International Journal for Research in Vocational Education and Training (IJRVET) Vol. 2, No. 4: 284-307, DOI: 10.13152/IJRVET.2.4.3 Cooperative VET in Training Networks: Analysing the Free- Rider Problem in a Sociology-of-Conventions Perspective Regula Julia Leemann* University of Applied Sciences, School of Education Chair of Educational Sociology Clarastrasse 57, CH-4058, Basel, Switzerland E-mail: [email protected] Christian Imdorf University of Bern, Seminar for Sociology Fabrikstrasse 8, 3012 Bern, Switzerland E-mail: [email protected] * Corresponding author Received: 14 October 2015; accepted: 13 December 2015; published online: 27 December 2015 Abstract: In training networks, particularly small and medium-sized enterprises pool their resources to train apprentices within the framework of the dual VET system, while an intermediary organisation is tasked with managing operations. Over the course of their apprenticeship, the apprentices switch from one training company to another on a (half-) yearly basis. Drawing on a case study of four training networks in Switzerland and the theoretical framework of the sociology of conventions, this paper aims to understand the reasons for the slow dissemination and reluctant adoption of this promising form of organising VET in Switzerland. The results of the study show that the system of moving from one company to another creates a variety of free-rider constellations in the distribution of the collectively generated corporative benefits. This explains why companies are reluctant to participate in this model. For the network to be sustainable, the intermediary organisation has to address discontent arising from free-rider problems while taking into account that the solutions found are always tentative and will often result in new free-rider problems. Keywords: Vocational Education and Training, Inter-firm Cooperation, Training Networks, Cooperative VET, Initial VET, Dual VET, Case Studies, Sociology of Conventions, Switzerland Bibliographical notes: Dr Regula Julia Leemann holds a professorship in educational sociology at the School for Teacher Education in Basel and is a member of the Centre for Educational Sciences at the University of Basel. Her research interests focus on educational inequalities (gender, social origin), vocational education and training, academic careers, educational institutions and organisations, and transitions from school to work. IJRVET 2015 Coorporative VET in Training Networks 285 Dr Christian Imdorf holds a professorship in educational sociology at the University of Bern, funded by the Swiss National Science Foundation. His research interests are educational systems (in an international comparative perspective), vocational and educational training, transitions to tertiary education, school-to- work transitions, discrimination and inequalities in education, and labour market research. Acknowledgement: We would like to extend many thanks to Andrea Tönjes and Stephan Elkins (SocioTrans - Social Science Translation & Editing) for their careful and thorough work in translating the text from German to English. My thanks are also due to the anonymous reviewers for their helpful suggestions on an earlier version of this article. IJRVET 2015 286 R.J. Leemann & C. Imdorf 1 Introduction “It’s good that there is a network [...] because then one can also take advantage of synergies, but in our case it’s mainly the small ones [companies] that benefit.” (Person responsible for in-company training, Public Transport Network) Over the past two decades, the Swiss VET system has seen the establishment of so- called training networks (Ausbildungsverbünde). This model of vocational education and training means that companies, particularly small and medium-sized enterprises, form a network and pool their in-company training resources for the joint training of apprentices. Training networks have several objectives: they broaden the qualifications of apprentices (Leemann and Birr 2015), create new training places, increase training efficiency for the participating companies (Walther and Renold 2005) and enable more inclusive recruitment and mentoring practices than companies can provide on an individual basis (Imdorf and Leemann 2012). This is why this model of vocational education and training has great potential in terms of the qualification and integration tasks associated with dual VET. It can thus play a major role in adapting the VET system to the new demands arising from technological, economic and social change. In several other countries, national vocational education policy has promoted inter-firm cooperation and there are various other forms of cooperative training based on different organisational and funding models in these countries. The Swiss model involves some initial funding and information by the federal government, while the operational management of the largely self-sustaining network is in the hands of an intermediary organisation, the so-called lead agency. This agency recruits both the training companies and the apprentices and is responsible for the training programme as such. The apprentices are employed by the lead agency and switch companies several times over the course of their training (rotation principle). However, despite being a very promising form of organising in-company training – be it for the companies, the apprentices or the VET system as a whole – the number of training networks in Switzerland is growing only slowly. Unfortunately, there is no statistical data available on the total number of training networks or the overall number of apprenticeship places that they provide. On the basis of an evaluation by the Swiss Federal Agency for Vocational Training and Technology (BBT 2008) and our own research on the Internet, we estimate that over the last decade there has been only