Business and Employers’ Associations
Furthermore, the BVDS organizes the German Foundation Day, bestows the KOMPASS Award for good
public relations work of foundations, and edits a variety
of publications, such as the magazine ‘‘Stiftungswelt,’’
the foundation yearbook, and the annual ‘‘Stiftungs Report.’’ On the European level, the BVDS works closely
together with the European Foundation Center (EFC).
Structure and Governance
The BVDS is a nonprofit organization, divided into
five departments, with one head each. All heads build
together the association board, led by a secretary general.
In 2008 the secretary general was Dr. Hans Fleisch, who
also holds the position of the federal commissioner for
civic engagement, which leads to a rare close attachment
between the BVDS and the German government.
Outside the organizational structure, but connected,
stands the Deutsche Stiftungs Akademie (DSA – German
Foundation Academy), which is a joint project of the BVDS
and the Stifterverband der Deutschen Wissenschaft. Overall, the BVDS has 30 employees.
In 2008, the BVDS had 3,200 listed members, the
largest part being foundations (approx. 2,500), the other
being foundations’ administrators (individuals and legal
entities). Due to the latter, the BVDS itself claims to
represent approx. 6,000 members in total, which
are 40% of approx. 15,000 foundations in (2008) all over
Germany.
Funding
The revenues of the association come from member fees
and donations. In its statute the BVDS bounds itself to the
exclusive disposition of funds for charitable and statutory
purposes.
Accomplishments
The BVDS supports third sector research via informing
about the activities of the sector, the awarding of good
practices, and producing a variety of publications about
the foundation system in Germany.
Cross-References
▶ European Foundation Centre
▶ Stifterverband der Deutschen Wissenschaft
▶ Umbrella Organizations
References/Further Readings
BVDS. (2001). Zahlen, Daten, Fakten zum deutschen Stiftungswesen.
Darmstadt, Germany: Darmstadt Hoppenstedt.
BVDS. (2007). Stiftungsjahr 2006. Berlin, Germany: Trigger.Medien.
GmbH.
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Business and Employers’ Associations
BERNHARD EBBINGHAUS, SEBASTIAN KOOS
Universität Mannheim, Mannheim, Germany
Introduction
According to Friedrich Engels, business is always organized and therefore does not need a formal association.
Nevertheless traditional guilds and craftsmen associations
existed before the first trade unions were founded.
With the industrial and democratic revolutions the organization of business interests changed substantially, first
challenging and later becoming an important partner for
organized labor. Research on business and employers’
associations is less advanced and more recent than research on labor unions. Comparatively, business interest
organizations are often more powerful and more
specialized than labor interest organizations.
Definition
A business association (BA) is a voluntary organization of
enterprises (or entrepreneurs) that represents the interests
of (for-profit) business in the political arena and provides
services to its members. As trade associations, these organizations promote the economic interests of a particular
sector, be it in relation to international trade (fostering
export, limiting import), favorable economic conditions
(tax concessions and subsidies), or sector-specific issues
(industrial norms, joint research and development, advertisement). Peak associations unify these BAs under one
umbrella and represent their interests on a national or
even international level. Some of these organizations include besides the economic interests of companies also the
function of employer associations. In some cases, instead
of formal associations of companies, ‘‘clubs’’ of entrepreneurs or networks of managers (CEOs) play an influential
role in coordinating business interests.
In addition, chambers organize business interests, particularly of small and medium sized companies and artisanal trades. These chambers promote the interests of local
business and provide common services, e.g., coordinating
vocational training. In some countries, membership in the
respective local or national chamber is mandatory, while
some international chambers are set up to promote multilateral trade and business relations.
