Abstract
Based on one-to-one interviews and focus group interviews with management representatives, trade union representatives, and blue- and white-collar workers this article investigates how the global financial crisis was handled in Swedish industry. In the light of the crisis agreement signed between trade union IF Metall and company representatives how can the implementation of the agreement be described? How were these new conditions interpreted and how were they experienced? Three conceptual themes emerged, trust, loyalty, and principle of fair-play. Large differences were shown that were related to attitudes towards blue- and white-collar workers, recognition of work, and the size of the town.
The financial crisis of 2008 and 2009 was a problematic time for the Swedish engineering industry, resulting in a significant reduction in orders, production, and employment. In order to cope with the situation an agreement 1 was signed between trade union IF Metall and employer representatives Teknikarbetsgivarna. The agreement comprised reductions in salaries and working hours. The purpose of the agreement was to secure businesses and, as far as possible, to avoid redundancies. The Agreement can be regarded as historic in Sweden, as never before in modern times has an agreement on wage reduction been reached between the labor market parties. The Agreement was signed on 2 March 2009 in order to overcome a temporary period of labor crisis. This agreement ended in March 2010.
As a background to the Agreement, it should be noted that the Swedish trade union movement is different to that in most other countries. One main difference is the so-called industrienhetsprincipen (principle of industrial unity), and a high degree of union affiliation is another important difference. The employer has only one trade union organization to negotiate with. In this case the main organization for blue-collar workers is IF Metall, and the affiliation degree is approximately 90 percent. A basis for trade union configuration in Sweden is governed by the Saltsjöbads agreement that was signed in 1938 between the union organization Landsorganisationen Sweden and the employer association Svenska arbetsgivare föreningen. This agreement came to be the cornerstone of the so-called Swedish model, meaning that key agreements between employers and unions are signed in order to regulate the relationships between employees and employers locally. This created a unique relationship between employee trade unions and employers. The relationship centered on trying to resolve conflicts through negotiation. This focus on dialogue and negotiation differs somewhat from labor relations in other countries. A great deal of trust has been built between employers and trade union organizations over the past decades. This aspect proved to be an important factor in the Agreement.
The study has been carried out at a large Swedish company in the engineering industry. The company will in the article be referred to as the Mill AB (publ). The Mill AB is a global public company and is active in several parts of the world. The present study has focused on three locations in Sweden, where the Mill AB has plants. These locations will be called Alpha, Beta, and Gamma. Our initial meeting with a representative for the Mill AB was with its human resources (HR) manager. He explained quite directly to us how he and the HR department had reasoned regarding the financial crisis and the Mill AB’s activities—in other words, how they had felt that the company should act. The HR manager drew a curve on the white-board that was meant to symbolize trade conditions and said, Our interest [HR department] was in competence. To take careful account of individual and collective skills, and we were convinced that the economy would bounce back. It was only a question of when. To lay people off and then after 1 to 2 years re-employ them will cost you. Then, we may not return to the same level of competence we had before. They have probably moved on and applied for another job. They won’t sit and wait. If we just could retain the competence within the organization when the economic cycle turned we would have a head start vis-à-vis our competitors. Right here [he draws a line on the right hand side, see Figure 1] we have a full crew, instead of having to begin recruiting and training new staff. (HR manager)
Human resources (HR) curve period of economic fluctuations, reported according to HR manager of the company.
The study was exploratory, and on the basis of the above, the aim of it was to explore patterns of experiences and effects on first and foremost the level of the employees, that is to say, experiences and the effects for the individual that can be traced back to changes in working life, and in life circumstances that the Agreement and the local efforts at the Mill AB led to the two guiding research questions: (1) How can the implementation of the Agreement be described? and (2) How were these new conditions interpreted, and how were they experienced?
Furthermore, the study will discuss, in more generic meaning, implications and effects of the activities and actions that can be attributed to the implementation of the Agreement.
Method
Initially we formed a project group. The group consisted of two employer representatives, two trade union representatives, and one of the researchers. The group formulated a few initial limitations for the study, that is, which plants and how many participants from each and every plant that would be included.
Adaptation to Problems and Purpose
Since previous knowledge and experience of a crisis of this size and the effects of one was limited we were forced to formulate exploratory questions and thus our qualitative approach to collecting data. The methods that were most suitable for this purpose were focus group interviews and individual interviews. The focus group interviews were used to pick up as many voices from the staff as possible from the different plants (Alpha, Beta, and Gamma; see below). The focus group interview is also an appropriate method in the contexts in which individuals have a split-specific experience of something, in this case the shared experience relating to working hours (and pay cuts). The dynamics that are (may be) created in a group that has discussions on a topic also creates conditions that may support individuals’ ability to remember. The interaction therefore contributes to an emergence of a greater number of nuances.
