Abstract
The varieties-of-capitalism (VoC) approach distinguishes liberal market economies (LMEs) such as the USA and coordinated market economies (CMEs) such as Germany based on institutional differences in terms of corporate governance, industrial relations, company relations, as well as education and training. According to the VoC approach, firms differ in the ways in which they combine market and non-market mechanisms to coordinate their activities. Firms in LMEs are considered to rely more on market or exit mechanisms than firms in CMEs, which more often complement market with non-market or voice mechanisms. This chapter summarizes what has been learned from the VoC approach on the linkages between the institutional environment and labor-management relations. Various important lessons can be drawn. Employment protection legislation is a productive element within the institutional setup of CMEs. LMEs tend to induce strong overall wage dispersion, whereas in some CMEs such as Germany the labor market performance varies markedly by skill type and gender. The recent literature also indicates that the institutional setup is more complex than the VoC approach suggests, calling for revisions to the approach. In particular, some countries are hybrid economies that combine elements of both types of capitalism. The CME-LME dichotomy does not appreciate the true variety of country-specific skill systems. Finally, multinational enterprises overcome institutional boundaries of different types of capitalism in ways that were not included in the original VoC approach.
Highlights
In the varieties-of-capitalism (VoC) approach, Hall and Soskice (2001) distinguished liberal market economies (LMEs) such as the USA and coordinated market economies (CMEs) such as Germany
This chapter will describe the linkages between type of capitalism and labor-management relations, with the latter defined as comprising human resource management (HRM) practices, industrial relations practices and the nature of employment relations more generally at the firm or higher level
Corporate Social Responsibility (CSR) reporting seems more common in firms located in LMEs but firms in the three CMEs Netherlands, Germany, and Switzerland include less on environmental issues but more on labor issues in their CSR reports when compared to US firms
Summary
In the varieties-of-capitalism (VoC) approach, Hall and Soskice (2001) distinguished liberal market economies (LMEs) such as the USA and coordinated market economies (CMEs) such as Germany. This chapter will describe the linkages between type of capitalism and labor-management relations, with the latter defined as comprising human resource management (HRM) practices, industrial relations practices and the nature of employment relations more generally at the firm or higher level Focusing on these linkages is important for the future development of the VoC approach. Subsequent sections will discuss the linkages along four themes, namely training and employment security; HRM practices and job quality; labor market inequality; and globalization and international issues Each of these sections will clarify key propositions and implications of the VoC approach and selectively review the most important work that used the VoC approach as frame of reference to examine labormanagement relations. This chapter will largely ignore findings that are specific to particular industries
Sign-in/Register to view highlights & summary Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
