There
are noticeable differences in the way that the employment relationship is
regulated in different countries, such that we can identify different
national employment systems.
National employment systems can be compared on the basis of
similarities and differences in the extent and
patterns of institutionalised regulation of the employment relationship.
Different countries’ employment systems are embedded in and
shaped by their wider business systems.
Historically, Germany, Japan and the USA have adopted different
employment paradigms based on, respectively, social
partnership, welfare corporatism and a managerially led model.
Each of the three paradigms has been embedded in distinctive
business systems that have in turn produced
and supported distinctive strategies for achieving competitiveness in domestik and
international markets.
Since the 1980s, each system has come under intense pressure to
change in response to forces that many observers
believe are encouraging the convergence of all employment systems towards
the current US model, based as it is on shareholder capitalism. However, both
the German and Japanese business systems have displayed resilience
in the face of pressures towards convergence.
Globalisation, if it means anything, means that international
competitive pressures and reactions to them override
the priorities of national business and employment systems, leading to the
further marketisation of corporate governance and employment
relations. More recently pressures associated
with globalisation have witnessed the emergence of attempts at
rulemaking by some multinational firms over taxation
liability in their country of origin and the host
economies where they invest. Similarly the ‘employee’
status of operatives who work for some new economy
firms is currently a matter of dispute in some European
economies. More recently still the emergence of informalisation in employment
relations in some sectors of the American economy
challenges the status of the three varieties of Americanness in
established US employment relations.
In a global context, financial performance becomes much more
important than previously, particularly as the
stock market and the market for corporate control increasingly discipline management
to ensure managerial efficiency on the basis that investors and
shareholders are the dominant stakeholders.
The diffusion of investor and shareholder approaches to
corporate performance, combined with external shocks
such as the recession caused by the credit crunch, encourages employers to
see labour as a cost rather than a productive resource,
leading to changes in HRM. At the same time, however,
national systems of institutional regulation moderate this pressure.
The financial crisis is a global phenomenon which has
contradictory results for HRM. As a reaction to crisis,
many multinational firms have retreated to strong country-of-origin stereotypes
but at the same time many multinationals have sought to accommodate the crisis
by getting closer to host countries in terms
of HRM. In summary, the financial crisis has reinforced ever
present tensions within multinational firms between standardisation and
localisation.
Brexit is likely to further reinforce embedded business and
human resource approaches associated with multinational firms
of different nationality. In addition Brexit may too create new opportunities
and challenges for subsidiaries of overseas multinational firms
located in the UK.
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