ABSTRACT Works councils in Germany possess substantial institutional resources to protect workers' interests. Yet little is known about how these resources are mobilised in practice and why similar outcomes may emerge through different pathways. Drawing on two German firms acquired by Chinese state‐owned enterprises, this study examines how works councils mobilised institutional power resources during cross‐border mergers and acquisition negotiations. Despite reaching similarly favourable labour agreements, mobilisation processes differed markedly. Case‐A featured conflictual management–works council relations and strong workforce coalitional power, leading to protective activation of institutional power resources through explicit reliance on labour laws and co‐determination rights. Case‐B showed collaborative relations between the works council and management but cautious workforce–works council ties, enabling proactive institutional activation where resources were strategically held in reserve. Across both cases, structural, ideational and associational power resources complemented institutional ones. The study contributes to institutional and power resource theories by demonstrating that institutional power resources can be strategically deployed through either protective or proactive orientations, with coalitional power configurations serving as a critical antecedent shaping mobilisation pathways. This reveals significant variation in agency within the same institutional environment, highlighting how similar employment outcomes can emerge through distinct strategic approaches.
Miedtank et al. (Thu,) studied this question.