On the role of works councils and plant level agreements for developing more sustainable organisations

Florian Krause, Leibniz University Hannover

The academic attention towards sustainability continues to be on a high level. While the focus has been largely on voluntary agreements with mostly external stakeholders like NGOs, the role of binding plant level agreements with works councils has rarely been discussed. With our empirical and interdisciplinary study, we aim to pick up this line and enhance the discussion on the role of works councils and plant level agreements by shedding light on the introduction, implementation, institutionalisation and continuation of sustainability related projects within a firm. While sustainability is often discussed in a frame of voluntariness, our main focus is on the motivation of works councils and management to negotiate binding plant level agreements on sustainability related issues and how these agreements support the continuation of a sustainability project – or, in other words, the sustainability of a sustainability project.

While from the perspective of the structural antagonism, explicit or implicit economic reasoning for certain projects is part of the managements role, while works councils would reason with social arguments. For the paper, we focus on the reasoning of different individual and collective actors with regard to sustainability topics and which internal action strategies they develop in this regard (Bondy 2008). For ecological as well as social projects, it is an open empirical question, which topics are favoured by different actors and why (Aguinis & Glavas 2012). Also, it is not very clear yet whether and how ecological and social projects are processed within a firm (Baumann-Pauly et al 2013, Wickert et al 2016).

But the thematization and implementation of a new practice is only the first step. For the continuation of a sustainability project within a firm, research for example in strategic HRM reveals two major barriers that make it hard for new practices to succeed (see Wright & Nishii, 2013). On the one hand, new practices might not fit into the company's strategic concept (vertical integration: see the overview by Allen & Wright, 2007). On the other hand, new practices are often not aligned with the already established practices (horizontal integration: see the overview by Boxall & Purcell, 2011). New practices correspond to existing practices but they are not always synergetic with them. In addition, existing practices have certain persistence and are difficult to change (Daudigeos, 2013; Haack et al 2012). The assumption that every executive and every employee simply understands, accepts and implements new practices as planned is just not plausible. Many practices are not adequately communicated, emphasized and understood or cannot be carried out due to insufficient qualification. In these situations, executives and employees prefer established, short-term successful behaviour over new, long-term successful behaviour (Bansal & DesJardine 2014). From vocational education and training, we know, that sustainability activities can only be sustained when they connect organisational development and individual development of competencies (Siebenhüner 2004, Siebenhüner & Arnold 2007). Siebenhüner (2004) defines "sustainability-oriented learning" individually and organisationally as "the change of their [the actors] action pattern, which is due to a changed knowledge base as a result of reflexive processes and is based on the concept of sustainability as a target frame" (p. 8).

Empirical Design

In order to introduce new internal practices, works councils can demand the negotiation of plant-level agreements on topics connected with sustainability. The German Works Constitution Act provides a wide range of options for picking up social and environmental issues. These issues can be negotiated and recorded in the form of legally binding plant-level agreements. We analysed 133 plant-level agreements on sustainability related issues (e.g. health and safety, digital labour, flexible work, vocational training, environment) focussing on rationale, conflict arrangements and evaluation. In addition, we conducted expert interviews with representatives of trade unions and employer associations focussing on promoting and hindering factors of introducing, implementing, institutionalizing and continuing sustainability within a company. We identified five companies (of which are 4 from the chemical industry) with the most promising plant-level agreements on sustainability issues and conducted intensive case studies. In these companies, interviews with (HR-)managers, works-councils representatives, sustainability managers and internal experts (health and safety, environment, HR-development) have been conducted focussing on reasoning, negotiation process and the role of the plant-level agreements for a sustainable change of organisational practices.

For the analysis, we combine an institutionalist view of employment relations at the national, sector-specific and company level with a micropolitical analysis of the interests and strategies of the actors involved (Krause & Haunschild 2017) in the German context. Since important actors within a German company are collective actors (especially works councils), the analysis needs to take into account the German system of industrial relations (Hall & Soskice 2001, Whitley 1992), which shapes power structures within a company (especially through co-determination and collective bargaining) and sets certain goals for the individual and collective actors involved (vgl. Brandl 2006; Matten & Moon 2008; Preuss et al. 2009; Haunschild & Krause 2014).

Outlook

In the main paper, we will present findings from the analysis of the plant-level agreements, the expert interviews as well as the five case studies, focusing on the internal dynamics of the different actors connected with sustainability issues.

With our study, we contribute to research on the role of co-determination for the sustainable implementation of sustainability projects within existing organisational contexts. We shed light on the promotion, implementation and hindrance of sustainability by analysing from a micro-political perspective the role of and interactions between individual and collective actors (works councils, trade-unions, employer associations and networks). The paper advances our understanding of roles that works-councils and trade unions play in the development of more sustainable organisations.

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