From dichotomy towards inclusion: whether and how Korean shipbuilding stakeholders are integrated through social contracts

This case study focuses on a paradoxical aspect of the dual labour market in the shipbuilding industry. In particular, we delve into subcontracting practices legitimized in the shipbuilding industry that entail the societal challenges of segregating labour markets. Based on Integrative Social Contract Theory (ISCT), we investigate how Daewoo Shipbuilding & Marine Engineering (DSME) deals with such paradoxical aspects through stakeholder integration. Specifically, by examining DSME’s 51-day subcontractor union strike, followed by collaborative efforts and ESG initiatives, we explore how DSME navigates economic and social values amid government policy shifts. This approach offers a potential solution to dual labour market issues, with ESG promoting diversity, equity and inclusion complemented by government incentives. Synergizing a market-driven approach with targeted policy measures enables firms to formulate hypernorms, fostering a stable and productive workforce.