Explaining Diversity in Industrial Relations at Company Level in Eastern Europe: Evidence from Romania

Aurora Trif

No 05/3, MPIfG Discussion Paper from Max Planck Institute for the Study of Societies

Abstract: Whilst most studies on the transformation of industrial relations (IR) in Eastern Europe focus on the common trends, this paper examines variations in IR practices at company level. It uses a revised version of the exchange model to analyse the evidence from nineteen case studies in Romania. As the exchange model argues that capital and labour are involved in a rational exchange, it would be expected that if a negative sum game occurs, the rational choice of the actors would be to move towards a zero or positive sum game. However, evidence indicates that nine companies investigated seem to have a long-term equilibrium with a negative sum game for capital and labour. It is argued that this is able to occur because, in addition to capital and labour, the government and, sometimes, the top management are key actors involved in complex games that sum to zero. The paper suggests that differences in the power relations between these four actors lead to variations in the IR types employed at company level within a country. The main contribution of the paper is twofold: firstly, it cites original evidence for the diversity of IR practices at company level; secondly, it operationalises a revised version of the exchange model that could be used in further research to explain the variations in IR at the company level in Eastern Europe. Overall, it aims to contribute to a deeper understanding of variations in IR at the company level.

Date: 2005
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