Management Under Differing Value Systems: Political, Social and Economical Perspectives in a Changing World [Reprint 2019 ed.] 9783110863659, 9783110085532

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Management Under Differing Value Systems Editors: Giinter Dlugos and Klaus Weiermair

Management Under Differing Value Systems Political, Social and Economical Perspectives in a Changing World Editors: Günter Dlugos and Klaus Weiermair in Collaboration with Wolfgang Dorow

W DE G Walter de Gruyter • Berlin • New York 1981

Proceedings

of the International

Conference,

Toronto, October

1980

Prof. Dr. Günter Dlugos, Fachbereich Wirtschaftswissenschaft, Fachrichtung Unternehmungspolitik, Freie Universität Berlin, Berlin (West) Prof. Dr. Klaus Weiermair, Faculty of Administrative Studies, Department of E c o n o m i c s , York University, Toronto, Ontario, Canada Dr. WolfgangDorow, Fachbereich Wirtschaftswissenschaft, Fachrichtung Unternehmungspolitik, Freie Universität Berlin, Berlin (West)

CIP-Kurztitelaufnahme der Deutschen Bibliothek Management under differing value systems: polit., social and econom. perspectives in a changing world; [proceedings of the internat, conference, Toronto, October 1980]/ed.: Giinter Dlugos and Klaus Weiermair in collaboration with Wolfgang Dorow. - Berlin; New York : de Gruyter, 1982. ISBN 3-11-008553-4 NE: Dlugos, Günter [Hrsg.] Library of Congress Cataloging in Publication Data Management under differing vlue systems Proceedings of an international conference held in Toronto, Oct. 1980 Includes index. 1. Industry-Social aspects-Congresses. 2. Comparative management-Congresses. 3. Social values-Congresses. 4. Industrial relations-Congresses. I. Dlugos, Giinter. II. Weiermair, Klaus, 1939 - III. Dorow, Wolfgang. HD60.M36 658.4'08 81-15081 ISBN 3-11-008553-4 AACR2

© Copyright 1981 by Walter de G r u y t e r & Co., Berlin 3 0 All rights reserved, including t h o s e of translation i n t o foreign languages. N o part of this b o o k m a y be r e p r o d u c e d in any f o r m — b y p h o t o p r i n t , microfilm or any o t h e r m e a n s n o r t r a n s m i t t e d n o r translated into a m a c h i n e language w i t h o u t w r i t t e n permission f r o m t h e publisher. Printing: Karl Gerike, Berlin. — Binding: Dieter Mikolai, Berlin. — Printed in G e r m a n y .

Preface

Research in Philosophy and various Social Sciences disciplines has recently received new impetus from a general recognition that human action and behavior is largely determined by prevailing social values and norms. The relationship between social values and human behavior therefore becomes an important explanatory variable in the analysis of varying interests and needs across societies with differing value systems and, as such, also serves as the explanation and prediction of secular changes in basic human goals and human behavior. The enterprise sector, as one of the main determinants of social and economic development obviously represents in this regard a key social subsystem with interrelationships to social values and social value changes in the product and factor markets, particularly the market for labour and the ensuing system of industrial relations. To the present, research into changing values, while concentrating on the special phenomena of western industrial society, also has emphasized the relative importance of the enterprise sector. So far there has been no attempt at a comprehensive analysis of the interdependencies between value systems and the structures, processes and efficiencies of the enterprise sector in different societies, on the one hand, and the impact of the sector in changing value systems on the other hand. This serious research gap, a shared interest in the field of value research and the existence of research results on enterprise related value analysis, were among the motives for the Faculty of Administrative Studies at York University, Toronto, and the Faculty of Enterprise Policy at Free University, Berlin, to organize an international conference in Toronto on

VI

Preface

"Management Under Differing Value Systems". The conference was facilitated by the presence and active interest of a large number of social scientists engaged in value research who sought to exchange information with regard to competing paradigms and approaches and who had become interested in closer collaboration. Among the topics of the conference were fundamental problems with the applicability and interpretation of general social value research, enterprise specific value research, questions of research design, interdependencies between social value systems, the employment relationship and managerial values, and the contextual and structural leeway accorded to them. These analyses, adapted to North American and Western European conditions, were supplemented by comparisons with conditions prevailing in Eastern Europe and Japan. Publication of the papers should promote an overview on the state of the arts in value research as it relates to the enterprise sector, and to stimulate greater research efforts in this area for the purpose of expanding scientific collaboration. During the conference, discussion was also sought with representatives of companies, a dialogue which we would like to deepen and explore and which was a further motive behind this publication. We are grateful to all participants of the Toronto Conference for their earnest cooperation, especially to the chairmen, speakers and discussants, and the submission of revised and largely publishable papers. As for overcoming the inevitable residue and helping with translation, we thank Hilde Karge, Helga Prouty, David Antal, and Dipl.-Kfm. Hans-Georg Lilge, all residing in Berlin, as well as Filomena Otto and Diane Plumridge in Toronto. The realization of our desire to publish the conference papers was accommodated most generously by the publishing house of

Preface

VII

Walter de Gruyter, Berlin - New York, whom we should like to thank for diverse favors, and the speedy publication of this research. A necessary precondition for the realization of the conference in Toronto has been the generous support of our project by both universities involved and a grant from the Social Sciences & Humanities Research Council of Canada. We are particularly grateful to Reemtsma Cigarettenfabriken GmbH., Hamburg, Siemens AG., Zentrale Berliner Leitung, Volkswagen AG., Wolfsburg, Imperial Oil, Gulf Canada, and the Ontario Government for filling the remaining financial gaps. The Editors

Contents

Part I Fundamental Problems and the Epistemology of Value Research Schwan, A. (Berlin) Fundamental Values of Western Democracies Opp, K.D. (Hamburg) The Explanation of Values. Problems and Approaches Wilson, H. T. (Toronto) Taking on Ayres. Values: On the Possibility of a Convergence Between Economic and Non-Economic Decision-Making

3 13 37

Part II Societal and Political Perspectives of Value Change Inglehart, R. (Ann Arbor) Value Change in the Uncertain 19 70's Bell, D. V. J. (Toronto) Social Change and the Political Culture of Problem-Posing in Advanced Industrial Societies: The Case of Canada Stevenson, H. M. / Ornstein, M. D. (Toronto) Changing Values and the Politics of the Quality of Life Goldstaub, J. (Toronto) Social Value Change and Economic Development: Idiosyncrasies and Non-Linearities

75 109 12 7 15 7

Part III Values, External Exchange Processes and the Employment Relationship A. Value Systems and External Exchange Processes Weiermair, K. (Toronto) Relationships Between Social Values, the Education System and the Structure and Performance of Labour Markets

179

Mayer, R. N. (Salt Lake City) / Nicosia, F. M. (Berkeley) Social Organization and Changing Consumer Values

199

Reber, G. (Linz) 211 Possibilities and Limits of Influencing Consumer Behaviour

X

Contents

B. Industrial Relations Shalev, M. (Tel-Aviv) Theoretical Dilemmas and Value Analysis in Comparative Industrial Relations

241

Barbash, J. (Wisconsin-Madison) Price, Power, Social Justice and Other Union Values

265

Adams, R. J. (Hamilton) A Theory of Employer Attitudes and Behaviour Towards Trade Unions in Western Europe and North America

277

Rose, J. B. (Hamilton) The Nonwage Impact of Unions

295

Sacker, F.-J. (Berlin) The German Model of Code termination: Programmatic Perspectives, Confrontative Issues and Prospective Developments

311

C. Industrial Democracy and Quality of Worklife Nightingale, D. V. (Kingston) The Co-Determination and Quality of Work Life Movements Compared

349

Jick, T. D. (Toronto) Management and Quality of Worklife: A Clash of Values?

359

D. Social and Economic Rationale of Organization-Internal Labour Markets Goldberg, V. P. (Davis) Bridges Over Contested Terrain: Exploring the Radical Account of the Employment Relationship

375

Keenoy, T. (Cardiff) The Employment Relationship as a Form of Socio-Economic Exchange

405

Marsh, R. M. (Providence) / Mannari, H. (Nishinomiya) Divergence and Convergence in Industrial Organizations: The Japanese Case

447

Burke, R. J. (Toronto) Changing Values and the Future of the Employment Relationship

461

Part IV Values and Management Process - Cross-National Comparisons Whitely, W. (Norman) Sources of Influence on Managers' Value Dimension Structure, Value Dimension Intensity, and Decisions

4 81

Contents XI Horväth, D. (Toronto) ./ Azumi, K. (New Brunswick)/ Hickson, D. J. (Bradford) / McMillan, C. J. (Toronto) Bureaucratic Structures in Cross-National Perspective: A Study of British, Japanese, and Swedish Firms

537

KOW-lnternational Research Team (Norman) The Meaning of Working

565

Jaggi, B. (Binghampton) Social Responsibility of Business Firms and Social Reporting

631

Part V Value Changes and Conflict Management Dlugos, G. (Berlin) The Relationship Between Changing Value Systems, Conflicts, and Conflict-Handling in the Enterprise Sector

651

Dorow, W. (Berlin) Values and Conflict Behavior: An Exploration of Conceptual Relationships

677

Wondracek, J. (Berlin) Dynamization of Employees' Goal Criteria

703

Grunwald, W. / Lilge, H.-G. (Berlin) Change of Leadership Style in German Enterprises: From Authoritative to Participative Leadership?

