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1 Financial Crises, Multinational Corporations and Industrial Relations Ph.D. Course, 27. November 2009 FAOS Employment Relations Research Centre University.

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Presentation on theme: "1 Financial Crises, Multinational Corporations and Industrial Relations Ph.D. Course, 27. November 2009 FAOS Employment Relations Research Centre University."— Presentation transcript:

1 1 Financial Crises, Multinational Corporations and Industrial Relations Ph.D. Course, 27. November 2009 FAOS Employment Relations Research Centre University of Copenhagen

2 2 Programme 9.00 – 9.10 Welcome to the day. Associate professor Steen E. Navrbjerg, FAOS, University of Copehagen 9.10-9.40: Four SME’s and MNC take-over. Steen E. Navrbjerg 9.40 – 12.00 Joint presentation by professor Michael Morley and professor Patrick Gunnigle, Limerick University: 9.40-10.20 Convergence, Divergence and Institutional Influence in International HRM (M. Morley) 10.20-10.35 Break 10.35-11.15 International Employment Relations/HRM and the Study of Multinational Companies (P. Gunnigle) 11.15-12.00 Methodology in international HRM research: experience from two large scale projects (M. Morley & P. Gunnigle) 12.00 – 12.15 Break

3 3 Programme 12.15 – 13.05 2 presentations from PhD-students and feedback –Eugene Hickland: The Efficacy of Employee Voice: Does European Regulation Help or Hinder? A Case Study in Three Cross-Border Companies on the Island of Ireland –Marie Bailey: Can you Hear Us? The Effectiveness of European Works Councils as a Mechanism of Employee Voice for Hungarian Workers in the Printing, Chemical and Food Industries 13.05 – 14.05 Lunch 14.05 – 14.55 2 presentations from PhD-students and feedback –Hilary Drew: Organizational Restructuring and its Implications for the Management of Demographic Shift in German Organizations –Nana Wesley Hansen: Local Bargaining in the enlarged Danish Municipalities 14.55 – 15.00 Summing up (Steen E. Navrbjerg) 15.00 End of conference

4 4 Introduction Why are MNC’s of interest to IR? The Danish Case: Four case-studie of SME’s and MNC take-over

5 5 Why are MNC’s of interest to IR-research? Size = impact 1960’s: 7000 multinationals 2003: 65,000 multinationals –Employing some 55 million people –850,000 subsidiaries In SME-countries: a big actor In developing countries: could be a decisive actor

6 6 Why are MNC’s of interest to IR-research? Influence on company level: Transferring HR-policies - work design - documentation (headcount, accounting etc.) - new, competing perceptions of commitment etc. - individual contracts - challenging collectively based bargaining systems?  Thereby affecting Employment Practices and ultimately IR?

7 7 Why are MNC’s of interest to IR-research? The bigger picture: Benchmarking countries against each other -Labour costs -Tax revenues -Economic stability -Political stability -IR-regulations/legislation -Labour skills -Market proximity -Openness to FDI  thereby affecting the political-economic system as a whole?

8 8 The Economist’s Ranking of Countries

9 9

10 10 The Danish Case Strong CME DK: 3066 foreign owned companies = 1 percent Employing 18 per cent of the work force 20 per cent of turn-over in private sector On avarage 74 employees (the avarage in Danish enterprises: 4 employees) Big enterprises are in general main movers in collective negotiations

11 11 Case study of four Danish SME’s Interviews in 1995, 2001, 2005 All Danish owned in 1995 Case I, II and III owned by MNC’s in 2005 Research question: Are the IR-relations affected by MNC ownership - at company level? - at national level?

12 12 Four Danish SME’s Enterprise IEnterprise IIEnterprise IIIEnterprise IV 19952005199520051995200519952005 IndustryPlastics Electro mechanics AutomatsPlastics OwnershipDKUSDKUSDKITDK Number of employees 3601858053550380250456 Number of blue collar employees 2601385026350295175243 Number of white- collar employees 1004930272008575213 Ratio white- collar/blue- collar 1:2.61:2.81:1.71:11:1.81:3.51:2.31:1.15

13 13 Four Danish SME’s Enterprise IEnterprise IIEnterprise IIIEnterprise IV 19952005199520051995200519952005 Absenteeism< 2 %4-5 %< 2 % 4 %4,5 %4 %4,6 % Management style Stake- holder Share- holder Stake- holder Between stake & share Share- holder Stake- holder % of employees compared to 1995 516669182

14 14 General unemployment

15 15 Four Danish SMEs Level of influence from HQ to subsidiary Grey indicating HQ control, white indicating subsidiary autonomy Enterprise IEnterprise II Enterprise III Enterprise IV Level 1: Strategy and overall finance Level 2: Tactics and local economy Level 3: HR policy Level 4: Work organization Level 5: Industrial Relations

16 16 Conclusions Every taken-over enterprise lost jobs – Danish owned gained 82 per cent In one case, the enterprise lost more than half of the white-collar labour force None of the MNC’s tried directly to interfere with company-level IR… …but local management is kept in a short leach  might affect employment relations and co-operation … and the Italians tried harder than the Americans!!!

17 17 New hypothesis In systems with strong IR-partners (CMEs), MNCs influence on ER/IR is limited Those who do try to change IR/ER might not get what they’ve paid for! But: Big companies rule the collective bargaining system… …and 20 per cent of the private sector employees work in bigger, foreign owned enterprises  even strong and balanced national IR-systems are liable to be affected by MNCs

18 18 The academic discussion on MNC’s MNC’s might affect: Economy – huge FDI, for better or for worse Employment – new jobs, what kind of jobs, greenfield sites, threat of outsourcing Employment practices –convergence versus divergence –country-of-origin versus host-country –ethno-, poly-, regio- or geo-centric HRM Power balances – politically, IR, locally and nationally

19 19 Everything - or everyone - can be outsourced…


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