International Human Resource ManagementManaging people in a multinational context

v IHRM Chapter 10 2

• 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

Chapter ObjectivesIn this chapter we:

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Terms

3IHRM Chapter 10

industrial relationstrade unionsregional economic zonescollective bargainingenterprise unionsstrike-proneness

European Union (EU)National Contact Points (NCP)

Single European Market (SEM)International Trade Secretariats (ITSs)

umbrella or chateau clause‘golden handshake’‘investment strike’‘social policy’Social ‘dumping’‘converging divergences’

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Possible factors underlying historical differences in structure of trade unions

4IHRM Chapter 10

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

2. Methods of union regulation by government3. Ideological divisions within the trade union

movement4. The influence of religious organizations on trade

union development5. Managerial strategies for labor relations in large

corporations

v 5IHRM Chapter 10

Table10-1

Trade union structure in leading Western industrial societies

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Key issues in international industrial relations

6IHRM Chapter 10

1. Industrial relations policies and practices of multinational firms

2. The degree of inter-subsidiary production integration3. Nationality of ownership of the subsidiary4. International HRM approach5. MNE prior experience in industrial relations6. Subsidiary characteristics7. Characteristics of the home product market8. Management attitudes towards unions

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Table10-2

Union membership for selected countries

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Trade union limits on MNE strategic choices

8IHRM Chapter 10

1. Influence wage levels2. Constrain the ability of MNEs to vary employment

levels at will3. Hinder or prevent global integration of operations

of multinationals

v 9IHRM Chapter 10

1. MNEs have formidable financial resources2. MNEs have alternative sources of supply3. MNEs can move production facilities to other

countries4. MNEs have a remote locus of authority5. MNEs have production facilities in many industries6. MNEs have superior knowledge and expertise in

industrial relations7. MNEs have the capacity to stage an ‘investment

strike’

Trade union concerns about MNEs

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Trade union responses to MNEs

10IHRM Chapter 10

1. International trade secretariats (ITSs)2. Lobbying for restrictive national legislation3. Regulation of multinationals by international

organizations

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Regional integration: the European Union (EU)

11IHRM Chapter 10

1. Disclosure of information and European Works Councils2. 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

12IHRM Chapter 10

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.