William N. Cooke

Employee Participation Programs, Group-Based Incentives, and Company Performance: A Union-Nonunion Comparison

This analysis examines whether union representation positively or negatively influences the effectiveness of employee participation programs and group-based incentives in improving firm performance. Examined at the firm level, a model of the independent and interaction effects of participation, profit and gain sharing, and union representation is estimated against data on 841 manufacturing firms in Michigan in 1989. The evidence indicates that employee participation programs contributed substantially more to performance in unionized firms than in nonunion firms, whereas profit and gain sharing programs contributed substantially more to performance in nonunion firms than in unionized firms.

The Influence of Industrial Relations Factors on U.S. Foreign Direct Investment Abroad

Although managers of multinational companies have identified labor practices and regulations, access to skilled labor, and similar factors as important considerations in foreign direct investment decision-making, few studies have empirically examined the influence of industrial relations factors on foreign direct investment. Applying a transaction costs framework to U.S. Department of Commerce data published in 1992, the author examines the influence of several key industrial relations variables on U.S. foreign direct investment across nine industries and nineteen OECD-member countries. Across the countries studied, U.S. foreign direct investment was negatively affected by the presence of high levels of union penetration, centralized collective bargaining structures, stiff government restrictions on layoffs, and pervasive contract extension policies; it was positively affected by high levels of education and policies requiring works councils.

Industrial Relations Systems and US Foreign Direct Investment Abroad

Five readily distinguishable industrial relations systems are identified based on differences in education levels, hourly compensation costs and various government and collective bargaining constraints placed on management’s freedom to set the terms and conditions of employment. A model of foreign direct investment (FDI) that incorporates these key industrial relations variables is then specified and tested against US FDI across a sample of nine industries and 33 industrialized and developing countries. The industrial relations system variables significantly influence US FDI abroad. In particular, education is negatively related to FDI across low skill–low wage countries but is positively related to FDI across high skill–high wage countries. Higher hourly compensation costs (apparently capturing higher productivity) are associated with greater FDI. Whereas government restrictions on layoffs, union penetration and centralized negotiation structures are negatively related to US FDI, the ratification of ILO standards and works council policies are positively related to US FDI. Based on these findings, the FDI attractiveness of industrial relations systems are compared and policy implications discussed.

Determinants of the Outcomes of Union Certification Elections

This study analyzes determinants of union election outcomes at the level of the work unit. Within a theoretical framework of utility maximization, voting behavior is modeled as a function of the social psychology of groups, the economic and sociopolitical environment, NLRB procedures, and the extent of union organization of the industry. Utilizing NLRB certification-election records for 1979, the author finds a negative relationship between unit size and union victories in units of fewer than 65 workers, but no relationship in larger units. Also negatively related to union victories are delays between petition and election dates, elections held in southern states having right-to-work laws, and elections involving the Teamsters. In contrast, workers are more likely to vote for representation as unemployment levels and the proportion of consent elections rise and as the rate of unionization in their industry rises to 35 percent.

PRODUCT QUALITY IMPROVEMENT THROUGH EMPLOYEE PARTICIPATION: THE EFFECTS OF UNIONIZATION AND JOINT UNION- MANAGEMENT ADMINISTRATION

This study investigates the effectiveness of employee participation in achieving product quality improvement in union versus nonunion settings and in programs unilaterally administered by management versus programs with joint union-management administration. An analysis of data from two surveys of manufacturing firm managers suggests that among unionized firms, those with jointly administered programs achieved significantly greater improvements in product quality than did those with more traditional, adversarial collective bargaining relationships (that is, with no participation programs), but those with programs administered solely by management fared no better than those with no programs. The gains associated with jointly administered programs in unionized firms were at least equal to the gains associated with participation programs in nonunion firms.

The Failure to Negotiate First Contracts: Determinants and Policy Implications

This study examines why unions, after winning certification rights, fail to secure agreements in roughly one of every four first-contract negotiations. Hypotheses are derived from Chamberlains theory that the relative power of the negotiating parties is a function of the costs of agreeing and disagreeing, costs that are shaped by economic, legal, and organizational factors. The author analyzes data through 1982 on 118 cases in which unions had won NLRB elections in Indiana in the years 1979 and 1980. He finds that an employers discrimination against union activists and his refusal to bargain, measured by section 8(a)(3) and 8(a)(5) charges deemed meritorious by the regional office of the NLRB, have substantial negative effects on the probability that a first contract will be reached. Similarly, negative efffects result from lengthy delay in the NLRBs resolution of employer objections and challenges to lost elections. On the other hand, unions are also more likely to obtain first contracts when firms pay wages well above the industry average, when national union representatives participate in negotiations, and when bargaining units are relatively large and cohesive.

Factors Influencing the Effect of Joint Union-Management Programs on Employee-Supervisor Relations

This study tests a model in which programmatic features of joint union-management programs, the exercise of relative power options by employers, and organizational constraints are hypothesized to influence the intensity of collaborative efforts and, in turn, changes in employee-supervisor relations. An analysis of survey responses provided in 1986 by 92 unionized manufacturing plants having formalized joint programs generally supports the model. The results suggest, for example, that improvements in employee-supervisor relations are more likely when joint programs are structured to have highly active team-based efforts and substantial union leader participation; when programs are in their first few years of activities; when there has been either substantial growth or substantial decline in employment levels; and when the employer has refrained from subcontracting out bargaining unit work.

Political Bias in NLRB Unfair Labor Practice Decisions

Previous research has suggested that U.S. presidents appoint members to the National Labor Relations Board who reflect the administrations own union-management predilections. No adequate empirical evidence has yet been reported, however, to show that, once appointed, Board members act in a biased manner. The present study develops and tests a choice model of Board member decisions in selected unfair labor practice cases over the 1954–77 period. The evidence strongly supports the popular belief that Board decisions are heavily dependent upon shifting political winds.

Structural and Market Predictors of Corporate Labor Relations Strategies

The authors develop a model predicting which of three broad labor-relations strategies—union avoidance, union-management collaboration, or a mixed strategy combining elements of union avoidance and collaboration—a company will adopt. A multinomial logit estimation using data on 58 large unionized manufacturing corporations confirms that market pressures and structural characteristics of the company are important predictors of strategy choice. Specifically, the worse the market conditions (as gauged by import penetration and industry employment), the more likely executives will choose union avoidance over collaboration and mixed strategies. Collaboration is more likely to be chosen the greater the percent of plants unionized and the higher the ratio of cost of goods to sales. The choice of the mixed strategy is more likely the higher the labor intensity, capital investment, and number of plants.

Union avoidance and foreign direct investment in the USA

The USA is not only the largest foreign direct investor country in the world, it is also host to the largest inflow of foreign direct investment (FDI) in the world. Although recent analyses have shown that multinational companies have invested less in countries with higher levels of union membership and contract coverage, more centralized negotiation structures and more restrictive workplace regulations, no similar analysis has been made of the influence of these factors on FDI in the USA. Also lacking in the literature is any analysis of the extent to which foreign‐owned affiliates have engaged in union avoidance in the USA as part of their investment and human resource management/labor relations strategies. This study first focuses on the estimated effects of the relatively low union penetration and decentralized negotiation structure of the USA on FDI in the USA. Second, the precipitous decline in union coverage of foreign subsidiaries in the USA over the last two decades is analyzed. The results of both inquiries strongly support the proposition that foreign multinationals have given substantial weight to union avoidance preferences as part of their FDI strategies.