Albizu University Developing a Global Management Discussion

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Help me study for my Business class. I’m stuck and don’t understand.

As an HR manager in the healthcare industry, discuss ways to attract qualified candidates and list two interview questions you may want ask your potential hires. What is the benefit of asking each of two questions? Also, list two additional questions that you should NOT ask of potential hires during a job interview? Why should you avoid those two questions?10-1
Copyright ©2017 Pearson Education, Inc.
Ninth
Edition
Chapter Learning Goals
10-2
1.
To appreciate the importance of international
assignments in developing top managers with
global experience and perspectives
2.
To recognize the need to design programs for
the careful preparation, adaptation, and
repatriation of the expatriate and any
accompanying family, as well as programs for
career management and retention, thereby also
transferring knowledge to and from host
operations
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Chapter Learning Goals
10-3
3.
To become familiar with the use of global
management teams to coordinate host country
and cross-border business
4.
To recognize the varying roles of women
around the world in international
management
3.
To understand the variations in host-country
labor relations systems and the impact on the
manager’s job and effectiveness
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Opening Profile: The Expat Life





10-4
Is it an adventure or a hardship?
Experiences of those who have done a stint
abroad are mixed
Experiences vary by job type, and especially
by location
Adjustment is easier for those who go to
places where the culture and business
practices are similar
Most expect the assignment to be careerbroadening
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Chapter Learning Goals
To appreciate the importance of
international assignments in
developing top managers with
global experience and
perspectives
10-5
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The Expat Life





10-6
Could include a nanny, driver, or even a
bodyguard
Tax-free income
Round trips home every year? Language
classes, fees for private schools
Being laid-off in a foreign country
26% of ex-pats opt to continue their
overseas assignment
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Essentials of IHRM
Maximize long-term
retention and use of
international cadre
through career
management to
develop a topmanagement team
with global
experience.
10-7
Develop effective
global management
teams.
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Understand value, and
promote the role of
women in
international
management to
maximize those
underutilized
resources.
Work with the hostcountry labor
relations systems to
help implementation
and employee
productivity.
Chapter Learning Goals
To recognize the need to design
programs for the careful preparation,
adaptation, and repatriation of the
expatriate and any accompanying
family, as well as programs for career
management and retention, thereby
also transferring knowledge to and
from host operations
10-8
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Expatriate Career Management
Preparation,
adaptation,
and
repatriation
10-9
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The role of
the
expatriate
spouse
Expatriate
retention
Preparation, Adaptation, and Repatriation
10-10
Reverse
culture
shock occurs
because
• Reintegration is difficult
• Expatriates are often “out of sight,
out of mind”
• Feelings of alienation from “home”
Poor
management
of
expatriates
• Means fewer will be willing to take
assignments
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HRM Practices Most Frequently Associated
with Successful Repatriation





10-11
Visible signs that the company values
international experience
Career planning sessions
Communications with HQ about
repatriation process
Continuous communications with HQ
Agreement about position upon
repatriation
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Elements of Successful
Repatriation Programs
Using the
increased
experience and
skills of
returnees
Support to
those overseas
Careful career
planning
10-12
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The Role of Expatriate Spouse
Employment status
• Half of expatriate
spouses are
employed before
the assignment,
but only 11
percent are
employed during
the assignment
10-13
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Spouse adjustment
more likely:
• Intercompany
networking to find
spouse a position
• Personal concerns
and future career
Expatriate Retention
 Exit from the home country
 Quality of preparation
 Entry to the host country
 Monitoring and support
 Entry back to the home country
 Reverse culture shock depends on preparation
and support
10-14
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Expatriates: “Handle with Care”?
Expatriates are highly marketable and receive
more attractive offers from other employers.
Overseas compensation packages are more
generous than those at home.
Expatriates feel unappreciated at home and
on assignment.
10-15
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The Role of Repatriation in
Developing a Global Cadre
Successful expatriates
acquire skills:
• Managerial skills
• Tolerance for
ambiguity
• Multiple
perspectives
• Ability to work with
and manage others
10-16
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Leading company
• GE
Best practices:
• Start repatriation
program before the
assignment
• Shared learning
among global
managers
• A culture that values
international
experience as part
of a career path
Variables Influencing Success of Knowledge
Transfer from Repatriated Manager
Knowledge
Acquired
Retention of
manager in firm
Manager’s
willingness to
share
10-17
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Variables Influencing Success of Knowledge
Transfer from Repatriated Manager
Firm value placed on knowledge transfer
Organizational knowledge transfer process
Level of integration of
knowledge/repatriated manager →
knowledge management/Org value added
10-18
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Under the Lens: Expatriates’ Careers Add
to Knowledge
 Casio Calil returned to Sao Paulo to head
up JP Morgan Asset Management
 Expats returning to Libya after Gaddafi
hoping business would improve
 “Fly-jins” in Japan after disasters in 2011
10-19
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Global Management Teams
A collection of managers in or from several countries
who must rely on group collaboration
Whirlpool Int’l: US-Dutch JW with administrative
HQ in Italy; management team = Swedish, Italian,
Dutch, American, Belgian, German
Teams must provide the means to communicate
corporate culture, develop a global perspective,
coordinate and integrate the global enterprise, and be
responsive to local market needs
10-20
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Operational Challenges for
Global Virtual Teams
Geographic dispersal: the
complexity of scheduling
communications across multiple
time zones, holidays, and so on
Cultural differences: variations
in attitudes and expectations
Virtual Teams’
Challenges
Language and communication:
translation difficulties, variations
in accents, semantics, and so on
10-21
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Technology: variations in
availability, speed, acceptability,
and so on
Virtual Teams’ Future Needs
 How to lead a virtual team meeting
 How to coach and mentor virtually
 How to monitor team progress
 How to use communication technologies
 How to manage team boundaries
10-22
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Managing Transnational Teams
Tasks for Global Business Teams
• Cultivating trust among members
• Overcoming communication barriers
• Aligning goals of individual team members
• Obtaining clarity regarding team objectives
• Ensuring that the team possesses necessary knowledge and skills
10-23
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Managing Transnational Teams
 Advantages:
 Greater opportunity for global competition
 Opportunities for cross cultural
understanding
 Exposure to different view points
 Disadvantages:
 Problems resulting from differences in
languages
 Complex decision making processes
 Personality conflicts
10-24
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Management Techniques to Deal with the
Cross-Cultural Collaboration Challenges
Draw upon individual tolerance
and self-control
Trial-and-error processes
coupled with personal
relationships
Setting up transnational cultures
10-25
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Chapter Learning Goals
To recognize the varying roles of
women around the world in
international management
10-26
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Management Focus: The Role of Women in
International Management
Ginni Rommetty, Chairman, CEO, and
President of IBM
Mary Barra, CEO of General Motors
Indra Nooyi, PepsiCo Chairman and
CEO
10-27
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Management Focus: The Role of Women in
International Management
There are limitations on opportunities for women for
expatriate assignments
The United States, Spain, Canada, and Finland lead the world
in employing the largest numbers of women from entry level
to senior management.
Women lag behind their male peers in pay and opportunities
for advancement.
