Non-standard work arrangements and national context

European Management Journal (2013) 31, 464– 477

Adam Smith Business School journal homepage: www.elsevier.com/locate/emj

Non-standard work arrangements and national context George I. Kassinis, Eleni T. Stavrou

*

University of Cyprus, Department of Business and Public Administration, 75 Kallipoleos Avenue, 1678 Nicosia, Cyprus

KEYWORDS National context; Non-standard work arrangements; Comparative; Human resources

Summary National context is an important component of organizational settings. Employing a sample of 1893 companies operating in 15 countries we draw from institutional and cultural approaches to examine the relationship between public expenditure on national family-leave policies, employment legislation and culture on one hand and use of two bundles of non-standard work arrangements (NSWAs), namely flexibility patterns and part-time options, in firms on the other. Utilizing hierarchical linear modeling, we find that all three national level measures influence the use of NSWAs in organizations. The specific relationships vary depending on both context and type of NSWA. These results provide evidence on the diverse impact of public expenditure on family-leave policies, employment protection laws and culture when dealing with NSWA use in organizations. ª 2013 Elsevier Ltd. All rights reserved.

Introduction The world of work is transforming (Ashford, George, & Blatt, 2007): over the past two decades, the economic, business, legal, technological and socio-cultural environments have changed dramatically; firms increasingly have expanded into international markets and organizational environments have become progressively more competitive (Bjorkman, Fey, & Park, 2007). In order to respond to the changing needs of both their markets and their workforce, firms have made a strategic shift towards non-standard work arrangements (NSWAs) (Brewster, Mayrhofer, & Morley, 2004; Ryan & Kossek, 2008): organizational policies and practices that enable variations in the time and place of work or a divergence from tra-

* Corresponding author. Please note: author order is alphabetic. Tel.: +357 22893613; fax: +357 22895026. E-mail address: [email protected] (E.T. Stavrou).

ditional working days and hours (Ashford et al., 2007; Scheibl & Dex, 1998; Stavrou, 2005). The organizational context in which NSWAs are used is an important determinant of how much employees in these organizations use them to better integrate work and family responsibilities (den Dulk, Peters, & Poutsma 2012; Hill, Ferris, & Martinson, 2003; Westman, 2010). Among the NSWAs most often associated with work-family balance are flextime, telework, compressed work week and parttime options (Gottlieb, Kelloway, & Barham, 1998; Lapierre et al., 2008; Westman, 2010; Yang & Zheng, 2011). According to Lewis and Humbert (2010) such NSWAs are particularly associated with the transition to and practice of parenthood and are often designed to enable women and men to combine career and family. In addition to the organization, the state also plays a role in promoting the reconciliation between family responsibilities and employment, with particular attention focused on womenÕs employment and the encouragement of flexible

0263-2373/$ - see front matter ª 2013 Elsevier Ltd. All rights reserved. http://dx.doi.org/10.1016/j.emj.2013.04.005

Non-standard work arrangements and national context work, especially for parents (Leon, 2009; Lewis, Knijn, Martin, & Ostner, 2008). For instance, within the European Union (EU), work-family policy is increasingly regarded as an employment issue (Lewis, 2006): while childcare may promote womenÕs participation in the labor market, long home leave of mothers may not. In turn, Lewis et al. (2008) discuss trends, at least at the EU level, of promoting flexible working hours, which often entail reduced hours, but which may nevertheless increase labor force participation. Despite their promotion, such practices appear to be used unevenly among organizational contexts throughout the globe (Kalleberg, 2001; Lewis & den Dulk, 2008). Thus, here while controlling for organizational-level factors we investigate how national-level factors may explain such differences within firms operating across different national contexts. To do so, we draw from institutional theory (DiMaggio & Powell, 1983; Oliver, 1991), Lewis and SmithsonÕs (2001) work on the notion of ‘‘entitlement,’’ and the cultural perspective (Gupta, Hanges, & Dorfman, 2002; Hofstede, 2001), to investigate how public spending on familyleave policies, employment protection legislation and culture influence the use of NSWAs in firms. A number of researchers proposed that institutions and culture play a significant role in the use of NSWAs (e.g., Gunnigle, Turner, & Morley, 1998; Peters, Bleijenbergh, & Oldenkamp, 2009). For example, Kalleberg (2001) notes that institutional and cultural variations in organizational flexibility are highly likely to reveal differences in NSWA practice. Similarly, Lewis and den Dulk (2008) explain that aspects of wider social contexts, including institutions and culture, are significant to the use of flexibility in organizations. In this respect, den Dulk et al. (2012, p. 2785) found support for the institutional argument that public provisions help create a normative climate and a sense of ‘‘entitlement’’ among employees towards higher utilization of work-family support in organizations. Goodstein (1994) and Ingram and Simons (1995) were among the first to study the relationship between institutional perspectives on the one hand and organizational level work-family practices on the other. Almost a decade later, Arthur (2003) and Bardoel (2003) conducted similar studies. All these authors, using organizational level proxies for their institutional variables, concluded that the combination of managerial and institutional factors offers the most appropriate means of looking at the provision of work-family practices at the organizational level. In a similar fashion, den Dulk et al. (2012), studying the institutional context through welfare state regime dummies, found that both the institutional environments of employers and organizational factors potentially affect utilization of work-family arrangements at the organizational level. Our work extends the above studies by bringing in new and enriched national context factors while controlling for firm-level factors. First, we introduce two national-level institutional measures, public policy spending on familyleave and employment protection legislation. Second, we introduce a national proxy for culture as complementary to the institutional approach. Researchers propose that a perspective combining several context-related national level factors rather than a single one is more appropriate for the study of organizational level phenomena (Eichhorst, Escudero, Marx, & Tobin, 2010). Employing a sample of 1893

465 companies operating in 15 countries, we propose that the use of flexibility (flextime, telework and compressed workweek) and part time arrangements (part-time and job sharing) in firms varies by context.