An employer association (EA) represents the interests
of employers (entrepreneurs or companies) in the industrial relations and political arena. These voluntary organizations engage in collective bargaining with labor unions
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Business and Employers’ Associations
on wage and working conditions, they also engage in
lobbying of political decision-makers on matters of labor
law and social policy. In contrast to trade unions that
organize workers, EAs organize companies from small
shop owners with few employees to large multinational
companies with a separation between managers and owners (shareholders). In several countries and many sectors,
companies may engage in bargaining with local unions by
themselves and larger companies can afford to lobby political decision-makers separately thereby circumventing
EAs. Some EAs organize only private companies, while
others are constituted by or include public administration,
state owned companies and not-for-profit organizations,
including churches and NGOs.
Historical Background
Historically three factors have been crucial for the development of business (and employers’) associations, all of
which foster specific interests: labor relations, competition, and public policy. At the end of the nineteenth
century, employers ‘‘colluded’’ in reaction to the collective
organization of their workers in strike action and increasingly in trade unions (Crouch, 1993), first by opposing,
later by recognizing them. While larger companies were
capable to react single handedly, small-, and medium-sized
firms were often the first to form a ‘‘cartel’’ on the labor
market and coordinate lock outs-against strike action.
With the increased recognition of collective bargaining,
particularly after its breakthrough during and after World
War I, the formation of EAs boomed and peak associations
were formed in many industrializing countries. Following
the integration of national labor markets and the rise of
national welfare states, EAs engaged not only in multiemployer collective bargaining, but they also sought to
lobby lawmakers in respect to the increased regulation of
employment and expansion of social rights. Antiunion
activities such as yellow unions or black lists against unionized workers were outlawed in some countries after 1918
and internationally after 1948.
Another reason to form BAs was to ensure political
voice in emerging democratic systems. With the introduction of universal suffrage, the majority of voters were
dependent employees, thus entrepreneurs faced the risk of
state intervention into business and employer prerogatives.
BAs promote the idea of a liberal market economy, with
private ownership, free trade and a non-interventionist
state. Hence in countries with state-owned sectors they
push for privatization. In many instances, BAs seek to
fight redistributive policies, direct state intervention, and
codetermination since these policies are seen as a threat to
business autonomy and private property. To meet their
objectives organized business relies on the one hand on
public communication geared towards a wider public audience and on the other hand on informal channels of lobbying public bureaucracies and political actors. By means of
public relations, BAs try to promote and gain public support for their policy recommendations; they often operate
special bureaus, close to lawmakers’ offices, for instance, the
US policy-makers in Washington or EU Commission in
Brussels, thereby getting easier access.
A third reason for business to form ‘‘cartels’’ was to
prevent foreign competition and to limit the dependence
on providers of raw materials. For keeping foreign business at bay and controlling suppliers, tariff unions were
established. While generally pushing for free trade, cutthroat competition or a monopoly can threaten the
functioning of the whole economic system. Therefore in
some countries BAs came to agree on coordination. Especially in neo-corporatist systems a tripartite mode of
concerted action between employers’ associations, labor
unions and the state came into existence to prevent wage
competition.
On the international level, the International Organization of Employers (IOE) was founded in 1920 in response to the formation of the ‘‘tripartite’’ International
Labor Organization (ILO) in 1918 with representatives of
national governments, employers, and trade unions. Initially an organization of industrialized countries, the IOE
today organizes over 140 national peak employers’ associations in the member-states of ILO, a special division of
the United Nations since 1945. With increased European
economic and political integration after World War II,
UNICE coordinated business and employers’ interests
at a European level following the Common Market in
1957. Today, BUSINESSEUROPE (renamed in 2007) organizes 40 national peak associations from 34 countries,
including all member states of the European Union plus
several other countries.
Key Issues
Power Asymmetry Between Organized Capital
and Labor
Pluralist theory postulates that in liberal democracies
interest groups compete equally for influence, while
neo-Marxist and corporatist approaches assume that capital has more structural power than labor in influencing
public policy and determining employment relations.