5 percent of the chief executives of the 600 companies
surveyed were women.
10-28
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Management Focus: The Role of Women in
International Management
North American women
working as expatriate
managers in countries
around the world showed
that they are—for most
part—successful.
Women and minorities
represent a significant
resource for overseas
assignments—whether as
expatriates or as hostcountry nationals.
10-29
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The Role of Women in International
Management: Japan
 Opportunities for women are tied to cultural
values and expectations regarding the role of
women
 Working married women = loss of face for husband
– women were only allowed clerical positions
 Only 11% of Japanese women are in managerial
positions
 “Japan has gone as far as it can go with a social
model that consists of men filling all of the
economic management and political roles”
10-30
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Chapter Learning Goals
To understand the variations in
host-country labor relations
systems and the impact on the
manager’s job and effectiveness
10-31
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Working Within Local
Labor Relations Systems
The Impact of
Unions on
Business
Organized Labor
Around the
World
Convergence
Versus
Divergence in
Labor Systems
Adapting to
Local Industrial
Relations systems
The NAFTA and
Labor Relations
in Mexico
10-32
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The Impact of Unions on Business
10-33
Labor Relations and
Collective Bargaining
Three Dimensions to
Consider
Labor Relations
Constraints
• The process through
which managers and
workers determine
their workplace
relationship
• The participation of
labor in firm affairs
• The role and impact
of unions
• Human resource
policies
• Wage levels set by
unions
• Limits on the firm’s
ability to vary
employment levels
• Limitations on the
global integration of
operations
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Organized Labor Around the world
Union membership is in
decline in the U.S.
Industrial, craft,
conglomerate, and general
unions
Labor unions must be
understood within their given
contextual environment.
10-34
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Under the Lens: Vietnam the Union Role in
achieving Manufacturing Sustainability and
Global Competitiveness
 The U.S. is Vietnam’s seventh largest FDI
country
 From 1986: doi moi; 2000: stock market
established; member of ASEAN, AFTA and WTO;
trade relations with U.S. normalized in 2006
 Footwear and apparel manufacturing are
offshored operations from Taiwan and South
Korea
10-35
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Under the Lens: Vietnam the Union Role in
achieving Manufacturing Sustainability and
Global Competitiveness
 10,000 workers in some buildings, but grounds,
infrastructure, cleanliness similar to western
parks
 Wages remain low; 20 day holiday
 Satisfactory living arrangement, not inhumane or
depressing
 Better Work Vietnam
10-36
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Labor Systems
Convergence in Labor
systems
 Forces for convergence:
 Global competiveness
 Political change
 New market economies
 Free trade zones
10-37
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Divergence in Labor
systems
 Competition for jobs
 Collective bargaining
methods
 The role of political ideology,
overall social structure, and
history of industrial practices
Adapting to Local
Industrial Relations Systems
Considerable
pressure for
MNCs to adapt
their practices
largely to the
traditions of
national
industrial
relations systems
10-38
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MNCs are
subject to local
and country
regulations and
practices.
Considerable
gap exists
between the
labor laws and
the enforcement
of those laws—
in particular in
less developed
countries
NAFTA and Labor Relations in Mexico
10-39
Labor issues subject to
review under NAFTA:
Hiring Mexican
nationals for 90% of
workforce
Workers believe MNCs
use blacklists,
intimidation, and
economic pressure to
oppose union
organization.
MNCs violate labor
rights and cooperate
with pro-government
labor leaders
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Comparative Management in Focus: Labor
Relations in Germany
 Codetermination law
 The German model holds
(mitbestimmung) is
that competition should
coming under pressure. not be based on cost
 Union works councils  Conflicting opinions over
are “co-managers”
the value of
 German unions are
codetermination
increasingly willing to
make concessions.
 Termination costs are
very high
10-40
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Conclusions
 Ex-pat career management necessitates plans for
retention during/after assignments
 Ex-pat’s spouse plays a crucial role
 Global management teams offer greater
opportunities for competition
 Virtual global teams enable cost effective rapid
knowledge sharing and collaboration
 Women represent an underutilized resource
 Labor relations environment, system processes
vary around the world
10-41
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All rights reserved. No part of this publication may be reproduced, stored in a
retrieval system, or transmitted, in any form or by any means, electronic,
mechanical, photocopying, recording, or otherwise, without the prior written
permission of the publisher. Printed in the United States of America.
Copyright © 2017 Pearson Education, Inc.
42
Chapter 10-Lecture Notes
DEVELOPING A GLOBAL MANAGEMENT CADRE
Chapter Learning Objectives
10-1. To appreciate the importance of international assignments in developing top
managers with global experience and perspectives and to understand the
benefits and costs associated with expatriate assignments
10-2. To recognize the need to design programs for the careful preparation,
adaptation, and repatriation of the expatriate and any accompanying family,
as well as programs for career management and retention, thereby also
transferring knowledge to and from host operations
10-3. To become familiar with the use of global management teams to
coordinate host country and cross-border business
10-4. To recognize the varying roles of women around the world in
international management
10-5. To understand the variations in host-country labor relations systems
and the impact on the manager’s job and effectiveness
Introduction
A crucial factor in global competitiveness is the ability of the firm to maximize long term
its global human resources. To do this, attention must be paid to several important areas:
• To maximize long-term retention and use of international cadre through career
management so that the company can develop a top management team with global
experience
• To develop effective global management teams
• To understand, value, and promote the role of women in international
management in order to maximize those underutilized resources
• To work with the host country labor relations system to effect strategic
implementation and employee productivity
I. Expatriate Career Management
A. According to the Cartus survey on “Trends in Global Relocation: 2018 Biggest
Challenges,” managers who are mobile across national borders face three primary
challenges.
• cost control
• immigration
• tax compliance
B. Preparation, Adaptation, and Repatriation
1. In a Brookfield Global Relocation Survey study of global mobility trends, 61
percent of the survey respondents revealed that their companies communicate
the significance of expatriate assignments to employees’ careers. However,
only 41 percent of the respondents indicated that their companies use mobility
policies in the recruitment process for external candidates and only 23 percent
have a clearly defined process that incorporates career planning from
assignment creating a talent-management gap.
Page | 1
2. Effective human resource management of a company’s global cadre does not
end with the overseas assignment. It ends with the successful repatriation of the
executive into company headquarters.
3. Reverse culture shock occurs primarily because of difficulty of reintegration
into the organization, but also, the longer a person is away, the more difficult
it is to get back into the swing of things.
4. Expatriates cited the following HRM practices as important to them.
• Visible signs that the company values international experience
• Career planning sessions
• Communications with home office of details of the repatriation process
• Continuous communications with the home office
• Agreement about position upon repatriation
5. For companies to maximize the long-term use of their global cadre, they need to
make sure that the foreign assignment and the reintegration process are positive
experiences. This means careful career planning, support while overseas, and
use of the increased experience and skills of returned managers to benefit the
home office.
C. The Role of Expatriate Spouse
1. Many companies are beginning to recognize the importance of providing
support for spouses and children. Firms often use informal means, such as
intercompany networking, to help find the trailing spouse a position in the
same location. They know that with the increasing number of dual-career
couples, if the spouse does not find a position, the manager will very likely
turn down the assignment.
