research.


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