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The German model

The German model
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First Published: Mon, Dec 28 2009. 10 39 PM IST
Updated: Mon, Dec 28 2009. 10 39 PM IST
Mumbai: Surinder Kapur, executive chairman of the Rs3,500-crore Sona auto part making group, is planning to experiment with enhanced worker participation.
“Our unlisted company Sona Okegawa is an ideal model for this,” Kapur said. The move has been inspired by the German co-determination model, where workers share responsibility through board representatives.
The management board of Sona BLW, the group’s German unit, reports to the supervisory board, a third of which is made up of employees. Workers also divert a part of their provident fund into the company to be used as capital, Kapur said.
Co-determination was implemented in the 1960s, said Munich, Germany-based, Ferry Wittchen, global coordinator, Ernst and Young, in a phone interview. The kind of co-determination adopted by a company is guided by its size and the strength of its workforce. “By means of improving the communication, labour conflicts are put to rest,” he said. The relationship, however, depends on a joint effort, he said.
Management and workers will undergo training. Some Sona Okegawa Precision Forgings Ltd managers in Europe are being trained in the system to understand how it works, Kapur said.
“Our supervisory board members in Germany ask critical questions on cash flow,” he said. “The management doesn’t have to get upset with people asking questions as they are as much a part of the company.”
Kapur is looking to implement the system in another two-three years. “I am trying to see how it works,” he said, adding that there’s a lot to learn from the model both as business concept and from the union perspective. While owners have the casting vote, the workers at least have the opportunity to present the case at a very high level of management, Kapur explained.
Unlike India, where each company has an independent policy on labour issues such as wages, bonuses and working hours, in Germany, negotiations are conducted at the national level with the unions or associations that workers are affiliated with, said Delhi-based Praveen Sinha of the German Foundation, who works as a consultant to German companies in India on labour-related matters.
In the absence of a similar structure in India and the multiplicity of unions, Sinha is sceptical about the success of replicating a similar model. Another challenge lies in the unwillingness of the management to share information, he said.
“Unlike Germany, where the management shares all information, barring sensitive issues related to finance, companies in India are not legally bound to do the same,” he said.
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First Published: Mon, Dec 28 2009. 10 39 PM IST