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Organization Studies
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DOI: 10.1177/0170840613492072
2013 34: 1073Organization Studies
Markus Helfen and Jörg Sydow
Framework Agreements
Negotiating as Institutional Work: The Case of Labour Standards and International
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DOI: 10.1177/0170840613492072
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Negotiating as Institutional Work:
The Case of Labour Standards
and International Framework
Agreements
Markus Helfen
Freie Universität Berlin, Germany
Jörg Sydow
Freie Universität Berlin, Germany
Abstract
Although institutional work has recently attracted considerable attention from organization research, there
is a surprising neglect of inter-organizational negotiations as a form of institutional work. This neglect is
astonishing, since negotiations provide a unique opportunity both to study institutional change in settings
characterized by diverging institutional logics and to illustrate how institutional constraints and strategic
agency are linked in interaction processes. Based on a combination of the literature on institutional work
and the theory of strategic negotiations, we examine in detail three illuminating negotiation processes
taking place around International Framework Agreements on global labour standards. This examination
reveals three types of (proto-)institutional outcomes produced by these processes: institutional creation,
modification and stagnation. Whereas institutional creation and modification, albeit differing in quality, show
how integrative negotiation practices of global unions might engage management in a joint endeavor for
institutional change, institutional stagnation illuminates some of the pitfalls of negotiation work.
Keywords
institutional change, institutional work, ILO, International Framework Agreements, labour relations,
negotiation, corporate social responsibility
Introduction
International labour relations have been the scene of repeated failures to establish a core of industrial
human rights as the minimum labour standards for (business) organizations. This core is laid down in
conventions of the International Labour Organization (ILO): prohibition of forced and child labour
Corresponding author:
Markus Helfen, Management Department, School of Business & Economics, Freie Universität Berlin, Boltzmannstr 20,
14195 Berlin, Germany.
Email: markus.helfen@fu-berlin.de
492072OSS34810.1177/0170840613492072Organization StudiesHelfen and Sydow
2013
Article
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1074 Organization Studies 34(8)
(ILO co. 29, 105, 138, 182), non-discrimination and equal pay (ILO co. 100, 111) and freedom of
association and collective bargaining (ILO co. 87, 98). In many parts of the world these conventions
are not only far from being fully institutionalized but are still extensively violated. In today’s cross-
border production networks, coverage of employees by these standards still seems to decline with
every step away from the core multinational corporations’ (MNCs) headquarters (HQs); the more
peripheral an organization is, the less regulated labour relations are, in particular at the level of sup-
pliers and subcontractors (Frenkel & Kim, 2004; Palpacuer, 2008). Therefore, it is no surprise that the
shape of labour relations throughout global production networks, including subsidiaries, suppliers
and subcontractors at the local level, is a highly controversial issue between MNCs and global union
federations (GUFs), i.e. the international federations of manufacturing and service unions.
The Sisyphean experience with the dissemination of industrial rights is above all a fundamental
social problem, negatively affecting the daily lives of millions of people around the globe. However,
the non-proliferation of core labour standards also poses serious challenges for theorizing institu-
tional change in an inter-organizational context, here between MNCs and GUFs. In what follows, our
intention is to tackle one aspect of this challenge by introducing and exploring inter-organizational
negotiations as a form of ‘institutional work’ (Lawrence & Suddaby, 2006), i.e. negotiation work.
Conceptually, we go beyond contestation and struggle as institutional work (Lawrence, 2008;
Suddaby & Greenwood, 2005) by highlighting joint and interactive efforts to transform conflict over
rules and their application into new agreements (McKersie et al., 2008). Thereby, we contribute to the
recent conceptual renewal of neo-institutional theory in regard to the interaction of agency and insti-
tutions (Lawrence, Suddaby, & Leca, 2011; Thornton, Ocasio, & Lounsbury, 2012; Zietsma &
Lawrence, 2010), using a dialectical perspective, in which conflicts between opposing forces are
synthesized in a (new) outcome – here, through negotiating – in order to become subject to subse-
quent rounds of change (Barley & Tolbert, 1997; Hargrave & Van de Ven, 2006; Seo & Creed, 2002).
We begin with a literature review to illustrate why we think that negotiations, despite early
recognition as a ‘social skill’ (Fligstein, 1997), represent an important gap in the research on insti-
tutional work. To fill this gap, we build our framework of ‘negotiation work’ by adding practices
borrowed from the strategic negotiations approach (Walton & McKersie, 1991; Walton, Cutcher-
Gershenfeld, & McKersie, 2000) to the forms of institutional work. Most notably, strategic nego-
tiation theory provides us with the idea of integrative bargaining, which allows for an alteration of
institutions by making the meta-rules of negotiations an issue for bargaining themselves (Cutcher-
Gershenfeld, 1994; McKersie et al., 2008; Walton et al., 2000). Next, we examine in detail three
negotiations between MNCs and GUFs over International Framework Agreements (IFAs) in more
detail. IFAs are jointly negotiated and agreed on between MNCs and GUFs, containing both sub-
stantive and procedural provisions for global labour relations, intended to hold for individual
MNCs, their subsidiaries, and in many cases also for their suppliers (Fichter, Helfen, & Sydow,
2011; Hammer, 2005). Interpreting negotiations on IFAs as pioneering new (proto-)institutions
(Lawrence, Hardy, & Phillips, 2002), we illuminate the link between negotiation work and its
institutional outcome. In so doing, we identify three types of (proto-)institutional outcomes, i.e.
institutional creation, modification and stagnation, of which only the first two imply institutional
change. We conclude by summarizing the results and highlighting the insights of our study for the
debate on institutional work and global labour relations.
Negotiations in Theories of Institutional Work
Bringing non-isomorphic institutional dynamics into (neo-)institutional reasoning, the theory
of institutional work focuses on how actors can bring about institutional change by creating,
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Helfen and Sydow 1075
maintaining or disrupting institutions (Lawrence, 2008; Lawrence & Suddaby, 2006; Suddaby
& Greenwood, 2005; Zietsma & Lawrence, 2010). In other words, institutional work com-
prises those individual and collective practices by which actors consciously evoke institu-
tional change, which is defined by Hargrave and Van de Ven (2006, p. 866) ‘as a difference in
form, quality, or state over time in an institution’. Institutional change can affect various
aspects of institutions, as they consist of ‘formal and informal rules, monitoring and enforce-
ment mechanisms, and systems of meaning that define the context within which individuals,
corporations, labour unions, nation-states, and other organizations operate and interact with
each other’ (Campbell, 2004, p. 1). Going beyond a rather passive stance on institutionaliza-
tion, as expressed in early versions of the organizational isomorphism thesis (DiMaggio &
Powell, 1983; Strang & Meyer, 1993), institutional change, then, is more an outcome of inter-
est-guided activities, although still taking place within the confines of existing institutions and
logics (DiMaggio, 1988; Greenwood & Hinings, 1996; Greenwood, Suddaby, & Hinings,
2002; Lawrence & Suddaby, 2006;Thornton et al., 2012). As such, a focus on institutional
work takes the political and interactive dimension of institutions seriously, as they result from
‘struggle and bargaining’ (Campbell, 2004, p. 1).
From these considerations, one would expect that processes and practices of negotiations are a
recurrent topic in accounts of institutional work, as negotiating bears the potential to bring about
institutional creation, i.e. ‘a novel or unprecedented departure from the past’ (Hargrave & Van de
Ven, 2006, p. 866). Even more so, if one follows Walton and McKersie (1991, p. 3) and defines
negotiations as ‘the deliberate interaction of two or more complex social units which are attempt-
ing to define or redefine the terms of their interdependence’.1 However, the literature on institu-
tional work has so far by and large neglected negotiations between opposing parties, thereby
leaving the capacity of negotiations for institutional change unconsidered (see Helms, Oliver, &
Webb, 2012, and Slager, Gond, & Moon, 2012, for two recent exceptions). As such, inter-
organizational negotiations make only a partial appearance in theoretical and empirical contribu-
tions to the literature on institutional work, although the politics of collective action and social
movements (e.g. Hargrave & van de Ven, 2006; Rao, Morrill, & Zald, 2000; Schneiberg &
Lounsbury, 2008;) as well as institutional entrepreneurship (e.g. Maguire & Hardy, 2006; Phillips,
Lawrence, & Hardy, 2004; Suddaby & Greenwood, 2005)2 figure prominently as core generating
mechanisms of institutional change.
