Innovation, working conditions and industrial relations - Antonioli (Davide)

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Business & Mgmt

Published on December 5, 2008

Author: Anact

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INNOVATION, WORKING CONDITIONS AND INDUSTRIAL RELATIONS. EVIDENCE FOR A LOCAL PRODUCTION SYSTEM Davide Antonioli, Massimiliano Mazzanti, Paolo Pini. University of Ferrara Department of Economics, Institutions and Territory (DEIT) Contact: ntndvd@unife.it

1. Objectives 2. Literature 3. Dataset 4. Methodology and Results 5. Conclusions Outline

Objectives Main Objectives To highlight the relationships between innovation activities and working conditions To put in evidence the linkages between cooperative industrial relations and working conditions

Main Objectives

To highlight the relationships between innovation activities and working conditions

To put in evidence the linkages between cooperative industrial relations and working conditions

2. Literature 1. Techno-organizational changes and working conditions Two main views a. Positive “ Empowerment thesis ”: both management and workers gain from the introduction of techno-organizational changes (see Handel, Levine 2004 and Vidal 2007 for a review)

1. Techno-organizational changes and working conditions

Two main views

a. Positive

“ Empowerment thesis ”: both management and workers gain from the introduction of techno-organizational changes (see Handel, Levine 2004 and Vidal 2007 for a review)

2. Literature (continue) b. Negative “ Intensification thesis ”: the management uses techno-organizational changes to strengthen control over workers’ efforts and to intensify the pace of work (Green, McIntosh, 2001; Green, 2004; Askenazy, 2004; Fairris, 2004; Askenazy, Caroli, 2006)

b. Negative

“ Intensification thesis ”: the management uses techno-organizational changes to strengthen control over workers’ efforts and to intensify the pace of work (Green, McIntosh, 2001; Green, 2004; Askenazy, 2004; Fairris, 2004; Askenazy, Caroli, 2006)

2. Literature (continue) 2. Industrial Relations and working conditions The presence of cooperative relations between management and union delegates support the workers well being (see Eurofound, 2007 for a recent review)

2. Industrial Relations and working conditions

The presence of cooperative relations between management and union delegates support the workers well being (see Eurofound, 2007 for a recent review)

Main Value Added Comprehensive perspective on the innovation phenomenon Availability of firm level industrial relations data and of firms’ balance sheets data Perceived measures of changes in working conditions provided by union representatives

Comprehensive perspective on the innovation phenomenon

Availability of firm level industrial relations data and of firms’ balance sheets data

Perceived measures of changes in working conditions provided by union representatives

3. Dataset Manufacturing firms with at least 20 employees located in the province of Reggio Emilia (Emilia Romagna) Questionnaire was administered in 2005 and allowed us to collect information over the year 2004. The overall number of firms with RSU is 376 The number of respondents is 192 (51% of the 376 firms with RSU) The 192 firms employ 31.600 workers Balance sheets data: 156 out of 192 firms covered for 1998-2003

Manufacturing firms with at least 20 employees located in the province of Reggio Emilia (Emilia Romagna)

Questionnaire was administered in 2005 and allowed us to collect information over the year 2004.

The overall number of firms with RSU is 376

The number of respondents is 192 (51% of the 376 firms with RSU)

The 192 firms employ 31.600 workers

Balance sheets data: 156 out of 192 firms covered for 1998-2003

3. Dataset (continue) Firms with RSU (percentage distribution ) Size (n. employees) Sectors 20-49 50-99 100-249 250-499 >499 Total Total (numb.) Food 1.86 1.33 1.59 0.27 0.54 5.59 21 Other Industries 1.33 0.53 0.00 0.00 0.27 2.13 8 Chemical 4.53 1.85 2.13 0.27 0.27 9.04 34 Wood 1.33 1.33 1.06 0.79 0.00 4.52 17 Machineries 23.94 16.50 11.43 3.73 2.12 57.71 217 Non-metallic mineral 3.45 5.32 4.25 2.12 1.85 17.02 64 Textile 1.33 1.33 0.26 1.07 0.00 3.99 15 Total 37.77 28.19 20.74 8.24 5.05 100.00 376 Total (numb.) 142 106 78 31 19 376

3. Dataset (continue) Firms interviewed (percentage distribution) Size (n. employees) Sectors 20-49 50-99 100-249 250-499 >499 Total Total (numb.) Food 2.08 2.08 2.60 0.52 0.52 7.81 15 Other Industries 1.56 0.52 0.00 0.00 0.52 2.60 5 Chemical 4.69 1.56 2.60 0.52 0.52 9.90 19 Wood 1.56 1.04 1.56 1.04 0.00 5.21 10 Machineries 16.67 13.54 12.50 4.17 3.13 50.00 96 Non-metallic mineral 4.17 5.21 4.69 3.13 2.08 19.27 37 Textile 1.56 1.56 0.52 1.56 0.00 5.21 10 Total 32.29 25.52 24.48 10.94 6.77 100.00 192 Total (numb.) 62 49 47 21 13 192

3. Dataset (continue) Dependent variables constructed on the basis of the following question: “ In 2004, also subsequently to the introduction of changes by the management, how did the working conditions change? ” Working Conditions Indexes Contents WC_1 (empowerment related items) Index capturing the average trend of 8 job items on a scale from 1 to 3 (decreased, stable, increased) Items: effort, security and job stability, employees competences, information disposable to the employees, autonomy in accomplish the job tasks, influence over the managerial decisions, monetary incentives, non-monetary incentives WC_2 (intensification related items) Index capturing the average trend of two job items on a scale from 1 to 3 (decreased, stable, increased) Items: safety/security and stress

