Transnational Company Industrial Relations: The Role of European Works Councils and the Implications for International Human Resource Management

The general study of institutional arrangements that are designed to impact on managerial prerogatives is typically cast in the genre of forms of industrial democracy. While the last few decades have seen a decline in interest in this area of study, developments in the European Union have enabled an ongoing dialogue specifically on the topic of consultation. Although consultation is generally seen by scholars as a modest form of industrial democracy, formal European Directives have provided the opportunity to assess the representative strength or otherwise of initiatives such as European Works Councils that are explicitly designed to address social policy and inequality in the workplace. Drawing on 41 case studies, we examine the determinants of European Works Councils morphology, activities undertaken and general outcomes. We note that it is important to presumptively inquire as to what is being theorized rather than simply take the implicit position that European Works Councils are the prime institution of influence. This leads us to establish the primacy of management and in particular, the vector of management decision-making as the primary independent variable that predicts much about the operation and robustness of European Works Councils. Accordingly, we find that strong centralized management, rather than the usual suspects of differing national industrial relations systems and cultural differences, typically account for much of what we understand in terms of the role that European Works Councils play.