In the social movement approach, using terms like ‘institutional war’ (Hoffman, 1999, p. 367)
or ‘war of positions’ (Levy & Egan, 2003, p. 812), conflicts are made central in situations in
which challengers of an institutional status quo mobilize for an initiative by strategic positioning,
rhetorical framing, and taking advantage of opportunity structures (Schneiberg & Lounsbury,
2008). In these accounts, negotiations among opposing parties either appear as a black-box mech-
anism for alluding to dynamic policy processes in institutional change (e.g. Hoffman, 1999) or as
a tactic to curb change initiatives through accommodation (e.g. Levy & Egan, 2003). Djelic and
Quack (2003) are among the few who at least distinguish a negotiation mode of (transnational)
institution building where change is ‘the result of confrontation, debate and bargaining between
actors coming from different national rule systems’ (Djelic & Quack, 2003, p. 30). Although
reflecting on negotiations as a coordination mechanism in policy fields characterized by inter-
organizational networks (Mayntz, 1993), Djelic and Quack do not lay out the details of inter-
organizational negotiations.
In the institutional entrepreneurship approach, discursive practices of change agents are
made productive for understanding institutional change. Using a discourse perspective, the
symbolic realm of social action is explored by illuminating how institutional entrepreneurs
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1076 Organization Studies 34(8)
preserve, create and change the meaning of institutions (Levy & Scully, 2007) by various com-
municative acts such as ‘text production’ (Phillips et al., 2004), ‘discursive strategies’ (Maguire
& Hardy, 2006), or ‘rhetorics’ (Suddaby & Greenwood, 2005). However, again, surprisingly
little is said in this literature about direct negotiations between opposing parties. For example,
Phillips, Lawrence and Hardy (2004) build heavily on Berger and Luckmann (1966) in their
theoretical contribution on the role of discourse for institutional construction. But negotiations
in which actors act upon their text productions in direct encounters with each other are left out
of the picture. Suddaby and Greenwood (2005) use rhetorical strategies to explain the amalga-
mation of corporate law services and accounting in North America. They provide a detailed
analysis of how change agents persuade through language by using a diverging institutional
vocabulary, i.e. drawing a linguistic demarcation line between themselves and opponents, and
connect this vocabulary with rhetorical justification strategies, i.e. broader, archetypical
frames of legitimation. As such, rhetorical strategies are regarded as the ‘key tools of institu-
tional entrepreneurs’ (Suddaby & Greenwood, 2005, p. 61) for evoking change through legiti-
mizing/de-legitimizing institutional logics, i.e. the ways an institution is made sense of by
encoding, constructing and sustaining criteria for legitimacy (for a similar conclusion, see also
Erkama & Vaara, 2010; Tracey, Phillips, & Jaris, 2011). However, negotiations, as immediate
confrontations bearing the potential for joint institutional change initiatives, are not
discussed.
Negotiation Work
Although the literature on institutional work fails to engage with negotiations explicitly, it provides
us with solid building blocks for our framework of negotiation work (see Figure 1). We draw on a
dialectical perspective that highlights collaborative aspects of institutional work along with con-
flict and competition between collective and corporate actors (e.g. Hargrave & Van de Ven, 2006,
2009; Lawrence et al., 2002; Reay & Hinings, 2009). In a dialectical perspective, conflicts between
opposing forces are synthesized in a (new) outcome in order to become the subject of subsequent
rounds of change (Hargrave & Van de Ven, 2006). As such, negotiating institutions goes beyond
the imposition of rules as ‘normatively connoted procedures of praxis’ (Ortmann, 2010, p. 205) in
that ongoing negotiation allows actors to perceive institutionalization as a process open to agency
(Giddens, 1984; see also Strauss, 1982). But, although negotiations bear the potential for institu-
tional work, the institutional outcomes of negotiating, i.e. creating, modifying or preserving insti-
tutions, depend on whether an institution can be made subject to negotiation and on the practices
used in negotiations to mediate competing institutional logics (Hargrave & Van de Ven, 2009; Reay
& Hinings, 2009; Thornton et al., 2012). In a nutshell, acknowledging inter-organizational negoti-
ating as a form of institutional work raises the fundamental question of how actors who compete in
a battle on institutional change (Lawrence, 2008; Suddaby & Greenwood, 2005; Tracey et al.,
2011) can enter a joint, more or less collaborative process, initiating and conducting negotiations.
To answer this question, we borrow the systematization of negotiation practices from strategic
negotiation theory.
Institutional context and logics
Negotiation work, like other forms of institutional work, does not take place in an institutional
vacuum. In particular, the strategies and practices for initiating negotiations are influenced by
institutional contexts and logics that shape actors’ goals, interests and attentional focus
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Helfen and Sydow 1077
in general, and their perception of the necessity and the opportunity for institutional work in
particular (Helms et al., 2012). Institutional contexts and logics thus constrain as well as enable
the initial choice of some strategies or practices over others. Dialectical tensions between insti-
tutional logics allow for the partial autonomy of agents from social structure required for
agency to be effective in change attempts (Greenwood & Hinings, 1996; Thornton et al., 2012;
Walton et al., 2000; see also Giddens, 1984). Both sides enter the negotiation with conflicting
perceptions of institutional deficits, diverging needs to build new institutions (or preserve the
present ones), and different assessments of the opportunities for institutional work. For our case
of cross-border labour–management negotiations, ‘competing institutional logics’ (Suddaby &
Greenwood, 2005) and ‘institutional thickness’ (Selznick, 1996, p. 274) are highly relevant
contextual conditions.
Competing institutional logics allow actors to perceive institutional deficits in the first place,
contributing to what Greenwood and Hinings (1996, p. 1034) call ‘precipitating dynamics’ or
what Walton et al. (2000, p. 54) call the ‘desirability of change’. Apart from the obvious man-
agement-labour opposition, in cross-border negotiations competing institutional logics are more
likely to be observed, because globally dispersed production and supply networks bridge dis-
tances between heterogeneous local contexts (Levy, 2008; Palpacuer, 2008; Purdy & Gray,
2009).
In addition, institutional thickness has an impact on the extent to which actors see opportuni-
ties for negotiation work. By institutional thickness we mean not only the number and reach of
institutions but also their complementarity (Sydow & Staber, 2002; see also Amin & Thrift, 1994).
Apart from regulatory institutions, institutional thickness might also include enshrined habits, past
experiences and other contexts that go beyond the single episode of negotiating. However, institu-
tional thickness is a double-edged sword in a cross-border setting like the IFA negotiations we
examine. On the one hand, the rather thick regulatory environment of European labour relations
provides for access to the bargaining table (Egels-Zandén, 2009). On the other hand, these regula-
tions may restrict the range of solutions negotiators can think of, leading to negotiation outcomes
that are difficult to translate and enact for local actors constrained by different institutions.
Perceived deficits
of existing
institutions
Shaping
attitudes
Managing
internal
differences
Defining
negotiation
mode
Practices of
Negotiation
Work
Strategies &
practices for
initiating
negotiations
(Proto-)
Institutional
outcome:
Creation,
Modification,
Stagnation
Perceived
opportunities for
institutional work
Institutional
context &
logics
Figure 1. Negotiation Work.
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1078 Organization Studies 34(8)
Practices of negotiation work
During negotiations institutionalized expectations are confronted with direct responses from the
other party; and both parties need to take these into account reciprocally by selecting negotiating
practices that allow the negotiations to continue and result in an agreement. To capture these nego-
tiation practices, we make use of behavioural or strategic bargaining theory, which has derived
three major interrelated practices of negotiating, i.e. defining the negotiation mode, shaping of
attitudes, and managing internal differences (Walton & McKersie, 1991; Walton et al., 2000).
