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Human resource management or machines that change the world in the automotive industry?

The HRM Issue in the Automotive Industry

With the title of this article we refer to the MIT study "The machine that changed the world" (Womack/Jones/Roos 1990), since our empirical analysis of the European automotive industry presented here got its inspiration from this study. The MIT study had a great impact on both developments in the automotive industry and recent research about the automotive industry. The message of the book, the declaration of Lean Production as the worldwide best practice of automobile manufacturing, is clear and simple, on the one hand but not entirely acceptable from a scientific point of view, on the other hand (e. g. Jurgens 1992; Schumann 1992). Therefore the success of the book was somewhat mysterious. It seemed to be an alarm-clock for practitioners even though they were aware of the decreasing competitiveness of the European automotive industry long before the book was published and even though they were critical of the books' tendency of oversimplification. Nevertheless, the study was welcomed in order to legitimize internal and external restructuration processes. The second source of the books' success is its scientific reception. Even though the MIT study was highly criticized especially for its methodology it gave inspiration for further research and kicked off further investigations.

Whatever concept lies behind the "machine that changed the world", the automobile itself or the entire production process, our notion here is the question if HRM strategies make a significant contribution to the success in the automotive industry.

Looking at major studies concerning the automotive industry of the last fifteen years one recognizes that HRM practices are becoming increasingly identified as critical success factors. European automobile studies of the eighties and early nineties (Kern/Schumann 1984; Jurgens/Malsch/Dohse 1989; Berggren 1991) focus on HRM concepts such as the use of qualification, the development of qualification and job satisfaction. HRM is treated mostly as depending on technological and organizational changes. The major question of these studies concerning HRM is whether there is an improvement in working conditions, use of qualifications, personnel development, and job satisfaction for production employees. In a more indirect way these studies argue that the use of qualification and job satisfaction are correlated with high economic performance. Nevertheless, the main interest of these studies does not lie in performance measurement but in the investigation on developments in the division of labor and work regulations and their consequences for work forces.

In contrast to the mentioned European studies recent US-American studies in the automobile industry, the above mentioned MIT study "The machine that changed the world" (Womack/Jones/Roos 1990; compare also MacDuffie/Krafcik 1992) and the follow-up analyses to the first MIT study (Kochan 1995; MacDuffie/Pil 1994) focus mainly on economic performance. It is interesting to note that these studies conceptualize Human Resource Management as an independent variable similarly as technology and work organization. Performance figures such as quality and productivity are conceptualized as dependent variables. All mentioned studies show an important role of HRM strategies on manufacturing performance.(2) The first MIT study explains high performance in terms of both quality and productivity by a special combination of HRM and work organization while the technology index does not differentiate between world class and other organizations in the international comparison (MacDuffie/Krafcik 1992 and Table 1). In other words, this study provides clear evidence for the assumption that HRM is an important possibly the most important factor in production strategies of vehicle manufacturers.

Table 1. Impact of Automation, Production Organization, Buffers and HRM Policies on Manufacturing Performance
Zone n Total Production
 Automation Organization
 (% auto steps) (100 = Lean)

low-qual 19 15.6 32.2
Iow-qual 6 31.6 35.1
high-qual 15 29.3 53.8
World class
prod and qual 6 36.4 81.7

Zone Use of HRM Policies
 Buffers (100 = HiComm)(*)
 (100 = Minimal)

low-qual 43.3 26.2
Iow-qual 44.4 30.4
high-qual 60.7 50.4
World class
prod and qual 87.0 79.1

(*) HiComm = High Commitment

Source: MacDuffie/Krafcik 1992, p. 221

The second MIT study supports the message of the first study: highly cooperative employee relations are regarded as a critical success factor in addition to a lean production organization (Kochan 1995) respectively a system of complementary HRM practices and technology is regarded as a prerequisite to benefit from new practices in work organization (Pil/MacDuffie 1996, p. 447). Therefore, recent US-American studies emphasize HRM as an independent variable of organizational performance and organizational development (MacDuffie/Krafcik 1992; MacDuffie/Pil 1994; Kochan 1995; Pil/MacDuffie 1996).

