Transnational Trade Unionism in Action: How Unions Use National Institutions to Influence Multinational Corporations

Existing research has found that unions relocate conflicts with employers to the international level when national-level institutions fail to provide labor with adequate influence. This paper argues that the purpose of transnational trade unionism is often not to transcend national institutions entirely but to take advantage of different national institutional frameworks. Specifically, labor activists have attempted to alter the behavior of multinational corporations (MNCs) by forming transnational alliances that link workers in countries with weak labor rights to workers employed by the same company in countries with strong unions and institutionalized channels for union influence on business practices. By forming transnational alliances, workers experiencing a conflict with an employer in a country with limited institutional support for freedom of association, collective bargaining, and other labor rights can leverage the power of workers employed by the same MNC in a different country that has a national institutional framework more conducive to worker influence on corporate decision making. The better-positioned workers then use their institutionalized advantages to negotiate with the corporation on behalf of the other set of workers. Hence, unions can relocate conflicts to more advantageous national contexts – that is, exercise “institutional power” (Brookes 2013) – to compel employers to change their behavior in countries where national protections for labor rights are weak.

Using two case studies, which feature recent transnational campaigns focused on multinational corporations Tesco and Unilever, this paper examines trade unions’ attempts to exercise institutional power, which means invoking the formal or informal rules of one country to influence another actor’s behavior in a different country. The purpose is to analyze why this strategy sometimes succeeds for workers and other times does not. Because institutional power can only be understood by analyzing both the politics of transnational activism and cross-national differences in employment relations institutions, this paper draws on both varieties of capitalism (VoC) theories and theories of transnational networks. Reconciling existing theories of national-level institutions with the reality of transnational actors and structures has been especially challenging for scholars of employment relations (Jackson et al. 2013). Global value chains, international finance, regional trade agreements, and global union federations all create new ways for non-state actors to expand across borders, spread ideas, secure rights, and otherwise pursue their interests. This emergence of new actors and structures has thus called into question “the adequacy of outdated frameworks and theoretical lenses that are rooted in distinct national institutional contexts” (Jackson, Kuruvilla, and Frege 2013: 431). The varieties of capitalism (VoC) framework in particular has come under the scrutiny of those who contend that national institutions are far less of an important factor influencing the interests and strategies of employers and workers than proponents of the VoC approach claim. This is because VoC scholars tend to ignore or treat as exogenous the wider international economic context. Nevertheless, this paper argues that VoC theories and other scholarship emphasizing the importance of the national level remain valuable for analyzing conflicts between trade unions and MNCs when combined with a more nuanced understanding of how national institutions and transnational actors interact.

The paper begins by explaining how national-level institutions affect employment relations, according to the VoC perspective. I then note some major criticisms of the VoC approach, particularly the charge that VoC does a poor job of accounting for transnational actors and structures. Next I suggest a way to combine VoC approaches with theories of transnationalism through the analysis of unions attempting to exercise institutional power. In doing so I develop a theory for why this strategy is effective on some employers but not others. I argue that institutional power is only effective when it is exercised by a union on whom the employer in question depends for its core material interests and continued business success. When the employer cannot ignore the union’s demands without harming its own core interests, it is more likely to honor that union’s request for changes in its business practices in another country. Two case studies featuring transnational campaigns centered on Tesco and Unilever then serve to illustrate the dynamics of successful and unsuccessful institutional power exercised by unions. To investigate these case studies, I use process-tracing methods of causal analysis and data from original interviews, newspaper and web archives, and case-relevant information in the scholarly literature. I find evidence for the argument that the institutional power strategy succeeds only when the target corporation cannot ignore or subvert labor-friendly institutions without jeopardizing its own core interests. I also find that the workers with weaker labor rights must actively support the transnational campaign in their home country for the strategy to succeed.

The paper concludes that national institutional frameworks still afford economic actors certain advantages and capacities. The key question is not whether national institutions still matter but, rather, in what ways do national institutions continue to shape actors’ relationships and power dynamics, not despite but in light of employers’ and workers’ deepening engagement with the international scale? In other words, we need to consider more carefully how national institutional frameworks condition the possibilities for power in a world of transnational structures and actors. One can acknowledge that national institutions still shape the strategies of MNCs in important ways even in the present era of economic globalization. By integrating institutional analysis with theories of transnational networks, we can begin to resolve the tension between VoC approaches and those concerned with processes of internationalization. The contribution of this paper thus aligns with recent calls “to better integrate GVC/network approaches with comparative institutional perspectives” (Lakhani, Kuruvilla, and Avgar 2013: 452).