Defining the negotiation mode means that negotiators decide whether they practise distributive
bargaining, integrative bargaining or a mixture of these two modes. Distributive bargaining prac-
tices are used in negotiations in which interest conflicts about fixed-sum, pure-conflict issues are
resolved within predetermined rules of the negotiation game. Typical examples are overstating
one’s initial claims to get the most out of the bargain for one’s own camp, creating artificial bound-
aries for the issues at hand, or using pressure such as strike action to reaffirm one’s position. In
contrast, integrative bargaining bears the greater potential for institutional change, since it is con-
cerned with finding unforeseen solutions to new problems, and also includes the meta-rules of
negotiations themselves (Cutcher-Gershenfeld, 1994; Walton et al., 2000). Examples of integrative
practices comprise emphasizing shared motives and goals or restricting one’s initial claims in order
to provide room for joint problem-solving. However, ongoing tensions between conflicting parties
lead to the so-called ‘fixed pie fallacy’ (Bazerman, Curhan, Moore, & Valley, 2000, p. 288), i.e. the
precipitate assumption that one party’s gains are the other party’s losses. This fallacy makes a
purely integrative negotiation mode almost impossible and a mixed negotiation mode more likely
(Bacon & Blyton, 2007; Lewicki, Weiss, & Lewin, 1992).
Shaping of attitudes consists of the practices by which both sides define their relationship
towards each other. In labour relations, the most prominent distinction is between an adversarial,
arm’s-length relationship versus a collaborative relationship (McKersie et al., 2008). A typical
practice for adversarial negotiation relations is storytelling about the other party’s motives; a typi-
cal practice for collaborative relations is stock-taking of the other party’s views to increase joint
understanding. However, the industrial relations literature also recognizes what Müller-Jentsch
(2008) has termed ‘conflict partnership’. Here, the relationship is characterized by adversarial and
collaborative practices at the same time, since it is stabilized through regulatory safeguards such as
labour law and collective actors.
Managing internal differences consists of the way in which negotiators handle the interest con-
flict among the participants of their own party and may use such divergence on the opponent’s side
(Walton et al., 2000). The insight that the outcome of a negotiation depends on who participates in
the process is well-established in the fields of industrial relations and organization theory (March
& Simon, 1958; Walton & McKersie, 1991). With respect to managing differences in one’s own
camp, practices such as strictly tolerating only one negotiator to ensure internal coherence, or a
more participative approach allowing for additional voices, can be distinguished. Interference in
the other party’s negotiating team might be attempted through demands to exclude single actors
from negotiations or by playing different sub-parties of the other side against each other.
Practices in these three categories can be separated only for analytical purposes because they
happen to occur simultaneously in negotiations (see overlapping ellipses in Figure 1). Hence, stra-
tegic bargaining theory argues that negotiation practices can be expected to occur in more or less
coherent patterns. For example, distributive bargaining goes along with a rather adversarial attitude
on both sides and an exclusion of deviant voices in negotiations, whereas integrative bargaining
flourishes in a collaborative and participative atmosphere (Cutcher-Gershenfeld, 1994; Walton
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Helfen and Sydow 1079
et al., 2000). However, it is an empirical question whether negotiating practices actually fit into
such coherent patterns.
Institutional outcomes
Actors’ practices of negotiation work are inspired and directed towards certain outcomes. Following
Lawrence et al. (2002, p. 283) we define the institutional outcomes of negotiation work as proto-
institutions, i.e. not (yet) widely diffused rules with the potential to become institutionalized. In our
case, new procedural rules regarding information and conflict resolution over work-related issues
classify as (proto-)institutions. A concentration on these procedural institutions allows us to put
more emphasis on the dynamic nature of negotiation work’s impact.3 According to our dialectical
perspective negotiation work is not settled once and for all, but enters into next round (re-)negotia-
tions over how procedural rules are properly enforced, triggering re-evaluation of institutional
deficits and opportunities for additional institutional work (see feedback loop in Figure 1).
Furthermore, we apply Thelen’s (2009) idea of distinguishing in the outcomes of institutional
work between institutional creation, modification and stagnation, the latter implying the lack of
any substantial change at all. Our major criterion for qualifying the observed outcomes is context-
specific, i.e. the reliability of the joint agreement on conflict resolution procedures. If these proce-
dures are reliable, negotiating contributes to institutional change. However, outcomes of institutional
change are different in quality: whereas institutional creation bears the potential to produce an
entirely new (proto-)institution, institutional modification is confined to incremental changes of
and within existing institutions. If outcomes neither produce something new nor modify existing
procedures, the outcome of negotiation work may be a hollow institution, in that it produces a
formal document, but leads to institutional stagnation rather than change.
IFA Negotiations as a Field of Study
IFA negotiations are an ideal field for studying negotiation work as institutional work because they
classify as an exemplary case of inter-organizational negotiations in which GUFs strategically
attempt to influence MNCs’ labour relations. Formal annual meetings between the GUFs and the
management of various MNCs started as early as 1987, but the Convention on Trade Union Rights
signed in 1994 between Groupe Danone (then BSN) and the International Union of Food Workers’
Associations (IUF) might well be said to be the first IFA (Hammer, 2005). After almost two dec-
ades of a slow but continuous process of negotiating additional IFAs, the early pioneers of the IUF
have passed on their leading role to the larger GUFs in the manufacturing and service sector, which
account for the bulk of agreements signed since then. At the end of 2012, there were 88 IFAs (see
Figure 2) covering a variety of MNCs, predominantly with a European origin. Large global players
have signed IFAs as well as some medium-sized companies with rather small international net-
works (see Papadakis, 2011).
Given the procedural character of IFAs’ outcome, i.e. ‘meta’-rules on ‘how to bargain’ over
local violations of labour standards, one might expect that IFA negotiations have been conducted
within an integrative mode allowing for jointly finding new solutions (Cutcher-Gershenfeld, 1994).
At the same time, however, negotiators are driven by competing logics, i.e. MNCs as representing
globally mobile capital and GUFs as representing global workforces; moreover, these institutional
logics vary by country. GUFs have almost always initiated the negotiation process (for details see
Croucher & Cotton, 2009; Platzer & Müller, 2011). They regard the conclusion of an IFA, the
projected outcome of negotiations, as being instrumental in raising the bar for labour standards.
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1080 Organization Studies 34(8)
This occurs by way of establishing GUFs as legitimate negotiating partners accepted by MNCs,
very often for the first time. Hence, IFAs provide an opportunity for institutional work to influence
global labour relations in bilateral negotiations with MNCs as long as they contribute to the exten-
sion of the scope of union rights and union organizing, and increase GUFs’ overall standing (see
also Croucher & Cotton, 2009; Fichter et al., 2011; Hammer, 2005; Papadakis, 2011; Stevis &
Boswell, 2007). For MNCs, it is fair to say that management almost always enters passively into
negotiating, either because it does not perceive deficits in global labour relations as an urgent issue,
or because it is satisfied with a unilateral corporate social responsibility (CSR) approach, or it is
not convinced that IFAs provide a reliable solution. However, management might also regard an
IFA as a way to lend additional credibility to the company’s CSR policies or might feel obliged by
HQ labour relations to give in to unions’ initiative (Egels-Zandén, 2009).
Most prominently, these competing logics across types of organizations as well as across regions
are revealed by the most contentious issues in IFA negotiations: extension of the agreements to the
periphery of global production networks, i.e. whether joint ventures’ and suppliers’ compliance
with labour standards is to be included into the agreement’s clauses, and the precise meaning of
union recognition in local contexts where labour law puts firm restrictions on unions organizing
freely (Fichter et al., 2011). Whereas GUFs aim for the inclusion of the periphery of global produc-
tion networks and demand universal application of their right to organize, MNCs usually want to
place restrictions on both of these aspects. However, in IFA negotiations these conflicting institu-
tional logics can be reconciled with each other through the creation of new (proto-)institutions.
This reconciliation may be facilitated by the rather thick institutional environment at MNCs’
(European) HQs, where labour law, collective bargaining agreements, co-determination practices
and industry and corporate traditions all interplay and (re-)enforce each other (Egels-Zandén,
2009; Fichter et al., 2011).
Empirical Approach, Data Collection and Analysis
In order to examine empirically these general expectations about IFA negotiations and their impact
on institutional outcomes, we analyse three negotiations around IFAs in more detail by using our
framework of negotiation work. Such an examination of IFA negotiations requires a qualitative
approach (Eisenhardt & Graebner, 2007; Schneiberg & Clemens, 2006) accounting for the local
peculiarities of an inter-organizational negotiation setting. In particular, we need to use a variety of
1247
21
36
54
71
80
88
0
20
40
60
80
100
1990 1995 2000200
52
010
No. of IFAs
Year
Figure 2. The Total Number of International Framework Agreements (1994–2012).