These US-American studies in the automotive industry have advanced HRM to one of the most important variables in addition to technology, production organization, product design and development, supplier relationship and customer services (Womack/Jones/Roos 1990). This has led us to point out the question, if HRM is completely comparable with other success factors of the automotive industry? On the one hand HRM might partly depend on the other success factors such as technology and production organization as European studies tell us. Technology and production organization can be regarded as contingencies. On the other hand the HRM issue is much more connected with the broader social environment than contingency variables as European studies tell us, also. Important environmental influences on HRM policies can be identified in the labor market, the educational system, industrial relations or social values (Maurice/Sorge/Warner 1980). This environmental embeddedness of the HRM issue, as it is emphasized in the societal effect approach (Maurice/Sorge/Warner 1980; Sorge 1991), is much more taken into consideration in European automotive studies than in the MIT investigations.

European studies focus on the interconnection of HRM with environmental variables. They regard HRM as socially established. American studies identify HRM as success factor rather independent of environmental influences. If one brings together both perspectives, HRM can be seen as a success factor which can only be specified with regard to and depending on the social environment. Under different environmental influences different HRM policies would lead to organizational performance. This hypothesis is inconsistent with both the one-best-way hypothesis of the first MIT study and the conceptualization of HRM as dependent variable as it can be observed in European studies.(3)

With regard to our analysis of HRM policies in the European automobile industry this has led us to point out the following questions:

-- Do European vehicle manufacturers try to establish HRM policies which help them to distinguish from their competitors? In other words, do European vehicle manufacturers try to gain competitive advantages by distinctiveness in HRM policies?

-- How can the trend of European HRM policies be characterized, is there a converging or diverging trend? This is a more specific question whether firms try to follow an one-best-way strategy or whether they pursue diverging trends and if so, where divergence is based on--organization strategy and/or social environment?(4)

Methodological Aspects

In this chapter we will describe our empirical design of data collection and evaluation.


We analyzed HRM in seven German, three British, two French, one Swedish, one Czech, and one Mexican automobile plant. The field work was carried out between 1993 and 1996. The analysis of these plants is based on investigations of the final assembly. We decided to focus on the final assembly for three reasons:

1) comparability between plants,

2) the final assembly is the most labor intensive production process and therefore most interesting for HRM analysis, and

3) as technological strategies of further automation have failed in this area in the past (Jurgens/Malsch/Dohse 1989; Bleicher 1992) this is a reason to look at HRM as possibly more fruitful success factor.

Table 2 characterizes the sample in more detail. It shows that the sample consists of traditional European plants as well as of so called new transplants.(5)

Table 2. Plant Profiles
Figure Location Branch Date of Age of
 owner analysis factory(**)

D 11 Germany German 1993
D 12 Germany German 1993
D 13 Germany US-American 1993
D 14 Germany US-American 1993
D 15 Germany German 1995
D 16 Germany US-Americ. 1996
D 17 Germany German 1996
S 21 Sweden Swedish 1994
GB 31 Great Brit. British 1993
GB 32 Great Brit. British 1993
GB 33 Great Brit. Japanese 1993
F 41 France French 1994
F 42 France French 1994
Mex 51 Mexico German 1993
CZ 61 Czech Rep. Germ.-Czech 1996

Figure Age of Type of
 factory(**) Product

D 11 5 years mid-size
D 12 env. 20 y. large
D 13 62 years large & small
D 14 23 years lower mid-size
D 15 41 years large
D 16 4 years small
D 17 5 years small
S 21 30 years mid-size & large
GB 31 env. 70 y. mid-size & large
GB 32 env. 80 y. gear-boxes
GB 33 6 years small
F 41 env. 30 y. mid-size & large
F 42 env. 30 y. mid-size & large
Mex 51 env. 25 y. small
CZ 61 0 years mid-size

Figure Volume(*) Number of

D 11 150.817 6876
D 12 185.000 16798
D 13 286.134 21867
D 14 300.000 7300
D 15 338.223 32722
D 16 160.000 1900
D 17 100.000 2400
S 21 94.000 5900
GB 31 4560
GB 32 3846
GB 33 270.000 4600
F 41 200.000 7001
F 42 248.293 10688
Mex 51 188.000 14000
CZ 61

(*) Data concern the year before plant analysis,

(**) Data concern the year of plant analysis

Data Collection and Validation

The data collection was based on a multi-method mix. The instruments of analysis were:

1) Partly structured two hours interviews with the personnel manager, the production manager, and a workers' representative (work council, shop steward, or comparable function) at every plant,

2) a standardized questionnaire filled in by the personnel department of each plant, and

3) observation of the final assembly.