Theoretical background Non-standard work arrangements (NSWAs) NSWAs are increasingly a component of firm responses to changing market and workforce demands (Ryan & Kossek, 2008). Greenberg and Landry (2011) explain that workers seek, and often demand, new work arrangements that support their non-work lives. Illustrating this point, a poll of 4000 workers in the UK showed that 33% would prefer to work flexibly rather than receive an extra £1000 per year; and, 46% chose flexible working as the most desirable benefit that their next job could offer (Musson & Tietze, 2009). Furthermore, approximately 86% of employees surveyed by the Families and Work Institute reported that having workplace flexibility was very important to their ability to manage work-life demands, while only half felt they had the workplace flexibility necessary to do so (Greenberg & Landry, 2011). Agreeing with the above, Lapierre et al. (2008) explain that a family supportive work environment should include formal family-friendly benefits, such as those that provide employees with more scheduling flexibility. Such flexibility arrangements center around, but are not limited to, compressed work week, telework and flextime (Lapierre et al., 2008; Westman, 2010). According to Westman (2010) and Baltes, Briggs, Huff, Wright, and Neuman (1999), these flexibility arrangements are perceived to have positive outcomes for both organizations and employees: they may help reduce absenteeism and turnover or costs, increase productivity and improve performance for a firm (Beauregard & Henry, 2009); or they may enhance employeesÕ sense of control over their work hours, enable them to meet responsibilities at home (i.e., during the noncore hours) and help them avoid traffic, thereby reducing costs. On the downside, such arrangements may have negative consequences on employee career mobility or pay advancement, possibly due to reduced networking opportunities (Eaton, 2003; Linehan & Scullion, 2008). Another set of NSWAs often associated with work-family balance are part-time options (Lapierre et al., 2008; Westman, 2010). According to Westman (2010) and Gottlieb et al. (1998), these can be a way of achieving balance between the demands of the job and those of family by providing flexibility and limits in scheduling time at work. They are often coupled with higher productivity and job satisfaction and lower stress and burnout, resulting in improved organizational outcomes. At the same time, part-time options may also create communication and collaboration difficulties in the scheduling and execution of work (Westman, 2010). Gregory and Connolly (2008) describe part-time options as a predominantly female phenomenon where women, especially after the birth of their first child, reduce their hours to part-time. Differently, the working hours of fathers remain unchanged or even increase. In turn, a number of researchers question whether part-time arrangements are actually the result of choice (Buddelmeyer, Mourre & Ward, 2008; Kalleberg, 2001); some go as far as to state that the

466 policy environment forces mothers to choose part-time over full-time (Gregory & Connolly, 2008). Gregory and Connolly (2008) explain that a switch from full- to part-time work reflects a growing polarization of part-time jobs in low-wage occupations. Whatever the case may be, these NSWAs are not applied in a vacuum but within an organizational as well as a larger institutional and cultural context; a national context largely ignored in extant research. Extant research related to NSWAs has focused on employee attitudes toward these arrangements and various employee and organizational outcomes (Greenberg & Landry, 2011; Shockley & Allen, 2010; Stavrou, 2005). While such studies offer valuable insights on the implications of NSWAs for individuals and organizations, they do not help us fully understand the antecedents of NSWA utilization in organizations. Few are the studies examining national context (den Dulk et al., 2012; Lewis & den Dulk, 2008); even among those, the majority have focused on single countries (i.e., Idiagbon-Oke & Oke, 2011; Michie & Sheehan-Quinn, 2001; Skinner, 2011; ten Brummelhuis, Haar, & van der Lippe, 2010). The very few studies using a multicountry context, while very intuitive and useful, are mostly descriptive and exploratory (Lewis & den Dulk, 2008; Lewis et al., 2008; Masuda et al., 2011; Tregaskis & Brewster, 2006) or have been limited in the national level variables used (Bardoel, 2003; den Dulk et al., 2012; Ingram & Simons, 1995). We enrich the explanatory power of these studies in two ways: first, we utilize two national-level institutional measures, namely public spending on family-leave policies and employment legislation; second, we add a national-level proxy for culture as a complementary mechanism to the institutional context.

NSWAs and the institutional environment As DiMaggio and Powell (1983) argued, organizations adopt various practices to conform to their institutional environment and to gain resources, including legitimacy, reputation and talented employees. Baron (1995) suggests that a high degree of interdependence exists between a firmÕs competitive environment and national context. Griffin and Dunn (2004) report that organizations tend to develop similar structures and procedures in response to similar institutional pressures: for example, those subject to the same laws, policies and regulations adopt similar ways. As den Dulk et al. (2012) report, firms in countries with the highest levels of national support rely almost entirely on that support and also exhibit a high utilization of NSWAs, due to normative pressures that promote social expectations and a sense of entitlement regarding flexible work arrangements. On the contrary, firms in countries with low levels of national support do not seem to do so. Following den Dulk et al. (2012), we view the extent of use of the aforementioned NSWAs in a firm as a normative response within the firmÕs environment to institutional pressures emanating from the national environment. We argue that the NSWAs used within a firm represent how the firmÕs environment responds to a given institutional context in a country (OECD, 2001). We explain below in what way we propose that use of NSWAs varies with institutional context.

G.I. Kassinis, E.T. Stavrou

NSWAs and Public Policy Expenditure Public spending associated with family-leave policies provides employees with incentives to leave the labor force during child rearing but to also maintain ties with their employer. Thus, it facilitates employeesÕ return to work (Kahn, 2010; Schott, 2012). As Wall, Leita ˜o and Ramos (2010) note, the link between family policies and employment policies is inevitable and increasingly important. Such mandates have a complicated set of potential effects on parentsÕ labor market outcomes and, under a traditional division of labor in the family, these impacts are disproportionately felt by women. On the one hand, having an entitlement to oneÕs job may raise incentives to return to work after childbearing; however, the availability of paid leave and/or a longer duration of potential leave may induce some, especially women, to stay out of work longer than otherwise (Hegewisch & Gornick, 2011). Furthermore, where women tend to take up their leave in one block, men are more likely to take their leave in smaller installments, such as combining it with part-time employment. In turn, these employee choices have an effect on organizational practices: depending on the kind of workforce in an organization, specific NSWAs will be more popular than others (Hegewisch & Gornick, 2011). In a similar fashion, given the public policy environment of a firm and the level of public spending on family-leave in a country, the use of NSWAs at the firm level will be adjusted accordingly. Public spending on family-leave policies aims towards the reconciliation of work and family responsibilities and organizations like the OECD view this kind of spending as a way to promote societal goals such as family wellbeing, increased employment, secure sources of income that generate domestic spending, and gender equity (Widener, 2007). Thus, it is widely acknowledged that work-family balance is a pressing social issue across developed countries today (Witt & Carlson, 2006) and relevant policies are very much in development and expanding, even though unevenly across countries (Gauthier, 2002). For example, Nordic countries and France have generous mandated family leaves and short paid working hours compared to international standards (Craig, Mullan, & Blaxland, 2010). Overall, continental European countries mandate relatively high levels of paid family-leave (particularly countries such as Norway, Sweden and Germany) although CanadaÕs is higher than several European country levels (Kahn, 2010). Also, in Nordic countries, gender equity in both paid and unpaid work is an explicit policy goal. This type of institutional framework, with generous family-leave policies for both women and men, facilitates work-family reconciliation. Differently, in much of the Anglo world (i.e., in the USA, the UK and Australia), care is considered a private family responsibility, so state monetary support to reconcile work and family is limited (Craig et al., 2010; Kahn, 2010). We propose that in more supportive family-leave policy environments, where public spending on such leave is higher, the use of flexibility patterns such as teleworking, compressed work week and flextime (Hall & Atkinson, 2006) in organizations would increase. According to de Dulk et al. (2012), such policies may help promote workplace flexibility through a sense of entitlement among employees in their effort to reconcile work with family while working full-time.