Locations and Participants
Three locations (or plants) have been the focal point for this study. The plants were selected in conjunction with the members of the project group (see above). The names of the locations have been changed and are referred to as Alpha (700 employees), Beta (1,800 employees), and Gamma (300 employees).
These three plants have to some extent handled the crises in different ways. Both Alpha and Beta approached the crisis with a collective solution, a solution that included both blue- and white-collar employees. Gamma on the other hand departed from this line because the research and development (R&D) department was located at Gamma. There was a consensus at the Mill AB that the R&D department was to remain untouched. The main reason for this was strongly tied to future competitiveness. Furthermore the local management at Gamma decided that because of this reason only the blue-collar workers should be included in the Agreement. This meant that all of the employees at Gamma were not included in the Agreement. Consequently there is an interest in looking at these three plants as a whole but also in comparing the plants and the employees’ experiences with each other.
In total, nine focus group interviews were carried out (n = 78): three at Alpha, four at Beta, and two at Gamma. The participants were selected by trade union representatives together with employer representatives; they did this by using employee records. All the participants were union members. The focus groups were composed of both blue- and white-collar workers. This combination of employees created a good momentum in the different groups. This also meant that the variance in interpretations, statements, and narratives increased, that is, how the participants framed the Agreement and how they interpreted the different consequences for the individual.
In order to obtain an additional perspective on the employees’ experiences of the Agreement, interviews were conducted with trade union representatives (n = 2 IF Metall, blue-collar and Unionen, white-collar) and management representatives (n = 5). The trade union and management representatives were selected strategically on the basis of their involvement in developing and implementing the Agreement.
Interviews and Focus Group Interviews
The focus group interviews and individual interviews were scheduled for one hour and thirty minutes. All interviews were recorded with digital equipment. The recordings were later transcribed verbatim. The participants were informed about the purpose of the study and that the overall theme for the focus group interviews was to be about “the Agreement.” Each focus group was asked to follow a certain chronological order:
The work situation before the crisis
The period of notice before the Agreement
Agreement period 1 (the collective solution)
Agreement period 2 (the individual solution)
Apart from this order, each group was free to pick up any event, action, or experience that the members felt was meaningful or important. The role of the researcher in the focus group was to attempt to make the informants expand on their arguments and ask them to focus on a specific event, action, or situation. Furthermore the researcher asked for clarifications and required concrete and practical examples.
The individual interviews were conducted in a similar way. The participants were asked to follow the same chronological order as the focus group participants. The interviews were inspired by narrative research (Czarniawska and Gagliardi 2003; Johansson 2005); thus the participants have been encouraged to provide their story of the Agreement, this period in time, and the different local actions and the processes that took place. In the same way as above the researcher asked for (if necessary) clarifications, elaboration, and concrete and practical examples.
Approach and Analysis
Never before in Swedish working-life history had an agreement like the present Agreement been signed between IF Metall and Teknikarbetsgivarna. This meant that the companies and their employees in the Swedish labor market were faced with a completely new experience. This applies to the Mill AB as well. As empirical subject matter this phenomenon has up to now been a void within the Swedish working-life studies. Whereas the knowledge about this phenomenon was limited, an exploratory approach was the most suitable. Thus our focus group interviews have been made with few restrictions aside from the chronological framework mentioned above. We have encouraged the participants to elaborate on their experience and stories about the Agreement. With these given episodes (states) as a starting point our interest has been in understanding the events and actions that have taken the participants from one state to another (Coffey and Atkinsson 1996; Czarniawska 2008; Czarniawska and Gagliardi 2003; Johansson 2005). What visible complications have the participants experienced? Do the participants have a certain moral embodied in their stories? What kind of genres do they use when retelling the story about the Agreement and other actions related to this? Perhaps some consider it a success story and others a tragedy. The following concepts have emerged when interpreting the empirical material, consisting of the participants’ narratives: trust, loyalty, and principles of fair-play.
Voices from the Field
This section is divided in two parts. Part one will be based on the interviews that were carried out with the representatives of management and trade unions. The focal point in this part rests upon the actions that were carried out before the Agreement actually materialized, together with a pursuit to understand the way the situation was problematized by the management and trade unions, the different intentions, and so forth. Part two will deal with the focus group interviews and hence the employees at the Mill. The participants in the focus group interviews consist of both white- and blue-collar workers.
