Social relations, firms and societies: A study of institutional embeddedness

Business systems theory holds that specific nations are locked onto a particular developmental trajectory reflecting differences in both institutional configuration and corresponding social agency; these variations are reflected in the role and structuring of firms and employment practices. This article uses an international survey of firms to test the extent to which specific national business systems are distinguished by the nature and extent of employer-employee interdependence and the degree of delegation to employees. The evidence provides empirical support for the theory, though with some need for subtle modification, showing continuing difference between the employment practices of nations and business systems.