1. Labor Relations, Unions, & CSR: MNE Relationships in Germany Gabrielle Annala Yuanxin Bi Bethany Dockins

2. Labor in Germany Germany follows EU trend of shrinking union population 18% of employees are in a union 16 major unions 6.6 million total people covered by unions Aside from unions, Works Councils also exist (mentioned last week)

3. How do the work together? Unions and works councils are separate Should be viewed as co-determinative Unions represent employees at an industrial level Works Councils represent employees at an institutional level Works Council handles mostly institutional level negotiations and representations, but unions handle recruiting, wages, workers rights, etc.

4. Why have two? Merits of both are debated Works Councils are more frequently used today WC gives individual institutions more control over a local office Important to have two to ensure equal treatment – think about institutional level training for middle/upper management vs. unskilled laborers. Although they need different training, training should be available to everyone.

5. Apprenticeship and VETs VET – Vocational and Educational Training Lower unemployment rate amongst young people Better control over skills and salaries More stable employement 60% of all German employees have some form of certificate from a VET

6. Unionization & Collective Bargaining Ranks High in: Market Regulation Union Strength Collective bargaining centralization US ranks low on all three points MNEs may have difficulty navigating labor markets

7. Germany & the US Differences in the US & German ways of business Germany has been historically interested in American manufacturing and production techniques US companies have expressed admiration for German HRM practices

8. Unions Vs. Works Councils Many companies would opt to avoid a union and choose an exemption that does not require they have union coverage Works Councils frequently look more attractive Size of company and existing labor relations policy could influence a companies choice of labor representation structure

9. US Companies in Germany Walmart entered Germany via acquisitions; inherited a labor union Kept the union in place, despite avoiding unions in most other countries McDonald’s allows German workers to be a part of the large FFC unions, which covers fast food workers but only 5% join Many companies are claiming the exemption out of union contracts

10. CSR & Ethics No standardized practices or reporting OECD suggested policies; formally accepted by Germany Germany as no council or administrators creating or enforcing policy or CSR

11. Trends in CSR Most commonly reported elements of CSR include concerns for workers, customers, suppliers, community, environment, and society. Germans are more likely to report on concerns for social issues and workers than companies in the US, UK, and Australia. Commonly reference the connection to politics and work life Relatively new issue in Germany because labor agreements typically covered concerns for workers

12. German CSR Germans find it important to support companies with a connection to the community and society Government values supporting basic human rights; corporations tend to support the communities in other way allowing for a higher standard of living and a livable tax rate It is socially acceptable to halt CSR efforts during times of financial hardship to maintain operations and employees

13. The Future for Germany No government position on CSR could be a substantial risk in the future May have to play catch-up to the rest of the western world Suggestion: Use Unions and VETs Empowers organizations without straining government resources

14. Questions?