General Patterns
From Confidence and Calm to Chaos and Disorder
Each interview started with the question of how the participants experienced the period shortly before the crisis became a reality for the Mill AB. The participants were asked to tell how they viewed the situation for the Mill AB before they reached a point where they realized that something had to be done. Regardless of whether it was a trade union representative or employer representative the initial portrayal given of the situation was similar. Naturally, everybody was aware of what was going on, in the financial market, and that sooner or later it would affect the Mill AB. However, the participants expressed that they nonetheless had felt confident about the future. The business was going very well, so the participants meant that it was difficult to imagine anything else. Because there weren’t any maps or earlier references to rely on or that could help to guide their actions, this made it more elusive. This fact would distinguish the interviews with both the employer and union representatives. One of the participants gave the following portrayal: This decline was global and instantaneous. … In principle the single market, which had only a small ripple on the surface was China. But all the other markets … from −70 percent to −10 percent, less in volume 2009 compared to 2008. It all started the second or third week in October 2008. The Mill AB actually had a global meeting at that time: our more important market management and we, the directors. We all looked at the different markets and our incoming orders, and everybody saw … “oh, no 50 percent minus from yesterday, what is going on?” I remember it as it was yesterday, it was two or three markets, I think it was particularly Europe, but USA and the others fell afterwards. A day or so after. It just said stop. This was perhaps a week, maybe two after that they let the big bank in the USA go bankrupt, Lehman Brothers. It was very obvious that something radical was happening. Not only in Sweden or a few markets or a specific region, this was everywhere and at the same time. We asked ourselves questions like: What’s going on? Were will it end? What will the outcome be, the consequences? And of course, a very intense job began for the directors of the Mill AB. Because we wanted to identify what was going on. Is this short-lived? For how long will it proceed? What does the analysis say? What do the markets say? What are the experts saying? There weren’t any references. Not anything. (Interview 1:1)
Other participants gave similar descriptions, perhaps not always with the exact same specific events or episodes in their explanation. But in common for all the reports were the difficulties in making sense of what was happening. There was no story, or any framework to hang up these new events and impression on. These new events did not fit into any of the participants’ past experience. The extract from the participant above could be summed up in a single sentence: “What is happening?”
To Improvise in an Unordered Reality
A description of a situation that was very strenuous runs through the individual interviews. The portrayal was nonetheless filled with commitment and positive emotions—not about the situation in itself but about the challenge that they were facing. The participants describe a break from everyday patterns. Something had to be done, and we were the ones who had to do that something, said the participants. In the beginning they felt that very little made any sense, but nevertheless they started to act and crafted a course of action.
There were quite a lot that discussed if we would make it at all and be able to make a comeback. The recurring question was: What is going on? This was something completely new, no one knew. … This is the biggest fall in the history of the Mill AB. But we did a couple of assumptions about how the market and we would develop. We didn’t think the world would cease to exist. This was the same pattern as before but with a greater amplitude. We have falls but we will come back, it will turn around. This is not the end of the Economy as we know it. And when we do come back it will go quickly. We had to consider how long this period would last—we have to have a quite a substantial cost-savings program before we can see a growth and re-hire the staff. We outlined different scenarios depending on how long the crises would last. Somewhere between 1 and 3 years depending on how you count. When we are back up to 10 percent we can go back to our old solutions. But we chose to believe that this would be a rather short period and then a strong increase. We decided that this was a temporary concern and not a permanent one. That is, the people that we have in the organization now, we will be in need of them within a certain time span. Consequently, start by getting rid of these people and we will soon be facing a huge recruitment drive. People will pass each other at the gates, due to backlog from when you let people off. We agreed instantly in the management department that we needed to find a flexible solution that creates the possibility of keeping people in the system. The problem is that we cannot keep them at full-time 100 percent right now. But the need will come back. … Then when the Agreement expired we were in need of the people that had stayed. Our faith was right. (Interview 1:2)
2
It was not only a question of faith. It was also about the prerequisites that existed at the Mill AB. The participants talked about improvisation and acting without any predetermined action plans and furthermore about extracting patterns in a seemingly patternless world. The participants felt that collaboration and the relationship between trade union and the company were the basic conditions for this to materialize. They described a feeling of trust in the available resources, together with the ability to conjoin them. The participants emphasized that one of these resources was the relationship between the trade union and company. Other recurring resources were how they looked upon common assignments, local mill town culture, and the Time Bank at Beta. The Time Bank is designed to allow the employer to allocate and re-allocate working time in dialogue with the employee based on (an increase or decrease in) orders and workload. These resources or factors were experienced as important for the Agreement and its implementation. On the other hand, the trade union was in no doubt that this Agreement was signed in a special situation under certain circumstances. The two union representatives emphasized that nobody knows how exactly things will be handled in the near future (the next time).
