Employee Relations in German Multinationals in an Anglo-Saxon Setting and the New German Model of Labour Relations

Abstract

Against the background of increased globalization pressures, the growing internationalization of German multinational companies (MNCs) and the current problems and erosion of the traditional German industrial relations (IR) system, there has been growing interest in the employee relations’ (ER) approaches and practices of German MNCs, especially those operating in an Anglo-Saxon setting. A key issue is whether nationality of ownership still matters in ER approaches and practices of German MNCs or whether ER patterns in MNCs are converging towards the Anglo-Saxon approach, irrespective of MNCs’ countries of origin. This issue is connected to the wider debate on the fate of national ER models in an era of heightened global competition where MNCs are seen as powerful transmission belts for transnational convergence. The unresolved question is whether national models will retain their national distinctiveness by responding to the pressures of globalization in a path-dependent trajectory of change (Lane, 1995; Whitley and Kristensen, 1996). An alternative view is that these pressures lead to the disappearance of tightly regulated and densely institutionalized models with their emphasis on a collective ER approach, such as the German one, and their convergence to the orthodox Anglo-Saxon deregulated market-led model with its emphasis on an individualistic human resource management (HRM) style (Streeck, 1997). The consensus on the benefits of the traditional German collective ER approach has declined and employers have demanded a more flexible, deregulated and decentralized IR system (Wirtschaftswoche, 1995; Institut der deutschen Wirtschaft, 2000).

This chapter is based on a research project funded by the Hans-Böckler Foundation, Düsseldorf, Germany, and has been carried out in cooperation with the Economic and Social Research Institute (Wirtschafts- und Sozialwissenschaftliches Institut), Germany. Infrastructural support was provided by the German-British Chamber of Commerce and Industry in London.