Job security (Organizational Theory)

Piore has pointed out that one fundamental impulse behind internal labour markets and the associated job security is the desire to avoid the impact of economic fluctuations. The structuring of the labour market is in response to the contradiction between the inherent instabilities of capitalist economic activity and the social and political pressures for economic security. 10 Whilst this may be true, it nevertheless assumes a particular origin of internal labour markets: namely that they are a structural response to trade union and working-class pressure. Such an assumption only examines the supply side of the labour market (i.e. the preferences and characteristics of the workers), and says nothing about the demand side. However, as ILMs represent an employer labour market strategy, it is necessary to understand why large employers should be willing to adopt the strategy of internal labour markets.

One answer, the answer favoured by Lazonick and Edwards, is the control function argument. Given the relations between capital and labour there is a central indeterminacy of labour potential which necessitates some degree of motivation and commitment for getting the work out. However, the earlier and alternative labour control strategies proved to be failures or to have severe limitations. In contrast, the motivational implications of ILMs-the potential to call forth organisational commitment via a career consciousness-proved decisive for technologically based, large corporations. We deliver individual resume service for all industries! Our professional resume service are online and unique Do not miss this chance!

But this is not a conclusive answer to the theoretical problem. If labour control is an unresolvable conflict, then there will be a continual process whereby workers react to managerial tactics, and strategies recede in importance, decay and blend with new principles of labour management. In other words, internal promotion systems may prove to be a contingent and transient phenomenon with no discernible association with the phase of monopoly capitalism. Indeed, Goldberg has recently argued that the success of an internal labour market strategy is highly contingent on the firms rate of growth. The reasons for this are straightforward: secure jobs convert the wage bill from a variable to a fixed cost. Moreover, any kind of seniority-based career structure or seniority wage system within a static or slow-moving company results in accelerating wage costs, because there is a high percentage of older and more expensive workers. In contrast, rapid expansion means that there is a frequent intake of new workers at the bottom of the wage and career scales so that overall costs are kept down. Given these economic implications of ILMs, Goldberg is reduced to explaining their American diffusion in terms of managerial 'systematic error' which the market is slow to penalise.