a slight increase from roughly 1% of all training places within the dual VET system to around 2–3%. The aim of this article is to identify reasons for the low degree of institutionalisation of this training model in Switzerland. How can it be that this organisational arrangement faces difficulties in gaining acceptance in a country with a long tradition of dual VET? In a first attempt to zero in on this question, we can state that the Swiss model is a very ambitious and complex form of organisation. The companies that participate in this division of labour in providing cooperative VET are in different situations and have different motives. While they can pass on part of their training responsibilities to the lead agency, this involves surrendering decision-making powers as well. From the apprentices’ perspective, to be trained in a network is interesting and offers broad knowledge of the occupational field. From the participating companies’ perspective, however, the IJRVET 2015 Coorporative VET in Training Networks 287 pooling of resources can create constellations that give rise to free-rider problems. This could possibly explain the low prevalence of training networks in Switzerland. We will, therefore, take a closer look at such potentially problematic constellations. Starting from the assumption that free-rider problems do exist in these networks, we will address two questions: (1) Which particular constellations draw criticism because of single actors disproportionately profiting from the training network and its corporative benefits, that is, by contributing fewer resources than benefits reaped (free-rider problem)? (2) How do the lead agency and the companies within the network try to address these free-rider problems? What are their solution strategies? To examine these questions from a theoretical angle, we will draw on the sociology of conventions (Boltanski and Thévenot 1999, 2006). This theoretical framework provides the means to get a grasp on (a) the mode of coordinating action among the various network actors, (b) the areas of conflict arising from the joint training of apprentices and (c) the ways of dealing with these conflicts. The data for our study come from four case studies of four training networks in Switzerland that were selected on the basis of typological criteria (Yin 2009). For each network, we conducted expert interviews with the representatives of the lead agency and with company representatives responsible for in-house VET. The article is structured as follows: Section 2 starts by providing a summary of the current national and international state of research on the significance of training networks in VET (2.1) and then presents the Swiss model with particular attention paid to the concept of resource pooling and potential free-rider constellations (2.2). Section 3 introduces the reader to the theoretical framework of the sociology of conventions used to identify free-rider constellations. Section 4 presents the four training networks studied and outlines our methodological approach (4.1), gives the results of our analysis with special emphasis on imbalances in the distribution of corporative benefits and on strategies to resolve this problem during the provision of training (4.2) and after its completion (4.3). Section 5 summarises our findings and ends with a brief conclusion. 2 Training networks as an innovative model in vocational education and training: Opportunities and problems In this section, we begin by presenting models of inter-firm cooperation in vocational training that exist in other national VET systems, ask how common these models are and review research findings on their opportunities and risks (2.1). We will then introduce the Swiss model and explain how resource pooling within a network can create free-rider problems in the distribution of the jointly generated collective goods (2.2). 2.1 The significance of inter-firm cooperation in vocational training in other national VET systems In several countries, national vocational education policy has promoted inter-firm cooperation as an alternative way of organising the provision of vocational training. Of particular interest for our study are so-called group training companies in Australia, group training associations in the UK, local training agencies in Norway and training networks (Ausbildungsverbünde) in Germany and Austria. The significance of these organisational arrangements varies by country. In the early 2000s, around 14% of all apprentices and trainees in Australia and around 10 per IJRVET 2015 288 R.J. Leemann & C. Imdorf cent in the UK received vocational training in cooperative training schemes (Cooney and Gospel 2008), compared to 70% of the apprentices in Norway (Bowman 2005; Michelsen and Høst 2004). Group training was introduced decades ago in the UK (late 1940s) and in Australia (1970s), whereas the expansion of training agencies and networks has been more recent in Norway, (Eastern) Germany and Austria (1990s). Cooperative training structures come in different types, shapes and sizes (BMBF 2011). While some studies of such training schemes in Germany, Austria and Australia mention rotational systems (Cooney 2003; Lachmayr and Dornmayr 2008; Schlottau et al. 2003), other studies do not address the issue of whether apprentices switch companies. The models range from community-based schemes geared to meeting local and regional needs to employer- and industry-based organisations providing industry-specific training designed to address skill shortages. Some of these arrangements are the result of bottom-up initiatives by cooperating firms with little external coordination; others were initiated top-down from the outside, i.e., with government support or the help of large firms (Cooney 2003; Cooney and Gospel 2008; Gospel and Foreman 2006). In the