Socio-Economic Review Advance Access published online on December 21, 2007
Socio-Economic Review, doi:10.1093/ser/mwm026
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The organizational governance of work relationships between employment and self-employment
1 Austrian Institute of Economic Research (WIFO), and Department of Economics, Vienna University of Economics & B. A., Vienna, Austria
2 Department of Social Sciences, University of Turin, Torino, Italy
Correspondence: ulrike.muehlberger{at}wifo.ac.at; sonia.bertolini{at}unito.it
This paper analyses work relationships on the border between employment and self-employment and the consequences of making use of these new forms of work, especially on the side of firms. We study the complexity and variety of dependent forms of outsourcing by comparing the firm-internal solutions adopted to solve the arising control–flexibility dilemma in two industries (insurance, business services) embedded in two different institutional contexts (Italy, Austria). This paper shows that employers have established informal relational contracts that, in combination with formal contracts, reduce the threat of opportunism while simultaneously allowing a certain amount of control over the worker. We highlight the fact that a hierarchal structure returns to the relationship between worker and employer through the mechanisms of control and dependency. Finally, we stress that social relationships complement the market mechanism through the creation of assurance and trust as well as the development of specific configurations of social networks (i.e. network and temporal embeddedness).
Key Words: self-employment • outsourcing • employment relationship • relational contracts