2. Companies such as Hewlett-Packard, Shell, Medtronic, and Monsanto offer a
variety of options to address the dual-career dilemma. Clearly, then, the
selection process must include spouses, partners, and entire families. Global
assignments must take account of the expatriate’s personal concerns and future
career; otherwise, the company will face the possibility of early return and a
possible doubling of the chances for employee attrition.
D. Expatriate Retention
1. Support services provide timely help for the manager and therefore are part of
the effective management of an overseas assignment. It comprises three phases of
transition and adjustment that must be managed for successful socialization to a
new culture and re-socialization back to the old culture. These phases are:
• exit transition from the home country
• entry transition to the host country
• entry transition back to the home country or to a new host country
2. The attrition rate for expatriates is about double that of non-expatriates for the
following reasons.
• Expatriates are more marketable and receive more attractive offers from
other employers.
• Expatriates find that their compensation packages on overseas assignments
are more generous than at home and go from one company to another to
take advantage of that.
Page | 2
•
Expatriates feel unappreciated and dissatisfied both during and after the
assignment and leave the country.
II. The Role of Repatriation in Developing a Global Management Cadre
A. In the international assignment, both the manager and the company can benefit
from the enhanced skills and experience the expatriate gains. Many returning
executives report an improvement in their managerial skills and self-confidence.
Some of these acquired skills, as reported by Adler, include the following.
•
Managerial skills, not technical skills: Learning how to deal with a wide
range of people, to adapt to their cultures through compromise, and not to
be a dictator.
• Tolerance for ambiguity: Making decisions with less information and
more uncertainty about the process and the outcome.
• Multiple perspectives: Learning to understand situations from the
perspective of local employees and businesspeople.
• Ability to work with and manage others: Learning patience and
tolerance—realizing that managers abroad are in the minority among local
people; learning to communicate more with others and empathize with
them.
B. Knowledge Transfer
Traditionally, it has been assumed that the role of expatriates is partly to bring
knowledge from the corporate headquarters to subsidiaries; however, it is clear
that there is a potential strategic advantage when expatriates acquiring knowledge
while on international assignment bring it back to the center of the organization or
disseminate it across other subsidiaries.
• Knowledge about what (such as differences in customer preferences)
• Knowledge about why (e.g., understanding how culture differences
affect cross-cultural understanding)
• Knowledge about how (e.g., management skills, such as delegating
responsibilities)
• Knowledge about when (e.g., knowledge about the effect of timing)
• Knowledge about who (e.g., relationships created over the life of an
assignment)
The company should therefore position itself to benefit from that enhanced
management knowledge if it wants to develop a globally experienced
management cadre—an essential ingredient for global competitiveness—in
particular where there is a high degree of shared learning among the
organization’s global managers. See Exhibit 10-1.
III. Global Management Teams
A. Global management teams are collections of managers from several countries
who must rely upon group collaboration if each member is to experience the
optimum of success and goal achievement. The role of, and importance of,
international teams increase as the firm progresses in its scope of international
activity.
Page | 3
B.
For global organizations and alliances, we find the same cross-cultural
interactions as in MNCs and, in addition, considerably more interaction with
the external environment at all levels of the organization (as indicated by the
arrows extending into and out of the organization). Therefore, worldwide
international teamwork is vital, as are the pockets of cross-cultural teamwork
and interactions that take place at many boundaries.
C. When a firm responds to its global environment with a global strategy and then
organizes with a networked “global” structure, various types of international
teams are necessary for global integration and local differentiation. These
include headquarters-subsidiary teams and those coordinating alliances outside
the organization. In joint ventures, in particular, multicultural teams work at all
levels of strategic planning and implementation, and on the production and
assembly floor.
D. Global Management Teams
Global management teams describes a collection of managers in or from
several countries who must rely on group collaboration if each member is to
experience optimum success and goal achievement. The team’s ability to work
effectively together is crucial to the company’s success. In addition, technology
facilitates effective and efficient teamwork around the world. For the global
company worldwide competition and markets necessitate global teams for
strategy development, both for the organization as a whole and for the local
units to respond to their markets.
E. Virtual global teams
Virtual global teams are a horizontal networked structure, with people around
the world conducting meetings and exchanging information via the internet,
enabling the organization to capitalize on 24-hour productivity. Exhibit 10-2
shows the operational challenges of such teams.
F. Managing Transnational Teams
1. The ability to develop effective transnational teams is essential in light of the
increasing proliferation of foreign subsidiaries, joint ventures, and other
transnational alliances.
2. The advantages of synergy include: greater opportunity for global competition
by being able to share experiences, technology, and a pool of international
managers; and opportunities for cross-cultural understanding and exposure to
different viewpoints. The disadvantages of international teams include
problems resulting from differences in language, communication, and varying
management styles; complex decision-making processes; fewer promotional
opportunities; personality conflicts; and greater complexity in the workplace.
3. Important variables in building global teams according to Govindarajan and
Gupta are:
• Cultivating trust among members
• Overcoming communication barriers
• Aligning goals of individual team members
• Obtaining clarity regarding team objectives
• Ensuring that the team possesses necessary knowledge and skills
Page | 4
4. Following are some general recommendations the researchers make for
improving teamwork.
• Cultivate a culture of trust; one way to do this is by scheduling face-toface meetings early on, even if later meetings will be virtual
• Rotate meeting locations; this develops global exposure for all team
members and legitimizes each person’s position
• Rotate and diffuse team leadership
• Link rewards to team performance
• Build social networks among managers from different countries
5. A comparative study of European project groups in several countries by Sylvie
Chevrie revealed three main strategies:
• Drawing upon individual tolerance and self-control: In this R&D
consortium, the Swiss manager treated all team members the same,
ignoring cultural differences, and the team members coexisted with
patience and compromise. Many of the members said they were used to
multinational projects and just tried to focus on technical issues
• Trial-and-error processes coupled with personal relationships: This is a
specific strategy in which the project manager sets up social events to
facilitate the team members getting acquainted with one another. They
discover through trial and error what procedures will be acceptable to the
group.
• Setting up transnational cultures: Here the managers used the common
professional, or occupational, culture, such as the engineering profession,
to bring the disparate members together within a common understanding
and process.
IV. The Role of Women in International Management
A. Whether in global management teams, as expatriates, or as host-country nationals,
the importance of women as a valuable, and often-underused resource should not
be overlooked in IHRM efforts to maximize the company’s global management
cadre. On February 26, 2015, Christine Lagarde, then Managing Director of the
International Monetary Fund (IMF), explained on various news programs its
committee’s action plan to discuss with heads of state what can be done to improve
their country’s economic progress by removing or lessening the roadblocks to
females working there—cultural and practical.
B. For example, in Japan, she proposed that more women could take jobs if the
government instituted a child-care plan. And, in fact, in August 2015, Prime
Minister Shinzo Abe announced a new law requiring companies with over 300
employees to set targets for hiring more women managers—at the time, women
comprised only 11 percent of supervisory or managerial positions. Child-care was
not addressed in the new law and remains an obstacle.
