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Understanding the Effects of Works Councils on Organizational Performance. A Theoretical Model and Results from Initial Case Studies from the Netherlands

Author

Listed:
  • Jan Ekke Wigboldus

    () (SBI training/consultancy)

  • Jan Kees Looise

    () (University of Twente, School of Management and Governance)

  • Andr351 Nijhof

    () (Nyenrode Business Universiteit, European Institute for Business Ethics)

Abstract

In this article, we present a conceptual model to understand the effects of works councils on organizational performance. The model is based on economic and HRM literature on employee participation and organizational performance, as well as on German and Dutch research into the economic and other effects of works councils. The model has been operationalized through a research approach and applied for the first time using in-depth case studies in a large insurance company in the Netherlands. In this paper we present the results of these case studies and the consequences for the model and the research approach. The findings show that works councils not only affect performance through changing employee attitudes and behavior \u2013 in a not dissimilar way to HRM \u2013 but also in a direct way by adding asymmetric information to the decision-making process and in an indirect way through influencing management attitudes and behavior. Thus the works council - performance relationship differs substantially from the HRM - performance relationship. The influence of the three potential mechanisms will depend to an extent on the characteristics of the works council and the organizational context. Further research is needed to determine how contextual conditions influence the positive effects of works councils on organizational performance.

Suggested Citation

  • Jan Ekke Wigboldus & Jan Kees Looise & Andr351 Nijhof, 2008. "Understanding the Effects of Works Councils on Organizational Performance. A Theoretical Model and Results from Initial Case Studies from the Netherlands," management revue. Socio-economic Studies, Rainer Hampp Verlag, vol. 19(4), pages 307-323.
  • Handle: RePEc:rai:mamere:doi_10.1688/1861-9908_mrev_2008_4_wigboldus
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    Cited by:

    1. Saraï Sapulete & Arjen van Witteloostuijn & Annette van den Berg & Yolanda Grift, 2011. "The Impact of Works Councils on Productivity in Times of Reorganization," Chapters,in: The Nature of the New Firm, chapter 8 Edward Elgar Publishing.

    More about this item

    Keywords

    works councils; organizational performance; the Netherlands;

    JEL classification:

    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • J53 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Labor-Management Relations; Industrial Jurisprudence
    • M10 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - General

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