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Helfen and Sydow 1081
sources to reduce any distortion of results by biased informants driven by an institutional logic in
a particular context. Hence, we collected and analysed a variety of data around single negotiation
processes within a multiple case study design (Yin, 2009; see Table 1 for an overview):
(1) Our core source for the present analysis is interviews for eight IFA negotiations, three of
which we have selected for presentation and closer discussion here: (i) the International
Metalworkers’ Federation (IMF) negotiations with MetalCorp (automotive industry); (ii)
the Building and Wood Workers’ International (BWI) negotiations – joined by the
International Federation of Chemical, Energy, Mine and General Workers’ Unions (ICEM)
– with ResourceCorp (resource extraction and building materials); and (iii) the ICEM nego-
tiations with ChemCorp (chemical industry). For each of these IFA negotiations, we have
conducted between four and six interviews – at least one each for management and labour
– making a total of 15 interviews with an average length of about 45 minutes. With one
exception, all the interviews were audio-taped and transcribed.
These three negotiations were selected from a broader set of case studies we conducted
between November 2008 and March 2011. In total, we have interviews on 22 MNCs with
an IFA, yielding 69 semi-structured interviews. To select our case studies from this group
we used the following criteria: (a) given the bilateral nature of negotiations, we select only
Table 1. Data Sources of Multiple Case Study Design.
Source Category Criteria Labor Management
Semi-
structured
interviews at
HQ level
Institutional
context and logics
Practices of
negotiation work
(Proto-)
institutional
outcome
Initiating practices and
strategies and how they
relate to context and
logics
Defining the negotiation
mode
Shaping of attitudes
Managing internal
differences
Complaint handling and
evaluation
8 Interviews
with
representatives
of GUFs, works
councils, and
affiliated unions
7 Interviews with
management
representatives at
the HQ level from
human resources,
industrial relations,
CSR/sustainability
IFA texts (Proto-)
institutional
outcome
Formal conflict
resolution mechanism
Shaping of attitudes
Text analysis of three agreements
derived from database on 73
agreements
Contextualizing
material
(Proto-)
institutional
outcome
Complaint handling and
evaluation
GUF and company
profiles
Interviews from subsidiary level for
four countries: Brazil, USA, India and
Turkey (local management and unions)
23 HQ-level interviews (7
management, 16 unions) for 5 other
IFA cases qualifying for comparison
31 HQ level interviews for other cases
not in the focus of present analysis
Interviews with civil society
organizations, employer associations,
and country experts
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1082 Organization Studies 34(8)
those cases where we had at least one interview for each side, i.e. management (HR manag-
ers, industrial relations and CSR officers) and labour (GUFs, home country trade unions,
works councils); (b) the MNC has signed an agreement with one of the four major GUFs,
because these GUFs account for 90 percent of all IFAs in the last 15 years; (c) the MNC is
headquartered within Europe, where 85 percent of all MNCs with an IFA come from, and
which is indicative of European-style labour relations at the HQ level. This procedure
yielded eight negotiating pairings on which we could carry out our analysis. However, we
single out three cases for more detailed discussion that are highly characteristic and repre-
sentative of one pattern of negotiation work and institutional outcome: ChemCorp,
MetalCorp and ResourceCorp. As such, we exclude two pairings since they took place in
the global service industry with its different conditions in terms of global labour relations
(see Dolvik & Waddington, 2005), restricting our present analysis to the manufacturing
sector. Furthermore, we exclude another three cases for pragmatic reasons, in terms of
space considerations, since these cases basically confirm the conclusion we derive from the
three focus cases. Nevertheless, we pick up these additional cases in the concluding section
in order to illuminate important deviations from, but also commonalities with, the focus
cases, allowing us to record some limitations of our findings.
(2) In addition to the interviews, we analysed 73 agreements with regard to their agreed con-
flict resolution mechanisms, identifying some 120 characteristics (i.e. actors, substantive
and procedural rules). For the present analysis, we concentrate on those criteria that char-
acterize the formality of the conflict resolution mechanism, and statements that characterize
the relationship between the signing parties in our eight cases.
(3) Apart from the overall number of interviews at the HQ level and the excluded cases, we occa-
sionally draw on additional interviews with several other sources – secondary to the present
analysis – in order to place our selected cases within the larger field of IFA negotiations. We
held some two dozen background interviews with actors in the field of international labour
relations (including representatives from civil society organizations, employer associations
and country experts), a similar number of interviews with local unions and local managers at
the subsidiary level of our selected IFA-MNCs, and a small number of interviews with control
cases in which negotiations failed completely. Additionally, we participated in five work-
shops (two for the GUFs, one for the MNCs, and four for local actors in India, Turkey, the
USA and Brazil) in which participants in IFA negotiations debated relevant issues.
Insights into Negotiating IFAs as Institutional Work
Table 2 provides an overview of the basic characteristics of our three negotiation pairings such
as year of signature, and GUF and MNC profiles. All of the MNCs are examples of highly
complex networks of subsidiaries, suppliers, joint ventures and subcontractors spanning many
institutionally and culturally diverse settings. However, the MNCs differ in industry, overall
size and number of international locations. MetalCorp is a very large MNC measured in terms
of employment figures, whereas ResourceCorp is medium-sized and ChemCorp is a rather
small MNC. All of the GUFs are transnational organizations themselves, formally representing
millions of union members through their affiliates in countries on every continent. Despite
limited financial resources and small staffs, each needs to engage with MNCs in several manu-
facturing sectors.
For each of the cases, we examine important aspects of the institutional contexts and logics and
how the agents refer to them, in particular when initiating negotiations. Furthermore, we investigate
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Table 2. Three Exemplary IFA Negotiations.
Company profile Global union federation profile Interviews
management/
labour
2008–2011
Pairing
(company and
global union
federation)
Year of
agreement
Industry Direct employees
x¯2007–2010
International
locations
x¯2007–2010
Sectoral domain Number
of affiliates
(countries)
2010
Number of
organized
workers 2010
(million)
Total No.
of IFAs
concluded
2011
MetalCorp
and IMF
2002 MetalCorp:
Automotive
industry
>100,000 <20 IMF: Steel, metal
metalworking
and electronics
200 (100) 25.0 20 3/3
ChemCorp
and ICEM
2005 ChemCorp:
Special
chemicals
<50,000 20–50 ICEM: Energy,
mining and
chemicals, pulp
and paper
467 (132) 20.0 15 2/2
ResourceCorp
and BWI/
ICEM
2005 ResourceCorp:
Building
materials
50,000–100,000 >50 BWI:
Construction,
building
materials and
wood-working
industry
328 (130) 12.0 15 2/3
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the practices of negotiation work, i.e. the practices deployed for defining the negotiation mode,
shaping of attitudes and managing internal differences. Finally, we consider the quality of the
(proto-)institutional outcome and identify empirical patterns among these variables.
Negotiations leading to institutional creation: The example of ChemCorp
ChemCorp is highly illustrative of IFA negotiations having the potential for institutional creation.
The decisive reason for us to regard ChemCorp–ICEM negotiations as creating new institutions is
that it contains innovative properties of global labour relations which did not exist prior to negotia-
tion; in fact, prior to negotiations nothing existed that came close to a ‘functional equivalent’ to
what both actors had agreed on after negotiations. At ChemCorp, HQ-level actors not only estab-
lished a new, direct negotiation relationship between the GUF and HQ management, but they also
defined joint initiatives to negotiate implementation with local actors, such as joint site visits and
a reporting procedure in which local actors from both sides, i.e. subsidiary management and local
labour representatives, are directly involved. An illustrative piece of evidence for this innovative
– and among all IFAs’ texts to date: rare – exceptionalism in selecting a joint management-labour
approach is the following quote from the agreement’s text:
[The parties] shall cooperate to ensure the best possible understanding of this agreement by employee
representatives on its sites. ChemCorp will facilitate participation of delegates in meetings that may be
organized locally by the [GUF] … [The parties] will continuously monitor the application of the agreement
and in this respect they will carry out [joint] assessment missions … Any problems encountered with the
application of this agreement will be described in a report that will also discuss the solutions developed. If
the difficulties are observed locally this report will be written jointly by management and [local] employee
representatives. (ChemCorp IFA text)
However, ChemCorp is also a peculiar case in that HQ-level actors seek active dissemination of
the IFA clauses into practice, for example, by actually holding local meetings jointly, conducting
joint assessment missions (already done for China, Brazil and the USA) and bringing in local
actors’ views through reporting on complaint handling. As the ICEM representative confirms:
We have a [joint] monitoring committee … So each year we discuss what happened. And also every three
years an external body makes an audit for the global agreement. So, it is an ongoing process. And if any
problem is reported from any country, we immediately enter into communications with the company.
