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Home arrow Business & Finance arrow Human Capital and Innovation: Examining the Role of Globalization
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Flexibility and Conflict

As discussed earlier, the coexistence within the same organisation of employee groups engaged under different terms and conditions, and possibly involved in the same or interrelated tasks, may be a source of resentment and conflict, hampering organisational performance. Conflict is particularly likely if peripheral employees are used to cushion core employees, with the former effectively assuming a disproportionate share of employment risk. The response of the global factory to this paradox may be to ensure that dualism occurs between organisations rather than within a single establishment (Harrison, 1994). Such segmentation not only helps avoid direct conflict but allows greater differentiation if it occurs between operations subject to varying cost and regulatory regimes.

Flexibility and Commitment

High-performance workplaces are likely to be characterised by high levels of employee commitment. Traditionally, commitment has been secured through the provision of job security and favourable pay and working conditions. However, the growth of less secure employment and performance-based evaluation have eroded this fundamental bargain, with, at best, opportunities for training and development to enhance ‘marketability’ replacing security of tenure. Opportunities to increase capabilities, while valued by many employees, do little to encourage commitment to a single employer. Ensuring employee commitment is likely to be problematic, particularly where employment conditions of a group of employees are changed unfavourably. Since such changes often coincide with lower levels of institutional and regulatory workplace support such as trade union coverage or social security benefits, they can trigger unconstructive responses. In essence, some employees may believe that their ‘psychological contract’, the terms of the exchange relationship between employee and employer, has been breached (Hiltrop, 1996). Maintaining psychological contracts within a flexible organisation pursuing some form of dualism necessitates significant investments in training and development opportunities. If the organisation is reluctant to make these investments, perhaps because it is primarily seeking to cut costs, commitment levels may be expected to plummet. For the global factory, the simplest solution to this problem is to differentiate activities and to ensure that tasks which are likely to be restructured are outsourced. This no longer means externalising a complete function such as production, but through ‘fine slicing’ targets specific tasks and employee groups. For the global factory, dualism (or more broadly, significant differentiation) may exist between network members, but does not have to occur within a single establishment.

 
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