Non-standard work arrangements and national context In this context, and in line with institutional theory (DiMaggio & Powell, 1983), organizations adapt to societal values, responding to both normative pressures from cultural expectations and mimetic pressures from the desire to look like other organizations. Such pressures, like the desire to be an ‘‘employer of choice’’ (Hornung, Rousseau, & Glaser, 2008) have increased expectations that organizations have some responsibility towards their employeesÕ quality of life (Ashford et al., 2007). In addition, Milner (2010) presents the combination of these policies with flexibility patterns as Ôwin–winÕ measures: good for children, parents, and business. Finally, Schott (2012) notes that (paid) leave legislation (along with employment protection) may help facilitate higher levels of (full-time) labor force participation, especially among women with small children, through more flexibility patterns. Additionally, one could argue that public policies on family leave signal to employees that reconciling work and family is relevant and important, something that increases their sense of entitlement for part-time work as well. At the same time, such policies make it possible for them to return to full-time employment and keep their career opportunities. Thus, we propose that the use of part-time options would decrease (Castles, 2003) in more supportive family-leave policy environments. To illustrate, Jaumotte (2002), using aggregate panel data on 17 OECD countries found that paid parental leave promotes full-time rather than part-time work. Also, Castles (2003, p. 219) distinctively notes that ‘‘If state schemes of parental leave are unavailable, it will be easier to juggle work and family where . . . there are arrangements for part-time working.’’ In addition, Tranby (2010) reports that maternity leave tends to increase the chance of women entering full-time work. Finally, Widener (2007) showed that countries with the most generous family-friendly policies also boast the highest full-time employment rates for both women and men. Therefore: Hypothesis 1. In countries where public spending on family-leave policies is higher, the use of flexibility patterns will be higher and the use of part-time options will be lower in firms.

NSWAs and employment protection legislation In addition to public spending, Kelly and Kalev (2006) explain that the legal environment has implications for NSWA use in organizations with different employment laws encouraging or discouraging the diffusion of such practices. Furthermore, Lee (1996) notes that changes in reliance on NSWAs are partly due to labor market regulation. More specifically, laws and regulations on employee rights and protection are an important component of the institutional environment in relation to NSWA use. Kalleberg (2001) emphasizes the importance of explicitly considering the role of laws and regulations covering employment protection when looking at flexibility across institutional contexts. Similar to public spending, the impact of employment protection varies from country to country (Kahn, 2010). Overall, Nordic and central European countries have far more extensive protections on jobs than Anglo ones. In most Anglo countries firms enjoy the most freedom in firing workers from regular jobs and in using arrangements that fit firm

467 needs, without much consideration for employees. The US stands out as having the least regulated labor market with respect to employment protection (Kahn, 2010). Employment protection laws include provisions related to the flexibility of working conditions, alternatives to the standard employment contract, and the termination of employment (Botero, Djankov, La Porta, Lopez-de-Silanes, & Shleifer, 2004; OECD, 2004b). Such laws define the status of part-time workers compared to the full-time ones, the extent and type of fixed-term contracts, the protection of employees from being ‘‘forced’’ to work unsocial hours, and the conditions under which employees may be laid off. According to Kahn (2010), employment protection has both advantages and disadvantages: on the one hand it may lead to fewer layoffs while on the other it may discourage job creation. In fact, Eichhorst et al. (2010) warn that excessive employment protection may reduce both the ability of firms to quickly respond to technological change and consumer demand as well as the capacity of national labor markets to adapt to sudden economic shocks. Researchers argue that in the past fifteen years employment protection has been declining and suggest that countries with strong employment protection for the core labor force will see a reduction in Ôatypical jobsÕ. They also report that in countries with relatively strict employment protection, when in need for workforce restructuring, firms relied more on internal flexibility (i.e., via working hours) rather than layoffs (Eichhorst et al., 2010). Along similar lines, Schott (2012) explains that when their job is protected by federal legislation, employees can negotiate more favorable terms with their employer (i.e., when they return to work after childbirth), such as flexibility or part-time arrangements. Finally, Akan (2010) describes significant trends in Europe towards such flexible forms of employment especially in boosting the participation of women, the young and the elderly in the labor market in co-ordination with employment protection policies. Given the above, we propose that institutional pressures, in the form of stronger employment protection laws will be positively related to both flexibility arrangements and part-time. Thus: Hypothesis 2. In countries where the level of employment protection is higher, the use of both flexibility patterns and part-time arrangements in firms will be higher too.