The interviews were conducted by using three partly structured and thematically focused guidelines. The guidelines covered corresponding questions that were specified to the functions of the interview partners respectively organizational experts. The second source of data--the questionnaire--provided a different methodologically perspective on each single case study. It contained redundant items which allowed us to discover inconsistencies in the interview statements. The visit of the final assembly cannot be characterized as systematic observation of work processes. It rather adds information to the interview and questionnaire data by visualization. It should be mentioned that not all of the instruments could be administered in all plants. From 45 scheduled interviews 37 took place and 11 out of 15 questionnaires were sent back completely or partly filled out. A visit of the production took place in all cases (see Table 3).
Table 3. Analysis Instruments

 Plant D D D D D
Instruments 11 12 13 14 15

Interviews with
Personnel Manager x x x x x
Production Manager x - x x x
Workers' Represent. - x x - x

Questionnaire x x x x (x)

Visit of the final x x x x x

 Plant D D S GB GB
Instruments 16 17 21 31 32

Interviews with
Personnel Manager x x x x x
Production Manager (x) x - x x
Workers' Represent. x x (x) x x

Questionnaire - (x) x (x) x

Visit of the final x x (x) x *

 Plant GB F F Mex CZ
Instruments 33 41 42 51 61

Interviews with
Personnel Manager x x x x x
Production Manager - x x - x
Workers' Represent. - x x - x

Questionnaire - x x - -

Visit of the final x x x x **

x: performed, (x): partly performed, -: not performed, *: gear-box production, **: not in production, yet

The data gathered was summarized and fed-back to the analyzed plants. Especially if inconsistencies could be identified we asked the plant managers for further information. The data can be regarded as communicatively validated

Data Evaluation

One of the most critical points of data evaluation in an international comparative analysis is to find and define categories that can describe HRM of all plants in all countries. Some authors are convinced that it is impossible to carry out a category-based cross-national comparison of organizations. They prefer an international comparison which describes organizational aspects embedded in their environmental conditions (Maurice 1991; Maurice/Sorge/Warner 1980). In this case categories are only country specific. In our analysis we wanted to find cross-national valid categories. Therefore, it was necessary to identify functional equivalencies between countries (Scheuch 1990, p. 20; Greifenstein/Jansen/Kirsler 1993, p. 47). Since data collection was not primarily theoretically based it was part of the data evaluation process to identify these functional equivalencies of HRM in the automobile industry (Meuser/Nagel 1991). The identification of these categories took place in a mutual process between practitioners and scientists. This process led us to more general respectively broader categories (Berg-Schlosser/Stammen 1992, p. 129f.), because functional equivalencies could not be identified in details but they could be identified in systems. For instance it was rather impossible to compare team-work because of country specific differences in the understanding and definition of a team. But it was possible to make comparisons with regard to the more general category "work organization". Moreover, it was rather impossible to compare hierarchical functions isolated -- function by function -- because the organizational systems were conceptionalized differently. But it was possible to compare these organizational systems as a whole. This led us to four broader categories of data evaluation (see Figure 1): work organization, leadership concepts, incentive policies, and training and personnel employment policies.


A further systematization of these categories is based on the ideas of the HRM approaches of Tichy et al. (1982) and Beer et al. (1985). They point out the importance of an integration between different fields of HRM.(6)

The operationalization of these categories is mainly based on the variables used in the described European and US-American studies in the automotive industry. The variables are introduced in the following chapter together with the results.

Findings from the European Automotive Industry(7)

Work Organization and Use of Qualification

The aim of comparing work organizations was to gather information about the use of workers qualification in the investigated final assemblies. We wanted to know if and if so to what extend the use of qualification differed between plants. The work organization was analyzed with regard to the horizontal and vertical division of labor as described by Ulich (1972) and stated more precisely for the final assembly of automobile manufacturing by Schumann et al. (1992). The task analysis gives evidence about the use of qualification. It increases with the reduction of horizontal and vertical division of labor. As the systematization of Schumann et al. (1992, p. 23) shows it is necessary to reduce both, horizontal and vertical division of labor to increase the use of qualification. The most advanced empirical example of task integration of automobile manufacturing was the concept of semi-autonomous work groups that was performed at the Volvo plant Uddevalla until 1993. This concept was based on workers craft-skills (Auer/Riegler 1988; Pawlowsky 1989; Forslin 1990; Berggren 1991; Rehder 1994). In contrast, an isolated vertical task integration as it can be observed in the Toyota production system does not lead to considerably higher use of qualification (Schumann et al. 1992, p. 23).

