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The Europeanization of Industrial Relations in the Service Sector

Problems and Perspectives in a Heterogeneous Field

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Stefan Rüb and Hans-Wolfgang Platzer

The service sector has not always received the attention it merits in industrial relations research when set against its enormous economic significance. One factor in this is certainly the highly diverse nature of services. Research attention has also lagged behind long-standing processes of transnationalization undertaken by service sector companies and the challenges these pose for policy and practice in the field of employment relations. This study by Stefan Rüb and Hans-Wolfgang Platzer represents a pioneering effort to remedy this gap. Through six named company case studies, Rüb and Platzer explore the scope and background for transnational employee relations conflicts and the mechanisms that have emerged to resolve and anticipate these, highlighting the complex relationships between employee representatives, management and trade unions.
The choice of case studies aims to capture a broad range of service sector employment, in terms of both working conditions and employment relations arrangements. As well as covering a number of key sectors, the choice of home countries of the selected firms also aims to capture the impact of national influences for the main industrial relations models in Europe. Overall, the study offers insights into the complexities of the Europeanization of company-level industrial relations in a dynamic field now also confronted by the convulsions unleashed by the Eurozone crisis.
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Chapter 6: Continuous development and differentiation of transnational industrial relations: The case of IKEA

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CHAPTER 6

Continuous development and differentiation of transnational industrial relations: The case of IKEA

6.1 IKEA

IKEA is a globally active large-scale retailer in the field of furniture and home accessories. In 2012, the group had 135,000 employees and a turnover of some €28 billion.

The parent company is the Dutch INGKA Holding B. V. This choice of registered head office – as with the complex structure of the group – has primarily been driven by tax considerations (Hentschel, 2013). The managerial and administrative headquarters of the group, and the location of product development, is in Älmhut, Sweden, where the first IKEA store was opened in 1958 (Kulke, 2011: 17). In addition, some central management functions are conducted in the Netherlands.

The group’s activities span the entire value-chain from designing a product range and product development, through to production, sourcing, distribution, and retail. Most production is outsourced. Factories operated directly by IKEA compete with external contract manufacturers, with the latter producing the vast bulk of the product range. There are intense cost pressures. After steadily expanding the number of suppliers to some 2,200, over the past ten years this has been cut back to just over 1,000 in fifty-two countries (IKEA, 2013: 14; Schmid and Hefter, 2013: 341). At the same time, relationships with ‘strategic partners’ have been deepened (Kulke, 2011: 17).

Only some 10 per cent of production is produced in IKEA’s own...

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