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Chapter 9 INTERNATIONAL INDUSTRIAL RELATIONS & THE GLOBAL INSTITUTIONAL CONTEXT
Chapter 9 Vocabulary Objectives Introduction Key issues in international industrial relations Trade unions & international industrial relations The response of trade unions to MNEs Region integration: the EU Codes of conduct –monitoring HRM around the world Managing HR in ‘offshoring countries’ INTERNATIONALINDUSTRIAL RELATIONS &THE GLOBAL INSTITUTIONAL CONTEXT
Vocabulary • industrial relations, trade unions • regional economic zones • collective bargaining • enterprise unions • plant closure, redundancy, layoff programs • lobbying • sub-optimizing • investment strike • offshoring, turnover rates, BPO = business process outsourcing, EHCNs • guanxi, iron rice bowl • ITSs = international trade secretariats, SEM, NCP, EU • ETUC, ILO, UNCTAD, OECD, IFCTU, CIIME, EWC, FIET, AFL-CIO • social dimensions, social ‘dumping’ • umbrella or chateau clause • ‘golden handshake’ • strike-proneness • ‘converging divergences’
Objectives In this chapter, we … • Discuss key issues in international industrial relations & the policies & practices of MNEs • Examine the potential constraints that trade unions may have on MNEs • Outline key trade union concerns regarding MNEs • Discuss recent trends & issues in the global workforce context • Discuss the formation of regional economic zones such as the EU & the impact of opponents to globalization • Present issues of codes of conduct & NGOsas MNEs • Discuss HR implications of offshoring
Factors underlying historical differences in trade unions • Mode of technology & industrial organizationat critical stages of union development • Methods of government union regulation • Ideological divisions withinthe trade union movement • Influence of religious organizationson trade union development • Managerial strategies for laborrelations in large corporations
Key issues • Industrial relations policies & practices of MNEs • Degree of inter-subsidiary production integration • Nationality of ownership of the subsidiary • International HRM approach • MNE prior experience in industrial relations • Subsidiary characteristics • Characteristics of the home product market • Management attitudes towards unions
Trade unions limit MNE strategies • Influence wage levels • Constrain the ability of MNEs to vary employment levels at will • Hinder or prevent global integration of operations of multinationals
Trade union concerns about MNEs MNEs … • have formidable financial resources • have alternative sources of supply • can move production facilities to other countries • have a remote locus of authority • have production facilities in many industries • have superior knowledge & expertisein industrial relations • have the capacity to stagean ‘investment strike’
Three trade union responses • International trade secretariats (ITSs)want to achieve transformational bargaining by • research & information • Calling company conferences • Establishing company councils • Companywide union-management discussions • Coordinated bargaining • Lobbying for restrictive national legislation • Regulation of MNEs by international organizations:ETUC, ILO, UNCTAD, OECD, EU
EU regional integration • Disclosure of information& European Works Councils • 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
HRM related to global code of conduct may include • Drawing up & reviewing codes of conduct • Conducting cost-benefit analysis to oversee employee & relevant alliance partners’ compliance • Championing the need to train employees & alliance partners in the code of conduct • Checking that performance & rewardsinclude compliance to codes of conduct
Offshoring countries HRM • Offshoring & HRM in India • Turnover issues • Offshoring & HRM in China • No systematic link between HRM & business strategy • Despite labor surplus, recruiting & retention problems • No systematic link between performance management, reward & long-term motivation • Lack of coherence & continuity in enterprise training
Summarizing emerging issues Possible HRM roles: • Consult with unions/employee representatives • Manpower planning, considering the scope for employee redeployment • Contribute to internal communication strategy • Identify training needs • Design new jobs generated by offshoring operations • Highlight potential risks, such as the implications of employment regulation both in HC &in foreign locations