We analyzed the horizontal work organization with regard to the following aspects:

-- basic work organization (assembly lines or production islands)

-- work content (time cycle, performed work steps, work content in production islands)

-- job rotation (frequency, participants, decision making)

-- integration of indirect tasks (kind of task, responsibilities)

The vertical dimension was analyzed with regard to:

-- the existence of work groups

-- the organization of group meetings

-- the discretion of work groups (fields of group decision)

-- share of responsibility between group members, team speaker, or team leader and first-line-manager

With regard to these items (see Figure 2) we found out that the results reveal only small differences concerning the horizontal division of labor. All plants work organizations rely on assembly lines with short cycle times that do not exceed 2 minutes. Moreover, there is a general trend towards shortened cycle times. Differences are only based on the frequency of job rotation and percentage of participants in job rotation.


With regard to the vertical integration of work tasks the variance between plants is a bit higher. At the French sites and the Mexican plant team work can hardly be identified. Workers discretion does not go beyond a partly integration of process control. Even though plant managers introduce and describe these plants as team-based production concepts, this does not imply a semi-autonomous understanding of group work. Ideas of self-organization are not incorporated in these approaches. Therefore the label "team work" or "group work" does not fit from a German perspective. From a German point of view a certain degree of self-organization is a necessary prerequisite to characterize a concept as group or team work (Seitz 1993; Antoni 1994). At the Swedish, the Czech, three British, and six German sites team members have a certain discretion about the division of labor within the groups, perform internal process control, and organize some group matters. It is only at one German (D 15) and the Swedish plant (S 21) that teams decide about the rate of work and carry out performance assessment in addition to the already mentioned fields of decision making. Nevertheless, at most plants the overall discretion of work groups remains low.

These findings lead us to the conclusion that there is a convergent trend in European assembly work organization characterized by assembly line work with short cycle times and rather low discretion of work groups. There is and for that matter possibly always will be a high division of labor in European final assemblies. This implies furthermore that there is a convergent trend of low skill-using models in European automobile final assemblies. A tendency in European automobile industry towards more qualification based production work that could be observed in the seventies and eighties at some Swedish and German plants (Berggren 1991; Jurgens/Malsch/Dohse 1989) has obviously disappeared, at least in the final assembly process. The qualification-based way of manufacturing remains only a niche strategy in pre-assembly processes at one German and one Swedish plant (see Figure 2, no. 15b and 21b). An increasing international convergence in work organization after diverging developments in the seventies and eighties is also emphasized in other analyses (e.g. Flecker/Schienstock 1994).

Training and Personnel Employment Policies

The analysis of training and personnel employment policy covers two aspects: a comparison of the available qualifications of work forces and therefore a comparison of internal labor markets on the basis of formal qualification and a comparison of plants' training respectively personnel development activities, estimated on the basis of training spending, the development of the training budget, and the focus of training programs.

Employment policies differ considerably between plants (see Table 4).(8) At six out of seven German sites the majority of production workers is highly skilled. At other European plants the majority of employees is semi-skilled and most of the workers in the Mexican plant are un-skilled. Therefore the workers qualification structure shows a considerably variance. Employment policies diverge within Europe and between European and the Mexican plant.
Table 4. Formal Qualification Structure

 Plant D D D D D D
Available 11 12 13 14 15 16

workers (in %) 20 45 60 25 50 20
workers (in %) 80 55 40 75 50 80

 Plant D S GB GB F F
Available 17 21 31 32 41 42

workers (in %) 3 60 85 68 87 60
workers (in %) 97 40 15 32 13 40

 Plant Mex CZ
Available 51 61

workers (in %) [equivalent] 90 [equivalent] 80
workers (in %) [equivalent] 10 [equivalent] 20

Having the rather similar solutions in work organization in mind the finding of these qualification differences between plants leads us to the conclusion that there is an underutilization of workers skills at least at six out of seven German sites. The overall picture shows: Skilled production workers perform tasks with low qualification demands. A negative consequence resulting from a permanent underutilization of workers skills can be identified in a decline of workers motivation (Pawlowsky 1996) and a loss of skills. Qualification is the only resource which improves through its intensive use and which fades away if it remains unused (Wilkens/Pawlowsky 1996). At the other plants the relation between available qualification and demanded qualification fits better. French and British plant managers tended to complain about qualification deficits. This was not the case at the other plants.

