Essay on France Germany economic analysis overview report - Essay Prowess

Essay on France Germany economic analysis overview report

Essay on France Germany economic analysis overview report


France and Germany


Different institutions of corporate governance produce different output that differ due to unique decision-making process, patterns of adjustment, and the value added among the various parties.   The sustainability of institutions in any country is determined by the national system of corporate governance. Organization of various activities in any institution can contribute to resilience of domestic institutions. The organization of the workplace involves the micro issues and the role of labor in corporate governance. All employees must align to the jobs demands and the workers competencies. This is a challenge to most firms in these two countries as the basic performance of the companies is determined by the correct match between the tasks and the competencies. It is also important for employers of these organizations to monitor the workforce through performance tasks in different work environment (Pierre & Peters 2000).   

The German social model includes a social cohesion, high competition and decreased level of social inequality. Majority of German market are politically instituted and socially controlled to provide a competitive market across the world. However, globalization has brought great changes to the market through the rising technology and integration of financial markets. The rise in technology has created pressure on Germany economy as a result of increased products in the market (Weber & Kabst 2000). On the other hand, integration of financial markets raises the pressure on capital market. In the last few decades, European capital market has realized changes through internalization of world financial markets and more so, implementation of different political reforms. This paper will analyze the various issues that influence the management of people in both France and Germany.

The Corporate Governance

The Corporate Governance in Germany

The manner in which corporations are managed and rationalized can have an impact on society. For example, large corporate have great impact to the society as they are able to provide job opportunities to many people thus developing part of economy’s wealth. Therefore, these firms can form the face of our society or social institutions which determines the relationship between economy and society. For long period, the corporate governance system has been recognized as an insider-control and a stakeholders-oriented system. However, this has changed with time as internalization has forced many countries to adapt to corporate governance system that follows the capita market based Anglo-Saxon model. This system has been realized in corporate such as big universal banks. For German corporate governance system model, it is based on two main pillars which include the Dual-Board Institution and Separation of Management and Supervision (Weber & Kabst 2000). Under the dual-board institution governance structure, the management board (Vorstand) and the supervisor council (Aufsichtsrat) have different functions. This structure prohibits a member from on body to participate in other bodies. The management board is responsible for directing different activities and on the other hand, the supervisory council has responsibility of appointing, dismissing, and supervising the management board. In addition, the supervisory council has the duty of analyzing the corporation’s financial records.

Corporate Governance in France

Proper corporate governance has become a key value driver of enhancing the country’s economic reputation among its financial and industrial partners. Many companies in French Republican have lately switched to operating by governance. Almost all French organizations are handled by the general managers who are responsible for shareholders and other investors. The shareholders and investors have been given necessary powers and during the AGMs, they make most important corporate decisions. The French regulators develop a general framework for corporate governance and this can have other company governance organs to perform certain duties. Therefore, the French companies can select a one-tier or a two-tier board system. These organizations can also decide to separate or combine the functions of the chairman or the Chief Executive Officer. However, the regulation of governance in the recent years been developed by reference to soft legal guidelines. These guidelines are complied in the corporate governance codes which are provided by the private organizations. Therefore, the type of corporate governance in France is one that balances the powers, and which ensure there is board performance and transparency of corporate practices. Each board of director has a specific role to play in the organization. The progress achieved in improving French corporate governance in different companies is an evident balanced power of governance. This results to transparency of practices and this contributes to competitiveness and high performance of the companies in the France.

