Strategy Meets Institutions : The Transformation of Management-Labor Relations at Deutsche Telekom and NTT

This comparison of labor-management relations at Deutsche Telekom (DT) and NTT Group (formerly Nippon Telephone and Telegraph) demonstrates the value of considering both institutions and strategic decision-making to understand the interaction between companies and unions. As corporations diversify, multi-divisional or holding company structures emerge, but the degree of diversity introduced in employment relations within the corporate group depends on the interaction between corporate strategy and the strategy of organized labor. The authors' field research, based on interviews with managers and labor leaders, shows that despite a broadly similar corporate strategy of diversification by DT and NTT after the liberalization of telecommunication markets, employment relations became more decentralized—both for unions and for works councils—within the DT group than within the NTT group. This difference in outcomes is explained by the relative power and strategic choices of labor and management, rather than by constraints and opportunities specific to the existing national institutions