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Multinational Corporations and Trade Unions

Multinational corporations are the main subject of globalization in the modern world. These are enterprises that own or control production, distribution, service, or funds outside the home country. Trade unions were the first in world practice to be concerned about the uncontrolled actions of multinational corporations. They were worried that these corporations were importing capital to countries with low social indicators to earn super-profits. At the same time, trade unions understand that this process is inevitable and has not only harmful but also beneficial aspects. However, they strive to ensure that it does not lead to a decrease in social standards in capital-exporting states and, on the contrary, helps to increase those in importing countries. As a result, seeking to consolidate in the face of a common adversary, trade union organizations worry not only about the socio-economic but also about the political consequences of globalization. Trade unions and their international confederations consistently require strict observance of civil, political, and social human rights anywhere in the world.

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International trade union cooperation is hampered by the multiplicity and fragmentation of trade union structures and the rivalry of trade unions in many countries. Ideological and sometimes religious differences within and between national trade union movements are a barrier to achieving their effective joint action. Difficulties arise not only in ensuring cooperation between trade union organizations. Attempts to mobilize ordinary members to support the concerted effort against multinational corporations are also a complicated process. This leads to a decrease in the density of trade unions and weakens their power in opposing multinational corporations (Arrowsmith & Marginson, 2006). Union strategies aimed at creating an organizational counterweight to multinational corporations can now only lead to the creation of structures that are unable to counter international capital effectively. This becomes especially noticeable during periods of economic downturn and rising unemployment, which reinforce the protectionist and nationalistic nature of the actions of some trade unions.

The most fundamental challenge facing the modern union movement is the increasing pace of globalization. The very nature of the activities of multinational corporations contradicts the interests of organized labor. In particular, the development of multinational corporations led to a decline in bargaining coverage, which, in turn, causes deterioration in labor standards. This negatively affects the quality of the work of employees and its result (Doellgast, 2012). The primary long-term strategy that allows unions to use positive aspects in the activities of corporations is to combine the efforts of trade unions from different countries. One of the helpful tools in this respect are International Framework Agreements that help make various processes reliable, standardized, and fruitful. This strategy should ultimately lead to the development of global structures representing the interests of organized labor in collective bargaining with multinational corporations.

There are severe obstacles to multinational unionism and the conclusion of transnational collective agreements. These are resistance on the part of corporate management, differences between the short-term economic interests of workers in different countries, the multiplicity and fragmentation of trade union structures, and others. Due to the weaknesses of trade unions in collective bargaining at the level of multinational corporations, they have to concentrate their efforts on lobbying and pressuring their national governments. Most likely, national labor relations systems will be central in the future, and the international level will rather complement than absorb them. Thus, the most productive strategy in the current situation would be unification rather than a struggle, since it can enable companies to use joint positive aspects.


Arrowsmith, J., & Marginson, P. (2006). The European cross-border dimension to collective bargaining in multinational companies. European Journal of Industrial Relations. 12(3), 245-266.

Doellgast, V. (2012) Disintegrating democracy at work: Labor unions and the future of good jobs in the service economy. ILR Press.

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