case of Norway, Michelsen and Høst (2004) distinguish three organisational models: the classical “artisan” model (one- trade model), the branch model (broader sector or trades), which is the most frequent form, and the multi-trade model (especially in rural areas), while Gospel and Foreman (2006) distinguish between single- and multi-occupational models. The Norwegian training agencies are run either by firms, independent associations, subsections of employer associations or by private for-profit enterprises. International research has outlined several benefits of inter-firm cooperation in training: the costs of employment and training are collectivised and shared and the administrative costs of training are reduced especially for small and medium- sized enterprises (economies of scale). Apart from the costs, the risks of employing apprentices are also shared and lowered, in particular if the apprentices are employed directly with the training agency and not by the individual training firms. This factor reduces the employers’ fear of being at a competitive disadvantage and a potential victim of poaching, which makes them more willing to engage in training. Through the collective provision of training and employment of apprentices, cooperative training schemes provide collective goods not only to the member firms. The mobilisation of training firms secures apprentices and therefore creates a broader public good and social capital for communities, industries and the national economy (Bowman 2005; Cooney 2003; Gospel and Foreman 2006). However, a high level of government funding seems to be an essential prerequisite for this model to materialise, at least in countries such as Australia, the UK and Norway where group training heavily depends on government subsidies. In those three countries, but also in Germany, cooperation in the provision of training has proven to be reliable and has boosted the quality of VET, especially in small-firm economies and at local levels (Unwin et al. 2012; Lutz and Grünert 1999). Culpepper’s (2003) in-depth analysis of the development of training networks in Eastern Germany in the 1990s has shown that the successful implementation of cooperative training depends on the capacity of intermediary actors (e.g., lead agencies, training agencies) to respond to the fears and concerns of local companies that are reluctant to offer training. A decisive factor is gaining the confidence of the cooperating companies that they will benefit from investing in IJRVET 2015 Coorporative VET in Training Networks 289 training. The authors highlight two main factors that are crucial for individual companies to cooperate in the collective provision of training: continuous government aid and relief of financial burden on training companies especially during the apprentices’ first year of training when training costs are usually the highest and the productive return from the apprentices the lowest. Gospel and Foreman (2006) emphasise that inter-firm cooperation becomes especially fragile when the participating companies lack broader government support resulting in uncertainties about funding. With respect to our own research, this raises the question as to which features of the model favoured in Switzerland contribute to the low prevalence of training networks there. 2.2 Cooperative VET in training networks in Switzerland Conceptually, a training network is an organisational network (Leemann and Imdorf 2015). Several firms pool their in-company training resources in order to generate collective benefits (the corporative benefits) that they could not generate as single players or that is qualitatively better than the benefit achievable through their individual efforts alone. The collectively generated benefit is then distributed among or made accessible to all participating actors (Preisendörfer 2011). The management and control of a training network is in the hands of an intermediary organisation, the so-called lead agency. This entity can have different legal forms, such as an association, foundation or limited company (cf. BBT 2008). The lead agency recruits suitable companies and provides them with technical and administrative support. The participating companies pay for these services, which constitutes the lead agency’s main source of funding. Other sources of funding are e.g. public subsidies or financial contributions by the the founding organisation (e.g. trade association). The lead agency also recruits the apprentices, who during the course of their training switch training companies on a yearly or half-yearly basis (rotation principle). They are employed by the lead agency and have two supervisors: a training manager at the lead agency and a vocational trainer at each company. The participating companies must transfer certain rights, decision-making powers, and areas of exercising influence to the lead agency and the network partner companies, such as, for instance, the right to choose their own apprentices or the possibility to keep the apprentices for the whole duration of their training. According to Preisendörfer (2011, 26ff.), corporative actors (like organisations) are faced with three dimensions of questions and problems that need to be defined, negotiated and coordinated: (I) Initiation and participation: What are the shared objectives and motives of a network (for Switzerland, cf. Leemann et al. 2016)? Which resources have to be contributed? (II) Decisions: How to organise training and its supervision? How to organise member participation in decision making? (III) Distribution: How to distribute the corporative benefits? This article will analyse the third dimension – the distribution of the corporative benefits – to find answers to problems that might form an obstacle to the organisation of VET in training networks. One problem arising from the pooling of resources is that of free riding, i.e., the possibility that an actor benefits from the IJRVET 2015 290 R.J. Leemann & C. Imdorf network without giving an equivalent in return, which may give rise to imbalances in the companies’ commitments. There is, on the one hand, the potential problem of internal free riding in the event that one of the participating companies contributes fewer resources than the others but claims the same (or even bigger) share of the corporative benefits. On the other hand, it is also conceivable that there may be external free riding in the sense that companies from outside the network take advantage of these corporative benefits without having contributed to the cooperative training scheme. 