(ICEM rep)
This holds true even for local situations in which IFA implementation might be expected to be
a rather complicated affair, for example, in Asian countries or the USA with their different tradi-
tions and institutions for labour relations. One exemplary quote on this comes from the central HR
manager’s account about local case handling in an Asian country:
So we said [to an Asian supplier’s management]: ‘Listen, every employee is covered by our safety policy,
whether he works for us or [for] a supplier. … And, we have an agreement with [GUF] which comprises a
clause on our suppliers.’ I can tell you that our approach caused surprise on the part of the supplier.
(ChemCorp management rep)
Similarly, the union negotiator confirms the management’s approach in the USA which is
characterized by a strong commitment to management neutrality, i.e. management refrains from
countervailing actions in a case when unionization drives and bargains without attacking the
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counterparts fundamentally, a position towards the unions not easy to cope with for US
managers:
If you are familiar with US labor relations, this neutrality is very important. And we managed to include a
special provision for neutrality for any organizing drive which is very important particularly for the US
case. (ChemCorp ICEM rep)
This outcome of institutional creation is the result of a highly integrative pattern of negotiation
work: the parties not only entered easily into direct negotiations; negotiations also followed an
ideal-typical pattern of integrative bargaining practices on each side and for all three components
of our framework (i.e. defining the negotiation mode, shaping attitudes and managing internal dif-
ference). Arriving at an outcome of institutional creation was already eased during the initiation
stage of getting negotiations started. Notably, ChemCorp is the only case in our sample in which
management responded to an inquiry by the ICEM with its own initiative for IFA negotiations. Two
aspects are of importance in this regard: (1) both parties managed to escape a hold-up through the
strongly institutionalized, but fragmented and adversarial labour–management relations in the
country of corporate HQs; and (2) a position change of a former union representative to become
the leading negotiator on behalf of management. At ChemCorp’s HQ, unions demanded to be
included directly in the negotiations; however, they were frustrated in that demand by both sides,
the ICEM and HQ management; this was based on the consensually shared argument that these
negotiations require an international mandate:
The demand has been made by the national unions organized at my company: … They wanted to
negotiate the agreement directly. But I refused, because it is supposed to be a global agreement.
(ChemCorp rep)
In fact, this sort of exclusion of unions organizing at the HQ from negotiations has proven to be
highly problematic for other IFA negotiations. However, at ChemCorp a hold-up through conflicts
among these unions was avoided by the credibility of the management negotiator and the approach
of ICEM to integrate affiliates at the same time. On the union side, ICEM was in charge of the
global-level negotiations while managing internal differences by ensuring feedback from all of the
affiliates with a major stake in ChemCorp, including but not privileging the home country unions:
First, we communicate over this with our unions. We … get their opinions. First, there was a special
resolution for that [at our congress] … [in which] we demanded improvements in the agreement, and then
we started to negotiate with the company. And after the negotiations, we consulted with our affiliates
[again]. (ICEM rep)
On the management side, negotiations were facilitated by the role change of a former high-
ranking union official who had become a top manager capable of integrating employee rights into
the company’s policies on sustainability:
The involvement of [a former union leader as ChemCorp management rep] is an advantage for us,
particularly for facilitating communication. But ChemCorp’s decisions are made by their board and the
chief executive officer. (ICEM rep)
Moreover, lifting negotiations to the global level assisted negotiators in avoiding the restrictions
of another institution at the HQ location, i.e. the employee representation body, like the European
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works council, also dominated by unions from the HQ location. As a result, both negotiating par-
ties were freed from the restrictions of typical labour–management negotiations at the HQ, yet
could still indirectly build on the thick institutional environment of labour relations to enter into an
integrative negotiation mode in which both parties could openly contribute their views. In this way,
both parties, GUF as well as HQ management, did not follow the path of ChemCorp’s home coun-
try institutions, but rather bypassed it by direct negotiation between top management and GUF
leaders.
In addition, a reciprocally held collaborative attitude towards labour–management relations
supported this approach:
In general ChemCorp has this kind of social responsibility and sensibility … But not just for employees
but also for other stakeholders, so that’s why I tend to define the company as highly socially responsible.
(ICEM rep)
[One] pillar is social dialogue. This company that I represent is not anti-union. It has developed a high
level of dialogue in the various countries in which it is operating. (ChemCorp rep)
All this does not mean that there were no conflicts in negotiations, but at ChemCorp these were
handled in an integrating way, resulting in a reliable joint labour–management conflict resolution
mechanism that was non-existent before negotiations. In 2011, the process of institutionalizing this
creative proto-institution was reaffirmed by the successful re-negotiation of the agreement, to be
extended to a health and safety programme. Following our model, we interpret this second-round
negotiating work as a positive feedback loop, increasing the chances of institutionalizing the newly
defined approach to global labour relations at ChemCorp.
Negotiations leading to institutional modification: The example of MetalCorp
MetalCorp is an exemplary case of negotiations that build on already existing institutions to modify
them into a more global direction. However, during the negotiation process, and also regarding the
outcome in terms of subsequent complaints handling, the negotiated solution follows the path of
those procedures already established at the corporate HQ. The negotiating pattern is strongly influ-
enced by the thick and highly institutionalized environment of MetalCorp’s home country. First and
foremost, the HQ institutions influence the overall approach of the labour side to negotiating the
IFA. This holds for how negotiations were initiated, i.e. by using the established procedures for
labour–management dialogue via the employee council, and also extends to the way internal differ-
ences on the labour side were effectively managed, for example by choosing the council chairman
as the lead negotiator for the labour side. Additionally, we observe that the complaints handling
procedure is also embedded into the regular proceedings of the employee council.
In comparison with ChemCorp, the definition of the negotiation mode in MetalCorp negotia-
tions is heavily imprinted by the established labour–management bargaining relationships at cor-
porate HQ. In fact, an already existing body for global employee representation, i.e. a world works
council, dominated by a strong HQ location’s union, negotiated the IFA on behalf of the International
Metalworkers’ Federation (IMF). The relationships between the employee council and manage-
ment are characterized best as an institutionalized form of the mixed negotiation mode, i.e. ‘con-
flict partnership’ (Müller-Jentsch, 2008), in which both sides follow their logics and use distributive
and integrative practices in negotiations about a single issue while at the same time avoid jeopard-
izing their basic relationship. Compared to a purely integrative mode, in this mode conflictive
attitudes are tolerated on both sides without endangering the goal of achieving a collaborative
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outcome. For example, management holds the following opinion on its relationship with workers’
representatives:
The works council, labour representatives in general, are seen as social partners and issues are managed in
a partnership-like way. (MetalCorp rep1)
At the same time, management is very clear on the distributive limits for the outcome of IFA
negotiations, which it is absolutely unwilling to cross in negotiations with the unions:
We do not want to be forced by employee representatives to select this or that supplier. The same holds also
for our sales partners. (MetalCorp rep1)
Labour representatives, for their part, initiated negotiations through the already institutionalized
channels for negotiating with MetalCorp’s HQ management, in order to overcome MetalCorp’s
initial reluctance:
In the beginning, one felt like the management side was complaining about everything: ‘Do we really need
an IFA?’ After the two first rounds of negotiation, I really had the impression that we would never get an
agreement. (IMF rep)
In this stage, labour negotiators were capable of using their ties to the unions at a MetalCorp’s
competitor to convince management of the urgency of taking action on the IFA issue:
What helped us a lot was that [another OEM] had initiated parallel negotiations. … That was surely also a
signal for the management. (IMF rep)
Apart from such external pressurizing, fostering a distributive rather than an integrative prac-
tice, the labour side also explicitly expresses respect for unilateral management initiatives such as
introducing supplier audits autonomously:
For example, these sustainability guidelines [containing supplier audits] have been a voluntary management
initiative, without any pressure from us. We have to admit that this was their initiative; and we see it as a
clear signal that they want to push things in a positive direction. (Council rep)
Due to a strong reliance on extant institutions at the HQ level, labour’s lead negotiator came
from the employee council at the HQ, not from the GUF. To be sure, he was a multi-function
employee representative (head of works council, an active representative of a union affiliated to the
IMF, and a supervisory board member) backed by a strong union presence at the HQ level, but he
was not a formally appointed official representative for the IMF. This distinguishes the MetalCorp
negotiations considerably from the negotiations at ChemCorp, in that not the GUF but the com-
pany-related employee representative body led the negotiations.
