1	Bargaining Across Borders‑ Multinational Corporations Lecture 1 of 2
2	Administrative Papers due Monday
3	Review Importance of collective bargaining in most countries Growing importance of legal enactment Worker Participation ‑ Germany ‑ co‑exists with collective bargaining Growing Competitiveness of World Economy and Implications for US Economy and US Industrial Relations
4	Today Growth of Multi-National Corporations The Challenge of Multinationals to IRHRM Arrangements
5	I‑ Growth of Multi-National Corporations (MNCs) What is a Multi-National Corporation? Operates production or service facilities in more than one country Why? What is the alternative? Internal Dynamics of companies Nature of overseas markets - growth of trading blocks Restraints and Incentives
6	I‑ Extent and Growth Dramatic growth since WWII 1975 world-wide foreign direct investment was $23 billion 2000 world-wide foreign direct investment was $1.3 trillion Largest recipients in 2000
7	I- Extent and Growth Manufacturing was 42% total world foreign direct investment 1999 Services were 50% Largest employers as MNCs Growth of stateless corporations
8	I‑ Extent and Growth ORIGINALLY ALMOST ALL MNCS WERE US‑BASED BUT EUROPEAN AND JAPANESE HAVE GROWN GROWTH OF FOREIGN COMPANIES INVESTING IN THE US JAPANESE CAR EXPORTS BANNED BY TAIWAN AND KOREA FOLLOWING ARAB BOYCOTT OF ISRAEL
9	II‑ Challenge of Multi-Nationals to IRHRM Arrangements Nature of IRHR Issues Multinational enterprise presents many of same challenges as multi-plant enterprise of earlier era Principal difference is that the growth in the earlier period of national markets occurred in regions that had substantial political unity
10	II- Nature of IRHR Issues 1990s some attempts to establish internationally recognized labor standards ILO has succeeded at this No child labor No discrimination Freedom to join unions Right to bargain and to strike
11	II‑ Nature of IRHR Issues Thus governments and unions both national institutions facing growing international challenge One result is that countries compete for foreign investment with no one to regulate the competition Non‑labor bases of competition Labor bases of competition
12	II‑ Nature of IR Issues Two sides of workers’ problem Complaints from workers in the investing countries Complaints from workers in the host countries Some are complaints by both
13	II‑ The Challenge of Multinationals to IRHRM Arrangements Multinational Corporations could increase union bargaining power Interdependence of operations in different countries can spread costs of strikes Foreign ownership may be less willing to make waves by taking strikes or locking out
14	II‑ Complaints about Multinationals in their IRHRM Weakens Union power‑ in host countries and investing countries Ability to operate in one country when struck in another Production switching in dispute situations Ability to use lower level of restrictions in one country to argue for lower levels in others
15	II‑ The Challenge Complaints about Multinationals in their labor relations Weakens Union power‑ in host countries and investing countries Threat to leave host country In the investing countries there are further issues Complaints that most modern technology being exported so foreign workers have technological advantage
16	II‑ The Challenge Complaints about Multinationals in their labor relations - Weakens Union Power Generally Limited information Only management knows full details of worldwide operations Even getting information about the company's labor and personnel practices overseas can be very difficult Overall, there is evidence that multinationals do weaken union bargaining power at least in investing and perhaps in host countries as well
17	II‑ Complaints about MNCs in their labor relations Charge that multinationals show contempt for local industrial relations customs and values Seems most use locals as IR managers and frequently join employers' associations Corporate IR managers largely coordinate information or act as consultants
18	II‑ Contempt for Local Customs and Values BASED ON HOME PRACTICES, SOME JAPANESE FIRMS IN BRITAIN HAVE INSISTED ON ONLY ONE UNION IN THE PLANT MacDonald’s has largely been able to impose its normal mode of operation across the EU despite difference in IRHRM systems and laws STILL, MANY FOREIGN FIRMS IN BRITAIN HAVE BEEN LEADERS IN INNOVATIVE AND SUCCESSFUL IRHRM PRACTICES
19	II‑ Contempt for Local Customs and Values Overall, the charge of multinational indifference to local attitudes and practices does not seem to be supported Some MNC changes are successful and called innovations while others are perceived as ignorance MNCs often see themselves as damned if they do or if they don't, especially in LDCs
20	Next Time The Union Response Employer Reactions Government Responses Conclusions
21	Bargaining Across Borders‑ Multinational Corporations Lecture 2 of 2
22	Administrative Presentation Reminder Collect Papers
23	Review Growth of MNCs Challenge of MNCs to IRHRM Arrangements
24	Today The Union Response Employer Reactions Government Responses Conclusions
25	I‑ The Union Response - Limitations Amount of authority a national union can give up depends on how much control it has over work group behavior Where national confederations exert strong control over affiliates, the nationals may not be able to cede authority to multinational union organizations Some problems also arise from inter‑union conflicts
26	I‑ The Union Response - Limitations Other problems involve differences in wage structures Another problem is the concern of governments with economic issues such as the rise in the relative international pay standard of a group of its workers Cross‑national comparisons of working conditions don't seem very salient to workers Difficulties posed by varying laws and practices Management Opposition
27	I‑ The Union Response - Attempts General nature of attempted activities Simultaneous strikes throughout the domain of a multinational Refusal to work overtime at non‑struck plants Pressuring employers to recognize unions at newly acquired facilities
28	I‑ The Union Response - Attempts Attempts to organize consumer boycotts Inter-union exchange of information on the global financial and industrial‑relations positions of the company Providing information on world‑wide operations has been the most important tactic
29	I‑ The Union Response - Attempts IMF has encouraged cooperative efforts and coordinated bargaining Including creation of company councils Including refusals to do transferred work ICEM‑ Chemical Federation‑ has been active Refusals to do struck work Organization of boycotts Coordinated bargaining
30	I‑ The Union Response - Attempts 1997 International Transport Workers Federation (ITF) hosted meeting of UPS unions from around world To create permanent body to negotiate with UPS and to establish international standards company wide A primary goal is to get the company to recognize local customs and practices
31	I‑ The Union Response - Attempts Only ITS engaged in genuine multinational collective bargaining is the ITF In 2000 US workers at Imerys (French based multinational ceramics and construction materials co) joined with Belgian unions and ICEM to launch an international organizing campaign All ITS have hope and long‑range plan to establish transnational bargaining
32	I‑ The Union Response – Attempts Outside ITS Union Network International (UNI) federation of 900 unions from 150 countries 2000 IG Metall signed agreement with Faber-Castell (one of world’s leading producers of writing and drawing instruments) to respect minimum social standards in all its operations in Germany and overseas October 2004 British Union (GMB) and American Union (UNITE-HERE) signed agreement to organize workers in the casino and gaming industry
33	II‑ Employer Reactions Most won't talk to unions, even about general issues, on an international basis Exceptions Recession of early 1980s seemed to induce more companies to try multinational consultations
34	III- Government responses - EU 1982 European Parliament adopted Vredeling Directive 1994 European Works Council Directive 1998 EU adopted policy for all large employers, not just multi-nationals, to inform employees of their financial status and of employment developments June 2001 European union issued guidelines strengthening the obligation of European companies to “inform and consult” worker representatives about company strategy
35	III- Government Responses Attempts to provide information to worker representatives Limited opposition by European companies Unions have tried to increase the legitimacy of the proposals by having them adopted as an ILO convention
36	IV -Conclusions Not much multinational bargaining going on. Process still in its infancy National public policies and issues of sovereignty will be a major obstacle
37	Next Time Summary and Conclusions Course Evaluation