Management communication, unionization, FDI and company performance in a developing country

Date14 October 2014
Publication Date14 October 2014
AuthorRichard Croucher,Marian Rizov,Ram Goolaup
SubjectHR & organizational behaviour,Global HRM
Management communication,
unionization, FDI and company
performance in a developing
Richard Croucher and Marian Rizov
Business School, Middlesex University, London, UK, and
Ram Goolaup
Department of Management, University of Mauritius, Reduit, Mauritius
Purpose – The purpose of this paper is to examine the associations between management direct
communication to employees, unionization, foreign direct investment (FDI) and company performance
in Mauritius, Africa’s most successful economy.
Design/methodology/approach – The authors use firm data from a survey conducted in Mauritius
in late 2011. The authors conduct regression analysis to study the relationship between direct
communication, unionization and performance conditional on ownership type.
Findings – Mauritian labour unions, in common with their counterparts from mainland Africa, are
strongest in the public sector. They have been characterized as weak and lacking in influence on
management. Yet the authors find a strong association between unionization and management
communication in the private sector. The authors also find a positive association between direct
communication and company performance which the authors argue is likely to be an indirect
consequence of unionization. FDI shows no particular effects.
Research limitations/implications – It appears that the consequences of union presence transcend
pay and conditions. The effects are unexpectedly marked, particularly when the stress by some
authors on union weakness in the private sector is taken into account.
Originality/value – It may be that local unions’ strong focus on the enterprise – a form of
representation favoured by US-based multinational companies, constitutes a strength in stimulating
management communication to employees by focusing union activities at that level. Whilst the
authors have suggested that this is unlikely to be primarily a result of conscious union strategy,
the enterprise focus may serve to buttress existing employee attitudes. In any event, unionization is
certainly closely associated in this African country with a practice that is linked to positive economic
effects at the enterprise level.
Keywords Work engagement and commitment, Development, FDI, Employee motivation,
International human resource management, HR Practices in multinational organizations,
Human resource management (general), Inter-organizational relations,
Work performance and productivity, Management communication, Labour unions,
Company performance
Paper type Research paper
1. Introduction
We examine the associations betw een management direc t communication to
employees, unionization and company performance, in the context of Mauritius, the
only case of African developmental success not based on natural resources. Mau ritius
is widely canvassed as an African success stor y, a unique regional example of
successful development essentially achieved through its human resources, without any
element of natural resource endowments (Lange, 2003; Sandbrook, 2005; Lincoln, 2006;
Sandbrook et al., 2007; Darga, 2011; Van Demorteele and Bird, 2010). It has been
The current issue and full text archive of this journal is available at
Received 1 December 2012
Revised 15 March 2013
18 April 2013
Accepted 1 May 2013
Evidence-based HRM: a Global
Forum for Empirical Scholarship
Vol. 2 No. 2, 2014
pp. 164-175
rEmeraldGroup PublishingLimited
DOI 10.1108/EBHRM-12-2012-0017

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