IS POLDER-TYPE GOVERNANCE GOOD FOR YOU? Laissez-Faire Intervention, Wage Restraint, And Dutch Steel

This paper searches for the origins of the relatively successful performance of Hoogovens, the only sizeable steel firm in the Netherlands. It is suggested that Hoogovens has at critical moments benefited substantially from both strategic and financial support, but was basically left to decide its own policies. Luckily, it mostly opted for ‘right’ policies so that the industry’s decline hit less hard in the Netherlands than elsewhere thus making it less necessary to develop emergency programmes. More specifically, Hoogovens chose to diversify into the aluminium market at a relatively early stage, and it broke up its merger with Germany’s Hoesch. However, Hoogovens also benefited from the Polder Model’s emphasis on wage restraint as much of the firm’s output is exported. Moreover, corporatist welfare arrangements allowed Hoogovens to shed labour without causing extraordinary unrest. It is concluded that the success of ‘laissezfaire intervention’ heavily depends on the qualities of the supported firm’s management. Poldertype governance in terms of wages and labour has beneficial effects in the short run, may but retard innovation. 5001-6182 Business 5546-5548.6 5548.7-5548.85 Office Organization and Management Industrial Psychology Library of Congress Classification (LCC) HD 3611 Industrial policy M Business Administration and Business Economics M 10 L 2 Business Administration: general Firm Objectives, Organization and Behaviour Journal of Economic Literature (JEL) L 52 Industrial policy 85 A Business General 100B 240 B Organization Theory (general) Information Systems Management European Business Schools Library Group (EBSLG) 160 D Industrial economics Gemeenschappelijke Onderwerpsontsluiting (GOO) 85.00 Bedrijfskunde, Organisatiekunde: algemeen 85.05 85.08 Management organisatie: algemeen Organisatiesociologie, organisatiepsychologie Classification GOO 83.67 Industrie Bedrijfskunde / Bedrijfseconomie Organisatieleer, informatietechnologie, prestatiebeoordeling