The Impact of Globalization on Recent Changes to Employment Patterns - Report Example

The Impact of Globalization on Recent Changes to Employment Patterns and Structure in either a Country or Industry of Your Choice Joe Executive Summary Objectives of the Report The report is primarily based on the fulfillment of certain salient objectives that can be underlined as follows. Firstly the report focuses on understanding the concept of globalization and its impacts on the industrial relation scenario. Secondly the report tends to set its focus on understanding the changes in the employment scenario in terms of patterns and structures linking the same to the aspect of industrial relations. Thirdly in terms of conducting the above tasks the report narrows down its focus specifically to a country. Fourthly pertaining to the country in focus the report tends to understand the pattern of recent changes in the industrial relation policy structures and the impacts such changes had on the employment scenario. Fifthly the report also focuses on encompassing different case studies relating to particular industries in the country selected to effectively highlight on the employment scenario. Finally in the sixth case the report endeavors to render useful recommendations pertaining to the study of the employment standards in the cases involved. Scope of the Report Scope The report basically focuses on understanding on how globalization tends to bring about changes in the industrial relation policies and in how such industrial relation policy changes have tended to affect the employment patterns and structure. The scope of the report is further narrowed in terms of understanding the above relating to a specific country. Limitations The project herein only focuses to study the impacts of globalization on industrial relations policies and its effects on employment structures. However it fails to reflect the different potential advantages and disadvantages gained by the industrial environment of the country selected in respect to the emergence of globalization or opening up of the market economy standards. Information Sources Used Information relating to the report is sought from a plethora of sources pertaining to books, articles, journals and other government publications. Secondary sources derived from the internet are mainly used for conducting the report for it helps in gaining authentic information relating to the context of the report. More specifically current sources are used for the report to gain knowledge of the pattern of current changes introduced thereof and its due implications on the employment scenario. Findings The findings relate that the era of globalization or liberalization has impacted the pattern of industrial relation policies and thereby the employment structures of the Indian economy. Firstly it is noticed that the system of due protectionism of employees which was the significant feature of Indian industrial relations gradually is subjected to abolition thereby contributing to the reduction of impacts of trade unionism in India. Secondly the system of collective bargaining is also found to be decentralized to render potential to the management in governing trade union activities. Thirdly the findings reflect that how human resource management functions have focused on development of employee productivity through aspects of training and employee development. Fourthly the growth of services and communication sector industries in the country is also noticed side by side with the manufacturing sectors thereby leading to the emergence of new employment structures. Fifthly policy changes to industrial relations in the post liberalization period reflected a rise in both organized and unorganized types of employment structures leading to the growth of casual and self-employed labor market. Sixthly case studies dealt with in relation to manufacturing sectors pertaining to cotton and jute mills are presented where issues relating to modernization and employee participation are presented. The findings reflect the impacts of modernization and participative style management in the specific industries and thereby render effective recommendations thereof. Key Recommendations In recommendations it is reflected that the company management in addition to the pattern of modernization introduced in the manufacturing industries through the mode of policy changes in industrial relations is also required to safeguard the interests of the existing labor systems. This process would thereby help in creating a balanced environment relating to the incorporation of both capital and labor intensive systems. Further enhanced recommendations are also placed in terms of effective use of styles relating to participative management introduced in the concern where it would mutually help in protecting the interests of the employees and the company. Principal Elements of Conclusion The conclusion of the report specifically highlights on drawing a summary of the essential themes related to globalization and its impact on the employee patterns and structures in the Indian employment market. It also draws a summary of the findings of the report relating to the case studies used reflecting the impacts of industrial relation policy changes on the employer-employee relationships. Finally it also focuses on the pattern of recommendations sought in relation to the employment issues relating to the cases underlined. Introduction The Concept of Globalization The concept of globalization relates to a large scale interaction and interrelation between different types of economies operating around the world. These world economies are found to interrelate and interact with each other in terms of sharing capital and technological resources through the flow of investments and needed knowhow from developed to developing economies. Similarly the mode of trading activities between different countries is comprised of export and import activities through which commodity and services produced and generated respectively are traded along borders. The above activities contribute to the mutual economic and social development of the economies. Globalization also contributes to the flow or migration of labor forces from one country to the other thereby affecting the potentials and opportunities of employment generation in the economies. Thus the above impacts rendered by the process of globalization tends to call for the developments and changes in the policy structures related to the optimal utilization of labor, capital and technology.1 Relating to India the emergence of global standards called for the opening up of the economic system thereby making the Indian firms susceptible to competition. The above fact resulted in the need for changes in the policy structures related to industrial relations and employment matters requiring the personnel management to shift their focus in developing employee productivity. It also led the rise in the capital and technological intensive industries thereby reducing the importance of labor intensive production process. Casual and unorganized labor force also gained the due incidence during the post liberalization period in India. 