Employment regimes in Denmark and Norway – heading in different directions?

Abstract

In general, the literature on the Danish and Norwegian labor market systems emphasizes the commonalities of the two systems. In this paper, we challenge this perception by investigating employment practices of multinational companies (MNCs) in the two countries. Based on a survey of 203 companies, we present three findings: (1) union recognition is highly common among multinationals operating in Denmark and Norway, with MNCs operating in Norway as the most positive towards unions. (2) Danish owned MNCs in Denmark consult unions to a lesser degree regarding work organization and employment issues compared to Norwegian owned MNCs in Norway. (3) HRM policies are similar across the Norwegian and Danish labor market systems particularly in regard to involvement and communication. The differences we observe are explained by differences in the Danish and Norwegian labor market models. In particular we point to the development over the last two decades of the Danish flexicurity system and also to differences in the obligation to inform employees on significant changes in work organization; while these obligations are legislative in Norway in Denmark they are grounded in the Co-operative Agreement.