ASSIGNMENT

INDUSTRIAL RELATIONS AND GLOBALIZATION

BY : PRIYA SINGH CLASS: MBA ( HR & IR )SEM 3 ROLL NO. 35

INTRODUCTION TO INDUSTRIAL RELATION Industrial relations has become one of the most delicate and complex problems of modern industrial society. Industrial progress is impossible without cooperation of labours and harmonious relationships. Therefore, it is in the interest of all to create and maintain good relations between employees (labour) and employers (management).

Concept of Industrial Relations: The term Industrial Relations comprises of two terms: Industry and Relations. Industry refers to any productive activity in which an individual (or a group of individuals) is (are) engaged. By relations we mean the relationships that exist within the industry between the employer and his workmen. The term industrial relations explain the relationship between employees and management which stem directly or indirectly from union-employer relationship. Industrial relations are the relationships between employees and employers within the organizational settings. The field of industrial relations looks at the relationship between management and workers, particularly groups of workers represented by a union. Industrial relations are basically the interactions between employers, employees and the government, and the institutions and associations through which such interactions are mediated. The term industrial relations have a broad as well as a narrow outlook. Originally, industrial relations were broadly defined to include the relationships and interactions between employers and employees. From this perspective, industrial relations cover all aspects of the employment relationship, including human resource

management, employee relations, and union-management (or labour) relations. Now its meaning has become more specific and restricted. Accordingly, industrial relations pertains to the study and practice of collective bargaining, trade unionism, and labourmanagement relations, while human resource management is a separate, largely distinct field that deals with non-union employment relationships and the personnel practices and policies of employers. The relationships which arise at and out of the workplace generally include the relationships between individual workers, the relationships between workers and their employer, the relationships between employers, the relationships employers and workers have with the organizations formed to promote their respective interests, and the relations between those organizations, at all levels. Industrial relations also includes the processes through which these relationships are expressed (such as, collective bargaining, workers participation in decision-making, and grievance and dispute settlement), and the management of conflict between employers, workers and trade unions, when it arises. Definitions:a. Industrial Relation is deals with the manpower of the enterprise and the management which is concerned with whether machine operator, skilled worker or manager. b. Industrial Relation is a relation between employer and employees, employees and employees and employees and trade unions. and the process by which people and their organizations interact at the place of work to establish the terms and conditions of employment. - Industrial dispute Act 1947

IR in the global context IR - a definition "IR" may be defined as the means by which the various interests involved in the labour market are accommodated, primarily for the purpose of regulating employment relationships. IR is essentially collectivist and pluralist in outlook. It is concerned with the relationships which arise at and out of the workplace (i.e., relationships between individual workers, the relationships between them and their employer, the relationships employers and workers have with the organizations formed to promote and defend their respective interests, and the relations between those organizations, at all levels). Industrial relations also includes the processes through which these relationships are expressed (such as, collective bargaining; worker involvement in decisionmaking; and grievance and dispute settlement), and the management of conflict between employers, workers and trade unions, when it arises. These relationships and processes are influenced by the government and its agencies through policies, laws, institutions and programmes, and by the broader political, social, economic, technological and cultural characteristics of each country. The IR policy, legal and institutional framework in a particular country is developed through bipartite consultative processes (i.e., between employer and worker representatives, and by them, individually, with government) and tripartite consultation and cooperation (involving government and the social partners).

GLOBALIZATION TO IR Increasing international economic interdependence has disturbed traditional IR arrangements in several broad ways. Firstly, such

arrangements have normally been confined to the circumstances created by national markets; but globalization has fundamentally changed, and considerably expanded, the boundaries of the market place. In this respect, the extent of information flows made possible by new technology is building inter-enterprise networks around the world, is calling into question the traditional boundaries of the enterprise and is eroding current IR arrangements. MNC's are the primary driving force for change. They are organizations that engage in FDI and own or control productive assets in more than one country. They are creating very complex international production networks which distinguish globalization from the simpler forms of international business integration in earlier periods. As producers of global goods and services (notably, in the area of mass communications), centres of networks and large employers, MNC's have an impact extending far beyond urban centres in the countries in which they are located. In addition to the activities of MNC's, many locally-based enterprises, of varying sizes, in many countries are using information technology to focus on the demands of international (and domestic) "niche" markets in a way which is contributing to a growing individualization and decollectivism of work. Secondly, globalization has disturbed the status quo between "capital" and "labour" in each country, in the sense that capital is significantly more mobile in an open international environment, while labour remains relatively immobile (here it should be noted that, under globalization, international labour migration is continuing, but, proportionately to the rate in the1970's, has not increased see World Bank 1995: 53). This can place "labour" at a relative disadvantage, in that "capital" can now employ "labour" in different countries, at lower cost and on a basis which can prejudice the continuing employment of workers in the originating country.

