Ihrm chapter10


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Ihrm chapter10

  1. 1. Chapter Ten <ul><li>International Industrial Relations </li></ul>
  2. 2. Chapter Learning Objectives <ul><li>After reading this chapter, you should be able to: </li></ul><ul><li>outline the key issues in international industrial relations and the policies and practices of multinationals </li></ul><ul><li>discuss the potential constraints that trade unions may have on multinationals </li></ul><ul><li>name key concerns for trade unions </li></ul>
  3. 3. Chapter Learning Objectives <ul><li>identify recent trends and issues in the global workforce context </li></ul><ul><li>discuss the formation of regional economic zones such as the European Union and the impact of opponents to globalization </li></ul>
  4. 4. Terms <ul><li>industrial relations </li></ul><ul><li>trade unions </li></ul><ul><li>regional economic zones </li></ul><ul><li>collective bargaining </li></ul><ul><li>enterprise unions </li></ul><ul><li>strike-proneness </li></ul>umbrella or chateau clause ‘ golden handshake’ ‘ investment strike’ ‘ social policy’ Social ‘dumping’ ‘ converging divergences’ European Union (EU) National Contact Points (NCP) Single European Market (SEM) International Trade Secretariats (ITSs)
  5. 5. Opening Vignette <ul><li>Four Season Goes to Paris </li></ul><ul><li>Restrictive labour laws </li></ul><ul><li>capitalism that maintains social equity with laws and tax policies </li></ul><ul><li>social spending that reduced income disparity </li></ul><ul><li>reduction of the work week to 35 hours. Unemployment and retirement benefits were generous </li></ul><ul><li>terminations require dues process and good cause </li></ul>
  6. 6. Opening Vignette <ul><li>Some flexibility </li></ul><ul><li>allow work hour increases during peak business </li></ul><ul><li>periods and less during a lull </li></ul><ul><li>could hire 10 percent to 15 percent of staff on a “temporary,” seasonal basis </li></ul>
  7. 7. Industrial Relations <ul><li>Difficult to compare systems and behavior across national boundaries </li></ul><ul><li>concept change considerably when translated from one industrial relations context to another </li></ul><ul><li>cross-national differences emerge as to the objectives of the collective bargaining process and enforceability of collective agreements </li></ul><ul><li>can not be understood without an appreciation of its historical origin </li></ul>
  8. 8. Historical Evolution of  Industrial Relations <ul><li>developed from the social values of the societies and countries in which they have operated </li></ul><ul><li>cannot be understood without an understanding of the way in which laws, rules, and union management power relationships, interests and decisions were established and implemented </li></ul>
  9. 9. Factors Underlying Historical Differences in Structure of Trade Unions <ul><li>the mode of technology and industrial organization at critical stages of union development </li></ul><ul><li>methods of union regulation by government </li></ul><ul><li>ideological divisions within the trade union movement </li></ul><ul><li>the influence of religious organizations on trade union development </li></ul><ul><li>managerial strategies for labor relations in large corporations </li></ul>
  10. 10. Trade Union Structure in Leading Western Industrial Societies (Table 10.1)
  11. 11. Trade Union Structure <ul><li>Industrial unions </li></ul><ul><li>represent all grades of employees in an industry </li></ul><ul><li>Craft unions </li></ul><ul><li>based on skilled occupational groupings across industries </li></ul><ul><li>Conglomerate unions </li></ul><ul><li>represent members in more than one industry </li></ul>
  12. 12. Trade Union Structure <ul><li>General unions </li></ul><ul><li>open to almost all employees in a given country </li></ul><ul><li>Enterprise unions </li></ul><ul><li>increasingly evident in industrialized nations </li></ul>
  13. 13. Industrial Relations Policies and Practices <ul><li>policies must be flexible enough to adapt to local requirements </li></ul><ul><li>differences in economic, political, social and legal systems </li></ul><ul><li>MNEs generally delegate the management of industrial relations to their foreign subsidiaries </li></ul>
