The focus of this chapter is on the industrial relations strategies adopted by multinationals rather than the more general topic of comparative industrial relations.8 Later in this chapter we will cover the emerging topic of ‘offshoring of labor’, but first we examine the central question for industrial relations in an international context, which concerns the orientation of MNEs to organized labor.
Industrial Relations Policies and Practices of Multinational Firms
Because national differences in economic, political and legal systems produce markedly different industrial relations systems across countries, MNEs generally delegate the management of industrial relations to their foreign subsidiaries. However, a policy of decentralization does not keep corporate headquarters from exercising some coordination over industrial relations strategy. Generally, corporate headquarters will become involved in or oversee labor agreements made by foreign subsidiaries because these agreements may affect the international plans of the firm and/or create precedents for negotiations in other countries. Further, Marginson et al.9 found that the majority of the firms in their study monitored labor performance across units in different countries. Comparison of performance data across national units of the firm creates the potential for decisions on issues such as unit location, capital investment and rationalization of production capacity. The use of comparisons would be expected to be greatest where units in different countries undertake similar operations. For reviews of the literature in this area, see the work of Gunnigle and his colleagues.10
Much of the literature on the industrial relations practices of MNEs tends to be at a more cross-national or comparative level. There is, however, some research on industrial relations practices at the firm level. Empirical research has identified a number of differences in multinational approaches to industrial relations. Indeed, a number of studies have examined differences in the propensity of multinational headquarters to intervene in, or to centralize control over,
The focus of this chapter is on the industrial relations strategies adopted by multinationals rather than the more general topic of comparative industrial relations.8 Later in this chapter we will cover the emerging topic of ‘offshoring of labor’, but first we examine the central question for industrial relations in an international context, which concerns the orientation of MNEs to organized labor.
Industrial Relations Policies and Practices of Multinational Firms
Because national differences in economic, political and legal systems produce markedly different industrial relations systems across countries, MNEs generally delegate the management of industrial relations to their foreign subsidiaries. However, a policy of decentralization does not keep corporate headquarters from exercising some coordination over industrial relations strategy. Generally, corporate headquarters will become involved in or oversee labor agreements made by foreign subsidiaries because these agreements may affect the international plans of the firm and/or create precedents for negotiations in other countries. Further, Marginson et al.9 found that the majority of the firms in their study monitored labor performance across units in different countries. Comparison of performance data across national units of the firm creates the potential for decisions on issues such as unit location, capital investment and rationalization of production capacity. The use of comparisons would be expected to be greatest where units in different countries undertake similar operations. For reviews of the literature in this area, see the work of Gunnigle and his colleagues.10
Much of the literature on the industrial relations practices of MNEs tends to be at a more cross-national or comparative level. There is, however, some research on industrial relations practices at the firm level. Empirical research has identified a number of differences in multinational approaches to industrial relations. Indeed, a number of studies have examined differences in the propensity of multinational headquarters to intervene in, or to centralize control over,
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