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    Stakeholder capitalism

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    In Germany, under the model of "stakeholder capitalism", employee representatives sit on company boards of directors. In the German model of business, it is assumed that both labor (employee representatives) and capital (shareholder representatives) have important stakes in the enterprise and should work in harmony with each other. In the United States, the board of directors usually represents only the owners of the business. What advantages are there to employees as stakeholders are available in Germany that are not provided to employees in US companies? In the United States, how do employees let management know their stakeholder concerns?

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    Solution Preview

    This is an issue of corporate governance. One of the issues about corporate governance focuses on whether the organization owes a greater responsibility to the shareholder who has invested in the company or to the stakeholders and those who can most be affected by its actions, namely the employees, suppliers, creditors, and customers.
    As per scu, European companies give more stress on Corporate governance too. In late 2002, France "became the first and only country to date to place a legal obligation on companies to report their social and environmental impacts," (H. Bettignies, personal communication, April 13, 2004).
    As in the question, it is stated that German's give lot of emphasis on social role of the organization and also taking care of the interest of the employees and other stakeholders. Stakeholders play an important role in ...

    Solution Summary

    The solution includes the discussion on corporate governance and stakeholder capitalism.

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