Centralized bargaining and reorganized work: Are they compatible?

The paper examines the implications for wage bargaining of an important asp ect of the ongoing reorganization of work - the move from occupational spec ialization toward multi-tasking. The analysis shows how, on account of such reorganization. centralized bargaining becomes increasingly inefficient an d detrimental to firms' profit opportunities, since it prevents firms from offering their employees adequate incentives to perform the appropriate mix of tasks. The paper also shows how centralized bargaining inhibits firms f rom using wages to induce workers to learn how to use their experience from one set of tasks to enhance their performance at other tasks, In this way, the paper may also help explain the increasing resistance to centralized b argaining in various advanced market economies. (C) 2001 Elsevier Science B .V. All rights reserved.