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The theoretical model of the CBHRT — which includes factors such as industrial relations, strategy, human resource management, and performance — was proved to have value on the sectoral, individual organization, and international comparative levels. In attempting to achieve the balance between social justice and competitiveness to further the uniqueness of HRM, this book has tried to illustrate some practical insights on HR roles and introduce the 4logic HRM scorecard. Research and development in the area of HRM and performance carries on as this proves to be a relevant topic for enchancing the competitive advantage of firms. HRM is concerned with several issues regarding legitimacy, fairness, sustainability, and other such issues. This concluding chapter realizes that it takes a lot to study the factors that shape HRM practices and policies, and it is important for practitioners to consider a unique HRM approach that is appropriate for their respective organizations.

This chapter opens by contrasting two opposing theories on how firms respond to the increasing pressures of international competition: the resource-based view of strategic management on the one hand, and the competitiveness literature on the other. Given that contributors to the competitiveness literature offer more developed theories, the chapter proceeds by assessing their hypotheses on comparative institutional advantages. It thus analyses whether pharmaceutical firms in Germany, Italy, and the UK specialize in the pursuit of a strategy facilitated by national institutions. Since these micro-level analyses do not provide empirical support for the specialization idea, which is typically based on macro-level indicators, a higher level of data aggregation can lead to an overestimation of specialization trends. But if firms in different economies can pursue different competitive strategies, how can they compete despite comparative institutional disadvantages? This concluding question of the chapter is addressed in Part II, including Chapters 3, 4, and 5 of the book.

This chapter analyses how firms can compete despite comparative disadvantages of national financial-market institutions. It first studies whether pharmaceutical firms in Germany, Italy, and the UK require different types of financing to pursue strategies of radical product innovation, incremental product innovation, and product imitation, respectively. Since quantitative analyses of corporate balance sheets show this to be the case, the chapter goes on to ask how firms can acquire the necessary financial means if their provision is limited by unfavourable national institutions. Illustrating how firms collaborate with foreign investors, it identifies international financial markets as a functional equivalent to national institutions promoting the availability of institutional (venture) capital. It concludes with reflections on how these findings contribute to the resource-based view and the competitiveness literature, and illustrates how a Schumpeterian perception of firms as creative entrepreneurs helps to explain how they compete despite comparative institutional disadvantages.

This chapter examines how firms can compete despite comparative disadvantages of national antitrust legislation. It first studies whether pharmaceutical firms in Germany, Italy, and the UK develop different types of component standards to pursue strategies of radical product innovation, incremental product innovation, and product imitation, respectively. Since quantitative analyses of interviews with Quality Assurance managers show that firms differ in their standardization approaches according to the strategies they pursue, the chapter also looks at how national antitrust legislation affects these strategies. Contrary to the findings in the previous chapter, qualitative analyses of interviews suggest that national antitrust legislation constitutes neither a comparative institutional advantage nor a disadvantage. The chapter concludes with reflections on how these findings contribute to the resource-based view and the competitiveness literature, and on reasons why a Schumpeterian perception of firms as creative entrepreneurs may nevertheless help to explain how firms gain competitive advantages.

This chapter investigates how firms can compete despite comparative disadvantages of national labour-market institutions. It first analyses whether pharmaceutical firms in Germany, Italy, and the UK require employees with different types of skills to pursue strategies of radical product innovation, incremental product innovation, and product imitation, respectively. Since quantitative analyses of employees' skill profiles show this to be the case, the chapter goes on to ask how firms can acquire the necessary skill types if their availability is limited by unfavourable labour-market institutions. Illustrating how firms hire employees from abroad and on the basis of atypical contracts, the chapter identifies international labour markets and contracts as functional equivalents to national labour-market institutions. It concludes with reflections on how these findings contribute to the resource-based view and the competitiveness literature, and illustrates that a Schumpeterian perception of firms as creative entrepreneurs can help to explain how firms compete despite comparative institutional disadvantages.

While the formal welfare states of Australia and New Zealand resembled the British model in the post‐war period, economic policies and industrial‐relations systems differed. As highly competitive exporters of agricultural products and raw materials, both countries had developed highly protected import‐substituting manufacturing industries to ensure full employment as a complement to the minimal protection provided by the ‘liberal’ welfare state. When this configuration ceased to be economically viable in the 1970s, both countries chose to liberalize their industrial sectors, attempting to achieve price competitiveness through government‐controlled wage‐setting procedures. In New Zealand, these efforts failed and its Westminster‐type government opted for radical neo‐liberal reforms in the 1980s that reduced welfare‐state protection and caused a steep rise of unemployment. In Australia, by contrast, unions were better able to cooperate with the government in defending international competitiveness, and federal and bicameral institutions did favour policy compromises that combined liberalization with the maintenance and even expansion of welfare‐state protection.

