Is Germany a model for managers?

Most American managers have a hard time making sense of Germany. The country has a fraction of the resources and less than one-third the population of the United States. Labor costs are substantially higher, paid vacations are at least three times as long, and strong unions are deeply involved at all levels of business, from the local plant to the corporate boardroom. Yet German companies manage to produce internationally competitive products in key manufacturing sectors, making Germany the greatest competitive threat to the United States after Japan. The seemingly paradoxical nature of the German economy typically evokes one of two diametrically opposed responses. The first is to celebrate the German economy as a "model" worth emulating--indeed, as the answer to declining U.S. competitiveness. The alternative, more skeptical response is to question Germany's staying power in a new, more competitive global economy. According to Kirsten Wever and Christopher Allen, the problem with both points of view is that they miss the forest for the trees. Observers are so preoccupied with praising--or blaming--individual components of the German economy that they fail to see the dynamic logic that ties these components together into a coherent system. In their review of recent research on the German business system, Wever and Allen argue that managers can learn an important lesson from Germany. In the global economy, competition isn't just between companies but between entire socioeconomic systems. Germany's ability to design a cohesive economic and social system that adapts continuously to changing requirements goes a long way toward explaining that country's competitive success.     

Will your Medicare claims stand up?

In the first two installments of our series, we gave you the details of reimbursement under the new Medicare fee schedule, and showed how to code evaluation-and-management services with the revised CPT system.* This issue, we'll tell what to expect from Medicare carriers as they teach and enforce the new payment rules.     

Small firm mutual funds: Additional evidence on the small firm effect

Returns generated with small firm mutual fund data are used to examine the extent to which identification of a small firm effect is due to the difficulty in measuring the direct and indirect transaction costs involved in investing in the common shares of small capitalization stocks. Little if any evidence of the excess risk-adjusted returns is obtained for either of the period 1978–1983, when the small firm effect was observed, or the period 1984–1989, when it was not. The small firm effect may therefore be attributed to (1) higher direct transaction costs including bid-ask spread and broker fees and (2) higher indirect transaction costs including portfolio management expenses and market impact costs.The authors thank an anonymous referee for helpful comments on an earlier version of this paper, and Brett Salazar for valuable assistance in data collection. Errors remain our own.     

Integration of collective bargaining and formal worker participation processes: Boon or barrier to worker rights?

Many employers are extending workplace rights by allowing for more employee voice in decision making. Numerous unionized organizations have established formal worker participation processes to help achieve this end and to improve organizational performance. Based largely on theory, such processes are normally designed to operate independently from the bargaining process. The purpose of this study was to examine the relationship between participation and bargaining processes, and the effect of this relationship on workplace satisfaction. A total of 712 Midwest union officials were surveyed, and the results indicate that the processes tend to become integrated in the workplace. Further, union officials' workplace satisfaction was greater where formal worker participation is institutionalized within the bargaining process.     

A CROSS-NATIONAL STUDY OF LEADERSHIP: PARTICIPATION AS A FUNCTION OF PROBLEM STRUCTURE AND LEADER POWER

This study explores the effects of task structure and leader power on participative leadership across Australian, African, Papua-New Guinea and Pacific Island managers. Managers in all national groups are more participative in situations of low structure and low power than for high structure and high power, respectively. Participation in situations of low structure and low power declines in the order: Australia, Africa, Papua-New Guinea, Pacific Islands. It is argued that this effect is an instrumental effect of managerial education, rather than being culturally determined. the Vroom-Yetton leadership methodology is used to measure participation levels. Subjects are a total of 150 middle-level managers attending management education courses.