With regard to training activities it is interesting to note that especially those European plants with an un- or semi-skilled work force increase training spending and training activities whereas the German plants with mostly highly skilled workers tend to cut the training budget. It seems that plants with a low skilled work force compensate deficits in the employment structure with internal training activities. French and British sites as well as the Czech plant follow a personnel development approach. They start on a rather low level of qualification but try to increase workers qualification to become more flexible.

It is only the Swedish plant that shows a sophisticated way of personnel development. The training policy aims at a continuous learning program for production employees which enables them to become specialists for certain fields. Training is integrated in a larger career development concept which focuses especially on a horizontal career development and at least a temporary task integration.

Only at the Mexican plant it is the pronounced goal of the training policy to spend as little as possible on training and to try to make as much use of the (low) available qualification as possible. The general pattern of the German plant D 13 is similar to the Mexican plant. This is because the German plant D 13 differs completely from the other German sites: it has a low skill structure--comparable with the British and French plants--and it makes low training investments for production employees. Organizational internal training activities do not compensate the qualification deficits in this case.

The differences in training and employment policies are visualized in a four field matrix (Figure 3) which shows the available qualification on the one dimension and the HR-orientation on the other dimension. The HR-orientation consists of the estimation about the use of qualification on the one hand and the identified training investments on the other hand. We located the plants qualitatively within this matrix and labeled them as: HR-User, HR-Underutilizer, HR-Developer, and HR-Strategist.


The Mexican plant and the German plant D 13 are estimated as HR-Users because of their low skill structure, their low skill models of final assembly and their comparatively small personnel development activities. This policy tries to make as much use as possible from the given basis without further investments. In contrast to the German plant D 13 all other German plants can rely on a comparatively high qualification potential. But these plants do not make use of these qualifications in their work organizations and they pursue little training policies. This has led us to label them HR-Underutilizers. The British, French, and the Czech plant are opposite from most German plants in the matrix. These plants have lower available qualifications than the German plants but make higher use of them, because of similar work organizations. There is a better match between available and demanded qualifications. Moreover, these plants pursue a training strategy which tries to increase the skill base constantly. Even though the general level of these plants is not advanced, yet, the HR-policy shows a development perspective for production employees which could not be identified at the mentioned German plants. Only one plant -- the Swedish plant -- is sophisticated in training policy. This plant makes comparatively high use of qualification because its work organization is most advanced from all plants and the qualification structure shows

a medium level. Therefore, we have labeled this plant HR-Strategist to advocate that the identified HR-policy is more advanced than at the other plants.

The analysis and systematization of training and employment policies shows that there are considerable differences between plants, training and employment policies diverge within Europe. The divergence seems to reveal country patterns. A possible explanation might be that country specific differences in the educational systems lead to country specific combinations of personnel employment and personnel development policies.

Leadership Concepts

The analysis of leadership concepts focuses on a comparison of the leadership system as a whole. The major variables of analysis are the levels of hierarchy, the communication structure and communication flow and the analysis if, and if so how the concepts of work organization are integrated into the broader organizational structure and management system. Moreover, we analyzed how leadership roles change because of the developments on the shop floor.

Generally speaking, all plants have reduced their levels of hierarchy over the last few years. Two British sites (GB 31 and GB 32) have reduced hierarchy enormously from eight respectively five to only three hierarchical levels. Six of the German plants are based on four hierarchical levels whereas Plant D 15 has five levels of hierarchy. Former organizational structures were based on five to eight levels of hierarchy. The French sites show five levels of hierarchy now and showed seven levels before the reorganization. The Swedish, the Czech, and the third British plant (GB 33) have similar to most German plants four levels of hierarchy. The reduction of hierarchy that could be observed in the older plants was mainly accomplished by reducing levels in the middle management and to a certain extent also in the lower management.

With regard to the Japanese organization structures it has been argued that levels of hierarchy do not hinder communication flows necessarily (Cole 1979). This seems to be different in the European sample where a growing number of hierarchical levels seemed to be closely connected to problems of leadership and communication. Managers argued in the interviews that the main objective of hierarchical reduction was to improve communication.