2 Globalization and Industrial Relations Globalization pursued in the different world economies tends to have a significant impact in the raising of demands for specialized and skilled labor sets. This rise in the demand for a highly productive labor force thus tends to largely affect the dimensions and practice of Industrial Relations in the different countries.3 Similarly the situation of industrial relations pertaining to the Indian industries also countered significant changes owing to the rise in global demand for productive labor and employment. Industrial relation policies in India countered further changes owing to the introduction of voluntary retirement schemes for the people that the management considered as unproductive.4 Global Employment Patterns and Structures An evaluation of the employment patterns and structures in the global context reflects that where the total amount of global labor force stood to around 2.8 billion the amount of working population relating to the developing economies constituted to only 0.55 billion. One of the significant factors contributing to the small quanta of working population in the developing nations relates to the failure to optimally utilize foreign direct investments gained for industrial development.5 In India the rate of growth of employment opportunities fail to reflect parity in terms with the economic growth rate. Statistics reflect that where the average economic growth rate of India during the periods 1999-2000 and 2009-2010 amounted to around 7.5 percent the rate of employment during the same period reflected a figure of only 1.5 percent. Decline in the level of employment elasticity is noted along different sectors ranging from manufacturing to construction and also in the services sector. Rate of employment declined along the different sectors owing to a change of focus pertaining to the Indian industrial relations policy mechanisms. The industrial relation policies started focusing more on augmenting productivity of firms and thus shifted their focus from labor to capital and technological intensive directions leading to rise in underemployment and unemployment conditions.6 Globalization and Changing Industrial Relations With the advent of liberalization the industrial relations policies in India countered major shifts thereby promoting the culture of employee productivity and reducing impacts of protectionist ideologies.7 Similarly the emergence of a liberal economic policy in India owing to globalization of the world economy several new policy measures came to the front that triggered the growth of events like mergers and acquisitions. Again the rise in a disinvestment climate in the country was also noticed that led to the undue growth of a capitalist regime and privatization. All these led to a change in the Industrial Relations climate that focused more on modernization of the industries through introduction of new technology and capital. New set of policy measures came in the front relating to employment and work standards that differed greatly between the public and private sector concerns. Further with the growth of an open market economy the Indian economy started facing large amount of competition owing to price and cost standards and also relating to the quality aspect of the produces. This led the industrial managers to shift their focus on enhancing employee and operational productivity in the firms. Again the significance of trade unionism in the Indian industries was largely reduced in the open-economy system owing to the growth of policies like collective participation wherein employees were invited by the managers in key decision taking activities. 8 Relating to the above discussion the following section would focus on elaborating the impact of globalization on employment patterns and structure specifically pertaining to the Indian economy. It would reflect and tend to analyze the changes in the industrial relation policies in India pre and post liberalization and in how such changes affected the existing employment patterns. Discussion Impact of Industrial Relations on Employment Patterns and Structures in India Industrial Relations in India are largely governed and monitored by the government of the country in close cooperation with different bodies and tribunals organized to look after the welfare conditions of the employees. In industries relating to the organized employment sector of the country the existence of labor union or trade unions work through the system of collective bargaining in dealing with the company management for restoration of employee welfare standards. However the labor and industrial relation policies in India gain a sharp contrast relating to the different states and also in relation to the industries falling under the private and public sectors. Further the State machinery also tends to take a significant role in dealing with industrial relation activities pertaining to the different industries where the trade unions are found to operate based on political contacts. It is also found that the system of collective bargaining on which the trade union bodies rest upon is conducted on an optional note. The system of collective bargaining works without any type of proper legislative support. However the recent changes in the economic and trade structures of the country owing to emergence of globalization has impacted the structure of the industrial relations system. With emergence of globalization the workforce in organizations has gained due diversity. Further new economic and trade policies have started emerging which in turn tends to impact the employment and industrial relation standards practiced. Industrial Relation practices in India gains emphasis as a tri-partite agreement between employer or management bodies, the employees and the state in particular.9 Globalization and Changes in