lted on management decisions). German industrial relations system is highly standardized, extensively organized through state regulation, and characterized by formal recognition of employee rights at all levels of the firm. This concept of fostering strong employee participation in corporate decision making is generally referred to (especially in Europe) as industrial democracy. Industrial democracy refers to a consensus among national leaders and citizens in a country that employees at all levels of organizations have a right to be involved in decisions affecting their long-term welfare. Nowhere is the concept of industrial democracy better illustrated than in Germany, where strong industrial unions, codetermination, and works councils characterize the workplace environment.: The shaded boxes represent formal parts of the organization. The white boxes represent independent agencies, institutions, service providers, and contingent workers that are largely outside the formal organization design.a national level, the German constitution guarantees all citizens the right to join unions and engage in collective bargaining. It also indirectly guarantees the right of companies to join employer associations. At present, 42 percent of German industrial workers (and 30 percent of all German employees) are members of unions, compared to less than 10 percent in the US. Eighty percent of German employees are members of various branches of Germany s largest trade union, the Deutsche Gewerkschaftsbund (or DGB). Moreover, the national government plays a strong role in industrial relations. All political parties have strong factions representing workers interests, although the Social Democratic Party has the closest links to unions. Extensive legislation covers labor standards, benefits, discrimination, plant closures, and employee rights.bargaining agreements are negotiated on an industry-wide basis, either nationally or regionally. Little direct bargaining takes place between unions and employers at the plant level. As a result, wage differentials across companies in similar industries are small. Employment disputes are usually settled through labor courts, consisting of three persons: a professional judge who is a specialist in labor law, a union representative, and a representative of the employer s association. These courts have jurisdiction over both individual employment contracts and collective contracts involving industrial disputes.hallmark of German firms is the technical competence they bring to the manufacture of so many diverse products. German engineering is world famous. A major reason for this lies in the training of managers and workers. Line managers in German firms are typically better trained technically than their European or American counterparts, with closer relations between them and technical experts in the firm. In contrast to American managers, most German managers are trained as engineers and have completed some form of craft apprenticeship training program. The typical German organization is distinguished by its tightly knit technical staff superstructure, closely linked to supervisory and managerial tasks that, when combined, produce high levels of performance. Compared to French or British industry, German firms have lower center of gravity; that is, they have less proliferation of administrative and support staff and more hands-on shop floor managers.the first-line supervisor (usually held by a Mei...
