Two Faces of Corporate Governance in Britain: Symbiotic Diffusion of Human Resource Management/Japanization and European Works Council

It is commonly assumed that managerial conditions in Germany are not favourable to Japanese manufacturing firms. It is notable, however, that some Japanese transplants not only manage to survive but even achieve solid results through the partial application of Japanese management and production techniques, and the adaptation to (or adoption of) particular location-specific management advantages in Germany. This chapter will address the following points: 1 How do Japanese transplants in Germany manage to cope with rigid social regulations and customs, such as the Tarif system based on AZUBI (to be described later), which are implemented through negotiations with labour unions and work councils (Betriebsrat)? 2 How do Japanese-style flexible production systems and ‘mechatronics’ (mechanical and electronics) technologies manage to coexist with German-style rigid work organization and mechanical engineering technology? 3 What are the advantages to Japanese manufacturers of having their production bases in Germany in terms of markets and logistics? What are the advantages of being in Germany in terms of supplying functionally advanced and high quality products to the German market, or in terms of parts procurement from suppliers and OEM (Original Equipment Manufacturer) contracts with local manufacturers in eastern European countries?