Industrial relations in foreign and local firms in Asia

Abstract

The recent phenomenal growth of multinational companies (MNC's) has sparked major controversies everywhere regarding their nature, role and mission. Particularly in the Third World countries, where MNC phenomenon has had a historic significance since the colonial era, new controversies have become evident with reference to emerging relationships between MNC's and a new class of indigenous entrepreneurs. Central to these controversies are concerns that suggest a significant advantage gap between MNC's and local companies in the Third World. A recent report of the United Nations Commission on Transnational Corporations [23] provides an assessment of growing advantage gap between the two with respect to their participation in world trade, investments, technology, technical and managerial skills, organization of production, distribution networks and market size. However, the magnitude and nature of MNC advantage over local firms in the area of industrial relations are not fully known. Flanagan and Weber [11], Lea [23], Roberts [29], Tudyka [31] and Weiss [34], represent a growing point of view in the literature that MNC's have continued to not only dominate, but also influence the evolution of systems of industrial relations in many nations. But as Bomers [7] points out that an accurate assessment of this dominance and influence has proven difficult due to serious methodological and theoretical shortcomings. Part of the foregoing difficulty is due to the nature of available theoretical constructs for comparative research. For example, various theoretical constructs, ranging from the classical model of Dunlop et al. [21] to the contemporary systems analysis [1], continue to focus on relationships among local actors (labor, employers and government) within a purely domestic context with reference to the web of rules, ideology and a history of interaction among them. As Bomers [7] and Roberts [29] reveal that the MNC phenomenon, with its transnational and complex structure, has not been adequately treated as an important force on the domestic industrial relations scene. Hence, according to Flanagan and Weber [11], the scope of both industrial relations theory and research have not expanded sufficiently to explain the impact of MNC's on host country systems and vice versa.