We saw that it was going downhill and very fast. But we had a working hours agreement and we thought that this could handle 20 percent in one year, it should handle 10 percent in two years. That is what that (old) agreement is calculated on. We went home for Christmas (2008), we closed the plants. This is when it started to go really bad. It continued downward in January, we dropped 30 percent. It ended with a reduction of 50 percent of our production here on Beta. It went fast. In November we started to realize it was all going to pot, and in March we hit rock bottom. We had started early to find a solution, we saw that it was not enough. We just had to find a solution. We wanted a reduction of 20 percent in working time and 10 percent in salary, but Metall (central) doesn’t allow this kind of local agreement. We then came up with the idea of re-writing all the employment contracts—80 percent employment and 90 percent in salary. That wouldn’t be a bad idea, we could refuse to change it later when everything was back to normal. We had some wild speculations. And we had a good dialogue, here but also with the management and leadership. I think we had up to three or four crazy solutions that weren’t possible to launch. But we all agreed that we would manage it in one way or another. We together with the company, made one thing clear; no one should be forced to leave, and we shall fight for this and make it through. We said this jointly to the media as well. It was here at Beta at 09.00 we said to the Radio that our ambition was that no one should be forced to leave. The journalist turned off the mic and asked if we were just being foolish and ridiculous. Then at 14.00 the company had their press conference and showed they had exactly the same focus. Then IF Metall signed the large agreement (The Agreement). In this agreement there was supposed to be a 20-20 solution. Twenty percent less in working time and 20 percent less in salary. However, we have a thesis from University of Uppsala that explains how much a solution like this will generate for the company when the state of the market turns around. Consequently, we thought that we shouldn’t have to pay for everything. Our objective was that the company should pay for half and we should pay for half. We got pretty close to that. … The negotiations were based on having a common ground and on consensus. The collaboration was really, really good. Sometimes it was difficult to remember that we were opponents. We could even root for each other when the other side was thinking right. At the same time, they had an obligation to save as much money as possible, and we had an obligation to save as many people as possible.
Why do you think the relationship with the company looks the way it does?
It is built by farmers. We are the largest private employers in the region and we are situated in the countryside. We do not demand as much money to go to work on a Saturday like they do in the big city. Low turnover of people, and we know each other, we have a relationship … a bit scary really. It is founded by common people, the management too is also common. The plant manager comes from this area. I think we all understand that we need each other. If this doesn’t become a popular place of work there’s no one around to employ. I think we have a good working climate, and I’m pleased with our role, we live with the company not against it.
The cited participant is referring to all the previously mentioned areas. He exemplifies the relationship between management and the trade union and the view on a common mission and assignment. In general the participants (Alpha and Beta) talked about having a common point of departure—the assignment—and that they were mutually dependent upon one another. One way the participants tried to explain this was that Alpha and Beta were small towns and actually mill towns. The company had a decisive role, not only for the employees but for the whole town. The participants explained that this relationship has created a common responsibility for the company, joint mission, and the assignment and a sense of responsibility for each other. This was expressed only by the participants at Alpha and Beta and not from Gamma.
The participant above mentioned the Time Bank on Beta; this working time agreement was highlighted by several participants. It was mentioned in two ways: (1) it functioned as a shock absorber, giving Beta the possibility of a longer startup, and (2) it had made available the experience of seeing a flexible solution. The participants said that this meant that the gap between the old solution and the actual agreement wasn’t as big for the Mill AB as it was for some other companies. The participants felt that there was an understanding about the need for this kind of solution from the employees. This was partially because of the Time Bank at Beta, which has been occasionally in use since 1998.
The participants also felt that the Mill AB had a special culture that paved the way for the implementation of the Agreement. However, when asked to explain the culture the participants had more difficulty, but they all ended up discussing how the people were down to earth and also the easygoing relationships and that the culture was tinged by its “mill town mentality.”
Focus Group Interviews with the Employees
The focus group interviews were carried out at three locations: Alpha, Beta, and Gamma. The experiences of the participants showed that the different plants handled the crises in different ways and that there were different prerequisites for the three plants. These differences affected how the employees interpreted and experienced the Agreement. This is why we have decided to divide the presentation into two main parts. Initially we will present a general description by the participants, which in particular can be attributed to Alpha and Beta. This will be followed by a focus on Gamma, primarily on the criticism that the participants from Gamma stated regarding the Agreement and various local solutions.
Time Periods and Areas
As has been presented before, the focus group interviews followed a chronological order: notice of laying-off, agreement period 1, agreement period 2, and finally how the participants considered the current situation. The participants highlighted different areas connected to these events. The most prominent were the jobs were to be retained, how time was used (inter-organization and leisure), training, work climate, and culture. The latter part consisted of concepts like relations, information, and communication.
First of all, in general, the participants explained that they were positive about the Agreement because the jobs were to survive. In the narrations from the participants the jobs were always the focal point. These statements were not given for self-centered reasons but were just as much related to the colleagues and the town. The importance of the town was only attributed at Alpha and Beta. The town’s dependence on the Mill AB was discussed in all the focus group interviews, together with the fact that that the people always looked after each other. The participants experienced a sense of solidarity and loyalty to each other, the company, and the town.
