International Employment Relations - Essay Example

INTERNATIONAL EMPLOYMENT RELATIONS (HUMAN RESOURCE) Insert Name Course Institution Instructor Date of Submission Introduction Systems comprise of inter-dependent sub-systems that are linked together to achieve a common objective. The globalization process aims at uniting the world on the economic, social, political and commercial fronts. Towards this end, nations will be required to adjust their national and regional structures in order to facilitate relations with other nations. However, the most critical aspect to the globalization concept is the decentralization and deregulation of the product and labour markets. Growth among nations is based upon their production capabilities and resource availability. This paper therefore aims at discussing the globalization concept by focussing on the deregulation and decentralization of the labour and product markets. Globalization Technological and other advancements within the world have made it possible for individual and organizational entities to surpass geographical boundaries and mutually interact with each other on various forefronts. These forefronts include trade, political, social, economical and technological among others. In the recent past, nations and corporations have strived to establish relationships with other similar entities towards the provision of products thus increasing their operations and activities as well as creating new markets. This interaction has seen the unification of various entities within the world as organizational and individual entities reach out beyond their geographical boundaries and establish mutually beneficial relationships. Scholars have referred to this trend as globalisation that has been evidenced by nations entering into agreements with each other and/or forming alliances (Stiglitz 2003, p11). Stiglitz defines globalization as the process through which societies or entities enhance their connectivity as well as interdependence in the world markets (2006, p24). From this definition, globalization may seem a simple activity but realistically it is quite a complex activity. This is because entities entering into a relationship have to evaluate their needs and find a matching entity that can be able to meet their needs in exchange for another product. The matching principle therefore makes the globalization process much more difficult although beneficial to the involved parties. However, it should be noted that globalization does not only exhibit the commercial aspect only. Globalization aims at tightening the ties between societies by bringing them closer together by harmonising their philosophical, economic, social and political ideologies (Stiglitz 2003, p14). The concept therefore aims at uniting societies in all major fronts and enhancing cohesive living among individuals and the utilisation of the available natural resources. In the past decade, the globalization process has been fuelled by two major developments within the society. These are; the development of technological infrastructure and the internet. With the bust of the internet, individual entities were able to connect irrespective of their geographical locations and this led to an increase in trade activities. Initially, the internet was mainly adopted for commercial purposes until later on when social, economic and political activities began being pursued through the internet. As a result, entities with different perspectives on the world process found a common forum whereby they would share their perspectives and assist in making the world a better place (Speth 2003, p144). Through globalization, entities are able to acquire and utilise scarce resources from other entities that have them in their plenty. With the increased adoption of the globalization concept, supporters and critics have emerged and have actively participated in pro-globalization and anti-globalization campaigns. Economic and social scholars have noted that despite the numerous benefits that stand to be realised from globalization, there exists several limitations that negatively impact on the economic and social structures (Bhagwati 2004, p63). The most common benefit of globalization addresses the increased trade volumes and levels of trade among nations. Increased trade practices among nations will eventually lead to economic prosperity as the parties engage in favourable trade practices. Socially, globalization increases cohesiveness within the society as members from different cultural backgrounds interact and exchange their cultural values and practices. On the same note, some initiatives can only be undertaken on a global scale whereby individual entities harmonise their operations for the common good. Such initiatives include protecting the environment that will require the formulation, implementation and evaluation of environmental policies on a global platform (Speth 2003, p101). On the other hand, the globalization concept has its fair share of limitations that subject it to resistance from the individual entities. Through globalization, some cultural values and cultures will be eroded as some of the entities impose their cultures on others. Cultural differences should be appreciated as they provide individual entities with a sense of identity. As a result, the society will disintegrate as they individual entities lose their social bonds. This will be counterproductive to the social cohesiveness achieved through the globalization concept (Beck, Klobes & Scherrer 2005, p75). Currently, there exists a wide