MN7374 International Human Resource Management Assignment Sample 3
Module code and Title: MN7374 International Human Resource Management Assignment Sample 3
Introduction
An international or global framework of agreements is a widely regarded international tool for developing a negotiation between multinational corporations and trade unions. The international framework agreement has thus established a set of standards to maintain a relationship of mutual trust and dependence between these two parties. Hence, the major impact of this particular framework lies in the fact that it establishes conductive sustainability within the business relationship and creates a balance between the commercial environments.
Henceforth, in order to establish this following argument, the present essay has critically evaluated the origin of the International Framework agreements and its theoretical approaches. In addition, the following essay has also critically evaluated the impact of this framework on the engagement of respective trade unions and made a critical comparison regarding how it becomes more effective than the mere CSR policies.
Thesis statement
The thesis statement in this study aims to prove that with the application of these international framework agreements these multinational corporations may develop a more effective engagement with the trade union than the mere application of certain corporate social responsibility policies.
A Critical Analysis of the importance of the IFA framework in engaging the Labour organisations
A critical overview of the International Framework and its origin
As stated earlier, International Framework Agreements refer to certain codes for establishing a long-term relationship with the suppliers that lead to a commercial environment that promotes a conducive and sustainable approach towards investment and employment within the local construct. As a result, this particular framework agreement has been considered as a major tool for managing the relationship with the suppliers and the trade unions.
According to Schwartzman et al. (2021), this regulatory framework of the International Framework Agreement was first developed as a reaction or response to the gradually increasing trend for the corporate social responsibility implemented by various multinational corporations and institutions. This tool for establishing the transnational standards between multinational enterprises has been formed during the onset of the 21st century.
As per the opinion of Dorssemont et al. (2019), with the beginning of 2000, the IFA framework had therefore been widely accepted as a Global Framework Agreement (GFA) in both employing the social and the labour policies at these organisations.
This unilateral adoption of the CSR policies had inspired the contemporary organised labour forces of the multinational corporations to establish this set of rules. However, in the establishment of the International Framework Agreement, the BWI or Building and Woodworkers’ International had played a crucial role during the initiation phase (Ashwin et al. 2020). BWI had evidently realised that the CSR policies implemented by the various multinational organisations are often used from a marketing perspective and mitigate the organisational goals instead of preserving the rights and concerns of the trade unions or the employees.
As a result, it became essential for the contemporary organised labour forces to develop a response against this negative publicity associated with abusive and exploitative labour practices by various multinational corporations under the veil of their organisational policies and the CSR approaches (Bourguignon et al. 2020). Hence, as a reaction to these popular brand images started to establish new standards of codes. However, other than BWI, IG Metals has also been responsible for the genesis of the International Framework Agreements.
On the other hand, it is also to be noted that the origin of the International Framework Agreements has never been only a reactionary phase to the contemporary failure of CSR codes. In addition, as per the observations of Chelkeba (2018), the genesis of this framework has also been a result of the recognition and wide acceptance of the international labour standards over various international areas.
The International Labour Organisation had developed the basis of the International Framework Agreements based on certain tools. According to Escap (2020), these tools have included their recent Declaration regarding the Fundamental Principles and Rights at Works as well. In addition, the OECD guidelines for the functioning of the multinational organisations have also made an effective contribution towards the genesis of this framework.
Other than the gradually concentrating impact of globalisation upon the economy and its dynamic phase of embedding the financial crises, the transnationalisation has also been a major precursor to the formation of the IFA. During the 1990s, because of the rising economic globalisation, a large measure of the global financial market had come under the liberalised process (Galeva, 2021). Consequently, the direct increase in the investment in the portfolio had also intensified the competition in the market.
As a result, the transnationalization process had driven most of the global corporations. The competitions in both capital and the financial markets have contributed with a revised logic within the redefinition of the value-added chain and management of the corporate strategies (Goerke, 2022). The flexible operationality and experimental production by the multinational corporations have also illustrated the development of the IFA.
As a result of this rising competition, it has been observed that by the end of 2000, there have been more than 65000 multinational corporations all across the globe and 850,000 subsidiaries (Gold et al. 2020). This continued liberalisation all across the globe had evidently weakened the binding force of the nations and their regulatory structure. Hence, according to Golyshev et al. (2020), the formation of the IFA had helped the contemporary organised labour forces to deal with the social harnessing of the capitalist value-added system and their employment standards.
In addition, the WTO regime has also set up further scopes and opportunities for this framework. The dominant role of the WTO, IMF (International Monetary Fund) and World Bank has effectively contributed to the architecture of the framework and its governance as well. However, with the gradual advancement of time, it has been evident that the absence of IFA in multinational corporations has failed to foster the dialogue of multiculturalism in the organisation.