NSWAs and the cultural environment In addition to institutional factors, we propose that culture should be taken into account when studying NSWA use in firms across national contexts since, arguably, shared meaning results from cultural values, beliefs and assumptions (Hofstede, 2001; House, Hanges, Javidan, Dorfman, & Gupta, 2004). To illustrate, Peters et al. (2009) showed that different cultural values were related to differences in telework adoption among line managers. In turn, we adopt Fey, Morgulis-Yakushev and BjorkmanÕs (2009) argument that both cultural and institutional angles are helpful in understanding societal differences and similarities in HRM practices, and more specifically NSWAs. According to Kelly and Kalev (2006), legalization provides an emerging cultural model that may be applied to new NSWAs as they arise: laws

468 and regulations are cultural resources for managers to utilize in understanding and administering NSWAs. Lewis and den Dulk (2008) note that cultural values feed into and/or reflect social policy. Further, organizations are legitimate to the extent that their activities are congruent with the goals of the societal system in which they operate (Woodward, Edwards, & Birkin, 1996). Researchers have used various dimensions of culture to study human behavior (e.g., Hofstede, 2001; House et al., 2004; Ronen & Shenkar, 1985; Whitley, 1999). Furthermore, studies demonstrate that HRM practices considered appropriate in one cultural context may be less appropriate in another (Ferris, Hochwarter, Buckley, Harrell-Cook, & Frink, 1999; Francesconi & Garcia-Serrano, 2004). Schuler and Rogovsky (1998) emphasize that national culture plays a crucial role in explaining both cross-national HRM differences and organizational HRM practices. Lastly, Sparrow and Hiltrop (1998) explain that HRM researchers need to have considerable historical and cultural insights to understand the processes, philosophies, and problems associated with national models of HRM. Cross-cultural studies on the subject of work-family reconciliation have begun to address the impact of national cultural values, placing emphasis on beliefs on the role of women (Aycan, 2008). According to Desai (2010, p. 44), cultural expectations on the role of women in many societies continue to create constraints on their access to employment, concentration in low-paying jobs, gender-segregated labor markets, pay gaps, and discrimination in the workplace. To this respect, the level of power women have in a society becomes relevant. In their work, Lyness and Kropf (2005) found that greater empowerment of women in a society was positively related to the availability of flexibility patterns, highlighting empowerment as an important national characteristic for future cross-country investigations of these issues. Along similar lines, Lyness and Judiesch (2008) report on research in 14 countries which shows that in countries where women are empowered, employees and firms value flexibility in work hours more than those in their less-egalitarian ones. Similarly, Mutari and Figart (2001, p. 56) suggest that ‘‘policies to shorten the work week and challenge the norms of full-time employment . . . offer the best prospects for gender equity.’’ Finally, Rao (2009) explains that flexible work options such as compressed work week, part-time jobs and individualized work schedules are more prevalent in MNCs whose origin is from higher gender-egalitarian cultures. Therefore: Hypothesis 3. The higher the empowerment of women in a society, the higher the use of both part-time arrangements and flexibility patterns (flextime telework and compressed work week) in firms. In summary, given the variability in external environments, the use of NSWAs in firms may not be uniform across such environments (Kalleberg, 2001). Therefore, the consideration of factors that are unique to specific contexts becomes important when studying organizational practices such as NSWAs. Here, then, we explore the extent to which such environments affect, at least in part, the use of NSWA bundles in firms.

G.I. Kassinis, E.T. Stavrou

Methods Sample Our sample of organizations was drawn from the Cranet comparative survey of human resource management (HRM). Since 1989, Cranet, a research network of business school academics, gathers and analyzes primary data on HRM practices across the world (for details see Brewster et al., 2004; Parry, Stavrou & Morley, 2011). We use firm level data from the 2008–2010 survey round from firms with at least 100 employees representing all industries based on the NACE (Nomenclature ge ´ne ´rale des activitie ´s e ´conomiques dans les Communaute ´s europe ´ennes) system of industrial classification. This database includes 6258 organizations from 32 countries around the globe from both the wider public and private sectors. The Cranet questionnaire has been developed using an iterative process based on past literature on HRM policies and practices and discussions of the Cranet research team. It was first developed in English and then translated into the language of each country by a local HRM expert. The questionnaire was then translated back into English by a different HRM expert in each country to ensure that the meaning of each question remained the same. Any differences found after the back translation were changed after discussion between the research team and the partner in each country, in order to ensure that the questions in each survey retained their intended meaning. It was first pilot tested locally in each country (Cushner & Brislin, 1996) and shared with local HRM executives to ensure that the meaning was accurate. The final survey was subsequently conducted by the Cranet representative in each country. The unit of analysis was the organization and the respondent was the highest-ranking corporate officer in charge of HRM. Since a comprehensive international database with all organizations was not available, each participating institution was responsible for developing a mailing list of organizational contacts in their country. The mailing lists were drawn from commercial, governmental or professional association databases. The sampling frames were designed to produce stratified samples (den Dulk et al., 2012) or address the entire population of organizations in a country. Potential respondents were contacted by letter or email and subsequently sent a copy of the questionnaire. To encourage response, non-respondents were later sent a reminder. The only exception was Greece where face-to-face interviews were used to complete the questionnaire. However, as den Dulk et al. (2012) note, this did not create problems of measurement equivalence, especially given the nature of questions posed, deliberately designed to rely on factual information. Furthermore, to discourage ‘‘guessing,’’ respondents were advised to leave blank any questions for which they did not know the answer. For this study we limit ourselves to firms from a subset of countries from the Cranet study. To capture the diversity of national environments, we chose countries on the basis of GLOBE (House et al., 2004) taking into account the literature on welfare states as well (Arts & Gelissen, 2002). The idea was to capture as many different regimes as possible in order to have a wide spectrum of welfare states. To collect our

Non-standard work arrangements and national context national public policy spending data, we used OECDÕs Labor Markets and Social Issues database. Finally, we obtained our employment law data from Botero et al. (2004). Taking into consideration time-lag issues (Wright & Haggerty, 2005), we selected a minimum three-year lag to separate our national level measures and our organizational outcome variables, providing ample time for any such effects to appear. After combining the above datasets, our final sample included 1893 firms with full data on all variables. Sample firms came from the following countries: Australia, Austria, Denmark, Finland, France, Germany, Greece, Ireland, Israel, The Netherlands, Slovenia, Sweden, Switzerland, the United Kingdom and the USA. Austria, Germany, Switzerland and the Netherlands represent GLOBEÕs Germanic cluster; Australia, Ireland, the UK and the USA represent GLOBEÕs Anglo cluster; France and Israel represent GLOBEÕs Latin cluster; Greece and Slovenia represent GLOBEÕs Eastern European cluster; Denmark, Finland and Sweden represent GLOBEÕs Nordic cluster (House et al., 2004). The average response rate for these countries varied between 16% and 22%. We compared answers from the first 10% of respondents to return the questionnaire to those of the last 10% of respondents (who are assumed to be most like non-respondents) to questions used in this study and found no evidence of systematic response bias. Since our data involved a nested structure of 1893 firms in 15 countries, we select a Hierarchical Linear Modeling (HLM) approach to analyze our data and test our hypotheses. Unlike regular OLS regression, that assumes independence of firms within a country, HLM accounts for the fact that firms within a country may be more similar to one another than firms in other countries, taking into account differences in industry type (Woltman, Feldstain, MacKay, & Rocchi, 2012).