As a result, in these negotiations managing internal differences meant involving the GUF in the
background, which was facilitated by the fact that the more influential affiliates of the IMF have
representation in the employee council:
In the process, there was some discomfort with the fact that the [GUF] did not sit directly at the bargaining
table. … But we thought [the IFA] is a delicate issue and it would be best to use the established negotiation
structures at the [headquarters]. (Council rep)
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In sum, the entire IFA negotiations took place within the confines of the highly institutional-
ized labour–management relationship at MetalCorp’s HQ, as a peculiar combination of learnt
practices in defining the negotiation mode as well as the shaping of the parties’ attitudes towards
each other and the handling of internal differences. This pattern of negotiation practices spills
over into the complaints handling procedure defined in the agreement. At MetalCorp, a local
problem is typically communicated from the local union to the GUF, and from there to the
employee representatives at the HQ, who raise the issue with HQ management. After negotiation
about the nature of the complaint, HQ management may decide to act upon it by intervening at
local management level. Although two-thirds of about 20 complaints have been finally resolved
to the satisfaction of both sides, this procedure is more reactive and involves the GUF less than
the mechanisms referred to at ChemCorp, as the following description by management reveals:
Complaints are processed this way: … if a violation is reported to us, … sourcing checks whether the
supplier is registered in our supply chain, and if he is, then we send him a little letter asking for an
explanation. (MetalCorp rep1)
As such, we conclude that the outcome is best characterized as an extension of the scope of an
already existing institution, in that the employee council opens the agenda of the regular meetings
for the international issues of the IFA.
Negotiations leading to institutional stagnation: The example of ResourceCorp
In the ResourceCorp negotiations no reliable conflict handling procedure was defined. Hence,
we classify the outcome of negotiation work in this case as institutional stagnation. Negotiations
in ResourceCorp followed a distributive pattern continuing into complaint handling and result-
ing in repeated dead-end situations when it came to finding adequate solutions accepted by both
parties.
The negotiation process at ResourceCorp is a striking example of producing institutional stag-
nation, in that the agreement concluded with BWI only contains a weakly formalized conflict reso-
lution clause, i.e. specifying joint meetings at the HQ level for debate; and in that there are many
unresolved cases reported from several countries, fuelling doubts about the true intention of man-
agement to start negotiating in the first place:
There is no such thing as an assessment, organized through the agreement, but we have our annual
sustainability report for which we send out a questionnaire to our business units … For us, the whole idea
for having the agreement was not to create a procedure. (ResourceCorp rep2)
At least two aspects are remarkable about the pattern of practices in these negotiations: first, in
the ResourceCorp–BWI negotiations, distributive bargaining tactics prevailed on the management
side – even in the face of integrative concessions from the principal negotiator on the unions’ side;
second, management intervened directly into the selection process of labour’s negotiation team. To
come to an agreement, the leading union negotiator clearly signalled a considerable commitment
to integrative bargaining by indicating his willingness to substitute a company ‘promise’ to comply
with labour standards for a more binding commitment:
Right away we said: ‘Send the lawyers home. They’ll just confuse you and they’ll confuse us.’ Because all
our discussions are based on a certain spirit, which is not legally binding. But we also want a clear promise
from your side that you will honour the agreements we reach. (BWI rep)
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For its part, management did not reciprocate this offer, but used distributive bargaining prac-
tices, above all by emphasizing that the IFA endangers opportunities to exploit cost advantages
obtained through local subcontractors and joint ventures:
It is not our responsibility to operate our subcontractors. We are not to interfere with the business
management of our subcontractors. (ResourceCorp rep1)
When we don’t own the majority of a joint venture company, there is obviously a different management.
(ResourceCorp rep2)
Most significantly, management directly intervened in the composition of the unions’ negotia-
tion team by demanding the exclusion of national unions at their HQ because of the expectation of
HQ-centric policy priorities:
The unions at HQ have no responsibility for these international questions, and are too much concerned
with their own priorities. (ResourceCorp rep1)
In this case, given the distributive tone set by management, this exclusion could not be handled
as easily on the labour side as in the ChemCorp case, triggering additional efforts of the main
negotiator to keep national unions at the HQ informed about the proceedings of the negotiations.
In other [IFAs] we involved the unions at the HQ, but this was not the case with ResourceCorp because
there are several … confederations. So both ResourceCorp and ICEM agreed to exclude them. That was a
mistake, I think. (ICEM rep2)
In addition, ResourceCorp’s management complicated negotiations by having a representative
of a North American subsidiary on the negotiation team, who argued against the conclusion of an
agreement applicable to the US:
There was heavy resistance from the US management … They feared that there might be a neutrality
clause interfering with their national affairs and local conflicts. (BWI rep).
The major stumbling block was application in the United States. The agreement would have been reached
at least 12 months earlier if it hadn’t been for the United States. (ICEM rep1)
Only after the US manager had withdrawn from the management’s negotiation team did a
breakthrough occur. The managing of internal difference has been further complicated by the fact
that two GUFs, i.e. the BWI and ICEM, had to coordinate negotiations. Although the GUF repre-
sentatives assure us that they defined a functioning division of labour in principle, their relation-
ship has been complicated through ResourceCorp’s subcontracting policy, which happened to
affect the local affiliates of the GUFs disproportionately:
At ResourceCorp, whenever we bring local issues from India, or Malaysia or America, they say: ‘All
authority concerning local operations is with local CEOs or local HR managers. The HQ has nothing to do
with it.’ (ICEM rep2)
However, there are some recent signs that this situation might change in that ResourceCorp is
becoming more responsive to the special concerns of the unions organizing at their East Asian
subsidiaries. In particular, the re-employment of a group of workers at an Indonesian subsidiary –
after the GUF’s intervention – could be interpreted as a first sign of change.
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Discussion and Conclusion
Our major empirical finding for the three IFA negotiations we have discussed here in detail is that
there is a strong link between practices of inter-organizational negotiations and the divergence in
(proto-)institutional outcomes (see Table 3 for a summary). We conclude that negotiating classifies
as a distinct type of institutional work because its outcome may elicit different institutional trajec-
tories, ranging from stagnation through modification all the way to the creation of what have been
called proto-institutions (Lawrence et al., 2002, p. 283), i.e. new rules and practices with the poten-
tial to become institutionalized. Another reason why negotiating represents a distinct type of insti-
tutional work is more process- than outcome-related. That is, agents actively and, as it seems, for
the most part intentionally combined the three inter-organizational negotiation practices high-
lighted by our model of negotiation work against the background of specific institutional contexts
and logics.
Acknowledging negotiation work across organizational boundaries adds to the current
debate on institutional work by taking the double face of institutional change processes into
account, i.e. contestation and joint problem-solving (Hargrave & van de Ven, 2009). Above all,
the creation of a new institution – in our case International Framework Agreements (IFAs) as a
new social contract for regulating global management–union relations, aiming at securing
global labour standards – is more likely if negotiations allow for continuous joint problem-
solving. In this way, our results confirm the expectation that integrative bargaining is more
conducive to defining new meta-rules of labour–management relations (Cutcher-Gershenfeld,
1994), thereby contributing to institutional creation as the outcome of negotiation work. In
more detail, institutional creation through negotiating is contingent upon three key practices of
negotiation work: not only on choosing and defining an integrative bargaining mode, but also
on avoiding or reducing adversarial orientations on each side, and on respecting the composi-
tion of each side’s negotiation team. Additionally, a reliable feedback loop affords a minimum
of formalization of conflict resolution to ensure that violations can be communicated from the
bottom up. Given the differences in institutional contexts and competing institutional logics in
the field of industrial relations, these conditions are difficult to meet, making the negotiation of
global labour relations a challenging endeavour. However, we interpret our findings on the
ChemCorp–ICEM negotiations as confirming that the fulfilment of these conditions for institu-
tional creation is not entirely impossible.
