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Chinese and foreign firms are adjusting to this growing voice of labor by
providing both higher pay and a variety of benefits, while others are moving
operations from the expensive coast to more inland cities such as Chongqing. This
western Chinese city of 32 million people has labor costs that are 20-40% lower
than those of coastal cities.
C. Other Asian unions
Countries such as India, Indonesia, the Philippines, Thailand, and Vietnam are
examples of economies—and labor relations—in a state of transition. The other
so–called “Asian Tigers” – Singapore, South Korea, and Taiwan- have become
major influences in the world economy. Although a good deal of government and
multinational influence is exerted on workplaces in these countries, there are big
differences in the state of their labor relations. Labor issues in Singapore and, to a
longest banking strike in 2011.
III. Unions in Mexico, Central, and South America
Since the passage of the North American Free Trade Agreement (NAFTA), much
attention has been focused on Mexico. Federal laws govern labor relations in Mexico,
many different unions within one factory. If the official union declares a strike, all
personnel—including management—must vacate the premises. Flags are stationed at
each locked entrance signifying a strike. Union members receive pay during the time
IV. Unions in Africa
Overall, union activity in Africa is relatively underdeveloped. South African labor
relations are especially interesting. In the 1970s, when racial segregation (apartheid)
was at its height, white groups were permitted to form unions and allowed to engage
in collective bargaining. In 1980, black groups gained limited union rights, and the
number of union members nearly tripled in five years. Strike activity increased
Once released from prison and elected president in South Africa’s first democratic
election, Mr. Mandela’s challenge was to balance the demands made by unions and
businesses—especially foreign ones. Many businesses and foreign investors felt that
V. International Employee Unions
Unions around the world have had varying degrees of membership rates and success
in recent years. Perhaps the largest challenge to domestic unions is the multinational
can move some or all of its operations to another country. The most noteworthy
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member countries, the ILO has been responsible for developing guidelines and
standards for labor conditions and treatment. These guidelines have the same legal
status as an international treaty; they must be ratified and agreed to by each nation. In
Of unions with international membership, one of the most important of these is the
International Confederation of Free Trade Unions (ICFTU). Its goal is to help
national unions in their dealings with multinationals. The membership of the ICFTU
International unions have been largely ineffective due complex and unique laws of
various countries and the ability of multinationals to effectively play one country and
its unions against another. There are few examples of cross-border coordination
among unions, such as the financial backing provided by German union IG Metall to
striking workers at British Aerospace. Also, United Electrical Workers in the U.S.
recently supported a Mexican union’s efforts to organize a GE plant in Mexico.
VI. Other Forms of Employee Input/Control
Employees can obtain their desired outcomes using a variety of other ways to be
heard and have an impact. These methods are known most commonly worker
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A. Joint consultation committees
Joint consultation committees (JCC) are common in many Western countries.
These groups of workers sit on a committee that deals with topics of mutual
B. Work councils
Works councils in Western Europe (e.g., France, Germany, and the Netherlands).
are dissimilar to JCCs in that they often have significant power to block
C. Board membership
Board membership is a third, less common mechanism by which workers have, in
this case, extensive input. In seven European countries (e.g., Denmark, France,
and Germany) law dictates workers must have representation on the board of
VII. Putting Agreements into Practice
Unfortunately, there are also many ways that disagreements can emerge and those can
sometimes result in open conflict between the two groups.
A. Relations between management and labor
The general state of relations between management and employees is often
evaluated by firms before they choose to invest in a foreign subsidiary. These
relations show great variability. A study asked over 10,000 top business
B. Deterioration of relations
Sometimes labor-management relations can deteriorate to the point at which work
slows down, sabotage occurs, and even violence happens. But, events such as
1. Strikes have been declining since the 1970s. The number of days lost to
strikes has fallen in recent years and especially so in the EU, outcomes
2. There has been a shift in the reason for strikes. Strikes are more likely to
involve public services (e.g., transportation systems), and work process issues
3. Some countries that are thriving economically have a relatively high number
of strikes (e.g., Denmark, France, and Italy). The total number of lost work
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Table 9.7 presents a ranking of a variety of countries on the number of
strikes/lockouts and the number of work days lost from these actions.
C. Strike Activity in Germany
Despite powerful tradition of union influence, strike activity in Germany is not as
common as in other Western European nations. Days lost per 1,000 employees
D. Strike Activity in Japan
Union-management relations in Japan are quite good. Table 9.7 shows there were
only 18 strikes in 2008, which produced only about 2,000 lost work days. Most
E. Strike Activity in China
Increased activity shown by Chinese workers, including a well-publicized strike
at Honda in 2010 that resulted in a 24% increase in pay (before overtime and
F. The United States
Table 9.7 shows that the U.S. had 16 official strikes in 2008 – this figure has
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VIII. Overall impact of unions
There are benefits from a unionized workforce, including a structured bargaining
system and clear contractual obligations that must be fulfilled. A subtle benefit of
union membership is that it may quell more extreme and militant worker action.
CHAPTER SUMMARY
This chapter looked closely at the management topics of ethics and labor forces/relations and
related issues around the globe. We reviewed various perspectives on ethics that can be taken
There are many differences across countries in both the presence and influence of unions. The
percentage of workers who are union members varies across countries and is on the decline
worldwide. One reason for both the variance and the decline is that worker interests can be
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DISCUSSION QUESTIONS
1. What role does universalism and relativism play for international managers? Which
approach to ethics makes the most sense in your view? Why?
• Universalism – moral guidelines exist and should be followed by everyone
everywhere including international managers
• Cultural relativism – popular alternative to universalism provides more
flexibility for international managers
o The definition of “ethical behavior” in a country is shaped by its
culture, laws, and business practices
2. How should multinationals deal with demands for bribes abroad? What about other
questionable practices? Do you agree with the basic tenets of the FCPA? Explain
your position.
• May choose to adopt formal corporate guidelines about bribery and other
forms of questionable payments
3. Why might multinationals have the upper hand in dealing with workers, even if those
workers are unionized and spread across a variety of countries?
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• A multinational may outlast a union strike by absorbing losses at a particular
location.
4. What are some of the differences between how North American, European, and Asian
unions operate? Why might those differences exist?
• See Table 9.3 and 9.4
• National differences have been tied to numerous factors, including political
leanings of the government, how wages are determined and the size of the
public employment sector
5. What is the relationship between the presence of unions and the level of worker
militancy? Explain why this is the case.
• Organized employee input may make management-worker relations smoother
than would otherwise be the case
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ADDITIONAL ACTIVITIES
DEVELOPING YOUR INTERNATIONAL CAREER – Developing Expertise in
International Labor Trends
BOXED FEATURES
CULTURE CLASH – Science Project: Overcome Barriers in Multi-Cultural Teams
ADDITIONAL RESOURCES
Table 9.1 –
Table 9.2 –
Table 9.3 –