Among ‘Continental’ welfare states, Switzerland had and has the highest per capita income and the highest employment ratio in the group of advanced welfare states included in this study. Its export‐oriented industries and services have remained highly competitive; its levels of taxation and welfare expenditures are low; and its labour‐market institutions are highly flexible. Nevertheless, Switzerland suffered severe job losses in the first oil‐price crisis and responded by introducing compulsory unemployment insurance. In the 1980s and 1990s, political pressures from export‐oriented businesses were successful in reducing the tariff and non‐tariff barriers, protecting the sheltered sectors of the Swiss economy, whose inefficiency was beginning to hurt the competitiveness of internationally exposed firms. However, when the demand for neo‐liberal reforms touched on the benefits provided by the — not particularly generous — Swiss welfare state, they were stopped not by the ‘social partners’ as in other consociational/ corporatist democracies, or by electoral shifts in governments, but by the direct democracy of the referendum system. As a consequence, limited retrenchment had to be combined with some important extensions of welfare coverage.

Germany was comparatively successful in weathering the macroeconomic crises of the 1970s and early 1980s, and its industrial sector remained highly competitive throughout. Nevertheless, unemployment has been high and is still rising. The impact of unification is only a part of the explanation. Instead, the very formula for Germany's past success is also the key to its current problems. Cooperative labour relations, on which German international competitiveness depends, were maintained by using the welfare state's generous exit options from the labour market for older and less productive workers. Given the prevailing mode of financing the “Bismarckian” welfare state, however, the resulting rise of social security contributions added to the costs of labour throughout the economy. As the government relied on the same solution in coping with the massive employment losses in East Germany after unification, non‐wage labour costs have risen to a level that can be sustained only by highly productive types of work. This constrains the growth of private services that have compensated industrial job losses in other countries.

The very generous, service‐oriented ‘social–democratic’ welfare states in Sweden and Denmark did consistently achieve higher levels of overall employment, extremely high levels of public services, greater equality in wages, and higher rates of female employment than either the ‘liberal’ or the ‘Bismarckian’ welfare states covered in this study. Following the liberalization of capital markets and errors of fiscal and monetary policy at the end of the 1980s, however, the Swedish economy went from an overheated boom into a deep recession, which then required significant cutbacks of social spending and public‐sector employment in the 1990s. By contrast, Denmark combined growth‐oriented macroeconomic policies with more flexible labour‐market regulations that allowed it to maintain the high level of public services while also increasing employment in private services. With the rapid recovery of the Swedish economy at the end of the 1990s, both countries are again successful in combining high competitiveness in the international economy with very high levels of social protection.

The Commission promotes a competitive technology and related industrial policy through its coordination Framework Programmes. Commission funding is concentrated on a variety of Information Society Technologies. This chapter examines its role through two case studies of advanced television broadcasting technologies projects: High Definition Television (HDTV) and Digital Video Broadcasting (DVB). Competing leadership candidates with the Commission for HDTV included the French and Dutch national governments and major firms based on government-industry collusion in the service of competitiveness. The HDTV flagship project to meet the Japanese and American challenge, supported by the Commission and Council of Ministers with subsidies, was a failure of European technology policy. The DVB firm-led consortium has by contrast been market-driven and successful without public subsidy.

This is the second of three chapters on the role of economic interests, and of systems for representing those interests, in the politics of welfare state reform. They explore the linkages between national welfare states and national economies, and examine the processes through which economic actors press their interests on policy makers. Section 1 of Manow's chapter offers a critical account of contributions that predict the formation of new political coalitions along the cleavage line between those firms and workers that are forced to adjust to international market pressures and those that enjoy domestic shelter from globalized markets; a brief discussion is included of the relative importance of the electorate in current welfare reforms as compared with the role played by organized interests of capital and labour. Section 2 presents a transaction cost argument that seeks to identify one central logic linking production and protection in continental welfare states and coordinated market economies, respectively; the central argument is that generous welfare state programmes may enhance and not diminish international competitiveness and can be part of the comparative institutional advantage of an economy rather than solely contributing to its comparative cost disadvantage. Section 3 concludes by briefly discussing the implications of the argument presented in Sect. 2 for the present debate on the compensatory role of the welfare state in a globalized economy.

