Union Mergers as a Revitalization Strategy and the Role of Post-merger Integration: The Case of Ver.di in Germany

Anja Kirsch

In many developed market economies, unions' response to membership decline and to decreasing economic and political influence is to merge. Union merger strategies are often embraced with the expectation that they will result in 'revitalization': more members, and greater economic and political influence. In practice, however, union mergers rarely result in revitalization. This study examines why many unions adopt a merger strategy when there is no clear evidence to suggest that mergers can deliver revitalizing results.
A framework for analysing merger outcomes along five dimensions is developed and applied in a case study of one of the world's largest unions, the German service sector union Vereinte Dienstleistungsgewerkschaft (ver.di). The study reveals that in ver.di's case, revitalization was not achieved along any of the five dimensions.

Corporate mergers also frequently fail to create value for the firms involved, and it is generally recognized that merger failure is often caused by shortcomings in the management of the post-merger integration process. This study explores the post-merger integration process in unions and examines what role post-merger integration plays in determining whether a union merger leads to revitalization.

A framework for analysing both the structural and cultural integration of merging unions is developed and applied to the ver.di case. It is found that ver.di's structural and cultural integration processes were not completed seven years after the merger. In addition, the union leadership was highly constrained in its management of post-merger integration.

Together, these findings build our understanding of union mergers as a revitalization strategy and the role of post-merger integration. When unions formulate a merger strategy for revitalization, they need to implement it in a way that ensures its success. External factors, such as employer and state strategies, and economic and political developments, can have an impact on the implementation of a merger strategy. Yet internal factors, in particular structural and cultural integration in the merged union, are pivotal for its success.

The key conceptual contribution of this thesis is to link the union merger, union revitalization and post-merger integration literatures. Previous research on union mergers sits entirely within the field of employment relations. This research also draws on insights from the strategic management literature on post-merger integration in for-profit and non-profit organizations.

As a case study of the German service sector union ver.di, this thesis also makes an empirical contribution to the body of knowledge on union mergers in several ways.

  • Firstly, it forms part of a small body of research written in English on union mergers in countries other than the English-speaking ones. Knowledge of German union merger processes is of interest to researchers and practitioners in other developed market economies because the German union movement is internationally recognized as a particularly strong movement with an important role in the German political economy. How German unions respond to environmental challenges and to a decline in membership and political and economic influence is informative for other national union movements.
  • Secondly, as ver.di is one of the largest unions in the world, its answer to the external and internal challenges many unions face can provide them with valuable lessons and insights.
  • Thirdly, prior to the merger wave in the 1990s, the German union movement was seen as the prime example of industrial unionism. Several other national union movements have sought to emulate the German model. However, while engaging in mergers in order to establish industry unions remains the goal of various unions around the world, many industry unions, in Germany and elsewhere, have used mergers to become multi-industry or general unions. Rather than augmenting their political and economic power by representing all workers in a given industry, unions like ver.di aim to increase strength by uniting workers across several industries. Researchers and practitioners can compare and contrast the German experience of union mergers to that of unions in their own countries.

Fourthly, in contrast to previous research on ver.di's merger process, which was conducted either before the merger in 2001 or in the initial post-merger years, the data underpinning this study was collected 5-7 years after the merger. Because sufficient time passed between the merger and the data collection, the effects of the merger became manifest and it was possible to analyse ver.di's merger outcomes and the management of post-merger integration. By focusing on the post-merger phase, this study extends and expands the previous research on ver.di's merger process. In conjunction with such research, this thesis documents and thoroughly analyses ver.di's development in the pre- and post-merger phases. In doing so, it contributes to the body of empirical knowledge of the ver.di merger and of union mergers in general.

Supervisors

Professor Russell Lansbury and Dr Rae Cooper

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