721

Part VI Values and Organizational Processes in Different Countries Dierkes, M. / Antal, A. (Berlin) Changing Business Values and Management Concepts The German Experience

759

Kanungo, R. N. (Montreal) Work Motivation and Canadian Bicultural Context

785

McMillan, C. J. (Toronto) Social Values and Management Innovation: The Case of Japan

815

Pusic, E. (Zagreb) Ambiguity of Managerial Values in Self-Management

833

Wielicki, T. (Wroclaw) Societal Values Affecting the Level of Leadership Creativity in Polish Economic Organizations

851

Subject Index

863

Programme Committee

Prof. Dr. Klaus Weiermair Faculty of Administrative Studies Department of Economics York University, Toronto, Ontario Canada

Prof. Dr. Günter Dlugos Dr. Wolfgang Dorow Dipl.-Kfm. Jochen Wondracek Fachbereich Wirtschaftswissenschaft Fachrichtung Unternehmungspolitik Freie Universität Berlin, Berlin (We

Chairmen Borins, Sandford, York University, Toronto Dimick, David, York University, Toronto Jick, Todd, York University, Toronto Proudfoot, Stuart, York University, Toronto Read, William, York University, Toronto Schwan, Gesine, Free University Berlin, Berlin (West) Spender, J. C., York University, Toronto Thompson, Donald, York University, Toronto Tryfos, Peter, York University, Toronto Weiermair, Klaus, York University, Toronto Wolf, Bernard, York University, Toronto

Discussants Courtney, Alice, York University, Toronto Crispo, John, University of Toronto, Toronto Glaubrecht, Helmut, Reemtsma Cigarettenfabriken GmbH., Hamburg Jain, Harish C., McMaster University, Hamilton Lazar, Fred, York University, Toronto Manzer, Ron, University of Toronto, Toronto Meltz, Noah M., University of Toronto, Toronto Michalos, Barbara, Woods Gordon Management Consultant, Toronto Murray, Victor, York University, Toronto Packmohr, Horst, Siemens AG, Berlin (West) Simixiie, Patricia, York University, Toronto Simmons, Harvey, York University, Toronto

Parti Fundamental Problems and the Epistemologa of Value Research

Fundamental Values of Western Democracies Alexander Schwan ABSTRACT This article deals with the spiritual, economic, and social crises in highly industrialized societies which are rapidly becoming problematical for western democratic nations, too. On the one hand, the democracies require a strengthening of their capacity for government, and on the other, a co-responsibility of the citizenry if these problems are to be solved. One of the most important preconditions for tfiis would seem to be the development of a common ethos in a pluralistic society, orientated by the fundamental values inherent in our democratic constitutions. The following guiding fundamental values are described in this paper: dignity of man, liberty, life, equality, social justice, solidarity, and plurality. These values are closely related and mutually explanatory. Not one of these fundamental values can be isolated from the rest and become absolute. Political decisions orientated by these values gain in legitimacy, but they are subject to constant scrutiny, critique, and revision. The binding common ethos of pluralistic democracy, at the same time, permits the development of particular ethics for the individual and for the social subsystems. While these ethics are autonomous in themselves, they must not appear to be antagonistically opposed to the pluralistic public ethos.

Crises and Prospects of the Pluralistic Democracy The western democracies at present must overcome some severe crises. These crises have been experienced to a different ex" tent by the citizens of these countries, but they have been particularly acute for the young generation. Their roots are situated in material and spiritual problems which, for the most part, are phenomena resulting more from the highly industrialized and technological life of today than from special characteristics of the pluralistic society and the democratic state. The ecological problems, the scarcity of raw materials, the pressing difficulties of the world economy, especially the imbalance of the world monetary system, are international factors taking priority on our political agendas. Since the analyses and prognoses of the Club of Rome, the limits, the dangers, the possibilities, and the necessities of material growth have been intensively discussed. These structural difficulties of economy and ecology induce social and spiritual weaknesses involving the labor market and the maintaining of security in society; a great many people have lost their professional and social orientation; finally, a deep crisis over the sense of living (called "Sinnkrise" in Germany) is becoming more apparent. All these factors have created worldwide problems in the structural and intellectual existence of modern civilization, prob-

4

A l e x a n d e r Schwan

lems which cannot s i m p l y be a t t r i b u t e d t o any p a r t i c u l a r p o l i t i c a l s y s t e m . N e v e r t h e l e s s , they endanger t h e f o u n d a t i o n s and the f u n c t i o n i n g o f the p l u r a l i s t i c democracies. In f a c t , only i n t h e s e d e m o c r a c i e s have t h e s e problems been f r a n k l y d i s c u s s e d ; the p o l i t i c a l s y s t e m can be c r i t i c i z e d p u b l i c l y and ( f o r t h e most p a r t w r o n g l y ) be c a l l e d r e s p o n s i b l e f o r them. H e r e i n l i e s one o f the r e a s o n s f o r t h e a c u t e doubt i n t h e competence and t h e c a p a b i l i t y o f d e m o c r a t i c s t a t e s t o c o n t i n u e t o g o v e r n and f i n d convincing solutions. Indeed, the p r o c e s s o f d e v e l o p i n g consciousness o f the problems and c a r r y i n g o u t d e c i s i o n s c o n c e r n i n g them needs much t i m e i n t h e p l u r a l i s t i c democracy t o be a c k n o w l e d g e d , e l a b o r a t e d , and i m p r o v e d , and o f t e n i t r e t a i n s many d e f i c i e n c i e s . But o n l y t h e r e l a t i v e l y h i g h e l a s t i c i t y and s t a b i l i t y o f p l u r a l i s t i c democ r a c y has good p r o s p e c t s f o r c r e a t i n g t h e p o t e n t i a l t o pose and s o l v e t h e problems f a i r l y , through f r e e i n s i g h t and p u b l i c e x a m i n a t i o n , by a l l o w i n g i n d i v i d u a l s i n t h e s o c i e t y t o e s t a b l i s h a g e n e r a l c o n s e n t b a s e d on t h e i r own w e l l - u n d e r s t o o d i n t e r e s t . D e s p i t e a l l i t s d i f f i c u l t i e s , t h i s p o l i t i c a l system i n t h e l o n g run i s thus more e f f e c t i v e than any o t h e r s y s t e m , e s p e c i a l l y t h e a u t o c r a t i c and b u r e a u c r a t i c t y p e . The answers g i v e n by t h e adherents o f a u t h o r i t a r i a n regimes are unacceptable f o r reasons o f p r i n c i p l e and p r a c t i c a l i t y . They o f f e r no r e a l a l t e r n a t i v e s t o the p l u r a l i s t i c democracy. P l u r a l i s t i c democracy t o d a y needs an i n c r e a s e o f the g o v e r n m e n t ' s c a p a b i l i t y f o r a c t i n g and a s t i m u l a t i o n o f c o n s t r u c t i v e c o o p e r a t i o n o f c i t i z e n s , s o c i a l g r o u p s , and i n s t i t u t i o n s . The l o n g term p o l i c y o f p u b l i c a u t h o r i t i e s and the c i v i l s e r v i c e w i l l have t o be more e f f e c t i v e . A t the same time., more d i v e r s i f i c a t i o n and d e c e n t r a l i z a t i o n o f the d i f f e r e n t l e v e l s f o r p o l i t i c a l a c t i o n s seems d e s i r a b l e , a t l e a s t i n most o f the European c o u n t r i e s . That would be i n the i n t e r e s t o f an a c t i v e p a r t i c i p a t i o n by the p e o p l e . A l l i n d i v i d u a l s , g r o u p s , and o r g a n i z a t i o n s must assume r e s p o n s i b i l i t y i f the v i t a l l y i m p o r t a n t a t t e m p t i s t o s u c c e e d i n m a s t e r i n g the c r i s e s i n a manner t h a t combines j u s t d i s t r i b u t i o n o f u n a v o i d a b l e burdens w i t h s e c u r i t y and f u r t h e r d e v e l o p m e n t o f i n d i v i d u a l and p o l i t i c a l liberty. Challenges There a r e some c h a l l e n g e s t h a t must be r e s p o n d e d t o . I n f u t u r e t h e improvement o f t h e q u a l i t y o f l i f e f o r a l l i n d i v i d u a l s w i l l become more i m p o r t a n t than t h e mere i n c r e a s e o f m a t e r i a l p r o s p e r i t y . That demands t h a t t h e p o p u l a t i o n must change i t s o u t l o o k on l i f e . A c r u c i a l c o n d i t i o n f o r i m p r o v i n g t h e q u a l i t y o f l i f e i s t h e r e s t o r a t i o n and p r e s e r v a t i o n o f human r e s o u r c e s ( i n t h e w i d e s t s e n s e ) , which a r e b o t h w i t h i n man's a b i l i t y through c a r e f o r h e a l t h , f o r n e i g h b o r l y s o c i a l r e l a t i o n s , f o r a humane and s e c u r e w o r k e r ' s s i t u a t i o n , f o r an i n t e l l i g e n t o r g a n i z a t i o n o f l e i s u r e time, f o r the v a l u e of r e -

Values of Western Democracies

5

laxation and so on. Yet an effective economy, large-scale industrial investments, a sufficient supply of energy, adequate nutrition, and many other things are equally important for a qualitatively satisfying individual and social life. Last but not least, the continual improvement of the education system is essential to the enrichment of life because that gives the chance to each member of the society to realize a relatively independent self-reliant life. But all these and many other required social accomplishments demand great effort on the part of citizens; the commonwealth can distribute to the citizens only the sum of their own individual and collective work. It is not the purpose of this chapter to continue the outline of the problems and challenges indicated above. But it is clear that the democratic society of the near future can no longer be a hedonistic and egoistic society. It will and must be a rather ascetic and joint society, a society of solidarity yet also of freedom; that is the feat. There are no simple solutions for these complex modern tasks; there exists only a troublesome way of difficult decisions with long-term effects, most of which must connect a variety of strategies. Today's single interest groups often overlook that point, even though the special perspectives they emphasize are sometimes very useful for public discussion. But political practice in general is responsible for handling the complex of social duties, and decisions must be based upon competence and courage to take far-reaching action on behalf of the common good. They are mostly judgments in conflicting situations, often made in "tragic conflicts" between goods and values which are of equal importance in securing the quality of modern life. On these grounds political decisions can never satisfy everyone and can never claim general validity; on the contrary, there are always relative decisions under uncertain and diverse conditions, especially in the present society. This fact, however, does not diminish but it enlarges the intellectual, moral, and political demands on politicians and the population to find the readiness and strength for active participation. The Importance of a Common Ethos In the interest of a humane society—not only of society and mankind as such, but of free society and free mankind, the sole interesting quality of survival^—the reflection on the fundamental values of the pluralistic democracy is a crucial issue. It is important that the ethical standards of the free social life of individuals, groups, and organizations are recognized and adopted. It should not only be regarded as up-to-date to accommodate social goals to the changing subjective requirements of individuals and groups; at the same time, these subjective requirements ought to be scrutinized to determine whether they are justified as supporting liberal politics in the pluralistic democracy or not.