More important than the pure number of hierarchical levels is the integration of the shop floor organization in the broader organizational structure. At the British sites (GB 31 and GB 32) the team concept has been implemented plant-wide. Every department is organized as a team connected with other teams by coordinators (see Figure 4). Following plant managers arguments communication has been improved considerably due to this structure. In this organizational structure the information flow and communication processes go top-down, bottom-up, and lateral respectively across. Moreover, in this model the function of foreman is completely altered. The cell manager or production manager is the new first-line-manager. Shop floor work groups are guided by a teamleader who is elected by group members after a first selection of the management. This model integrates the shop floor organization completely into the general organizational structure. The Swedish plant (S 21) shows a similar organizational structure. Even though it is not as much formalized as the British plants there is a team spirit all over the plant and managers take team work for granted in all departments.


In contrast to the described plants with team organization, the French sites remained traditionally hierarchically organized (see Figure 4). Information flows go mostly top-down. Communication barriers can be identified especially at the first-line-manager level. Following the answers of the interview partners the reason for this is that first-line-managers often want to maintain their traditional supervisory role. The asked managers appreciate a new role of first-line-manager with more coaching elements. Presently, this new role could not be implemented successfully. However, since group self-organizing on the shop floor is not pursued by plant managers the rather traditional work organization (see above) can be regarded as integrated into the traditional hierarchical structure and the overall leadership concept. Also the German plant D 13 belongs to this model. Here managers and work councils are critical towards team concepts in the final assembly.(9) In our estimation two further plants D 17 and Mex 51 also belong to the hierarchical model. This is because the shop floor team concept is not as advanced as described by plant managers, yet. Therefore these two plants are rather in between the hierarchical model and the combination of hierarchy and team, describes next.

The third leadership model -- the combination of hierarchy and team -- can especially be observed at German plants. Here, a team concept has been developed for the shop floor but the shop floor organization is not connected conceptually with the overall organizational structure, since functions and departments from top management to first-line-manager are organized in a traditional hierarchical way (see Figure 4). In this model several communication problems have been identified on the first-line-manager level by the interview partners. This is partly due to the fact that first-line-managers want to maintain their supervisory role and it is partly due to the fact that their function and new role is rather unclear between hierarchy and team. The plants try to turn away from traditional supervisory functions and focus on coaching tasks or consider higher managerial functions in business. The latter alternative is especially considered in cases with assigned teamleaders because then the teamleader is especially trained in group leading functions like coordination and coaching and therefore partly replaces the first-line-manager. This shows also another characteristic of the German plants in the sample: elected teamspeaker or assigned teamleader in-between work groups and first-line-managers. Two problems can be identified in this model from our point of view. Firstly, coordination problems between first-line-manager and teamspeaker or teamleader due to unclear responsibilities. Secondly, a gap between first-line-manager and shop floor due to the team structure on the shop floor on the one hand and the hierarchical managerial structure on the other hand. The latter is especially a problem because a process synchronization beyond hierarchical levels seems to be impossible with this organizational structure.

We observed a fourth model (see Figure 4), labeled linking-pin-model, at the three new transplants (D 16, GB 33 and CZ61).(10) In this model the team concept is the core of the plant organization. Decision making and coordination are focused on the team leaders who are the linking pins to the departments for a well running communication flow. Even though this concept is based on teams, there remains a hierarchical element within the teams. The concept is not as democratic as the described team-organization.

To generalize the results: In Europe communicational problems are solved with flattened hierarchies. This trend shows similarities with the Volvoistic model but is quite different from the Toyotistic model with extended hierarchical levels (Jurgens 1992). Nevertheless, steps towards flattened hierarchies are usually associated with the Toyota production system by plant managers. Flattened hierarchies are the European way of improving communication processes.

Differences between European plants are mainly based on the way of integrating the shop floor in the broader organizational structure and the roles of first line-managers. Especially German plants show problems of a disintegrated organization and therefore produces high demands on the level of first-line-manager.

Even though work organization principles are characterized as similar at all investigated plants there is high evidence for considerable differences in leadership models. The way of integrating the shop floor organization into a broader organizational structure differs on organizational as well as on country level. As especially the findings from French, German, and British plants show there is considerable evidence for country specific solutions even though it remains rather unclear if there are country specific influences which lead to these differences.

In addition to these diverging trends there is a converging trend with regard to the three new transplants in the sample (D 16, GB 33 and CZ61). All plants have implemented a linking-pin model and it seems that this model is regarded as best-practice model which is implemented at least if a new plant is built. This model shows further that team work is an important element of the new best practice model -- but only team work with low discretion of the team members.

Incentive Policies

The analysis of incentive policies investigates the plants material and post-material incentives provided to production employees on an individual or collective basis. Moreover, we wanted to know whether the provided incentives support the development processes in work organization, training, and leadership.

