Abstract: Negotiating Cultures of Capitalism: IBM's Human Relations in the United States and West Germany

Corinna Schlombs


When IBM's long-time chief executive Thomas Watson, Sr., learned in April 1950 that German IBM employees had formed a works council, he advised his local management to have "a good heart-to-heart talk" with the council members. As IBM rose to global dominance in the two decades following World War II, the company needed to balance globalizing tendencies against local cultures. In the United States, IBM implemented welfare capitalist human relations measures during the New Deal era. When IBM began to rebuild its European operations after World War II, it reorganized its international operations into wholly owned subsidiaries that received directions from the United States. In West Germany, IBM's welfare capitalist policies conflicted with the newly established system of codetermination that provided employees with a say in corporate decisions through works councils and representatives on the board of directors. Mary O'Sullivan and others have provided comparative studies that investigate how a system of corporate governance affected corporate resource allocation and performance. Based on research in IBM's corporate archive as well as its corporate magazines, this paper investigates how IBM bridged different systems of corporate governance.