The ‘newcomer’ MNC and the re-organization of national industrial relations actor network: the case of the Finnish food-retailing sector

Abstract

This article looks at the institutional-level negotiations and configurations between a ‘newcomer’ multinational, the trade union and the association of employers. Developing a relational approach based on Actor Network Theory, the article goes beyond the currently used convergence and divergence perspectives by looking at the effect of MNCs on human resource and industrial relations systems as a process of re-organizing identities and power positions of the actors. A qualitative study on the case of the entry of the first international company (Lidl) into the Finnish food-retailing sector suggests that an international company tends to become positioned as an authorial representative of the global market forces, superior to the national actors. A closer analysis reveals, however, that the trade union is granted with some strategic discretion in the emerging actor network whereas the association of employers appears as the least powerful actor in the evolving configuration. At a general level, the analysis of the Finnish case underlines the importance of examining the MNC effect from a theoretical perspective that pays full attention to the complexities and particulars of the process. Implications for internationally oriented human resource management and industrial relations research are discussed.

Keywords:

• Multinational corporations
• industrial relations systems
• Actor Network Theory
• case study
• international human resource management

Acknowledgements

The author wishes to acknowledge the financial support of the Wihuri Foundation as well as the invaluable help of Noora Laitio. I am also grateful to the interviewed informants for their willingness to participate in the study.

Notes

1 In the classical industrial relations theory (Dunlop, 1958) actors engaged in the negotiation of employment management issues include the employees, the employers and the state. More recently, Bellemare (2000) and Jones (2002) have argued that any politically potential societal group or organization can be seen as an actor in the shaping of employment management contexts. On the other hand, authors like Reich (1991) and Katz and Darbishire (2000) suggest that the global multinationals are taking a more central role alongside traditional workers' and employers' representatives while at the same time the influence of the state seems to be decreasing.

2 On the other hand, ANT is often labelled as a variant of critical postmodern theory (Calás and Smirchich, 1999) and, thus, it is anticipated that the emerging critical theoretical perspectives on international human resource management will resort to ANT type of approaches on power and organizing also in the future (Peltonen, 2005a). For an application of some of Actor Network Theory ideas to a critical analysis of frequent flying ‘assignments’, see Peltonen (2005b).

3 Another feature commonly associated with Actor Network Theory is its emphasis on materiality and the role of technology in the institutionalization of social and administrative systems.

4 Lidl is a German-based low-cost grocery chain employing about 45,000 people across Europe, with a global turnover of approximately 35 billion euros. It operates 87 stores in Finland and has achieved a 4 per cent share of the local grocery market. Similarly to many other retailing multinationals, it can be described as ‘regionally globalized’ (Rugman and Girod, 2003).

5 Without going into a detailed discussion about the philosophical underpinnings of Actor Network Theory (Lee and Hassard, 1999), it might be good to point out that the emphasis of ANT on the precarious and contingent nature of systems and structures suggests that the research methods suitable for actor network analyses are closer to the inductive and constructionist approaches to social science research rather than to the deductive methodologies emblematic of positive functionalism (Easterby-Smith et al., 2002).

6 The interview material (1) comprised one interview with organization of the employers and three interviews with the trade union, totalling about 50 pages of transcribed talk. The semi-public data (2) included about 30 pages drawn from the actors' Internet pages. The public data (3), in turn, consisted of 20 media clips (from business magazines, daily newspapers and TV documentary transcriptions) as well as of 60 pages of Web discussions in various Internet fora.