Socio Economic Review (2005) 3: 311-330
One can observe different forms of industrial relations across countries. To illustrate: Scandinavia and Austria enjoy strong, centralized unions, which favour cooperation with management objectives. In comparison, France has weak unions, yet industrial relations tend to be highly conflictual in nature. How can we explain the great disparity of industrial relation systems between countries? The general assumption is that these different industrial relations systems (the relationships between management and unions) emerges out of the interactions between 1) the type of labour-capital conflict and 2) the coordinating institutions that allow for the (short-term) resolution of this conflict. Hence it is not only the relatively bargaining power of capital and labour that results in different industrial relation systems, institutions contribute to the shaping as well. It specifically puts forward the notion of ‘institutional complementarity’: the joint, indirect influence that institutions have on the behaviour of its agents.
This essay focuses specifically on the impact of institutional complementarity of financial institutions: how does the financing relationship (between the firm and the financial market institutions) affect the management strategies, and, in turn, affect the onion’s respective strategies. Respectively, the essay assumes:
Types of financing relationships: 1) bank (low pressure on short-term objectives) 2) market-based (high pressure on short-term objectives)
Types of management strategies:1) long-term
Types of union strategies:1) long-term
Emerging from the type of financing relationship, the type of management strategy and the type of union strategy,...