However it showed the individuals’ worries and insecurities associated with the notice of work changes that had been announced prior to the time when the Agreement had been entered into. During this period lots of time was devoted to attempts at reducing this insecurity, in part by means of self-composed calculations regarding where they might lie on a redundancy list. Rumors flourished within different departments regarding who might be at risk. In this regard the steps taken were shown to be of little use and in fact helped create even more distress. The roots of this worry and insecurity could actually be traced to those similar problems described with regard to the individual interviews, namely, the difficulty in understanding what this crisis meant and what it actually was that was happening. Several of those participating in the focus group interviews repeated the same stories as the informants in the individual interviews; that which was happening, and when it was going to happen, could not precisely be predicted. And when they remembered back, it was as if it happened over night, “From where everything flowed the way it should and new investments were about to be launched into, to where the orders suddenly died off.”
Even if there existed a generally positive attitude to the work-hours agreement and its implementation during the period 2009-2010, several participants made the point that the general view was that personnel were more positive during the actual Agreement than they were today (after the end of the Agreement). One often-recurring statement was, “Of course our jobs are saved, and the same goes for our competence, but what are we going to get back from the company?” What they mean is that the perceived sacrifices that many felt they had endured, with the reduction in salary, hadn’t been fully recognized, now after the fact, when production once again had returned to full capacity.
Reflections on Actions Taken and Hindsight
A number of practical problems were discussed in the groups, problems that related to how the challenge was interpreted and the willingness to do a good job. The groups were mixed, consisting of both white- and blue-collar workers. Both of these groups felt that their work situation was negatively affected during the period of the Agreement, though the reasons given for this differed between the groups. White-collar workers primarily felt that they didn’t have enough time for the work requested of them during this period. Their explanation for this was that the amount of work during this time remained unchanged.
We made a huge mistake here at Beta on the side of the office-workers when we reduced our working hours by 10 percent. We should have removed 10 percent of the work-load. All of the office-workers at Beta did 100 percent of the work in 90 percent of the time needed. … Most of the office-workers worked even more. Work-wise we had no crisis, because we had plenty to do. Given then that production decreased we were going to have to deal with all of the organization’s old and persistent problems.
In discussions the blue-collar workers didn’t relate problems from the same perspective as the informant quoted above, though it is possible to identify similarities regarding willingness to do a good job and the desired conditions to do so. What was brought to attention was the tension between autonomy and co-operation. There was a great deal of self-determination in each department regarding how time should be allocated, when staff could be free, and when they should be at work. This was, according to the participants in the focus groups, generally positive in itself but actually caused a good deal of problems regarding planning and work-flows. That is to say, communication between departments and parts of the production process were at times unsatisfactory. Differences between departments could also be seen in how questions of education and competence-development were dealt with during the period of the agreement.
Education and competence development were, according to the Agreement, supposed to be prioritized. Up to 20 percent of actual work time was to have been reserved for different methods of increasing knowledge and skills of those covered by the scope of the Agreement. It was discovered that the situation differed greatly from department to department, especially regarding Beta, but also for Alpha. Courses were, to start with, not supposed to cost anything, which caused a certain amount of restriction, as well as the fact that suggestions for appropriate courses were closely determined by a person’s individual creativeness. There existed no ready plans for what would represent an appropriate course. They instead developed locally and on occasion didn’t materialize at all. As an illustration of the latter case, the following quotes may be viewed for consideration: There was much talk of the fact that there was now the possibility of courses and training, but I have to say that I haven’t seen so much of that. (focus group 2:1) There was a lot of training, although it wasn’t supposed to cost anything, but our department had a lot of training. (focus group 2:3) The thought was that you would have training rather than stay at home, but everyone was at home instead. … It felt as though it was easier to send people home than to create courses for them. (focus group 2:4) You also took the opportunity to learn each other’s jobs. You job-rotated, so that you would later have a greater flexibility, and that was also called training, and is still great now, because everyone has got to know each other, and know each other’s job. (focus group 2:2)
As can be seen, there is a certain degree of spread regarding how the question of training and skill development has been handled at a local level. These local variations were explained amongst other ways by the differences in how first-line managers interpreted and dealt with the questions primarily regarding training and skill-development. In general the situation that the first-line managers found themselves in was described as unmanageable and messy. For the managers at the Mill AB a situation presented itself that was previously unknown: there were namely no pre-determined rules to rely on. At the same time they were expected to be ready to find an answer to any questions that arose, often questions that no one knew the answer to. And of course this was the case not only when it came to the question of training.
