Firms and Workers: History, Economy and Society - Institutional Approaches: New Directions and Syntheses

There has been a resurgence of interest in the relationship between institutional configurations and what firms do. The latter encompasses, of course, approaches to the operationalization of the employment relationship, which, in turn, affects the responses of workers. There are a number of distinct phases in this institutionalist revival, however, and again, considerable diversity within the institutionalist camp.

The first phase, in the 1990s, was prompted by a preoccupation with why different developed nations followed distinct trajectories, and more specifically, the reasons underlying the export successes of Germany and Japan, and the correspondingly poor performance of liberal markets in this regard. Even at the time, there were a number of distinct strands to institutional analysis. Firstly, there were those who built on the structural tradition in socio-economics, and who saw institutions as centres of webs of social relationships, that operated in such a way as to make economic growth possible. Writers such as Lincoln and Kalleberg¹and Dore² focused specifically on the differences between shareholder-dominant models of capitalism and more cooperative stakeholder models; it was held that the latter were more conducive to incremental higher value-added production paradigms that underpinned manufacturing success, a viewpoint that still holds true for the manufacture of quality goods. Secondly, within the interpretive sociological tradition, Di Maggio and Powell³ argued that institutions represented social constructions, through the choices of individuals and groups. Thirdly, within the mainstream economics tradition, writers such as North⁴ highlighted the importance of institutional effects in terms of the relative protection of private property rights.

A second wave of literature emerged in the early 2000s. A landmark edited collection by Hall and Soskice⁵ sought to further delineate the distinctions between liberal and more coordinated markets, and how the latter were coping with renewed challenges in the late 1990s. The resurgence of finance-led growth in liberal markets at this time led to renewed confidence in the camp of neo-liberal economists. In a particularly influential paper, La Porta and colleagues⁶ argued that legal traditions, and the extent to which different legal families protected private property rights, had a profound effect on growth.

By the 2000s, a growing body of critical literature challenged some of the assumptions of both varieties of capitalism approaches, and neo-liberal rational hierarchical approaches. Both made assumptions as to path dependence, whilst both assumed that the primary site of differentiation was at the level of the nation-state. Dichotomous approaches to varieties of capitalism conflated differences among different forms of coordinated market (e.g. among Scandinavia, continental north-western Europe, and Japan). The 2008 economic crisis challenged neo-liberal assumptions as to the superiority of the liberal market model, and more broadly, that of path dependence. On the one hand, it was clear that lightly regulated liberal markets were prone to endemic speculative booms and crises. On the other hand, many national governments were forced to adopt already discredited neo-structural adjustment policies by the World Bank and the IMF, and through fear of unrestrained hedge funds. In short, whilst greater regulation and more interventionist states were necessary, that option was not made possible.

In response to these issues and challenges, a third wave of literature has emerged in the late first decade of the 2000s. Key concerns include the nature of internal diversity within specific types of capitalism,⁷ the role of social action vis-à-vis structure,⁸ and the nature of systemic evolution, crisis, and change. This review article focuses on three recent works within this broad body of literature, and highlights key issues and challenges, in terms of understanding continuity and change, whether in a neo-liberal or progressive direction.

Corporations in Evolving Diversity: Cognition, Governance, and Institutions

Concerned both with persistent difference and...