International Human Resource Management:
An Employment Relations Perspective
Introduction: An Employment Relations Perspective
to IHRM
Contributors: By: Miguel Martínez Lucio
Book Title: International Human Resource Management: An Employment Relations Perspective
Chapter Title: "Introduction: An Employment Relations Perspective to IHRM"
Pub. Date: 2014
Access Date: May 8, 2020
Publishing Company: SAGE Publications, Inc.
City: 55 City Road
Print ISBN: 9780857029768
Online ISBN: 9781526435958
DOI: http://dx.doi.org/10.4135/9781526435958.n1
Print pages: 1-14
© 2014 SAGE Publications, Inc. All Rights Reserved.
This PDF has been generated from SAGE Knowledge. Please note that the pagination of the online
version will vary from the pagination of the print book.
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Introduction: An Employment Relations Perspective to IHRM
Miguel Martínez Lucio
The Challenge of Globalization
The way people work, the character and nature of their workplaces, the manner in which they are managed
and the mechanisms by which they are recruited into these jobs have to a great extent reflected the economic,
political and cultural characteristics of their national economies and specific sectors of employment. A national
economy may be more or less developed, the technologies used may vary, and there may be customs and
practices that have shaped the way people work and how they value or view the management of their work
and themselves as workers. The laws that govern their work may also differ. For example, the rights they
have may vary in terms of how they may express their views at work, argue for a safe environment to work in
and are compensated when their employment is terminated.
Within capitalist societies, workers have to sell their labour in the labour market and thus enter into a con-
tractual relationship of some form with organizations and other individuals. The nature of this contract, the
expectations of each party regarding the contract and the manner in which rights and obligations on either
side are understood and operationalized often tend to diverge.
The study of work and employment has become more challenging in a context where the boundaries of
labour markets and national economies have been changing. There has also been a restructuring of national
spaces around which work and employment are experienced, managed and regulated. These changes have
brought new challenges to the ways that companies manage their workforce, be they multinational corpora-
tions (MNCs) or local firms.
One of the main sources for change has been increasing levels of internationalization of investment. The
emergence of a greater intensity of international trade has meant that national systems of employment and
management have been subject to greater instability and a range of increasingly diverse influences and pres-
sures. Overseas competition and the ability to compete in international markets mean increasing the pres-
sures on firms to find more productive and cost-efficient ways of employing workers and managing their work.
Globalization and the movement of people and resources across boundaries, between and within firms, brings
to the fore the problems of dealing with different approaches to representation and systems of rights and cus-
toms in relation to work and employment. Operating across countries, both directly and indirectly – through
subcontracting work to a range of smaller firms, for example – brings a degree of complexity which needs
ongoing attention from management to detail of contracts and product quality. Different organizational and
management approaches and the responses to them have to be taken into account.
For the workforce itself, changes are emerging from the opportunities and challenges that globalization brings
in one form or another. In many industrial sectors, we may see decline in one country as a result of competi-
tion and the undermining of traditional industries in costs and even quality (e.g., the impact of China on steel
manufacturing and toy production in Europe). However, there may also be opportunities for new sectors in,
for example information technology (IT) or service sectors, or the growing emphasis on high-quality tourism.
Globalization also brings with it the adoption of new practices and new ways of working, which may vary in
their impact but which begin to alter patterns of work and employment (e.g., a greater emphasis on working
in teams or a greater number of workers employed on new types of temporary contract). What is more, the
very boundaries of national labour markets may be challenged as people migrate in search of better employ-
ment and work (e.g., the use of overseas professionals in the medical sector in the United Kingdom, or the
inflow of African migrant workers into the Spanish construction industry in response to local shortages in the
1990s). One could argue that there is nothing new in such changes, but their intensity and regularity across
a broader space does appear to be increasing. Multinational corporations (MNCs) now deploy managers and
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professionals across wider geographical areas.
As a consequence of these changes, governments are now under pressure to balance a new set of roles in
the way they manage work and employment. They need to ensure that their workforce is ‘attractive’ in skills
and/or costs to those investing or proposing to invest in their country, but they must may also have to deal with
the after-effects of the changes outlined above in terms of declining industrial areas, mass mobility across
regions (e.g., the move from west to east in China) and the possible exit of key workers and professions from
their labour markets.