discrepancy among the prosperity of nations across the globe. This presents an uneven platform from which the concept can be spearheaded. The adoption of the globalization concept with this state of affairs will further increase the unequal distribution of wealth in the world. Wealthier nations will use their available resources to exploit poorer nations and thus increasing the wealth gap between nations. To ensure full adoption of the concept, nations should agree on how their distinctive differences will be addressed thus providing a way forward towards global prosperity. Deregulation and Decentralization Commercial trade practices are at the centre of the globalization concept whereby nations strive to increase their production capacity and market opportunities by engaging in favourable trade agreements. Nations have varying natural resources both in their scarcity and abundance. An exchange will therefore have to take place for nations to acquire the scarce resources in exchange for their abundant resources. However, for globalization to fully unlock the trade potential among nations, two major markets have to be liberalised. Stiglitz notes that these markets are the product and labour markets that support the production process (2006, p41). Policies pertaining to the deregulation of products will have to be enforced through standardised procedures across the globe. The deregulation of products involves making all manufactured goods available within nations irrespective of their views on the products. To an extent, this can be considered as an imposition of products on nations such that corporate organizations increase their sales revenues. Governments exercise authority on product markets in order to boost their national production capacity and protect their industries from going under due to increased importation. The deregulation of the product markets will see an increase in imports and thus hurt the local industries. Therefore the government has to exercise their authority and protect these industries and thus negate the globalization concept. On the other hand, globalization requires the deregulation of the labour markets such that skilled and unskilled labourers can work anywhere in the world without any restrictions (Bamber, Lansbury & Wailes 2004, p56). Although this will serve to increase the production capacities, less developed nations will be at a disadvantage. The regulation of labour markets aims at protecting the internal industries as well as equipping individuals with skills and capabilities that will enable them to fully utilise their knowledge and skills. Due to the wealth disparities among nations, wage rates in wealthier nations are much higher than in developing and less developed nations. Therefore the liberalization of labour markets will in turn result into an unprecedented shift of labour towards developed nations as labourers seek higher returns in exchange for their services (Mosely 2008, p1). Similarly, the exportation and importation of labour may have a positive effect among less developed nations as they might in turn receive highly skilled labourers from developed nations and thus improve on their economic performance. Quality products will be produced thus increasing corporate sales revenues and thus increase the wage rates significantly. However, the deregulation of the labour markets will have an adverse impact on the less developed nations as the wealthier nations prey on their labour force that is much cheaper. Decentralization and deregulation are two basic procedural structures that require to be established for individual nations to cooperate and harmonise their operations. Mosely notes that unlike deregulation, decentralization refers to the free market system whereby the labour markets are governed by an established authority (2008, p1). Through decentralization, labourers will be able to work anywhere in the world without necessarily being subjected to procedural barriers. This will facilitate the exchange of manpower and capabilities that will enable a nation increase its production levels and product quality. However, it should not be forgotten that rationally, workers will move to areas that are paying higher wage rates for similar services. Through decentralization and deregulation, the wage rates will be harmonised as they will be determined by the demand and supply of labour within the nation. Despite the numerous efforts to harmonise wage rates, variations will continue to exist due to the demographic dynamics within nations. Demographic characteristics of a population directly impact on the demand and supply of labour that in turn influences the cost of labour. Deregulation of products and the labour markets aims at providing entities with the freedom to operate in other nations without having to overcome the imposed barriers. These barriers include discrimination, high tariffs and taxes, entry and exit barriers among other impositions. Minimal barriers will enable manufacturing entities to go about their processes smoothly and thus reduce the cost of production. In turn this will increase the nation’s production levels thus accrue high revenues due to enhanced exportation. The levels of industrial operations will increase thus increasing the demand for labour. Depending on the nation’s population size and characteristics, the wage rates will increase relative to the labour supplied (Ellison 2002, p205). With the labour markets being deregulated, workers will be able to seek employment in industries they feel comfortable in. However, with the