6

Alexander Schwan

T h e r e i s a n e c e s s a r y framework o f f r e e s o c i e t y , and t h i s f r a m e work has d i s t i n c t i n t e l l e c t u a l and moral r o o t s . For t h i s r e a s o n , t h e f o c u s on " f u n d a m e n t a l s " (Grundwerte) i n the d i s c u s s i o n t h a t has been g o i n g on i n some o f t h e w e s t e r n c o u n t r i e s f o r s e v e r a l y e a r s i s n o t e w o r t h y and p l e a s i n g . I n t h e F e d e r a l R e p u b l i c o f Germany, t h e d i s c u s s i o n was i n i t i a t e d by t h e programmatic change o f the S o c i a l D e m o c r a t i c P a r t y (SPD, Bad G o d e s b e r g , 1959) which abandoned i t s M a r x i s t t r a d i t i o n t o f o l l o w a new d i r e c t i o n o f d e m o c r a t i c s o c i a l i s m . I n t e n s e c o n t r o v e r s i e s between t h e p a r t i e s , t h e c h u r c h e s , and o t h e r groups about v a r i o u s a s p e c t s o f t h e p o l i t i c a l r e f o r m s s i n c e 1969 ( R e f o r m p o l i t i k ) have r e a n i m a t e d the d i s c u s s i o n . A s i m i l a r d i s c u s s i o n has a r i s e n i n the A n g l o Saxon c o u n t r i e s through John R a w l s ' e m i n e n t " T h e o r y o f J u s t i c e " , through D a n i e l B e l l ' s i m p o r t a n t r e s e a r c h on t h e c o n s t i t u t i o n a l s t r u c t u r e s and changes o f c o n s c i o u s n e s s i n t h e " p o s t i n d u s t r i a l s o c i e t y " , and through many o t h e r s c h o l a r s . The d i s c u s s i o n s i n both p a r t s o f t h e w e s t e r n w o r l d a r e c o n t r i b u t i n g t o a " r e c o n struction of p o l i t i c a l philosophy", a Philosophy of P r a c t i c e , e v a l u a t i n g i t a g a i n s t the p r e s e n t domination o f a n a l y t i c a l , M a r x i s t , o r l i n g u i s t i c — i n g e n e r a l , the s c i e n t i f i c a l l y o r i e n t a ted—social theories. I s y m p a t h i z e w i t h and p a r t i c i p a t e i n these e f f o r t s . But does p l u r a l i s t i c democracy have any c o m p e l l i n g e t h i c a l s t a n d a r d s b e a r i n g on f u n d a m e n t a l s ? I s t h e r e n o t j u s t t h e i n ^ d i f f e r e n c e o f an unbounded p l u r a l i t y i n which each s i n g l e p o s i t i o n seems t o be autonomous and i s o l a t e d ? W i t h o u t any b a s i s w i l l n o t t h e w h o l e c o l l a p s e i n t o a thousand p i e c e s ? I n d e e d , t o t h e p l u r a l i s t i c , f r e e , and open s o c i e t y b e l o n g s a p l u r a l i t y o f t h e e t h i c s , l e g i t i m a t e l y p r a c t i s e d i n i t , t o o . The d i f f e r e n t t y p e s o f r o l e s , g r o u p s , s u b s y s t e m s , forms o f s o c i a l i z a t i o n , and k i n d s o f communication i n t h i s s o c i e t y have a p a r t i a l autonomy t h a t g a i n s i t s s e c u r e d and l i m i t e d v a l i d i t y w i t h i n t h e s t a t e ' s o r d e r . Each o f them, h o w e v e r , has i t s own e t h o s . I n p l u r a l i s t i c s o c i e t y and democracy t h e r e i s n o t t h e s i n g l e , a b s o l u t e , com^ manding a u t h o r i t y o f norms and r u l e s . T h i s i s p r e c i s e l y t h e e s s e n t i a l cause o f g r a v e d i f f i c u l t i e s t h a t i n d i v i d u a l s and groups e x p e r i e n c e when o r i e n t a t i n g t h e m s e l v e s w i t h i n t h e s o c i e t y when f o r m i n g t h e i r i d e n t i t y , and when f i n d i n g a s e n s e o f p u r p o s e . I t s absence i s n o t a burden o n l y , h o w e v e r ; i t a l s o i m p l i e s a s o r t o f r e l i e f j a chance f o r an i n d i v i d u a l l i f e - s t y l e . I t i s t h e p r e r e q u i s i t e f o r a f r e e and s e l f - r e l i a n t d e v e l o p m e n t o f t h e c i t i z e n s , a l t h o u g h a g a i n n o t a g u a r a n t e e . The p l u r a l i t y o f norms and r u l e s , t o o , i s i n t h e modern w o r l d o f l i f e an u n a l t e r a b l e and d e s i r a b l e t h i n g ; i t i s n o t an aim i n i t s e l f , b u t r a t h e r a n e c e s s a r y means t o an e n d " t h a t o f f r e e moral, s e l f - r e a l i z a t i o n o f the i n d i v i d u a l s . A t t h e same t i m e , t h e p l u r a l i s t i c s o c i e t y n e e d s , and h a s , a b a s i c s t a n d a r d o f a common e t h o s i f i t i s t o r e c o v e r o r p r e s e r v e t h a t c o n s i s t e n c y and t h a t o r d e r which a r e t h e c o n d i t i o n s o f t h e a b i l i t y t o overcome t h e c r i s e s i n f r e e d o m . T h i s b a s i c s t a n d a r d o f a common e t h o s l i e s i n t h e f u n d a m e n t a l v a l u e s as they a r e

Values of Western Democracies

7

fixed in or combined with the democratic constitutions. According to the American' "founding fathers", the constitution of the commonwealth not only means a structure of government but, above all, a declaration of rights and a definition of the basic conditions and essential form of public morality. In this meaning, the constitution results from a fundamental consensus of the citizens or groups or various forces in the founding generation, a consensus, specifically, on the fundamental values of communal life, too. This basic consensus must be revived, renewed, deepened, and enlarged constantly by later generations, for as long as the democratic society and the democratic constitution exist. Though the constitution in a free society is of particular importance, it is not the sole absolute authority for all ethics but only for that basic standard of a common ethos that must direct public life and politics in the pluralistic society. In this capacity, it directs all citizens and groups, too. Thus the practice of the pluralistic society's citizens and groups is formed by it to a large extent, but without a total determination and without elimination of their partial autonomy . The Fundamental Values What are the fundamental values fixed in model democratic constitutions like the Constitution of the United States, the Grundgesetz of the Federal Republic, or the unwritten British constitution elaborated by common law and precedent? The basis of these kinds of constitutions is the dignity of man as the indisputable and inviolable foundation of common life. From this concept, unalterable rights of men are derived, binding not only on all political power, but on all citizens, groups, and social organizations. These rights give a direction, a standard, and a set limit for the actions of individuals and social forces. Hence, it is understandable and logical that a main issue in the present struggle over the Canadian constitu^ tion is the question of which authority is to define the fundamental rights and how-. The discussion involves the question of consensus on the fundamental values of public life. The dignity of man is the dignity of each human being, the absolute importance of each individual'—not arrived at through subjective assessment, or sympathy, but with the objective postulate in the strict sense of Immanuel Kant that the humanness in each person shall be handled not only as a means but also as an end in itself always.^ The dignity of the individual therefore does not depend on how society values his achievements. On the contrary, the immutability, the inviolability, and the inalienability of the dignity and rights of men indicate truths which are not in the domain of the society, of the state, or even of the individual himself. They are essential, basic