Lots of questions arose when someone had their wages lowered and was later laid-off, is it the lower pay that’s the basis for unemployment benefit? And about pensions and parental benefits … lots of energy went into discussing these things during that time. And also how much time you had accumulated in the different time-banks. As a boss there was a whole lot of calculating to do, with different codes and all a big mess. Unfortunately there wasn’t one single system in play for doing this. Instead everyone had to sit in his own office and try to invent. (focus group 2:4)
Gamma
We have chosen to present Gamma under a separate heading due to the fact that the discussions in the focus groups differed largely from those in Alpha and Beta. If the discussions in Alpha and Beta largely revolved around time and wages, then those at Gamma centered instead on how the situation was dealt with and how staff had interpreted the company leader’s different decisions.
Irrespective of who we asked during this study, everyone is in principle in agreement that very much was done wrongly at Gamma. The decisions made, and methods chosen, cannot be isolated from other factors; they were embedded within a system of symbolic content, that is, the local culture at Gamma. Implications and meanings can’t be controlled; rather, they are interpreted and given a meaning within their locality. The initial intention does not necessarily correspond to the meaning another person derives from a decision made or action taken. That which made Gamma different from Alpha and Beta was that certain areas of that workplace were excluded from the work time part of the Agreement. Initially it was R&D that the company wanted to exclude from the Agreement, the result of which was that no office workers at gamma lost any hours or pay. The management at gamma initially created the problem regarding how the Agreement was interpreted. The R&D department even included members of the union IF Metall, and they of course also considered themselves part of the development department; this attachment was determined by their role, not by their union affinity. The design of the agreement however created a different division: some people in the same department were covered by the Agreement and others weren’t, even though they had identical roles. This was seen as a value marker and stimulated some to want a return (as they expressed it) to traditional roles and divisions. A clear You/Us division was created between those seen as “real researchers” and those who worked side by side with them yet were excluded from that group. A chief at Gamma expressed it this way: At Gamma there was a conflict because we had a reduction of hours for union members, those with Metall [blue-collar], whereas not on the white-collar side of research and development. That created conflicts between the different union organizations. That wasn’t very clever. At R&D there are about 40 blue-collar members and 100 to 120 white-collars. So that wasn’t so great. Then, retroactively, that was corrected. As much as was possible that is.
A recurring theme within the Gamma focus groups was the mention of the principle of fair-play. The way things were done was more important than what was done. Participants from Gamma often referred to both Alpha and Beta, saying that in these places everyone had been treated equally, and that with regard to accepting such an agreement it is of the greatest importance that no distinction is made between an individual’s function and his or her position. Even one of the departmental heads at gamma made this point during one of the interviews: It’s of course not good making such differences, that goes without saying. It set back many discussions by 10 years. Then there was of course the argument that this was that type of agreement, and there were good and strong arguments in favor of that viewpoint. It wasn’t that anyone was trying to be awkward. … But what occurred was a discussion about We or Them, and why a little group should bear the whole brunt of the savings. My personal view—I think it’s less dramatic if you allow a whole group to be affected by an agreement, after that you can have differentiation within the group. But to differentiate between 0 and 10 to 15 percent so that it produces such a split, and on top of that such a small group having to carry so much; how they experience it is that they feel very vulnerable.
The problems and the climate generated at Gamma during that period affected work satisfaction negatively. The same departmental head as quoted above explained that the negative atmosphere and the clear division between We and They went so far as even becoming noticeable in personnel turnover.
I can of course notice that both within the blue-collar workers and white-collar workers that there has never been a bigger turnover of staff as now during the past six months to a year. And I have been a chief for a number of years.
The quoted participant elaborated on the increase in turnover and implied that the interpretation of the Agreement at Gamma reinforced traditional roles. How different assignments were appreciated and who was most important appeared as an area of conflict. According to the participant, this affected the work environment negatively and was one major contributory factor to the increase in personnel turnover.
Analysis and Discussion
Although an agreement like the one presented in this material has never before in Sweden been reached between the labor market parties, there can be reason to assume that the situation at the Mill AB and the whole of Swedish industry during this period, in one form or another (and with increasing frequency), is likely to re-occur. We will in our analysis and discussion circle around the following concepts: trust, loyalty, principle of fair-play, and rural contra urban community, and this will be done with the Swedish model as a conceptual background.
By viewing the empirical material through such a lens as our questions provide, we see some central organizational mechanisms at work that appear to be totally crucial for the different undertakings that were carried out, the affects these had, how they were interpreted and evaluated. The crisis was beyond anyone’s imagination. It was quite clear that there would be no maps to guide anyone’s way. It was a matter of trying to give isolated events a meaning in themselves, a meaningful wholeness (Weick 1995). When we don’t recognize or understand ourselves our initiative disappears, to be replaced by confusion. Here we can see there is a need for meaning in order to facilitate action (Ericsson 2010). The actors at the Mill AB in time began to act; they looked for solutions, found their bearings, and made their move. Although the participants didn’t always directly state so, a large part of their statements dealt with the necessity for dialogue and the exchange of views (Buber 1970). Foremost, dialogue allowed them to extend beyond the roles expected by the unions and the employer. Focus was laid upon the assignment and the workplace. The available resources that actors at the Mill AB could identify were their first experiences of flexible solutions (the Time Bank at the Mill AB), but possibly more identifiable was the pre-requisite that dialogue and exchanges of views occurred so naturally between the employer and the unions. The Mill AB’s ability to positively adapt was intimately linked to trust and loyalty.