Economy in Both France and Germany

Germany Economy

Germany has an open economy that is highly depend on industrial sector, producing a third of its gross domestic products for foreign market. The economy is characterized by social protection and great effort from the state’s role. Due to this kind of openness, the state is influenced by the intense global competition. Therefore, the Economic decisions are subject to the state’s need to compete in the global economy. Protection exists in different sectors of the German economy, particularly on individuals (Freedman & Jaggi 2010). For example, this has been done through social security for health care, old-age pensions, unemployment, nursing care, and social welfare. However, those employed are also protected with respect to their jobs and income as negotiated by the trade unions, the social partners, and employer’s associations. On the other hand, Germany’s labor market is heavily regulated. In addition, people are protected from completion by institutional forms of governance in the Germany system. The management of firms is done by various parties that include employees’ and union representatives in the supervisory boards of directors and workers’ council. On the other hand, firms mainly receive their capital through a bank-based system and via government administrative planning approach. Government has a great impact on the Germany economy as half of the GDP passes through it. There are factors that lead to forces of global capitalism within institutions that are a regulated by the social market economy. The German government has been a dilemma of implementing liberal or non-liberal modes of regulation. In liberal system of regulation, the features tend to oppose rigid regulations of the labor market like obligatory social security and dismissal protection from both employee and employer.

Economy in France

There is increasing recognition of economic globalization that generates patterns of both economic convergence and divergence.  France global environment is characterized by the increasing mobility of foreign capital and talents. However, the government has decided to strengthen its policy of attracting foreign investment and promoting France. The current bill and related measures firms throughout France with the means to take action and boost employment (Freedman & Jaggi 2010). 

Approaches to Equal Opportunities/Diversity

Both countries operate under a common community (European Union). Therefore, both have approaches to equal opportunities since they have common regulation and organization. For instance, they share the same industrial regulation system. They also share the same European single currency and this give them great benefits in terms of stability in currency, European identity and more so, low cost of trade. The European Works Councils meet yearly in order to share information and discussing on various economic and social developments.  Although, there is a common framework for European countries and similarities in the systems of industrial relations, industrial relationship in both France and Germany may differ a lot. This is as a result of difference in the path of dependency and directions towards development based on their own situation. Both countries may differ from the aspects of labor market, employers association, trade unions, collective bargaining, or government’s roles and regulations.

Employment Relationship in Germany

German employment relationship is characterized by a “decommodification” of labor.  Since German is recognized to have the most successful economies in Europe, employees tend to be highly skilled and their training is conducted through a multi-employer and quasi-public system of occupation training.  Employees are graded largely according to their level of qualification. There is also income differential between the top management and production employees. Work councils ensure that workers who have attained certain qualifications acquire jobs and prevent skilled workers from being categorized to unskilled jobs. Majority of employees in German have interest to form a reliable relationship with trade unions (Freedman & Jaggi 2010). This enables the workers in different firms to react on static negotiations with employers by forming strikes and lockouts. This employee’s relationship has shown an increase in compliance from employers and pushing back strikes as they harm the company at large. There is another trend that has been noted in German, this is about the growth of temporary work where companies can increase their work force during the peak-season. This has resulted to exploitation of the employees. For instance, such jobs can be associated with low wages, negligible job security, minimal benefits, no job prospects, and little training. On the other hand, temporary and triangular employment relationship can increase possibilities of reducing unemployment rate, hiring, and training cost (Freedman & Jaggi 2010).

Employee Relationship System France

 The employee relationship system in France helps those working in various companies in the following ways. First, through trade unions movement although is regarded as one of the weakest in European with only 8 percent of the workers joining this unions. Despite the low membership and traded unions, they can mobilize French workers to great effects. Secondly, the employees are in a position for collective bargaining in the company, industrial and national level. Each level, there are details and rules on who is responsible for bargaining and ensure that the agreement is valid. However, the industry level agreement is the most important for negotiation although in many cases, the rate they set are below the actual figure that they should get. Thirdly, the system enables employees to have a workplace representation. However, France has been known to have the most complex system of employee representation compared to other countries in Europe. For example, the entire representatives of trade unions and their structures are directly elected by all workforces. The legislation that was passed in 2013 allowed representative of employees at board level. It was later expanded in 2015 where it allowed the large companies to represent at least an individual at the board level (Freedman & Jaggi 2010). Fourthly, the European-level representation allows representatives from European Works Councils as well as the European Company bodies to be selected by the unions. However, there is exception of board level representatives in the European Company where the representative body decides how the leaders should be selected. In addition, there is health and safety representatives which are the most important input for employees at this sector. The committee must be consulted and analyze various issues that demands an outside expert who handles the case. Finally, France has been known to be leading in participation of schemes unlike other European countries. This is as a result of requirement of those companies with more than 50 employees to abide to the law that offers a profit-sharing scheme.