Measures Dependent variables: Use of non-standard work arrangement (NSWA) bundles We identified the NSWA bundles used by our sample firms. We chose ‘‘use’’ rather than ‘‘policy’’ because organizations may claim the adoption of flextime without actually implementing it; thus adoption needs to be separated from implementation (Yang & Zheng, 2011). The NSWAs (measured on a scale from 0 = not used, 1 = 6 5% of the workforce, 2 = 6–10% of the workforce, 3 = 11–20% of the workforce, 4 = 21–50% of the workforce to 5 = > 50% of the workforce) that we extracted and their definitions are: (a) part-time work: employees work less than a full week on a regular basis; (b) flextime: employees work full-time but choose their start and finish times within limits set by management; (c) job sharing: two employees share the responsibilities of one full-time position; (d) compressed work week: employees work fewer days than standard by extending the length of each working day; and (e) tele-working: employees work away from the office for some/all of working week, maintaining an electronic presence in the office. Stavrou (2005) notes that organizations rarely adopt NSWAs individually, but usually adopt groups or bundles of interrelated practices. MacDuffie (1995) and Perry-Smith

469 and Blum (2000) proposed ‘‘bundles’’ of, rather than individual, practices as the most appropriate unit of analysis. Along the same lines, Michie and Sheehan-Quinn (2001, p. 287) noted that HRM practices are more likely to contribute to competitive success where they are introduced as a comprehensive package, or ÔbundleÕ of practices. Therefore, we conducted principal component analysis (PCA) to identify the interrelationships among items designed to measure the same construct (MacDuffie, 1995), reduce the number of NSWAs, and group them into bundles (Stavrou, 2005). We used varimax rotations and set the minimum eigenvalue to 1; the resulting scores were uncorrelated with a mean of 0 and a standard deviation of 1. Consistent with Huselid, Jackson, and Schuler (1997) and due to our large sample size (Tabachnick & Fidell, 2000) the minimum correlation coefficient set for an item to be classified into a factor was 0.5. Two principal components (PCs) or ‘‘bundles’’ were extracted (see Table 1) and used in all subsequent analyses as our dependent variables: we named them flexibility patterns (flextime, telework and compressed work week) and part-time options (part-time work and job sharing). Independent variables Public expenditure on family-leave policies. We proxy for the level of public expenditure on national family-leave policies using one composite variable, following Castles (2003) who argues that integrated packages of policy measures have an impact above and beyond their separate components. We use public spending data from OECDÕs Social Expenditure Database (SOCX) for all countries in our sample. According to OECD, this database was developed ‘‘. . . to serve a growing need for indicators of social policy’’ and includes ‘‘. . . reliable and internationally comparable statistics on public social expenditure at programme level. SOCX provides a unique tool for monitoring trends in aggregate social expenditure and analyzing changes in its composition’’ (www.oecd.org/els/social/expenditure). Public spending in SOCX covers all levels of government (central, state, and local). We extracted data from the ‘‘Detailed Data by Social Programme’’ Dataset for the period 2003–2007. For each country, we extracted public spending (as a percent of GDP) data on policies for maternity and parental leave, which constituted a single spending variable and is grouped under the family cash benefits sub-category. Annual values ranged from 0 to 1. We calculated the average leave between the years 2003 and 2007. The higher the score, the higher the public expenditure was (see Table 5). Employment law. We proxy for the legal framework relevant to NSWAs in a country using Botero et al.Õs (2004) Employment Laws Index available through their 2004 publication. Index values are normalized and range from 0 to 1, with higher values representing more extensive legal protection of workers (see Table 5). More specifically, the index is calculated as the average of four variables: alternative employment contracts, cost of increasing hours worked, cost of firing workers and dismissal procedures. Alternative employment contracts involve the existence and cost of alternatives to the standard employment contract (i.e. the mandatory benefits and cost of terminating

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G.I. Kassinis, E.T. Stavrou

Table 1 Factor arrangements.a

analysis

of

non-standard

work

Principal components Flexibility Patterns 1

Items Proportion Proportion Proportion Proportion Proportion

on on on on on

flexi-time teleworking compressed work week part time work job sharing

Part-time Options 2

0.68 0.79 0.63 0.72 0.69

a The extraction method used was principal component analysis with varimax rotation. The cut-off point was 0.50. Total variance explained was 53.18%.

part-time versus full-time workers, the normalized maximum duration of fixed-term contracts, etc.). The cost of increasing hours worked is a measure of how strictly employment laws protect workers from being ‘‘forced’’ to work more. The cost of increasing hours worked (including maximum allowed overtime) is computed as the ratio of the final wage bill to the initial one. The cost of firing workers involves the notice period, severance pay, and any mandatory penalties established by law or mandatory collective agreements for a worker given their tenure with the firm. Finally, dismissal procedures involve worker protection granted by law or mandatory collective agreements against dismissal.1 Gender empowerment. As a proxy for culture we use the Gender Empowerment Measure (GEM), which is a composite index developed to measure gender (in)equality in a given society based on womenÕs relative income as well as their access and participation in high-paying and powerful positions. In short, GEM seeks to measure relative female representation in economic and political power and is frequently used in cross-country comparative studies to represent cultural norms on gender egalitarianism or equality (Desai, 2010). GEMÕs values range between 0 and 1; the higher the value, the more gender equality is assumed to exist between men and women in a country, at least in regards to the aspects covered by GEM. Controls We considered a number of additional factors in order to reach more accurate conclusions as to how NSWAs are connected to their antecedents and minimize the possibility of spurious results. We discuss each control variable and the reasons we chose to include it below. Trade unions for collective bargaining. Whether organizations recognize trade unions or not may play a key role in developing organization-level policies and programs to im1

In addition to their paper, Botero et al. (2004) refer the interested reader to http://iicg.som.yale.edu for a more detailed description of the indices and variables they include.

