Based on this literature, it would appear that MNCs should anticipate encoun-
tering barriers and at least some resistance across their foreign subsidiaries to any
HRM changes sought, especially in the case of unionized sites. It follows that MNCs
need to make cost–beneWt calculations of the expected net gain derivable from
substituting preferred or modiWed HRM practices for existing practices in their
subsidiaries. Only if there were a suYcient net gain achievable after subtracting out
the costs of transforming the workplaces of their foreign locales would MNCs
rationally pursue the diVusion of preferred HRM policies and practices abroad.
- 3 Taking Union Representation into Account
As discussed, MNCs generally attempt to limit their exposure to union represen-
tation and collective bargaining, believing that the ‘eYciency’ gains achievable
from operating without union representation are greater than the ‘voice’ gains
achievable from operating with union representation. The presumption that
unions in general are on net costly appears to carry over into the global HR
strategies pursued by MNCs where they have invested abroad. Based on a number
of recent studies, it is apparent that many if not most MNCs attempt to avoid
union representation across their foreign operations when the costs of avoidance
are not viewed as too high. For example, Purcell et al. ( 1999 ) found that MNCs did
not strongly resist union representation in the manufacturing sector when it
appeared that the costs of avoidance outweighed the beneWts. In contrast, where
the costs of union avoidance in theWnance and tourism sectors were not seen as
high, Japanese MNCs aggressively avoided union representation of their subsid-
iaries. In their study ofWve US-owned MNCs with subsidiaries in the UK, Ferner
et al. ( 2005 ), likewise, found that decisions to avoid union representation are
dependent on a mix of factors inXuencing the capacity and costs associated with
avoidance. Similarly, numerous other studies indicate that MNCs have made
concerted eVorts to avoid unions, for example, regarding German-owned MNCs
with subsidiaries in the UK (Beaumont et al. 1990 ) and European and Japanese-
owned MNCs in the USA (Cooke 2001 b). Furthermore, by pitting unionized
operations against other unionized and non-union operations as each vies for
limited investment and jobs, MNCs have positioned themselves to extract conces-
sions from their unionized operations at home and abroad (see e.g. Marginson and
Sisson 2002 ; Martinez Lucio and Weston 1994 ).
The crux for unions representing the workforces of given MNC operations is
either to compete with each other over scarce capital investment and production or
to form transnational inter-union partnerships for the purpose of negotiating
directly with MNC headquarters, namely over the central global issues of FDI
and movement-of-work decision-making. Under the Wrst scenario, one can
surmise that only stronger unions situated in critical links within a MNC’s global
496 w i l l i a m n. c o o k e