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Works councils in family businesses in Germany: Why are there so few?


  • Schlömer-Laufen, Nadine
  • Kay, Rosemarie
  • Holz, Michael


Works councils are an inherent part of the German economic and social system. An analysis of the prevalence of works councils in Germany reveals that they are not uniformly distributed across all types of businesses. Works councils occur less frequently in owner-managed businesses - regardless of their size - than in companies run by employed managers. The reasons for this low prevalence are still largely unknown as there has been practically no discussion of this phenomenon in the literature so far. This paper delivers first answers to this question by conducting an exploratory study. Based on a literature analysis and an empirical analysis of a secondary dataset, we found some explanations why works councils are so rarely established in family businesses. These explanations refer to special characteristics of the owner-manager (i. e. eagerness for independence) as well as to special characteristics of family businesses as a whole (i. e. performance and organizational changes).

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  • Schlömer-Laufen, Nadine & Kay, Rosemarie & Holz, Michael, 2014. "Works councils in family businesses in Germany: Why are there so few?," Working Papers 03/14, Institut für Mittelstandsforschung (IfM) Bonn.
  • Handle: RePEc:zbw:ifmwps:0314

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    References listed on IDEAS

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    Cited by:

    1. Kölling, Arnd & Schnabel, Claus, 2019. "Owners, external managers, and industrial relations in German establishments," FAU Discussion Papers in Economics 10/2019, Friedrich-Alexander University Erlangen-Nuremberg, Institute for Economics.
    2. Hans-Dieter Gerner & Holger Reinemann & Andreas Dutzi & Daniel Ludwig, 2019. "Im Zentrum ökonomischer Mitbestimmungsforschung steht die Frage, ob Betriebsräte effizient sind. Die hierzu vorliegenden empirischen Befunde tendieren zu einem überwiegend positiven Einfluss von Betri," ZfKE – Zeitschrift für KMU und Entrepreneurship, Duncker & Humblot, Berlin, vol. 67(2), pages 113-144.

    More about this item


    works councils; family business; exploratory study;

    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • J53 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Labor-Management Relations; Industrial Jurisprudence
    • L20 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - General
    • M54 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Labor Management

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