Unitarism, pluralism and human resource management in Germany : a comparison of foreign and German-owned companies.
This thesis tests aspects of convergence theory by studying the human resource management of
German-, UK- and US-owned banks and chemical companies operating in Germany. The research
examines evidence for any convergence to a more unitarist US-type HRM (Human Resource
Management). Germany provides a particularly interesting test since German labour market
institutions exert pressures towards a pluralist management of human resources. The two key
research questions are, how far German companies adopt HRM policies and practises, and how
far foreign-owned firms comply with the German institutional environment.
The research, based mainly on 25 detailed case studies, found that the German- and UK-owned
firms as well as the larger US subsidiaries generally comply with the requirements of the three key
German labour market institutions of centralised collective bargaining, co-determination and
initial vocational training. Central tenets of the HRM literature, such as extensive training,
employment stability and single status are compatible with German institutions. In the early 1990s
many companies in the sample introduced HRM techniques such as attitude surveys, performancerelated
pay and quality circles that are not enthusiastically welcomed by trade unions and
employee representatives. This development does not appear to threaten the German system, as
these techniques are introduced by negotiation and not confrontation. Six mostly smaller US
subsidiaries deviate. Nevertheless, these firms seem to be an exception in German industry.
Evidence is presented to suggest these findings apply to German industry in general. Far from
supporting convergence thinking, the German example supports a divergence theory. The human
resource management of companies in Germany remains distinctively different from American
practises. As the German economy has remained robust, the more pluralist German model offers
a serious alternative to a unitarist US HRM model.