Institutions, labour management practices and firm performance in Europe

We develop a theoretical framework to examine three hypotheses on the relationship between LMPs and organisational performance in European firms. The first is that collaborative forms are more strongly associated with superior firm performance than calculative forms. The second is that these associations are strongest where national institutional and normative settings support them. The third is that employer-employee consultative committees and collective payment methods are also associated with superior firm performance. The first two hypothesis are strongly empirically supported, as is the third albeit more weakly. The implications of the findings in the context of the Varieties of Capitalism theory are discussed