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
v
IHRM Chapter 10
2
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’
European Union (EU)
National Contact Points (NCP)
Single European Market (SEM)
International Trade Secretariats (ITSs)
ETUC UNCTAD CIIME
IFCTU OECD
EWC
ILO
FIET
AFL-CIO
v
IHRM Chapter 10
3
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
v
IHRM Chapter 10
4
Table
10-1
v
Trade union structure in leading Western industrial societies
IHRM Chapter 10
5
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
v
IHRM Chapter 10
6
Table
10-2
v
Union membership for selected countries
IHRM Chapter 10
7
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
v
IHRM Chapter 10
8
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’
v
IHRM Chapter 10
9
Trade union responses to MNEs
1. International trade secretariats (ITSs)
2. Lobbying for restrictive national legislation
3. Regulation of multinationals by international
organizations
v
IHRM Chapter 10
10
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.
v
IHRM Chapter 10
11
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.
v
IHRM Chapter 10
12