8

A l e x a n d e r Schwan

a n t h r o p o l o g i c a l data o f o n t o l o g i c a l q u a l i t y . The d i g n i t y o f man would a c t u a l l y not e x i s t i f i t depended on the d e c i s i o n s o f the i n d i v i d u a l s . The o t h e r fundamental v a l u e s founded in the democratic c o n s t i t u t i o n s , l i b e r t y , l i f e , e q u a l i t y , j u s t i c e , s o l i d a r i t y , and p l u r a l i t y , are d e r i v e d from these b a s i c d a t a , and are e s s e n t i a l and n e c e s s a r y . They a l l belong t o g e t h e r ? they r e q u i r e and i n v o l v e each o t h e r , they d e f i n e each o t h e r and cannot be i s o l a t e d ; one cannot be a m p l i f i e d t o the n e g l e c t o f the o t h e r s , o r be i n t e r p r e t e d in an extreme sense. I t i s the c r u c i a l p r i n c i p l e o f these democratic v a l u e s t h a t none o f them can claim an e x t r a o r d i n a r y , or predominant, v a l i d i t y , They are o n l y understandable and p r a c t i c a b l e as i n t e r c o n n e c t e d and, t h e r e f o r e , as s t r i c t l y " r e l a t i o n a l " (not p r e c i s e l y as " r e l a t i v e " ) , q u a l i t i e s . For example, the l i b e r t y granted and guaranteed by the democ r a t i c c o n s t i t u t i o n i s no mere l i c e n s e , no l i m i t l e s s a r b i t r a r y a c t i o n , no t o t a l emancipation o f a l l l i a b i l i t y and o r d e r . I t i s a freedom t i e d t o the r i g h t s o f o t h e r i n d i v i d u a l s , t o the a c c e p tance o f d u t i e s in communal l i f e , t o the r e c o g n i t i o n o f a s o c i a l o r d e r , t o the acknowledgement o f moral law. This l i b e r t y i s not only a l i b e r t y from, but a l s o a l i b e r t y f o r . I t i s l i b e r t y from unlawful power, t h a t i s , from any a r b i t r a r y l i m i t a t i o n o f i n d i v i d u a l a c t i o n by the s t a t e or by o t h e r s o c i a l f o r c e s , I t i s a l i b e r t y f o r c h o i c e , f o r d e c i s i o n - m a k i n g , and f o r s e l f - g o v e r n m e n t and thus a l i b e r t y to p a r t i c i p a t e , t o c o o p e r a t e , and t o assume r e s p o n s i b i l i t y i n the commonwealth. The c i t i z e n s ' p o l i t i c a l l i b e r t y i s , as was known by the founding f a t h e r s o f the American C o n s t i t u t i o n , not "freedom from the law, but by the law f i x e d of t h e i r own r e s p o n s i b l e making,"2 This fundamental v a l u e r e q u i r e s p r o t e c t i o n and, at the same t i m e , completion in the form o f a f r e e o r d e r d i v i d i n g and b a l a n c i n g the l e g i s l a t i v e , e x e c u t i v e , and j u d i c i a l powers o f the s t a t e . I t i s , t h e r e f o r e , connected w i t h r e p r e s e n t a t i v e democracy, w h i l e a l l approaches to anarchy w i l l f a i l to achieve l i b e r t y and l e a d only t o i l l e gitimate d i c t a t o r s h i p of biased s o c i a l f o r c e s . Concerning the p r e s e n t German d i s c u s s i o n i t must be s a i d t h a t the ( c r i t i c a l ) l o y a l t y t o the democratic c o n s t i t u t i o n n o t o n l y s i g n i f i e s a l i m i t a t i o n of l i b e r t y , but a l s o a kind o f s e n s i b l e f u l f i l l m e n t . There i s a s i m i l a r r e l a t i o n t o the value o f l i f e . I t s p r o t e c t i o n can be regarded as a c o n d i t i o n , a l i m i t a t i o n , and a p a r t o f the r e a l i z a t i o n o f l i b e r t y . The l a r g e c o n t r o v e r s i e s about a b o r t i o n show how d i f f i c u l t i t i s t o f i n d the r i g h t balance in the " t r a g i c " c o n f l i c t between the v a l u e s o f p r o t e c t i n g unborn l i f e and the values o f s e l f - d e t e r m i n a t i o n (which i s p a r t o f l i b e r t y ) . The r e l a t i o n s h i p between the fundamental values demands more mutual t o l e r a n c e and understanding from the opposing p a r t n e r s . Furthermore, the fundamental value o f e q u a l i t y i s i n t e n s i v e l y connected with 1 i b e r t y , Egucility i s n o t t o b

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V = Variable C = Constant The theory holds that the attitudes of employers towards trade unions in both Europe and North America are fundamentally the same. Employers place a very high value on the power to manage free from restriction and unions are a prime threat to that objective. Stemming from this value orientation the initial behaviour of employers towards unions in both Europe and North America was essentially the same. In defense of their

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power to manage employers sought to either destroy or contain the emerging anions. Today employer behaviour towards unions varies considerably. In Europe employers recognize unions as the legitimate representatives of the working class; in North America they do not. In Europe employers have formed strong organizations to deal with social and labour matters; in North America they have not. In Europe employers frequently interact with labour and the state in search of consensus solutions to pressing national issues; in North America they do not. The theory suggests that these differences are primarily the result of government action. In Europe governments demanded that employers recognize unions as the legitimate representatives of workers generally or face state intervention toward that end. North American governments never made such demands on employers. Union behaviour has had both a direct influence on employers and an indirect influence through the medium of the state. In Europe the mainstream of the labour movement, faced with intransigent employers, rejected the capitalist system and organized broadly to achieve social change through political action. This strategy influenced both the government action and the change in employer behaviour noted above. North American unions, faced with similar employer intransigence, adopted a very different strategy. Pragmatic craft unionism, accepting of capitalism, became the mainstream. 23 Pressure for comprehensive recognition was neither exerted nor granted. Moreover, the embracing of pragmatism, although it resulted in strength and survival in specific enterprize and industrial situations, produced political and social weakness. The philosophy of "more, more, more" appeared to lack an idealistic base and thus was incapable of arousing widespread social and political support. Employer belligerence came to be accepted as a reasonable stance towards union self-centredness. This variation in employer behaviour has had major consequences for the operation of present day industrial relations systems. Individualistic belligerence in North America contributes significantly to the high level of overt conflict and to the restriction of the extent of employee participation in management by right. However, employers caught in the web of strong unions in spite of their belligerence have seen their rights to manage dissipated to a greater extent than their European counterparts. In Europe collective acceptance of unions has produced a low level of industrial conflict and wide spread establishment of employee participation mechanisms. Most employees work in establishments where some form of participative structure has been established. Until recently, however, employers through their associations have been able to restrict the depth of participation. While recognizing the legitimacy of collective employee representation at the national level and at the industrial level and at the peak level within corporate hierarchies they have been able to maintain a

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great deal of control over managerial functions. In short, workers' participation in enterprise management in Europe is extensive but shallow; in North America i t is restricted but relatively deep. This pattern has, however, been changing in recent years and workers in Europe have, through p o l i t i c a l means, been acquiring more influence on managerial decisions."^ The theory presented here i s very general. Admittedly Europe and North America are not invariant entities. Thus Britain in many ways stands between continental Europe and North America on several of the f a c t o r s discussed. In turn Canada stands between Britain and the United States. France and I t a l y are exceptional because of the continuing i d e o l o g i c a l militancy of their unions. The general theory requires refinement to take account of such variations. Nevertheless, we b e l i e v e that the dominant patterns and relationships have been identified. Notes 1.

Quoted in Kendall, Walter (1975), The Labour Movement in Europe, London: Allen Lane, p. 7.

2.

T a f t , P h i l i p (1952), Germany. Comparative Labor Movements, N. Y.:

3.

Lorwin, Val (1954), The French Labor Movement, Cambridge: University Press.

4.

Wigham, Eric (1973), The Power to Manage, London, Macmillan.

5.

Bobbins, James J. (1942), The Government of Labor Relations in Sweden, Chapel H i l l : University of North Carolina Press.

6.

See Bonnett, Clarence E. (1922), Employers' Associations in the United States, N. Y.: Macmillan; McCaffree, Kenneth M. (1966), A Theory of the Origin and Development of Employer Associations, Proceedings of the f i f t e e n t h annual meeting of the Industrial Relations Research Association; Dulles, Foster Rhea (1966) Labor in America, N. Y.: Crowe11.

7.

The comment i s attributed to the f i r s t managing director of the Swedish Employers' Federation in 1907. See Johnston, T. L. (1962), Collective Bargaining in Sweden, Cambridge: Harvard University Press, p. 70.

8.

Malles, Paul (1973), The I n s t i t u t i o n s of Industrial Relations in Continental Europe, Ottawa: Labour Canada.

9.

Bunn, Ronald F. (1965), Employers' Associations and C o l l e c t i v e Bargaining in the German Federal Republic. In: The Southwestern

In: Galenson, W a l t e r Russell & Russell.

(ed.), Harvard

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10.

Wigham, 1973.

11.

Lorwin, 1954.

12.

The Role of the U I M M A m o n g E m p l o y e r s Industries Metallurgiques et Minieres.

13.

Ehrmann, H. W. (1957), University Press.

14.

The Role of the UIMM Among Employers, 1976.

15.

Forseback Lennart (1976), Industrial Relations & Employment in Sweden, Stockholm: The Swedish Institute.

16.

Wigham, 1973.

17.

Sturmthal, Adolf University Press.

18.

S t r u c t u r e , S c o p e and A c t i v i t i e s of National Central E m p l o y e r Organisations (1970), L o n d o n : International Organisation of Employers. This observation is contrary to the argument put forth by Ingham that centralization of power and authority in employers' associations is related positively to the level of industrial concentration. See, Ingham, G. K. (1974), Strikes and Industrial Conflict, London: M a c m i l l a n and Jackson, Peter and Keith Sisson (1976), Employers' Confederations in Sweden and the U. K. and the Significance of Industrial Infrastructure. In: British Journal of Industrial Relations, Vol. XIV, No. 3.

19.

S t r u c t u r e , S c o p e and Organisations, 1970.

20.

Chamberlain, Neil (1948), The Union Challenge to Management Control, New York: Harper & Row.

21.

Derber, Milton (1970), The A m e r i c a n Idea of Industrial Democracy, Urbana: University of Illinois Press.

22.

The AFL-CIO has supported numerous legislative initiatives in the general interest of workers. Nenvertheless, in the public mind these statements and activities are eclipsed by the self-serving image which emerges from decentralized collective bargaining.

23.