Globalization, as Chapter 1 will outline, is therefore a complex development bringing various types of change
and contradictory outcomes. It is not simply a case of there being winners and losers, because even those
gaining from increasing their external trade, and developing new dynamic industrial sectors, face new chal-
lenges and objectives in relation to worker expectations and new social needs, such as health services and
education. For example, we may see the growth of employment in the IT sector in developing countries, but
with that may come new ways of working and new types of control at work, which can unsettle relationships
and expectations and generate new ones that are themselves challenging to manage.
The Enigma of IHRM
The widening spaces within which leading firms operate globally, and their own widening remit and greater
scale, mean that the question of managing and regulating work and employment generates new challenges.
International Human Resource Management (IHRM) is one area of study that has addressed this challenge
by focusing on the way that MNCs attempt to change the way people work in their operations across different
boundaries. Much depends on the type of MNC and whether it wishes to have – or whether it can have – an
integrated and coherent form of management across a number of countries, and much also depends on the
type of business and corporate strategy a company follows.
IHRM emerged initially from a focus on the management structures of MNCs and the problems of organiza-
tional control brought by operating in different countries. The focus at first was on the challenge to American
multinationals during the late 20th century in adapting to different national contexts and attempting to change
them; sustaining a coherent management elite in personnel and strategic terms was a priority, but this reflect-
ed an almost colonial perspective where the problem was ensuring order and supporting managers travelling
overseas (Scullion 2005: 3–21). Yet this focus on management has led to a range of limitations on the prior-
ities of IHRM. First, the focus has been in the main ‘internal’; that is, it has been concerned chiefly with the
internal environment of the firm and the manner in which it manages and develops its resources (especially
human resources). While the external environment of national cultural factors, different national HRM con-
texts and the challenge of creating synergies between national contexts in terms of personnel and strategies
has been discussed, the focus has been primarily on the internal structures and strategies of the firm, albeit
in relation to the external. The MNC is thus the principal focus for much of this debate about creating effective
and coherent strategies, structures and personnel deployment across diverse operations. Second, a concern
with strategy has predominated. That is, the emphasis has been on the need to create increasingly integrated
approaches that allow the MNC to control its environments and manipulate them. At the heart of this concern
is the stress on control. How people within an MNC – especially management – are rewarded, developed,
promoted and supported is considered to be the primary concern of the strategy proposed. In this respect,
unlike HRM, IHRM is more insular in its concerns, which is ironic, given that it is meant to be about globaliza-
tion. The development of globalization and its impact on various organizational levels is of concern primarily
as a test for senior managers and executives in ensuring the success of their MNC.
Increasingly, texts have widened the sphere of engagement by taking an interest in regulation and dealing
with international concerns about the behaviour and business ethics of MNCs. In the European context – and
the British context in particular – publications have begun to engage with these topics. However, the subject of
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IHRM remains a challenge because it has no real indigenous theory or focus beyond that mentioned earlier.
In part, this is because HRM theories continue to focus on the internal sphere of the firm and management re-
sponses to external factors instead of taking a broader view of the political and economic environment. There
may be perspectives which concern themselves with the internal politics, diverse stakeholders and competing
strategies within a firm (Beer et al. 1985; Blyton and Turnbull 2008; Legge 2005), but these only feature briefly
in most IHRM textbooks when they are addressing strategy-related issues. In the US literature, this is a lower
priority, though the situation is different in the United Kingdom (see Edwards and Rees 2006).
Broader HRM theories and debates do not always seem to be reflected in IHRM textbooks. The question of a
choice between control or cooperative strategies for firms is not an explicit aspect of many managerial texts.
Whether an MNC adopts a ‘hard’ or ‘soft’ approach in its attitude to its workforce, and the associated ethics
and challenges, is more a leitmotif than an explicit subject of concern. At a time when there is concern about
the ‘dark side’ of HRM such as the development of surveillance and tighter performance management, and
the ambivalent impact of MNCs on the quality of people's lives, these issues appear to form a small part of
the backdrop to the discussion in management texts. Ultimately, Scullion's (2005) concern is correct, and the
colonial heritage of management theory seems – unfortunately – to be alive and well in many of these texts.
