Abstract
This book seeks to answer three questions that are central to industrial relations and human resources (hereinafter called employment relations). The empirical work to answer these questions is rooted in a comparative study of the automobile industry in the BRIC countries (Brazil, Russia, India and China). The first question concerns whether the diffusion of lean production is going to bring about a convergence of employment relations (ER) strategies worldwide or whether divergence will prevail given the effect of particular national institutions. This is an old question which has been well addressed in different research endeavours, but what is new here is the empirical focus on the BRIC countries. The second question, also an enduring question in the human resources (HR) literature, asks if HR policies in multinationals are centrally determined and implemented or whether there is room for local isomorphism in the design of these policies. The third question addresses a futuristic issue, whether the automobile sector in the BRIC countries will evidence high road or low road strategies going forward.
The research design involves, in each country, a comparison between auto plants belonging to global multinationals Toyota and Volkswagen, and one selected local manufacturer. However, Brazil did not have a local manufacturer and hence three Volkswagen and one Toyota plant were studied there. In India and Russia the plants were more consistent with the research design, with one plant from each of the global firms and one from the local. In China there were two Volkswagen plants, one Toyota plant, and one local manufacturer. The design raises many questions that ought to be considered when interpreting the results. Why were some these indigenous manufacturers chosen and not others? How does one think of joint ventures (and many of the plants are joint ventures, where there could be a mix of global and local practices), and how does that affect the interpretation of the findings? How much global versus local perspectives were considered in the design and management of employment relations policies? How is it possible to control for the myriad differences across the plants chosen? These are considerable, such as different production histories, different sizes, different ownership structures, diverse products and product complexities, different degrees of automation, and therefore different workforce mixes, different rates of growth of the factories and so forth.
The authors use the case study method, but focus their attention on several ER variables such as the organization of the HR function, recruitment, training, employee development, incentive systems, work organization, industrial relations and employee voice (this was not studied in the Toyota plants), and selected employee outcomes such as work satisfaction, turnover and absenteeism. The authors have made considerable efforts at standardization in their data collection to ensure that the key variables meant the same to differing workforces. Standardization was also achieved through the use of a structured interview format in each country, for different sets of employees and institutions such as managers, supervisors, blue collar workers, trade union/works council representatives and related institutions such as universities, vocational training institutions, employer associations and automotive industry experts.
The organization of the volume consists of a theoretical reprise in Chapter 2, a description of the cases in Chapter 3, followed by five chapters focusing respectively on recruitment and training, employee development, pay systems, shop floor work organization and industrial relations. These are really the meat of the book, and this is where the most interesting comparative insights are to be found. The final chapter (Chapter 9) attempts to pull out, from this mass of empirical data, the answers to the three major questions posed.
In terms of overall conclusions, the answers to the three questions posed are as follows. There was some evidence of ‘convergence’ especially in the adoption of high performance work systems, evident in several HR systems, such as employee training and development, the attention paid to recruitment and the role of meritocratic principles therein, and the important role of the HR department in these practices. With regard to the second question, a comparison of the two global companies, Toyota and Volkswagen suggests a strong element of global centralization as corporate policies in each of the companies (which were quite different) show evidence of being implemented in their local plants in the BRIC countries. The indigenous manufacturers exhibited more variation, but in general, were quite consistent (at the level of principle) with those of the global manufacturers. This finding led the authors to conclude that corporate policies seem to be more dominant than national ER system characteristics in explaining the use of different HR systems, despite the view of the expatriates of global companies, who saw national cultures as an impediment to achieving a fuller standardization across their plants. Finally, the authors find that there was there was little evidence in this study that the automobile plants in the BRIC countries were likely to follow the low road option, and more evidence to suggest that they were on a ‘high road path’, with elements of high performance work systems already introduced.
The authors are to be commended for a well-organized and ambitious undertaking that took over three years to complete. It would have been good if there was a more grounded presentation that specifically connected the results in each of the chapters to the final conclusions, so that readers could see the rationale regarding how the final conclusions were drawn and the respective weights given to the different HR variables in reaching the final conclusions. This might have been achieved through an additional chapter that made both explicit as well as broader comparisons before the concluding chapter. Unfortunately, space limitations have precluded such a chapter. Overall, this is a particularly useful book for teachers of comparative employment relations, especially given the scarcity of empirical investigations of ER in companies and plants from the BRIC countries. I will certainly use chapters from this book in the teaching of my comparative ER courses.