Management Sciences and Quantitative Methods Commons^™

Multinationals And Unionism In Indonesia, Riani Rachmawati, Alex De Ruyter

The South East Asian Journal of Management

This paper presents a critical analysis of the factors shaping the interaction between multinationals and trade unions in Indonesia, focusing on the recent period of democratization following the downfall of the Suharto regime. It has been suggested that union growth risks undermining Indonesia’s competitive advantages (cheap labour) and could encourage the exit of multinationals to cheaper competitors. In order to test this proposition, two case studies were conducted: one in the automotive industry and the other in the banking industry. The paper first provides an overview of multinational activity and FDI in Indonesia, and their interaction with a nascent union …