Heinz-Josef Tüselmann

Employee relations in German multinationals in an Anglo-Saxon setting: Towards a Germanic version of the Anglo-Saxon approach?

This study examines whether German multinationals operating in an Anglo-Saxon setting design their employee relations primarily on the German or the Anglo-Saxon model. The authors’ cross-sectional comparison with UK-owned firms provides no evidence of a transfer of the current German approach but does point to a distinctive Germanic version of the ‘high-road’ variant of the Anglo-Saxon approach. Intra-German analysis shows that this is most pronounced among the types of subsidiaries that are particularly significant for disseminating employment relations innovations across the multinational, but that these also have the highest incidence of collective arrangements and the lowest incidence of the ‘low-road’ variant of the Anglo-Saxon approach. In the light of recent reforms in the German industrial relations system, the findings point to an emerging new flexible collective approach with a comprehensive direct employee involvement dimension.

Progress towards greater labour flexibility in Germany

Government and employers’ sources frequently emphasize that companies located in western Germany have traditionally been circumscribed in their pursuit of flexibility in staffing, working time arrangements and pay, due to the particular configuration of the German industrial relations system and labour market regulations. Examines to what extent recent deregulation and decentralization measures have actually enhanced the environment for greater labour flexibility. Then considers whether this has led to higher degrees of labour flexibility at the company level. The analysis of a number of key flexibility indicators reveals that, despite some significant broadening of the scope for greater labour flexibility since the late 1980s, companies seem, in general, not to have greatly altered their flexibility mix. In the light of the relatively high degree of functional flexibility in German firms, the pay‐offs from enhancing other forms of flexibility may be considered to be low.

Varieties and variability of employee relations approaches in US subsidiaries: Country-of-origin effects and the level and type of industry internationalisation

This article investigates the relative importance and variability of the country-of-origin effect in employee relations approaches of US subsidiaries within the context of diversity of employee relations patterns in home- and host-country business systems and the influence of important industry forces. It is based on a representative survey of US subsidiaries and indigenous firms in the UK. The cross-sectional comparison with indigenous UK firms confirmed a distinct US country-of-origin imprint in employee relations patterns in US subsidiaries. However, the magnitude of such an effect cautions against assumptions of popular stereotypes and reflects, inter alia, the diversity of employee relations approaches among US parent companies as well as developments in the UK industrial relations landscape over the last decades. The intra-US analysis revealed the importance of both the level and type of industry internationalisation in shaping the strength and nature of the country-of-origin influence. On the basis of the findings, the article highlights lessons to be learned for the study of cross-border policy-transfer issues in MNCs.

The Strategic Development of Foreign-Owned Subsidiaries and Direct Employment in Host Locations in the United Kingdom

The authors use international business strategy and regional development literature to inform a set of propositions about the links between direct employment by foreign-owned subsidiaries in the manufacturing sector and the development of embeddedness and autonomy in these subsidiaries. A large-scale survey of French, German, and US manufacturing subsidiaries in the United Kingdom is used to test the importance of embeddedness (host-country sourcing and use of networks) and autonomy (decisionmaking and operational autonomy) for the growth of employment by foreign-owned subsidiaries and the growth of skilled jobs in such subsidiaries. The results indicate that growth of embeddedness and autonomy factors are important, especially for the growth of skilled jobs, but those subsidiaries that have this attribute are a minority of foreign-owned subsidiaries. In the light of these results, the authors argue that policies need to be geared towards developing embeddedness and encouraging the growth of autonomy in subsidiaries that are likely to be regarded as central to the overall objectives of multinational corporations (MNCs). This requires policymakers to be aware of the internationalisation strategies used by MNCs, particularly in the light of the emergence of new, low-cost, countries which can easily provide high-quality but low-cost manufacturing operations. An important conclusion is that simple promotion of networking among firms and supporting agencies, and attempts to improve the local asset pool are unlikely to be effective in most cases.

Globalisation, nationality of ownership and employee relations: German multinationals in the UK

Based on a representative survey of German subsidiaries in the UK, their parent companies and a comparative analysis to the Workplace Employee Relations Survey 1998, the article examines the impact of nationality of ownership on employee relations (ER) in German multinational companies (MNCs) operating in an Anglo‐Saxon setting. It also assesses whether in light of heightened international competition and the problems in the German ER model, there has been a weakening of the home country effect over time. The study finds little evidence of a home country effect in relation to ER structures but reveals a pronounced country‐of‐origin effect in the ER approach and style. There is also evidence that German MNCs have responded to the globalisation pressures of the 1990s by a heightened emphasis on the country‐of‐origin collective approach in their UK subsidiaries, whilst at the same time developing comprehensive direct human resource management employee involvement schemes to complement, rather than substitute collective ER.

