Van Haren Group
Rhineland Model V 2 1
The origins of the term Rhineland model
Business Management: the Rhineland model versus the Anglo-American model
The essential differences between both models are described in this table:
Minimal government control on society
Organization as working community
Organization as support
Focus on stake holder value and mid-term and long-term policy; business continuity and labor relations being more important than achieving short term profits.
Focus on share holder value and short term profits.
A well-adjusted balance of power between share holders and managers.
Most power is with the share holders.
Efficiency of social structures
Efficiency of economic structures.
Focus on effective leadership.
Focus on effective management.
Planning and organization.
Most companies financed by family capital or banks.
Most companies financed by shares that are sold via stock exchange.
Labor relations are more ‘co-operative’; government, employers and employees are prepared to work together; shared values by most of the management and employees regarding the ideas of equality and solidarity.
Labor relations are more ‘conflictuous’.
Employees stay longer in the same firm and have higher loyalty towards the company they work for.
Employees stay shorter in the same firm.
Employees are protected against firing.
Employees easily hired and fired.
Generous unemployment benefits.
Modest unemployment benefits.
Wage bargaining more centralized: more income equality.
Wage bargaining more de-centralized: income distribution more unequal.
Acceptance of international management models and theories: the Rhineland model versus the Anglo-American model
Focus on employees’ own responsibilities and personal initiatives from employees on operational level.
Focus on control mechanisms by higher level management and reduction of personal initiative by employees on operational level.
Little attention to risk management.
Much attention to risk management.
Project success as a result of competent team members.
Project success as a result of methods and (control) instruments.
Participation to project teams ‘principal based’.
Participation to project teams ‘rule based’.
Focus on contact and trust in (business) relations.
Focus on contract.
Long lasting discussions with all stakeholders to achieve a compromise. The outcome is often ‘half baked’.
In recent publications, Matthieu Weggeman, a Dutch author of several publications on the Rhineland model, makes clear that the issue is not to choose between the Rhineland model and Anglo-Saxon model, but to create a Third Way, combining the best of both models. Obviously, this is a typical Rhineland approach. Probably the current global Economic Crisis will be decisive which of both models will proof to offer the best solutions to overcome this crisis.
By Bart Verbrugge