Dimitrios. M. Mihail, University of Macedonia
Stella Kufidu,, University of Macedonia
JEL classification : J51, J53, M12
This study assesses the organized labor and management attitudes towards the technological change in Greek manufacturing. Specifically, it looks at what trade unions try to achieve and what activities undertake when faced with technological change at the Greek workplace. The main issue examined is trade unions as mechanism in raising employee participation in the workplace innovation. Since the mid-eighties the European Commission has tried to compromise conflicting interests and attitudes to the adoption of technological change. Management at a European level argues that company modernization is promoted within a flexible internal and external business environment, whereas unions place emphasis on technological unemployment. Commission’s insistence on social dialogue as a means of ameliorating innovation implications, led the social partners to an agreement, in 1987. European management accepts the process of information and consultation of unions about modernization plans, whereas the organized labor admits the management prerogative in the relevant decision making process. In 1994, Commission moved ahead institutionalizing labor participation in innovation through the Directive of European Works Councils (94/45/EC). European Union developments on this issue impacted Greek legislation almost spontaneously. Greek legislators echoed Commission directives and adopted Law 1767/88 that obliges management to inform company’s works council about modernization plans and to decide with employee representatives on corresponding training schemes. Provided this relatively favorable institutional framework, we try to assess in our study whether unions were able to promote employee participation based on four research hypotheses. The first hypothesis relates directly employee involvement to market competition. Companies which compete in new product markets where innovation, product quality and customer orientation are basic company strategies, tend to encourage employee participation. The second hypothesis contends that long- standing conflictual relations between labor and management would tend to undermine participation at company level. The third hypothesis accepts the argument that the level of employee participation is inversely related to the sophistication of technological innovation. The fourth hypothesis relates directly employee involvement to union density. However employee involvement is conditioned by the specific implications of innovation. There is no room for unions to maneuver facing, for instance, the issue of job loss concerning low – skilled workers. The sample was drawn from large manufacturing companies, employing more than 250 employees and operating in Northern Greece. Among the 37 organisations of our sample only 22 have recently introduced computer based technological change. All of them were unionized. Half of the companies agreed to participate in our survey so data were collected by means of a structured questionnaire that was completed by trade union representatives of 11 companies. The aim of our survey was to detect if there has been a marked shift towards employee participation schemes in facing the challenge of workplace technological change. The main finding is that, until 1997, one can hardly speak about employee participation since management simply announced its plans about plant modernization. All companies studied, except one, chose to simply inform their employees about innovation and only three of them scheduled a special meeting for this occasion. Management just complied with the existing regulations and did not adopt any form of participation. This result is not surprising if one contrasts each of the reviewed cases to the participation limitations imposed by our research hypotheses. Almost all of the examined companies belong to traditional industries such as food and beverage, chemicals and textile, which dominate the Greek manufacturing sector. Our survey did not find any organization that changed its production process by adopting flexible manufacturing systems in a full-scale fashion. Hence, both the competition strategy and the degree of technological change were not supportive of participation schemes from the management viewpoint. In addition, the conflictual industrial relationships in postwar Greece, undermining trust between the social partners, seem not to condition favorably employee participation initiatives. The high union density, averaged 70.3%, could not either promote participation or reduce technological unemployment, the latter being another major concern of the study. In fact, unemployment due to innovation reached a remarkable 6.8% in the surveyed firms. Here, the main finding is that unions proved ineffective due to the fact that lay-offs were mostly related to low-skill job positions. Furthermore, it is worth mentioning that company restructuring was taking place in macroeconomic conditions of high unemployment. Only three trade unions were reported to engage in dialogue with management, proposing certain measures for avoiding lay-offs. These were basically built around functional flexibility within companies. In only one case such union propositions found fertile soil, considering however that this development took place in a firm where all its employees are registered members of the company trade union. Another main finding is that management itself, without practically facing any union pressure, approached systematically and cautiously the issue of technological unemployment. There was an organized effort by management to limit lay-offs to low-skill jobs, to use extensively early retirement schemes and to transfer employees to other job positions within companies. The main policy implication of this study is the documented lack of initiatives from unions in intervening in crucial areas of labor-management relations. The remarkable union weakness to advance articulated propositions for employee participation in the technological innovation and unemployment tends to undermine worker voice at workplace. However, limitations to social partnership might slow down forthcoming massive company restructuring in Greece. This potential danger calls for systematic assistance to unions through institutionalizing suitable agents for information, training and human resource development within union ranks.