German direct foreign investment in Eastern and Central Europe: relocation of German industry?

Against the background of the hotly‐debated issue of Germany’s attractiveness as a manufacturing location, the article assesses whether, and to what extent, the extraordinary growth of German direct foreign investment (DFI) into Eastern and Central Europe (ECE) can be connected to a relocation of German industry caused by unfavourable location conditions on the cost side of the German economy. Reviews the German DFI position in general, analyses the particularities of the growth patterns of German DFI into ECE, critically evaluates the perceived location advantages of the region, examines the reasons underlying the DFI decisions of German companies and the subsequent types of investments in ECE, and finally assesses their economic impact on Germany. Concludes that, although the majority of German investors transferred production capacities to ECE, these were only in the minority of cases connected to unfavourable conditions on the cost side of the German location. There are strong grounds to suggest that the net effect of all German DFI into ECE on German exports, production, domestic investment and ultimately German jobs, has been positive.

Institutional frameworks and radical innovation: an analysis of high- and medium-high-technology industries in Germany

Radical innovation is increasingly becoming the focus of attention of both policy makers and senior corporate managers. However, debates within the varieties of capitalism literature on the ease with which radical innovation can be achieved within less de-regulated economies, such as Germany, have tended to focus on the pharmaceutical industry. This article demonstrates that attempts to assess the extent to which the socio-economic institutions typically associated with Germany support radical innovation should be broadened to cover other sectors besides the pharmaceutical industry, as the distinctiveness of that sector has yet to be firmly established. This article proposes theoretical reasons to suggest that the pharmaceutical industry may not be as distinct, in terms of radical innovation, from other sectors as it is often implicitly assumed to be. These arguments are assessed using the large-scale, representative survey data. This paper opens up new areas that can be explored in future research. The core finding is that pharmaceutical firms are not statistically more likely to introduce radical innovations compared to those in many other high-technology and medium-high-technology industries. In addition, works councils and sectoral collective agreements do not hinder the development of new technologies. Both of these findings have important public-policy implications.

Sectoral collective agreements: Remuneration straitjackets for German workplaces?

Purpose – This paper aims to map some of the diversity in employee relations in Germany that is overlooked, first, within assessments of the German labour market that focus on the national level and second, within separate studies in this area that emphasize attempts by employers to circumvent important institutions.Design/methodology/approach – The research adopts a quantitative approach to examine data for German manufacturing and service sectors on both the spread of industry‐wide collective agreements and the extent to which workers are paid wage rates that are higher than those set out in those agreements. It also assesses the prevalence of profit sharing and employee share ownership schemes.Findings – Industry‐wide collective agreements are not the burden that they are often portrayed. Actual wage rates and the prevalence of profit sharing and ESOSs make German workplaces more heterogeneous than critics and advocates of the German economic model posit.Research limitations/implications – The data are...

Standort Deutschland – is Germany losing its appeal as an international manufacturing location?

Against the background of intensified competition for company locations, hotly debates Germany′s position as an international manufacturing base. Aims to identify how far concerns about Germany′s location quality are justified. After examining German direct foreign investment (DFI) developments as an indicator for location quality, analyses important underlying variables, which actually determine the quality of location. The DFI position compares unfavourably with those of other major economies. The German position has deteriorated further since the early 1990s. The eastern region′s location quality seemed to be even poorer than that of the western region. The subsequent comparative analysis of quantifiable cost and burden factors and qualitative factors revealed that, on balance, the relative location weaknesses outweighed the relative strengths in both German regions. Grave disadvantages were disclosed in eastern Germany. A reliable prognosis concerning Germany′s future location quality could not be mad...

The strategic development of subsidiaries in regional trade blocs

Purpose – The purpose of this paper is to explore the relationships between the strategic development of subsidiaries and the likelihood of subsidiaries exporting on an intra‐regional basis to European markets.Design/methodology/approach – The paper defines the strategic development of subsidiaries as increases in autonomy, embeddedness in host locations and use of networks and host country sourcing. The location of subsidiaries in industrial clusters is also considered. Use is made of multinomial probit analysis of a survey of 391 UK‐based subsidiaries to identify the relationships between the strategic development of subsidiaries and supplying European markets.Findings – The study finds some evidence that there are links between increasing networks and supplying European markets, but there is no evidence that developing host country sourcing is associated with European supply. Location in an industrial cluster is consistently associated with supplying European markets, and autonomy also appears to be cl...