prove work-family balance (Ferner, Almond, & Colling, 2005). Through collective bargaining, unions may promote provisions that support NSWAs or not (Todd, 2004). However, union roles and agendas on NSWAs may not be the same in all organizations or countries. For example, European trade unions have been actively involved in promoting the development of legislation for part-time equity and other working time provisions, while many US unions retain a high level of anxiety about part-time jobs and seek to eliminate rather than to upgrade them (Williams, 2000). In addition, union strength varies among nations and organizations. In the US, for example, the union movement has been steadily weakening, which may influence the unionsÕ power in relation to NSWA use (Williams, 2000). Therefore, controlling for whether our sample firms recognize unions for collective bargaining becomes important to the NSWA/context relationship. We do so with a binary variable: recognition of ‘‘trade unions for collective bargaining’’ (0 = no, 1 = yes). Markets. Apart from the role of unions, Mayne, Tregaskis, and Brewster (1996) report that high-flexibility organizations tend to be more global than local. At the same time, Sefertzi (1996) notes that strategic choices made by organizations on flexibility are influenced more by local socioeconomic factors than by global models, which apply to all the operations of an organization. According to Ferner et al. (2005), the decision of multinationals to adjust to local practices rather than more ‘‘universal’’ ones will depend greatly on the type of practice and the local environment. Given this line of argumentation, the local versus global orientation of a firm becomes an important control for our study: we want to see the NSWA/context relationship over and above firm market orientation (global/international = 0 and local/national = 1). Industry. Differences between service and manufacturing industries may be important since certain NSWAs are more common in some sectors than others. For example, in the service sectors of many countries, the share of part-time workers is high (OECD, 2004a) while certain NSWAs cannot be avoided irrespective of industry. Moreover, Mayne et al. (1996) note that flexibility patterns are concentrated in service- rather than production-oriented firms. Others have found no significant differences in NSWA use across industries in the EU (Stavrou, 2005). Because the exact role of industrial sector in relation to NSWAs is not clear in the literature, it is important to control for it in order to examine the relationship between national context and NSWAs over and above any industry effects. In this study we broadly control for industry by separating industry into manufacturing, services and other. Female participation. Finally, literature presents NSWAs as a concept very closely linked with female participation in the labor force (den Dulk, et al., 2010; Osterman, 1995). A number of researchers (see den Dulk, et al. 2010; Goodstein, 1994; Ingram & Simons, 1995 for example), found that organizational resistance to pressures to adopt family friendly policies varied with the percent of women in the organization. In fact, women appear to appreciate the value of certain NSWAs, actively seek employment in firms

1 0.20*** 1 0.46*** 0.44*** 1 0.10*** 0.06* 0.05*

Results

1 0.10*** 0.15*** 0.00 0.09** 0.05*

6

1 0.28*** 0.11*** 0.37*** 0.09** 0.11*** 0.02

5

1 0.83** 0.29*** 0.20*** 0.38*** 0.04 0.14*** 0.03

4 1 0.19*** 0.23*** 0.10*** 0.03 0.36*** 0.17*** 0.07** 0.12***

3 1 0.00 0.06* 0.02 0.10*** 0.06* 0.06* 0.20*** 0.02 0.41***

2

Mean percent of women employees = 36%. p < 0.05. ** p < 0.01. *** p < 0.001.

a

*

1. 2. 3. 4. 5. 6. 7. 8. 9. 10.

Flexibility patterns (pc) Part-time options (pc) Manufacturing Services Markets Trade unions (TU) Female% (LOG)a Public expenditure Employment law index Gender empowerment

0 0 0.46 0.44 0.50 0.77 3.60 0.66 0.50 0.78

1 1 0.50 0.50 0.50 0.42 2.26 0.27 0.22 0.10

1.65 1.82 0 0 0 0 0 0.00 0.16 0.61

4.97 5.51 1 1 1 1 10 0.66 0.74 0.91

1 Max Min SD Mean

Descriptives and correlations. Table 2

471 offering such NSWAs, and cite these NSWAs as a reason for loyalty to employers (Gregory & Connolly, 2008; Lewis et al., 2008). Therefore, we control for the percentage of women employed in an organization (log scale, standardized).

1 0.13*** 0.02 0.42*** 0.11***

9 8 7

Non-standard work arrangements and national context

First we sought to obtain an overview of variable characteristics and bivariate relationships. As Table 2 shows, public expenditure on family-leave policies was positively related to flexibility patterns and negatively to part-time options; the employment law index was positively related to only part-time options; and gender empowerment was positively related to both flexibility patterns and part-time options. Considering some relatively high correlations in this table, we checked for potential problems with multicollinearity by examining the variance inflation factors (VIFs). We concluded that multicollinearity was not a major concern since all VIFs were lower than five (Berenson, Levine, & Krehbiel, 2012). Further, Mason and Perreault (1991) report that multicollinearity becomes a serious issue at absolute values of larger than 0.8 or 0.9. Subsequently, we tested our hypotheses in two steps. In each step, the covariance parameters for the random effects are statistically significant (p < 0.10), suggesting the contribution of these effects warrants their keeping in the model. First, we conducted the analyses with each independent variable separately. As Table 3 shows, after controlling for a variety of relevant factors, and differently from both hypotheses, flexibility patterns were not significantly related to public expenditure on family-leave policies (H1) or the employment law index (H2). Public expenditure on family-leave policies was negatively related to part-time options as hypothesized in H1 while, differently from H2 the employment law index was not significantly related to such options. Flexibility patterns was positively related to GEM, as hypothesized in H3 but not related to part-time options. Second, we included the three independent variables together. As shown in Table 4, flexibility patterns were not significantly related to public expenditure on family-leave policies (differently from H1) or the employment law index (differently from H2) but were positively related to GEM (as hypothesized in H3). Differently, part-time options were negatively related to public expenditure on family-leave policies (as hypothesized in H1), and positively to both the employment law index (as hypothesized in H2) and GEM (as hypothesized in H3). In order to better understand the aforementioned results, we calculated descriptive statistics for each national level measure and each NSWA ‘‘bundle’’ by country. Table 5 shows that the Nordic countries have the highest public spending. The highest use of flexibility patterns is in Germany and Denmark while the highest use of part-time options is in the Netherlands and Switzerland. The Nordic countries rank among the highest, along with Australia and the Netherlands, in gender empowerment. Finland and Sweden also rank among the highest in employment legislation along with the Netherlands, Germany, France and Slovenia. The USA, the Netherlands and Switzerland rank lowest in public expenditure while

