PROJECT REPORT ONDEPTH ANALYSIS OF SELECTION POLICIES OF MNC’s
Participation: an asset of Corporate Governance in MNC’s. Does the SE provide an advantage for...
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Transcript of Participation: an asset of Corporate Governance in MNC’s. Does the SE provide an advantage for...
Participation: an asset of Corporate Governance in MNC’s. Does the SE
provide an advantage for enterprises and investors?
Dr. Sigurt VitolsScience Center Berlin (WZB)
Presentation prepared for the SEEurope Network
Conference,
29-30 November 2004, Brussels
Key Questions for the Study
• Internationalization and company change
• Resulting challenges for HRM
• Workers’ Participation: The Management View
• EWC + SE
Study Design
• DJ Stoxx 600
• Postal survey of 165 Companies w/ EWC
• 63 Replies (38 % Response Rate)
• 13 In-depth Interviews
• Access to Lift.com Participants
Internationalization at Company Level
• Weakening of National HQ vis-a-vis Regional and/or Divisional HQ
• Regional Production + Sales Strategies
• Product + process standardization
• Regional/divisional HRM upgraded
• Increased Monitoring by Capital Markets + NGOs
• Uneven Process
Examples of Company Change
• Centralization at GM Europe HQ/Detroit
• BP European HQ in Paris
• Devolution of responsibility to divisions (e.g. Degussa, Zeneca)
• Centralization of risk management function in financial services
Challenges for European HRM• Understanding national cultural and legal
differences• Harmonization of HRM policy which respects
national differences• Create “real” corporate culture/identity• Encourage cross-border mobility of employees • Develop truly international management cadre• Implementing European legislation (e.g. timely
info for EWC)• “Think globally and act locally”• Increase local control/monitoring w/o increasing
bureaucracy• CSR/Sustainability/Code Implementation
European Employee Participation
• 2/3 managers see EWCs positively + have plans for improvement
• Better communication, acceptance, decisions
• Decrease in decision speed
• No “country of origin” effect
• However: significant minority negative
• Near-consensus: no negotiating rights, no strengthened Directive
Some Benefits of EWCs
• Upgrading of HR function
• Discussion of new topics: strategy, finances, health + safety, training
• From information to consultation
• Agreements/statements on:– Health and safety– Sustainable development– Social + ethical charters
Enlightened Managers: EWC future role
• More confident information conduit
• More informed consultative body able to act as a genuine interlocutor
• A serious and active partner
• A key role in European social dialogue
• A brainstorming group
• A platform for a constructive social dialogue and wide-ranging communication
Adoption of SE: Wait and See?
• 8 %: likely to adopt
• 12 %: “unthinkable”
• 80 %: “Might be considered but unlikely that it would be adopted”
• Key issues: taxation, simplification of corporate structure, financial reporting + transparency, employee representation
Participation + SE: Possible Advantages
• Upgrading of HRM function
• Improvement in employee communication + motivation, implementation of change
• Independent force monitoring management
• „New“ issues: CSR, transparency, pension funds
• Role for trade unions?