Contested Firm Governance, Institutions and the Undertaking of Corporate Restructuring Practices in Germany

This article investigates the undertaking of corporate restructuring practices (employee downsizing and wage moderation) in Germany from 2008 to 2015. I present a political perspective that draws from the insights of the power resources approach and of institutional analyses. My theoretical framework highlights how institutional arrangements structure power relations within companies by empowering, in an asymmetrical manner, different categories of firm stakeholders (employees, managers and shareholders) as well as shaping how they relate to each other in an interactive manner. My empirical findings point to the importance of extensive, but contingent, corporate restructuring in Germany. Companies are more likely to implement ‘defensive’ corporate restructuring practices under conditions of high leverage/debt than when confronted by shareholder value driven investors, thereby reflecting the presence of overlapping interests between employees and managers.