many markets, making it easier for firms to realise synergistic linkages between
their subsidiaries. Coupled with these changes have been improvements in
communications and transportation which have facilitated international coor-
dination. Accordingly, many MNCs have strengthened the inter-unit linkages
by developing new structures for their international operations. In particular,
many have moved away from country-based structures towards organising
themselves around global divisions or regional blocks, so that comparable
operations are linked together. For example, IBM’s operations are not struc-
tured along the lines of the various countries in which the firm operates, such
as IBM China or IBM Canada; rather they are organised into global divisions,
such as software and services, and regional blocks, such as Europe, Middle East
and Africa (EMEA) and North America.
The replacement of country-based structures with these types of inter-
national management structures appears to have been most marked within
Europe. The process of European integration has created a product market
which is largely free from formal barriers to trade, while aspects of the regula-
tion of other issues, such as competition, industrial and social policies, have
also become harmonised. Perhaps most significantly, the single currency has
increased the transparency of costs and prices across Europe and created a large
Euro capital market. Thus Marginson has argued that Europe is ‘an economic,
political and regulatory space whose character and dynamic is distinctive when
set against wider, global, developments or those in the other two “triad”
regions’ (2000: 11). Consequently, many MNCs have created an influential
European aspect to the structure, with the potential to develop Europe-wide
policies in HR.
The developments described above in relation to the markets are uneven,
however. Many sectors remain localised in that they are strongly influenced by
nationally distinct customs or regulations. Commonly, these sectors are ones
in which MNCs are generally absent, such as the provision of personal care and
hairdressing. In some other sectors which are still influenced by national cus-
toms or regulations, MNCs are present but tend to adopt management struc-
tures based around the countries in which they operate, and there are few
inter-linkages between their operations. Examples are electricity and retail
banking. In contrast, the scope for achieving a high degree of international
integration is much stronger in sectors like textiles, automotive, IT services and
investment banking, where units are strongly linked to their counterparts in
other countries.
This integration can take two forms, each of which has important impli-
cations for employment relations. International integration can take the form
of the segmentationof operations across countries, with those in one country
providing components or services to those in another. Examples of this are the
producers of branded sports and fashion wear which subcontract production to
nominally independent, but in fact closely controlled, firms mainly in South-
east Asia. These arrangements, through which production is both internationalised
Transfer of Employment Practices Across Borders in MNCs 401