Offe and Wiesenthal (1980), building upon Marxist class
theory, postulated ‘‘two logics of collective action’’ to the
advantage of organized capital and to the detriment of
labor. Capitalists are a smaller group with more narrow
Business and Employers’ Associations
instrumental interests and plentiful (financial) resources;
they can also use their structural power by going separately, while workers are a much larger and heterogeneous
group with diffuse political and economic interests that
have to rely on collective action for lack of individual
bargaining power. Comparative studies on business and
employers’ associations in OECD countries (Traxler,
1995) have challenged this thesis. Although employer
associations are more concentrated and better organized
than trade unions, ‘‘producer coalitions’’ are more fragmented and narrower, given the competitive pressures
within each sector and the anti-cartel policies in market
economies. Corporatist analyses studied the self-regulative
function of business interests, in particular in respect
to standard setting, vocational training, and labor relations
(Streeck and Schmitter, 1985), indicating substantial crossnational variations in the degree of corporatist interest
intermediation. The increased global competition and the
political turn toward neo-liberal policies has been seen as a
factor limiting the potential for corporatism, although in
some European countries a renaissance of ‘‘social pacts’’
between government, employers, and organized labor occurred following the European Monetary Union.
Internationalization of Business Interests
The promotion of international trade, free market institutions and foreign direct investments need not much
coordination at global level as multinational companies
often can do this on their own and international competition has been hampering supranational cooperation.
The organization of employers’ interests has been particularly problematic, even though EAs are represented on
the international governmental organizations (e.g., ILO,
OECD). Within the European Union (EU), EAs were
reluctant to give up competencies, in particular to allow
negotiations at supranational level, thereby limiting the
possibilities to reregulate at EU-level what was deregulated with the ‘‘Internal Market’’ since 1992. After longer
efforts to foster European ‘‘social dialogue’’ between capital and labor since the 1970s, the Maastricht Treaty of
1992 introduced the possibility to negotiate EU-level
agreements between employers and trade unions on social
issues that would otherwise be legislated by the European
Union; this led to a reallocation of resources and competencies at the EU-level and some joint agreements
(Sadowski and Jacobi, 1991).
Role of Business in Policy Making
In one perspective business associations are perceived as
‘‘cartels in disguise,’’ that are more or less undermining
antitrust laws and democratic institutions. In a different
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view, they are said to enhance democracy in at least three
distinct ways by checking power, by representing interests,
and by direct governance (Fung, 2003). Firstly, business
associations contribute to democratic governance by
checking power and resisting illegitimate authority.
There is empirical evidence that especially in young
democracies business associations help overcoming corruption, by monitoring public officials and signaling resistance to law violations (Duvanova, 2007). BAs thereby
become agents of development, assisting in establishing
core economic and democratic institutions. Secondly,
their core feature is the representation of business interests, channelling and transmitting the needs and preferences of the business community to governments. As an
intermediary between state and companies, BAs assume
the role of pressure groups, seeking to influence legislative
decision-makers and governmental agencies through legal
actions, law expertise, party support and lobbyism. This
raises also the issue of asymmetric power, if not illegitimate influence. Business associations are accused of using
‘‘money for politics’’ and thereby threatening the
functioning of democracies. A third way of enhancing
democracy is by direct self-governance. In some – mostly
neo-corporatist – countries business (and employers’)
associations assume the role of ‘‘private interest governments’’ (Streeck and Schmitter, 1985) by self-regulating
and implementing policies for the common good.
Through collaboration in advisory councils and boards
(especially regarding social security, vocational training,
and labor administration) they perform a self-regulatory
function. This can often be found in compulsory chambers that have the power to control, tax, and even sanction
their members in order to produce public goods.
International Perspectives
Business (and employer) interests are better organized in
OECD economies than elsewhere, though research has
largely focused on few (western) European and North
American countries, less on Japan and other non-European
OECD countries. Given the different historical development during industrialization, there are considerable differences in the organization of business and employer interests
across OECD countries. Corporatist theories (Crouch,
1993) as well as the ‘‘Varieties of Capitalism’’ approach
(Hall and Soskice, 2001) point at major differences between liberal (or uncoordinated) and corporatist (or coordinated) market economies: the capacity of business and
employer interests to overcome collective action problems and coordinate joint activities for the common
good is lower in liberal market economies and higher in
corporatist countries.
