Labour Regulation and Enterprise Strategies in South Africa

by ALTMAN, M. , 1996
Regional Studies, vol 30(4), pp. 387-399, 1996.

Altman explores the impact of regional differences in labour regulation on the accumulation strategies of firms in the South African clothing industry. A strong positive relationship was found between dominant accumulation strategies and forms of local regulation. In the context of a footloose industry, South African clothing firms should have been able to make use of differences in labour regulation on a national space. Yet, this study found that firms took advantage of differences in labour regulation available to them in their immediate vicinity only. In particular, very few firms ventured further than a one-hour drive in their decentralizing activities. Firms in the urban areas that were not proximate to areas ensuring low cost and unorganized labour adopted new technologies and operational methods such as unit production systems. Firms with head offices in urban areas situated within a one-hour drive to areas with less democratic wage determination systems did not adopt modern operational systems. Instead, they emphasized labour cost reduction accumulation strategies. The main strategy entailed production decentralization to the regions with more stringent controls on worker organization and pay scales that were a fraction of those in urban areas.