Challenges Involved in Comparative Employment Relations - Assignment Example

Human Resource; Questions and Answers 10th January What are the main theoretical and methodological challenges involved in comparative employment relations? Why? Research conducted in the area of work and employment was established as an independent concept in Britain and USA. Later on the theoretical perspective on employment relationship falls under the tenets of industrial psychologists and personnel management scholars (Bamber, Lansbury, &Wailes, 2011). Employment relationships have faced many challenges including the change in the scope of view. Employment has been perceived as an outcome of labor markets in the paradigm of laissez-faire framed on the concepts of private property and individual rights. Institutionalization of trade unions at different levels of bargaining provided a tenet for the study of employment relations (Bamber et al, 2004). Institutionalization of trade unions also falls under the category of post-war industrial capitalism. One of the theoretical challenges in the employment relationship is a failure to explain the cross-national variety in employees and a change of pattern(Hyman, 2009). There is no common ground regarding the recent changes in international employment relations and the extent to which there has been sustainability and stability in the relations over time. Theoretical perspectives face immense challenges in situations when theorists come up with the concepts without foundational culture(Bamber et al, 2004). There lacks theoretical capability of capturing the changes in the employment relationship for the past one decade(Koen, 2005). A gap exists in the lack of overarching theory capable of explaining comparative employment relationships in the lenses of market forces and actor strategies (Bamber, Lansbury, &Wailes, 2011). The best theory in explaining the employment relationship falls under the specification of strengths and weaknesses while providing insights on weaknesses of various perspectives. Some of the theoretical approaches explaining the employment relationship lack specification on instances when the variables are less effective. In their propositions, these theories lack enough answers to the lingering questions concerning the foundations of the arguments. Some of the neoliberal approaches and theories have altered collective employment rights and individual rights. Despite the novelty of some of the theories, they lack disproportionate effects on policy changes. Politics remains the main subject in the shaping employment relationships. There exist huge voids in the theoretical explanations with some of them lacking the necessary backing. In this case, the theories offer simplistic and blunt tools that explore the employment relations issue and the multicultural perspective. The models or theoretical perspectives explaining employment relationships have refracted convergences only to retain the distinctiveness(Bamber et al, 2004). There is an intellectual void in capturing the shift seen in the decline of labor organizations and an incline in the power of multinational corporations. There is a need to explain the shift in three major theoretical lenses including the market forces, institutions and actor strategies. There is a need for theoretical development due to the inherent inability of explaining change in the national patterns of employment development. Methodological challenges especially in the theoretical aspects are obtaining the depth of information regarding the issue of employment relations. Furthermore, it has become difficult to explain the relationship between similarity and differences(Hyman, 2009). Data collection and analysis used by countries and institutes do not use the same definitions and other methods of measurements. This makes it difficult to compare data. Another methodological problem limiting the support for theoretical perspectives is lack of enough data (Koen, 2005). Availing a team of researchers covering the countries of interest especially in testing the theories becomes a difficult prospect. The problem manifests differently in disciplinary backgrounds, personalities and the research interests. Testing the theories has presented challenge in designing and execution of surveys across the countries of study(Bamber et al, 2004). Availability and adequacy of the information in various firms lacks with a variation in terms of sources. One theory may be applicable in one aspect while inefficient in another(Koen, 2005). Many of the theoretical and methodological challenges in explaining the employment relationship arises due to variation in approaches to study (Bamber, Lansbury, &Wailes, 2011). Formulations of theories explaining employment relationships were done in the past (Hyman, 2009). There have been revolutionary changes over the time, and these constructs need to be revisited to find applicability. There is a failure of the theories in explaining the behavior and outcomes of the proposed concepts with a compounding problem of the methodological approach in explaining the theories(Hyman, 2009). Compare the ‘shareholder’ and ‘stakeholder’ models of corporate governance and, with the example, their implications for the employment relationship? Good corporate governance is a pillar in the fabric of the global economy(Budd, 2004). It is a system through which business corporations are controlled and directed. Furthermore, it specifies responsibility distributions and rights among the participants within the corporation including the shareholders and stakeholders. The main aim of corporate governance is achieving value-oriented management and control within companies(Koen, 2005). It is a platform through which confidence of current and future shareholders, employees and the general public is reinforced. The governance profile within the corporation has become essential in taking consideration when one decides to allocate the necessary investment capital(Budd, 2004). Investors would like to see growth of their investments, but they also require confidence on the foundational basis of their growth. Although there are general principles that define corporate governance, comparative research indicates that there are two distinct patterns of handling the