18 Jun 2022


Multinationals and Transnational collective bargaining

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Academic level: College

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Increasing globalization has opened channels for multinational corporations operating in different countries either marketing and or production of goods depending on the business environment favorability to organizational growth. Many organizations venture into countries outside the United States and the European zone to exploit the little labor and, materials costs and markets available in different parts of the world. As a result of the increased number of organizations venturing to other countries transnational collective bargaining has become a predominant matter for discussion. Most trade unions believe that multinational organizations have the ability to influence work environment standards and remunerations offered to workers by organizations to which production or marketing is outsourced. Calls for bolder actions by trade unions for multinationals to intervene in demand for better working conditions and remuneration has been prompted by a notion that cheap labor costs come at the expense of the workers 

Donaghey 2014 quotes Steve Jobs former Apple Chief operating officer saying "We've known about labor abuses in some factories for four years, and they're still going on...Why? Because the system works for us". This statement by Steve Jobs reflects the average business company mindset on the exploitation of labor costs opportunities exploited through outsourcing. 

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The most commonly applied employment governance practices instituted across many parts of the world are collective bargaining and state regulation. .tate law concerns minimum wage standards and outline compensation models (Office, Kyloh, & Donaghey, 2014). On the other hand, collective bargaining is a form of influence exerted by workers on the employer for better terms and working conditions. Critics urge that where collective bargaining is restricted either by business practice or by state determinism, the outsourcing corporation has an influence if they intervene in support for better terms and remuneration for workers on a company to company basis. 

The effectiveness of pressure from the outsourcing principal to its agent is likely to have an immense impact and relatively has a high chance of success. On the other hand, the multinationals willingness is somewhat negative since corporations drive increased revenue, efficacy in infrastructure and technology use, increase overall production efficiency and time zone advantages. Interventions would, however, make a difference in how agents relate to its workers. 


Office, I. L., Kyloh, R., & Donaghey, J. (2014). From conflict to cooperation: Labour market reforms that can work in Nepal. Geneva: International Labour Office. 

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