International Human Resource Management

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IHRM Chapter 10
International Human Resource Management
International industrial relations
Managing people in a multinational context
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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
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)
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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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Table10-1
Trade union structure in leading Western
industrial societies
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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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Table10-2
Union membership for selected countries
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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 dumpingThat 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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