Thirdly, globalization is having a contradictory impact on IR. It is accelerating economic interdependence between countries on an intra- and inter-regional basis and encouraging similarities in approach by individual enterprises in competitive markets. This may lead to some convergence in industrial relations arrangements around the world. At the same time, there is clear evidence of resistance towards convergence, based on particular national and regional circumstances . Current responses to globalization. The advanced economies are more and more concerned with increasing (or maintaining near full) employment, preferably in high wage, high skill jobs. Increasing attention is being given to ensuring that business and employment relations policies and practices are in place which are conducive to innovation and flexibility, integrate technology and work organisation, and provide for continuous productivity improvement, customer responsiveness and the delivery of high quality products and services. Improving equity and worker participation in decisionmaking at enterprise level are increasingly being seen as necessary parts of such strategies. The situation confronting the high growth, newly industrialising economies is different. In some countries, there have been substantial improvements in employment and working conditions to the extent that they are now experiencing labour shortages and are increasingly relying on foreign workers as they endeavour to maintain rapid growth. In the newly industrialising countries, there is also a preoccupation with establishing the most appropriate policy settings for maintaining economic growth. A range of considerations is involved. For example, what strategies (i.e., industry, labour market and employment relations) should governments embark on to encourage effective use of technology, labour market flexibility

and high productivity growth? What conditions should be set for foreign investment - should it be allowed in certain economic sectors when basic labour standards might be undermined? What role can employers' and workers' organizations pursue with their constituents to encourage and support increasingly more exportfocused growth strategies? Moreover, what changes are required in the increasingly more export-focused growth strategies? Moreover, what changes are required in the workplace to job design, skill formation and work organization to realise the benefits of new technology, while maintaining employment growth; and, with the spread of education and increased emphasis on skills development being accompanied by demands for greater worker participation, what strategies should be adopted by management to ensure more equitable treatment in the workplace? IMPACT OF GLOABLIZATION ON IR IR as integral to macro-level development policies and planning. Tripartite cooperation Declining unionism Bipartite relations and worker involvement in decision-making Decentralization of bargaining Increased attention to linking performance, skills development and pay, and questioning the continued relevance of minimum wage arrangements. Increased focus on job security Cross-cultural managing and working.

Figure 1: Framework for Analyzing Impact of Globalization on Industrial Relations

Conclusion The impact of globalization is requiring IR systems to adapt to ensure improved economic competitiveness, flexibility and overall efficiency to respond to changing international market circumstances. Individual enterprises, whether domestically or internationally-based and organized, are in "the frontline" of these changes. Employers and their organizations therefore have the most important role in generating the responses needed to take advantage of these new and emerging circumstances. But while globalization is a significant factor, it is not the only factor, driving IR changes in the region. Factors internal to each country - some of traditional IR concern, others instigated or exacerbated by liberalization - are prompting similar changes. In addition to helping to achieve the improved efficiency and productivity which is driving enterprises in responding to a more competitive business and trading environment, the changes required to IR arrangements must provide stability in relations between managers and workers and ensure equitable participation by workers in the benefits of increased enterprise development and growth. That is, the essential challenge for each country is how to achieve a stable and flexible IR system which balances "efficiency" with "equity. In this endeavour, attention must be given to traditional and emerging areas of IR concern (which together should constitute a broader focus for action than previously, based on the concept of "employment relations"). This will require action in the areas of policy, legislation, institutions, workplace practices and associated capacity building. A re-examination of the roles of government and the social partners and of the relevance and scope of IR laws and other rules and institutions will be necessary to acknowledge the realities of a more decentralised IR environment, and the need for the norms of the system to move away from a regulatory, to an increasingly facilitative, role, while still providing appropriate protections for workers. A renewed commitment to tripartite

action and a greater emphasis on bilateral relations will be critical in realising these changes. In all of these areas, employers - as the generators of economic development and growth - and, through them, their organizations, have to have a clear set of priorities and strategies to address the factors, both internal and external to the enterprise, which will affect their capacity to harness employment relations as a key element in improving enterprise competitiveness and performance. The diverse IR situations across the region make it unrealistic to predict, with any degree of certainty, the future course of IR in the region. While globalization emphasises convergence between economic and related systems, and this is occurring to some extent , IR are ultimately determined by a complex range of factors within individual countries, reflecting particular national, cultural and institutional circumstances.