International Industrial Relations & The Global Institutional Context

Chapter 9
INTERNATIONAL
INDUSTRIAL RELATIONS &
THE GLOBAL
INSTITUTIONAL CONTEXT
Chapter 9
For use with International Human Resource Management 6e ISBN-10: 1408032090
By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr. © Cengage Learning
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INTERNATIONAL return to this table

of contents.
INDUSTRIAL RELATIONS &

THE GLOBAL INSTITUTIONAL CONTEXT
 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
Chapter 9
 Managing HR in ‘offshoring countries’
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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’

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strike-proneness
 ‘converging divergences’
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Objectives
In this chapter, we …
1. Discuss key issues in international industrial relations &
the policies & practices of MNEs
2. Examine the potential constraints that trade unions may
have on MNEs
3. Outline key trade union concerns regarding MNEs
4. Discuss recent trends & issues in the global workforce
context
5. Discuss the formation of regional economic zones such as
the EU & the impact of opponents to globalization
6. Present issues of codes of conduct & NGOs
as MNEs
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7. Discuss HR implications of offshoring
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Introduction
Chapter 9
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Factors underlying historical
differences in trade unions
 Mode of technology & industrial organization
at critical stages of union development
 Methods of government union regulation
 Ideological divisions within
the trade union movement
 Influence of religious organizations
on trade union development
 Managerial strategies for labor
relations in large corporations
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Key Issues in international
industrial relations
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Key issues
1. Industrial relations policies & practices of MNEs
2. 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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Trade unions & international
industrial relations
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Trade unions limit MNE strategies
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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The response
of trade unions to MNEs
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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 & expertise
in industrial relations
 have the capacity to stage
an ‘investment strike’
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Three trade union responses
1. International trade secretariats (ITSs)
want to achieve transformational bargaining by
1) research & information
2) Calling company conferences
3) Establishing company councils
4) Companywide union-management discussions
5) Coordinated bargaining
2. Lobbying for restrictive national legislation
3. Regulation of MNEs by international organizations:
ETUC, ILO, UNCTAD, OECD, EU
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Region integration: the EU
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EU regional integration
1. Disclosure of information
& 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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Codes of conduct –
monitoring HRM around the world
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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 & rewards
include compliance to codes of conduct
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Managing HR
in ‘offshoring countries’
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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
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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
Chapter 9
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International Industrial Relations & The Global Institutional Context

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Chapter 9

Chapter 9 go to its section.

Click on the book

INTERNATIONAL return to this table

INDUSTRIAL RELATIONS &

1. Influence wage levels

2. Constrain the ability of MNEs to vary

3. Hinder or prevent global integration of

2. The issue of social ‘dumping’:

that firms would locate in those member states

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