C. In light of the growing presence of females in the corner suite, the 2018 ranking
by Fortune magazine of the most powerful women in business in the United
States revealed only 25 female CEOs of large companies, down from 32 female
Page | 5
CEOs in 2017. At the top of the list are Mary Barra, CEO of General Motors
(#10); Gail Boudreaux of Anthem (#29); Ginni Rommetty, Chairman, CEO, and
President of IBM (#34).
D. Although women’s advancement in some global companies is impressive, it is
still true that there are limitations on managerial opportunities for many women in
their own country—some more than others—and there are even more limitations
on their opportunities for expatriate assignments. In a 2017 McKinsey study,
women tended to use more leadership behavior that enhances firm performance
than their male counterparts. See Exhibit 10-3.
E. Adler studied this phenomenon regarding women and recommends that
businesses:
• avoid assuming that a female executive will fail because of the way she
will be received or because of problems female spouses experience
• avoid assuming that a woman will not want to go overseas
• give female managers every chance to succeed by giving them the titles,
status, and recognition appropriate to the position—as well as sufficient
time to be effective
V. Working Within Local Labor Relations Systems
A. It is the responsibility of the IHRM function to monitor the labor relations systems
in host countries and advise local managers accordingly. In fact, that information
should be considered one input to the strategic decision of whether to operate in a
particular country or region.
B. The Impact of Unions on Business
1. European businesses are undermined by poor labor relations and inflexible
regulations. Businesses move jobs overseas to cut labor costs, resulting from a
refusal of unions to grant reduction in employment protection or benefit
non-European firms operating in Europe must consider labor relations.
C. Organized Labor Around the World
1. Labor union membership has been on the decline across most developed
nations. In 1985, 30 percent of workers were labor union members in OECD
countries. As of 2018, union membership had dropped to 16 percent.
According to OECD statistics, approximately 81 million workers are part of
labor unions in its member states. Moreover, roughly 155 million workers
partake in collective agreements at various levels (e.g., national or regional).
The percentage of workers covered by collective agreements has declined from
45 percent in 1985 to 32 percent in 2017.
2. The reasons for the drop in union membership include technological and
organizational changes, international expansion of firms, and most noticeable,
the decline of the labor union membership rate of 90.4 percent—the highest
among OECD countries. Sweden ranks second with union membership rate
of 66.1 percent. In contrast, Japanese and Australia union membership rates
are substantially lower—roughly 17 percent and 13 percent, respectively.
Page | 6
3. Industrial labor relations systems across countries can only be understood in the
context of the variables in their environment and the sources of origins of unions.
These include government regulation of unions, economic and unemployment
factors, technological issues, and the influence of religious organizations. Any of
the basic processes or concepts of labor unions, therefore, may vary across
countries, depending on where and how the parties have their power and achieve
their objectives, such as through parliamentary action in Sweden. For example,
collective bargaining in the United States and Canada refer to negotiations between
a labor union local and management; but in Europe collective bargaining takes
place between the employer’s organization and a trade union at the industry level.
4. In the industrialized world, tumbling trade barriers are also reducing the power of
trade unions because competitive multinational companies have more freedom to
choose alternative production and sourcing locations. Most new union workers—
about 75 percent—will be in emerging nations, like China and Mexico, where
wages are low and unions are scarce. However, in some countries, such as India,
outmoded labor laws are very restrictive for MNEs, making it difficult to lay off
employees under any circumstances and forcing foreign companies to be very
careful in their selection of new employees.
In China, for example, in a surprising move, the government passed a new law
that will grant power to labor unions, in spite of protests by foreign companies
with factories there. The order was in response to a sharp rise in labor tension and
protests about poor working conditions and industrial accidents.
5. At Foxconn Technology, for example, which is a major supplier to several
electronics giants such as Hewlett Packard, Apple, and Microsoft, there were
large protests in January 2012 by workers at its Wuhan plant that involved threats
from some workers to commit suicide. The employees were protesting that they
had been forced to work long hours under poor conditions with little pay.
Foxconn resolved the dispute and, under pressure from Apple and other
companies, pledged to improve working conditions in China.
D. Convergence versus Divergence in Labor Systems
In October 2006 the International Trade Union Confederation (ITUC) was
formed in Vienna, comprising the affiliated organizations of the former ICFTU
(International Confederation of Free Trade Unions) and WCL (World
Confederation of Labor), plus eight other national trade union organizations, to
form a global body. The ITUC is the world’s largest trade union and, as of 2012,
represents 175 million workers through its 308 affiliated organizations in 153
countries and territories. Its objective is to provide “a countervailing force in a
society that has changed enormously, with workers’ rights being flouted under
the pressure created by the current trajectory of ‘race to the bottom’
globalization.”
1. Political changes, external competitive forces, increased open trade, and
frequent moves of MNCs around the world are forces working toward
convergence in labor systems. Convergence occurs as the migration of
management and workplace practices around the world results in the reduction
of workplace disparities from one country to another. This occurs primarily as
Page | 7
MNCs seek consistency and coordination among their foreign subsidiaries, and
as they act as catalysts for change by “exporting” new forms of work
organization and industrial relations practices. It also occurs as harmonization is
sought, such as for the EC countries, and as competitive pressures in free-trade
zones, such as the NAFTA countries, eventually bring about demands for some
equalization of benefits for workers.
2. Other pressures toward convergence of labor relations practices around the
world come from the activities and monitoring of labor conditions worldwide by
various organizations. One of these is the International Labor Organization
(ILO)—comprising union, employer, and government representation—whose
mission is to ensure that humane conditions of labor are maintained. Other
associations of unions in different countries include various international trade
secretariats representing workers in specific industries. Exhibit 10-4 shows the
major forces for and against convergence in labor relations systems.
3. Adapting to Local Industrial Relations Systems
a. Although there are forces for convergence in labor relations systems
around the world as discussed above, for the most part, MNCs still adapt
their practices to a great extent to the traditions of national industrial
relations systems, and there is considerable pressure to do so. Those
companies, in fact, act more like local employers, subject to local and
country regulations and practices.
b. Although the reasons for continued divergence in systems seem fewer,
they are very strong; not the least of these are political ideology and the
overall social structure and history of industrial practices.
4. USMCA and Labor Relations in Mexico
a. Government control over union activities is very strong, and although
some strikes occur, union control over members remains rather weak.
Most labor unions are affiliated with the Institutional Revolutionary Party
(PRI) through the Confederation of Mexican Workers (Confederación de
Trabajadores Mexicanos—CTM).
b. In 2018, the leaders of the United States, Mexico, and Canada signed a
new trade agreement— called USMCA—which replaces NAFTA.
Pending Congressional approval, one of the most salient differences in the
USMCA compared with NAFTA pertains to protections for workers in the
three member countries. Mexico has agreed to pass laws giving workers
the right to real union representation, to extend labor protections to
Central America), and to protect women from discrimination.