472

Table 3

HLM analyses by country between NSWA bundles and each independent variable separately including the controls. Flexibility patterns

Fixed effects Intercept Manufacturing Service Markets TUs for collective bargaining Female participation (LOG) Public expenditure Employment law index Gender empowerment measure Random effects r2e r2 Information Criteria ( 2 Restricted Log Likelihood)

0.47* 0.48*** 0.27 0.13* 0.05 0.01 0.07

0.85*** 0.10** 3083.49

Part-time options

(0.19) (0.13) (0.18) (0.06) (0.08) (0.03) (0.12)

(0.04) (0.03)

0.35* 0.02 0.28* 0.09  0.07 0.31*** 0.25**

0.61*** 0.04** 2703.87

(0.14) (0.11) (0.14) (0.05) (0.07) (0.03) (0.07)

(0.03) (0.02)

Flexibility patterns

Part-time options

0.55** 0.58*** 0.33  0.14* 0.04 0.01

(0.17) (0.11) (0.17) (0.06) (0.08) (0.03)

0.30* 0.01 0.25  0.09  0.04 0.30***

(0.14) (0.09) (0.14) (0.05) (0.06) (0.03)

0.04

(0.12)

0.09

(0.10)

0.85*** 0.09**

(0.03) (0.03)

3418.37

0.59*** 0.06** 2956.94

(0.02) (0.02)

Flexibility patterns

Part-time options

0.63*** 0.57*** 0.33* 0.14* 0.04 0.01

(0.16) (0.11) (0.15) (0.06) (0.08) (0.03)

0.27  0.01 0.25  0.09  0.05 0.30***

(0.14) (0.09) (0.14) (0.05) (0.06) (0.03)

0.39**

(0.12)

0.19

(0.12)

0.85*** 0.06**

(0.03) (0.02)

0.59*** 0.06**

(0.02) (0.02)

3409.54

2954.79

Level 1: NSWA bundle = b0 + b1 · Manufacturing + b2 · Service + b3 · Markets + b4 · TUs + b5 · Female participation + e. Level 2: b0 = c00 + c01 (industryj) + c0j where j = 1. . .. . . 15 bk = ck0 + ck1 (industryj) + ckj where k = 1. . .. . . 6.   p < 0.10. * p < 0.05. ** p < 0.01. *** p < 0.001.

G.I. Kassinis, E.T. Stavrou

Non-standard work arrangements and national context Table 4

473

HLM Analyses by Country between NSWA bundles and National Measures in Pairs including Controls. Flexibility patterns

Part-time options

Fixed effects Intercept Manufacturing Service Markets TUs for collective bargaining Female participation (LOG) Public expenditure Employment law index Gender empowerment index

0.56** 0.47*** 0.27 0.13* 0.04 0.01 0.01 0.02 0.39**

(0.18) (0.13) (0.18) (0.06) (0.08) (0.03) (0.11) (0.14) (0.13)

0.21  0.01 0.21* 0.09  0.05 0.33*** 0.36** 0.22* 0.19*

(0.13) (0.10) (0.10) (0.05) (0.07) (0.03) (0.06) (0.08) (0.07)

Random effects r2e r2

0.85*** 0.07**

(0.04) (0.03)

0.62*** 0.03 

(0.03) (0.02)

Information criteria ( 2 restricted log likelihood)

3079.91

2699.83

Level 1: NSWA bundle = b0 + b1 · Manufacturing + b2 · Service + b3 · Markets + b4 · TUs + b5 · Female participation + e. Level 2: b0 = c00 + c01 (industryj) + c0j where j = 1. . .. . . 15 bk = ck0 + ck1 (industryj) + ckj where k = 1. . .. . . 7.   p < 0.10. * p < 0.05. ** p < 0.01. *** p < 0.001.

Table 5 public expenditure on family-leave policies, a employment law indexa and gender empowerment measure with NSWAs by country. Public Expenditure

Employment Law Index

Gender Empowerment Measure

Mean Flexibility Patternsb

Mean Part-time Optionsb

Australia The United Kingdom The USA Ireland

0.08 0.21 0.00 0.10

0.35 0.28 0.22 0.34

0.85 0.78 0.76 0.70

0.64 0.62 1.18 0.54

1.30 1.22 0.85 1.08

Austria Germany The Netherlands Switzerland

0.18 0.19 0.00 0.00

0.50 0.70 0.73 0.45

0.79 0.83 0.86 0.66

1.50 1.83 0.93 1.53

1.37 1.31 1.67 1.69

France Israel

0.35 0.22

0.74 0.29

0.72 0.66

0.36 0.88

0.98 0.65

Denmark Finland Sweden

0.57 0.63 0.66

0.57 0.74 0.74

0.88 0.89 0.91

1.69 1.49 1.40

1.11 1.11 1.20

Greece Slovenia

0.09 0.49

0.52 0.74

0.62 0.61

0.39 0.62

0.55 0.66

a

The values are the averages over the five year period 2003–2007 and are rounded up to the second decimal point. For the sake of this analysis flexibility patterns and part-time options were calculated as the mean of the individual variables constituting them and were not used as PCs. b

the USA, the UK and Israel rank lowest in employment legislation. Greece and France rank lowest in flexibility while Greece, Israel and Slovenia rank lowest in part-time options.

Discussion Our contribution is both conceptual and empirical. Conceptually, we combined institutional and cultural perspectives,

