Europe's "New Corporations"
Dalia Marin | Bruegel | October 2008
Global commerce has dramatically changed in the last fifteen years. The opening of new markets, growing competition, and the struggle for attracting the world's brightest minds are all responsible for such a change. On the basis of substantial evidence from Germany and Austria, Dalia Marin shows the two manners in which companies in Europe have reacted to this development:
- Restructuring of organizations: Thanks to the opening of new markets in eastern Europe, beginning in the 90s, European companies have expanded into the East (Off Shoring) and have initially profited from low wages. In the course of the following market liberalization on the European and international level, competition has increased and thus the search for efficient organization structures have become a driving force in business.
- Introduction of decentralized decision-making structures: Growing competition demands a particular innovative ability, should companies desire to remain competitive. Therefore new creative talent is necessary for the constant creation of new ideas. Scores of companies have thus decentralized internal decision-making structures and have introduced flattened hierarchies in order to give middle managers an opportunity for more creative leeway and to attract long-term, talented employees. Human capital is becoming the "new stakeholder" of companies. The data shows that companies in Germany who comparatively employ many people with university degrees tend toward decentralized hierarchies, delegating the bulk of decision-making power to company departments.
Europe's politicians can expedite these structural adjustments through targeted measures so that Europe remains attractive to highly qualified workers. With the introduction of flattened hierarchies, companies have already made an important contribution. Now policy must seek to promote mobility in the labor market, especially for employees from the new member states.
This summary was prepared by the Atlantic Community editorial team from "The New Corporation in Europe" published here by Bruegel, October 2008.
Related materials from the Atlantic Community:
- Jens F. Laurson & George A. Pieler: Too Much Political Meddling Will Only Prolong the Financial Crisis
- HOT ISSUE: How to Respond to the Financial Crisis?
- Andreas Kern: Think Tank Analysis: Asking Financial Markets for a Viennese Waltz
Sat, Oct 18th 2008, 19:18
amarjyoti acharya
1. Delinquency - elite and artistic sections.
2. Universities - where academic discussions or debates are geared towards activism.
3. Infiltration of decision-making process via its civil society.
4. Infiltration of its civil society via delinquency - activism-oriented university mobs.
5. In the politics of imagination - the legitimization the now-illegitimate. Issues like tolerance, euthanasia, etc. are one thing. The abuse of a liberal society for its infiltration does mark much of the threat.
6. The imagination of the delinquent-criminal section in its 'immunity of infiltration' of the decision-making processes.
7. The assumption of commerce of its 'immunity and its transcendence' of the state.