Page | 8

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Help me study for my Business class. I’m stuck and don’t understand. As an HR manager in the healthcare industry, discuss ways to attract qualified candidates and list two interview questions you may want ask your potential hires. What is the benefit of asking each of two questions? Also, list two additional questions that you should NOT ask of potential hires during a job interview? Why should you avoid those two questions?10-1 Copyright ©2017 Pearson Education, Inc. Ninth Edition Chapter Learning Goals 10-2 1. To appreciate the importance of international assignments in developing top managers with global experience and perspectives 2. To recognize the need to design programs for the careful preparation, adaptation, and repatriation of the expatriate and any accompanying family, as well as programs for career management and retention, thereby also transferring knowledge to and from host operations Copyright ©2017 Pearson Education, Inc. Chapter Learning Goals 10-3 3. To become familiar with the use of global management teams to coordinate host country and cross-border business 4. To recognize the varying roles of women around the world in international management 3. To understand the variations in host-country labor relations systems and the impact on the manager’s job and effectiveness Copyright ©2017 Pearson Education, Inc. Opening Profile: The Expat Life      10-4 Is it an adventure or a hardship? Experiences of those who have done a stint abroad are mixed Experiences vary by job type, and especially by location Adjustment is easier for those who go to places where the culture and business practices are similar Most expect the assignment to be careerbroadening Copyright ©2017 Pearson Education, Inc. Chapter Learning Goals To appreciate the importance of international assignments in developing top managers with global experience and perspectives 10-5 Copyright ©2017 Pearson Education, Inc. The Expat Life      10-6 Could include a nanny, driver, or even a bodyguard Tax-free income Round trips home every year? Language classes, fees for private schools Being laid-off in a foreign country 26% of ex-pats opt to continue their overseas assignment Copyright ©2017 Pearson Education, Inc. Essentials of IHRM Maximize long-term retention and use of international cadre through career management to develop a topmanagement team with global experience. 10-7 Develop effective global management teams. Copyright ©2017 Pearson Education, Inc. Understand value, and promote the role of women in international management to maximize those underutilized resources. Work with the hostcountry labor relations systems to help implementation and employee productivity. Chapter Learning Goals To recognize the need to design programs for the careful preparation, adaptation, and repatriation of the expatriate and any accompanying family, as well as programs for career management and retention, thereby also transferring knowledge to and from host operations 10-8 Copyright ©2017 Pearson Education, Inc. Expatriate Career Management Preparation, adaptation, and repatriation 10-9 Copyright ©2017 Pearson Education, Inc. The role of the expatriate spouse Expatriate retention Preparation, Adaptation, and Repatriation 10-10 Reverse culture shock occurs because • Reintegration is difficult • Expatriates are often “out of sight, out of mind” • Feelings of alienation from “home” Poor management of expatriates • Means fewer will be willing to take assignments Copyright ©2017 Pearson Education, Inc. HRM Practices Most Frequently Associated with Successful Repatriation      10-11 Visible signs that the company values international experience Career planning sessions Communications with HQ about repatriation process Continuous communications with HQ Agreement about position upon repatriation Copyright ©2017 Pearson Education, Inc. Elements of Successful Repatriation Programs Using the increased experience and skills of returnees Support to those overseas Careful career planning 10-12 Copyright ©2017 Pearson Education, Inc. The Role of Expatriate Spouse Employment status • Half of expatriate spouses are employed before the assignment, but only 11 percent are employed during the assignment 10-13 Copyright ©2017 Pearson Education, Inc. Spouse adjustment more likely: • Intercompany networking to find spouse a position • Personal concerns and future career Expatriate Retention  Exit from the home country  Quality of preparation  Entry to the host country  Monitoring and support  Entry back to the home country  Reverse culture shock depends on preparation and support 10-14 Copyright ©2017 Pearson Education, Inc. Expatriates: “Handle with Care”? Expatriates are highly marketable and receive more attractive offers from other employers. Overseas compensation packages are more generous than those at home. Expatriates feel unappreciated at home and on assignment. 10-15 Copyright ©2017 Pearson Education, Inc. The Role of Repatriation in Developing a Global Cadre Successful expatriates acquire skills: • Managerial skills • Tolerance for ambiguity • Multiple perspectives • Ability to work with and manage others 10-16 Copyright ©2017 Pearson Education, Inc. Leading company • GE Best practices: • Start repatriation program before the assignment • Shared learning among global managers • A culture that values international experience as part of a career path Variables Influencing Success of Knowledge Transfer from Repatriated Manager Knowledge Acquired Retention of manager in firm Manager’s willingness to share 10-17 Copyright ©2017 Pearson Education, Inc. Variables Influencing Success of Knowledge Transfer from Repatriated Manager Firm value placed on knowledge transfer Organizational knowledge transfer process Level of integration of knowledge/repatriated manager → knowledge management/Org value added 10-18 Copyright ©2017 Pearson Education, Inc. Under the Lens: Expatriates’ Careers Add to Knowledge  Casio Calil returned to Sao Paulo to head up JP Morgan Asset Management  Expats returning to Libya after Gaddafi hoping business would improve  “Fly-jins” in Japan after disasters in 2011 10-19 Copyright ©2017 Pearson Education, Inc. Global Management Teams A collection of managers in or from several countries who must rely on group collaboration Whirlpool Int’l: US-Dutch JW with administrative HQ in Italy; management team = Swedish, Italian, Dutch, American, Belgian, German Teams must provide the means to communicate corporate culture, develop a global perspective, coordinate and integrate the global enterprise, and be responsive to local market needs 10-20 Copyright ©2017 Pearson Education, Inc. Operational Challenges for Global Virtual Teams Geographic dispersal: the complexity of scheduling communications across multiple time zones, holidays, and so on Cultural differences: variations in attitudes and expectations Virtual Teams’ Challenges Language and communication: translation difficulties, variations in accents, semantics, and so on 10-21 Copyright ©2017 Pearson Education, Inc. Technology: variations in availability, speed, acceptability, and so on Virtual Teams’ Future Needs  How to lead a virtual team meeting  How to coach and mentor virtually  How to monitor team progress  How to use communication technologies  How to manage team boundaries 10-22 Copyright ©2017 Pearson Education, Inc. Managing Transnational Teams Tasks for Global Business Teams • Cultivating trust among members • Overcoming communication barriers • Aligning goals of individual team members • Obtaining clarity regarding team objectives • Ensuring that the team possesses necessary knowledge and skills 10-23 Copyright ©2017 Pearson Education, Inc. Managing Transnational Teams  Advantages:  Greater opportunity for global competition  Opportunities for cross cultural understanding  Exposure to different view points  Disadvantages:  Problems resulting from differences in languages  Complex decision making processes  Personality conflicts 10-24 Copyright ©2017 Pearson Education, Inc. Management Techniques to Deal with the Cross-Cultural Collaboration Challenges Draw upon individual tolerance and self-control Trial-and-error processes coupled with personal relationships Setting up transnational cultures 10-25 Copyright ©2017 Pearson Education, Inc. Chapter Learning Goals To recognize the varying roles of women around the world in international management 10-26 Copyright ©2017 Pearson Education, Inc. Management Focus: The Role of Women in International Management Ginni Rommetty, Chairman, CEO, and President of IBM Mary Barra, CEO of General Motors Indra Nooyi, PepsiCo Chairman and CEO 10-27 Copyright ©2017 Pearson Education, Inc. Management Focus: The Role of Women in International Management There are limitations on opportunities for women for expatriate assignments The United States, Spain, Canada, and Finland lead the world in employing the largest numbers of women from entry level to senior management. Women lag behind their male peers in pay and opportunities for advancement. 5 percent of the chief executives of the 600 companies surveyed were women. 