3. Dataset (continue) Main firm characteristics/activities covered by the questionnaire data and balance sheets data Structural characteristics Dummies: sector, size, firm typology, social responsibility, delocalization, strategy pursued. Indexes: turnover on international markets, skill ratio, economic performance indicators 74% of firms export part of the production Balance sheets data 1998-2004 Labour productivity, ROE Organizational changes INNO_ORG Indexes: changes in labour ( ORG_LAB ) and production organization, individual and collective rewards ( REW ), in-/out-sourcing, inter-firm relations 20% of firms adopt HPWP

Main firm characteristics/activities covered by the questionnaire data and balance sheets data

Technological innovation INNO_TECH Indexes: innovation input (R&D, R&D expenditure, firm collaborations), innovation output (product, process, incremental, radical, quality control innovations) 60% of firms invested its own resources in R&D; radical innovations 27%; incremental innovations 62% Training INNO_TRAIN Indexes: training coverage, training modalities, specific competences to which training is addressed (informatics, economics and law, etc…), advantages from training Weakness of small firms (20-49 employees): 72% no training ICT INNO_ICT Indexes: ICT adoption in communication, in production and in the management of activities and external relations E.g. Material Requirements Planning 64% of firms; 82% web site; 75% intranet

Industrial relations Dummies: presence of bilateral technical commissions (BTC), presence of second level bargaining Indexes: Management/Union interaction on changes, firm issues, flexibilities; trend in firm level industrial relations ( I NDREL_TREND ) , evaluation of the firm level industrial relations ( INDREL_EVAL ) , union density, BTC activity, intensity of firm level bargaining Most diffused relation between management and union delegates: information Less diffused : negotiation Flexibility Indexes: coverage of contractual flexibility ( LCF ), conversion of flexible contracts in long-lasting ones; variation in flexibility types (temporal, functional, wage and organizational flexibilities) ( FLEX_VAR ) Flexible contracts: 83% of firms; 11.5% workers involved Conversion rate of flexible in long-lasting contracts in 2004: 50%

4. Methodology… 1. Innovation and Industrial Relations  Working Conditions Working Condition (WC_1 or WC_2) = β 0i + β 1i [structural variables] + β 2i [innovation activities] + β 3i [industrial relations] + β 4i [flexibilities] + β 5i [balance sheets variables] + ε i

1. Innovation and Industrial Relations  Working Conditions

Working Condition (WC_1 or WC_2) = β 0i + β 1i [structural variables] + β 2i [innovation activities] + β 3i [industrial relations] + β 4i [flexibilities] + β 5i [balance sheets variables] + ε i

4. ……..and Results (continue) Dependent variable WC_1   1 2 3 4 Structural variables  Yes Yes Yes Yes Synthetic Innovation Indexes INNO_ICT *   ** * Organizational changes   ORG_LAB / *** / * Industrial Relations  INTERAC_ISSUES **   **   INDREL_TREND ** *** ** ** Flexibility  LCF   * (-)     FLEX_VAR *** *** ** ** Economic Performance PROD_QUEST   * / / Adj R 2 0.26 0.29 0.27 0.26 F test prob. 0 0 0 0 N 191 191 156 156 Note: * 10%; ** 5%; *** 1% levels of significance

Dependent variable WC_2   1 2 3 4 Structural variables Yes Yes Yes Yes Synthetic Innovation Indexes INNO_TRAIN ** **     INNO_TECH     * * INNO_ORG ** (-) / ** (-) / Organizational changes   REW / ** (-) / ** (-) Industrial Relations   INDREL_EVAL *** *** *** ** INDREL_TREND ** ** * * Flexibility FLEX_VAR *** *** * * Economic Performance VA/EMP 2004 / / * * M_VA/EMP98-03 / /   * (-) Adj R 2 0.26 0.26 0.25 0.25 F test prob. 0 0 0 0 N 191 191 156 156

4. …….and Results (continue) Summing up Dependent WC_1 WC_2 Influencing factors Technological innovation Not significant Positive but weakly significant Organizational innovation…. Not significant Negative and significant … .Changes in Labour Organization Positive and significant Not significant … .Reward System Not significant Negative and significant Training Not significant Positive and significant ICT Positive and significant Not significant Cooperative Industrial relations Positive and significant Positive and significant

Conclusions Our empirical results support the hypothesis that working conditions are an outcome of techno-organizational changes The results seem to be sensible to the choice of the working conditions index As a whole, working conditions are positively influenced by techno-organizational changes ( empowerment view supported) and by cooperative industrial relations in the local production system of Reggio Emilia

Our empirical results support the hypothesis that working conditions are an outcome of techno-organizational changes

The results seem to be sensible to the choice of the working conditions index

As a whole, working conditions are positively influenced by techno-organizational changes ( empowerment view supported) and by cooperative industrial relations in the local production system of Reggio Emilia

Future agenda Extending the analysis to ‘many’ local production systems or over wider geographical areas (e.g. regions) Extending the empirical analysis in order to verify the existence of complementarities/synergies among innovation activities and industrial relations

Extending the analysis to ‘many’ local production systems or over wider geographical areas (e.g. regions)

Extending the empirical analysis in order to verify the existence of complementarities/synergies among innovation activities and industrial relations

Thank you for your attention !

Thank you for your attention !

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