Institutional Environments and Employee Relations in German Firms

Heightened globalization pressures, characterized, inter alia, by rising capital mobility and increasing international competition have led to a growing interest in the institutional environments in which firms operate. These environments include the labour-market system (Coates, 2000; Hall and Soskice, 2001; Whitley, 1999). At the policy level, there have, in recent years, been many calls for far-reaching reforms of more regulated economies, such as Germany’s, along the lines of the Anglo-American model of capitalism (Berthold and Stettes, 2001; Siebert 1997). This has, at least in part, been spurred by the superior macro-economic performance, in terms of economic growth, unemployment rates and employment creation, of deregulated neo-liberal economies, such as the United States and the United Kingdom, throughout the 1990s and the early 2000s. Some analysts expect there to be a process of convergence in the structures of national economies — from social security to industrial relations systems. This process of convergence is said to be driven by a performance-induced imperative and is argued to lead to the adoption of a global best-practice model. This best-practice model is frequently regarded to be the Anglo-American model of capitalism.