Many publications also pay very little attention to broader questions of organizational theory, as can be seen
by constant references to national cultures as opposed to competing organizational cultures. In the main,
globalization is seen in terms of the challenge of cultural differences or different systems of management.
There is a need to introduce a broader perspective (Delbridge et al. 2011), as IHRM is not an academic disci-
pline with a clear theoretical basis, but rather an area that derives much from a limited study of organizational
behaviour and human resource management. Yet the object of IHRM is – in reality – the management of work
and employment: this means that the dynamics that constitute these in terms of representation, worker devel-
opment, the working environment and regulation need to move into the centre to provide a wider academic
and teaching agenda. One area in particular that can greatly benefit this exercise is employment relations,
or labour and industrial relations, as some prefer to call it. This is an area that approaches the subject from
the perspective of those on the outside who are most affected by the actions within MNCs, that is: workers,
national contexts, and national systems of representation and regulation of economies and societies. What is
more, labour and employment relations studies have, broadly speaking, also been mapping these subjects in
terms of their international dimension (e.g., the mobility of workers internationally, and the changing nature of
international systems of regulation). In many ways the aim of this book is to shift the gaze of the reader and
start from ‘the ground up’, seeking to put MNCs in a more dynamic context and a contested space.
An Employment Relations Perspective
This book therefore adopts such a perspective, because it takes a broader approach to work and employment
by drawing on the study of employment relations. This perspective is implicit in some of the leading texts
(Edwards and Rees 2006; Harzing and Pinnington 2011). The aim here is to ground our approach in the pol-
itics of globalization and MNCs in relation to work and employment thus building on the insights of a range
of scholars who share this agenda (Morgan and Kristensen 2006; Edwards and Bélanger 2009; Ferner et al.
2012).
First, an employment relations perspective focuses on the tensions that exist in the employment relationship.
It views these as being the outcome of the nature of the capitalist employment system, which is based on
a market where people buy and sell labour. It is important to acknowledge that there is an uncertainty and
instability within employment relations and modes of representation (Hyman 1975). This is a radical perspec-
tive that sees management initiatives on behalf of employers as being focused on gaining the consent of
workers for the purpose of production and effective activity, and worker commitment to their jobs, through the
use of consensual (e.g., participative schemes) or controlling mechanisms (e.g., performance management
and surveillance) (Friedman 1977). This assumes that there is no real common interest between employers
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and workers. Some see this as the conflict of interest between labour and capital, given the ownership of the
means of production and the alienation of labour from its work (Hyman 1975). Others have elaborated on this
arguing that there is a ‘structured antagonism’ between employer and worker. (Edwards 2003: 17).
This term is used to stress that the antagonism is part of the basis of the relationship, even though,
on a day-to-day level, co-operation is also important. It is important to distinguish this idea from the
more usual one of a conflict of interest. The latter has the problem of implying that the real or funda-
mental interests of capital and labour are opposed, and hence that any form of participation scheme
is simply a new way of bending workers to capital's demands. The fact that workers have a range of
interests confounds this idea. A structured antagonism is a basic aspect of the employment relation-
ship, which shapes how day-to-day relations are handled, but it is not something that feeds directly
into the interests of the parties. Firms have to find ways of continuing to extract a surplus, and if they
do not, then both they and their workers will suffer. (ibid.)
Pluralists in general argue that these tensions can be overcome – at least in the short term (see Blyton and
Turnbull [2008] for a discussion of pluralism). This can be done through the use of dialogue and mechanisms
of representation that allow the different interests to find some common point of reference – for example,
seeking to sustain employment activity in one particular location by developing activities such as training to
enhance the skills of the workforce to the benefit of both worker and employer. Chapter 3 will provide further
details with regard to the way an employment relations framework assists our understanding of work and em-
ployment dynamics, and their politics. So the question becomes one of how employers, managers, workers,
and in many cases their representatives, engage with each other to further their specific interests or reconcile
them in one way or another, and what the mechanisms are for doing so.
