Unit 4: Knowledge transfer and industrial relations
International Human Resource Management notes · PTU syllabus (MBA 933-18)
On this page
- Unit summary
- Significance of organisational knowledge
- Knowledge transfer within and across MNCs
- Key issues in international industrial relations
- Trade union responses to multinationals
- Regional integration: the European Union
- HRM practices in Japan, the UK, the US, India and China
- Key terms
- Quick revision
- Important questions
Unit summary
Knowledge must flow across subsidiaries, and labour relations differ sharply by country. This unit covers the significance of organisational knowledge, tacit and explicit knowledge, knowledge transfer within and across MNCs, key issues in international industrial relations, trade union responses to multinationals, regional integration in the EU, and HRM practices in Japan, the UK, the US, India and China.
After this unit you can
- Explain organisational knowledge and its transfer in MNCs
- Explain issues in international industrial relations and union responses
- Explain regional integration in the EU
- Compare HRM practices in Japan, the UK, the US, India and China
PTU syllabus topics
- Organizational knowledge significance
- tacit and explicit knowledge
- transfer of knowledge within and across MNCs
- key issues in international industrial relations
- trade union responses to multinationals
- regional integration (EU)
- HRM practices in Japan
- UK
- US
- India and China
Nature
In people's heads, experience
Written, codified
Transfer by
Mentoring, expatriates, teams
Manuals, databases
Example
How to negotiate with local officials
Standard operating procedures
Topic 1
Significance of organisational knowledge
- Knowledge is a key source of MNC advantage — technology, processes, market insight, customer relationships.
Nature
Personal, experience-based, hard to articulate
Codified in documents, manuals, databases
Transfer
Through people — mentoring, assignments, teams
Through documents and IT systems
Example
A senior engineer's judgement on plant problems
Standard operating procedures
- SECI model (Nonaka and Takeuchi): socialisation (tacit to tacit), externalisation (tacit to explicit), combination (explicit to explicit), internalisation (explicit to tacit).
Topic 2
Knowledge transfer within and across MNCs
- Directions: headquarters to subsidiaries (conventional), subsidiaries to headquarters (reverse), between subsidiaries (lateral).
- Mechanisms: expatriates and inpatriates, international teams, centres of excellence, communities of practice, knowledge management systems, training.
- Barriers: absorptive capacity, lack of motivation, cultural and language distance, "not invented here", weak relationships.
Topic 3
Key issues in international industrial relations
- Differences in union structure, membership and power; collective bargaining levels (national, industry, enterprise); legal frameworks; role of the state.
- MNC concerns: decisions taken far away, threat of relocation, transfer pricing hiding profits, differing standards.
Topic 4
Trade union responses to multinationals
- Strategies: international trade secretariats and global union federations (IndustriALL, UNI Global), international framework agreements with MNCs, lobbying for regulation, cross-border solidarity actions.
- Codes and guidelines: ILO Tripartite Declaration on MNEs, OECD Guidelines for Multinational Enterprises.
- Limits: national laws, differing interests of workers across countries.
Topic 5
Regional integration: the European Union
- Social dimension: Social Charter, European Pillar of Social Rights; directives on working time, equal pay, information and consultation.
- European Works Councils (Directive 1994, revised 2009): information and consultation bodies in firms with 1,000+ employees in the EU and 150+ in each of two member states.
- Free movement of workers and mutual recognition of qualifications.
Topic 6
HRM practices in Japan, the UK, the US, India and China
| Country | Distinctive HRM features |
|---|---|
| Japan | Lifetime employment (declining), seniority-based pay, enterprise unions, consensus decision making (ringi), job rotation |
| United Kingdom | Pluralist industrial relations, declining union density, legislation on equality and minimum wage, flexible labour markets |
| United States | Employment at will, performance-based pay, individualism, strong anti-discrimination law, low union density |
| India | Labour codes (2025), dual labour market (organised and informal), relationship-oriented management, growing professional HR in IT and services |
| China | State influence, hukou system, labour contract law, guanxi (relationships), rapid shift towards performance-based pay |
Key terms
- Tacit knowledge
- Experience-based knowledge hard to codify
- Reverse knowledge transfer
- Knowledge flowing from subsidiary to headquarters
- Global union federation
- International federation of national unions
- European Works Council
- Body for informing and consulting employees in EU MNCs
- Ringi
- Japanese consensus decision process
Quick revision
- Organisational knowledge; tacit vs explicit; SECI.
- Conventional, reverse, lateral transfer; mechanisms; barriers.
- International IR issues; union responses; ILO and OECD guidelines.
- EU social dimension and European Works Councils.
- HRM in Japan, UK, US, India, China.
Important exam questions
Practice questions written to the PTU exam pattern for this unit's syllabus: short answers (Section A style) and long answers (Sections B and C style).
Short-answer questions
- Q1.Distinguish tacit and explicit knowledge.
- Q2.What is reverse knowledge transfer?
- Q3.State two barriers to knowledge transfer in MNCs.
- Q4.How have unions responded to multinationals?
- Q5.What is a European Works Council?
- Q6.State two features of Japanese HRM.
Long-answer questions
- Q1.Explain the significance of organisational knowledge and its transfer in MNCs.
- Q2.Discuss key issues in international industrial relations and trade union responses to MNCs.
- Q3.Explain the impact of regional integration in the EU on HRM.
- Q4.Compare HRM practices in Japan, the US and India.
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