Works councils and organizational performance: The role of top managers’ and works councils’ attitudes in bad vis-à-vis good times

This study seeks to offer a contribution to the works council – organizational
performance literature by adding, to date, largely unexplored potential
contingencies: the attitudes of Dutch top managers and works councils as to the
functioning of the latter, in bad vis-à-vis good times. The overall conclusion from
our probit analyses is that the way in which management and works councils
interact, and hence the way in which codetermination is implemented, makes all
the difference to the firm’s economic position. Our most compelling finding relates
to the role of management: a positive attitude of managers toward the works
council is positively associated with organizational performance, both in the private
and the public sector. In the private sector, this result is even reinforced in times
of reorganization.