  14. 14. Key Issues in International Industrial Relations <ul><li>MNE involvement in industrial relations policies and practices is influenced by </li></ul><ul><li>degree of inter-subsidiary production integration </li></ul><ul><li>nationality of ownership of the subsidiary </li></ul><ul><li>international HRM approach </li></ul><ul><li>MNE prior experience in industrial relations </li></ul><ul><li>subsidiary characteristics </li></ul><ul><li>characteristics of the home product market </li></ul><ul><li>management attitudes towards unions </li></ul>
  15. 15. Union Membership for Selected Countries (Table 10.2)
  16. 16. Trade Union Limits on MNE Strategic Choices <ul><li>influence wage levels </li></ul><ul><li>constrain the ability of MNEs to vary employment levels at will </li></ul><ul><li>hinder or prevent global integration of operations of multinationals </li></ul>
  17. 17. Influencing Wage Levels <ul><li>directly impact the organizations competitiveness due to increased cost structures and wages </li></ul>
  18. 18. Constraining Ability To Vary Employment Levels <ul><li>legislation that limits plant closures, redundancy, and layoff practices </li></ul><ul><li>union striking and lobbying governments and </li></ul><ul><li>international organizations for increased restrictions </li></ul>
  19. 19. Preventing Global Integration <ul><li>hindering MNEs operations </li></ul><ul><li>increased costs </li></ul>
  20. 20. Trade Union Concerns About MNEs <ul><li>MNEs have </li></ul><ul><li>formidable financial resources </li></ul><ul><li>alternative sources of supply </li></ul><ul><li>production facilities to other countries they can move </li></ul><ul><li>a remote locus of authority </li></ul><ul><li>production facilities in many industries </li></ul><ul><li>superior knowledge and expertise in industrial relations </li></ul><ul><li>the capacity to stage an ‘investment strike’ </li></ul>
  21. 21. Trade Union Concerns About MNEs <ul><li>these characteristics act to limit the bargaining  </li></ul><ul><li>power of unions </li></ul>
  22. 22. Trade Union Responses to MNEs <ul><li>International Trade Secretariats (ITSs) </li></ul><ul><li>lobbying for restrictive national legislation </li></ul><ul><li>regulation of multinationals by international organizations </li></ul>
  23. 23. International Trade Secretariats (ITSs) <ul><li>loose confederations providing worldwide links for the national unions in a particular trade or industry </li></ul><ul><li>mainly operated to facilitate the exchange of information to achieve transnational bargaining with each of the multinationals in its industry </li></ul>
  24. 24. Chapeau Clause <ul><li>OECD guidelines for multinationals </li></ul><ul><li>disclosure of information, competition, financing, taxation, employment and industrial relations, and science and technology </li></ul><ul><li>multinationals should adhere to the guidelines within the framework of law, regulations and prevailing labour relations and employment practices, in the countries in which they operate </li></ul>
  25. 25. Regional Integration: The European Union (EU) <ul><li>disclosure of information and European Works Councils </li></ul><ul><li>the issue of “social dumping” </li></ul>
  26. 26. “Social Dumping” <ul><li>MNEs movement to another region/country that has lower labour costs, (relatively low social security) to gain a competitive advantage </li></ul>
  27. 27. <ul><li>Why is it important to understand the historical origins of national industrial relations systems? </li></ul><ul><li>In what ways can trade unions constrain the strategic choices of multinationals? </li></ul><ul><li>Identify four characteristics of MNEs that give trade unions cause for concern. </li></ul>Discussion Questions
  28. 28. Discussion Questions <ul><li>4 . What is ‘social dumping’ and why should unions </li></ul><ul><li>be concerned about it? </li></ul><ul><li>5. Can you give other examples of documentary films which are critical of large multinational firms? </li></ul>
  29. 29. Case : Advice for Companies Going Global <ul><li>Discuss the different approaches and strategies that global players such as McDonald’s can select to deal with the local labour unions when entering a new country. </li></ul><ul><li>2. Do you agree with Quinlan’s statement that unions do not ‘bring much to the equation’ of the employee/employer relationship? Explain! </li></ul>
  30. 30. Case : Advice for Companies Going Global <ul><li>Considering McDonald’s relatively standardized product and service, does it come as a surprise to you that McDonald’s employs so relatively few expatriates? </li></ul><ul><li>4. If McDonald’s achieves its goal of 100 percent local employees w hat are the advantages and disadvantages of having solely local management negotiating with the local labour unions? </li></ul>