1. International Human Resource Management
IHRM Chapter 10
International Human Resource Management
Managing people in a multinational context
International industrial relations

2. Chapter Objectives In this chapter we:
Discuss the key issues in international 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 and the impact of opponents to globalization
IHRM Chapter 10

3. Terms industrial relations trade unions regional economic zones
collective bargaining
enterprise unions
strike-proneness
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)
UNCTAD
OECD
FIET
ETUC
IFCTU
ILO
CIIME
EWC
AFL-CIO
IHRM Chapter 10 3

4. Possible factors underlying historical differences in structure of trade unions
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
IHRM Chapter 10 4

5. Trade union structure in leading Western industrial societies
Table 10-1
Trade union structure in leading Western industrial societies
IHRM Chapter 10 5

6. Key issues in international industrial relations
Industrial relations policies and practices of multinational firms
The 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
IHRM Chapter 10 6

7. Union membership for selected countries
Table 10-2
Union membership for selected countries
IHRM Chapter 10 7

8. Trade union limits on MNE strategic choices
Influence wage levels
Constrain the ability of MNEs to vary employment levels at will
Hinder or prevent global integration of operations of multinationals
IHRM Chapter 10 8

9. Trade union concerns about MNEs
MNEs have formidable financial resources
MNEs have alternative sources of supply
MNEs can move production facilities to other countries
MNEs have a remote locus of authority
MNEs have production facilities in many industries
MNEs have superior knowledge and expertise in industrial relations
MNEs have the capacity to stage an ‘investment strike’
IHRM Chapter 10 9

10. Trade union responses to MNEs
International trade secretariats (ITSs)
Lobbying for restrictive national legislation
Regulation of multinationals by international organizations
IHRM Chapter 10 10

11. Regional integration: the European Union (EU)
Disclosure of information and 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.
IHRM Chapter 10 11

12. Discussion Questions
Why is it important to understand the historical origins of national industrial relations systems?
In what ways can trade unions constrain the strategic choices of multinationals?
Identify four characteristics of MNEs that give trade unions cause for concern.
IHRM Chapter 10 12