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Corporate Governance in Germany: Productive and Financial Challenges

Chapter
Part of the The Jerome Levy Economics Institute Series book series (JLEI)

Abstract

Corporate governance has, in recent years, become a highly charged political issue in Germany. As recently as the late 1980s confidence in the ability of the ‘Rhenish system of capitalism’ to deliver economic performance without sacrificing social cohesion was running at an all-time high. From the early 1990s, however, as Germany wrestled with the challenges and costs of reunification, and then plunged into its worst recession since World War II, talk of the strengths of German capitalism was replaced by anxious discussion of the viability of Industriestandort Deutschland (Germany as an industrial location). Employers warned that German companies would be forced to relocate production abroad if drastic reforms of corporate structures and, indeed, the foundations of the social market economy, were not undertaken to ensure closer attention to the bottom line. Senior German managers seemed to be increasingly influenced by what was happening overseas, especially in the US corporate economy. Indeed, companies such as Daimler-Benz and Deutsche Bank, formerly seen as synonymous with the distinctive German postwar system of managerial capitalism, have emerged at the forefront of a shareholder value movement in Germany in the mid- to late 1990s

Keywords

Foreign Direct Investment Corporate Governance Pension System Supervisory Board Work Council 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

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© Palgrave Macmillan, a division of Macmillan Publishers Limited 2002

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