Chapter 12: Flexibility and capital market + Chapter 13: The firms´ labour demand and employment

In the framework of a societal production model, there is always a variety of different business models, social production systems and work models. At the macro level, one can describe ideal-typical forms of a production model: e.g. predominant ways of how to organise enterprises, companies and work. The research association proceeds under the assumption that typical patterns of the German production model are eroding; that an increasingly heterogeneous company landscape is evolving; and that, therefore, the conditions for the employees increasingly differentiate themselves too. In order to examine this assumption, analyses at the meso level of the enterprise landscape as well as at the micro level of workers are indispensable. In this chapter two different empirical perspectives will be incorporated.

The first perspective sees the changes in enterprise structures and in the organisation of production as determining factors for the transformation in the production model. The altered organisation of production, value creation and work directly and indirectly affects the employees and their employment prospects.

The second perspective consists of the observation of corresponding changes at the enterprise and company level. Insofar as micro data concerning employment and work conditions or linked-employer-employee data are applied, the employment, income and qualification effects for employers can be analysed at a company level too.

Both perspectives are connected by measuring the market-oriented actions of enterprises and companies according to their socioeconomic effects.


Market-oriented actions of companies and enterprises

Since the Seventies, the signs of erosion in the Fordist patterns of corporate organisation and the organisation of work at the company level are increasing. In connection with internationalisation, new market-oriented management and control tools are emerging, new production concepts and new business models of enterprises (e.g. increasing centralisation at group or enterprise level while at the same time production units get decentralised). These topics receive a qualitative and quantitative treatment. However, the (permanent) reorganisation of value creation, production and work refer to quite different units like (international) corporations, enterprises, companies and production sites. So for reporting, one first needs operational definitions for these units in order to paint a comprehensive picture of the enterprise and company landscape.

In its empirical analysis, the chapter emphasizes four main points:

  • Business organisation: Which new enterprise structures and production organisations are emerging? To what extent is this due to a shift in investment modalities? How does the internationalisation of production and value creation on a global scale affect the German company and enterprise landscape? Which role is played by financial markets and how do the state of credit markets and the patterns of outside financing influence big and small enterprises?
  • Internationalisation of financial markets: To what extent do enterprises depend on international financial structures? Do short-term opportunities for generating returns change entrepreneurial behaviour and how are they passed on to the employees in the form of demands concerning productivity, work content and work organisation?
  • Work organisation and labour policy: Does the balance of structural and procedural organisation (in companies) get modified or upset? How is work organised there? Does group and team work increase, how are decision making and hierarchies organised (in companies) and does this affect the organisation of working hours and payments on the side of the employees?
  • Industrial relations: Which changes can be observed in Germany’s system of dual representation of interests? Does the position of trade unions and work councils get undermined at the company level? What are the consequences for companies and their employees? How do management concepts, enterprise culture and worker participation relate to each other? Are employees still capable of asserting their interests, given the increasing competition for production locations?

The secondary analysis of qualitative research undertaken by industrial sociologists has a special role to play in this chapter, as the data availability concerning companies and enterprises in Germany permits analyses of this complex of issues only in a limited fashion. Qualitatively conceived company case studies will be consulted in order to record the conditions and effects of reorganisation and internationalisation and to evaluate their effects on employees.


Socioeconomic effects

The typical patterns of the German production model in a state of transformation are – within a socioeconomic development nexus – in at least three ways significant for the social prospects of employees:

  • Employment stability and employment security;
  • Incomes and income differentiation;
  • Acquisition, preservation and expansion of qualifications which are professionally utilisable

Research literature in industrial science (referring to enterprises and companies) is often concerned with these three socioeconomic impact dimensions. They are key indicators for social capabilities resulting from labour participation. Therefore, in soeb 2 companies are classified by applying the three dimensions mentioned above.

The epistemological interest is concerned with the shifts over the course of time and results directly from our transformation hypothesis. Thus, it can be assumed that the socioeconomic effects mentioned have clearly shifted since the times of Fordism. For that era it can be ideal-typically assumed that long employment with a company was accompanied by steadily rising wages and the non-aging of qualifications applicable in the production process.

There are hints that in recent times not all of these dimensions have shifted to the same extent; so that short-term employment for example is not necessarily accompanied by lower wages and missing occupational and advanced training possibilities. Instead, there are on the one hand companies which offer short-term employment associated with comparatively good earning and qualification possibilities (that applies for example to companies in the software and media industry). On the other hand, theoretical considerations regarding demand for labour suggest that there also companies where employees may enjoy long employment, but do not receive particularly good wages (e.g. in small companies in certain sectors of the manufacturing industry).

In East Germany, one can find (at least partially) different patterns of employment (keyword: betriebliche Überlebensgemeinschaften) which do not conform to the conventional hypotheses about corresponding cause-and-effect relationships in the three dimensions mentioned. Therefore, the task of this section is to classify the corresponding and typical behaviour patterns and to describe the changes they undergo in the course of time.

The typology to be generated must be located at the company level. For the operationalisation of the three dimensions (employment stability, income development and handling of professional qualifications) the level of the employees has to be included. Therefore, one first has to start on the level of the employees in order to subsequently aggregate suitable measures at the company level which express precisely these differences inside of companies.

The empirical implementation of such a research design is only possible with linked-employer-employee data. In Germany, the FDZ/IAB provides external scientists with such data for evaluation purposes.

The operationalisation of the three dimensions is carried out by aggregating employment parameters (of interest) at the company level. Possible parameters are:

  • Employment stability and employment security: average time of employment; share of those with more than five years of employment;
  • Income and income differentiation: average wage payments; standard deviation of wages in the company;
  • Acquisition, preservation and expansion of qualifications: vocational training and further education within the company, number of professional profiles in relation to the number of employees, share of university graduates.

After the operationalisation there are two different (empirical) possibilities to typify based respectively on factor analysis and cluster analysis. After typifying, an investigation into the changing composition of types in the aggregate is planned, and an analysis of regime changes at the company level will also follow. Afterwards, the detected types are related to the market-oriented actions of companies.


Results (German)
Alda, Holger (2008): Betreibliche Arbeitsnachfrage und Beschäftigung. Methodenpapier. soeb-Arbeitspapier 2008-6. PDF

Responsibility for this chapter

Soziologisches Forschungsinstitut an der Georg-August-Universität Göttingen

Institut für Sozialwissenschaftliche Forschung (ISF München)