Social risks can be managed in different ways. The management of social risks is commonly discussed in relationship to welfare state institutions or, in a less common approach, in relation to the protection corporatist institutions provide through collective bargaining, as presented in the previous chapter. However, one of the central institutions active in risk management, alongside the family, is the firm. In the nineteenth and twentieth centuries, firms took (some) responsibility for the well-being of their employees. In some welfare states, for example in the US, firms still play an important role in managing social risks, hence the term ‘corporate welfare state’, sometimes used to describe the US welfare state.
In this chapter we focus on the essential function private corporations fulfil in the way social risks are defined and dealt with collectively. It is important to investigate the role of private corporations in the management of social risks because firms become increasingly important in an era of economic globalisation. As markets open up and national states weaken, private corporations have more freedom to act. As companies become geographically and institutionally ‘footloose’, a process in the direction of reduced protection takes place, often called a ‘race to the bottom’ (Mishra 1999; Castles 2004) in the direction of diminished corporate responsibility for employees, resulting in a shift of responsibilities from employers to employees (Hacker 2006).
In this chapter, we investigate the development of labour policies in two transnational corporations. We learn that due to the fact that these corporations are embedded in diff erent national and transnational economic fi elds, the extent to which corporate responsibility for protection against social risks is diminishing varies from risk to risk, and that a polarisation is taking place in corporate responsibility between the responsibility taken for higher management and responsibility taken for lower levels of personnel.
Because the role of large firms has been unduly neglected in many debates about the transformation of the welfare state, in this chapter we will explore the changes large corporations have gone through since the 1980s and assess some of the consequences these have had for the redefinition and redistribution of social risks. We will do so by considering the profound transformation in the way corporations managed their labour force during the last two decades of the twentieth century.