The explanation for this union strategy, generally held in North

(1976), Paris:

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America, is that the union movement had no real choice because conditions unique to America precluded the success of the more idealistic, communitarian approach dominant in Europe. The validity of this explanation is not directly relevant to the argument of this paper. Our purpose is to demonstrate the effects of the choice irregardless of the reasons for it. See Perlman, Selig (1970), The Theory of the Labor Movement, N. Y.: Augustus Kelley and Galenson, Walter (1961) Why the American Labor Movement is not Socialist. In: American Review, Winter. Roberts, B. C. (ed.) (1979), Towards Industrial Democracy, London, Croom Helm.

The Nonwage Impact of Unions Joseph B. Rose ABSTRACT The purpose of this paper i s to discuss the nonwage impact of unions on management in North America. This is clearly a broad topic and therefore I wish to limit my comments to four areas. First, I w i l l b r i e f l y consider the philosophy of North American trade unionism and the centrality of collective bargaining in the indusrial r e l a t i o n s system. In the second part of the paper, consideration w i l l be given to recent research findings on the nonwage impact of unions on management. Third, i f the union impact has been positive, as some studies suggest, how do we account for employer resistance to trade unions? Finally, I wish to discuss an issue of great importance in the province of Ontario at the moment, namely how to deal with the plant shutdowns, technological change and l a y o f f s . Particular emphasis w i l l be placed on examining the impact of collective bargaining on job security.

UNION PHILOSOPHY Two f a c e t s of trade union philosophy in North America are "business unionism" and "job consciousness". Business unionism denotes the pragmatic nature of labour organizations to seek short-run improvements in the economic and social well-being of their members. This perspective has been a dominant theme with organized labour, dating back to Samuel Gompers, the Gompers f i r s t president of the American Federation of Labor (AFL). eschewed commitments to any long-run p o l i t i c a l or s o c i a l ideology, preferring instead to concentrate on short-term gains through c o l l e c t i v e bargaining (Kochan, 1980). A primary concern of organized labour then, as w e l l as today, has been the development of job consciousness as d i s t i n c t from class consciousness. By emphasizing the primacy of the individual employment relationship as opposed to being more reformist minded, the labour movement became pragmatic, conservative and preoccupied with securing job-related goals through c o l l e c t i v e bargaining. This i s not meant to suggest that North American unions are t o t a l l y uncommitted to s o c i a l change. As Crispo notes: "Acceptance of this approach need not entail the total absence of any commitment to reform of the overall socioeconomic-political system, but any such reform instincts are l i m i t e d to relatively modest changes and not to revolution or transformation" (Crispo, 1978).

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Notwithstanding the strong historical influence of American-based unions in Canada, organized labour in this country has developed a somewhat broader view of s o c i a l r e s p o n s i b i l i t y and p o l i t i c a l ideology (Kovacs, 1971 and Williams 1971). I do not wish to convey the impression that Canadian unions are not preoccupied with the pursuit of bread-and-butter issues, but simply to point out some departures from the American model. For one thing, Canadian labour would appear to have a deeper commitment to the ideal of s o c i a l j u s t i c e . The Canadian Labour Congress (CLC) i s far less conservative than the AFL-CIO and has established close ties with the New Democratic Party at both the federal and provincial levels. In addition, organized labour has not been reluctant to engage in p o l i t i c a l action to secure bargaining goals which have been d i f f i c u l t to achieve at the bargaining table. The successful campaign to obtain mandatory dues checkoff in collective agreements in Ontario represents a recent example of political action. In addition the frequency with which provincial labour laws are amended and the p r o c l i v i t y f o r reform and experimentation in labour policy in Canada contrasts sharply with the American system (Weiler, 1980 and Morris, 1978). While i t i s important to note these d i s t i n c t i o n s , the f a c t remains that trade union philosophy in both countries i s reinforced by a trade union structure characterized by the principles of exclusive jurisdiction, loose federations of autonomous unions and l o c a l union control over c o l l e c t i v e bargaining. Consequently, c o l l e c t i v e bargaining is highly decentralized with most collective agreements negotiated at the level of the individual company or plant (Christy, 1975). In contrast with Western Europe, there are r e l a t i v e l y few examples of i n d u s t r y - w i d e or broad r e g i o n a l negotiations. To a large extent decentralized bargaining structures r e f l e c t the representational interests of management and labour. In a recent study of several fragmented Canadian industries, e.g., air transportation and grain handling, several p a r t i e s expressed a desire to maintain the status quo and opposed the notion of wider-based bargaining (Bairstow, 1978). In the construction industry, there has been widespread labour-management c o n f l i c t f o l l o w i n g the consolidation of bargaining structures (Rose, 1980A). Whether organized labour w i l l develop a more "cosmopolitan" outlook remains problematical. One commentator on Canadian labour laments: "the r o l e and function assigned to the national and international trade unions is too narrow and the emphasis on self-centredself-help is too great" (Williams, 1971). I t seems reasonable to inquire why this philosophy persists and to consider whether i t is capable of coping with future challenges. I t has been argued that three f a c t o r s underlie the American labour movement's pursuit of narrow bread-and-butter issues in collective bargaining. These are: (1) job-consciousness and conservatism among rank-and-file union members; (2) environmental and employer pressures to l i m i t union attention to narrow economic goals and avoid p o l i t i c a l goals; and (3) the preferences of top union leaders. I t has also been said that: "Over time the success of

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unions in pursuing these narrow goals in collective bargaining, and the failures of broader reform movements reinforced the position of those advocating a narrow bread-and-butter strategy and helped to perpetuate this perspective" (Kochan, 1980). Using data from the 1977 Quality of E m p l o y m e n t Survey, Kochan sought to determine the priorities and goals of American workers and the extent to which their expectations were being met (Kochan, 1980). On the first issue, the results indicate that a majority of union members would like to expand the range of union goals. While workers expect their unions to give a higher priority to traditional economic issues, between 60 and 75 percent desired efforts to improve the quality of working life (e.g., a greater say on job and more interesting jobs). A comparison of member priorities and union performance indicates that unions are performing most effectively on the members' highest priorities and that gaps exist between expectations and performance on quality of working life issues. In conclusion, it seems unlikely that the central importance of economic issues in collective bargaining will be altered in the near future and, even if unions are successful in expanding the domain of bargaining to non-traditional issues, these gains w i l l not be at the expense of reducing union influence over bread-and-butter issues.

THE NONWAGE IMPACT OF UNIONS We can distinguish two types of union impact on management; one involves collective bargaining and the other is based on political action. Collective bargaining has a direct impact consisting of the terms and conditions of employment contained in collective agreements as well as a spillover effect from the union to the nonunion sector (e.g., wages or an acceptance of seniority). The political impact may result from organized labour's support for specific labour-management relations legislation, e.g., mandatory dues checkoff, or support for economic and social policies which do not exclusively benefit union members. My primary emphasis here w i l l be on the direct impact of collective bargaining on management in unionized firms. Brief reference w i l l be made to the use of political action to supplement collective bargaining. Space limitations preclude an exhaustive treatment of the range of union impacts or even lengthy treatment of a sample of issues. Accordingly, several key issues have been selected for discussion and the empirical evidence of union impact is summarized. We begin by examining the union impact on economic efficiency. According to the monopoly view of unionism, unions have a negative impact because: they raise wages above the competitive level leading to low labour/capital ratios in unionized firms, i m p o s e i n e f f i c i e n t w o r k r u l e s and l o w e r o u t p u t t h r o u g h s t r i k e s . Conversely, the collective voice/institutional response view of unionism

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argues that unions have positive effect on productivity by reducing quit rates and by inducing management to adopt more efficient management policies. Let us examine the evidence with respect to employee turnover and productivity (Freeman and Medoff, 1979).

Turnover It has been argued that unions reduce quit rates because (1) workers believe they have an effective voice in achieving desirable working conditions and (2) because seniority provisions play a greater role in promotions and provide additional protection against layoff. Since union workers can achieve desired working conditions by "sticking around" they are less prone to resort to exit and entry mechanisms to achieve these ends. The organization will benefit from unionism by lowering hiring and training costs, stabilizing work groups, and, in the process, raising organizational efficiency (Freeman and Medoff, 1979). Recent studies show that unions reduce quit rates. Our own research using newly available information on the job changes and employment status of thousands of individuals and industry-level turnover rates, shows that with diverse factors (including wages) held constant, unionized workers do have significantly lower quit rates than nonunion workers who are comparable in other respects .... Moreover, consistent with the claim that unions provide better representation for workers with greater seniority, the evidence suggests a larger reduction in exit and a larger increase in job tenure for older male workers than for younger male workers. (Freeman and Medoff, 1979) . 1 For older men (48-62 in 1969), the estimated reduction in quit rates attributable to unionism was 107 percent (tenure increased 38 percent); for younger workers (17-27) in 1969) quit rates dropped 11 percent (tenure increased 15 percent). Another study reported that stronger seniority provisions reduce employee turnover in manufacturing (Block, 1979). While Freeman and Medoff believe the "voice" aspect of collective bargaining accounts for the lower turnover of union members, Kochan's analysis of the Quality of Employment survey data suggests that the main effect of unions is to reduce the "ease of leaving". In other words unions provide their members with a better package of benefits than is available to them in the external market (Kochan, 1980). Regardless of which explanation is accepted, there is strong evidence that unions reduce turnover.

