Forcing German managers to focus on productivity

Abstract

PurposeAims to test Walton and McKersie’s theory on labour negotiations, specifically in the case of German car manufacturers.Design/methodology/approachThe research is based on interviews with industrial actors in Germany’s car industry – an empirical case study.FindingsThe article explains the structural force behind the managerial drive towards production. While German managers act at an enterprise level, a structural force has been responsible for the success of Germany’s post‐WW II manufacturing. Germany’s collective bargaining structure removed wage and working‐time bargaining from local management and opened four managerial options: production, productivity, innovation, and quality. This structure forced management to focus on these four options because they lie within the realm of management prerogative. The article explains how structural divisions between intra‐enterprise level arrangements and extra‐enterprise level collective bargaining at a conceptual level can best be understood.Originality/valueArgues that a regional and industry collective bargaining structure has supported the success of a competitive car industry in Germany.