Page 191 - DMGT548_GLOBAL_HRM

Global HRM

Notes
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Caselet MNCs and Trade Union

rade unions’ attitudes towards MNCs and responses to their impact on collective
bargaining vary. In some countries, especially in the NMS as well as Ireland, the
TNetherlands and the UK, trade unions have a generally positive view of MNCs and
welcome the inflow of foreign investment. In Poland, trade unions have in some cases
been willing to sign special deals – in particular no-strike agreements - in order to attract
investment, especially from the US and Japanese companies, echoing similar practices in
the 1980s in the UK. While the potential for employment creation is a common motivation,
a frequent additional justification in the NMS is the expectation that foreign-owned
companies might transfer into local industrial relations environments their west European
social dialogue and employee participation practices. Nevertheless, research studies raise
some doubts in this respect, as industrial relations transfers from the West seem to be the
exception rather than rule, and contingent on rather specific conditions.
By contrast, trade unions in some west European countries express negative opinions
about MNCs. In Belgium, the unions criticise MNCs for their tendency towards more
conflict-prone industrial relations, in addition to excessive flexibility and remote
management structures. In Sweden, meanwhile, trade unions are critical of MNCs’ aims to
further decentralise collective bargaining and in the industrial sector have successfully
opposed further movement in this direction. Elsewhere, trade unions have not necessarily
favoured the decentralisation of bargaining, but have accommodated pragmatically such
developments.

Source: http://www.eurofound.europa.eu/eiro/studies/TN0904049s/tn0904049s_7.htm

10.3 Response of Trade Unions to Multinational, Regional Integration

Trade union leaders consider the growth of multinationals as a threat to the bargaining power
of labour because of the considerable power and influence of large multinational firms. MNCs
are neither uniformly anti-union nor omnipotent and monolithic bureaucracies, their potential
for lobbying power and flexibility across national borders create difficulties for employees and
trade unions endeavouring to develop countervailing power.
There are several ways in which MNCs have an impact on trade union and employee interests.
Following are the seven characteristics of MNCs as the source of labour unions’ concern about
multinationals:
1. Formidable financial resources: This includes the ability to absorb losses in a particular
foreign subsidiary that is in dispute with a national union and still an overall profit on
worldwide operations. Union bargaining power may be threatened or weakened by the
broader financial resources of a multinational. It is true when multinational has adopted
practices of transnational sourcing and cross-subsidisation of products or components
across different countries. The economic pressure which a nationally based union can
exert upon a multinational is certainly less than would be the case if the company’s
operations were confined to one country.
2. Alternative sources of supply: This may take the form of an explicit “dual sourcing” policy
to reduce the vulnerability of the multinational to a strike by any national union. Also,

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