Institutional modification, by contrast, is the likely outcome when the practices IFA negotiators
choose are predominantly shaped by rather thick institutional environments at HQ locations. In
these cases – exemplified here in a proto-typical fashion by the MetalCorp–IMF negotiations – the
rather dense network of industrial relations institutions at corporate HQ restricts not only the choice
of negotiation practices but also the range of possible solutions, as negotiators do not dare to leave
the common ground laid down by strong institutional safeguards. As revealed by the MetalCorp
case, ‘conflict partnership’-type institutions play a crucial role in this regard, as they give unions at
the HQ level and employee representatives a more dominant role in negotiations. In these cases, a
negotiation mode can be observed in which integrative as well as distributive practices are deployed
simultaneously, triggering occasional criticism from either camp about a too-concessionary or too-
aggressive bargaining style; but all in all, the institutional safeguards keep the process on the road.
As a result, where actors’ preference for negotiating practices is shaped by the institutional context,
more incremental types of change show up, i.e. amending and supplementing already existing
institutions such as an employee council at the HQ level, rather than going beyond that by experi-
menting with a new solution for global labour relations.
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Table 3. Practices of Negotiation Work.
Negotiation
pairing
Practices of negotiation work
Defining negotiation mode Shaping of attitudes Managing internal differences
ChemCorp
and ICEM
Direct negotiations between MNC and GUF
Management: HQ management easily
accessible for IFA idea due to sustainability
strategy, lead negotiator former union
representative, abstaining from distributive
tactics
Union(s): GUF directly approaches
management based on idea of ongoing social
dialogue, abstaining from distributive tactics
Management: social partnership
attitude referencing social dialogue
tradition of company
Union(s): social partnership attitude
honoring management’s approach
Reciprocal assurance of acceptance of
the other party
Management: dominant HQ
management, engages actively in bringing
local management in line with IFA policy,
demands direct negotiations with GUF
Unions(s): GUF as lead negotiator with
global mandate, organizes open feedback
from affiliates and collaboration among
affiliates and employee council
MetalCorp and
IMF
IR institutions at corporate HQ (employee
council) as negotiation platform
Management: initially critical of IFA idea, but
commitment to Global Compact and similar
voluntary CSR initiatives
Union(s): initiation and leadership of
negotiation by employee council at HQ on
behalf of GUF, GUF with background role,
coordination with employee representatives
from competitor during negotiations
Management: conflict partnership:
acceptance of influential role of
employee council (and union at HQ),
but emphasizing limits
Union(s): labour co-management,
respecting management perspective
and initiatives, taking management’s
perspective about economic targets
Management: dominant HQ
management
Union(s): world (works) council
dominates negotiations using established
channels for labour–management
dialogue, feedback from selected
affiliates as represented in the council
ResourceCorp
and BWI/ICEM
Direct negotiations between MNC and two
GUF(s) at the expense of HQ level unions’
involvement:
Management: initially reluctant towards IFA
idea, but unilateral sustainability initiatives
Union(s): participation of one GUF in
sustainability initiatives, using informal
relationship with individual top managers to
open up negotiations, investing initial trust
Management: conflict orientation
towards unions at HQ as expressed
in prejudices about policy priorities
of unions (i.e. affiliates of ICEM),
partnership orientation towards
BWI negotiator based on personal
experience and interaction
Union(s): BWI and (European)
affiliates social partnership
orientation, ICEM (and Asian
affiliates) use storytelling about
corporate misbehavior
Management: dominant HQ
management, explicit intervention in
labour’s negotiation team by demanding
exclusion of unions at HQ
Union(s): one GUF leads negotiations,
other GUF confronted with inconsistent
management attitude, unions at HQ
excluded by management intervention
increasing integration problems of
labour’s side
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The decisive commonality of the negotiations creating as well as those modifying institutions is
that at least some move is made towards globalizing labour relations. Where institutional stagna-
tion is the outcome, institutional work fails to alter global labour relations, although an agreement
has been signed. ResourceCorp (see Table 3) is our exemplary case of what happens if negotiators
cannot go beyond distributive bargaining, entertain inconsistent or adversarial attitudes towards
each other, and intervene in various ways in the composition of the opponent’s negotiation team.
Doing justice to the other five cases which we also scrutinized thoroughly but, because of space
limitations, were not able to report about in any detail here, we wish to point out some basic com-
monalities and differences between these cases and the ones we have summarized so far. In doing
so, we also put some qualification and limitation on the conclusions we have drawn so far, since
these five cases do not always fit neatly into our explanative scheme. First of all, one case from the
global service industry shows a pattern of institutional creation like the negotiation at ChemCorp,
but simultaneously reveals that not all of the integrative practices mentioned need to be present
from the start of negotiations and throughout the entire negotiating process. As negotiators in this
case were capable of repairing their bargaining relationship in the process through mediation and
collaboration on joint arbitration procedures and problem-solving, they were able to offset a rather
aggressive initiation on the part of the global union federation involved. Another case, fitting well
with the results for MetalCorp, lends additional confidence in the robustness of our conclusion
regarding the pattern of negotiation practices leading to institutional modification as being driven
by strong institutional imprints from the HQ labour relations. This case reveals that the same out-
come can be obtained even if some details are different in quality, i.e. in this case a stronger
involvement of the union at the HQ (instead of the works council) and a management more inclined
to use a distributive bargaining style. As for the outcome of institutional stagnation, we found
another case that also fits roughly into the pattern we have observed at ResourceCorp, but differs
in some details, as in this case it was the HQ-level works council that was excluded from negotia-
tions, provoking several major stumbling blocks in actually applying the agreement at the subsidi-
ary level later on.
In addition, we have encountered two cases which do not fit into our conclusions about the
strong link between negotiation practices and observed outcomes. In these two cases, an outcome
of institutional stagnation was obtained, although negotiations originally started out with integra-
tive practices and collaborative labour relations at the HQ level. But both agreements remain a
hollow institution, since they are not used effectively for handling complaints. Apart from applying
our own framework more intensively to the issue of ongoing negotiations between HQ-level and
local actors during implementation, we see two major explanations for this contradictory finding:
first, an integrative negotiating mode at the HQ level can only be successful in terms of institu-
tional change when it is constructively coupled with conflict resolution for the distributive issues
arising during implementation at the local level, pointing to a necessity to study the implementa-
tion process in its own right (see, with regard to the US context, Fichter, Stevis, & Helfen, 2012).
Second, in these cases negotiating the IFA might have been used by management as a tactic to
accommodate stakeholder demands (Levy & Egan, 2003). As such, this also requires a linking
back of negotiation work to other forms of institutional work and social skills that reveal something
about the actors’ broader repertoire for strategizing beyond negotiation work.
Going beyond the empirical findings regarding IFAs, we relate our study to recent calls to inten-
sify the study of institutional work by examining the dialectical interaction between agency and
institutions and by taking into account the fact that institutional work is not always a success story
(Lawrence et al., 2011). Negotiations represent a rare opportunity to study interaction as ‘embedded
agency’ (Emirbayer & Mische, 1998) and in its capacity to change institutions. Negotiations are a
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Helfen and Sydow 1093
decisive point where diverging institutional logics meet, enmeshed in institutional structures with
differing degrees of thickness and diverging opinions and positions; and in these situations, actors
need (and are able) to work out how to evoke institutional change. Other forms of institutional work
might also be conducive to that end, e.g. campaigning, legislative action, or creating influential
rhetoric frames. But, as our cases show, it is negotiations that allow for the continuous practising of
institutional work, mediating dialectically between existing institutional structures and strategic
ambitions to bring about institutional change. In addition to this, negotiations provide for an alterna-
tive view on change processes accounting for the fact that institutional change is very often not a
positional ‘either/or’ struggle, but proceeds within a complex dialectical process of constituting
social order in inter-organizational encounters (Cutcher-Gershenfeld, 1994; Strauss, 1982).