3 The problem of free riding in a sociology-of-conventions perspective The theoretical framework of this study is based on the sociology of conventions (also known as the economics of conventions) (Boltanski and Thévenot 1999, 2006; Diaz-Bone 2011, 2015). This pragmatic and transdisciplinary institutional theory approach is well-established among French economic sociologists and increasingly being adopted also by their German-speaking counterparts. Our attempt is to make productive use of this concept in the organisational and institutional analysis of VET (Imdorf and Leemann 2012; Leemann and Imdorf 2015). The starting point is the assumption that competing and mutually conflicting logics of action and orders of justice (or conventions) co-exist within organisations (Jagd 2011). The respective organisational structure is a compromising device for coordinating the different logics of action. It is designed to bridge the contradictions between the different conventions and to reduce tensions (Knoll 2015, 19; Thévenot 2011). However, this process of designing the organisational structure is fluid and never completed since the solutions achieved through compromises will always create new problems, which the responsible organisational actors again need to address (Leemann and Imdorf 2015). With regard to the actors in a training network, this means that the companies and the lead agency draw on a limited number of historically evolved conventions in their efforts to co-ordinate their training activities, assess the social situations occurring in cooperative training settings (e.g., the distribution of corporative benefits) and make sound training-related decisions despite inherent uncertainties. Table 1 lists the conventions that are relevant to our object of research. Each of these conventions is characterised by its orientation towards a certain common good, by the significant worth and quality of objects, subjects and processes with respect to this common good and by a particular logic of action and order of justice meant to contribute to the common good. The order of justice is determined on the basis of the principle of equivalence and the model for testing worth (reality test): objects, subjects, and processes must be related to some common measure to clarify what they have in common (Boltanski and Thévenot 1999, 361) and arrive at a socially shared and commonly comprehensible assessment. They must hold up to the measure applied, i.e., they are assessed against the measure and ranked according to their worth. As mentioned above, free-rider problems emerge from mismatches between the resources contributed and corporative benefits reaped. The quality of contributed resources and distributed benefits as well as the advantages or disadvantages associated with this arrangement are always assessed on the basis of conventions. IJRVET 2015 Coorporative VET in Training Networks 291 Table 1: Conventions Conventions Logics of action, Significant worth / quality orders of justice Industrial Efficiency, expertise High productivity, know- convention (long term) how, technical skills Market convention Exchange, competition, Low costs – high return, price (short term) customer orientation Civic convention Equality, solidarity, Collective interest, participation, inclusion democratic principles Domestic Community, hierarchy, Respect, trust, loyalty, social convention tradition, socialisation fit Convention of fame Fame, renown Reputation, visibility, popularity, image Convention of Inspiration Intrinsic motivation, inspiration passion, vocation, creativity Source: Boltanski and Thévenot (1999, 2006), Diaz-Bone (2009, 2015). Highly valued resources are, for instance, a company’s competencies and expertise (industrial convention), money (market convention), inclusive recruitment practices (civic convention), shaping the individual (domestic convention), brand (convention of fame) and attractive training opportunities (convention of inspiration). The nature of the corporative benefits varies depending on the convention. In regard to the convention of fame, it is, for instance, the reputation that a company gains from taking part in the network and in dual VET. However, in the following, we will focus on the apprentices (including the graduates who have already completed their training) as the corporative benefit that is assessed in terms of its quality. With regard to the industrial convention, this involves, for instance, the quantity and quality of expertise of skilled junior staff; in terms of the convention of inspiration, it refers to having trainees who are highly motivated and identify with their chosen occupation or trade. 