Chapter 9
For use with International Human Resource Management 6e
By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr.
ISBN-10: 1408032090
© Cengage Learning
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Chapter 9
INTERNATIONAL
INDUSTRIAL RELATIONS &
THE GLOBAL
INSTITUTIONAL CONTEXT
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Chapter 9
INTERNATIONAL
INDUSTRIAL RELATIONS &
THE GLOBAL INSTITUTIONAL CONTEXT
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Vocabulary
Objectives
Introduction
Key issues in international industrial relations
Trade unions & international industrial relations
The response of trade unions to MNEs
Region integration: the EU
Codes of conduct –
monitoring HRM around the world
 Managing HR in ‘offshoring countries’
For use with International Human Resource Management 6e
By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr.
ISBN-10: 1408032090
© Cengage Learning
2 of 20
Chapter 9
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Vocabulary
industrial relations, trade unions
regional economic zones
collective bargaining
enterprise unions
plant closure, redundancy, layoff programs
lobbying
sub-optimizing
investment strike
offshoring, turnover rates, BPO = business process outsourcing, EHCNs
guanxi, iron rice bowl
ITSs = international trade secretariats, SEM, NCP, EU
ETUC, ILO, UNCTAD, OECD, IFCTU, CIIME, EWC, FIET, AFL-CIO
social dimensions, social ‘dumping’
umbrella or chateau clause
‘golden handshake’
strike-proneness
‘converging divergences’
For use with International Human Resource Management 6e
By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr.
ISBN-10: 1408032090
© Cengage Learning
3 of 20
Chapter 9
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Objectives
For use with International Human Resource Management 6e
By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr.
ISBN-10: 1408032090
© Cengage Learning
4 of 20
Chapter 9
In this chapter, we …
1. Discuss key issues in international industrial relations &
the policies & practices of MNEs
2. Examine the potential constraints that trade unions may
have on MNEs
3. Outline key trade union concerns regarding MNEs
4. Discuss recent trends & issues in the global workforce
context
5. Discuss the formation of regional economic zones such as
the EU & the impact of opponents to globalization
6. Present issues of codes of conduct & NGOs
as MNEs
7. Discuss HR implications of offshoring
For use with International Human Resource Management 6e
By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr.
ISBN-10: 1408032090
© Cengage Learning
5 of 20
Chapter 9
Introduction
Factors underlying historical
differences in trade unions
 Mode of technology & industrial organization
at critical stages of union development
 Methods of government union regulation
 Ideological divisions within
the trade union movement
 Managerial strategies for labor
relations in large corporations
For use with International Human Resource Management 6e
By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr.
ISBN-10: 1408032090
© Cengage Learning
6 of 20
Chapter 9
 Influence of religious organizations
on trade union development
For use with International Human Resource Management 6e
By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr.
ISBN-10: 1408032090
© Cengage Learning
7 of 20
Chapter 9
Key Issues in international
industrial relations
Key issues
1. Industrial relations policies & practices of MNEs
2. 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
For use with International Human Resource Management 6e
By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr.
ISBN-10: 1408032090
© Cengage Learning
8 of 20
Chapter 9
8. Management attitudes towards unions
For use with International Human Resource Management 6e
By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr.
ISBN-10: 1408032090
© Cengage Learning
9 of 20
Chapter 9
Trade unions & international
industrial relations
Trade unions limit MNE strategies
1. Influence wage levels
2. Constrain the ability of MNEs to vary
employment levels at will
For use with International Human Resource Management 6e
By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr.
ISBN-10: 1408032090
© Cengage Learning
10 of 20
Chapter 9
3. Hinder or prevent global integration of
operations of multinationals
For use with International Human Resource Management 6e
By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr.
ISBN-10: 1408032090
© Cengage Learning
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Chapter 9
The response
of trade unions to MNEs
MNEs …
 have formidable financial resources
 have alternative sources of supply
 can move production facilities to other countries
 have a remote locus of authority
 have production facilities in many industries
 have superior knowledge & expertise
in industrial relations
 have the capacity to stage
an ‘investment strike’
For use with International Human Resource Management 6e
By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr.
ISBN-10: 1408032090
© Cengage Learning
12 of 20
Chapter 9
Trade union concerns about MNEs
Three trade union responses
1. International trade secretariats (ITSs)
want to achieve transformational bargaining by
1)
2)
3)
4)
5)
research & information
Calling company conferences
Establishing company councils
Companywide union-management discussions
Coordinated bargaining
2. Lobbying for restrictive national legislation
For use with International Human Resource Management 6e
By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr.
ISBN-10: 1408032090
© Cengage Learning
13 of 20
Chapter 9
3. Regulation of MNEs by international organizations:
ETUC, ILO, UNCTAD, OECD, EU
For use with International Human Resource Management 6e
By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr.
ISBN-10: 1408032090
© Cengage Learning
14 of 20
Chapter 9
Region integration: the EU
EU regional integration
1. Disclosure of information
& European Works Councils
2. The issue of social ‘dumping’:
For use with International Human Resource Management 6e
By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr.
ISBN-10: 1408032090
© Cengage Learning
15 of 20
Chapter 9
that firms would locate in those member states
that have lower labor costs, (relatively low social
security) to gain a competitive advantage
For use with International Human Resource Management 6e
By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr.
ISBN-10: 1408032090
© Cengage Learning
16 of 20
Chapter 9
Codes of conduct –
monitoring HRM around the world
HRM related to global code of
conduct may include
 Drawing up & reviewing codes of conduct
 Conducting cost-benefit analysis to oversee
employee & relevant alliance partners’ compliance
 Championing the need to train employees &
alliance partners in the code of conduct
For use with International Human Resource Management 6e
By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr.
ISBN-10: 1408032090
© Cengage Learning
17 of 20
Chapter 9
 Checking that performance & rewards
include compliance to codes of conduct
For use with International Human Resource Management 6e
By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr.
ISBN-10: 1408032090
© Cengage Learning
18 of 20
Chapter 9
Managing HR
in ‘offshoring countries’
Offshoring countries HRM
 Offshoring & HRM in India
» Turnover issues
 Offshoring & HRM in China
For use with International Human Resource Management 6e
By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr.
ISBN-10: 1408032090
© Cengage Learning
19 of 20
Chapter 9
» No systematic link between HRM & business strategy
» Despite labor surplus, recruiting & retention problems
» No systematic link between performance management,
reward & long-term motivation
» Lack of coherence & continuity in enterprise training
Summarizing emerging issues
For use with International Human Resource Management 6e
By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr.
ISBN-10: 1408032090
© Cengage Learning
20 of 20
Chapter 9
Possible HRM roles:
 Consult with unions/employee representatives
 Manpower planning, considering the scope for
employee redeployment
 Contribute to internal communication strategy
 Identify training needs
 Design new jobs generated by offshoring operations
 Highlight potential risks, such as the implications of
employment regulation both in HC &
in foreign locations