same(Koen, 2005). These are shareholder or rather market-outsider system, primarily used in the USA and shareholder system or insider system primarily used in the U.K. Comparatively, the two models exhibit huge differences in their approach to various issues affecting corporate governance (Bennett & Kaufman, 2007). Shareholder model maximizes on the value and interests of the investors while in Stakeholder model remains concerned with interests of all including the public without limiting on the investors. While shareholder model looks at the efficiency and profitability, stakeholder orientation is less concerned on the profit but rather the true value for the money(Koen, 2005). A detailed look at the Stakeholder’s model reveals commercial aspects while at the same time remaining hard-nosed. The stakeholder model, on the other hand, looks for stability and long-term survival. In terms of ownership, the Shareholder model has the great degree of freedom with the possession scattered among the managers. Despite the managers having a high degree of freedom, they are subject to market forces including proxy fights. The ownership in Stakeholder model is different with ultimate power concentrated to the executive over the management(Koen, 2005). The ownership differences make the shareholders within market-outsider systems to have protection while keeping vigil of any actions by the management (Bennett & Kaufman, 2007). The insider model has a different approach altogether with the minority shareholders poorly protected while at the same time relying on independent director support. Another difference witnessed is the traditional structures for the two models. The market-outsider model uses a single-tier board while the insider model applies the two-tier board(Budd, 2004). A single-tier board is a model in which the executive and the non-executive directors come together to tackle various issues affecting the organization. The two-tier approach comprises of the non-executive directors while at the same time having a lower-level management that comprises of the full-time managers. In the single-tier board, both the chairman and the CEO work closely while at the same time there are committees for auditing. The two-tier system shows a situation where the supervisory board works independently from the management board. The ownership structures of the shareholder system are dispersed. Institutional shareholders have large amounts of shares while the ownership structure in the stakeholder is concentrated. In many organizations or companies management coincides with the family ties of the controller. Separation of this ownership is only possible when there is a pyramid of dual-class shares. Auditing is only important when there is an urgency of the problem (Bennett & Kaufman, 2007). In dispersed ownership, an issue that crop is whether the interests of the shareholder find protection from the directors and other managers. Shareholders in this case delegate control to managers and directors for running of the company. In the auditing process for the insider-system, the internal controls such as the board of directors play a crucial role in corporate governance. In terms of risks, the shareholder model has a short-term strategy with huge risk taking(Koen, 2005). These are some of the inherent dangers facing this model. The stakeholder model focuses on the long-term goals while having extreme caution in terms of management plan for the organization. Employee’s relations and corporate governance movements have received extensive discussion. Employee relationships are hard to ascertain with academic literature providing mixed results(Budd, 2004). The traditional shareholder model employees were viewed as a cost that needed maximization for profit gain. In the neo-shareholder model, the human resources are of significance to the firm. The resource-based view illustrates employees as vital and unique resource with a sustainable competitive advantage. Good employee relationship is vital for satisfaction of the corporate stability. It further helps in sustaining the interaction elements within the system(Koen, 2005). The model views that good employment relationship influences the reputation of the firm. Firms that do not employ good employment relationship experiences unmotivated employees and shareholders selling their stocks. On the other hand, the stakeholder model addresses the relationship between the organizations together with its constituent group. Employees in this case are considered to be prime resources (Bennett & Kaufman, 2007). Despite this recognition, engaging the employees, is not an inherent moral practice and thus it is different from the moral treatment of the employees(Koen, 2005). There are deficiencies in the model in terms of the support to the organizational employment relationships. The influence of the employees to the organization, according to the model, is salient in nature (Budd, 2004). Why are unions said to be declining? Why? What are unions doing to reverse decline (Strategies of revitalization)? The presence and role of unions in many organizations have eroded, and their involvement in the economy marginalized(Budd, 2004). The influence of labor unions has been in a decline since the 70’s. Decline in trade unions occurs in terms of proxy measures such as union density, frequency of strikes and bargain in terms of coverage. In all of these indicators, union density remains the most popular(Duran- Palma, 2010). Sources indicate that the union density has been on the decline since 70’s both in developed and developing worlds (Fernando, 2006). The trends in the decline may not be uniform or universal but remain uneven within major countries. A large variation exists in terms of union membership and the density changes. The changes in the union density are the major factors that explain the decline in unions. A persistent and overall variation in terms of the overall density affects major countries with differential impacts remaining imminent. The decline in unions does not mean loss in the union power due to variation existing across several countries(Budd, 2004). Economists place different arguments on the decline in union membership. Many argue on the plane of the hostility by the company towards the