Theoretical approach and Practices of Framework
In the case of implementing the International Framework Agreement between various organisations and Multinational corporations, the applications of the theoretical practices have also been evident. The International Framework agreement has always been considered as a major vehicle for determining the true commitment of a corporation toward achieving a corporate code of conduct (Harrison et al. 2019). Hence, the upper-level management of the Corporate codes have been inspired by the International Relationship Theory of the IR theory.
The application of the IR theory has however laid a legitimate and different outlook to this set of codes in IFA. In addition, according to Belzunegui-Eraso and Erro-Garcés (2020), the inclusion of IR theory within the IFA framework has also eased the process of understanding such a complicated framework. According to Burchill et al. (2022), during the sovereign change of the world, the IFA framework along with the IR theory has strengthened the regulatory frameworks of the multinational corporations as well.
On the other hand, in theory, it has also been accepted that the employees of these multinational enterprises have obtained reinstatement and maintained their fundamental rights with the application of the IFA framework. In addition, as per the theoretical framework of the IFA, it has also been stated that the framework would eventually protect the employees from the vindictive attitude of the employer and help to internalise the labour law.
In addition, under the application of the Analytical Generalisation Theory, IFA has also been effective in providing an explicit account of global agreements and their impact on the trade unions. As per the observation of Harrison et al. (2019), it has been observed that IFA has successfully maintained to cover the entire enterprise and the entities associated with it. However, in order to cover all the entities associated with it, IFA has accelerated the use of outsourcing within the organisation.
The inclusion of IFA within the organisational construct has therefore given birth to two kinds of employees, namely, the beneficiary group who have enjoyed the benefits from the IFA and IFA framework (Burton and Galvin, 2020). The other group has however denied the benefits.
In addition, the application of the IFA framework has also established the theoretical background for developing three categories of third party control. These three categories have included Encouragement, support and urge. Hence, with the application of these three basic categories, the IFA framework has theoretically organised the legal, political, and economic environment of the organisations.
Impact of International Framework on Trade Unions
The International Framework is also known as the “Global Framework Agreement”. The agreement helps establish a constructive relationship between multinational companies and trade unions. As stated by Lu et al. (2019), trade unions are an effective tool in representing the views of the labourers. Moreover, it also helps materialise the needs and demands of the larger workforce. Therefore, it is an essential component that helps labourers survives in unfortunate situations.
Consequently, the emergence of trade unions also necessitates establishing a healthy relationship with the organisation. In several instances, it shows that the rise of trade unions can pose a credible threat to organisations (Morozov et al., 2021). The central premise of such conflict is the rise of suspicion between each other. In the wake of the conflict between the management and trade unions, it can prove detrimental to the organisation’s growth. Therefore, the International Framework Agreement is an important tool in mitigating the conflicts between the two parties.
Additionally, Ukhanova (2021) believes that in the absence of any superstructure, the trade unions fail to represent their group adequately. This can give rise to substantial dissatisfaction and chaos within the operational function of the organisation. Henceforth, there is a high probability it will lead to strikes and operational failure amounting to further losses for the organisation. On the other hand, the framework will help the trade unions by ensuring that all the organisations maintain a minimum “International labour standard”.
Compared to other frameworks, the “International Framework Agreement” exhibits a wide scope and opportunities for the trade unions owing to its international outlook (Urbański, 2019). Furthermore, the provision showcase of safeguarding the basic rights of the labourers has made it an influential agent in the working of trade unions.
The changing outlook of businesses and rapid expansion of the supply chain network necessitated the emergence of IFA. As Visser (2019) observed, provided with the global outlook of the agreement, it allows protection of the workers beyond the company border. Hence, it secures workers’ rights not only within the boundary of the organisation but beyond that. It also promotes the establishment of decent workplaces to ensure that employees can work more safely.
All these collective approaches affect the trade unions by widening their scope and expanding their work area. The agreement acts as a safeguarding tool to ensure the protection of the larger workforce within and beyond the organisation. Moreover, the “International Labour Union” noted that there had been an increase in the number of signatories to IFA (Villajos et al. 2019). The rapid rise of the number of signatories shows the change of perspectives, emphasising labour health and working conditions.
Moreover, the establishment of IFA will also help expand the scope of representation within the organisation. It will also allow the labour unions to protect their rights against the manipulative initiatives of the capitalists. The framework will also help the trade unions establish their rights within and beyond the organisation (Jackson et al. 2018).
The increasing breach of the general regulatory framework of ILO shows that workers are being deprived of their rights, which further mounts tension and conflict between the two parties. Furthermore, it observes that there is no “legal enforcement” associated with the IFA (Visser, 2019).
