"US HRM and the EU Social Policy: A Case Study of the Works Council Directive"

Springer, Beverly. (1995) "US HRM and the EU Social Policy: A Case Study of the Works Council Directive". In: UNSPECIFIED, Charleston, South Carolina. (Unpublished)

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Abstract

The subject of this paper is the impact of European Union (EU) social policy on the human resource practices of European subsidiaries of American multinational corporations (MNCs). The human resource policies of an enterprise are affected by the environment in which it operates. Laws, culture, economic and social conditions all have an impact. In the case of a MNC, human resource management is complicated by the necessity to operate in two or more environments in which contradictory or incompatible conditions may exist. The issue that is of concern in this paper is the congruity or incongruity of American human resource practices with EU social policy in general and with the European works council directive in particular. The European subsidiaries of American multinational corporations (MNCs) are subject to the restraints and the benefits of European Union policies. In general, American corporations support the creation of the single market. Most observers believe that American corporations, experienced in a large domestic market, are well placed to benefit from the single market. American corporations, however, have opposed the addition of a social dimension to the single market. Their executives have argued that the social policies of the EU obstruct the normal operation of human resource management and result in the loss of flexibility and in an increase in the cost of operation. The objective of this paper is to examine the challenge which one of the most important social policies of the EU poses for American MNCs. The European works council directive is the first directive to be adopted under the Social Protocol of the Treaty on European Union (Maastricht Treaty). The approach involves both a consideration of the American field of human resource management (HRM) and a consideration of the works council directive in order to ascertain the difficulties in reconciling the two. The paper is divided into three parts and a conclusion. Part one deals with trends in American HRM and explains some similarities and differences with European developments. Part two examines the European works council directive. Part three presents the findings of a questionnaire given to human resource managers in American MNC's with operations in the EU. The conclusion, which are preliminary pending personal interviews with HR managers, draws together the implications of the findings in the three parts.

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