week 3 Flashcards
(10 cards)
What are Coordinated Market Economies (CMEs)?
Capitalist systems where firms coordinate through non-market relationships such as long-term employment, training systems, and strong institutional cooperation (e.g., Germany, Japan).
What defines industrial relations in Japan and Germany?
*Japan: Company-level collective bargaining, enterprise unions, few strikes
*Germany: Sector-level bargaining, employer associations and strong unions (e.g., IG Metall)
What are key features of employee relations in CMEs?
*Japan: Lifetime employment, seniority-based pay, company welfare
*Germany: Works councils, co-determination, employee representation on supervisory boards
How is education and training structured in CMEs?
*Japan: General education + firm-specific skills through in-house training
*Germany: Dual vocational system (apprenticeship + school), highly industry-coordinated
What is corporate governance like in CMEs?
*Stakeholder-oriented (e.g., employees, banks, suppliers)
*Bank-based finance provides patient capital
*Long-term strategic decision-making
What characterises inter-firm relations in CMEs?
*Japan: Vertical relationships (suppliers/manufacturers), keiretsu networks
*Germany: Industry-wide cooperation, joint R&D, shared training infrastructure
What are examples of institutional change in CMEs?
*Japan: Rise in atypical employment, meritocratic pay, weaker keiretsu ties
*Germany: Decline in bank-based finance, more shareholder influence, increased liberalisation
What are limits to change in CMEs?
*Institutional persistence (path dependency)
*Inter-firm and employment relationships still important
*Co-determination and works councils remain core in Germany
What challenges do CMEs face?
*Pressures from globalisation and liberalisation
*Ageing populations (esp. Japan)
*Transition toward digital and service-based economies
How do CMEs compare to LMEs?
*More coordinated and consensus-based
*Long-term planning and incremental innovation
*Stronger institutional constraints on firms and managers
