CH 9.intl - Ind Reln

Chapter 9
INTERNATIONAL
INDUSTRIAL RELATIONS
and
THE GLOBAL
INSTITUTIONAL
CONTEXT
Chapter 9
For use with International Human Resource Management 7e ISBN-10: 1473719026
By Peter J. Dowling, Marion Festing, and Allen D. Engle, Sr. © Cengage Learning
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Chapter 9
INTERNATIONAL INDUSTRIAL RELATIONS
and
C O N T E N T S
THE GLOBAL INSTITUTIONAL CONTEXT

START
Click on an item to
 Vocabulary go to its section.
 Objectives Click on the book

cover below to
return to this table
 Introduction of contents.
 Key issues in international industrial relations

O F
 Trade unions and international industrial relations

TA B L E
 The response of trade unions to MNEs

 Campaigning and mobilizing
 Region integration: the EU
 Codes of conduct –
Monitoring HRM practices around the world
 Managing HR in ‘offshoring countries’
Chapter 9
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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’
 strike-proneness
Chapter 9
 ‘converging divergences’
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Objectives
In this chapter, we:
1. Discuss key issues in international industrial relations and
the policies and 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 and issues in the global workforce
context
5. Discuss the formation of regional economic zones such as
the EU and the impact of opponents to globalization
6. Present issues of codes of conduct and NGOs
as MNEs
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 and 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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Table 9.1
Trade union structure in leading Western industrial societies
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Key Issues in international
industrial relations
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Industrial relations policies and
practices of MNEs
1. Degree of inter-subsidiary production integration
2. Nationality of ownership of the subsidiary
3. International HRM approach
4. MNE prior experience in industrial relations
5. Subsidiary characteristics
6. Characteristics of the home product market
7. Management attitudes towards unions
Chapter 9
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Table 9.2
Trade union density
* Data not available for 2013.
Source: OECD Database

www.OECD.Stat extracted
9 September 2015.
Trade union density =
# wage and salary earners that are

trade union members
———————————————
total # of wage and salary earners
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Trade unions and 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
4. Campaigning and mobilizing

against multinationals
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The response
of trade unions to MNEs
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Trade union concerns about MNEs
MNEs…
1. have formidable financial resources
2. have alternative sources of supply
3. can move production facilities to other countries
4. have a remote locus of authority
5. have production facilities in many industries
6. have superior knowledge and expertise
in industrial relations
7. have the capacity to stage
an ‘investment strike’
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Campaigning and mobilizing
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Three trade union responses
1. Form international trade secretariats (ITSs)
to achieve transformational bargaining by
1) research and information
2) Calling company conferences
3) Establishing company councils
4) Companywide union-management discussions
5) Coordinated bargaining
2. Lobby for restrictive national legislation

3. Regulate MNEs with international organizations
4. Mobilize or have a corporate campaign
against the MNE
Chapter 9
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Region integration: the EU
Chapter 9
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EU regional integration
1. Disclosure of information
and 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
Chapter 9
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HRM related to global code of
conduct may include
 Drawing up and reviewing codes of conduct
 Conducting cost-benefit analysis to oversee
employee and relevant alliance partners’
compliance
 Championing the need to train employees and
alliance partners in the code of conduct
 Checking that performance and rewards
include compliance to codes of conduct
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Managing HR
in ‘offshoring countries’
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Table 9.3
Offshoring nations, 2014
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Offshoring countries HRM
 Offshoring and HRM in India
» Turnover issues
 Offshoring and HRM in China

» No systematic link between HRM and business strategy
» Despite labor surplus, recruiting and retention problems
» No systematic link between performance management,
reward and long-term motivation
» Lack of coherence and continuity in enterprise training
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Table 9.4
Offshoring attractiveness ranking: a German perspective
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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 and
in foreign locations
Chapter 9
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Chapter 9

THE GLOBAL INSTITUTIONAL CONTEXT

 Objectives Click on the book

 Key issues in international industrial relations

 Trade unions and international industrial relations

 The response of trade unions to MNEs

Source: OECD Database

Trade union density =

# wage and salary earners that are

2. Constrain the ability of MNEs to vary

3. Hinder or prevent global integration of

4. Campaigning and mobilizing

2. Lobby for restrictive national legislation

2. The issue of social ‘dumping’:

that firms would locate in those member states

 Offshoring and HRM in China

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