Professional Documents
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CH 09
CH 09
Industrial relations
Chapter objectives
The focus of the preceding chapters has been on managing and
supporting international assignments, post-assignment and the
issues in subsidiary operations. In this chapter we:
Discuss key issues in 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.
Introduction
We need to consider some general points about the field of
international industrial relations. First, it is important to
realize that it is difficult to compare industrial relations
systems and behavior across national boundaries; an industrial
relations concept may change considerably when translated
from one industrial relations context to another.
Cross-national differences also emerge as to the objectives of
the collective bargaining process and the enforceability of
collective agreements.
(cont.)
Use with International Human Resource Management ISBN 1-84480013-X
Published by Thomson Learning Peter Dowling and Denice Welch
Introduction (cont.)
Schregle has observed:
A comparative study of industrial relations shows that
industrial relations phenomena are a very faithful expression
of the society in which they operate, of its characteristic
features and of the power relationships between different
interest groups. Industrial relations cannot be understood
without an understanding of the way in which rules are
established and implemented and decisions are made in the
society concerned.
(cont.)
Use with International Human Resource Management ISBN 1-84480013-X
Published by Thomson Learning Peter Dowling and Denice Welch
Introduction (cont.)
Poole has identified several factors that may underlie these
historical differences:
the mode of technology and industrial organization at critical stages of
union development
methods of union regulation by government
ideological divisions within the trade union movement
the influence of religious organizations on trade union development
managerial strategies for labor relations in large corporations.
(cont.)
Introduction (cont.)
Union structures differ considerably among Western countries.
These include industrial unions, which represent all grades of
employees in an industry; craft unions, which are based on
skilled occupational groupings across industries; conglomerate
unions, which represent members in more than one industry;
and general unions, which are open to almost all employees in
a given country.
(cont.)
Introduction (cont.)
Introduction (cont.)
These differences in union structures have had a major influence
on the collective bargaining process in Western countries. Some
changes in union structure are evident over time.
The lack of familiarity of multinational managers with local
industrial and political conditions has sometimes needlessly
worsened a conflict that a local firm would have been likely to
resolve.
Increasingly, multinationals are recognizing this shortcoming
and admitting that industrial relations policies must be flexible
enough to adapt to local requirements.
This is evidently an enduring approach, even in firms that
follow a non-union labor relations strategy where possible.
Use with International Human Resource Management ISBN 1-84480013-X
Published by Thomson Learning Peter Dowling and Denice Welch
Pan-European pensions
The EU Council of Ministers has approved the pension funds
Directive that sets standards for the prudential supervision of pension
plans in the EU. The Member States will need to implement the
Directive by the middle of 2005. The Directive covers employersponsored, separately funded pension plans. The Directive provides
pension funds with a coherent framework to operate within the
internal market and allows European companies and citizens the
opportunity to benefit from more efficient pan-European pension
funds. Once implemented, the Directive will ensure a high level of
protection for both members and beneficiaries of pension funds.
(cont.)
(cont.)
Use with International Human Resource Management ISBN 1-84480013-X
Published by Thomson Learning Peter Dowling and Denice Welch
(cont.)
(cont.)
Use with International Human Resource Management ISBN 1-84480013-X
Published by Thomson Learning Peter Dowling and Denice Welch
Chapter summary
The literature reviewed in this chapter and the discussion
surrounding the formation of regional economic zones such as
the European Union and the Asia Pacific Economic Cooperation
(APEC) support the conclusion that transnational collective
bargaining has yet to be attained by trade unions. As Enderwick
has stated:
The international operations of MNEs do create considerable
impediments in effectively segmenting labor groups by national
boundaries and stratifying groups within and between nations.
Combining recognition of the overt segmentation effects of international
business with an understanding of the dynamics of direct investment
yields the conclusion that general multinational collective bargaining is
likely to remain a remote possibility.