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Productivity Freeman and Medoff have challenged the view that unionism is a major deterrent to productivity gains. Indeed, they argue unionism leads to higher productivity in some sectors not only because of greater capital intensity and higher labour quality, but by what has been called "institutional-response" factors. In other words, management adjusts to unions by instituting changes designed to improve the efficiency of the firm. After controlling for capital intensity and skill, they found that productivity was substantially higher (20 to 25 percent) in the unionized sector of the manufacturing industry and represented "an amount that could roughly offset the increase in total costs attributable to higher union rates" (Freeman and Medoff, 1979). However, not all of the evidence was positive. A negative productivity effect was reported in bituminous coal, an industry plagued by labour relations problems. What proportion of the productivity gain is related to reduced turnover and "institutional-response" factors? A recent study of the cement industry indicates that about one-fifth of the positive productivity gain is associated with lower quit rates. The remainder appears to be the result of changes in management personnel and policies following unionization. Interestingly the enterprise typically changed plant management, suggesting that the union drive was an important signal to top management of ineffective lower-level managerial personnel. The drive thus provided valuable information or shock of a distinctive kind. Perhaps most importantly, the discussions with union and management officials in the cement industry indicated that firms often adopted more efficiencyoriented and less paternalistic personnel policies in response to unionism in order to raise productivity and meet higher wage demands (Freeman and Medoff, 1979). Furthermore, there was little evidence indicating that strikes had a significant overall impact on society in terms of lost goods and services. While this conclusion probably holds for Canada as well, the proportion of time lost due to work stoppages rose significantly in the seventies in Canada, and in some years the proportion of total time lost was double that of the U.S. Also, given inter-industry variations in strike activity, the general rule may be less applicable to certain sectors. For example, it is noteworthy that the union impact on the U.S. bituminous coal industry in the mid-sixties was positive; however, considerable political instability within the United Mine Workers Union, a rash of wildcat strikes, and a steady deterioration of labour-management relations produced a negative productivity effect in the mid-seventies (estimated at 20 to 25 percent). Thus, while there is some strong evidence of a positive union impact on productivity, it would be unwise and premature to generalize these results across all sectors.

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Joseph Rose U l t i m a t e l y , the e f f e c t s of c o l l e c t i v e b a r g a i n i n g on productivity depend on the ability of the union and the employer to develop an effective working relationship and upon the absence of constraints on the ability of management to adjust to higher labor costs by modifying its personnel p r a c t i c e s , adapting new technological innovations, and upgrading the quality of its labor force (Kochan, 1980).

Management rights and union participation Perhaps the most significant nonwage impact of unions is found in the application of grievance and arbitration procedures. In all but one Canadian jurisdiction, public policy requires all collective agreements to provide for binding arbitration as the final step in the grievance procedure. The impact of grievance arbitration has been particularly strong in the areas of discipline and discharge and the application of seniority. Such provisions have afforded union members security from arbitrary, discriminatory and capricious employer behaviour and required employers to prove their disciplinary decisions were for "just cause". Such blanket protection does not exist for most nonunion workers, although it is noteworthy that the Canada Labour Code entitles some nonunion workers to arbitration in unjust dismissal cases. With respect to the application of arbitration to seniority, union members are able to protect their right to certain benefit provisions, e.g., pensions, as well as protect their employment status, e.g., in promotion and layoff decisions. Although seniority enjoys some support in the nonunion sector, its coverage is generally narrower. Thus, collective bargaining has become an important mechanism for defining and protecting unionists' property in work and imposing limits on managerial discretion. Notwithstanding this outcome, management control has not been as severely circumscribed as some critics would suggest. For example, we might consider the positive impact of grievance and arbitration procedures on management. These include: (1) certain assurances of uninterrupted production during the life of an agreement, (2) the imposition of a union responsibility to screen frivolous grievances which may take up management time, and (3) the formal grievance procedure functions "as part of a business organization's information system, and the data it generates can be used for diagnostic, evaluative and corrective (i.e., for management) purposes" (Lewin, 1978). In addition, since the union impact is largely confined to bread-and-butter issues, management is able to retain substantial control over issues affecting productive efficiency As I shall demonstrate below, management has successfully retained control over decisions affecting plant shutdowns, technological change and layoffs. A potential threat to managerial autonomy can be envisaged if there is a

Nonwage Impact cf Unions

301

narrowing of workers' "zones of acceptance", i.e., a reduction in the scope of managerial discretion or decision-making. The 1977 Quality of Employment survey found evidence that workers desire and expect to participate in a variety of job-related decisions. ...almost all the respondents agreed that workers should have at least some say over safety equipment and practices and over how work is done. Ninety percent believe workers should have at least some say over wages and salaries, just under 80 percent hold this for the days and hours people work, and 60 percent have this view regarding hiring and lay-off decisions (Kochan, 1980). The desire for increased participation was found to be greatest among union members, younger workers and those earning higher hourly wages. As with other nonwage outcomes, "the desire for participation appears to increase in direct proportion to the extent to which the union has been successful in achieving higher wage goals" (Kochan, 1980). Whether the desire for increased participation will eventually prompt unions to seek improvements in the quality of work life is uncertain. To date, most efforts to humanize work in North America have occurred in the nonunion sector and there is little support for the worker participation schemes found in Western Europe. Finally, what is known about the relative impact of collective bargaining and political action? Lewin evaluated the impact of American unions on business accountability. He concluded that the most tangible evidence is that collective bargaining, the collective agreement and the grievance procedure "are the leading mechanisms through which this accountability is achieved". Nevertheless, Lewin felt that the direct union impact has been modest, limited to relatively few issues, and its indirect impacts through political action may be more substantial than its direct impacts through collective bargaining. In particular, union political activity supporting social and economic legislation (as distinct from legal reforms of collective bargaining) in the areas such as civil rights, employment and training, and pension reform, have significantly affected union and nonunion businesses (Lewin, 1978). The applicability of these findings to Canada is unclear, given the political orientation of Canadian labour and provincial control over labour-related policy issues. Moreover, since numerous provincial labour laws provide for labour-management advisory committees to study labour problems and propose legislative remedies, organized labour has probably had a greater impact on collective bargaining legislation in this country. For example, the construction industry advisory committee was instrumental in bringing province-wide bargaining to Ontario in 1978.

302

Joseph Rose

MANAGEMENT'S RESPONSE TO UNIONISM Considering some of the positive nonwage impacts of collective bargaining, it seems reasonable to inquire why employers strongly resist unions and collective bargaining. Freeman and Medoff suggest four possible explanations. First, managers see the benefits of unionism accruing directly to their subordinates and imposing costs on them in terms of diminished power, reduced flexibility, and a need to work harder. Second, although unions may have a positive effect on productivity, wages also tend to be higher, the return on capital may be lower and strikes may curtail production. Consequently, unionization involves a risk as to whether the firm can rationalize its operations, have a harmonious relationship with the union and remain profitable. Since the costs and benefits of unionism can vary among sectors and the prediliction of management is to avoid risks, opposition is to be expected. Third, unionism poses a serious threat to managerial personnel and operations, particularly in its initial stages. Following union certification it is not uncommon for firms to institute changes in organizational policies, structure and personnel. Finally, "unions are seen as both a source and an effect of managerial failure" (Freeman and Medoff, 1979). To begin with, unions are perceived as organizations which impede management's ability to operate efficiently. Furthermore, the formation of unions is largely a response to managements' mistakes and thus an indicator of past performances. The intensity of management opposition to unions has been described in a recent Conference Board survey (Kochan, 1980). Management opposition to new union organizing was described as a top labour relations priority in firms with no, or a relatively low proportion of organized employees and a middle-range priority among firms with some unionization. There was also less strong opposition to unionization in new plants among highly-organized firms in highly-organized industries where the economic and labour relations experience is relatively favourable. An example of a favourable relationship is the automobile industry, where in 1979 GM agreed to automatically recognize the UAW and extend the national agreement to any new auto plants it opens in the U.S. On the other side of the ledger, strikes, escalating wages and low productivity have significantly contributed to management opposition to new union organizing in the construction and coal mining industries. Finally, there appears to be widespread management opposition to white-collar unionization, regardless of the experience with blue-collar unions. There may be two additional and important factors which contribute to the intensity of management opposition, but which are difficult to measure. The first involves the views of top corporate management, not only with respect to the costs and benefits of unionism, but their personal attitudes towards unions. Second, the current socio-political milieu may play an important (yet intangible) role in determining the intensity of management response to unions. Opposition to unions is also a matter of how management perceives union

Nonwage Impact of Unions

303

impact. A recent study of hospital managers' perceptions of the nonwage impact of unions in the U.S. found that: (1) management decision- and policy-making became more standardized and formalized; (2) the quality of supervision and management improved, but supervisory jobs were more difficult and the overall ability of management to run a hospital effectively had diminished; (3) nonsupervisory employees found the hospital a more desirable place to work but their performance and commitment to the organization declined; and (4) organizational performance as measured by the quality of patient care was negatively affected (Maxey, 1980). In an effort to determine the basis for these perceptions a model was constructed and tested. The principle finding was that managers' assessments of the "union impact on organizational performance were strongly tied to their views of union effects on their own roles and, projectively on the motivations and actions of unionized workers" (Maxey, 1980). Thus we need to bear in mind that management values play a large role in assessing union impact and determining the intensity of management response. The management goal of achieving organizational efficiency constitutes an important element in management apposition to unions. In the unionized context, the goal remains the same, but is limited by the union's ability to satisfy its members expectations. When scarce resources exist, the world of management rights may collide with the world of job conscious unionism.