Material and non-material incentives can focus on individual or collective demands. With regard to material incentives the most important developments in plant policies are performance related wage systems and bonuses for continuous improvement activities (see Figure 5). The French plant F42 and the German plant D 14 decided for a mixture of group performance payment and individual performance payment. The French plant F 41 pays and the Czech plant CZ 61 is going to pay an individual performance based bonus. Moreover, the Swedish plant S 21 has and two British plants GB 31 and GB 32 are developing a qualification-based wage system.


Most plants pay bonuses for improvements resulting from continuous improvement process (CIP) activities and in most of these cases the payment is individually based. Only three German plants decided to pay group-related CIP bonuses. And in contrast to all other plants the two British sites GB 31 and GB 32 refuse to pay for CIP with the argument to pay with an employment for life guarantee.

The incentive policy with emphasize on non-material incentives is not advanced at all. Only the Swedish plant S 21 provides individual and group-related career development perspectives with increasing tasks and responsibilities for groups as a whole. Plant GB 33 provides also considerable career development perspectives, but only on an individual basis. Another non-material incentive which becomes more popular is the single-status-philosophy. At all British plants and at the German site D 16 all employees wear uniforms.(11)

A general conclusion with regard to incentive policies is not possible. The picture here is quite differentiated. There is some evidence (see Figure 5) that French and German plants focus mainly on material incentives and that the material incentive policy is much more developed than the non-material incentive policy. For example, the implementation of team concepts, training programs, or new leadership roles is only supported with material incentives in most cases. Moreover, in some cases it is difficult to identify a match between provided incentives and the aims of HRM. One might question whether individual performance bonuses support team work or whether group-related incentives would fit better. Only British and Swedish plants try to find a balance between material and nonmaterial incentives and they try to emphasize new incentive measures that might better support the reorganization programs in the other fields of HRM. Moreover, it becomes obvious that it is impossible to identify clear country-specific patterns in incentive policies. Differences are rather organization-specific. Finally, we conclude that incentive policies show diverging patterns on an organizational basis.


The analysis of HRM policies in the European automotive industry was based on the questions whether European vehicle manufacturers try to gain competitive advantages by HRM distinctiveness and more generally speaking whether one can observe converging or diverging trends with regard to HRM policies.

To start with the latter question, a divergence of HRM policies could be observed with regard to training and personnel employment policies, leadership concepts, and incentive policies. Training and personnel employment policies showed a country-based patterns that can possibly be explained with country specific differences in the education systems. Moreover, most differences in leadership concepts exist on a country basis. In this field it is not as obvious as in the field of training and employment policies where the identified patterns result from. Neither legal regulations, national institutions nor contingencies could be identified that would help to explain these patterns. Reasons can be suspected in national as well as organizational culture. The divergence in incentive policy does not show clear country patterns. Rather they seem to be based on organizational policy.

A convergence of HRM policies could be observed firstly with regard to the use of qualification in the final assemblies. Secondly, convergence of HRM policies could be observed at new transplants in nearly all aspects of the HRM dimensions. This became most obvious in the policy-field leadership concepts where new transplants from different locations had their own model while the other plants showed rather country-specific patterns. This implies that plant managers tend to find and implement a best practice model of HRM in the automobile industry at least if new plants are built. This HRM concept seems to be quite independent of environmental influences. The best practice model can be described by the following characteristics:

-- assembly line work with short cycle times

-- high flexible multi-skilled work forces (not craft-skilled in depth)

-- continuous personnel development activities

-- team work with low discretion of team members

-- strong emphasis on the team leaders who are responsible for coordination, communication, and workers commitment

-- high elements of variable payment

A second perspective of analysis referred to the internal fit of HRM policies. It should be taken into consideration that the best practice model of HRM policies can be regarded as a highly integrative policy-mix. Work organization practices, provided qualification, leadership roles, and provided incentives are complementary. The identified best practice model emphasizes the internal consistency of HRM policies but neglects the necessity of an external fit with the social environment.

Our empirical findings furthermore show that the identified best practice concept is not the only integrative concept. The HRM policy of French plants seemed to be integrative in a rather traditional way: restrictive work organizations, rather low qualifications, hierarchical leadership concepts, and material incentives. Another integrative concept can be seen in the Swedish case: a comparatively advanced(12) work organization concept, comparatively highly skilled and continuously developed work forces, team-based leadership roles, and team-based material and non-material incentives. In these latter cases the HRM approaches seem to be related to their social environments to a higher extent than the best practice model.

