Deregulation of the German Industrial Relations System via Foreign Direct Investment: Are the Subsidiaries of Anglo-Saxon MNCs a Threat for the Institutions of Industrial Democracy in Germany?
Restricted accessOtherFirst published online August, 2003
Deregulation of the German Industrial Relations System via Foreign Direct Investment: Are the Subsidiaries of Anglo-Saxon MNCs a Threat for the Institutions of Industrial Democracy in Germany?
This article asks whether the subsidiaries of American and British MNCs operating in Germany act as forces that endanger the traditional German system of industrial democracy by `importing' typical Anglo-Saxon style industrial relations practices into their host nation. In a mail survey based on responses from 297 foreign-owned and local German firms, little evidence was found that Anglo-Saxon-owned subsidiaries act as a threat to the central pillars of Germany's IR system, i.e. codetermination and collective bargaining. This finding contradicts a widely held belief of the erosion of the German IR system and suggests that this system is still strong: foreign companies adapt to local standards so as to retain legitimacy within their host nation's environment.
Get full access to this article
View all access options for this article.
References
1.
Addison, J., C. Schnabel and J. Wagner (2000) `Die mitbestimmungsfreie Zone - ein Problemfeld?' , Wirtschaftsdienst6: 361-365 .
2.
American Chamber of Commerce in Germany (1999) American Investments in Germany 1999. Frankfurt: American Chamber of Commerce .
3.
Bae, J., S. Chen and J. Lawler (1998) `Variations in Human Resource Management in Asian Countries: MNC Home-Country and Host-Country Effects' , International Journal of Human Resource Management9(4): 653-670 .
4.
Beechler, S. and S. Taylor (1994) `The Transfer of Human Resource Management Systems Overseas', pp. 157-185 in N. Campbell and F. Burton (eds) Japanese Multinationals. Strategies and Management in the Global Kaisha. London and New York: Routledge .
5.
Begin, J. (1992) `Comparative Human Resource Management (HRM): A Systems Perspective' , International Journal of Human Resource Management3(3): 379-408 .
6.
Bourque, L. and E. Fielder (1995) How to Conduct Self-Administered and Mail Surveys. Thousand Oaks, CA: Sage .
7.
British Chamber of Commerce in Germany (1999) Yearbook 1999. Cologne: British Chamber of Commerce .
8.
Clarke, O. and G. Bamber (1994) `Changing Management and Industrial Relations in Europe: Converging towards an Enterprise Focus?' , International Journal of Human Resource Management5(3): 633-651 .
9.
DiMaggio, P. and W. Powell (1983) `The Iron Cage Revisited: Institutional Isomorphism and Collective Rationality in Organizational Fields' , American Sociological Review48: 147-160 .
10.
Dingeldey, I. (1997) Britische Arbeitsbeziehungen. Wiesbaden: Deutscher Universitätsverlag .
11.
Edwards, T., C. Rees and X. Coller (1999) `Structure, Politics and the Diffusion of Employment Practices in Multinationals' , European Journal of Industrial Relations5(3): 286-306 .
12.
Etzel, G. (1998) Betriebsverfassungsrecht. Neuwied and Kriftel: Luchterhand .
13.
Ferner, A. and M. Varul (1999) The German Way: German Multinationals and Human Resource Management. London: Anglo-German Foundation .
14.
Ferner, A. and M. Varul (2000) `Vanguard Subsidiaries and the Diffusion of New Practices: A Case Study of German Multinationals' , British Journal of Industrial Relations38(1): 115-140 .
15.
Festing, M., Y. Groening, R. Kabst and W. Weber (1999) `Financial Participation in Europe - Determinants and Outcomes' , Economic and Industrial Democracy20(2): 295-329 .
16.
Flecker, J. and T. Schulten (1999) `The End of Institutional Stability: What Future for the German Model?' , Economic and Industrial Democracy20(1): 81-115 .
17.
Fowler, F. (1993) Survey Research Methods. Newbury Park, CA: Sage .
18.
Fox, R., M. Crask and J. Kim (1988) `Mail Survey Response Rate. A Meta-Analysis of Selected Techniques for Inducing Response' , Public Opinion Quarterly52: 467-491 .
19.
Frege, C. (1998) `Institutional Transfer and Effectiveness of Employee Representation: Comparing Works Councils in East and West Germany' , Economic and Industrial Democracy19(3): 475-504 .
20.
Gaugler, E. and S. Wiltz (1992) `Federal Republic of Germany', pp. 162-228 in C. Brewster (ed.) The European Human Resource Management Guide. London: Academic Press .
21.
Gooderham, P., O. Nordhaug and K. Ringdal (1998) `When in Rome, Do They Do as the Romans? HRM Practices of US Subsidiaries in Europe' , Management International Review38(2): 47-64 .
22.
Gunnigle, P. (1995) `Collectivism and the Management of Industrial Relations in Greenfield Sites' , Human Resource Management Journal5(3): 24-40 .
23.
Hamill, J. (1984) `Labour Relations Decision Making within Multinational Corporations' , Industrial Relations Journal15(2): 30-34 .