PLANT SHUTDOWNS, TECHNOLOGICAL CHANGE AND LAYOFFS While seniority has provided job security for long-service employees, the evidence suggests that union members are extremely vulnerable to plant shutdowns and technological change. In the U.S., it has been observed that: A minority of unions have been successful in negotiating income-security provisions that supplement the unemployment compensation system during short, temporary layoffs. A smaller minority of unions have negotiated provisions protecting the income and job security of employees affected by permanent job loss due to technological change or plant shutdowns (Kochan, 1980). For example, fewer than 10 pecent of the major agreements provide for advance notice of technological change or plant shutdown, 11 percent provide for relocation allowances and less than one third provide for interplarit transfers (Kochan, 1980). This finding partially reflects the values which labour and managment bring to the bargaining table. For one thing, the preoccupation of unions with

304

Joseph Rose

achieving short-run economic goals i s a l i m i t i n g f a c t o r . In addition, unions appear to be unable (due to management resistance) or unwilling (due t o i t s low p r i o r i t y during p e r i o d s of p r o s p e r i t y ) t o n e g o t i a t e comprehensive measures to promote long-term employment or income security. Consequently, they have been forced to respond to c r i s e s such as plant shutdowns on a case-by-case basis. Under these circumstances, most unions lack sufficient bargaining power to save jobs and are put in the position of attempting to trade o f f their members' property in work f o r economic compensation to soften the impact of job loss, e.g., severance pay. This tendency is reinforced by the general conservatism of rank-and-file members and employer pressures to restrict union bargaining to a narrow range of economic issues. Not only do we need to recognize that unions make this type of t r a d e o f f , but we need to explain managements' response to union demands for greater employment and income security. On the whole, management seeks to maintain the status quo in nonwage bargaining. This goal is particularly relevant in areas which are perceived as impinging on management rights and imposing substantial costs. One study concluded: "This pattern of responses suggests that private-sector management bargains hardest on those issues that a f f e c t its f l e x i b i l i t y and e f f i c i e n t utilization of the work force, (i.e., the nonwage factors most directly affecting productivity)" (Kochan, 1980). Over 90 percent of the managers surveyed indicated their nonwage goal was to tighten existing procedures or to maintain the status quo on issues such as subcontracting, layoff and recall prcedures, f l e x i b i l i t y in employee assignments and income security (e.g., severance pay). Their goal achievement in these four areas ranged from 76 to 94 percent (Kochan, 1980). What has been the Canadian experience? A recent study indicates there is a general attitude of mistrust between labour and management which makes i t d i f f i c u l t to resolve problems such as redundancies and layoffs through the collective bargaining process. When these limitations were contrasted with the broad legislative protection found in Western Europe, the Commission c a l l e d for l e g i s l a t i v e action (Carrothers, 1979). As I have commented elsewhere, the recommendations f e l l into three areas. With respect to processes, i t recommends the enactment of legislation which recognizes redundancy management as a shared responsibilty. I t also endorses j o i n t consultation as the mechanism for commenting on managementdecisions to change operations and f o r determining i f redundancy i s avoidable or determining what steps can be taken to minimize or cushion the e f f e c t s of l a y o f f s . In the area of avoiding and l i m i t i n g l a y o f f s , the report stresses the importance of re-employment through such devices as relocation, retraining, placement assistance and the use of severance pay to regulate l a y o f f schedules. As f o r mitigating the e f f e c t s of l a y o f f s , the

Nonwage Impact of Unions

305

Commission urges that public training and resources be available to assist displaced workers and that early retirement schemes and pension portability be expanded and upgraded. The study further recognizes the necessity of extending protection to unorganized employees (Rose, 1980B). The limited coverage of collective bargaining in this area can be illustrated in two ways. First, we can examine collective agreement provisions in several Canadian jurisdictions. In Table 1, data is presented on a number of issues associated with technological change (there was no published data on plant shutdowns in these jurisdictions). The general pattern is that a majority of unionized employees do not have contracts which either preserve their jobs or cushion the economic impact of job loss.^ While there are some interprovinciai differencepiprobably reflecting legislative requirements and union strength), two generalizations can be made. There is some evidence unionized employees are afforded a degree of protection in the areas of advance notice of technological change, consultation and opportunities for either training or retraining. There is also evidence (outside of British Columbia) that union members receive little protection in terms of advance notice of layoff, relocation allowances, transfer arrangements, severance pay and arbitration of disputes over technological change. In several instances, over 90 percent of the employees have no contract provision to protect them. Moreover, many of the contracts contained relatively weak provisions for protecting union members. The limited protection afforded by collective bargaining has also been illustrated by the national attention several recent plant shutdowns have received. In Ontario, for example, workers engaged in plant sit-ins at both Houdaille Industries and Wagner Brake and Lighting to dramatize their demands for improved severance pay and pension benefits. The simultaneous shutdown of the Winnipeg Tribune and the Ottawa Journal highlighted another issue of employer accountability. One newspaper chain has attempted to relocate displaced workers, whereas the other initially expressed the view that it had no responsibility to assist its former employees find new jobs. These developments suggest that plant closings are becoming a major social and political issue. Not only are the contractual obligations of employers limited, but existing legislation in Ontario has been sharply criticized by organized labour. The Employment Standards Act only provides for advance notice when employment is terminated. Accordingly, the UAW is now backing legislation which would require corporations to justify plant shutdowns to a public tribunal, provide six months notice and guarantee that workers and communities would be compensated for the social costs of a shutdown (Donner, 1980). While it is difficult to predict how the government will respond to this package, business will undoubtedly resist any attempt to require public disclosures. But, as the recession deepens, we can expect organized labour to increase pressure on the government to broaden the

306

Joseph Rose

Table 1 Collective Agreement Provisions and Technological Change (Percentage of Employees Covered) Issue 1.

British Columbia^

Canada^

40% 60%

83% 17%

38% 62%

90% 10%

97% 3%

48% 52%

95% 5%

61% 39%

(see * above)

65% 35%

84%

58% 42%

73% 27%

96% 4%

99.9% .1%

68% 32%* (*Also includes consultation)

Technological ChangeAdvance Notice of Layoffs no provision some provision

3.

Alberta 2

Technological ChangeAdvance Notice no provision seme provision

2.

Ontario^

56%* 44% (*90% have no special provision regarding permanent layoff)

91% 9%

Technological ChangeConsultation no provision some provision Technological ChangeTraining/Retraining no provision some provision

5.

16%

Technological ChangeRelocation Allowance

no provision some provision

91% 9%

Nonwage Impact of Unions

Ontario^

Issues .

Canada

70% 30%

87% 13%

92% 8%

91% 9%

60% 40%

95% 5%

99.7% .3%

80% 20%

—

—

Technological ChangeSeverance Pay no provision seme provision

.

British Columbia 3

Technological ChangeTransfer Arrangement no provision some provision

.

Alberta 2

307

77%* 23% (*refers to a wage or empployment guarantee)

Technological ChangeArbitration of Dispute no provision sane provision

Sources:

—

1.

Ontario Ministry of Labour provided data over the phone on 2,350 contracts covering 378,532 employees. These include private sector agreements covering 200 or more employees and public sector agreements for the current year.

2.

Alberta Labour, Negotiated Working Conditions in Alberta Collective Agreements, 1979-80 Edition. Data covers 731 agreements in the private and public sector for all sizes of bargaining units.

3.

British C o l u m b i a Department of Labour, Negotiated Working Condition 1980. Data covers 379 contracts and 314,077 employees (67 percent of the 1979 unionized workforce), in all sizes of bargaining units.

4.

Labour Canada, Canadian Industrial Relations Perspectives. Data based on agreements covering 500 or more employees for the year 1977.

308

Joseph

Rose

scope of business accountability. Finally, I am skeptical that organized labour w i l l abandon i t s philosophy of business and job conscious unionism in favour of Western European models of industrial democracy. The future w i l l witness a continuation of the strong emphasis on collective bargaining for achieving economic goals. The pursuit of certain goals through p o l i t i c a l action w i l l continue, but l a r g e l y as a supplement to c o l l e c t i v e bargaining and as a response to short-run conditions. In my opinion, the values organized labour holds dear are unlikely to experience a renaissance.

BIBLIOGRAPHY 3airstow, F. (1978), Report of the Commission on Wider-Based C o l l e c t i v e Bargaining, Ottawa: Labour Canada Block, R. (1978), The Impact of Seniority Provisions on the Manufacturing Quit Rate. In: Industrial and Labor Relations Review 31: 474-481 Carrothers, A.W.R. (1979), Report of the Commission of Inquiry Redundancies and Lay-offs, Ottawa: «Labour Canada

into

Christy, R. (1975), The Structure of C o l l e c t i v e Bargaining in Hameed, S.M.A. (ed.), Canadian Industrial Relations, Toronto: Butterworths Crispo, J. (1978), Industrial Democracy in Western Europe: Perspective, Toronto: McGraw-Hill Ryerson Limited

A North America

Donner, A. (1980), Plant Closings are Becoming a Social Issue. and Mail (Toronto), September 8, B5

In:

Globe

Freeman, R. (1976), Individual Mobility and Union Voice in the Labor Market. In: American Economic Review 66: 361-368 Freeman, R. and Medof f J. (1979), The Two Faces of Unionism. Public Interest 57: 69-93

In:

The

Kochan T. (1980), Collective Bargaining and Industrial Relations, Homewood: Irwin-Dorsey Limited Kovacs, A. (1971), The Philosophy of the Canadian Labour Movement in Miller R. and I s b e s t e r F. ( e d s . ) , Canadian Labour in T r a n s i t i o n , Peterborough: Prentice-Hall

Nonwage Impact of Unions

309

Lewin, D. (1978), The Impact of Unionism on American 3usiness: Evidence For An Assessment. In: Columbia Journal of World Business 13: 89103 Maxey, C. (1980), Organizational Consequences of Collective Bargaining: A Study of Some Noneconomic Dimensions of Union Impact. In IRRA Proceedings 33: 94-102 Morris, C. (1978), A Comparison of Developments on Both Sides of the Border in Bairstow, F. (ed.), The Direction of Labour Policy in Canada, Montreal: Industrial Relations Centre, McGill University Rose, J. (1980A), Public Policy, Bargaining Structure and the Construction Industry, Toronto: Butterworths Rose, J. (1980B), Redundancies and Layoffs: A Broader Analysis and Stronger Recommendations Needed. In: CAUT Bulletin 28: 3 Weiler, P. (1980), Reconcia'ole Differences: New Directions in Canadian Labour Law, Toronto: The Carswell Company Limited Williams, C.B. (1971), Trade Union Structure and Philosophy: Need For A Reappraisal in Miller R. and Isbester, F. (eds.), Canadian Labour in Transition, Peterborough: Prentice-Hall

NOTES 1.

