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GLOBALIZATION AND INDUSTRIAL RELATIONS

Globalization is the economic integration across the globe in terms of

free movement of capital, technology, products, and people.
Merits
 Sustained economic growth
 Free markets, with little or no intervention from govt.
 Economic globalization
 Privatization
 The primary responsibility of the government is to provide the
infrastructure necessary to advance commerce
Contd.

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Contd.

Demerits
 The process of globalization seems to be driven by a few in a
unipolar world.
 Is another form of imperialism
 Is leading to growing inequalities between the rich and the poor
 Is destroying jobs and local communities
 Is ruthless, rootless,

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 GATEWAYS TO GLOBALIZATION

 The shrinkage of time and space with the advent of information and
communication technologies.
 Rapid integration of financial markets and freer movement of capital.
 The blurring of national state and national boundaries and the evolution
of WTO.
 Global production chains and integrated supply chains.
 The new flexible production systems and new forms of industrial
organization.
 Flight of capital and industry.
 Shift of labour intensive manufacturing to low cost sites.
 Global networking facilitating inter- and intra-company trade in
transnational companies.
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 DISINVESTMENT

It affects industrial relations in the following ways:

 Changes ownership, which may bring out changes in work
organization, employment, trade union organizations, and
trade union dynamics.
 Changes the work organization by necessitating retraining
and redeployment.
 Affects the rights of workers and trade unions

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 DEREGULATION & DECENTRALIZATION

 Deregulation results in erosion of the accrued interests of workers and

trade unions.
 It results in a reduction in pension benefits and an uncertainty
concerning future provisions of pension benefits, due to:
o the absence of government guarantees,
o falling interest rates, and
o Investment of pension funds in stock markets
 Decentralization of industrial relations is seen in terms of the shift in
consideration of industrial relations issues from macro to micro and
from industry to enterprise level.
 It results in the weakened bargaining power of unions.

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NEW ACTORS AND THE NEW DYNAMICS IN
INDUSTRIAL RELATIONS

 Consumers and the community have started playing a

significant role in industrial relations
 Pro-labour-Pro-investor Policies
 Changed mindsets of the judiciary, legislature, and
executive
 Declining trade union density
 Worker militancy replaced by employer militancy
 Collective bargaining

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CHANGES IN THE SCENARIO, BEFORE AND AFTER ECONOMIC LIBERALIZATION

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 TRENDS IN EMPLOYMENT
 Declining stability and security
 Declining labour intensity
 A growing irregular labour force
 Shift from contract of service to contract for service
 Increase in home-based work
 Declining and/or extinction of a few occupations and the
birth of a few others
 Declining mutual commitment
 Declining influence of trade unions

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 TRENDS IN THE LABOUR MARKET

 Recruitment ban/squeeze in public sector and government

employment
 Increasing unemployment
 Decreasing formal sector employment in relative terms
 Growing casualization and contractualization of labour
 Falling employment elasticities
 Emergence of global chains splitting production processes
into different parts dispersed over several locations
 Mergers, acquisitions, divestures, and other ownership
changes
 Significant workforce reduction

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PARADIGM SHIFT IN LABOUR POWER AND MANAGEMENT CONTROL

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 CRITICAL CHALLENGES FACED BY THE INDIAN ECONOMY

 Technology and job creation

 Skills development
 Labour mobility
 Labour commitment
 Work culture
 Productivity and competitiveness

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 RE-STRUCTURING & DOWNSIZING

During the decade 1991 to 2000, many organizations in the

manufacturing as well as in the services sectors had, in phases,
restructured their business and employment model. This led to most
manufacturing companies getting various components,
subassemblies and, in some cases, even finished products,
manufactured by third parties. In the services sector too, various
activities were outsourced to service providers.

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 RE-STRUCTURING & DOWNSIZING
To achieve their purposes, these organizations had to downsize their
workforce, both bargainable and non-bargainable, through voluntary
Retirement Schemes (VRS). The trade unions, though, alleged that these
VRS were actually Compulsory Retirement Schemes (CRS), resulting in
a change in the employment structure itself. Inevitably, these schemes
also led to a lot of uneasiness and industrial unrest in the organizations.
The greenfield businesses set up after 1991, had the option of choosing a
different business and employment model. These businesses to begin
with outsourced many activities and adopted a minimum required
manning model. Though in some cases they also had to restructure their
work force at a later date.

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 INDUSTRIAL RELATIONS IN FUTURE
• There is no gainsaying the fact that social media facilitates speedy flow of
information across people and organizations. Everyone, including Managements,
are using social media to put across their points of view. With more than a billion
mobile subscribers in the country, the workers and trade union leaders will
certainly consider using the social media for their purposes, particularly to
communicate on issues of IR. They can, for example, circulate videos
highlighting violations of labour laws or other such unfair labour practices, or the
type of work being done by contract labour compared to what has been approved
by the appropriate government. This is going to be a new, big challenge to the
Employers.
• Yet another likely challenge can be dealing with the third and fourth generation
industrial workers who harbour high expectations and aspirations. Most of all,
this generation of workers expect clarity about their career paths in the Company.
Managements will be compelled to draw up career plans for their employees.

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 CONCLUSION
• From 1991 onwards, organizations are increasingly resorting to outsourcing in
the supply and distribution chain and are engaging more and more of contract
workers through contractors.
• Also, since 2000, there has been increased employment in the Gig economy.
This business model is bound to give rise to serious conflicts between the
Management and the Workforce, the Trade Unions, if any. The main areas of
contention center around earnings, working conditions, terminal benefits,
continuity of employment and related issues.
• Organizations require competent professionals who can analyze and
understand the complex work situations of the modern-day industries. We
need managers who can build relationships, not only with the permanent
workers but with the contract workers as well. We need leaders who can
skillfully manage disputes and conflicts by developing situation-specific IR
strategies and innovative solutions. It is imperative that all the disputes are
negotiated and settled amicably so that the interests of the organization and of
the employees associated with the enterprise are safeguarded.
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