24.
Han, T.-S. and S. Chiu (2000) `Industrial Democracy and Institutional Environments: A Comparison of Germany and Taiwan' , Economic and Industrial Democracy21(2): 147-182 .
25.
Hanel, U. (1996) `The Cranfield Network on European Human Resource Management. Ergebnisbericht 1995', University report, Dresden .
26.
Hofstede, G. (1980) Culture's Consequences: International Differences in Work-Related Values. Beverly Hills, CA: Sage .
Innes, E. and J. Morris (1995) `Multinational Corporations and Employee Relations. Continuity and Change in a Mature Industrial Region' , Employee Relations17(6): 25-42 .
29.
Jacobi, O., B. Keller and W. MuÈller-Jentsch (1992) `Germany: Codetermining the Future?', pp. 218-269 in A. Ferner and R. Hyman (eds) Industrial Relations in the New Europe. Oxford: Blackwell Business .
30.
Jain, H., J. Lawler and M. Morishima (1998) `Multinational Corporations, Human Resource Management and Host Country Nationals' , International Journal of Human Resource Management9(4): 553-566 .
31.
Jirjahn, U. (1997): Effizienzwirkungen von Erfolgsbeteiligungen und Partizipation. Frankfurt and New York: Campus .
32.
Katz, H. and T. Kochan (2000) An Introduction to Collective Bargaining and Industrial Relations. Boston, MA: McGraw-Hill .
33.
Keller, B. (1998) `Recent Shifts in Public Policy and Industrial Relations', pp. 61-74 in R. Hoffmann, O. Jacobi, B. Keller and M. Weiss (eds) The German Model of Industrial Relations between Adaptation and Erosion. DuÈsseldorf: Hans-BoÈckler-Stiftung - Graue Reihe.
34.
Kohaut, S. and L. Bellmann (1997) `Betriebliche Determinanten der Tarifbindung: Eine empirische Analyse auf der Basis des IAB-Betriebspanels 1995' , Industrielle Beziehungen4(4): 317-334 .
35.
Kostova, T. and S. Zaheer (1999) `Organizational Legitimacy under Conditions of Complexity: The Case of the Multinational Enterprise' , Academy of Management Journal24(1): 64-81 .
36.
Kotthoff, H. (1994) BetriebsraÈte und BuÈrgerstatus. Wandel und KontinuitaÈt betrieblicher Mitbestimmung. Munich and Mering: Hampp .
37.
Kruse, D. (1993) Profit Sharing. Kalamazoo, MI: W.E. UpJohn Institute for Employment Research .
38.
Kruse, D. (1996) `Why do Firms Adopt Profit-Sharing and Employee Ownership Plans?' , British Journal of Industrial Relations34(4): 515-538 .
39.
Lambrich, T. (1999) Tarif- und Betriebsautonomie. Berlin: Duncker und Humblot .
40.
Liao, T. (1994) Interpreting Probability Models: Logit, Probit and other Generalized Linear Models. Thousand Oaks, CA: Sage .
41.
Long, R. (1997) `Motives for Profit Sharing' , Relations Industrielles52(4): 712-733 .
42.
Mangione, T. (1995) Mail Surveys. Thousand Oaks, CA: Sage .
43.
Marginson, P. (1998) `Arbeitsbeziehungen und EuropaÈische BetriebsraÈte in Groûbritannien' , WSI-Mitteilungen51(4): 264-270 .
44.
Marginson, P. and K. Sisson (1996) `European Works Councils - Opening the Door to European Bargaining?' , Industrielle Beziehungen3(3): 229-236 .
45.
Martinez, Z. and D. Ricks (1989) `Multinational Parent Companies' Influence over Human Resource Decisions of Affiliates: USFirms in Mexico' , Journal of International Business Studies Fall: 465-487 .
46.
Mayer, M. and R. Whittington (1999) `Strategy, Structure and “Systemness”: National Institutions and Corporate Change in France, Germany and the UK, 1950-1993' , Organization Studies20(6): 933-959 .
47.
Meyer, J. and B. Rowan (1977) `Institutionalized Organizations: Formal Structure as Myth and Ceremony' , American Journal of Sociology83: 340-363 .
48.
Millward, N., A. Bryson and J. Forth (2000) All Change at Work? London and New York: Routledge .
49.
Mueckenberger, U. (1988) `Juridification of Industrial Relations: A German-British Comparison' , Comparative Labor Law Journal9(4): 526-556 .
50.
MuÈller, M. (1996) `Unitarism, Pluralism and Human Resource Management in Germany: A Comparison of Foreign and German-Owned Companies', unpublished doctoral thesis, Birkbeck College, University of London.
51.
MuÈller, M. (1998) `Human Resource and Industrial Relations Practices of UK and US Multinationals in Germany' , International Journal of Human Resource Management9(4): 732-749 .
52.
MuÈller, M. (1999) `Unitarism, Pluralism, and Human Resource Management in Germany' , Management International Review39(3): 125-144 .
53.
