Drawing upon the debate on institutional mediation of macro processes, we examine how multinational enterprises (MNEs) engage with global competition through restructuring their operations situated in local supply chain environments and how employment relations (ER) of coordinated market economies are reconfigured in the course of this restructuring process. Our empirical setting is the German chemical industry which is both an exemplar of coordinated labour-management-collaboration and highly exposed to global competition. Using a comparative case study design, we observe how MNEs re-structure two local production sites into ‘Chemieparks’. Our empirical data suggest that local agency diverges in the extent to which the social partnership type of ER is maintained or disrupted. Furthermore, we highlight the importance of micro-political practices for understanding the restructuring outcome as well as the local enactment and change of macro institutions within production networks as meso-level arenas for institutional mediation.
