Italy - Luxottica: changing Italian labor relations and HR practices to drive sustainable performance

the Luxottica case shows how a set of HRM policies, anchored on a heritage of craftsmanship and skilled labor, allowed the company to keep more than 50 percent of the production in Northeast Italy, despite the high labor costs, strong unionization, and fierce competition from China. The case also illustrates how it is possible in a highly unionized country to meet pressure on labor cost reduction and people needs, in accordance with unions. The case argues this was the result of the development of a special attachment between the firm and the workers, attachment nurtured by the local labor market situation, high commitment to work practices, and a far-sighted approach to sustainable relations with the local community and unions. The idea that workers’ quality of life ought to be linked with productivity and quality improvement efforts and that it is necessary to keep a strong industrial base in Italy to preserve employment and not betray the organizational heritage showcases a wider social sustainability approach that encompasses the Luxottica founder’s values and corporate culture