10-28 Copyright ©2017 Pearson Education, Inc. Management Focus: The Role of Women in International Management North American women working as expatriate managers in countries around the world showed that they are—for most part—successful. Women and minorities represent a significant resource for overseas assignments—whether as expatriates or as hostcountry nationals. 10-29 Copyright ©2017 Pearson Education, Inc. The Role of Women in International Management: Japan  Opportunities for women are tied to cultural values and expectations regarding the role of women  Working married women = loss of face for husband – women were only allowed clerical positions  Only 11% of Japanese women are in managerial positions  “Japan has gone as far as it can go with a social model that consists of men filling all of the economic management and political roles” 10-30 Copyright ©2017 Pearson Education, Inc. Chapter Learning Goals To understand the variations in host-country labor relations systems and the impact on the manager’s job and effectiveness 10-31 Copyright ©2017 Pearson Education, Inc. Working Within Local Labor Relations Systems The Impact of Unions on Business Organized Labor Around the World Convergence Versus Divergence in Labor Systems Adapting to Local Industrial Relations systems The NAFTA and Labor Relations in Mexico 10-32 Copyright ©2017 Pearson Education, Inc. The Impact of Unions on Business 10-33 Labor Relations and Collective Bargaining Three Dimensions to Consider Labor Relations Constraints • The process through which managers and workers determine their workplace relationship • The participation of labor in firm affairs • The role and impact of unions • Human resource policies • Wage levels set by unions • Limits on the firm’s ability to vary employment levels • Limitations on the global integration of operations Copyright ©2017 Pearson Education, Inc. Organized Labor Around the world Union membership is in decline in the U.S. Industrial, craft, conglomerate, and general unions Labor unions must be understood within their given contextual environment. 10-34 Copyright ©2017 Pearson Education, Inc. Under the Lens: Vietnam the Union Role in achieving Manufacturing Sustainability and Global Competitiveness  The U.S. is Vietnam’s seventh largest FDI country  From 1986: doi moi; 2000: stock market established; member of ASEAN, AFTA and WTO; trade relations with U.S. normalized in 2006  Footwear and apparel manufacturing are offshored operations from Taiwan and South Korea 10-35 Copyright ©2017 Pearson Education, Inc. Under the Lens: Vietnam the Union Role in achieving Manufacturing Sustainability and Global Competitiveness  10,000 workers in some buildings, but grounds, infrastructure, cleanliness similar to western parks  Wages remain low; 20 day holiday  Satisfactory living arrangement, not inhumane or depressing  Better Work Vietnam 10-36 Copyright ©2017 Pearson Education, Inc. Labor Systems Convergence in Labor systems  Forces for convergence:  Global competiveness  Political change  New market economies  Free trade zones 10-37 Copyright ©2017 Pearson Education, Inc. Divergence in Labor systems  Competition for jobs  Collective bargaining methods  The role of political ideology, overall social structure, and history of industrial practices Adapting to Local Industrial Relations Systems Considerable pressure for MNCs to adapt their practices largely to the traditions of national industrial relations systems 10-38 Copyright ©2017 Pearson Education, Inc. MNCs are subject to local and country regulations and practices. Considerable gap exists between the labor laws and the enforcement of those laws— in particular in less developed countries NAFTA and Labor Relations in Mexico 10-39 Labor issues subject to review under NAFTA: Hiring Mexican nationals for 90% of workforce Workers believe MNCs use blacklists, intimidation, and economic pressure to oppose union organization. MNCs violate labor rights and cooperate with pro-government labor leaders Copyright ©2017 Pearson Education, Inc. Comparative Management in Focus: Labor Relations in Germany  Codetermination law  The German model holds (mitbestimmung) is that competition should coming under pressure. not be based on cost  Union works councils  Conflicting opinions over are “co-managers” the value of  German unions are codetermination increasingly willing to make concessions.  Termination costs are very high 10-40 Copyright ©2017 Pearson Education, Inc. Conclusions  Ex-pat career management necessitates plans for retention during/after assignments  Ex-pat’s spouse plays a crucial role  Global management teams offer greater opportunities for competition  Virtual global teams enable cost effective rapid knowledge sharing and collaboration  Women represent an underutilized resource  Labor relations environment, system processes vary around the world 10-41 Copyright ©2017 Pearson Education, Inc. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America. Copyright © 2017 Pearson Education, Inc. 42 Chapter 10-Lecture Notes DEVELOPING A GLOBAL MANAGEMENT CADRE Chapter Learning Objectives 10-1. To appreciate the importance of international assignments in developing top managers with global experience and perspectives and to understand the benefits and costs associated with expatriate assignments 10-2. To recognize the need to design programs for the careful preparation, adaptation, and repatriation of the expatriate and any accompanying family, as well as programs for career management and retention, thereby also transferring knowledge to and from host operations 10-3. To become familiar with the use of global management teams to coordinate host country and cross-border business 10-4. To recognize the varying roles of women around the world in international management 10-5. To understand the variations in host-country labor relations systems and the impact on the manager’s job and effectiveness Introduction A crucial factor in global competitiveness is the ability of the firm to maximize long term its global human resources. To do this, attention must be paid to several important areas: • To maximize long-term retention and use of international cadre through career management so that the company can develop a top management team with global experience • To develop effective global management teams • To understand, value, and promote the role of women in international management in order to maximize those underutilized resources • To work with the host country labor relations system to effect strategic implementation and employee productivity I. Expatriate Career Management A. According to the Cartus survey on “Trends in Global Relocation: 2018 Biggest Challenges,” managers who are mobile across national borders face three primary challenges. • cost control • immigration • tax compliance B. Preparation, Adaptation, and Repatriation 1. In a Brookfield Global Relocation Survey study of global mobility trends, 61 percent of the survey respondents revealed that their companies communicate the significance of expatriate assignments to employees’ careers. However, only 41 percent of the respondents indicated that their companies use mobility policies in the recruitment process for external candidates and only 23 percent have a clearly defined process that incorporates career planning from assignment creating a talent-management gap. Page | 1 2. Effective human resource management of a company’s global cadre does not end with the overseas assignment. It ends with the successful repatriation of the executive into company headquarters. 3. Reverse culture shock occurs primarily because of difficulty of reintegration into the organization, but also, the longer a person is away, the more difficult it is to get back into the swing of things. 4. Expatriates cited the following HRM practices as important to them. • Visible signs that the company values international experience • Career planning sessions • Communications with home office of details of the repatriation process • Continuous communications with the home office • Agreement about position upon repatriation 5. For companies to maximize the long-term use of their global cadre, they need to make sure that the foreign assignment and the reintegration process are positive experiences. This means careful career planning, support while overseas, and use of the increased experience and skills of returned managers to benefit the home office. C. The Role of Expatriate Spouse 1. Many companies are beginning to recognize the importance of providing support for spouses and children. Firms often use informal means, such as intercompany networking, to help find the trailing spouse a position in the same location. They know that with the increasing number of dual-career couples, if the spouse does not find a position, the manager will very likely turn down the assignment. 