Second, an employment relations perspective is one where rights, and the propagating and management of
rights, are significant. Human resources are not just another ‘resource’: what is more, many workers seek fair
treatment in the way they are employed and deployed. In this respect, we need to understand the question
of individual rights at work. Slichter (1941) spoke of systems such as collective bargaining – where managers
and unions negotiate a common settlement regarding questions of pay or working hours – being an extension
of democratic rights at work and the extension of the democratic space into work. One could argue that this is
relevant where individual rights or liberty are of paramount interest and institutionalized politically, but these
rights are more or less organized in different contexts and different ways, and even when they are not insti-
tutionalized, the principle of democratic activity is at the heart of the process of employment relations and the
struggle over rights. In fact, as Macpherson (1992[1965]) argued, rights may not always be linked to the ques-
tion of just political rights, as in some of the more developed nations at the time his work was first published.
In developing countries, the right to economic enhancement may be the basis of political and organizational
activities and wages and rewards more generally. Social rights may also be seen as important, in that the
right to a working environment without serious hazards or risks in terms of individuals' health and safety may
also be the basis of demands from workers, and even the interests of particular managers. The desire to push
the understanding of rights as far as the questions of a voice at work (political rights), a decent type of work
(social rights) and employment itself (economic rights) are at the very heart of the human dimension of work
and employment. In this book, the various chapters deal with the question of rights and their development
and meaning.
Third, employment relations is about recognizing the tensions and realities of work and employment, including
the importance of rights: but it also highlights the context of their regulation and control. These can be formal
or informal: written or assumed and tacitly accepted. For many, the discipline of industrial relations (or labour
and employment relations) is about the regulation of the employment relationship, and this can be developed
in formal terms through written rules, contracts and agreements or through informal and unwritten rules and
agreements in the form of custom and practice (MacKenzie and Martínez Lucio 2005; see also Chapter 12).
This is the political dynamic and interplay that constitutes the relationship between the firm and the workforce:
and, in terms of MNCs, these can involve multiple points of regulation and relationships as they criss-cross
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countries. These are spaces (MacKenzie and Martínez Lucio 2005) where different organizations – especially
the representatives of workers and employers – and classes come together in one way or another and estab-
lish a series of agreements that allow a consensus on issues such as pay, working hours, particular practices
at work and other related activities to be accepted, and for production and service delivery to proceed unhin-
dered irrespective of the different interests that might exist.
Fourth, this means we have to the ‘map’ the broad range of actors in work and employment in a national, and
now international, context. These are not just the employers and their managers, and the workforce and their
representatives. For a complete understanding, this political map must recognize internal and external actors.
Internal actors would be management and worker representatives, but these might be differentiated internally,
with cohorts of managers having distinct different professional backgrounds or organizational interests (and
even networks; see Edwards et al. 1999). Worker representatives may also vary in terms of their political
allegiances or their relations with employers. There are also external actors who can frame the process of
regulation. The state – and the different institutions that constitute it – is an especially important actor, and
one that is much ignored in traditional accounts of IHRM: the state attempts to steer labour and employment
relations, for example, by emphasizing different forms of worker representation. Political projects may be de-
veloped to counter conflict within the workplace and employment relations, albeit with variable outcomes (see
Panitch 1981). Moreover, just as the state incorporates social actors it can also coerce them (Hyman 1975:
144), with strategies of containment and control in the regulation of union affairs, giving rise to new tensions
and new forms of worker action. Instability and uncertainty are central features of labour and employment
relations, requiring ongoing state investment in institutional processes, projects of reform and strategies of
change. Yet, the role of the state is almost non-existent within mainstream IHRM texts. What is more alarming
is the absence of any discussion of coercion and force – a major moral and ethical dilemma to which MNCs
have in many cases contributed in their darker operations, such as the link between American MNCs and
national governments in Latin America in the repression of democratic systems and worker rights.
Yet new discussions on labour and employment relations also point to a broader set of actors including inter-
national law firms; transnational consultancy firms propagating new ideas about work; non-government orga-
nizations (NGOs) and social movements raising ethical questions in relation to issues such as child labour;
new media and virtual organizations linked by the Internet and organizing work-related protest; educational
bodies, particularly business schools that are central to the propagation of approaches to HRM; and so on.
Work and employment relations, and approaches to these, are influenced by many bodies that may even be
beyond the direct remit of the employment relationship (Heery and Frege 2006). This book attempts to open
the door to these issues, and some of these actors, in terms of the way they shape strategies and under-
standing of employment and human resource management.