Approaches to Equal Opportunities/Diversity

Workforce diversity acknowledges that people differ in various ways. They may differ in terms of age, gender, social statues, color, marital statues, religion, ethnicity and culture. The predominant diversity across European countries is different. Therefore, organization understands that they require skilled labor in order to take the competitive advantage of flexibility in the business environment. For the last few years, a national debate has emerged in France on diversity and to some extent the issue of diversity as a “business case.” For many years, the issue on equal opportunity between men and women has been a major debate in France (Weber & Kabst 2000). This has been contributed by the increasing awareness of the challenges connected to French model of equality and integration of immigrants, and more so, equality of rights for all citizens. The government policy intervention on equality on employment comes in different dimensions. One is the human rights which are based on ethical stance of justice, equality, and fair treatment regardless of age, gender, race and sexuality. Second dimension involves cost-effectiveness and efficiency. This kind of discrimination may affect employer as they fail to employ the best inputs in their firms. In addition, there is political and social cost to discrimination that a society as a whole bears. Thirdly, involves the kind of human capital argument which adds value to labor force by developing a wider range of experience.


Human resource management is an important tool for the success of any business. It involves the collection of policies that help in organizing various activities and manage people who undertake this work. To have appropriate Human Resource Management, the top management should select the most suitable workforce to the right place.  The practice of Human Resource Management may differ in German and France due to the factors discussed above. Each factor shapes the HRM in its unique way. The major difference is in terms of different approach to capitalism in German and France business system. For instance, France applies an outsider-shareholders focused approach to capitalism unlike Germany which uses the insider-stakeholder approach. This means that firms and other organizations in France focus on shareholders’ interest.  The above factors also shaped the HRM in terms of states regulation. In other words, the manner in which firms in Germany and France associate with the states is different. However, states are playing important role to the state’s business system. In Germany, the state uses a “bargaining corporatism” and this makes the government to have stronger intervention to its economic activities. In addition, the German state embraces collective organization and representative of its workers. Thus, employees from different organizations are involved in decision making process. Unlike Germany state’s regulation, France does not have a bargained corporatism. Instead, it has its own “corporatism.” The link between employees unions and organizations is only applicable at enterprise level. France lack authoritative trade union at political level and this makes it different from German state regulation.

German’s firms obtain its finance from cross-investments. There is good relationship between the companies and financial organizations such as commercial banks. On the other hand, the system in France allows transparency and balance of power within the firms. Therefore, this has developed a good relationship organizations and financial organizations which help them to rise their capital for expansion. The two states have different market economic system. For instance, France operates under liberal market economic system while German works under corporate market economic system (Pierre & Peters 2000).

These differences influenced the Human Resource Management models as well as Human resource practices. The France business system is depends highly on individualism and thus trade-unionism is not well developed as that of German. In Germany, the presence of unions is crucial. However, this is different in France where legislation force firms to have a certain size of employee in order to consult trade unions in certain circumstances (Marginson 2004).

Human Resource Management uses the matching model to ensure that most suitable individual is located at the right place. In general, the matching model means that the internal situation is matching to the external environment which includes the cultural forces, economic forces, as well as political forces. Internal situation of a company involves the connection between strategy and mission, human resource management, and organization structure.  However, HRM deals with recruitment, selection, training and development, communication, reward, goals and performance management. Let’s take a German as an example, and how the HR practice in different firms (Pollitt & Bouckaert 2000).


This is an important element of HRM in selecting workforce carefully. The selection method involves, interview, tests, and assessment (Pollitt & Bouckaert 2000). The common method of selecting worker in German’s firms is the initial screening of application documents. The second step is to interviewing the applicants who qualified in the initial process. Formal tests and assessment are used mainly for selecting management trainees.