Trust and Loyalty
Work and organizational studies emphasize the importance of how trust and loyalty influence relations (Bachmann and Zaheer 2006; Kramer and Tyler 1996; Sitkin and George 2005). This case shows that the trust between employer and employee was an important ingredient in creating the conditions for loyalty and for the implementation of the Agreement. Loyalty (Niehoff et al. 2001) coincides with the will to do a good job despite cut-backs in the workplace (Ericsson 2010). Through the trust and loyalty that was grounded in the company’s history, the chance was given to be able to make it through the crisis, retain staff, and in this way reduce the cost of future recruitment when the crisis had blown over (see, for instance, Matevž, Brencic, and Moerec 2011).
The starting point both for the company management and the employees was that the crisis had a foreseeable end. The belief that the crisis was going to be relatively short-lived was therefore a contributing factor to the realization of the crisis agreement at the Mill AB.
That which was most agreed upon in focus groups Alpha and Beta was that the most important thing was that jobs were saved. Entering into the Agreement was, for most of the informants, in principle an obvious choice considering the situation that was facing the Mill AB. This does not mean there wasn’t any criticism from the participants at Alpha and Beta. However the criticism was always directed towards improvement in work and work organization. Further on, there was some agreement regarding whether the management had recognized the employees’ efforts, and after that the crisis was over. The participants did not talk about monetary rewards but implied some kind of social recognition (Augustinsson, Ericsson, and Pettersson 2012). Trust and loyalty are consequences of the content of the relations, where both parties acknowledge each other and each party’s specific interest. The employees regarded adequate employment security, reasonable economic reward, and social recognition from the management as significant. The management on the other hand had the focus on secured access of core competence and that the staff should remain with the company after the crisis. Creating trust and loyalty could also mean that both parties see and acknowledge the other party’s interest as a platform in negotiations.
The shared uncertainty from both parties was about how long the crisis would last, with the consequence of improvisation in an unordered reality. However, the parties shared a sustainable vision regarding the company’s future. This case also illustrates how earlier relationships and ways of communicating within the company created a framework for local handling of unexpected events. A lot of this can be referred to as trust and loyalty. In addition to this, the Swedish model has functioned as a beacon, in particular regarding the central negotiations between IF Metall and Teknikarbetsgivarna, which have paved the way for local solutions at the Mill AB. However, trust and loyalty are fragile and always consequences of relationships and communication, and they must be nurtured through roles, relationships, and what we define as fair-play.
Role, Relations, and the Principle of Fair-play
By placing Gamma in silhouette against Alpha and Beta certain crucial differences come to light. First and foremost a problem is seen that is directly linked to role and assignment. R&D is carried out by both blue- and white-collars. This assignment isn’t reserved for only those who are deemed “real researchers.” On the other hand the crisis agreement was implemented using a traditional view of affiliation and role (white- or blue-collar worker) (Hu, Kaplan, and Dalal 2010). Thus it was natural that the management came to neglect the fact that despite the division between white- and blue-collar workers, and even when tasks were completed in close co-operation, these tasks often entailed exactly the same duties (Gittell and Douglass 2012). Their common job became fragmented so that some parts were valued more than others. The whole of this top-down-driven process (Armenakis and Bedeian 1999) affected the above-mentioned properties of trust and loyalty in a directly negative manner at Gamma, which is situated in a large town. Here we can also note that ties to the local community can make a difference, as was shown in the interviews where staff stated that in smaller towns they stood closer to the company than those in large towns (Durkheim [1893] 1984; Tönnies [1887] 2001).
All of the above reasoning is supported by the fact that several of those at Gamma either directly or indirectly pointed out the principle of fair-play (Lawrence and Lorsch 1967). Both at Alpha and Beta it was seen as obvious that both workers and office staff should be included in the Agreement. This despite the fact that the crisis agreement at the central level had been signed by the union IF Metall and not by the white-collar union organization (Unionen). At Gamma they had to pay the cost of their alternative approach, a cost Alpha and Beta couldn’t have known they would avoid (but may have guessed). What the informants at Gamma are saying, in principle, is that the employer can make many changes that will affect us negatively; we can adapt to that, as long as that applies equally to all, as long as no differentiation is made. Or rather a different kind of differentiation than what the management had been signaling before the actual changes.