Fifth, there is tension and difference over the nature of the economic and social systems themselves. MNCs
are caught between national systems that organize and regulate work in different ways, and they support the
systems they see as convenient and useful for long-term economic development and power. MNCs can be
drawn to or deterred by such national systems and can sometimes reflect the practices of different national
structures in their own approaches. In this text, much is made of the tension between socially oriented and
more coordinated systems on the one hand, and more liberal and market-facing systems on the other: the
‘varieties of capitalism’ debate (see Hall and Soskice 2001). Various chapters will discuss these issues and
the debates that have ensued.
By developing such a perspective, we can start to approach IHRM from a broader environmental context and
give due respect to the question of politics. This allows us to locate MNCs in the real dynamic of the compet-
ing visions and politics of globalization. Perhaps the term IHRM is not appropriate, given this approach, but it
has become the byword for the study of transnational work and employment related issues in MNCs.
The Structure of the Book
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This book therefore attempts to link IHRM more closely to the contribution of labour and employment rela-
tions. It attempts to open up IHRM to the new influences and schools of thought engaged with its study from
a less managerialist perspective.
Chapter 1 engages with the subject of work and employment in the context of globalization. It aims to look
at how we understand globalization and how it has changed the way people are employed and the way that
they work. The chapter focuses on the competitive dynamics of such developments, and the competing inter-
pretations of what it is changing in terms of the global context, the firm and the nature of work.
The subject of MNCs and HRM is discussed in Chapter 2. The chapter focuses on how HRM strategies are
developed by MNCs, and how they attempt to change the contexts within which they are operating. MNCs
use a wide range of strategies and techniques as part of their attempt to transfer their practices and broad
philosophies of work to subsidiaries and host contexts. The chapter draws from a range of schools of thought,
which view MNCs as micro-political organizations using an array of strategies.
Chapter 3 covers employment relations, by looking at the role of regulation in different contexts and how in-
dustrial relations theories – both new and old – can be used to understand the differences that exist in relation
to the different environments faced by MNCs and other transnational bodies. Different national contexts in
terms of employment relations remain, and though these are changing, it is essential to understand the ways
in which these differences are sustained.
The second section of the book consists of chapters engaging with what we could call the internal environ-
ment of the firm in relation to the external changes taking place. Chapter 4 focuses on pay, which is the
quintessential element of the employment relationship. The chapter looks at how rewards depend on nation-
al contexts and structures. MNCs try to introduce new or organizationally specific systems in their reward
structures, yet find themselves confronting not just locally embedded and established systems of pay but also
tensions that arise in the way they implement changes.
In many respects, this issue is picked up by Chapter 5 on equality and diversity. A major development in IHRM
and international employment relations is growing concern with equality and fair treatment of staff. Equality
and diversity vary across countries and contexts in terms of origins, meaning and impact. The chapter at-
tempts to map the development of diversity management and outlines some of the challenges it brings.
A further feature of the internal environment of the firm is the question of human resource development, and
this is dealt with in Chapter 6. Many IHRM texts engage with how MNCs attempt to develop a more consis-
tent and integrated system of training in light of the more global requirements that emerge from the need to
communicate and create increasingly ‘cosmopolitan’ MNC leadership and management. Yet, local systems
of training and the way they are managed remain important. Hence, this chapter points to the role of local
contexts and differences in influencing strategies related to human resource development, but it also points
to how these local environments emphasize the development of a workforce that is adaptable and focused on
social and communication skills.
One of the missing features of the study of IHRM has been the way particular dominant strategies have
evolved within MNCs. How visions of production and employment are disseminated has been explained in
terms of how MNCs develop such visions and strategies, but not always what the politics of the strategies are.
In Chapter 7, we focus on the concept of lean production as a dominant ideology and a set of practices that
have been part of the transformation of work in many sectors and national contexts. These practices are seen
by many to represent a central form of labour exploitation and a dominant transnational paradigm of capital-
ism, which brings major issues in terms of health and safety for many workers. Its inclusion as a subject in
the book aims to bring the politics of organizations to our attention.
The third section of the book seeks to widen the remit of the discussion to include the impact of, and changes
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in, the external environment. This starts with Chapter 8, which follows on from the topic of lean production in
Chapter 7 by emphasizing more broadly the emergence of particular views of economic and organizational
change. It centres on the increasing role of the liberal market model and the emergence of Anglo-Saxoniza-
tion and Americanization as a reference point in the global context. This brings a vision of globalization that
is focused on short-term profitability, shareholders as dominant players and a financial and accounting view
of the organization and its priorities. There has been great concern regarding these developments for some
time, and the chapter updates us on many features of these shifts (see also Djelic 2001).