The cases that are brought through the IFA are mostly associated with the breach of provisions regarding the associations or unions. Another crucial drawback of the framework is that the transnational companies will be benefitted the most from it. This also leaves the space for other organisations that do not have any global transactions or operate locally.
To conclude, it can be said that the provisions of the IFA will help the trade unions to materialise their needs and demands. However, Kukuruz (2021) states that no legal enforcement is attached to the framework, which can make the provisions ineffective in the wake of any breach of any standard.
It shows that the framework is effective for transnational organisations, only leaving out many groups working on a country or local level. Despite the drawbacks, it cannot ignore that the framework’s provisions are highly beneficial for changing the image of trade unions by extending their scope of power (Urbański, 2019). It expects that IFA will be beneficial in displaying a more constructive representation of the labour force.
A critical comparison between the impact of CSR and the International Framework on Trade unions
The activities of “corporate social responsibility”, as stated by Villajos et al. (2019), have become a mainstream idea within the organisation, displaying the company’s allegiance to the environment and society of operation. Additionally, the activities associated with CSR are not confined to a single aspect or perspective.
For example, employee engagement has become a crucial aspect of the CSR report, addressing the employees’ issues with comprehensive resolution (Urbański, 2019). Hence, it can imply that CSR is indirectly linked to the trade unions as, generally; it does not highlight any direct reference of it in the CSR.
On the other hand, Ukhanova (2021) claims that the primary role of IFA is to extend the scope of trade unions by extending their power. The provisions are linked to establishing a healthy work culture to ensure decent working conditions for the large workforce.
Hence, the impact of IFA on trade unions is direct and stronger than that of CSR. It also promotes the “International Labour Standard” within and beyond the organisation (Morozov et al. 2021). The IFA provisions are concentrated on the single goal of providing a decent work culture to workers, whereas CSR is wider in scope, enlisting all the aspects of the business required for its development.
As stated by Matuszak and Różańska (2019), the code of conduct stated in CSR allows for enhancing the development of workers by formulating policies. It is also observed that the provisions stated in the CSR report sometimes lack action and initiative. Furthermore, the CSR provisions aim to improve the business both internally and externally.
Therefore, it focuses on the wholesome concept of the business (Lu et al. 2019). On the other hand, the IFA is solely focused on promoting the workers’ rights by giving more representative power to trade unions. Therefore, the provisions enlisted in the IFA are quite comprehensive in outlining the workers’ rights. Moreover, it proves that IFA is far more effective than CSR in terms of implementing the provisions.
Despite the meticulous formation of policy and strategy, it highlights that policy frameworks more often than not lack effectiveness. According to Kukuruz (2021), there is also no legal obligation attached to the code of conduct, which can help the organisation implement it according to their wills. In the absence of a comprehensive legal framework, the trade unions will be left as a prominent marketing tool instead of providing any essence to the workers’ lives.
However, the most crucial thing of CSR is to project the company’s image in a positive light. Based on the analysis, it is right to say that CSR is a marketing tool used by organisations to market the brand name to gain more profit. On the other hand, IFA is not a marketing tool formulated by the organisations as it solely represents the ideas and rights of the workers (Jackson et al. 2018). However, it has no legal framework attached, but the signatories have some form of obligation.
It is to conclude that IFA provisions are far better than CSR. In terms of implementation, IFA seems to be more effective than CSR. It also notes that the wider aspect of CSR makes it ineffective in rendering any influence on trade unions. On the other hand, IFA is more effective while addressing the workers’ rights.
Conclusion
The study made critical analysis on analysing the effectiveness of IFA in materialising the needs of the workers. Tracing the genesis of IFA shows that the primary reason for constructing the agreement is to provide a more constructive basis for the workers’ rights. The primary role of the IFA aims at establishing a healthy relationship between the management and trade unions. Furthermore, the study critically analysed the scope of “International Relationship Theory of the IR theory” and “Analytical Generalisation Theory” in rendering effectiveness to IFA. The analysis shows that IFA has a greater share of influence on the trade unions owing to its direct approach.
On the other hand, it also exhibits that the provisions enlisted in the IFA are more effective than the CSR in terms of its implementation. The analysis also refers to CSR as a marketing tool that organisations use to gain greater profit in the market. However, the validity of the IFA lies in safeguarding workers’ rights, which does not come under the premises of marketing. Moreover, the changing outlook of the business shows the practice of both IFA and CSR in the mainstream idea of the business operation. Therefore, it is to conclude that IFA shares more influence on the trade unions’ working than that CSR.
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