Deregulation of the German Industrial Relations System via Foreign Direct Investment: Are the Subsidiaries of Anglo-Saxon MNCs a Threat for the Institutions of Industrial Democracy in Germany?

Abstract

This article asks whether the subsidiaries of American and British MNCs operating in Germany act as forces that endanger the traditional German system of industrial democracy by `importing' typical Anglo-Saxon style industrial relations practices into their host nation. In a mail survey based on responses from 297 foreign-owned and local German firms, little evidence was found that Anglo-Saxon-owned subsidiaries act as a threat to the central pillars of Germany's IR system, i.e. codetermination and collective bargaining. This finding contradicts a widely held belief of the erosion of the German IR system and suggests that this system is still strong: foreign companies adapt to local standards so as to retain legitimacy within their host nation's environment.