German multinationals in the UK and the German model of labour relations: diffusion and reverse diffusion effects

Tüselmann, Heinz, McDonald, Frank and Heise, Arne (2001) German multinationals in the UK and the German model of labour relations: diffusion and reverse diffusion effects. In: Manchester Metropolitan University Business School Working Papers. Working Paper. Manchester Metropolitan University.

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Abstract

The paper examines whether in light of heightened globalisastion pressures, German multinational companies operating in an Anglo-Saxon setting have developed approaches to employee relations which may point to the diminishing international competitiveness of the German approach. It also assesses whether the wider knockon effect may exert pressures o the German model of labour relations to converge towards the Anglo-Saxon model. The paper is based on a survey of German subsidiaries in the UK, their parent companies and a comparative analysis to the Workplace Employee Relations Survey 1998. The study reveals the existence of a country-of-origin effect in the UK subsidiaries and finds little evidence of attempts to import Anglo-Saxon style practices into the parent companies German locations, despite some indications of possible reverse diffusion effects with regard to direct employee involvement schemes. With the current reforms in the German industrial relations system already providing a broader scope for more flexible collective employee relations responses, evolving pattern in German multinationals may be described as a "flexible collective approach with a HRM dimension". Taking into account possible wider knock-on effects onto other companies in the German economy, the paper predicts a continuation of the path dependent reform trajectory in the German model.