Policies Relating to Indian Industrial Relations The climate of industrial relations in India before the era of economic liberalization was found to work based on a protectionist philosophy where several legislations relating to the welfare of the workers existed. Legislations relating to resolving of industrial disputes to focusing on the enhanced promotion of the health and safety paradigm of the workers constituted a significant position relating to the management of labor relations. Further legislations and polices relating to the management of labor relations in situations of strikes, lockouts, lay-offs and retrenchment measures taken also existed signifying the enhanced focus on the protective philosophy firms worked upon. This pattern of enhanced protectionism was found to restrict the development of the productivity of the labor forces that was required to help the firm gain on revenue and profitability relating to the rise in competition in the global economic scenario. The business owners and the company management were found to suffer from lack of focus relating to the development of the productivity of the labor force. Thus companies started suffering from serious bottlenecks in the face of emerging competition. Thus with the advent of economic liberalization during the 1992 period the significance of different legislations relating to employee relation safety laws and industrial disputes largely reduced. In the new era of economic liberalization the change in the structure of industrial relations contributed to the rendering of larger power on the employer and management bodies. New types of policy structures came into the surface where the employers focused on bringing about voluntary retirement schemes for the employees along with other policies generating work-time flexibility. Further policy changes in the industrial climate in the era of post-liberalization reflect on the emergence of the practice of decentralization of collective bargaining activities. Decentralization of collective bargaining rendered is taken to help the organizations to reduce the pressure emanating from trade union groups. Policy changes also contributed to the development of internal trade unions to contribute in the reduction of impacts rendered by political forces. The system of collective bargaining been rendered reduced importance has helped in the enhancement of management-employee communication aspects thereby contributing to employee confidence. New labor relation policies in the Indian context are focusing on the growth of training and development opportunities that would in turn help in the development of required productivity and skill sets of the people in the industries. In total focus is being rendered on the cultivation of a culture where human beings or the employees would be held as potent resource groups by the management or owner bodies.1011 The advent of economic liberalization in India owing to the process of globalization contributed to the change in the pattern of employment structures. It is found that in India the system of exports contribute largely to the gaining of foreign investments. However in the current scenario it is observed that export activities in India are more concerned with capital-intensive products thereby reducing the demand for labor-intensive merchandises. Moreover the pattern of exports has earned a newer dimension in which services related to analytics, research and consulting are being continually outsourced. Henceforth a larger incidence of unorganized sectors related to services and communication increased along with capital and technology based industries thereby requiring lesser significance of labor intensive production Moreover the period of economic liberalization is also found to create the growth in the casual system of laborers in India that tends to encompass a larger portion of the total employed workforce in the country.1213 Impact of Changes in Industrial Relation Policies on Employment Patterns and Structures in India To understand the current impacts of the changes in the employment patterns and structures in India owing to a change in the industrial relations policies focus can be rendered on the manufacturing plants related to cotton mills. With the introduction of technological developments in the cotton mill industry through the rendering of automated production units a major shift was noticed from labor to capital insensitivity. Herein it was noticed that need for productive labor largely reduced owing to the introduction of automated looms that would only need a proper monitoring and supervising process than the need for long term involvement of people with the production process. This signified a shift in the pattern of recruitment of productive labor forces in the cotton mill industry. Modernization process in the cotton mills called for the requirement of productive labor forces that would contribute to the effective monitoring of the technological process involved without the need for manually getting involved in the production activities. This shift in the pattern of productivity requirements in the modernized mills also called for due shift in the mode of wages rendered. It was observed that a higher system of wages was made applicable for the workers working in the modernized mills that in the non-modernized ones. Similarly in the case of Indian banking sector it is also observed that the demand for core-banking facilities resulted in the requirement for incorporation of advanced computer networking driven technology linking the different branches. Thus the pattern of employment in such baking organization gained a larger shift towards the introduction of a workforce having adequate knowledge of information technology. Further changes in the internal employment structures were there in the form of larger employee participation and involvement in decision making. Training and human resource development initiatives have taken a larger significance in the light of use of information technology to develop the Core Banking System. Further the manufacturing and other business organizations in addition to the enhancement of the practice of employee involvement in key decision-making areas the creation of new roles was also evident owing to structural changes introduced. Again in the ambit of training rendered the need for more on-the-job training reduced the time duration relating to off-the-job and induction training approaches. 