Lean production and the German model

Traditionally the German employment system has been hailed as the surpreme example of how a symbiosis between equity and efficiency can be established in an economic system. A defining characteristic of the German employment system is how the world of work is embedded in a highly co‐ordinated system of industrial relations institutions inside and outside the enterprise. The argument of this paper is that this model of labour market organisation is coming under severe pressure as a result of a range of developments, not least the emergence of lean production as a credible alternative system of work organisation. Lean production which is based on techniques moulded and fine‐tuned in Japan affronts virtually every aspect of the prevailing model of economic citizenship in Germany. It is argued that important modifications will have to be made to key industrial relations institutions in the country so that enterprises can respond effectively to the lean production challenge.