Shareholder Value Comes to Germany: Liberalization As Discursive Transformation

This article investigates how national institutions for economic governance shape the effects of firms’ orientation to shareholder value on the workplace. Comparing two cases of downsizing at multinational technology firms in the United States and Germany, I show that Germany’s institutions, while formally more robust than those in the US, do no better at protecting workers’ job security unless workers mobilize to activate them. Relying on interviews with workers, works councilors, union representatives, and managers, I show that management can persuade workers to acquiesce to downsizing by convincing them that mobilization will be ineffective against market forces beyond their control. I introduce the concept of the discursive context of production in order to explain why workers find management’s justification for downsizing credible. Tracing the history of the tech sector in Silicon Valley, I illustrate how producing technological innovation came to be embedded in a primarily financial discourse, and I show how this discursive context of production was imported to Germany in the mid-1990s when policy makers adopted the Silicon Valley model for economic growth. As firms increasingly orient business strategy to delivering value to shareholders, this primarily financial discursive context of production reinforces managers’ discretion in the workplace. By illustrating the causal connections between management’s methods for control and Germany’s turn to models for economic growth based on services, this article makes the case that discursive struggles in the workplace play an important role in the broader trajectory of liberalization at the national and transnational levels.