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
ETUC UNCTAD CIIME
IFCTU OECD EWC
ILO FIET AFL-CIO
International Trade Secretariats (ITSs)
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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)
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
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Table
Trade union structure in leading Western industrial societies
10-1

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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
Union membership for selected countries
10-2

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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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