These considerations in mind we would like to come back to our question of the title, if Human Resource Management or machines change the world in the automotive industry. The findings tell us that actually neither machines nor Human Resource Management change the world in the automotive industry. There might be a chance to change the world in the automotive industry by implementing new HRM policies but actually little evidence supports this assumption. HR managers do not pursue a policy of distinctiveness. Differences existed only between older plants and there they could rather be traced to the firms' history than to HR managers' active policy. Therefore, we assume that strategic concepts changing the world in the automotive industry rely on further relocation policies with similar HRM practices. Go east young man!


(1) The "Future Working Structure project" was financed by Brite EuRam and participating European Vehicle Manufacturers: Rover, PSA Peugeot Citroen, Renault, BMW, Ford, Mercedes, and Daimler Benz. The data presented in this article result from the sub-project "Human Resource Management in the European Automobile Industry" which was financed by the research institute of the Daimler Benz AG, named F4G. Professor Peter Pawlowsky is principle investigator of this sub-project. Uta Wilkens carried out most of the field work.

(2) Recently Pil and MacDuffie (1996, p. 434 f.) conceptualize HRM, automation, productivity, and quality as independent variable while work practices are regarded as dependent variable.

(3) These different perspectives on the relation between organization and environment can also be identified in the HRM literature. While Wohlgemuth (1987) and Pfeffer (1994) follow an one-best-way paradigm, Tichy et al. (1982) and Beer et al. (1985) emphasize the necessity of a fit between HRM practices and contingency variables as well as the broader social environment in addition to an internal fit of HRM policies. A third perspective is provided by Evans and Doz (1992). They go beyond the assumption of a fit between organization and environment and emphasize ambiguities and inconsistencies between them as a prerequisite for organizational learning processes.

(4) There is a general trend in recent research that shows the re-vitalization of the convergence/divergence discussion (Smith/Meiksins 1995; Sparrow/Schuler/Jackson 1995). In contrast to the early convergence discussion which focused on increasing similarity between industrialized countries on a macro level (Kerr et al. 1962) the actual discussion is about best practices on the micro or meso level and their convergence regardless of differences in the social environment (Flecker/Schienstock 1994; Hirsch-Kreinsen 1996).

(5) In order to preserve the anonymity of the plants we use plant numbers and country letters.

(6) In the second part of the MIT study Pil and MacDuffie (1996) follow an integrative respectively "complementary" approach of new work practices and HRM practices, also.

(7) The findings from 14 European automobile plants are added on by the findings from one Mexican plant.

(8) The measurement is based on workers formal qualification. The differences between Germany and the other countries result from the differences in the educational systems. Most German production workers have a three year apprenticeship and therefore a considerably higher formal qualification than workers from other countries. It should be mentioned that not all skilled production workers in Germany are skilled in auto manufacturing. Nevertheless, managers are convinced that the important point is that workers have a three year apprenticeship and not what kind of apprenticeship it is exactly. This is due to the process skills workers learn during the period of apprenticeship. Plant GB 33 can not be included in the comparison because it is only interested in "right attitudes" of production workers. Therefore the plant records internal team-training instead of formal qualification.

(9) This answer is only valid for the final assembly. Plant D 13 has pilot projects with integrated team work in other production processes, especially the engine assembly.

(10) This model is drawn in alignment to Likert (1975), even though Likerts idea of a linking-pin-organization is in-between the following described empirically based concept and the above mentioned team-organization (Staehle 1989, p. 703 f.).

(11) It should be mentioned that single-status is not accepted as an incentive by all employees.

(12) This means advanced in comparison to the other analyzed plants even if not advanced at all, for instance compared with a concept of semi-autonomous work groups.


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Dipl.-Kffr./Dipl.-Hdl. Uta Wilkens, Research and Teaching Assistant at the Chair of Personnel Management and Leadership Studies, Technical University of Chemnitz, Chemnitz, Germany. Dr. Peter Pawlowsky, Professor of Personnel Management and Leadership Studies, and Director of the Research Institute for Labour Economics, Technical University of Chemnitz, Chemnitz, Germany.
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Title Annotation:International Human Resource and Cross Cultural Management
Author:Wilkens, Uta; Pawlowsky, Peter
Publication:Management International Review
Date:Jan 1, 1997
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