Industrial Relations: Sapna Joshi

Industrial Relations
Sapna joshi
Before we examine the key issues in industrial relations as
they relate to multinational firms, we need to consider
some general points about the field of international
industrial relations. First, it is important to realize that it is
difficult to compare industrial relations systems and
behaviour across national boundaries; a labour relations
concept may change considerably when translated from
one industrial relations context to another. The concept of
collecting bargaining, for example, in United States is
understood to mean negotiations between a labour union
local and management; in Sweden and Germany the term
refers to
negotiations between an employers’ organization and a
trade union at the industry level. Second, it is generally
recognized in the international labour relations field that no
industrial relations system can be understood without an
appreciation of its historical origin.
Industrial Relations Policies and Practices of Multination
Firms: Because national differences in economic, political,
and legal systems produce markedly different industrial
relations systems across countries, multinational generally
delegate the management of industrial relations to their
subsidiaries. However, a policy of decentralization does not
keep corporate headquarters from exercising some
coordination over Industrial relation strategy.
Multinational headquarters involvement in industrial
relations is influenced by several factors as detailed below:
(a) The Degree of Inter-Subsidiary Production Integration: A
high degree of integration was found to be the most
important factor leading to the centralization of the
Industrial relations function. Industrial relations
throughout a system become of direct importance to
corporate headquarters. In this context, a coordinated
industrial relations policy is one of the key factors in a
successful global production strategy.
(b) Nationality of Ownership of the Subsidiary: There is

evidence of differences between European and U.S. firms
in terms of headquarters involvement in industrial
relations. U.S firms tend to exercise greater centralized
control over industrial relations than do British or other
European firms.
(c) Prior Experience in Industrial Relations: European
firms have tended to deal with labour unions at industry
level rather than at firm level.
(d) Subsidiary Characteristics: A number of subsidiary

characteristics to be relevant to centralization of industrial
relations. Here the parent firm is a significant source of
operation or investment funds for the subsidiary, that is,
where the subsidiary is more dependent on headquarters
for resources, there will tend to be increased corporate
involvement in industrial relations and human resource
management.
THE RESPONSE OF TRADE UNIONS TO MNCs
Trade union leaders have long seen the growth of

multinationals as a threat to the bargaining power of labour
because of the considerable power and influence of large
multinational firms.
There are several ways in which MNCs have an
impact on trade union and employee interests. Following are
the given characteristics of MNCs as the source of labour
unions’ concern about multinationals:
● Formidable financial resources: union bargaining power

may be threatened or weakened by the broader financial
resources of a multinational.
● The ability to move production facilities to other
countries: A reported concern of employees and trade
unions is that job security may be threatened if a
multinational seeks to produce abroad what could have, or
previously has, been manufactured domestically.
● A remote locus of authority (i.e., the corporate head-office

management of a multinational firm): Industrial relations,
trade unions and works councils have reported that the
multinational decision-making structure is opaque and the
division of authority obscured. Further, employee
representative may not be adequately aware of the overall
MNC organizational strategy and activities.
REGIONAL INTEGRATION: THE EUROPEAN UNION
(EU)
Regional integration such as the development of the

European Union (EU) has brought significant implications
for international industrial relations. Some consideration
was given to social policy issues related to the creation of
the European Community.
There have been a number of significant
developments in EU social policy over the past four
decades. The social charter of the council of Europe came
into effect in 1965. In 1987, the major objectives of the
implementation of the single European Act was to establish
the Single European Market (SEM) on December 31, 1992,
in order to enhance the free movement of goods, money, and
people within the SEM
REGIONAL INTEGRATION: THE NORTH AMERICAN
FREE TRADE AGREEMENT(NAFTA)
Another important regional economic integration involves

the formation of a trade zone between the United States,
Canada, and Mexico. The Canada-United states Free Trade
Agreement (FTA) went into effect on January 1989, and a
draft accord to create NAFTA agreement was signed by the
government of the United States, Mexico, and Canada in
December 1992, ratified by the U.S. congress in November
1993, and came into force in January 1994. it is important
to stress here that NAFTA the North American Agreement
on Labour Cooperation (NAALS) differs from the Single
European Market in that it is a free trade zone and not a
common market.
NAFTA deals only with the flow of goods, services, and
investments among the three trading partners; it does not
address labour mobility or other common policies of the
SEM.

Industrial Relations: Sapna Joshi

Uploaded by

Copyright:

Available Formats

Industrial Relations: Sapna Joshi

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Industrial Relations: Sapna Joshi

Uploaded by

Copyright:

Available Formats

Industrial Relations

(b) Nationality of Ownership of the Subsidiary: There is

(d) Subsidiary Characteristics: A number of subsidiary

Trade union leaders have long seen the growth of

● Formidable financial resources: union bargaining power

● A remote locus of authority (i.e., the corporate head-office

Regional integration such as the development of the

Another important regional economic integration involves

You might also like

Pfad - The Proxy pFad of © 2024 Garber Painting. All rights reserved.