chapter  3
58 Pages

The Multinational Corporation

A second international structural change affecting collective bargaining is the emergence of the multinational company and a world economy. The multinational corporation will increasingly condition the effectiveness and relationship between management and labour in collective bargaining. At present the advantages are all on the side of management. Global mobility and structures able to implement new global strategies give management enormous superiority over national and local unions. Some of these advantages include: (a) ability to locate investment in favourable circwnstances

relative to low wages, weak unions, favourable tax laws and hospitable pro-management legislation;

(b) transfer of production from one country to another to offset the economic effect of a strike;

(c) minimization of tax obligations and maximization of profitpositions where desired through adjustment of intercompany or transfer pricing;

(d) exploitation of advantages of tax havens and avoidance of controls imposed to mitigate balance-of-payments difficulties;

(e) concentration of research and development in parental facilities to effect economy-of-scale advantages beyond the means of national companies;

(/) raising capital on world markets and freeing the company from subservience to national regulations on: tariffs, capital, cartels, taxes, publishing of financial statements and the like.