deregulation of the labour market, labour unions will lose their relevance and employees will have to deal directly with their employers. Labour unions are collective bargaining vehicles used to protect the rights of employees and avoid exploitation from the employers. With labour unions having lost their relevance, workers might be exploited by their employers and thus reduce the quality of production. The deregulation of products on the other hand will allow the free movement of goods among nations that could negatively impact on their internal industries. Importation of goods and services of goods could increase and this would hurt the operations of the local industries. More positively, deregulation of products will enhance competitiveness among manufacturing entities and this will increase the quality of products (Bhagwati 2004, p67). Mosely (2008, p1) defines decentralisation as the transfer of authority and responsibility from a single source to a wide range of entities within a single entity. Decentralization enables flexibility among the operations of an entity. Entities have the ability to choose from a wide array of process combinations that will enable it optimize its available resources. Decentralization of the labour market in the recent decades has indicated the need to break territorial barriers by adopting a larger perspective to the labour market processes. This trend arises from the varied demands of labour among nations. Despite the importance of decentralization towards facilitating globalization, this issue has remained highly political among nations as they seek to protect their regional interests. However, it is well understood that through decentralization, effective policies can be formulated that have both the positive and negative impact on the nation (Mosely 2008, p2). Decentralization of the labour market results into the formulation of favourable market policies that are tailor-made to match the needs of the local population. Populations have different needs at a particular time and through decentralization, these specific needs will be addressed through specific policies formulated at the local levels. Secondly, decentralization will result into the increased variation of products offered to the public as they seek to meet the diverse population needs. On the other hand, equal citizenship will lose its meaning as populations will be divided according to their needs thus resulting into social disintegration. Therefore despite the formulation of different policies and their respective implementation, national administrations should seek to retain the common policy frameworks. Decentralization seeks to promote innovation through enhanced competition between various regional and local authorities (Mosely 2008, p2). The diverse policies formulated by the various authorities seek to improve the service and product delivery by weighing and deploying the best available policy. Positive competition will therefore foster enhanced economic growth among nations although the markets should be regulated to an extent. Unregulated markets may result into ‘begging policies’ especially in welfare and environmental policies. Thirdly, local entities are only aware of the local environment and needs upon which they make their decisions. However, decentralization seeks to expand the perspectives that the local authorities view the environment and improve the effectiveness of their policies. Local authorities may lack the necessary capabilities required to improve the product and labour markets and therefore decentralization should be complemented with capacity building that aims at equipping the authorities will relevant capabilities for decision making. Lastly, decentralization enhances accountability and direction within the local population (Mosely 2008, p2). Due to the smaller scope of activities, regional and local authorities are able to prioritize their needs and amass their necessary resources to meet the population demands. Since the resources are channelled towards meeting the needs, accountability is enhanced and as a result minimal resource wastage is evident. However, regional and local entities may lack adequate resources to meet their needs compared to neighbouring regions. As a result, underdevelopment is evident as the regions are reluctant to help each other out due to competition (Landy, Levin & Shapiro 2007, p236). Conclusion Towards adopting the globalization concept, nations should seek to establish relationships that are mutually beneficial as opposed to entering into agreements just for the sake. Decentralization and deregulation of the product and labour markets should be structured in order to mitigate the negative impacts associated with globalization. Despite improved economic performance, globalization should seek to enhance social cohesiveness as well as foster positive competition among societies. However, positive competition is a difficult practice to achieve especially with the scarce availability of resources. References Appadurai, A 2000, Globalization, Michigan: Duke UP. Bamber, G, Lansbury, RD & Wailes, N 2004, Intrn’l & Comparative Emplymnt Relations: Globalization & the Dev. Mrkt Econ., 4th Ed., New York: Sage. Beck, S, Klobes, F & Scherrer, C 2005, Surviving Globalization?: Persp. For the German Econ. Model, New Jersey: Springer. Bhagwati, JN 2004, In Defense of Globalization, Washington: OUP US. Ellison, AP 2002, Entrepreneurs & the Transformation of the Global Econ., Denver: Edward Elgar Pub. 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