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Deregulation of the German Industrial Relations System via Foreign Direct Investment: Are the Subsidiaries of Anglo-Saxon MNCs a Threat for the Institutions of Industrial Democracy in Germany?

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  • Matthias Schmitt

Abstract

This article asks whether the subsidiaries of American and British MNCs operating in Germany act as forces that endanger the traditional German system of industrial democracy by `importing' typical Anglo-Saxon style industrial relations practices into their host nation. In a mail survey based on responses from 297 foreign-owned and local German firms, little evidence was found that Anglo-Saxon-owned subsidiaries act as a threat to the central pillars of Germany's IR system, i.e. codetermination and collective bargaining. This finding contradicts a widely held belief of the erosion of the German IR system and suggests that this system is still strong: foreign companies adapt to local standards so as to retain legitimacy within their host nation's environment.

Suggested Citation

  • Matthias Schmitt, 2003. "Deregulation of the German Industrial Relations System via Foreign Direct Investment: Are the Subsidiaries of Anglo-Saxon MNCs a Threat for the Institutions of Industrial Democracy in Germany?," Economic and Industrial Democracy, Department of Economic History, Uppsala University, Sweden, vol. 24(3), pages 349-377, August.
    • Handle: RePEc:sae:ecoind:v:24:y:2003:i:3:p:349-377
    DOI: 10.1177/0143831X030243003
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