What Factors Lead Management to Support or Oppose Employee Participation - with and Without Works Councils? Hypotheses and Evidence from Germany

31 Pages Posted: 17 Sep 2006

See all articles by Uwe Jirjahn

Uwe Jirjahn

University of Trier - Faculty of Economics

Stephen C. Smith

George Washington University - Department of Economics

Abstract

This paper provides the first econometric analysis to distinguish between works councils in establishments where managers have a positive or negative view toward employee involvement in decision making. We similarly distinguish between establishments where no council is present in which management supports or does not support worker participation. We stress the potential role of works councils and participation in motivating employees. Our theoretical analysis and empirical results from German manufacturing establishment data show that the structure of the workforce, principal-agent problems between owners and managers, collective bargaining, direct employee involvement, human resource management practices, and market strategy and innovativeness all play important roles. Some conflicting conclusions in the works council literature may be due to the failure to distinguish among industrial relations participation regimes characterized by cooperative or uncooperative relationships between works councils and management.

Suggested Citation

Jirjahn, Uwe and Smith, Stephen C., What Factors Lead Management to Support or Oppose Employee Participation - with and Without Works Councils? Hypotheses and Evidence from Germany. Industrial Relations: A Journal of Economy and Society, Vol. 45, No. 4, pp. 650-680, October 2006. Available at SSRN: https://ssrn.com/abstract=930783 or http://dx.doi.org/10.1111/j.1468-232X.2006.00446.x

Uwe Jirjahn (Contact Author)

University of Trier - Faculty of Economics ( email )

Trier, 54286
Germany

Stephen C. Smith

George Washington University - Department of Economics ( email )

2115 G Street NW
306 Monroe Hall
Washington, DC 20052
United States

HOME PAGE: http://https://www2.gwu.edu/~iiep/about/faculty/ssmith/

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