LU7 Employment Relations & Subsidiary Autonomy PDF

PBW3163: Multinational Corporations and Global Communication Issue 2: Local management autonomy in employment relations Professor Dr Ting Su Hie ([email protected])  Learning Outcomes Issue 2: Local management autonomy in At the end of employment relations...

PBW3163: Multinational Corporations and Global Communication Issue 2: Local management autonomy in employment relations Professor Dr Ting Su Hie ([email protected])  Learning Outcomes Issue 2: Local management autonomy in At the end of employment relations this lecture, you should be able to: 1. give an example of an unclear employment relation, compared to a standard work relationship, and 2. discuss employment relations if the subsidiary has strong autonomy in human Employment relations The employment relationship is the legal link between employers and employees. It exists when a person performs work or services under certain conditions in return for remuneration. It is the key point of reference for determining the nature and extent of employers' rights and obligations Standard Work towards their workers. Relationships Non-standard Employment Full-time, bilateral, permanent employment Part-time relationship characterised by the workers, home performance of work in the employers’ workers and premises and under the employers’ direct agency workers supervision https://ilo.org/ifpdial/areas-of-work/labour-law/ WCMS_CON_TXT_IFPDIAL_EMPREL_EN/lang--en/ index.htm Employment relations The issue of labour laws and social protection has become more important because there are more and more dependent workers who lack protection due to one or a combination of the following factors: the scope of the law is too narrow or it is too narrowly interpreted; the law is poorly or ambiguously formulated so that its scope is unclear; the employment relationship is disguised; the relationship is objectively ambiguous, giving rise to doubt as to whether or not an employment relationship really exists; the employment relationship clearly exists but it is  Human resource management - scope 1. Recruitment and selection How many % of employees should be local? Should top manager be local or foreign? What criteria for hiring [firing] managers and others? Subsidiary decision and/or HQ approval? Any differences for expatriates and local employees in their employment conditions like permanent position (until retirement) or contract (renew every 2 or 3 years)? Hannon, J. M., Huang, I. C., & Jaw, B. S. (1994). International human resource strategy and control: The case of multinationals and their subsidiaries. Purdue CIBER Working Papers, Paper 84.  Human resource management - scope 2. Training and socialisation – skills and corporate culture/shared values. German employment system sets aside budget for initial vocational training to have a qualified workforce. 3. Career planning – To have globally integrated (standardised) or locally responsive (customised) HR strategies? 4. Pay and compensation/rewards – To standardise or localise salary scale? US citizens who work elsewhere must submit their annual income taxes to the US government. “Output control of performance”. Hannon, J. M., Huang, I. C., & Jaw, B. S. (1994). International human resource 5.strategy Internal communication and control: (including The case of multinationals trade unions) and their subsidiaries. Purdue CIBER Working Papers, Paper 84.  How do MNCs manage their international workforces? MNCs are faced with a “think global”, “act local” paradox (Dowling, et al 1999). The question is the extent to which their various foreign subsidiaries act and behave as local firms (local adaptation) versus the extent to which their practices resemble those of the parent firm (global integration). Fugii et al. (n.d.) studied a Japanese multinational corporation with subsidiaries. Questionnaire data from 216 Japanese foreign sales subsidiaries in Thailand showed that giving local management too much autonomy leads to low performance of subsidiary. Fujii, A., Katsuragi, M., Matsumoto, S., Nishimura, D., & Nishizawa, K. (n.d.). The relationship between autonomy of local employees and performance of Japanese sales subsidiaries in Thailand. Seminar paper delivered at Faculty of Commerce, Kansai University.  Strong Global Integration Strong HQ control over human resource management. Expatriates from HQ manage subsidiaries. Leaves little decision-making authority to subsidiaries. Advantages Disadvantages Inculcate corporate Affects local philosophy and responsiveness of management method to subsidiaries to cope with local employees, and to local environment and to train local employees adapt business practices to thoroughly. local customer demands. Maintains quality of Reduces promotion employees – High-level opportunities for local Fujii, expertise A., Katsuragi, M., and decision- Matsumoto, managers S., Nishimura, D., & Nishizawa, K. (n.d.). because making skills to carry out expatriates manage. The relationship between autonomy of local employees and performance of Japanese sales subsidiaries in Thailand. Seminar paper delivered at  Localisation (Subsidiary Autonomy) Local management has a lot of autonomy Advantages Disadvantages Expand flexibility to Subsidiary staff have little cope with the local promotion opportunity environment and to subsidiary grows apart from adapt business practice HQ. to local demands. High turnover risk affects Can set appropriate continuity and smooth marketing policy for the functioning. Subsidiary local market. manager and local Staff know local employees who receive customs and languages, training may leave. Job andof Japanese saleshopping for higher salary. Fujii, A., Katsuragi, M., Matsumoto, S., Nishimura, D., & Nishizawa, K. (n.d.). The relationship between autonomy business of systems local employees and performance subsidiaries in Thailand. Seminar paper delivered at  Learning Outcomes Issue 2: Local management autonomy in At the end of employment relations this lecture, you should be able to: 1. give an example of an unclear employment relation, compared to a standard work relationship, and 2. discuss employment relations if the subsidiary has strong autonomy in human Finally, Work Value Today: Think of Others (e.g., the Company), Don’t be Egocentric (I, Me, Myself)