Managerial Perceptions of Works Councils' Effectiveness in the Netherlands

Although works councils have, by and large, equally extensive legal rights in Germany and the Netherlands, this is the first econometric analysis that investigates the influence of Dutch works councils on firm performance. We use a nationwide Dutch dataset with information on management's perceptions of the works council's impact on their establishments' efficiency and innovation. Inspired by the German study of Jirjahn and Smith (2006, Industrial Relations 45:650-80), we analyze which determinants influence management's attitude toward employee participation in the Netherlands. Owing to the specifics of our data, we are able to additionally include variables that measure the interaction between management and worker representatives. We establish a preponderant influence emanating from the works council's role attitude and management's leadership style.