union. In support of this argument, many companies of different sizes have waged war against the unions to undercut their influence. Overly aggressive unions, on the other hand, have been blamed for the loss of their influence. The decline in union trends is associated with qualitative indicators of power. The loss in strength and efficacy is blamed majorly on the failure to respond to ideological changes. The decline in union has been associated to phenomena including labor markets indicators, macroeconomic and political factors. Insecure forms of employment have been associated with a decline in labor unions (Fernando, 2006). The insecurity in the employment manifests in terms of threat to the existing union members, delayering, redundancy and privatization. Such challenges have been associated with the quality in terms of economic democracy for the organization(Budd, 2004). Two dimensions explain the reason behind the union decline such as structural and agency factors. On the other hand, there are internal and external factors. Cross-cutting both the dimensions lead to decline in explanation of the decline in union influences. External structural factors explain harsh economic and political factors that lead to decline in the union. Internationally, these factors refer to the hyper motility in terms of the capital. Nationally, structural changes concentrate on both the economy and economic factors within the business and the changing nature or relations (Fernando, 2006). External factors refer to a set of actions and strategies that entail political factors. Employers adopted a tougher stance towards unions especially the employer’s offensive in the early 70’s. Associated with this causative factor is the expansion of the multinational corporations. Making the situation difficult is the failure and the unwillingness of the employers to recognize the legitimacy of trade union representative role to the employees. Employers have used all manner of techniques such as the HRM avoidance techniques and anti-unionism(Duran- Palma, 2010). An example relating to this case is in the U.S, where the hostility by the employer has been a major factor explaining the decline in trade unions. Internal structural factors explain the changing nature of material circumstances of the constituencies that the unions seek to represent(Duran- Palma, 2010). These factors include the emphases on structural changes in terms of workforce composition. Rise in individualism and declining class-consciousness has led to a decrease in the unions (Budd, 2004). Decrease in demand for union representation is the main factor that leads to decline in the number of unions. Internal agency factors find the blame in the number of unions. This has to do with the policy and strategies adopted by the union. The inability of the unions to organize workers to fit high-technology and services are to blame for the decline in trade unions. Other scholars have argued that trade unions, just like other social movement experience the normal cycle of emergency, growth, decline and extinction. Union decline has drawn attention on the revitalization techniques. There are two major approaches with empirical studies focusing on the actual union action while prescriptive models were suggesting ways in which labor managements must change if they have to survive. Empirical studies follow the challenges faced by labor movement, actions followed and the outcomes in terms of union density and bargaining power (Fernando, 2006). The studies help in description and analysis of the changes rather than drawing of conclusions. Research on revitalization conceives the action of the union in purposeful and proactive manner. This empirical research aims at promoting proactive strategies with the belief being that unions can influence the contemporary developments(Budd, 2004). Unlike in the developing countries where the research focuses on responses, in the developed countries, the research focuses on strategies. Such strategies include union organizing whose function entails the recruitment of unorganized workers with the rationale being that it will enhance the market power. Servicing approach is a situation in which the workers within the organization are seen as the consumers of the services rendered by the trade union. Other adopted strategies include the participative unionism and professional unionism. Political action remains central to strategic union activity. In this case, it influences the policy-making process including the union involvement at different levels such as elections, voter mobilization and participation in electoral campaign processes. Union restructuring as a strategy is vital in revitalization initiatives. Restructuring process does not hold potential impact without progress in economic and political dimensions(Budd, 2004). Coalition building has been identified as a strategy in which there is discrete and continuous activity for the pursuit of shared common goals. The shared goals are between trade unions and the non-labor institutions within the society. International union action has been identified in the era of globalization as strategy to revitalize unions. This is a situation where transnational trade organizations come together in an intricate relationship to have immense influential power (Duran- Palma, 2010). Reference List Budd, J. W. 2004. Achieving Decent Work by Giving Employment a Human Face. Geneva: ILO. Bamber, G. J.; Lansbury, R. D.; and Wailes, N. 2004. International and Comparative Employment Relations: Globalisation and the Developed Market Economies. London: Sage. Bamber, G., Lansbury, R. D., &Wailes, N. 2011. International and comparative employment Relations: Globalisation and change. Los Angeles: SAGE. Bennett, J. T., & Kaufman, B. E. 2007. What do unions do?: A twenty-year perspective. New Brunswick, N.J: Transaction Publishers. Duran- Palma, F. 2010. Notes on the literature on Union Decline and Revitalisation. Fernando, A. C. 2006. Corporate governance: Principles, policies and practices. New Delhi: Pearson Education. Hyman, R. 2009. How can we study industrial relations comparatively? Research Paper, Comparative Employment Relations Group, LSE. Koen, C. I. 2005. Comparative International Management, London: McGraw-Hill. Read More