International Context of HRM Practice and Consultancy Essay

International Context of HRM Practice and Consultancy - Essay Example 12 References 13 Work Councils – Functions and Difference from Trade Unions Globalization has triggered sea changes not only in the transnational commerce but multinational companies are also deluged with issues concerning labor relations in a cross cultural and multi-economic scenario. The earlier concept of negotiating with a central trade union and implementing the issues agreed upon in workplace is no longer a sufficient guarantee of smooth labor relations. Multinational enterprises now need to negotiate at multiple levels with trade unions of several countries to achieve harmonious labor relations. This surely is a humongous task what with dealing in unionized labor of different cultural and economic contexts (Prahalad and Doz 1987). Such situations surely result in loss of managerial flexibility as conditions agreed upon in one country might not be acceptable in another country. Further, the terms and conditions of appointment and associated remunerations and perquisites also vary from country to country thus causing unwelcome variances in managing human resources. The basic problem of transnational human resource management can be categorized as (Poole 1986): The level of technological attainment and unionization of labor in a particular country The nature and extent of governmental intervention in labor management The number and political polarization of trade unions Impact, if any, of religious organizations on trade unions Strategies adopted by management These factors have resulted in the growth and proliferation of various types of trade unions which could be either generalized trade unions that represented all categories of employees, or, craft unions that represented employees having specific skill sets and are employed in different industries, or, a conglomerate of unions spread across different countries. Such diversity, quite obviously, present a rather daunting scenario for executives entrusted with the responsibility of collective barg aining with employees and also raises the prospect of multiple agreements within a single corporate entity. One option open to multinational corporations to find some semblance of order in this otherwise chaotic and indeterminate scenario is to set up work councils. These are micro level labor representatives who are elected by workers of a specific factory for a period of four years. The most vibrant forms of such work councils are observed in Germany where once nation-wide agreements with recognized trade unions are completed by representatives of a particular industry, each individual member firm of that particular industry undertake negotiations with their respective work councils on the details of how such an agreement has to be implemented in a particular work place. As members of work councils need not be members of recognized trade unions, these councils can be formed even in those industries where there is no existence of a nationally recognized trade union. This surely inv ests in such councils a large degree of flexibility and freedom from dogma or political influence associated with conventional trade unions. This also provides an opportunity for both management and workers to strike out an agreement that factors in micro specifics and thus is beneficial to both the workers and that particular firm. The other benefit of having work councils is that the levels of interaction and the channels of communication between management and wo