14 Another case reflected pertaining to the policy changes in the mode of industrial relations in the post-liberalization period relates to the Indian jute industry. The era of globalization and liberalization is found to have largely contributed to the enhanced development of the process of employee participation whether in groups or pertaining to participation matters related to the upper hierarchy like managers. This form of employee participation reflected in the jute industry tended to contribute however to the aspect of enhancing organizational disturbance rather than productivity. Jute mills organizations being affected by seasonal perspectives happens to reflect larger changes in the employment scenario leading to large amount of job cuts. Moreover the management-employee relationship patterns tend to get profusely affected owing to the decisions taken relating to reduction of wages and deterioration of employment and working conditions. However after the period of liberalization with the advent of the open-economic system the group participation of the employees leaded to enhancing the potential of their demands failure to which culminated in a group unrest leading to events like strikes and lockouts. This rise in the amount of employee unrest in the post-liberalization period gains a more significant linkage to the mode of transfer of the effects of a volatile production system on the pattern of employer-employee relationship in the jute industry sector. Thus though the pattern of employee participation that gained due enhancement in the post-liberalization period was taken to be an ethical necessity for business organizations yet failure to render potential control over it leaded to disruption in the employer-management relationship.15 Recommendations From the two case studies conducted relating to the modernization of the Indian medium and large scale manufacturing industries to the set of participative employer-employee relationship aspects in the post liberalization period a set of needed recommendations can be framed. Firstly in terms of cotton mills manufacturing sectors it can be stated that the government of the state needs to render due focus for the mutual development of units subjected to modernization and also the non-modernization ones. Emphasis must not only be based relating to the gaining and sustaining of such employees that would help in the troubleshooting ventures in terms of the new technological processes incorporated. The government must also focus on taking labors or in rendering patronage to those whose productivity is evaluated in terms of their spontaneous involvement in the production process. Similarly wage structures must also be based in an equivalent fashion depending on employee productivity both in terms of technological and operational knowledge. This pattern would thereby help in creating a balance between the existence and sustenance of both capital and labor intensive firms in the Indian economy. The second set of recommendations relate to the creation of participative environment in terms of employee to employee or pertaining to employer to employee relationships. Employee participation in decision making ventures in the organization and also relating to team or group building efforts though taken on a positive or ethical note must be closely monitored. A system of close monitoring standards should be created relating to the above case to help the management and employer bodies gain the due advantage of the participative approaches relating to enhancement of employee productivity. Again the process of decentralizing the collective bargaining mechanism should be given due significance both relating to the organized and unorganized sectors. The system of decentralization carried out relating to the collective bargaining process would help the management to enhance its relationship with the trade union groups thereby leading to reduction of conflicts. Conclusion The mode of globalization in relation to the world at large has contributed to the development and introduction of new set of operational, trade and employer-employee relationship aspects along different sets of business enterprises. Moreover the emergence of a liberal market has also spurred the growth of different employment sectors both in relation to the developed and developing economies. The project focuses specifically on the Indian economy where the emergence of a liberal market framework has led to the birth of casual forms of employment in sharp contrast to the existence of only organized employment sectors. Moreover the emergence of both public and private sectors in the Indian economy also triggers the development of newer styles of employer-employee relationship patterns. In fact the mode of industrial relations has gained a far flung change in comparison to the period pre and post liberalization in influencing the patterns of employment patterns and structures in the industrial and employment scenario of India. It is found that during the pre liberalization period the employment and the industrial structure of India were mainly governed by manufacturing and other large scale industries. However after the emergence of open economy the industrial sector was largely encompassed by the growth of service industries and like companies thereby creating a demand for change in the patterns of industrial relations practiced. Further in addition to the growth of new industries related to services and communication the Indian government also focused on the modernization of several existing industries. Policy changes were made relating to industrial relations where focus was rendered in the incorporation of such people having effective technological knowhow. On the other hand industries or sectors non-modernized were relegated to a backward position such that employees felt the dearth of opportunities to improve both in terms of their careers and also on the financial note. Further changes were also sought in the pattern of employer-employee relationships such that requirements were sought in the pattern of development of the productivity of the employees through the use of both on and off the floor training aspects. Herein the aspect of on the floor training activities was rendered significant importance thereby making it a spontaneous practice. Again the pattern of employee participation was also introduced in the different industries not only in terms of ethical requirements but also to help in the development of productivity and relationship standards. 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