Comparison of the countries’ union relations
The United Kingdom and Norway are both industrially advanced European nations, even though they differ along various dimensions. Over the decades, union numbers and membership has significantly reduced (Willman et al., 2016). As a result, there is high wage dispersion in the country. Contrarily, Norway is characterized by greater union activity, especially in wage-setting coordination (Torp & Reiersen, 2020). Therefore, the two nations are near opposites regarding the tasks of unions and how they are regarded traditionally.
The organization of the unions (and employers)
Unions are categorized into four confederations in Norway, with each consisting of various individual unions as per the industries and occupations. The unions include Landsorganizasjonen I Norge (LO), the confederation of unions for professionals (UNIO), Yrkesorganizasjonens Sentralforbund (YS) and Akademikerne (Fulton, 2021). In response to high employee union activity, the employers have also organized in the national federation of employers, which determine wages and work conditions for employees. In the United Kingdom, most employees are organized in large unions formed as a result of mergers (Fulton, 2021). There are also those that organize in unions for specific professions and others that organize in single firms.
Nature and role of bargaining
Norway uses a collective bargaining system with a stringent order of hierarchy. The primary agreements determine the main objectives and stipulate principles and procedures. These are regarded as the first section of sector-level negotiations, which decide the actual value of wages and working conditions when combined with company agreements (Bøckmann, 2021). The same collective bargaining system is used in the UK, where it occurs at the company level and determines pay and conditions of work. However, the system is prevalent in the private sector as sector-level negotiations exist in the public sector (Brandl & Kildunne, 2018). There are also pay review bodies that determine pay in the public sector.
The role of the government
The government plays the role of a mediator and, thus, intervenes in union matters and imposes mandatory arbitration if deemed necessary. This close coordination between the unions and government is reflected in agreements on inclusive working life (Inkluderende arbeidsliv), which seek to ensure accessible well-paying jobs for everyone and improve working conditions (Fulton, 2021). The UK government, by contrast, does not intervene in union negotiations and never regulates or guide the bargaining process.
Any additional forms of employee representation
Workers in the United Kingdom are most commonly represented in unions. Since 1999, they have successfully legally compelled companies to negotiate with them (Fulton, 2021). However, there also exist work councils, a feature it shares with Norway. The Norwegian works council (bedriftsutvalg) is elected by all the workers and established in firms with 100 or more workers. In companies with 200 or more workers, it is also possible to develop departmental councils.
Comparison of the two countries using Hofstede’s dimensions
Similarities
Differences
Recommended country for Yarn Paradise’s expansion
According to the comparison, the United Kingdom would be the ideal destination for expansion by Yarn Paradise. It is characterized by an indulgent, competitive and success-oriented population, a low power distance index, a low uncertainty avoidance and individualism (Hofstede Insights, 2021). However, due to the shocking development of Brexit in 2016, there is a lot of uncertainty, especially concerning corporate immigration between the country and the European Union. Thus, Norway remains the preferred choice as it still shares some desirable features with the UK, such as individualism and low power distance index. Norway also has a skilled workforce with highly organized unions and smooth corporate immigration, making it suitable for multinationals.
Problems for Yarn Paradise in bargaining with the countries’ unions
Multinationals encounter various issues while bargaining with unions in foreign locations. Culture, language, and labor laws will present a major problem to bargaining as they vary from one country to the next (Tarique et al., 2015). Also, since the government is involved in union activity and even takes the role of a mediator in Norway, Yarn representatives will view this as interference or even favouritism, for instance, in solving disputes. In the two countries, negotiations for excessive periods can frustrate employers. The negotiations can also be greatly fragmented, consisting of various units for bargaining. It can, in turn, be difficult to close deals at multiple levels, especially with a lack of sector and state-level bargaining.
The solutions to the problems
A variety of approaches, mainly through HR, can offer solutions to the problems mentioned above. A hands-off strategy is one such approach and can be employed by the parent company’s headquarters. Here, the local managers are tasked with employee and labor relations (Tarique et al., 2015). The local managers better understand their regions’ culture, laws, and languages and will be better placed to handle labor and workers’ matters. The firm can also use the monitor approach in which IHR managers from the headquarters anticipate problems during international expansion. As a result, they conduct due diligence about labor and employment tasks in various foreign locations (Tarique et al., 2015). However, the local managers will remain in charge of primary responsibility.
Another solution for the IHR managers will be in the form of guidance and advice. The IHR managers will provide continuous advice and guide the subsidiary managers on how they are to oversee labor and employee relations, which are often based on headquarters’ policies. Finally, strategic planning can be put in place to fully integrate matters dealing with international labor relations into the firm (Tarique et al., 2015). A centralized program will fully incorporate all the facets of the firm’s management, including labor and workers’ relations.
The future of union relations in the global economy, how and why it applies to Norway
In response to the increasingly transnational nature of business transactions, union relations in the global economy can no longer remain strictly within the local, regional or national boundaries. As a result, global union federations (GUFs) have been set up by regional and national unions in the global market (Sherrard & Wisskirchen, 2014). The GUFs represent national sector level federations in major industries and have attempted to bargain with multinationals using various strategies such as policy campaigns and international framework agreements (IFAs). These IFAs are becoming more common in the contemporary labor relations environment and have sought to improve employee working conditions and support unionization, especially in locations with less stringent labor standards.
Since IFAs seek to improve workers’ conditions and cooperative industrial relations, they are more applicable to multinationals with subsidiaries in social markets such as Norway. In such locations, representation of collective interests is the manner in which work and the labor market is regulated. IFAs are a huge problem for multinationals and are the reason some of the world’s biggest firms have refused to negotiate through them. Being in the chosen country for expansion, Norwegian unions would be a challenge for multinationals, especially during bargaining.
References
Brandl, B., & Kildunne, A. (2018). Outsourcing and collective bargaining in the UK. Country report-Recover project.
Bøckmann, E. (2021). Living and working in Norway. Eurofound.
Eurofound. (2019). International Framework Agreement.
Fulton, L. (2021). National industrial relations: Norway. ETUI. Web.
Fulton, L. (2021). National industrial relations: United Kingdom. ETUI. Web.
Hofstede Insights. (2021). Compare countries.
Tarique, I., Briscoe, D. R., & Schuler, R. S. (2015). International human resource management: Policies and practices for multinational enterprises (5th ed.). ‎Routledge.
Torp, S., & Reiersen, J. (2020). Globalization, work, and health: A Nordic perspective.International Journal of Environmental Research and Public Health, 17(20), 1-20.
Sherrard, M. G., & Wisskirchen, G. (2014). Next up for North American employers and unions? International and corporate social responsibility. ABA Journal of Labor and Employment Law, 29(2), 245-282.
Willman, P., Bryson, A., & Forth, J. (2016). UK trade unions and the problems of collective action(10043). IZA.