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Rigidities through flexibility: flexible labour and the rise of management bureaucracies

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  • Alfred Kleinknecht
  • Zenlin Kwee
  • Lilyana Budyanto

Abstract

Judging from organisation-level survey data, we find that organisations employing high shares of flexible workers have higher shares of managers in their personnel. This is in line with earlier findings that Anglo-Saxon countries with deregulated labour markets have thicker management bureaucracies than countries with more regulated labour markets of the ‘Rhineland’ style. We argue that flexibility in labour markets (i.e. easier firing and higher labour turnover) damages trust, loyalty and commitment. This requires more management and control. Related research suggests that easy hire and fire is at the cost of organisational learning, knowledge accumulation and knowledge sharing, thus damaging innovation and labour productivity growth.

Suggested Citation

  • Alfred Kleinknecht & Zenlin Kwee & Lilyana Budyanto, 2016. "Rigidities through flexibility: flexible labour and the rise of management bureaucracies," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 40(4), pages 1137-1147.
    • Handle: RePEc:oup:cambje:v:40:y:2016:i:4:p:1137-1147.
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    File URL: http://hdl.handle.net/10.1093/cje/bev056
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    Citations

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    Cited by:

    1. Kleinknecht, Robert & Haq, Hammad Ul & Muller, Alan R. & Kraan, Karolus O., 2020. "An attention-based view of short-termism: The effects of organizational structure," European Management Journal, Elsevier, vol. 38(2), pages 244-254.
    2. Pasquale Tridico & Riccardo Pariboni, 2018. "Inequality, financialization, and economic decline," Journal of Post Keynesian Economics, Taylor & Francis Journals, vol. 41(2), pages 236-259, April.
    3. Chengde You & Huishan Qiu & Zhuojie Pi & Mengyuan Yu, 2023. "Sustainable Enterprise Development in the Manufacturing Sector: Flexible Employment and Innovation in China," Sustainability, MDPI, vol. 15(10), pages 1-30, May.
    4. Igor Fedotenkov & Virmantas Kvedaras & Miguel Sanchez-Martinez, 2024. "Employment protection and labour productivity growth in the EU: skill-specific effects during and after the Great Recession," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 51(1), pages 209-262, February.
    5. Pichault, Francois & Fatien Diochon, Pauline & Nizet, Jean, 2020. "Autonomy of independent professionals: A political process perspective," European Management Journal, Elsevier, vol. 38(4), pages 623-633.
    6. Claudius Gräbner & Anna Hornykewycz, 2022. "Capability accumulation and product innovation: an agent-based perspective," Journal of Evolutionary Economics, Springer, vol. 32(1), pages 87-121, January.
    7. Riccardo Pariboni & Pasquale Tridico, 2020. "Structural change, institutions and the dynamics of labor productivity in Europe," Journal of Evolutionary Economics, Springer, vol. 30(5), pages 1275-1300, November.
    8. Alfred Kleinknecht, 2017. "Supply-side labour market reforms: a neglected cause of the productivity crisis," Working Papers 0027, ASTRIL - Associazione Studi e Ricerche Interdisciplinari sul Lavoro.
    9. Hoxha, Sergei & Kleinknecht, Alfred, 2020. "When labour market rigidities are useful for innovation. Evidence from German IAB firm-level data," Research Policy, Elsevier, vol. 49(7).
    10. Yagi, Hironori & Hayashi, Tsuneo, 2021. "Working conditions and labor flexibility in non-family farms: weather-based labor management by Japanese paddy rice corporations," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 24(2), February.

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