Manuscript Type: Empirical Research Question/Issue: This article considers the consequences for employment, work organization, and industrial relations when companies are acquired by private equity, hedge funds, or sovereign wealth funds. It also assesses the role of national labor regulation in moderating labor outcomes. Research Findings/Insights: The article draws on three case studies – a Spanish supermarket chain, a German engineering company, and a ports and logistics group hitherto based in the UK. Employment reductions are found in each case, though to varying extents. There are few changes in work organization but some developments in employee voice and representation. National systems of labor regulation do not impact substantially on employment reductions but they do affect the extent to which worker representatives receive information after, though not during, the acquisition. Theoretical/Academic Implications: Contrary to extant theory, the extent of national employment regulation does not appear to be an impediment to restructuring by investment funds. The differential effect of the three funds suggests that the extent of ownership is not decisive in explaining the level of activism or its impacts on labor. Instead, the objectives and time frames of funds appear to be more important. Practitioner/Policy Implications: The implication of the findings is that greater disclosure and regulation of new investment funds is more likely to enhance employee protection than further labor regulation. Broadly, this has been the main thrust of recent policy within European Union institutions.

New Investment Funds, Restructuring, and Labor Outcomes: A European Perspective / Gospel, HOWARD FREDERICK; Pendleton, Andrew; Vitols, Sigurt; Wilke, Peter. - In: CORPORATE GOVERNANCE. - ISSN 0964-8410. - 19:3(2011), pp. 276-289. [10.1111/j.1467-8683.2011.00848.x]

New Investment Funds, Restructuring, and Labor Outcomes: A European Perspective

GOSPEL, HOWARD FREDERICK;
2011

Abstract

Manuscript Type: Empirical Research Question/Issue: This article considers the consequences for employment, work organization, and industrial relations when companies are acquired by private equity, hedge funds, or sovereign wealth funds. It also assesses the role of national labor regulation in moderating labor outcomes. Research Findings/Insights: The article draws on three case studies – a Spanish supermarket chain, a German engineering company, and a ports and logistics group hitherto based in the UK. Employment reductions are found in each case, though to varying extents. There are few changes in work organization but some developments in employee voice and representation. National systems of labor regulation do not impact substantially on employment reductions but they do affect the extent to which worker representatives receive information after, though not during, the acquisition. Theoretical/Academic Implications: Contrary to extant theory, the extent of national employment regulation does not appear to be an impediment to restructuring by investment funds. The differential effect of the three funds suggests that the extent of ownership is not decisive in explaining the level of activism or its impacts on labor. Instead, the objectives and time frames of funds appear to be more important. Practitioner/Policy Implications: The implication of the findings is that greater disclosure and regulation of new investment funds is more likely to enhance employee protection than further labor regulation. Broadly, this has been the main thrust of recent policy within European Union institutions.
New Investment Funds, Restructuring, and Labor Outcomes: A European Perspective / Gospel, HOWARD FREDERICK; Pendleton, Andrew; Vitols, Sigurt; Wilke, Peter. - In: CORPORATE GOVERNANCE. - ISSN 0964-8410. - 19:3(2011), pp. 276-289. [10.1111/j.1467-8683.2011.00848.x]
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