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Contrast and compare what the literature has to say on why, despite the advance of globalization, business systems in the main i - Essay Example

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A. Why business systems in main industrialized countries continue to diverge despite globalization? It is a fact that though trends towards globalization and internationalization of business continue to intensify, business systems around the world are also diverging…
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Contrast and compare what the literature has to say on why, despite the advance of globalization, business systems in the main i
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"Contrast and compare what the literature has to say on why, despite the advance of globalization, business systems in the main i"

Download file to see previous pages It is argued by him that all decisions about the route to be followed are not made within an organization rather state plays a potentially important role in deciding the character of any business system in addition to determining how the employers should behave and what strategic choices should they make in response to rising globalization when the need arises to not let their businesses grow in isolation from the global business trends. There is greater state involvement in determining a business’s character and the path it would follow. By developing a framework of analysis to examine business systems, Whitley explained at length “certain components of business systems and their interaction with institutions” (Tempel, 2001, p. 43). Whitley’s concept of national business systems has however been criticized often due to its weaknesses like portraying organizations as “passive pawns” which have little option but to comply (Scott, cited in Tempel, 2001, p. 42). Employment systems– national systems of training: With the help of extensive research and discussion regarding why it is that business systems in many developed nations continue to diverge, many factors are unveiled. While a market driven approach lays the foundation of employment systems in UK, fully developed vocational educational systems in France ensure high skill development and strict on-the-job training. Such pattern of allocating highly skilled workers even for the lowest jobs is not observed in UK. Germany, in contrast, practices the best system of economy wide vocational educational training. The rate of formal consultation is highest in European countries like Germany, Italy, and Sweden where employees are highly valued (Brewster and Larsen, 2000) in contrast to US or UK. As a result, there exists convergence of skills in contrast to polarization of skills as has been reported in UK business leading to “dead-end and low-skilled employment” (Crouch, 1997, p. 372). German business has advantaged hugely from VET system which demands continuous retraining and up-skilling (Crouch, 1997, p. 372). Clear difference exists in employment systems and HRM policies between CMEs (Germany, Italy, France etc.) and LMEs (US, UK etc.) (Boyer, 2005) which explains why business systems continue to diverge despite increase in globalization. Reportedly, there is greater polarization in US business systems “with the bottom 10% of the working population now being absolutely poorer than they were at the end of 1970s” (OECD, cited in Crouch, 1997, p. 370), but they also emphasize more on diversity management (Egan and Bendick, 2003). Japan, however, practices a blend of general education system of a US kind and VET system of a German kind and believes in ensuring diversity of opportunities “but within a more German context” (Crouch, 1997, p. 373). HRM: In contrast to LMEs (Liberal market economies) like US, UK, and Australia, business systems in German, Netherlands, and Swedish market economies show different approach to dealing with HRM. Germany and Scandinavia are CMEs (Coordinated market economies) where legislation value is maximized. CMEs emphasize more on employment regulation in which state plays a greater role than the stock market. All business systems in CME countries have stronger systems of employee voice and there is higher consultation between firms and employees (Farndale, Brewster, and Poutsma, 2008, p. 2008). Now in HRM terms, business systems operating under CMEs are ...Download file to see next pagesRead More
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