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Business and Employers’ Associations
In liberal market economies (Britain and the USA, but
also other Anglophone OECD countries) business and
employers’ associations are more fragmented (lacking
often a peak association), direct lobbying and collective
bargaining by large (multinational) companies coexists,
and corporatist social dialogue is rare (an exception is
Ireland since the late 1980s). Not only labor unions tend
to be less organized with low union density and high
fragmentation, but also employer associations have less
encompassing membership (in both number of firms and
employees employed) and bargaining coverage is considerably lower than in the other countries. Thus a large
majority of employees are not covered by collective bargaining and have to negotiate employment conditions
individually. Responding to the criticism of a narrow
shareholder value orientation, ‘‘corporate social responsibility’’ has been advanced by some business communities
in liberal countries as a strategic goal, reaching out to civil
society organizations and the local communities.
In coordinated market economies a ‘‘stakeholder’’
orientation and corporatist coordination have a long tradition, dating back to the premodern guilds (Crouch,
1993). Business associations, chambers of commerce and
artisans, and employer associations tend to be more centralized, better organized in terms of firm membership
(and size of workforce covered), and more functionally
differentiated (Traxler et al., 2001). These organizations
coordinate and join resources to produce common goods
for the business community, ranging from lobbying for
subsidies to engaging in self-regulation and negotiating nation- or sector-wide collective wage agreements.
Enforcing compliance by all members, employers associations have played an important role in taking wages out
of competition and providing minimum standards of
employment. Interbusiness coordination through chambers facilitates also the organization of dual vocational
training (most prominently in Germany) as smaller companies train young people to acquire skills for later employment in larger companies.
Outside the OECD countries there is only scattered
research on business and employers’ associations, reflecting the more varied organizational landscape. In the postcommunist countries of Eastern and Central Europe and
Asia employers are generally perceived to be rather weak
or even disorganized. Nevertheless, for instance, in Russia
or Slovenia somewhat powerful BAs emerged after communist collapse. In Hungary a compulsory membership
in chambers of commerce was introduced, and like in the
Czech Republic, tripartite institutions emerged, while in
Poland only weak BAs came into existence. BAs in postcommunist countries often assume the role of promoters
for small businesses. Contrary to fears of BAs’ power to
exploit governments for business short term interests,
they often play a role in establishing economic institutions
and helping to overcome problems of bribery and lacking
state support for businesses.
Many African countries have adopted corporatist elements for example in Senegal, Nigeria, or Madagascar,
albeit with less success than in Europe. In some countries
BAs have been founded already by the 1960s in line with
independence (for instance the Uganda Manufacturing
Association). After an era of decline and stagnation due
to political and social turmoil many associations have
been (re-)established or revitalized by the 1990s. With
processes of political democratization BAs increase their
access to state bureaucracy and political decision-makers.
Today, African BAs seem to fill a gap of governmental
services to businesses, like the information on policy
environment and granting of access to policy makers.
African BAs are perceived as foundations for future progress in democratizing governance (Lucas, 1997). Therefore foreign aid sponsors promote these as agencies not
only of business interests, but also of ‘‘social capital,’’
fostering trusted social relations in the wider civil society.
In Latin America BAs have been largely shaped by the
state following the independence in the nineteenth century
(Schneider, 2004). Either the state helped in founding
BAs to gain support for its policies or to channel business
preferences, or BAs were founded to oppose specific state
policies, but even then they gradually shifted and became
dependent on the state for resources and access. Countries
like Mexico, Colombia, and Chile have strong encompassing business associations, unlike for instance, Brazil
and Argentina. Interest representations in the former
advance economic performance, and evidence leans toward a positive influence on democracy, even if there are
some negative examples.