A well trained workforce is also considered as an important tool for HRM. To achieve this, firms should invest in training their employees and help the organization to attain its function of flexibility (Marginson 2004).


The continuation of performance appraisal systems in various organizations in Germany differs significantly in terms of industries and type of employees (Beardwell & Claydon 2010). For instance, majority of the organization in the field of financial and chemical services provide rewarding system. However, there is the tendency of worker’s representatives to deny formal appraisal systems as they argues that this will develop great pressure to employees particularly when the appraisal is connected to compensation.

From such differences on social cultures, it makes HR practices different from the two countries. The HR practices in France firms tend to follow the communitarian system and group oriented unlike those based in Germany that believes in individualism (Beardwell & Claydon 2010). France operates under the coordinate market system. Some of the companies in France that market economy, they tend to focus on long term financial performance. The coordinate market economy system allows firms to increase the long-term competitive advantage, freedom to manage employees, and pay employees based on individual performance. Additionally, German that operates in corporate market economy tend to focus on long-run performance and aim on investment strategies which involves product and innovation. On corporate market economic system, workers view their employees as a form of competitive advantage towards the market. The market economic system main focus includes training and development. Under this system, there is constraint of managerial freedom due to state regulations, but employees are involved in the firm’s decision making process (Pollitt & Bouckaert 2000).


One thing that I got to learn through the module is about the Human Resource Management. It is evident to me that for a company to succeed it has to have effective Human resource management. Its objective is to make sure that the corporation can achieve its goal through people. Another thing that I got to understand is that every organization has its Human Resource management practices and model. It is also apparent that every country has its diverse human resource practice. Additionally, I learned about international Human resource management which is the procedure of managing individuals in an International setting. One thing I got to understand about the International Human Resource Management is that every country has its unique system when it comes to managing people. Initially, I assumed that countries had the same practices, and the only thing that mattered was the organizational structure. However, throughout the module, I got to learn new things that seemed to be confusing at the beginning. So as to understand about Human Resource Management at the International level, I had to put various things into perspective. I had first to understand the reasons that allow foreign companies in developing international Human resource strategies.

While looking at these ideas, I realized that most organizations that are investing in the global market have difficulties in competing with local agencies. I also got to understand that there is heightened global competition which is one of the reasons that most international companies are developing International Human resource strategies. Global Human Resource approaches help a company to remain relevant in the international market.  Another significant term that I got to learn throughout the module is Corporate Governance, which is an aspect of any business whether domestic or international. Corporate governance is a structure of rules and practices that help in ensuring there is transparency in the relationship between the company and its stakeholders.  It is made up of different features that include by-laws, the mission, vision and company’s values. At a glance, the aspect of corporate governance on an international platform seemed to be easy because I had an idea of what it was all about when dealing with individual companies. However, I must admit that I found it a bit complicated especially when differentiating between two countries.  One area that I had difficulties in is when discussing the Anglo-Saxon model. Maybe I might argue that the name seemed complicated, and that is why it was hard for me to understand what it was all about. However, after further explanations, I learned that it is focused on the interest of shareholders, and its principal aim is to maximize the company’s profit. I had to do a lot of research so as to understand the deeper meaning of the Anglo-Saxon model. I had to compare how different books and other academic sources define it.

One important aspect that I learned is that Anglo-Saxon model ownership of the firms belongs to individuals.  I must admit that doing research has never been my priority; however, throughout the module, I realized that I had to do a lot of research for me to understand the different topics. I also had to differentiate between academic sources and others. By others, I mean those sources that are not recommended for academic research such as the blogs. I realized that the not all internet sources could be used to research on educational topics. Initially, I assumed that I could use any source that appeared relevant to research on any subject. However, I found out that some of the sources had partial information or different from what is required academically. For example, while I was doing my research on the case study I found out that various internet sources had diverse information concerning my two countries of study. In this case, I had to use what I had learned throughout the module while doing my research. I also realized that I had to do a lot of reading when doing research on any topic so as to be sure of what the writer is talking about. In most cases writers would use different terms with the same meaning. Some of these aspects can make assignments appear difficult; hence, one has to use multiple sources so as to have a clear understanding of the terms. I have also realized that some articles highlight the topics differently.

