 In this topic, we are going to talk about multinational characteristics as source of concern for the trade union. So we are going to talk about what are the characteristics of multinationals that become a threat or a source of tension or threat for the trade union. Trade union leaders have seen growth of multinational enterprises as threat to the bargaining power of labor because of the considerable power or influence that multinationals have been able to gain. Because multinationals, they are huge enterprises, they have a lot of investment, they have a lot of resources. And obviously the owners and stakeholders of these multinational companies, they become very powerful. So the trade union leaders, they have always seen that the growth of multinational is something which reduces the collective bargaining power of their trade unions. Although it is recognized that multinationals, they are neither uniformly anti-union nor omnipotent and monolithic bureaucracies. There is no such thing that it is recognized that multinationals are not all multinationals anti-union. Nor are they so powerful or omnipotent that they can counter all kinds of pressures. Nor are they bureaucracies that are standing on a single power. So this is also recognized in literature, but their bargaining power is much more than a local organization because of many factors. So potential for lobbying power and flexibility across countries creates difficulties for employees and labor unions because they are able to lobby, they are able to create power, they are able to exert that power because of their huge enterprise, enterprising nature. So what are the different characteristics of multinationals which create a threat for these trade unions and collective bargaining agents? Number one is the formidable financial resources. You know that it is all about financial resources and profitability. If an organization is not able to generate cash flows, it is not able to generate enough profits, then after a certain time it will lead to closure, it will lead to bankruptcy. So no matter how good products they are selling or how good services they are giving, if they are not able to meet financial requirements, they will not be able to survive. However, these multinational companies, they have formidable huge resources. So what happens is that if in one particular subsidiary they are not able to show profits, they can show an overall global profit because of their existence in various different countries. So they have a lot of ability to absorb losses in a foreign subsidiary under dispute and still show an overall profit in worldwide operations. So that can be done through transnational sourcing. They can also take help from cross-subsidization of products or components. So they have got a lot of financial resources. And if for example in one subsidiary there is a strike going on, people are not working, there are prices, there is conflict, in that situation the multinational is in a better state than a local firm to absorb these kind of losses and keep on, keep standing on their own rules and policies and not giving in to the trade unions and collective bargainers. Then another aspect is that there can be alternative sources of supply. So if for example the subsidiary is providing input for another subsidiary in another company, what happens is that the multinational has got many different alternative sources of supply. So it is possible that for example if Coca-Cola stops producing in Pakistan, or if there is a strike, they can always get the supply from another Coca-Cola manufacturing unit working in let's say Afghanistan or in China or somewhere else. So they can produce alternative sources of supply if one unit, it goes on strike and stops working. And also temporary switching of production in order to counter industrial action. So this also happens because multinationals have various different subsidiaries working in different places. It is possible that they can shift the production function, protection operations to another locality, to another place and over there they can increase the production and counter industrial action. Then ability to move production facilities to other countries. So if they feel that there are more problems in one country, trade unions are affecting them a lot and they are trying to influence them a lot, then they will close their factories and put them in another company. So this work can be done by multinationals and local firms. So multinationals locate skill-intensive activities in countries with national policies promoting training and with relatively high labour costs. So the skill-intensive industries, multinationals put them in such a place where training and learning are being focused. They are ready to pay relatively higher wages and higher labour costs. Whereas those functions which are semi-skilled, which require labour, which have routinized activities, they are being located in countries with lower labour costs. For example, Silicon Valley, which is a big hub in the IT industry located in America, its production and operations are based in America because that is a skill-intensive industry. But for example, the textile industry, which is more labour-intensive, does not require a lot of skill. For example, you have to give the design, the designing takes place in your foreign country. And by giving the design, semi-skilled labour has to do that. So these are the things that used to be used in the industry in Pakistan and in Bangladesh, the textile industry has shifted a lot. So these are the things where the skill is not so important, they can shift there. So they stopped from Pakistan because there were issues in Pakistan and they shifted it in Bangladesh. So production facilities can be taken to other countries. Then another aspect which affects the trade unions' collective bargaining power is the remote locus of authority. Multinationals visibly portray a system of decentralization and local responsiveness of human resource management. But trade unions, they point out and declare that multinationals' decision-making process is opaque, it's not clear, and division of authority is obscure. So trade unions contest that multinationals do not delegate authority, they basically keep it in their hands. And they say that local employer representative may not be aware of the organization's strategy. So these things are the human resource aspects of their multinationals, they keep them obscure and opaque. So because of this transparency, because they don't see it, then your locus of authority sees the remote. Then another aspect that affects the bargaining power of trade unions is having production facilities in many countries. So because many multinationals, they have production facilities in many countries, so if a plant is not working very effectively, then production facilities in other countries, they can compensate for that one particular issue. Then the multinationals, they have superior knowledge and expertise in industrial relations because they are huge, they have more knowledge, they have more opportunity of employing experts. So all that leads them to have superior knowledge and expertise in industrial relations. And then the multinationals have a huge advantage that they have the capacity to stage an investment strike. So for example, if one unit, it becomes less profitable, it is not showing profits and there you have pressure from employees, from trade unions, so if you can't tie it up, then what you do is that you stop investing more money and let it remain unprofitable for a certain period of time after which slowly it becomes redundant and then everyone sees that it should be tied up. So multinationals have the ability to let certain units remain redundant or less profitable because the other functions, the other operations, they get profits from that and they can absorb losses. So multinationals, they can go on an investment strike because you are not allowed to close a particular unit or it is difficult to close that particular unit, they go on an investment strike. They don't see growth there, they don't see work there, they see that it is going to be closed and then people gradually leave it and go on. So these multinationals, they can stage an investment strike and they can reduce the bargaining power of the trade union. So these are the various different ways in which the multinationals, because of these characteristics but they have huge resources, they have production facilities in many countries, they have more knowledge, they have the ability to generate alternative sources of supply. All these things, they make the multinationals a threat to the trade unions and they reduce their bargaining power more than the local company.