2. Companies such as Hewlett-Packard, Shell, Medtronic, and Monsanto offer a variety of options to address the dual-career dilemma. Clearly, then, the selection process must include spouses, partners, and entire families. Global assignments must take account of the expatriate’s personal concerns and future career; otherwise, the company will face the possibility of early return and a possible doubling of the chances for employee attrition. D. Expatriate Retention 1. Support services provide timely help for the manager and therefore are part of the effective management of an overseas assignment. It comprises three phases of transition and adjustment that must be managed for successful socialization to a new culture and re-socialization back to the old culture. These phases are: • exit transition from the home country • entry transition to the host country • entry transition back to the home country or to a new host country 2. The attrition rate for expatriates is about double that of non-expatriates for the following reasons. • Expatriates are more marketable and receive more attractive offers from other employers. • Expatriates find that their compensation packages on overseas assignments are more generous than at home and go from one company to another to take advantage of that. Page | 2 • Expatriates feel unappreciated and dissatisfied both during and after the assignment and leave the country. II. The Role of Repatriation in Developing a Global Management Cadre A. In the international assignment, both the manager and the company can benefit from the enhanced skills and experience the expatriate gains. Many returning executives report an improvement in their managerial skills and self-confidence. Some of these acquired skills, as reported by Adler, include the following. • Managerial skills, not technical skills: Learning how to deal with a wide range of people, to adapt to their cultures through compromise, and not to be a dictator. • Tolerance for ambiguity: Making decisions with less information and more uncertainty about the process and the outcome. • Multiple perspectives: Learning to understand situations from the perspective of local employees and businesspeople. • Ability to work with and manage others: Learning patience and tolerance—realizing that managers abroad are in the minority among local people; learning to communicate more with others and empathize with them. B. Knowledge Transfer Traditionally, it has been assumed that the role of expatriates is partly to bring knowledge from the corporate headquarters to subsidiaries; however, it is clear that there is a potential strategic advantage when expatriates acquiring knowledge while on international assignment bring it back to the center of the organization or disseminate it across other subsidiaries. • Knowledge about what (such as differences in customer preferences) • Knowledge about why (e.g., understanding how culture differences affect cross-cultural understanding) • Knowledge about how (e.g., management skills, such as delegating responsibilities) • Knowledge about when (e.g., knowledge about the effect of timing) • Knowledge about who (e.g., relationships created over the life of an assignment) The company should therefore position itself to benefit from that enhanced management knowledge if it wants to develop a globally experienced management cadre—an essential ingredient for global competitiveness—in particular where there is a high degree of shared learning among the organization’s global managers. See Exhibit 10-1. III. Global Management Teams A. Global management teams are collections of managers from several countries who must rely upon group collaboration if each member is to experience the optimum of success and goal achievement. The role of, and importance of, international teams increase as the firm progresses in its scope of international activity. Page | 3 B. For global organizations and alliances, we find the same cross-cultural interactions as in MNCs and, in addition, considerably more interaction with the external environment at all levels of the organization (as indicated by the arrows extending into and out of the organization). Therefore, worldwide international teamwork is vital, as are the pockets of cross-cultural teamwork and interactions that take place at many boundaries. C. When a firm responds to its global environment with a global strategy and then organizes with a networked “global” structure, various types of international teams are necessary for global integration and local differentiation. These include headquarters-subsidiary teams and those coordinating alliances outside the organization. In joint ventures, in particular, multicultural teams work at all levels of strategic planning and implementation, and on the production and assembly floor. D. Global Management Teams Global management teams describes a collection of managers in or from several countries who must rely on group collaboration if each member is to experience optimum success and goal achievement. The team’s ability to work effectively together is crucial to the company’s success. In addition, technology facilitates effective and efficient teamwork around the world. For the global company worldwide competition and markets necessitate global teams for strategy development, both for the organization as a whole and for the local units to respond to their markets. E. Virtual global teams Virtual global teams are a horizontal networked structure, with people around the world conducting meetings and exchanging information via the internet, enabling the organization to capitalize on 24-hour productivity. Exhibit 10-2 shows the operational challenges of such teams. F. Managing Transnational Teams 1. The ability to develop effective transnational teams is essential in light of the increasing proliferation of foreign subsidiaries, joint ventures, and other transnational alliances. 2. The advantages of synergy include: greater opportunity for global competition by being able to share experiences, technology, and a pool of international managers; and opportunities for cross-cultural understanding and exposure to different viewpoints. The disadvantages of international teams include problems resulting from differences in language, communication, and varying management styles; complex decision-making processes; fewer promotional opportunities; personality conflicts; and greater complexity in the workplace. 3. Important variables in building global teams according to Govindarajan and Gupta are: • Cultivating trust among members • Overcoming communication barriers • Aligning goals of individual team members • Obtaining clarity regarding team objectives • Ensuring that the team possesses necessary knowledge and skills Page | 4 4. Following are some general recommendations the researchers make for improving teamwork. • Cultivate a culture of trust; one way to do this is by scheduling face-toface meetings early on, even if later meetings will be virtual • Rotate meeting locations; this develops global exposure for all team members and legitimizes each person’s position • Rotate and diffuse team leadership • Link rewards to team performance • Build social networks among managers from different countries 5. A comparative study of European project groups in several countries by Sylvie Chevrie revealed three main strategies: • Drawing upon individual tolerance and self-control: In this R&D consortium, the Swiss manager treated all team members the same, ignoring cultural differences, and the team members coexisted with patience and compromise. Many of the members said they were used to multinational projects and just tried to focus on technical issues • Trial-and-error processes coupled with personal relationships: This is a specific strategy in which the project manager sets up social events to facilitate the team members getting acquainted with one another. They discover through trial and error what procedures will be acceptable to the group. • Setting up transnational cultures: Here the managers used the common professional, or occupational, culture, such as the engineering profession, to bring the disparate members together within a common understanding and process. IV. The Role of Women in International Management A. Whether in global management teams, as expatriates, or as host-country nationals, the importance of women as a valuable, and often-underused resource should not be overlooked in IHRM efforts to maximize the company’s global management cadre. On February 26, 2015, Christine Lagarde, then Managing Director of the International Monetary Fund (IMF), explained on various news programs its committee’s action plan to discuss with heads of state what can be done to improve their country’s economic progress by removing or lessening the roadblocks to females working there—cultural and practical. B. For example, in Japan, she proposed that more women could take jobs if the government instituted a child-care plan. And, in fact, in August 2015, Prime Minister Shinzo Abe announced a new law requiring companies with over 300 employees to set targets for hiring more women managers—at the time, women comprised only 11 percent of supervisory or managerial positions. Child-care was not addressed in the new law and remains an obstacle. C. In light of the growing presence of females in the corner suite, the 2018 ranking by Fortune magazine of the most powerful women in business in the United States revealed only 25 female CEOs of large companies, down from 32 female Page | 5 CEOs in 2017. At the top of the list are Mary Barra, CEO of General Motors (#10); Gail Boudreaux of Anthem (#29); Ginni Rommetty, Chairman, CEO, and President of IBM (#34). D. Although women’s advancement in some global companies is impressive, it is still true that there are