International Human Resource Managment HRMT 20025 International Human Resource Managment

INTERNATIONAL INDUSTRIAL RELATIONS & THE GLOBAL INSTITUTIONAL CONTEXT Chapter 9 INTERNATIONAL INDUSTRIAL RELATIONS & THE GLOBAL INSTITUTIONAL CONTEXT

INTERNATIONAL INDUSTRIAL RELATIONS & THE GLOBAL INSTITUTIONAL CONTEXT Chapter 9 INTERNATIONAL 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 Managing HR in ‘offshoring countries’

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 & NGOs as MNEs Discuss HR implications of offshoring

Introduction

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

Key Issues in international industrial relations

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 & international industrial relations

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

The response of trade unions to MNEs

Trade union concerns about 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’

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

Region integration: the 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

Codes of conduct – monitoring HRM around the world

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

Managing HR in ‘offshoring countries’

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