4 Analysing free-rider problems in training networks After an introduction to the empirical design of this study (4.1), we will present two different kinds of free-rider problems and the solution strategies that we reconstructed from the data collected in the four networks examined and analyse both the problems and solutions from a sociology-of-conventions perspective. The first problem that we will address is the imbalances in the distribution of apprentices as they move from one company to another (4.2). The second problem has to do with the issue of post-training employment (4.3). IJRVET 2015 292 R.J. Leemann & C. Imdorf 4.1 Research design The data used for this article are derived from a larger research project1, a three- year case study of four training networks in Switzerland that were selected on the basis of typological criteria (Yin 2009). Apart from network size, a factor that will not be discussed in detail here, other important selection criteria were the founding initiative – who initiated the network and how? Table 2 shows that two of the training networks under examination, the Freight Forwarding Network and the Public Transport Network, were the result of bottom-up initiatives taken by economic actors from the respective industries, while the other two cases studied, the Region Network and the Integration Network, were initiated top-down by state actors. Our hypothesis is that, depending on the founding initiative, the action of the network actors is guided by different convention-specific rationalities. In the case of networks initiated by actors from a particular industry or by the participating companies themselves, we expect the need for highly qualified junior staff to be a driving motive behind the pooling of training resources. Action geared to the corporative benefit of having a “qualified workforce” reflects the logic of the industrial convention, which is oriented towards the long term and the securing of expertise. If it was a government agency that initiated the formation of a training network with the objective of generating more training opportunities for young people, we can rather expect civic motives, such as participation or inclusion, to be at work. Table 2: The four case studies Freight Forwarding Network Public Transport Network Founding Trade association (forwarding Two public transport initiative industry), association of companies member companies Size ~ 35 member companies ~ 60 member companies ~ 40 apprentices ~ 1,800 apprentices (80% of ~ 4 staff members the training places provided by a state-owned company) ~ 280 staff members Training 1 occupation ~ 25 occupations, offered in/as management assistant in most importantly: management freight forwarding logistics assistant in public transport Network Qualified junior staff for the Qualified junior staff for the objective(s) industry companies and the industry 1 The data analysed here are from the research project “Training networks in practice – A multiple case study on the functioning and the demands of a new organisational form of apprenticeship from the perspective of various actors”, financed by the Swiss National Science Foundation (SNF-13DPD3_134855) 6/2011–11/2014. Project managers: Regula Julia Leemann and Christian Imdorf. Project staff: Lorraine Birr, Sandra Da Rin, Rebekka Sagelsdorff and Nicolette Seiterle. IJRVET 2015 Coorporative VET in Training Networks 293 Region Network Integration Network Founding Cantonal Office for Vocational Municipal government of a initiative Education and Orientation, larger city, Association for the Promotion Centre for Vocational of the Regional Economy Education and Training Size ~ 15 member companies ~ 150 member companies ~ 55 apprentices ~ 220 apprentices ~ 4 staff members ~ 20 staff members Training ~ 7 occupations (management ~ 14 occupations across 4 offered in/as assistant, technical sectors (e.g., health-care occupations) assistant, management assistant, facility maintenance specialist) Network Training opportunities in the Training opportunities for objective(s) region (peripheral region), young people with difficulties labour market integration of in finding employment young people We selected nine companies from each network according to the following criteria: company size, ownership structure (public or private enterprise), and duration of participation in the network. The aim was to make the sample as heterogeneous as possible. We conducted semi-structured expert interviews with the employees responsible for in-company training in those companies. The interviews lasted between one and two hours each and focused on the companies’ motives, expectations and experiences in regard to cooperative VET. In each network four more expert interviews were conducted with representatives of the respective lead agencies to take a closer look at the overall dynamics of the networks and the strategies employed to overcome free-rider problems. All interviews took place on location in 2011 and 2012 and were recorded and transcribed. Our analysis focused on the interview passages in which the interviewees expressed discontent and criticism regarding the distribution of corporative benefits. We sought to identify conflicts, areas of tension and the actors’ own explanations and justifications thereof with the aim of reconstructing the conventions that the actors draw on. In a second step, the conflict resolution strategies developed by the companies and lead agencies were identified and also interpreted against the backdrop of our theoretical framework. 4.2 Distribution of apprentices over the course of training (rotation principle) Once they are recruited by the lead agency and assigned to the training companies according to the rotational system, the apprentices can be considered a preliminary corporative benefit. In several conventions, as will be shown below, the quality of an apprentice is rated on the basis of their stage of training (i.e., year of the apprenticeship) and the social attribute of “nationality”. Firstly, according to the rotation principle and in view of the training requirements, the lead agency has to make sure that the apprentices will have become familiar with all aspects relevant to their future occupation by the end of IJRVET 2015