limitations on managerial opportunities for many women in their own country—some more than others—and there are even more limitations on their opportunities for expatriate assignments. In a 2017 McKinsey study, women tended to use more leadership behavior that enhances firm performance than their male counterparts. See Exhibit 10-3. E. Adler studied this phenomenon regarding women and recommends that businesses: • avoid assuming that a female executive will fail because of the way she will be received or because of problems female spouses experience • avoid assuming that a woman will not want to go overseas • give female managers every chance to succeed by giving them the titles, status, and recognition appropriate to the position—as well as sufficient time to be effective V. Working Within Local Labor Relations Systems A. It is the responsibility of the IHRM function to monitor the labor relations systems in host countries and advise local managers accordingly. In fact, that information should be considered one input to the strategic decision of whether to operate in a particular country or region. B. The Impact of Unions on Business 1. European businesses are undermined by poor labor relations and inflexible regulations. Businesses move jobs overseas to cut labor costs, resulting from a refusal of unions to grant reduction in employment protection or benefit non-European firms operating in Europe must consider labor relations. C. Organized Labor Around the World 1. Labor union membership has been on the decline across most developed nations. In 1985, 30 percent of workers were labor union members in OECD countries. As of 2018, union membership had dropped to 16 percent. According to OECD statistics, approximately 81 million workers are part of labor unions in its member states. Moreover, roughly 155 million workers partake in collective agreements at various levels (e.g., national or regional). The percentage of workers covered by collective agreements has declined from 45 percent in 1985 to 32 percent in 2017. 2. The reasons for the drop in union membership include technological and organizational changes, international expansion of firms, and most noticeable, the decline of the labor union membership rate of 90.4 percent—the highest among OECD countries. Sweden ranks second with union membership rate of 66.1 percent. In contrast, Japanese and Australia union membership rates are substantially lower—roughly 17 percent and 13 percent, respectively. Page | 6 3. Industrial labor relations systems across countries can only be understood in the context of the variables in their environment and the sources of origins of unions. These include government regulation of unions, economic and unemployment factors, technological issues, and the influence of religious organizations. Any of the basic processes or concepts of labor unions, therefore, may vary across countries, depending on where and how the parties have their power and achieve their objectives, such as through parliamentary action in Sweden. For example, collective bargaining in the United States and Canada refer to negotiations between a labor union local and management; but in Europe collective bargaining takes place between the employer’s organization and a trade union at the industry level. 4. In the industrialized world, tumbling trade barriers are also reducing the power of trade unions because competitive multinational companies have more freedom to choose alternative production and sourcing locations. Most new union workers— about 75 percent—will be in emerging nations, like China and Mexico, where wages are low and unions are scarce. However, in some countries, such as India, outmoded labor laws are very restrictive for MNEs, making it difficult to lay off employees under any circumstances and forcing foreign companies to be very careful in their selection of new employees. In China, for example, in a surprising move, the government passed a new law that will grant power to labor unions, in spite of protests by foreign companies with factories there. The order was in response to a sharp rise in labor tension and protests about poor working conditions and industrial accidents. 5. At Foxconn Technology, for example, which is a major supplier to several electronics giants such as Hewlett Packard, Apple, and Microsoft, there were large protests in January 2012 by workers at its Wuhan plant that involved threats from some workers to commit suicide. The employees were protesting that they had been forced to work long hours under poor conditions with little pay. Foxconn resolved the dispute and, under pressure from Apple and other companies, pledged to improve working conditions in China. D. Convergence versus Divergence in Labor Systems In October 2006 the International Trade Union Confederation (ITUC) was formed in Vienna, comprising the affiliated organizations of the former ICFTU (International Confederation of Free Trade Unions) and WCL (World Confederation of Labor), plus eight other national trade union organizations, to form a global body. The ITUC is the world’s largest trade union and, as of 2012, represents 175 million workers through its 308 affiliated organizations in 153 countries and territories. Its objective is to provide “a countervailing force in a society that has changed enormously, with workers’ rights being flouted under the pressure created by the current trajectory of ‘race to the bottom’ globalization.” 1. Political changes, external competitive forces, increased open trade, and frequent moves of MNCs around the world are forces working toward convergence in labor systems. Convergence occurs as the migration of management and workplace practices around the world results in the reduction of workplace disparities from one country to another. This occurs primarily as Page | 7 MNCs seek consistency and coordination among their foreign subsidiaries, and as they act as catalysts for change by “exporting” new forms of work organization and industrial relations practices. It also occurs as harmonization is sought, such as for the EC countries, and as competitive pressures in free-trade zones, such as the NAFTA countries, eventually bring about demands for some equalization of benefits for workers. 2. Other pressures toward convergence of labor relations practices around the world come from the activities and monitoring of labor conditions worldwide by various organizations. One of these is the International Labor Organization (ILO)—comprising union, employer, and government representation—whose mission is to ensure that humane conditions of labor are maintained. Other associations of unions in different countries include various international trade secretariats representing workers in specific industries. Exhibit 10-4 shows the major forces for and against convergence in labor relations systems. 3. Adapting to Local Industrial Relations Systems a. Although there are forces for convergence in labor relations systems around the world as discussed above, for the most part, MNCs still adapt their practices to a great extent to the traditions of national industrial relations systems, and there is considerable pressure to do so. Those companies, in fact, act more like local employers, subject to local and country regulations and practices. b. Although the reasons for continued divergence in systems seem fewer, they are very strong; not the least of these are political ideology and the overall social structure and history of industrial practices. 4. USMCA and Labor Relations in Mexico a. Government control over union activities is very strong, and although some strikes occur, union control over members remains rather weak. Most labor unions are affiliated with the Institutional Revolutionary Party (PRI) through the Confederation of Mexican Workers (Confederación de Trabajadores Mexicanos—CTM). b. In 2018, the leaders of the United States, Mexico, and Canada signed a new trade agreement— called USMCA—which replaces NAFTA. Pending Congressional approval, one of the most salient differences in the USMCA compared with NAFTA pertains to protections for workers in the three member countries. Mexico has agreed to pass laws giving workers the right to real union representation, to extend labor protections to Central America), and to protect women from discrimination. Page | 8 Purchase answer to see full attachment

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  • Will complete your papers in 6 hours
  • On-time Delivery
  • Money-back and Privacy guarantees
  • Unlimited Amendments upon request
  • Satisfaction guarantee

How it Works

  • Click on the “Place Your Order” tab at the top menu or “Order Now” icon at the bottom and a new page will appear with an order form to be filled.
  • Fill in your paper’s requirements in the "PAPER DETAILS" section.
  • Fill in your paper’s academic level, deadline, and the required number of pages from the drop-down menus.
  • Click “CREATE ACCOUNT & SIGN IN” to enter your registration details and get an account with us for record-keeping and then, click on “PROCEED TO CHECKOUT” at the bottom of the page.
  • From there, the payment sections will show, follow the guided payment process and your order will be available for our writing team to work on it.