Towards a Social Regulation of the Global Firm? Introduction

Multinational firms are both a motor and a transmission belt for the internationalization of economic and social relations. The economic development and even the prosperity of most nations seem to be inextricably linked to the scope and intensity of the activities of the approximately 65,000 multinational firms and their 850,000 foreign affiliates operating in one area or another of the planet. The wealth of nations is thus tied to their capacity to partake of the international trading system by attracting foreign direct investment and finding their niches of competitive advantage within an increasingly global economy. Multinational firms are, of course, not a new phenomenon. To cite the example of Canada, from the earliest exploration of its territory and the opening of its frontiers and provinces by such international undertakings as the Hudson’s Bay Company, to the creation of Canadian branch plants of U.S. and British firms under the tariff protections of the late nineteenth and early twentieth centuries, to the increasing interpenetration of the Canadian and U.S. economies in the latter decades of the twentieth century, the activities of multinational companies in Canada have been a vector of its economic and social development, making it one of the most open and prosperous economies in the globe. Yet, as witnessed by the proliferation of the globalization lexicography (multinational, international, transnational, global), the nature of the so called multinational company appears to be changing in important ways. Earlier generations of multinational corporate structure are giving way to new types of structures (see, for example, Bartlett and Ghoshal 2002; Dicken 2003) and this raises challenges for practitioners and scholars of industrial relations. The original predominant model for multinational firms was that of a “portfolio of national businesses”. In essence, a multinational company decentralized its operations in order to ensure proximity and sensitivity to different national markets. Typically, it took the form of a “National Business Inc.”, which allowed for the possibility of a distinct and sometimes even autonomous identity for the firm in each of its national locations, making it much more sensitive to the host country environment and its policy tools. Indeed, such firms were an integral part of the historical development of national industrial relations traditions and policies. A subsequent model of international corporate structure was more centralized in nature. Typically, they were especially successful national corporations which drove their overseas activities and comparative advantage through technology transfers and a fairly high degree of centralized control. Although they were probably less sensitive to national policy environments in host countries, they did offer high quality employment and considerable potential for the diffusion of economic and organizational innovation from country of origin to host countries and, sometimes, through reverse diffusion, from host country to country of origin. The increasing importance of such organizational structures from the 1960s onwards raised several issues for labour policies. To what degree were such firms impervious to national domestic employment practices? For example, would rough and tough, anti-union firms originating in the United States of America adopt similar practices in other national contexts or adapt their policies to these different institutional contexts? Indeed, much research effort was dedicated to the employment policy motivations of such firms in the 1970s and 1980s. Given the relative centralization of this new type of firm, there was also an increasing attention to the role of international mechanisms to influence the behaviour of these firms. Thus a new generation of research was focused on the role of international bodies in doing research on and establishing guidelines for acceptable behaviour on the part of these firms, as in the case of the United Nations, …