International Human Resource Management

Summary

Chapter Ten
International Industrial Relations

10.1 Introduction

Human resource management practices result in

creation of relations among employees, management
and trade unions. Such relations are called
Industrial Relations. Similarly, the human resource
management policies and practices of international
business with regard to different country nationals
result in relations among management of MNC and
different kind of employees. Such relations are
called international industrial relations. These
relations play a crucial role in strategy
formulation & implementation in international
business either by enabling or disabling the MNcs
in the process of doing business in various
countries.
ILO defines “Industrial relations deal with either
the relationship between the state and employers’
and workers’ organizations or the relation between
the occupational organizations themselves”.
Factors of Industrial Relations include [1]
Institutional; [2] Economic, [3] Technological [4]
Social and Cultural and [6] Governmental factors.

10.2 Three Actors of Industrial Relations

Industrial societies necessarily create industrial

relations defined as the complex of interrelations
among workers, management and the government. Three
major participants or factors of industrial
relations, thus, are workers and their
organizations, management and the government.

10.3 Trade Unions.

A trade union is a continuing long term association

of employees, formed and maintained for the
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specific purpose of advancing and protecting the
interests of the members in their working
relationship. Some argue that it also covers
employers’ organizations and friendly societies.
Workers join unions to attain economic security,
improve earnings, acquire power and satisfy social
needs.
Functions and role of trade unions include to
protect & promote the interest of the workers and
conditions of their employment, achieve higher
wages, make them stand collectively to increase
their resistance power through collective
bargaining; make them partners of the industry and
citizens of the society by demanding increasing
share for the workers’ in management.
Trade unions are responsible for promotion of
international priorities, generally influencing the
socio-economic policies of the community through
active participation in their formulation at
various levels and instilling in their members a
sense of responsibility towards industry and the
international community.
Functions of trade unions are classified into
Militant or intra mural functions, Fraternal or
extra-mural functions, social, political and
ancillary functions.
Trade union structure consists of Craft unions,
General unions, Industrial unions, Federation and
Confederation and International Federation.

10.4 Concerns of Trade Unions in MNCs.

The main concern of the trade unions towards MNCs

is the possibility of MNCs shifting their
manufacturing and other businesses to countries
where the influence of trade unions is either zero
or negligible. Hence trade unions deal with MNCs
very carefully. MNCs try to locate very crucial
operations that require very skilled human resource
in their home country and locate other businesses
in countries where required human resource is
available in plenty and at low cost.

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Others practice home country human resource
policies and procedures in all their host country
subsidiary operations. Both strategies reduce or
eliminate bargaining powers of the trade unions in
the host countries.
Trade unions in MNCs influence decisions with
regard to employment of parent & third country
nationals, salary and benefits; and promotions.
MNCs to Counter Trade Union influences offset the
losses in one country with the profits earned in
other country or establish alternate and dual
sources simultaneously and develop the ability to
shift production.

10.5 Collective Negotiations

Collective bargaining is a method by which trade

unions protect and improve the conditions of their
members’ working lives. It is a group action
initiated through the representatives of workers.
It increases the economic strengths of unions and
management & establishes uniform conditions of
employment. It further lays down fair rates of
wages and norms of working conditions.

10.6 Disputes / Conflicts.

Industrial dispute means any dispute or difference

between employers and employers, employers and
workers or between workmen and workmen, which is
connected with employment or non-employment or
terms of employment or with the condition of labour
of any person. Deep seated and more basic causes of
disputes can be identified through in-depth probe
though surface manifestations appear to be
responsible for conflicts. The relative importance
of the causes is very difficult to gauge.
Industrial conflicts take the form of Strikes,
primarily against employer and secondarily against
third parties and Lockouts by employers.

Methods to prevent industrial disputes cover the

entire field of relations between industry and
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labour and include enactment and enforcement of
progressive legislation, works committee &
councils, wage boards, trade boards, profit sharing
and co-partnership, tripartite labour machinery,
education, housing, welfare work and all such
measures which can bridge the gap between the
employers and the employed. Conciliation by bi- or
tri- partite boards, formulation & issue of
standing orders, installing effective grievance
redressal procedure, collective bargaining strong
trade unions or allowing workers to participate in
management through co-partnership and profit
sharing all contribute to prevention of conflicts.
Conflicts are settled through Investigation,
Mediation, Conciliation, Voluntary or Compulsory
Arbitration / Adjudication,

10.7 Quality Circles and Participative Management

Quality circle is a small group of employees in the

same work area or doing similar type of work who
voluntarily meet regularly every week to identify,
analyze & resolve work related problems not only to
improve quality, productivity and total performance
of the organization but also to enrich quality of
work life of employees.
Participative management is a system of
communication and consultation by which employees
of an organization are kept informed about the
affairs of the undertaking or through which they
express their opinions, idea, suggestions and
contribute to the development of alternative
solutions, evaluate them and help the management
make decisions.
The schemes of participation have assumed a variety
of forms and structures in different countries.
This was due the different political set up,
governmental goals and values, economic and
industrial structure and the aspects of socio-
political culture of a particular country.

The End
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