International Human Resource Management

Managing people in a multinational context

Chapter Objectives
In this chapter we: Discuss the key issues in international industrial relations and the policies and practices of multinationals Examine the potential constraints that trade unions may have on multinationals Outline key concerns for trade unions Discuss recent trends and issues in the global workforce context Discuss the formation of regional economic zones such as the European Union and the impact of opponents to globalization
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Terms
industrial relations trade unions regional economic zones collective bargaining enterprise unions strike-proneness umbrella or chateau clause golden handshake investment strike social policy Social dumping converging divergences

ETUC UNCTAD CIIME IFCTU OECD EWC ILO FIET AFL-CIO

European Union (EU) National Contact Points (NCP) Single European Market (SEM) International Trade Secretariats (ITSs)
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Possible factors underlying historical differences in structure of trade unions

1. The mode of technology and industrial organization at critical stages of union development

2. Methods of union regulation by government 3. Ideological divisions within the trade union movement 4. The influence of religious organizations on trade union development 5. Managerial strategies for labor relations in large corporations
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Table 10-1

Trade union structure in leading Western industrial societies

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Key issues in international industrial relations

1. Industrial relations policies and practices of multinational firms 2. The degree of inter-subsidiary production integration 3. Nationality of ownership of the subsidiary 4. International HRM approach 5. MNE prior experience in industrial relations 6. Subsidiary characteristics 7. Characteristics of the home product market 8. Management attitudes towards unions

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Table 10-2

Union membership for selected countries

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Trade union limits on MNE strategic choices

1. Influence wage levels 2. Constrain the ability of MNEs to vary employment levels at will 3. Hinder or prevent global integration of operations of multinationals

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Trade union concerns about MNEs

1. MNEs have formidable financial resources 2. MNEs have alternative sources of supply 3. MNEs can move production facilities to other countries 4. MNEs have a remote locus of authority 5. MNEs have production facilities in many industries 6. MNEs have superior knowledge and expertise in industrial relations 7. MNEs have the capacity to stage an investment strike
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Trade union responses to MNEs

1. International trade secretariats (ITSs) 2. Lobbying for restrictive national legislation 3. Regulation of multinationals by international organizations

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Regional integration: the European Union (EU)

1. Disclosure of information and European Works Councils 2. The issue of social dumping: That firms would locate in those member states that have lower labor costs, (relatively low social security) to gain a competitive advantage.

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Discussion Questions
1. Why is it important to understand the historical origins of national industrial relations systems? 2. In what ways can trade unions constrain the strategic choices of multinationals? 3. Identify four characteristics of MNEs that give trade unions cause for concern.

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