MuÈller-Jentsch, W. (1997) Soziologie der Industriellen Beziehungen. Frankfurt and New York: Campus .
54.
Ngo, H., D. Turban, C. Lau and S. Lui (1998) `Human Resource Practices and Firm Performance of Multinational Corporations: Influences of Country of Origin' , International Journal of Human Resource Management9(4): 632-652 .
PaqueÂ, K.-H. (1993) `Germany: Living with Tight Corporatism', pp. 209-232 in J. Hartog and J. Theeuwes (eds) Labour Market Contracts and Institutions. A Cross National Comparison. Amsterdam: North Holland .
57.
Peppard, J. and D. Fitzgerald (1997) `The Transfer of Culturally-Grounded Management Techniques: The Case of Business Reengineering in Germany' , European Management Journal15(4): 446-460 .
58.
Perrons, D. (2000) `Living with Risk: Labour Market Transformation, Employment Policies and Social Reproduction in the UK' , Economic and Industrial Democracy21(3): 283-310 .
59.
Peters, T. and R. Waterman (1991) Auf der Suche nach Spitzenleistungen. Landsberg: Moderne Industrie .
60.
Poutsma, E. and F. Huijgen (1999) `European Diversity in the Use of Participation Schemes' , Economic and Industrial Democracy20(2): 197-224 .
61.
Poutsma, E., W. de Nijs and H. Dorewaard (1999) `Promotion of Employee Ownership and Profit Sharing in Germany' , Economic and Industrial Democracy20(2): 171-196 .
62.
Rogovsky, N. (1996) `IHRM Practices in Multinational Corporations: Developing an IHRM Integrative Framework', unpublished doctoral thesis, University of Pennsylvania.
63.
Rosenzweig, P. and J. Singh (1991) `Organizational Environments and the Multinational Enterprise' , Academy of Management Review16(2): 340-361 .
64.
Royle, T. (1998) `Avoidance Strategies and the German System of Co-Determination' , International Journal of Human Resource Management9(6): 1026-1047 .
65.
Sadowski, D. and R. BoÈck (1995) Perspektiven und Entwicklungen der industriellen Beziehungen in der europaÈischen Union: Ein Vergleich zwischen vier LaÈndern. Deutschland. Milan: Fondazione Regionale Pietro Seveso .
66.
Sadowski, D., U. Backes-Gellner and B. Frick (1995) `Works Councils: Barriers or Boosts for the Competitiveness of German Firms' , British Journal of Industrial Relations33(3): 493-513 .
67.
Schmitt, M. (2002) Der grenzuÈberschreitende Transfer von Personalpraktiken innerhalb multinationaler Unternehmen. Munich and Mering: Hampp .
68.
Schnabel, C. (1998) `The Reform of Collective Bargaining in Germany: Corporatist Stability vs Firm Flexibility', pp. 83-95 in R. Hoffmann, O. Jacobi, B. Keller and M. Weiss (eds) The German Model of Industrial Relations between Adaptation and Erosion. DuÈsseldorf: Hans-BoÈckler-Stiftung - Graue Reihe.
69.
Schnabel, C. and J. Wagner (1996) `Ausmaß und BestimmungsgruÈnde der Mitgliedschaft in ArbeitgeberverbaÈnden: Eine empirische Untersuchung mit Firmendaten' , Industrielle Beziehungen3(4): 293-306 .
70.
Schuler, R. and N. Rogovsky (1998) `Understanding Compensation Practice Variations across Firms: The Impact of National Culture' , Journal of International Business Studies29(1): 159-177 .
71.
Studenmund, A. (1997) Using Econometrics: A Practical Guide. Reading, MA: Addison-Wesley .
72.
Tempel, A. (2001) The Cross-National Transfer of Human Resource Management Practices in German and British Multinational Companies. Munich and Mering: Hampp .
73.
Trompenaars, F. (1995) Riding the Waves of Culture: Understanding Cultural Diversity in Business. London: Nicholas Brealey .
74.
Volz, R. (1997) `Konvergenz und Divergenz von Arbeitsbeziehungen in multi-nationalen Unternehmen: Die Nahrungsmittelindustrie und der Bankensektor im Drei-LaÈnder-Vergleich' , Industrielle Beziehungen4(2): 79-100 .
75.
Weiss, M. (1992) `Structural Change and Industrial Relations: The Federal Republic of Germany', pp. 243-250 in A. Gladstone (ed.) Labour Relations in a Changing Environment. Berlin and New York: de Gruyter .
76.
Wheeler, H. (1998) `Industrial Relations in the United States of America', pp. 444-459 in M. Poole and M. Warner (eds) The IEBM Handbook of Human Resource Management. London: International Thomson Business Press .
77.
Whitley, R. (1992) `Societies, Firms and Markets: The Social Structuring of Business Systems', pp. 5-45 in R. Whitley (ed.) European Business Systems: Firms and Markets in their National Contexts. London: Sage .
78.
Yuen, E and H. Kee (1993) `Headquarters, Host-Culture and Organizational Influences on HRM Policies and Practices' , Management International Review33(4): 361-383 .