See also Freeman, 1976

2.

It should be noted that in some jurisdictions, e.g., the federal and British Columbia, public policy limits the introduction of technological change by requiring advance notice.

The German Model of Codetermination: Programmatic Perspectives, Confrontative Issues and Prospective Developments Franz-Jürgen Säcker

Table of

Contents

A.

Worker

Participation

B.

Levels of C o - d e t e r m i n a t i o n :

C.

Philosophy

D.

Scope and General of 1976

E.

R i g h t s and F u n c t i o n s of the S u p e r v i s o r y Individual Member - Details

F.

C o n c l u s i o n : Worker P a r t i c i p a t i o n , W o r k a b i l i t y E n t e r p r i s e s , and Efficiency of the Economy

of

in C o r p o r a t e

Management

Plant and

Enterprise

Participation P r i n c i p l e s of the C o - d e t e r m i n a t i o n Board and of of

Act the

the

A. WORKER PARTICIPATION IN CORPORATE MANAGEMENT - A HISTORICAL SURVEY According to experience gained over the last 100 years the stability of the Western democratic industrial societies in Europe seems to be substantially dependent on the structure of social relationships within enterprises. The demand for industrial democracy is, of course, of mych more recent date than the demand for political democracy. Since the end of the First World War, however, in addition to demands for socialization of the economy raised by socialist and communist groups, the demand for industrial democracy has been at the center of political arguments in the majority of Western European states, at least. As you know, co-determination acts

312

Franz Jürgen Säcker 2

became effective in^Sweden in 1977 , and in the Federal Republic of Germany in 1978. At the supranational level the demand is being made within the European Communities for a co-determinaticn statute roughly oriented^to the German model to apply to transnational companies. In Italy, 5 France, 6 and England 7, the situation is so far still relatively quiet. The reason for this lies in the fact that the socialist and communist parties and trade unions consider co-determination in its German form to be a betrayal of the working class because it "de-radicalizes" the tgade unions and integrates them into the capitalist system. The supporters of free enterprises and of a liberal market economy, on the other hand, reject co-determination because they fear that co-determination means "^old" socialization and is the first step towards communism. The German trade unions and political parties on the other hand are in principle unanimous in their view that co-determination of capital and labor within a company provides a' third course between capitalism agd communism, in other words, a final stage of development. The German Federal Chancellor even likes to talk about the "German Model" in his lectures on co-determination. Co-determination in a company is thus in these terms neither transitory nor provisional,• on the contrary, it has complete validity. What does this model look like? How does it coipipare with the alternative system of collective bargaining? How are we to judge the political stability of this system? And what about the economic efficiency of companies under the conditions laid down by co-determination on a parity basis? In order to give satisfactory answers to all these questions we first have to consider how important co-determination is in the German system of collective labor legislation. Asking about the meaning of, and the necessity for,, industrial codetermination for workers is a typical product of modern industrial society with its division of labor as it has developed since the end of the 18th century. The man who lives in isolation on an island like Robinson Crusoe, or who is a craftsman or in a one-man firm, such a man is his own master. He has the legal right to make his own decisions and not to have them made for him by others. There are no instructions to dictate his rhythm of work; he has no superior to reprimand him; he cannot be dismissed; he can, of course, starve if his work is poor, but modern social legislation protects him from this risk, too. For the independent worker the demand for codetermination would indeed be pointless. The man who enjoys self-determination needs no collective protective institution to shield him ; or to safeguard his personal dignity and freedom. It is not until the worker is integrated into and subordinated to factory work with its division of labor and functions that the question of worker participation in factory and company management arises. The liberalism of the 19th century ("Manchester liberalism") - in Europe we like to talk about

German C o - d e t e r m i n a t i o n

313

paleo-liberalism - had not yet recognized these problems. In those days the belief was that recognition of general, individual civil rights would of itself lead to a just and fair system - the quasi-automatic result, as it were, of the process of the self-interested self-realization of all citizens. The belief in legal freedom and equality for all, which had only just been attained as a result of the enlightenment and the French revolution, was not allowed to become confused by the reality of economic constraint and inequality of a large number, at least, of the working class. It was only after a long and bitter struggle that the workers, now gradually organizing themselves, were able to wrest from the state the right to lay down unalterably in collective agreements, uniform, general minimum working conditions for their members, and to strike for better working condition^'without having to fear the imposition of penal sanctions. The possibility of improving general working conditions and especially wages, holidays, and working hours by concluding collective agreements proved, however, to be insufficient from the workers' point of view. Despite collective settlements, the individual worker on the job was, to a large extent, still not self-determined. As in the past the worker remained subject to the employer's authority to issue directives both concerning his job arid the place of work; as in the past.he had no influence on the organization of working conditions or his place of work (i.e. in the concrete 3-dimensional^lace of production or administration in which he had to work). Similarly no collective agreement could cover entrepreneurial planning, organizational, and management competencies (i.e. decisions on investments^diversification, production, location, prices, and marketing). Out of this situation, in which the individual worker remained as before dependent on the employer, there arose at the end of the 19th century the demand for workers to exert an influence on the organization of the social, personal, and economic affairs of the place of work, and the company as a whole. B. LEVELS OF CO-DETERMINATION: PLANT AND ENTERPRISE In the First World War a start was made to meet this demand with the Hilfsdienstgesetz - roughly translated Auxiliary Service Act - of 1916 and then, more comprehensively, in 1920 with the Works Councils Act (Betriebsrategesetz). During the National Socialist era this worker participation was superseded by fascist working regulations with commitment to a Fiihrer model. It was not until the end of the Second World War, that the development which had begun in the Weimar Republic could be resumed in the individual federal states. Laws on works councils were passed in the federal states, and in 1952 were superseded by the "Betriebsverfassungsgesetz" (Works Constitution Act) which applied throughout the Federal Republic.

314

Franz Jürgen Säcker

In 1972 the Betriebsverfassungsgesetz was fundamentally amended and given its current form. Just as in the preceding version of 1952, this act gives jobholders the right to participate in social and personal matters and to demand financial compensation (socjjil plans) when factories are closed down and work is cut back. The board of management has to give the works councils comprehensive information concerning the economic affairs of the company (§ 106 Shop Constitution Act) and has to report in full and in good time about the following entrepreneurial measures and shall produce the necessary records therefore in so far as the same shall not jeopardize operational and business secrets, - manpower

requirement planning

(§ 92),

- planning (§ 91) ,

for technical p l a n t s , working p r o c e s s ,

and

operations

- planning for a l t e r a t i o n s and d i s m i s s a l s of more than thirty jobholders (§ 111 of the Shop C o n s t i t u t i o n Act in c o n j u n c t i o n with § 17 (j>|: the Act To Provide P r o t e c t i o n Against U n w a r r a n t e d Dismissal. A r t i c l e s 111 to 113 of the Shop C o n s t i t u t i o n Act oblige the employer to consult the works c o u n c i l s for the intended steps, to aim at an a g r e e m e n t with the w o r k s c o u n c i l s upon f i n a n c i a l c o m p e n s a t i o n s when factories are closed down in order to cushion any socially d e t r i m e n t a l effects. Such a g r e e m e n t s exceed those p r o v i d e d for by the council d i r e c t i v e of the European C o m m u n i t i e s to avoid in p a r t i c u l a r t r a n s f e r s of e n t e r p r i s e s , jp^ants, or parts of b u s i n e s s being d e t r i m e n t a l for the w o r k e r s .

But all these are only information rights of the works councils, not co-determination rights. Therefore employees in the coal, iron, and steel industries were given in 1951, with the encouragement of the occupation powers, additional co-determination rights on the enterprise level. Jobholders in the other joint stock companies were given in 1952 the additional right to a third of the seats on the company body which elects and dismisses the members of the management board. In Germany this body, which formerly consisted solely of shareholders, is known as the "Aufsichtsrat" (supervisory board). The Co-determination Act of 1976 extends the scope of co-determination by giving the employees of joint stock companies and companies with limited liability half the seats on the supervisory board. The members who have been elected by the share-holders can be removed from office by a three-quarters majority of the votes cast at a shareholders' meeting (§ 103 German Stock Corporation Act). On the labor side are representatives from the trade unions, from the blue-collar workers, from the white-collar workers, from the white-collar employees, and one representative from the executive employees with managerial responsibility.

German Co-determination

Fig. 1

315

Model of parity co-determination in the coal and steel industries

ARBEITSDIREKTOR

4 ANTEILSEIGNERVERTRETER

z 3

ae.

0

I

1 WEIT. MITSUED l««t ll

1 NEUTRALER

»

1 WEIT. MIT5UEC

I

2 : 2 ARBEITNEHMERVERTRETER

316

Franz Jürgen Säcker

Fig. 2

Model of the Labor Management Act 1952/72

Notes to Fig. Vorstand Arbeitsdirektor Aufsichtsrat Anteilseignervertreter Weitere M i t g l i e d e r N e u t r a l e s Mitglied Arbeitnehmervertreter Hauptversammlung Betriebsrat Gewerkschaften Belegschaft Wahlorgane

1 and 2

Board of M a n a g e m e n t Labor Director S u p e r v i s o r y Board or C o u n c i l R e p r e s e n t a t i v e s of S h a r e h o u l d e r s A d d i t i o n a l Members N e u t r a l Member R e p r e s e n t a t i v e s of W o r k e r s S h a r e h o l d e r s Meeting Works Council Unions Worke rs Electoral Colleges

German Co-determination

>H M 4J m —• 0 D) . W -U i >Si 0