Hence, it is significant for an individual to ensure that they read through the article so as to grasp what the writer means. Personally, I make sure that I have read the abstract so as to have an understanding of what the paper is about. I then ensure that I go through the introduction. At times, you may assume that reading the introduction is not necessary; however, I must admit that it is helpful. The introduction helps in getting an idea of what the paper is all about. It is also significant to read the entire article so as to understand different terms.  I also realized that I am more confident when reading academic work. At the beginning of the module I was a little bit reluctant and at some point, I felt that I was in the wrong class.  I could not understand the materials that were being tackled in class; however, my professor was helpful and by the end of the module I was confident that I had a learned a lot of things.

One thing that I am confident that I got to understand thoroughly is the issue concerning how businesses perform on an international level.  I have gained enough knowledge about the system of industrial relationship in various International markets. For me to understand the system of industrial relationship I had first to focus on the definition of the term. The system of the industrial relationship includes institutions that are involved in hiring employees and the use of labor. I realized that every country was different when it comes to the characteristics of the system. Some countries highly rely on the trade unions in regulating the industrial relations. In this case, most of the undertakings concerning the industrial relations are conducted by trade unions. They oversee the negotiations at the national and branch levels. The trade unions act as the representatives of the workers. However, other countries do not highly rely on the trade unions. Rather they have other international bodies to ensure that they enhance the relationship between various firms.

The module has helped me in understanding the real-world situations. For instance, I can understand what organizations go through when they invest in foreign countries. I have learned about different features that can be applied in management on an international platform. I believe that the knowledge acquired can help me become an equipped Human Resource Manager on a global platform. I can mobilize the workers in working towards the company’s goals  I can use a broad range of ideas, and this would help in having organized activities in the company and deliverance of quality services to the client. Through this module, I have learned that the training of the workers is conducted at a level of general knowledge and skills obtained in formal education. Therefore, this idea can help me to use the amount appropriately in the allocated for training by directing them to the important sectors, thus utilizing the resources of the firm. Such skills can help to increase the profit realization of business.

On the other hand, I have learned that there is the need to specialize depending on the individuals and their possibilities in adapting to the system. The module has been educative on matters concerning the employment system. However, some areas were a bit confusing especially, when differentiating the different by-laws that govern the international market. At first, I felt that no one needed to understand everything when learning about the International human resource management. I felt that all I needed were the basics, and I was good to handle the Human resource management. However, as we dug deep into the module, I realized that there was a lot to be learned.

In general, I have learned that firms in different countries have diverse levels of cooperation. For example, they have a separate corporation in terms of employment of labor forces, development of companies, trade unions, and social norms. The big difference being the role assigned to vocational training of employees. I have also learned that organizations are embracing the use of technology. I have as well learned different skills that will help me in handling assignments. The module was broad, and I liked that we had a lot to learn. I now understand the importance of reading widely and relying on relevant materials. I understand that not all materials are fit for academic research. Personally, I had difficulties in explaining ideas when doing an assessment. However, I have realized that it is important to give examples as they help in understanding the term.  Explanation of the concept also helps in understanding the different definitions.


Beardwell, J., & Claydon, T 2010. Human Resource Management, A contemporary Approach.

Prentice Hall.

Freedman, M., & Jaggi, B 2010. Sustainability, environmental performance and disclosures.

Bingley, Emerald.

Marginson, P. 2004.The Eurocompany and European works councils, in A.W. Harzing and J.Van

Ruysseveldt (eds) international human resource management. London: Saga publications

Pierre, J., & Peters, B.G 2000. Governance, Politics and the State. London: Macmillan Press.

Pollitt, C., & Bouckaert, G 2000. Public Management Reform. A Comparative Analysis. Oxford:

University Press.

Weber, W., & Kabst, R. 2000. Personal management in international verglei. Paderborn:

University of Paderborn.

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