Indeed, GUFs as much as the management of MNCs are capable of acting as a ‘collective institu-
tional entrepreneur’, as they act upon their institutional environment to change it in negotiations with
each other (Schneiberg & Lounsbury, 2008). Nevertheless, the pitfalls of achieving the institutional
change of global labour relations through negotiations are numerous, as those cases of our small
sample reveal that brought about hollow institutions. In this context, IFA negotiations raise three
more general questions not only for research on institutional entrepreneurship (e.g. Maguire, Hardy,
& Lawrence, 2004) but also for that on social movements (e.g. Schneiberg & Lounsbury, 2008).
The first concerns the obvious differences in reacting towards and enacting of institutionalized
repertoires for action in the context of negotiations. As the comparison between ChemCorp and
MetalCorp clearly reveals, negotiating actors are partially free in their decisions about how to
relate precisely to the institutions in which they are embedded. They do have a choice: either fol-
lowing the paths set out by established institutions or distancing themselves from them in order to
reach new solutions. As such, this reveals a considerable scope of agency but also raises the ques-
tion of why and under what circumstances actors choose one of these courses of action. Our analy-
sis of IFA negotiations points to two important aspects in this regard: the expectation of the other
side’s willingness to go beyond institutionalized expectations, and the capacity of a negotiator to
bring his own camp to accept a departure from institutionalized expectations with an uncertain
outcome.
Building on this general observation of agentic leeway in enacting institutions in a negotiation
setting, the second – and related – question is: how can we account for incumbents’ reactions after
they have been forced into negotiating on institutional change? In our case, GUFs need to walk a
tightrope between representing their own demands and keeping the negotiations alive. Management,
after having been pushed by GUFs into negotiations, answered typically with distributive bargain-
ing tactics in the first rounds of negotiations. For unions, in order to avoid a breakdown of negotia-
tions and to actually reach an agreement, one of the major challenges has been to define an
integrative mode of negotiation that takes the distributive tactics of management into account in
order to make the underlying conflicts productive. In IFA negotiations, above all, GUFs have
avoided introducing issues that could have endangered the successful conclusion of the negotia-
tions. Most notably, unions abstained from including substantive issues such as global differentials
in wages or physical working conditions in more than a very general way, since – although impor-
tant for explaining unions’ motivation to negotiate IFAs in the first place – these issues would have
jeopardized the negotiations. At the same time, framing the IFA as an issue compatible with the
MNCs’ international strategies in order to accommodate employers’ demands and keep manage-
ment in negotiations risks losing support among the GUFs’ own constituency.
The third more general observation is the salience of managing internal differences in processes
of institutional work. In particular, GUFs had to move cautiously between excluding affiliates
opposed to IFAs in order to come to a joint solution, and integrating critical voices to provide for the
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1094 Organization Studies 34(8)
legitimacy of the final solution found. As the negotiations with stagnant outcomes reveal, this trade-
off is complicated even further if management is able (and allowed) to intervene in determining
labour’s negotiation teams. As a result of these interventions, it is not always the GUFs that have the
leading role in IFA negotiations, although the GUF is formally responsible for coordinating the
labour coalition behind an attempt to negotiate an IFA. For GUFs, this means that they are faced
with a dilemma: on the one hand, they need to rely on labour representatives close to corporate HQs
– above all, on influential national unions or works councils or a combination of both – to get access
to management in the first place (see Fichter et al., 2011; Hammer, 2005). On the other hand, within
a cross-border context, they need to obtain consent from their various local affiliates in order to alter
local practice with the help of further negotiations; in particular in situations where HQ contexts
diverge radically from local ones. For example, strategies of subsidiaries may contradict HQ-level
intentions, or local unions’ strategies may be more adversarial than those of HQ-level unions.
Our analysis represents just a starting point for examining further negotiation work across
organizational boundaries. Avenues for further research might be a closer look at the mediating
role of power relationships between negotiators, personal traits of the negotiators, and other condi-
tions influencing negotiation work and its capacity for institutional change. Similarly, industry
cultures and economic conditions might also contribute to an explanation of why diverging institu-
tional logics are either reproduced or altered during negotiations; with our concept of institutional
thickness we have been able to address these conditions only in a very general way. Obviously,
negotiations are not the only process of institutional work capable of producing change; however,
they are very relevant for organization-related institutional work. As a consequence, more work is
needed to differentiate institutional contexts and clarify the relationship between negotiations and
other forms of institutional work, and on the interplay of organizational and institutional change.
Relating back to the Sisyphean experience with globalizing industrial rights, we think of IFAs
as bearing the potential to change global labour relations, and thereby contribute to a proliferation
of core labour standards, despite the difficulties our analysis has revealed. And perhaps – given the
global weakness of labour-related regulatory institutions and agencies – IFAs are more instrumen-
tal in achieving an improvement of working conditions and labour relations in global production
networks than either unilateral CSR policies or NGOs’ global campaigns, because negotiating IFAs
brings the parties of the employment contract to act jointly.
Acknowledgements
We are grateful to Michael Fichter, Martin Behrens and Christopher Wright as well as to the Guest Editors of
this Special Issue and to three anonymous reviewers for their insightful comments on earlier versions of this
paper. Earlier versions of this paper were presented at the 2010 European Group for Organization Studies
(EGOS) Colloquium, Lisbon, and at the 2011 Meeting of the Academy of Management in San Antonio, Texas.
We thank the participants for their helpful suggestions and comments.
Funding
We thank the Hans Böckler Foundation for its generous financial support of the empirical research on which
this paper is based (HBS Grant 2008-141-2), and the Friedrich Ebert Foundation for a substantial grant that
allowed us to organize seminars with representatives from our cases in four countries (Brazil, India, Turkey
and the US).
Notes
1. In our ambition to bring inter-organizational negotiations into the theory of institutional work we are highly
selective in choosing strategic bargaining theory as developed within the field of labour–management
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Helfen and Sydow 1095
relations (Walton & McKersie, 1991; Bazerman & Lewicki, 1983) and applied in other areas of the social
sciences; for instance, in business-to-business relationships (e.g. Ness, 2009) or international policy
negotiations (Odell, 2010). However, we are well aware of the fact that negotiations are the subject of a
multidisciplinary field of research in their own right (for overviews from different disciplines, see Adair
& Brett, 2005; Aoki, 1984; Bazerman et al., 2000; Wohlgezogen & Hirsch, 2009).
2. The neglect of inter-organizational negotiation processes is not a unique shortcoming of the core litera-
ture on institutional work. In the neighbouring strands of macro- and micro-political institutionalism
these processes are also dealt with insufficiently as a mechanism for mitigating conflict and allowing
for (new) institutional solutions. However, given our focus on institutional work, we cannot go into the
detail of these accounts (e.g. Beckert, 2010; Deeg & Jackson, 2007; Geppert, Matten, & Walgenbach,
2006; Morgan & Kristensen, 2006; Thelen, 2009).
3. Nevertheless, we are well aware of the fact that for our study a perspective looking at ILO standards dis-
seminating into various institutional environments might also be applicable. We thank one anonymous
reviewer for reminding us of this possibility. However, based on our empirical material, we argue that
while in the initial rounds of IFA negotiations ILO standards are propagated, in the following rounds
negotiators start to define their own solutions for enacting ILO standards. In particular, they define new
procedural rules which we classify as (proto-)institutions.
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Author biographies
Markus Helfen holds a degree in economics from the University of Trier and earned his doctorate in business
administration at Aachen University (RWTH Aachen). He worked as a research and teaching associate at the
University of Stuttgart (Fraunhofer IAO) and RWTH Aachen before he became a research fellow in the
Management Department, School of Business & Economics, Freie Universität Berlin. His research interests
include interorganizational networks, industrial relations, service multinationals and institutional theory.
Jörg Sydow earned his doctorate and habilitation in business administration at the School of Business &
Economics at Freie Universität Berlin, where he is currently a professor of management. From 2004 until
2007 he was an International Visiting Fellow of the Advanced Institute of Management Research (AIM),
London and is now a Visiting Professor at the University of Strathclyde’s Graduate School of Business. He
is a founding co-editor of two leading German journals, Managementforschung and Industrielle Beziehungen
– The German Journal of Industrial Relations, and a member of the editorial boards of Organization Studies,
Organization Science, Academy of Management Review, Academy of Management Journal and The
Scandinavian Journal of Management.
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