Addresses the practical implementation of the liberal educational ideal. Section 5.1 identifies the ways in which choice, cultural coherence, and citizenship fit together within an autonomy‐driven education, and also discusses three other possible liberal or educational aims that should potentially help guide the implementation of the liberal ideal: economic competitiveness, democratic self‐reflection, and equality. Section 5.2 constructs a public policy of liberal education, arguing for strict state regulation of schools (both public/state and private) as well as for school choice in the form of controlled choice. Section 5.3 discusses the changes that would need to take place in the areas of legislation, pre‐service and in‐service teacher training, public dialogue, school accountability, and cultural attitudes about education in order to make the liberal educational ideal a reality, especially in the US and Britain.

This chapter is the fifth of six on the question of political representation in the EU. It analyses to what extent institutional differences between the member‐states of the EU are constraining the attitudes of representatives in respect of one major aspect—whom to represent; this is done by exploring the role orientations of members of the European Parliament (MEPs) and comparing them with those of members of 11 national parliaments (MNPs). The first section of the chapter presents a brief conceptualization of representational roles by looking at general conclusions from previous research, and defining 5 representational foci in two dimensions: group specificity (party voters; specific (interest) groups) and regional scope (constituency; all people in the nation concerned; all people in Europe). The next section looks at the distributions of these five foci of representation across parliamentary levels (MEPs or MNPs) over the 15 member‐states of the EU; data are from the 1996 European Parliamentarians Study, and indicate striking differences between countries. The last (and largest) section of the chapter looks for explanations for these differences in foci of representation. These include personal factors (social background; political experience), institutional settings (the regional dimension—the relationship between role orientation, competitiveness and electoral systems; the group dimension—the relationship between role orientation and the encompassiveness and inclusiveness of interest group systems; and the European focus of representation in relation to the size and experience of a member‐state).

As nation states lose a number of monetary and fiscal policy powers through the introduction of European monetary union, national industrial relations systems may acquire a new importance. Within those countries where neo‐corporatist collective bargaining survives, it becomes a means whereby wages can adapt to different levels of productivity and competitiveness when devaluation and variable interest rates are no longer an option.

In this second of three chapters on the distinctive policy dynamics of particular areas of social provision, Susan Giaimo addresses the issue of whether the success of the reformed welfare state in the shape of payers’ and policy makers’ cost‐containment projects have had as their price the sacrifice of equity and solidarity. These questions are explored through the lens of health care reform in Britain, Germany, and the US since the late 1980s: each a country with a distinctive health care system, which undertook major reform initiatives designed to control health care outlays, and addressed the efficiency and equity goals in markedly different ways. Section I provides a broad background to situate the contemporary politics of health care reform, explaining how and why health care systems in Western countries have come under the stress of increasing cost pressures even as governments and employers have become more apprehensive about the possible effects of the welfare state on economic competitiveness. Section 2 develops the argument in greater depth, explaining how existing health care and political systems provide different opportunities or constraints for payers and the state to pursue unilateral cost‐containment strategies, how health care institutions themselves shape policy preferences and strategies of payers, and how some systems require compromise solutions that reconcile equity with efficiency. Section 3 presents each country's case, and the concluding section considers the broader lessons from health care reform for the contemporary politics of welfare state adjustment.

How easily can governments alter the industrial structure of economies? This introductory chapter explores competing perspectives on the ability of governments to promote competitiveness within new technology industries, such as biotechnology and software. A first approach, widely shared by governments, is that policy can orchestrate the allocation of resources into new technology sectors needed to promote competitiveness. A second approach, widely endorsed by recent academic research, is that enduring national institutional frameworks strongly impact the governance of new technology firms. A popular strand of institutional research known as the “varieties of capitalism” approach makes particularly strong claims linking institutions to innovation. According to this perspective, most European economies have “organized” institutional frameworks that impede competitiveness in new technology industries. This chapter explores this debate, and sets the agenda used by the book to evaluate the extent to which institutional frameworks impact the ability of governments to promote competitiveness within new technology industries.

Coordinated market economies such as Germany or Sweden do not have appropriate institutional infrastructures to sustain large numbers of radically innovative firms. However, alternative strategies to develop competitiveness in new technology industries might exist. The biotechnology and software industries are each comprised of multiple sub-sectors. While important areas within each industry, such as therapeutics biotechnology or standard software, are associated with radical innovation, other large segments are characterized by incremental innovation. The chapter argues that companies within coordinated market economies could successfully specialize in such sub-segments, creating pockets of national competitiveness for their national industries. Descriptive statistics from the UK, Germany, and Sweden, and case studies from the platform biotechnology and enterprise software industries in Germany are used to empirically substantiate the argument.