Using the endowment effect to explain managerial resistance towards codetermination: Implications for employment relations from the German case

Harcourt, Mark; Gall, Gregor; Wilkinson, Adrian; Croucher, Richard; Lam, Helen

doi:10.1111/1748-8583.12261

Cited by 8 publications

(7 citation statements)

References 85 publications

(88 reference statements)

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“…The behavioral literature has revealed individuals' taste for discretionary power, including in cases when sharing powers would serve their material interests (Bartling et al 2014;Fehr et al 2013). Specifically for our case, Harcourt et al (2020) argue that German employers view codetermination as a departure from the default situation in which entrepreneurial prerogative applies and, for this reason, they underestimate the gains yielded by codetermination. This applies especially to owner-managers who seemingly ascribe a high utility to being the "ultimate boss" within their establishment (Jirjahn & Mohrenweiser, 2016).…”

Section: Employer Incentives To Influence the Behavior Of Work Counci...mentioning

confidence: 83%

The wage impact of being a works council representative in Germany: A case of strategic discrimination?

Brébion

2022

Industrial Relations

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Works councils provide an essential mechanism for worker participation in decision‐making. While the literature has extensively explored their impact on worker and establishment outcomes, the negotiation process between works council representatives and their employer has remained largely unexplored. This article contributes to filling this gap by investigating wage discrimination towards works councilors in Germany. Fixed effects models leveraging panel data show that councilors receive a wage premium that positively correlates with the sectoral coverage of collective bargaining. In the manufacturing sector, where the tradition of bargaining is heavily entrenched, employers positively discriminate councilors. In contrast, in the service sector, where the culture of bargaining is weak, employers penalize works councilors. In both sectors, partisan and unionized works councilors are the most affected. The most likely hypothesis to explain these results is that employers strategically discriminate these councilors in order to bypass the traditional constraints of establishment‐level participation. This article therefore questions the quality of industrial democracy in Germany.

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Section: Employer Incentives To Influence the Behavior Of Work Counci...mentioning

confidence: 83%

The wage impact of being a works council representative in Germany: A case of strategic discrimination?

Brébion

2022

Industrial Relations

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“…In Germany, works councils are in decline in recent years (Ellguth & Kohaut, 2021). Managers’ fear to lose power and their resistance to worker voice appear to be one factor contributing to a lower prevalence of works councils (Hartcourt et al., 2020; Jirjahn & Mohrenweiser, 2016). In the United States, there is an ongoing discussion on how to overcome the representation gap in the workforce (Freeman & Rogers, 1999; Hertel‐Fernandez et al., 2022).…”

Section: Discussionmentioning

confidence: 99%

Political spillovers of workplace democracy in Germany

Jirjahn

2023

Ann Public Coop Econ

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Although works councils provide a highly developed mechanism to promote workplace democracy, research on their consequences has been dominated by economic aspects. This study brings a new perspective to the understanding of works councils by examining their influence on workers’ political behavior. Political spillover theory suggests that participation in the firm's decision making has the potential to foster workers’ political participation in civic society. Our study for Germany indeed finds a positive association between the presence of a works council and workers’ interest in politics. This holds in panel data estimations including a large set of controls and accounting for unobserved individual‐specific factors. However, separate estimations by gender show a positive association between works councils and political interest only for men, but not for women. Traditional gender roles may make it difficult for women to be politically engaged even when a works council is present.

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“…In Germany, works councils are in decline in recent years (Ellguth & Kohaut, 2021). Managers fear to lose power and their resistance to worker voice appears to be one factor contributing to a lower prevalence of works councils (Hartcourt et al., 2020; Jirjahn & Mohrenweiser, 2016). Measures facilitating the implementation of works councils and strengthening their position may not only be important to increase economic performance (Jirjahn & Smith, 2018; Mohrenweiser, 2022), but may also help overcome social cleavage between natives and immigrants.…”

Section: Discussionmentioning

confidence: 99%

Immigrants and trade union membership: Does integration into society and workplace play a moderating role?

Jima Bedaso,

Jirjahn

2023

Brit J Industrial Rel

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We hypothesize that incomplete integration into the workplace and society implies that immigrants are less likely to be union members than natives. Incomplete integration makes the usual mechanism for overcoming the collective action problem less effective. Our empirical analysis with data from the Socio‐Economic Panel confirms a unionization gap for first‐generation immigrants in Germany. Importantly, using the presence of a works council as an indicator of workplace integration and contacts with Germans as an indicator of integration into society, the analysis shows that the immigrant‐native gap in union membership is heterogeneous. The gap is smaller for immigrants working in firms with a works council and having social contacts with Germans. Our analysis also confirms that the gap is decreasing in the years since arrival in Germany.

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Using the endowment effect to explain managerial resistance towards codetermination: Implications for employment relations from the German case

Abstract: and Lam, Helen (2020) Using the endowment effect to explain managerial resistance towards codetermination: implications for employment relations from the German case.

Cited by 8 publications

References 85 publications

The wage impact of being a works council representative in Germany: A case of strategic discrimination?

The wage impact of being a works council representative in Germany: A case of strategic discrimination?

Political spillovers of workplace democracy in Germany

Immigrants and trade union membership: Does integration into society and workplace play a moderating role?

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