Large Town Contra Rural Community
The material collected in this study shows a distinct difference between rural community and larger towns regarding the qualities of trust and loyalty (Durkheim [1893] 1984; Elias, 1994; Tönnies [1887] 2001). Informants from rural communities describe a situation where the survival of the community is a major factor in how they viewed the crisis. This goes for all levels within the local organization. People feel a greater responsibility for the bigger picture rather than primarily focusing on their own jobs. Informants describe a high degree of trust and loyalty for the organization and a confidence in the crisis agreement. This was not expressed to the same extent in the larger town, where the focus instead lay on roles and departments and not on the survival of the town. Retrospective descriptions of how everything happened feature more positiveness in the rural communities than in the larger town. In the town the picture is more negative, involving conflict and injustice, which contribute to a narrower perspective. In light of the stories from Alpha and Beta and Gamma, that is to say, two rural communities and one town, we claim that management used different strategies in the respective organizations. The organization in the town plant was seen in a different way by employees because they didn’t consider important values at the Mill AB such as justice, responsibility, trust, and loyalty as a part of the Mill AB’s history. Therefore there were differences in staff reactions.
Looking at the differences between rural communities and larger towns regarding trust and loyalty, it seems that the local culture influences concrete behavior at the different plants. Thus, unions and employers need to be aware that each plant, like in our case, is affected by the local town or community culture and how trust and loyalty are interpreted and materialized in practice.
Ending Thoughts
If we happen to forget that organizational resilience is a dynamic process (Sutcliffe and Weick 2007) there is a danger of misjudging that which happened at the Mill AB between 2008 and 2010. Firstly we might wrongly assume that things can be dealt with in the same way the next time there is a crisis, that is, that there are given templates for dealing with the next crisis (Bauman and May 2001; Stacey 2009). Secondly there is a danger that other organizations only see the result of the Mill AB’s methods and ignore the conditions that lay behind those solutions (Czarniawska 2009; Stacey 2009). However, there are many lessons to be learned from this case and from this time in the history of the Swedish labor market. The centrally signed Agreement between IF Metall and Teknikarbetsgivarna (employer representatives) shows that there are temporary solutions that do not include termination during recession and temporary labor shortage and subsequent loss of important competence. The case also portrays significant organizational mechanisms. And we believe that conclusions are to be made based on these mechanisms.
From the picture emerging at the Mill AB it appears that it isn’t a question of building models but of building relations, and it seems that given templates must be supplemented, using ad hoc solutions (Stacey 2003; Weick 1993; Buber 1970), exactly as happened in this case. We don’t mean that experiences learned during the crisis shouldn’t be exploited. On the contrary, they will of course be included in the “resource package” that Mill AB will be using when making future decisions. We have been discussing complex and elusive concepts such as trust, loyalty, fair-play, and social recognition, and another more concrete example of what the company should reflect on is the time usage in the company. Here, two problem areas that can be addressed differently in the future arose: training and coordination. The thought was that the Mill AB would exploit the times when staff were at the company but didn’t have much work to do by using them for training. This was done at some departments but not at others. Coordination between departments at Alpha and Beta was another big problem. Decisions about how free time should be organized were made locally at departments. In hindsight everyone seems to agree that this wasn’t very successful because the production process links the departments together and makes them dependent on each other. Each part had to take into account the other’s needs for things to work as a whole. The common denominator in the informants’ stories regarding these local problems seems to have been the first-line manager. The first-line manager has in most organizations a complex job to do, with several, sometimes conflicting, expectations laid upon him or her from several directions at the same time (Ericsson 2010; Richard 1997; Sims 2003). This function has been described by several researchers as that of “translator,” that is, the person interprets that which is happening and about to happen in the organization so that he or she then can pass it on, that is, talk about it (Ericsson 2010). When complexity and uncertainty increase within the organization this role becomes difficult to handle. For the managers at the Mill AB a situation arose that they had never experienced before and therefore had no ready solutions on which to rely. Here we see the same need as was met for the higher management and union representatives by means of dialogue and meetings. The difference was that these needs were not met for the managers in the first line. This failing becomes even more clear when listening to the reactions in the focus groups (in actuality the reactions regarding being given enough time to talk about common subjects). The focus groups consisted of both blue- and white-collar workers (including first-line managers) and their collective finger pointed to an unfulfilled requirement: the need to share views and together formulate a plausible story of what is happening. In this way the story about the crisis agreement at the Mill AB can contribute towards knowledge about flexible solutions and organizational resilience. There is still a need for extended research, on several similar cases as this, in order to deepen the understanding of how the story of trust and loyalty can, within the framework of flexibility, be seen as organizational resilience.
Footnotes
Declaration of Conflicting Interests
The author(s) declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.
Funding
The author(s) received no financial support for the research, authorship, and/or publication of this article.