Opening the Black Box of Works Council – Management Team Interaction. Germany and the Netherlands Compared

Abstract

Researchers still struggle with unravelling the internal interaction processes between management and employees (and their representatives). In empirical studies explaining the effects of works councils, the multidimensional nature of the works council–management team relationship is therefore largely ignored. By utilising a unique questionnaire among works councillors, this article examines the (potential) inner workings of this black box, by developing a construct aimed to capture the essence of these forms of social interaction. The authors find that behavioural aspects of cooperation, power, communication, goal sharing and trust significantly affect the relationship between works council and management. The authors also test their construct via a model that seeks to explain the influence of works councils on company decision-making. Their results indicate that despite a few noticeable cross-country differences, their black box construct is the most important factor in explaining this influence both in Germany and the Netherlands, revealing that a good relationship with management is imperative.