In China BAs have been seen as instruments of the
state to retain control during economic decentralization.
Nevertheless these associations seem to have gained some
autonomy to voice the interests of its members and open
up some space for societal initiative.
Future Directions
Research in the field of business and employers’ associations is still underdeveloped in many areas; hence many
issues still need to be further investigated to get a more
systematic understanding of the many facets of business
interest organization. The differences in the functioning
and organization of BAs in developing and developed
countries seem to be a crucial starting point for comparative research. In regard to civil society there seem
Business and Employers’ Associations
to be quite different roles that BAs play in both groups.
In developing countries, BAs might be important agencies
in building market institutions, but also fostering democratic development, while in the OECD world BAs seem
to challenge democratic institutions and developed welfare states, pushing towards liberal market reforms. The
question of negative or positive impacts on democratic
governance is still a matter of debate in need of more
empirical research. Processes of internationalization have
especially been studied for the European Union; given its
unique institutional set up, these efforts cannot be projected
on other international activities. The global economic
players such as the USA, the EU and Japan, but also nonOECD economies all face the processes of fast economic
globalization and slow political internationalization. Whether this will strengthen or weaken business interests at home
and worldwide remains an open question.
Cross-References
▶ Associative Democracy
▶ Collective Action
▶ Corporatism
▶ Interest and Pressure Groups
▶ Interest Politics
▶ Labor Movements/ Labor Unions
▶ Lobbying
▶ Membership and Membership Associations
▶ OECD
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References/Further Readings
Crouch, C. (1993). Industrial Relations and European State Traditions.
Oxford: Clarendon Press.
Duvanova, D. (2007). Bureaucratic corruption and collective action Business associations in the postcommunist transition. Comparative
Politics, 39(4), 441–461.
Fung, A. (2003). Associations and democracy: Between theories, hopes,
and realities. Annual Review of Sociology, 29, 515–539.
Greenwood, J. (Eds.). (2002). The effectiveness of EU business associations.
Houndsmills: Palgrave.
Hall, P. A., & Soskice, D. (Eds.). (2001). Varieties of capitalism: The
institutional foundations of comparative advantage. New York:
Oxford University Press.
Lucas, J. (1997). The politics of business associations in the developing
world. Journal of the Developing Areas, 32(1), 71–96.
Maxfield, S., & Schneider, B. R. (Eds.). (1997). Business and the state in
developing countries. Ithaca, NY: Cornell University Press.
Offe, C., & Wiesenthal, H. (1980). Two logics of collective action: Theoretical notes on social class and organisational form. Political Power
and Social Theory, 1, 67–115.
Sadowski, D., & Jacobi, O. (Eds.). (1991). Employers’ associations in
Europe: Policy and organisation. Baden-Baden: Nomos.
Schneider, B. R. (2004). Business politics and the state in twentieth-century
latin America. Cambridge, UK: Cambridge University Press.
Streeck, W., et al. (Eds.). (2006). Governing interests. Business associations
facing internationalization. London: Routledge.
Streeck, W., & Schmitter, P. C. (Eds.). (1985). Private interest government.
Beyond market and state. London: Sage.
Traxler, F. (1995). Two logics of collective action in industrial relations? In
C. Crouch & F. Traxler (Eds.), Organized industrial relations in
Europe: What future? (pp. 23–44). Aldershot: Avebury.
Traxler, F., Blaschke, S., & Kittel, B. (2001). National labour relations in
internationalized markets: A comparative study of institutions, change,
and performance. Oxford: Oxford University Press.
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Helmut K. Anheier, Stefan Toepler, Regina List (Eds).
International Encyclopedia
of Civil Society
With 40 Figures and 44 Tables
HELMUT K. ANHEIER
University of Heidelberg
Heidelberg
Germany
Hertie School of Governance
Berlin
Germany
STEFAN TOEPLER
George Mason University
Arlington, VA
USA
Library of Congress Control Number: 2009937022
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