(1 ) Codetermination was introduced in West Germany in 1951 with a law that provided for equal representation of all classes of workers on the supervisory boards of certain corporations. In 1976 codetermination (Mitbestimmung) was extended to all German enterprises employing 2000 or more workers. Similar legislation was attempted in other European countries without much success.
(2) Minority board participation is similar to codetermination. The Shop Constitution Law of 1952 requires that German firms with between 500 and 2000 employees give one-third representation to employees. Most EEC countries, along with Sweden and Norway, have introduced minority board participation with great success. In the United Kingdom and Italy, management resistance to minority board participation has brought repeated labor strikes.
(3) Works councils are bodies through which management-labor relations are institutionalized at the enterprise level. A council may consist of only workers' representatives or of both workers and management, as in the joint works councils in the United Kingdom. These bodies may be mandatory under the law, they may be established at the national level by agreement between trade unions and employers' organizations, or they may be specific to individual companies.
(4) Quality circle (QC) programs organize workers into small groups, through which they can take responsibility for increasing productivity and improving product quality. The unique feature of such programs is the use of statistical and industrial engineering techniques to influence decision making. In QC programs, employees meet regularly with their supervisors, study quality control and productivity improvement techniques, apply these techniques to identify and solve work-related problems, present their solutions to management for approval, and monitor the implementation of solutions to ensure that they work.
QC programs were conceived and developed in the United States in the 1930s, but they were first implemented in Japan. Their use in the United States appears to be a direct consequence of management's perception that Japanese market successes are due partly to the use of QCs. According to the International Association of Quality Circles (IAQC), 150 American companies were using QCs in 1979; this number had risen to 1500 by 1982.
(5) Financial participation, which has traditionally been in the form of profitsharing, has recently taken on a new dimension with employee stock option plans and management or leveraged buyouts. Although these practices are essentially an American phenomenon, it is expected that they will spread over the globe.
SOURCES: Ronen, Comparative and Multinational Management, pp. 367-372; Robinson, Internationalization of Business, pp. 76-88; Robock and Simmonds, International Business and Multinational Enterprises, pp. 577-580; Scarpello and Ledvinka, Personnel/Human Resource Management, pp. 627-628.
One conclusion that can be drawn from the study of labor relations is that under most circumstances unions play a positive role in society. Thus outright declaration of an "antiunion" or a "nonunion" policy is not in the best interests of any MNC anywhere. OECD EMPLOYMENT AND INDUSTRIAL RELATIONS GUIDELINES gives the OECD guidelines for industrial relations. By following these guidelines, a company can reduce the risks of strikes, confrontations, and direct government intervention.
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