Financial Crises, Multinational Corporations and Industrial Relations Ph.D. Course, 27. November 2009 FAOS Employment Relations Research Centre University of Copenhagen
Programme 9.00 – 9.10 Welcome to the day. Associate professor Steen E. Navrbjerg, FAOS, University of Copehagen 9.10-9.40: Four SME’s and MNC take-over. Steen E. Navrbjerg 9.40 – 12.00 Joint presentation by professor Michael Morley and professor Patrick Gunnigle, Limerick University: 9.40-10.20 Convergence, Divergence and Institutional Influence in International HRM (M. Morley) 10.20-10.35 Break 10.35-11.15 International Employment Relations/HRM and the Study of Multinational Companies (P. Gunnigle) 11.15-12.00 Methodology in international HRM research: experience from two large scale projects (M. Morley & P. Gunnigle) 12.00 – 12.15 Break
Programme 12.15 – 13.05 2 presentations from PhD-students and feedback • Eugene Hickland: The Efficacy of Employee Voice: Does European Regulation Help or Hinder? A Case Study in Three Cross-Border Companies on the Island of Ireland • Marie Bailey: Can you Hear Us? The Effectiveness of European Works Councils as a Mechanism of Employee Voice for Hungarian Workers in the Printing, Chemical and Food Industries 13.05 – 14.05 Lunch 14.05 – 14.55 2 presentations from PhD-students and feedback • Hilary Drew: Organizational Restructuring and its Implications for the Management of Demographic Shift in German Organizations • Nana Wesley Hansen: Local Bargaining in the enlarged Danish Municipalities • 14.55 – 15.00 Summing up (Steen E. Navrbjerg) • 15.00 End of conference
Introduction • Why are MNC’s of interest to IR? • The Danish Case: Four case-studie of SME’s and MNC take-over
Why are MNC’s of interest to IR-research? Size = impact • 1960’s: 7000 multinationals • 2003: 65,000 multinationals • Employing some 55 million people • 850,000 subsidiaries • In SME-countries: a big actor • In developing countries: could be a decisive actor
Why are MNC’s of interest to IR-research? Influence on company level: Transferring HR-policies - work design - documentation (headcount, accounting etc.) - new, competing perceptions of commitment etc. - individual contracts - challenging collectively based bargaining systems? Thereby affecting Employment Practices and ultimately IR?
Why are MNC’s of interest to IR-research? The bigger picture: Benchmarking countries against each other • Labour costs • Tax revenues • Economic stability • Political stability • IR-regulations/legislation • Labour skills • Market proximity • Openness to FDI thereby affecting the political-economic system as a whole?
The Danish Case • Strong CME • DK: 3066 foreign owned companies = 1 percent • Employing 18 per cent of the work force • 20 per cent of turn-over in private sector • On avarage 74 employees (the avarage in Danish enterprises: 4 employees) • Big enterprises are in general main movers in collective negotiations
Case study of four Danish SME’s • Interviews in 1995, 2001, 2005 • All Danish owned in 1995 • Case I, II and III owned by MNC’s in 2005 • Research question: Are the IR-relations affected by MNC ownership - at company level? - at national level?
Four Danish SMEs Level of influence from HQ to subsidiary Grey indicating HQ control, white indicating subsidiary autonomy
Conclusions • Every taken-over enterprise lost jobs – Danish owned gained 82 per cent • In one case, the enterprise lost more than half of the white-collar labour force • None of the MNC’s tried directly to interfere with company-level IR… • …but local management is kept in a short leach might affect employment relations and co-operation • … and the Italians tried harder than the Americans!!!
New hypothesis • In systems with strong IR-partners (CMEs), MNCs influence on ER/IR is limited • Those who do try to change IR/ER might not get what they’ve paid for! • But: Big companies rule the collective bargaining system… • …and 20 per cent of the private sector employees work in bigger, foreign owned enterprises • even strong and balanced national IR-systems are liable to be affected by MNCs
The academic discussion on MNC’s MNC’s might affect: • Economy – huge FDI, for better or for worse • Employment – new jobs, what kind of jobs, greenfield sites, threat of outsourcing • Employment practices • convergence versus divergence • country-of-origin versus host-country • ethno-, poly-, regio- or geo-centric HRM • Power balances – politically, IR, locally and nationally