Aerospace MNC Training and Development in Australia

Skill is a ‘local’ concept, one that is contextual, “notoriously complex and hard to define” (Grugulis, 2007 Lloyd and Payne 2009, p. 619).  Multinational companies (MNCs) are supranational employers, and some operate across a number of countries and yet are required to be inherently ‘local’ in that they have to respect national and regional legislation, hire local labour and interact with the local industrial relations systems.  While there has been a significant body of research compiled in relation to MNCs and employment conditions, pay and the diffusion of HR strategies, relatively little research has focused on MNCs and their training and development strategies, and in particular how these are adapted and changed in different ‘local’ contexts.

On a global level MNCs are influenced by dominant iterations of best practice, such as the ‘global HR model’ “an American vision of management, as itself modified by the shareholder value movement, with some elements of ‘post-Fordist work organisation that are, in large part, a liberal Westernised interpretation of Japanese production systems” (Almond 2011a, p. 263). Some commentators argue that MNC organisational forms are adapting, and that different models of MNC will have different outcomes for subsidiaries.  In particular the level of central control, diffusion of practices and subsidiary autonomy will have implications for how global training and development strategies are enacted on a local level.   High levels of centralisation will result in highly standardised practices with subsidiaries having far less autonomy, while greater decentralisation results in more autonomy and therefore variation at subsidiary level (Bartlett and Ghoshal 2002).   Proposed new organisational forms of MNC such as the transnational company (Bartlett and Ghoshal, 2002) are argued to be able to be globally integrated and share knowledge and expertise while the different units remain largely autonomous (Edwards 1998).  Ashton et al. (2010) suggest that transnationals in particular are seeking to manage skills globally, using approaches conceptualised as skill webs that approach skill management more holistically, from recruitment, training and development through to international departmental silos as opposed to regionally bounded operations (Ashton et al, 2010).   

What this means on a local level is that MNCs can strategically locate their subsidiaries in particular countries to access particular national skills systems, regime shop to access greater numerical flexibility or access high skill ecosystems (Finegold 1999; Buchanan et al. 2001; Buchanan et al. 2015) to expand R&D capabilities and links with research intensive universities.  The way that MNCs engage with the ‘local’ skill ecosystems their subsidiaries operate within, and how they influence or are influenced by the local context will have implications for how subsidiaries implement global training and development strategies.  Similarly MNC embeddedness within the local skill ecosystem can lead to them shaping both the demand for and nature of qualifications locally as they seek to acquire workers with the skills they require (Almond 2011b).

Using a case study approach, this paper presents initial findings around how MNC skill development strategies are adapted to the local context and the extent to which they are able to shape the local skills ecosystem in the Australian aerospace sector.  Aerospace was selected as while the product is global, aerospace MNCs undertake significant skill investment for their trades and engineering workforce, and display high levels of embeddedness within the local high skill ecosystem.  Drawing on historical institutionalism (Schmidt 2010; Morgan and Hauptmeier 2014) the national context and sub-national variation are explored, in particular how the historical industrial relations system has influenced subsidiary practices in the sector.   Semi structured interviews were conducted with key stakeholders in the local skill ecosystem (Unions, Employer associations, sector skill councils, state government representatives etc.), and with representatives of 3 aerospace multinationals. 

 Initial findings show patterns of similarity across the three MNCs in relation to the influence of global training and development strategies and recruitment.  Training and development strategies showed elements of global standardisation, particularly in relation to management level positions.  Additionally on the local level, there were patterns across the MNCs of clear job delineation tied to qualification levels.  The level of engagement and embeddedness of MNCs in the aerospace sector in the local skill ecosystem was high, with strong research and recruitment links development with the local tertiary education sector, and various mechanisms had been developed by MNCs to feed into university boards about future skill requirements.  MNC influence over the VET system was also identified, with one MNC developing modules that met their skill requirements. 

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