Pathways to cooperation: the transformation of labour relations among leading South Korean firms

Abstract

The presence of cooperative labour relations based on partnership among leading South Korean firms challenges prevailing theories that emphasize the role of national-level economic institutions and political alliances in shaping firm-level institutions. Economic liberalization and the failure of societal corporatist initiatives during the past decade indicate the absence of macro conditions favourable to the development of micro or firm-level partnership. Instead, partnership can be traced to political and economic factors operating at the micro or firm level. From case studies of five leading South Korean firms, this article will explain how partnership was forged out of micro-level interactions between cooperative institutions, power distributions and historical legacies. These firms’ cooperative ‘pathways’ reveal how micro-level institutions associated with coordinated capitalism may thrive within the macro framework of neo-liberalism. Given the economic importance of these leading firms, the institutional distinctiveness of Korean labour relations (and, by extension, the distinctiveness of Korean capitalism) is likely to persist despite the broader shift towards liberal capitalism.

Keywords:

• firm-level partnership
• corporatism
• high road
• low road
• chaebŏl
• institutional interdependence

Acknowledgements

I am grateful to the Nuffield Foundation (Award SGS/00772/G) and the British Academy (Award SG40843) for their financial support. Thanks are also due to: Mr Yoon Hyo-Won (ICEM); Prof Kim Dae-Hwan (Inha University); Prof. Moon Chung-In (Yonsei University); Prof Kim Eun-Mee (Ewha Woman's University); two anonymous referees; the editor of Economy and Society; and the many interviewees who kindly took time out from their busy schedules.

Notes

1. ‘Non-liberal capitalism’ is a term used by Streeck (2001, p. 6) to define German and Japanese capitalism as ‘regimes of economic governance that up to this day place relatively little trust in free-market laissez faire’. Use of the term ‘non-liberal institutions’ here refers to formal and informal rules and practices associated with this form of economic governance.

2. Existing secondary accounts were supplemented by interviews with key union and management personnel responsible for human resources/labour relations between 2004 and 2006.

3. Interviews with: Human Resources/Labour Relations Managing Director (‘cho˘nmu/insa nomu’), Managing Director (‘cho˘nmu’) and Director of Labour Relations and Safety (‘sangmu/nosa ancho˘n tamdang’) of DIMC.

4. Interview with General Secretary (‘samu kukjang’) (Pup'yo˘ng plant) of Daewoo Motors Workers Union (DMWU).

5. Interview with Director (‘siljang’) of DMWU Education and Propaganda Office.

6. Interview with President (‘wiwonjang’) and Deputy Planning officer (‘kihoek ch'ajang’) of HHI Labour Union.

7. Interviews with Manager (‘kwajang’) of the Industrial Relations Department, General Manager (‘pujang’) of the Personnel Department and Director (‘isa’) of Human Resources.

8. Interviews with Director of Human Resources (‘HR pumun-jang/pu-sajang’) and Manager (‘ch'ajang’) of the HR Labour-Management Cooperation Group).

9. Interview with Vice President/Secretary-General (‘pu-wiwonjang/samu ch'ojang’) of LGE labour union.

10. They point out that bonuses were higher before HR reform but levels of employee satisfaction were lower.

11. Interviews with Vice President (‘cho˘nmu isa’) of HR, and with Senior Manager (‘suso˘k pujang’) of HR Development.

12. Secrecy and sensitivity of the labour relations issue prevented access to individual group affiliates. Interviews were conducted instead with the Director and Chief Researcher of the HR & Organization Department of the Samsung Economic Research Institute (SERI). The former was responsible for devising HR strategies for the entire Samsung group.

13. Interviews with Director (‘siljang’) and Chief Researcher (‘suso˘k yonguwo˘n’) of the HR & Organization Department.