Academic journal article Journal of International Business Research

Cross-Cultural Industrial Relations in the Context of Socioeconomic Changes: The West, the East, and the Emerging Markets

Academic journal article Journal of International Business Research

Cross-Cultural Industrial Relations in the Context of Socioeconomic Changes: The West, the East, and the Emerging Markets

Article excerpt

INTRODUCTION

The field of comparative industrial relations seeks to understand, describe, and analyze labor relations systems in different countries. In the face of enhanced global competition, firms are increasingly going international to seek new business opportunities in more cost-efficient ways. This may be achieved through outsourcing or relocation of jobs and capital to overseas operations. Coupled with this trend is the challenge to effectively manage cross-cultural labor relations, particularly between the organized labor and management. While national differences in wages, skills, technology advancement, infrastructures, and proximity to natural resources offer potential comparative advantages to the business organizations, the transfer of competence across borders has to be accomplished through people, including both blue-collar and white-collar employees whether in a unionized or union-free work environment. In any event, international industrial relations present a key strategic issue to both cross-border business managers and local trade unions because the nature of management-labor relationship can greatly impact an organization's workforce stability, public image, productivity, and global competitiveness (Yang, 2008).

The purpose of the present study is to examine some important factors surrounding international industrial relations. It takes a comparative approach to highlight and analyze current trends in unionization and variations in collective bargaining across borders, with special attention to cultural traditions, institutional conditions, and ongoing socioeconomic changes that interact to impact the union density rates and collective bargaining coverage in different economic sectors. The study also offers international data, both quantitative and qualitative, to contrast societal norms about organized labor and emerging shifts in collective bargaining coverage and grassroots tactics, particularly in the emerging labor market such as China. Through this endeavor, multinationals' adaptations in the host-country context and responses from the local trade unions are examined to generate specific implications for the practical field. Based on recent international labor statics and country-firm specific cases, a comparative framework of key factors influencing international industrial relations is formulated to provide suggestions for future research.

SOCIOECONOMIC CHANGES AND UNION DENSITY TRENDS

Historically, trade unions have played a critical role in the early phase of industrialization of many developed countries today to end child labor practices, improve workplace safety, and increase wages and welfare for the workers and the working class families. Recent international labor statistics (e.g., Eurofound, 2004; ILO, 2006; OECD, 2008; USBLS, 2006; ACFTU, 2007), however, indicate that organized labor has been declining in most industrial nations with a few exceptions like in Finland and Sweden. In contrast, trade liberalization and rapid industrialization in some Asian societies have led to the growth of trade unions, such as in Cambodia, Indonesia, South Korea, and China, particularly expanding into the private and foreign owned sectors. By mid 2006, for example, about 30% of foreign companies in China had set up unions, including the world largest retailer Wal-Mart, known for its anti-union stance, and its direct rival the French retailer Carrefour SA. By September 2008, most fortune 500 multinationals doing business in China had allowed unionization. The All-China Federation of Trade Unions (ACFTU) is aiming at 60%-80% of the foreign companies and Chinese local firms to allow the workforce unionization. The emerging divergence and convergence in unionization trends across borders can be attributed to their differing cultural, economic, political, and legal environments.

Union Density Trends and Variations in Western Industrial Societies

The strength of trade unions are often measured by union density rates, union membership as a proportion of wage and salary earners in the workforce. …

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