The Dominance Effect? Multinational Corporations in the Italian Quick‐Food Service Sector
| Date | 01 December 2006 |
| Published date | 01 December 2006 |
| Author | Tony Royle |
| DOI | http://doi.org/10.1111/j.1467-8543.2006.00522.x |
British Journal of Industrial Relations
44:4 December 2006 0007– 1080 pp. 757– 779
© Blackwell Publishing Ltd/London School of Economics 2006. Published by Blackwell Publishing Ltd,
9600 Garsington Road, Oxford OX4 2DQ, UK and 350 Main Street, Malden, MA 02148, USA.
Blackwell Publishing Ltd.Oxford, UKBJIRBritish Journal of Industrial Relations0007-1080Blackwell Publishing Ltd/London School of Economics 2006December 2006444757779Articles
Multinational Corporations in the Italian Quick-Food Service SectorBritish Journal of Industrial Relations
Tony Ro yle is at the Department of Management and Research Centre for Innovation and
Structural Change, J.E. Cairnes Graduate School for Business and Public Policy, National
University of Ireland, Galway, Ireland.
The Dominance Effect? Multinational
Corporations in the Italian Quick-Food
Service Sector
Ton y Royle
Abstract
This paper is based on a study of the employment practices of one Italian-owned
multinational corporation (MNC) and one US-owned MNC in the Italian
quick-food service sector and examines such issues as work organization, union-
ization, employee representation and pay and conditions. The paper focuses on
the concept of ‘dominance’ and the related convergence and divergence theses.
The findings suggest that dominance can not only be interpreted as a mode of
employment or production emanating from one country, but could also be asso-
ciated with one dominant MNC in one sector. Consequently, it is argued that
while the effect of host and home country influences may be significant factors
in cross-border employment relations practices, more attention needs to be paid
to organizational contingencies and the sectoral characteristics within which
firms operate.
1. Introduction
Recent interpretations of Kerr
et al
.’s (1973) convergence concept focused
on the idea of a market-driven ‘one best way’ model of employment and
production practices; for example, the ‘lean production’ thesis put forward
by Womack
et al
. (1990). This argument suggests that such ‘one best way’
practices — which may often be driven by multinational corporations
(MNCs) — can act as a global solvent overriding difference in national
industrial relations systems. This interpretation has long been brought into
question by a number of ‘diversity’ theses such as Maurice
et al
.’s (1986)
‘societal effects’ and more recently Whitley’s (1999) ‘business systems’,
758
British Journal of Industrial Relations
© Blackwell Publishing Ltd/London School of Economics 2006.
which argue that national regimes are likely to remain diverse because their
unique cultures and institutions present considerable obstacles for MNCs.
However, other interpretations of the convergence argument such as Muel-
ler’s (1992) ‘functional flexibility’; Frenkel’s (1994) ‘just-in-time’; and Elger
and Smith’s (1994) ‘Japanization’ suggest that the way in which practices are
imposed, adopted and/or adapted across national systems is much more
complex, leading to the argument that national systems can exhibit both
converging and diverging trends (Katz and Darbishire 2000; Locke and
Kochan 1995).
Another approach put forward by Smith (2004) and Smith and Meiskins
(1995) suggests that the cross-national activities of firms can best be under-
stood through three concepts: ‘systems’, ‘society’ and ‘dominance’ effects.
They argue that there has always been a hierarchy between economies. In
addition, those in dominant positions have frequently evolved methods of
production and work organization that come to be seen as ‘best practice’
and that often invite emulation, a process that has arguably accelerated with
the increasing integration of economic activity. Although Smith and
Meiskins’ ‘dominance’ concept put forward a number of archetypal employ-
ers such as Toyota in Japan and Ford in the USA as metaphors for a whole
class of employment practices, their concept associated ‘dominance’ with
one country, not one company. Nevertheless, it can be argued that individ-
ual MNCs can be seen as globalizing forces themselves (Sklair 2002). Mar-
ginson and Sisson (2004) suggest that MNCs are in a unique position to
exercise a pattern-making role and are often at the forefront of develop-
ments in employment and production practices. However, they also point
out that this pattern-making role should be understood within the context
of the sector within which MNCs operate because the sector can have a
powerful influence on the market structure and institutions to which firms
relate, shaping ideas about accepted and ‘best practice’. Ferner (1997) has
also argued that the ‘dominance effect’ is likely to be strong in particular
sectors, with globalized industries likely to be more subject to pressures to
converge around the practices of dominant firms. Roche (2000: 276) also
argues that societal effects are likely to reduce in force as sectoral effects
and organizational contingencies become more pronounced, leading to ‘cus-
tomized social regimes’. This raises the possibility that within certain sec-
tors one powerful MNC could have a dominance effect strongly influencing
employment or production practices of other firms across national borders,
which may also suggest a form of ‘convergence’ of employment practices
across national borders, but one that is attenuated to particular sectors and
organizational contingencies.
2. Defining the sector
This paper compares McDonald’s employment practices in Italy with what is
argued as its main Italian-owned competitor, Autogrill. One of the problems
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