chapter  9
Institutional theory and employment relations
ByMatthew M.C. Allen, Geoffrey Wood
Pages 17

This chapter focuses on three particularly influential approaches within institutional theory that link national institutions to employment relations (ER) in theoretical terms and that serve as a base for a large body of comparative work. They are 1) the Varieties of Capitalism and the business systems approaches; 2) historical institutionalism; and 3) the régulation approach and later developments and extensions, including theories of social systems of production (SSPs). We highlight their different explanations of institutional change and emphasis on, and conceptualisation of, internationalisation and the multinational firm and examine the implications of these differences for the stability and characteristics of national ER. We also argue that all three approaches tend to assume that national institutional frameworks are relatively closely coupled, meaning that change in one area, such as financial systems, may trigger adaptations in another, such as ER. We argue that this downplays not only the extent to which systems may be dynamic and internally compensatory, but also important regional, sectoral and temporal variations. The latter can help to explain continuity and change in ER, leading us to highlight the need for future research to explain 1) how firms in the same country have diverse employment relations, and yet, 2) how institutions restrict that diversity. By doing so, future research could identify how, for instance, the prevalence and forms of precarious work vary across and within countries. Finally, we explore institutional reforms in the light of the financial crisis, and how structural changes in work and ER may be linked to energy transitions.