Discretion in employment relations policy among foreign-controlled multinationals in Canada

Abstract

This article assesses the extent to which the foreign-controlled subsidiaries of multinational firms have the discretion to establish their employment relations policies. Drawing on a survey of the activities of foreign-controlled multinational companies in Canada, it considers three lines of analysis: the parent company’s country of origin, the subsidiary’s specific organizational capabilities and its position in global value chains. While our results confirm that US-controlled subsidiaries have lower discretion than those from continental Europe and Asia, they also highlight the need to go beyond country-of-origin analysis. Organizational capabilities and the subsidiary’s role in global value chains are also important predictors of subsidiary discretion on employment relations policy.