These changes have not emerged just because they are ‘superior’ or because of the dominance of US or UK
MNCs in the context of globalization. To a great extent, these are driven by a range of ‘other actors’ who push
the relevance and ‘sale’ of these models – for example, business schools and consultancy firms. Chapter 9
therefore focuses on the role of US-influenced and US-inspired business schools and management education
in disseminating these views. This process is supported by a range of consultancy firms, which in effect sell
these ‘fashions’ and encourage a particular political view of how work and employment should be managed.
These are central to the apparatus of the dissemination of Americanization and especially neo-liberalism in
organizational practices.
These tensions play themselves out in both developed and developing countries, and Chapter 10 focuses on
the latter and the challenges they face in the light of such competing and politicized views of management-
and employment-related issues. The role of the state in such contexts is pivotal to responses to the benefits
and challenges that MNCs bring. Developing countries are not always passive recipients of overseas invest-
ment, but in many cases develop the infrastructure necessary to engage with international firms. However,
they are caught between the development of a pliable and supportive local environment in terms of workers'
skills, on the one hand, and the management of the expectations that emerge and the democratic sensibilities
that can evolve within their workforce and labour markets. These tensions emerge because of the inherent
contradiction within MNCs of wanting a skilled and educated workforce on the one hand, but often a cheaper
and more pliable workforce on the other.
Chapter 11, on international mobility, focuses on migration and the manner in which MNCs utilize and capital-
ize on the increasing movement of workers across boundaries. In many cases, this is managed in a way that
allows MNCs to bypass regulations and laws relating to pay levels and working conditions. The question of
migration has been introduced in this book as a result of the way in which IHRM often only discusses mobility
issues with reference to middle and senior managers, as if the workforce does not exist. The role of MNCs
in manipulating such flows of labour, and in the main downgrading working conditions, is rarely a subject of
discussion, yet this raises the serious issue of the unethical behaviour of many international firms.
This leads to Chapter 12, on the way that transnational systems of regulation have had to be developed to
create a political environment that can control and condition MNCs in the darker aspects of their development
and behaviour. The chapter talks about new forms of regulation across boundaries, such as the use of inter-
national law and ethical codes of conduct as a way of influencing the operations of MNCs. This is discussed
in light of the debate on regulation that has emerged in the current economic context of crisis and change.
Such developments bring the book to its two final chapters, which map how the voice of workers and of so-
ciety in general has developed in the face of greater transnational coordination by firms. Chapter 13 outlines
the way that trade unions, as the main expression of workers' interests, have developed international organi-
zational structures. These include both official structures and new forms of network-based organizations that
exchange information about the nature and content of MNCs and their operations. The chapter also looks at
the development of councils and committees that represent workers in specific MNCs, which can influence
the nature of decision making and its outcomes.
Chapter 14 covers the role of the Internet and social movements in developing a transnational dialogue on
ethics and the behaviour of corporate capital. These developments have created a virtual and social inter-
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national community which has tracked and questioned many aspects of the internationalization of capitalism
and led campaigns and projects to humanize and challenge it.
Conclusion
IHRM is a broad and rich area of study and practice, and the need to uncouple it further from a managerial
agenda and open it to the reality of international issues and agents in work and employment is imperative.
Balancing the study of IHRM with a more systematic employment relations perspective is of benefit in under-
standing the nuances and richness of work and employment in a global context. MNCs exist in a complex
relationship with the reality of a world they attempt to develop within. It is also a world that is changing (in part
as a result of the impact of MNCs) and which presents ongoing challenges: the presence of MNCs in national
environments creates economic responses and social changes.
Understanding the political aspects of many of the facets of management, and the ethical traumas MNCs give
rise to, needs to be given greater prominence as human beings speak to and engage with each other across
the globe in new and more effective ways. The need to place MNCs in the real context of political competition
and action, especially the demands of workers and national states, is the challenge we face.
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• international human resource management
• employment relations
• employment
• multinational corporation
• human resource management
• employment relationships
• firms
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