Competitiveness through co-determination: The case of Vandemoortele

Abstract

A margarine company in East Germany demonstrates that its cost minimization strategy in a highly competitive market can best be pursued not by moving to Poland or the Czech Republic where wages are only a fraction of German standards but by valuing its workforce. A coherent set of policies including good wages, multiple skilling, participation and emphasis on health and safety have created the trust that makes co-determination by the works council particularly beneficial. Generosity, openness and consistency on the part of management caused a sense of common purpose among employees who in turn contribute to a continuous downward spiral of costs. They created the most efficient production system in the industry. © 2009 Springer-Verlag Berlin Heidelberg.