474 while taking into consideration firm-level factors, to describe the complexity of a firmÕs external environment in relation to NSWAs. Empirically, we examined the variation in the influence of public expenditure on family-leave policies, employment law and gender empowerment on the use of NSWAs in firms across country contexts. In combination, these contributions build a richer understanding of the relationship between NSWAs and their national context, with implications for researchers, firms (local and multinational) and policy makers. Our results support the general motivation behind our hypotheses suggesting that as national contexts vary, their effects on firm practices vary as well. In this respect, the present study supports previous ones on the importance of institutional factors and the differing reactions at the firm level (Bardoel, 2003; den Dulk, et al. 2010; den Dulk et al., 2012). At the same time, it also supports the importance of firm level factors (den Dulk et al., 2012): for example, used as a control, female participation was positively related to the use of part-time options. This is an important finding as, in this study too, women are an important stakeholder group that can influence the amount and type of NSWAs used. Turning to the effects of institutional context, the relationship between public spending on family-leave policies and flexibility patterns, contrary to H1, while significant at the bivariate level, was not statistically significant at the multivariate level (see Tables 3 and 4). Differently, and in accordance with H1, the larger the amount of funds allocated to support family-leave policies, the lower the use of part-time options in firms. Furthermore, this relationship remained relatively consistent throughout the analyses. As with the case of family leave policies, and contrary to H2, employment legislation is not related to the use of flexibility patterns in firms either. This suggests that the level of employment protection within individual countries does not affect the use of flexibility options in organizations: possibly because such options enjoy the same benefits as other fulltime arrangements. Differently, part-time options, which often do not enjoy similar benefits as full-time ones, were significantly related to employment legislation: the relationship between employment legislation and part-time options, in accordance with H2, even though losing its strength between Tables 2 and 3, resurfaces even stronger in Table 4. Finally, looking at our cultural proxy, gender empowerment overall was positively related to both flexibility patterns and part-time options, as hypothesized in H3. These results seem to support the notion that greater empowerment of women in a society corresponds to higher flexibility in work hours even if such flexibility challenges the norms of fulltime employment (Lyness & Judiesch, 2008; Lyness & Kropf, 2005; Mutari & Figart, 2001; Rao, 2009). It is possible that looking at societies, not in isolation as in Table 2 but taking into account a multitude of factors like those outlined in the tables that follow it, employees in countries where public spending is high do not need to juggle so much work and family through NSWAs (like flexibility patterns or part-time options) but they have a choice to accommodate their various obligations through more ‘‘standard’’ forms of employment (Jaumotte, 2002; Tranby, 2010; Widener, 2007). Differently, in societies where the legal framework for employment protection is strong,

G.I. Kassinis, E.T. Stavrou employees feel secure (Schott, 2012) and possibly ‘‘entitled’’ to use part-time options, and possibly as a result do not have the need to use flexibility patterns as much. There are, however, societies like the Nordics (see Table 5) where public spending is high and employment protection is strong while at the same time the use of both flexibility patterns and part-time options is relatively high as well. However, in these societies we have a case where, as Widener (2007) indicates, not only family-leave but also child and eldercare are affordable and widespread due to extensive public policies on work-family balance; moreover, employees are protected from any form of unfair treatment not only through legislation but also through collective agreements. In such cases, culture may be a mechanism that complements, even drives both public policies and legislation: according to Kildal and Kuhnle (2005), institutional perspectives may even be embedded into a societyÕs cultural values, norms and assumptions. Therefore, not only institutions or legislation per se, but also the wider cultural context may create normative expectations and a sense of ‘‘entitlement’’ towards higher NSWA use, both flexible and part-time ones, as the results of our study may imply.

Conclusions On the whole, our findings confirm the importance of public policy spending, employment protection and culture as complementary factors to a firmÕs environment when dealing with NSWAs. As Woodward et al. (1996) noted, organizations are legitimate to the extent that their activities are congruent with the goals of the societal system in which they operate. Our study adds to the growing body of literature confirming the importance of the national context for firm level HRM practices. Moreover, it shows the fruitfulness of combining policy, legal and cultural aspects together along with the organizational context. It also demonstrates how such a link varies depending on the combination of national context and NSWAs. By utilizing two national level institutional measures and a national level proxy for culture, we add potential explanatory power to existing studies on NSWAs that focus on the individual or organizational level or use organizational level proxies for national context. For researchers, our results reinforce the importance of considering different institutional environments and the national culture associated with them, when designing and interpreting NSWA research. The results also support the need for caution in assuming that NSWA practices are ‘‘universally’’ relevant (Ryan & Kossek, 2008). At the same time, the results guide researchers as to which NSWA bundles may be more common in which settings, helping them to decipher firm and societal context more clearly. For firms, especially multinationals, our study reinforces the need for prudence in applying any generalized assumptions on the use of NSWAs without taking into account differences in their external environment. It may also provide them with broad guidelines as to which NSWAs are better suited to particular environments and under which conditions, particularly in shaping NSWA practice through the recognition of necessary combinations of national and organizational context. Finally, this study provides policy makers with a blueprint on the complex effects of national

Non-standard work arrangements and national context policies, legislation and culture on NSWA use and, hopefully, how to go about determining national context effects on organizational practice in different countries. Policy makers should first consider what they want to achieve through their policies before regulating specific aspects of employment. It goes without saying that our study could be enriched in a number of ways. First, different groups and levels of employees (i.e., technical, managerial, clerical) could be included in the models in order to enhance our understanding of the relationships examined. In addition, richer institutional and cultural antecedents of NSWA use could be applied in order to improve our knowledge on the subject (Widener, 2007). In this respect, testing for mediation effects might be an interesting venue for future research. Further, organization-level outcomes could help us draw conclusions on the effects of NSWAs on firms given their external environment. At the same time, the causal order of relationships could be confirmed through a longitudinal study: the data used on NSWAs, even though gathered after the predictors, cannot deal with time-lag issues completely since they were cross sectional. Finally, multi-employee, multi-level studies, qualitative and quantitative, would make the firm data more powerful (Becker, Huselid, Pickus, & Spratt, 1997). In sum, the relationship between national context and non-standard work arrangements is intriguingly multifaceted, especially when explored across national borders and within a set of controls. We believe that our study enriches existing research by showing a link between a combination of national factors and organizational flexibility, taking into account different organizational, institutional and cultural environments. We hope that, despite its limitations, the valuable insights that it provides will encourage further investigation of the issues explored here.

Acknowledgements We would like to thank Cranet colleagues for allowing us to use their country data. The data collection for this project was partly funded by a University of Cyprus research grant.

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GEORGE I. KASSINIS is an Associate Professor of Strategy at the University of Cyprus. He received his Ph.D. from Princeton University. His research focuses on stakeholders, organizations and the natural environment, public policy, social networks, and industrial ecology. His work has been published in journals such as The Academy of Management Journal, Production and Operations Management, and Strategic Management Journal.

ELENI T. STAVROU is Associate Professor of Management at the University of Cyprus. She has received her Ph.D. at the George Washington University. She has published widely including articles in various academic journals, like Journal of Organizational Behavior, Journal of Business Ethics, Entrepreneurship Theory and Practice, British Journal of Management, and International Human Resource Management Journal. Her research interests include: work-life issues; strategic and comparative human resource management; and intergenerational transitions in family firms.