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THE IMPACT OF GLOBALIZATION ON INDUSTRIAL RELATIONS

A CONCEPTUAL STUDY THE IMPACT OF GLOBALIZATION ON INDUSTRIAL RELATIONS
(With Special Reference to Kota Region)

A Synopsis Submitted For Consideration of Ph.D. In Vardhaman Mahaveer Open University

By M SHYAMSUNDER RAU C – 364 Kota – 324 005 Rajasthan

www.vmoukota.com

THE IMPACT OF GLOBALIZATION ON INDUSTRIAL RELATIONS

A Conceptual on the Impact of Globalization On Industrial Relations (With special reference to Kota region) with the advent of liberalization and New Industrial Policy, it is now often said that Indian vision of 2020 is a big leap towards making her a super power and for her economy to have global perspectives. Internally too, due to several economic reforms like liberalization, liberal EXIM policies, disinvestments plans leading to over subscription of the PSUs, Schemes like VRS, mergers and acquisitions, outsourcing and like, the country has achieved all round economic progress and industrial growth. Further the mass production of top quality goods at competitive prices, indigenization of several commodities, patenting and intellectual Property Rights, and so in have led to higher productivity and reducing unit costs. Many believe that this has been made possible through incorporating latest technology and scientific work methods that all organization to economize or cut costs. But if it has been only due to introducing new technologies, certainly the United States, the UK and other industrially advanced countries would not be overtaken by Germany, Japan and to some extent by china and India. The success in these countries largely depends upon the way they have managed to surpass other nations through better union management. It is difficult to conceive of any industrial society devoid of social and group phenomena or such institutional relationships intertwined with a variety of attitudes and expectations, from both management and employees. Consequently, industrial relations (IR) cannot be viewed in isolation from its wider context. The term IR can be defined as a specialist area of organization management dealing with the human relations and human activities on a work place. The term however is used in a restrictive sense to include only the formal and collective relationship between management and employees through the medium of trade unions. Several studies have been conducted on the discipline of IR but they have failed to promulgate any causative theory or predictive model nor has there been any ‘right’ approach towards setting up a conceptual framework, comprising of methods and means to understand the diversity and complexity or IR. So far research has been done with a view to bring about analytical considerations however the present study aims at preparing a conceptual as well as theoretical rationalization in the light of globalization and liberalization and to study how these phenomena have shown their impact on the entire gamut of IR in general, and for the sake of exemplifying the impact on the selected organizations of Kota region in particular. This study will also suggest ways and means for the subjective analysis of the economic scenario in the worker management setup in most organizations and for the possibility of evolving an comprehensive system of industrial relations.

A noteworthy feature of this study shall be its focus on the selected organizations of Kota region namely shriram Fertilizers and Chemicals (DSCL group), Chambal Fertilizers and Chemicals Limited, Gadepan (Birla Group), samcor Limited (Samsung group) and

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investment. Firms. travel. a semi government undertaking and their role in the development of the economic liberalization and in the promotion of globalization trends. rapid proliferation of communication and information technologies. and other forms of interaction. Today’s globalized world has been characterized by a brain drain. for example attempt to tap emerging markets by pursuing business in China. India. One characteristic of globalization ion the modern age has been expanding commerce between countries around the world. MNCs can pay these workers a fraction of what they would have to pay in a domestic division. Production jobs requiring only basic or repetitive skills. In such a scene of devastation a few organization including those under study have not witnessed any strike or dispute for the last many decades. trade and expansion led to increased contact between different civilization and societies. Business activities are becoming increasingly global as numerous firms expand their operations into overseas ma rkets.S. Many historians have identified globalization as a 20’th–century phenomenon connected to the rise of Western-dominated international economy. there are evidences that several ideologies of Indian origin have played a significant role in this era of economic. When such organizations exist in our country. or exodus of talented people from various continents to Europe and North America. and Russia and other Eastern European Countries. technological and environmental climate that has been affected in the wake of globalization. political. regional and national economics. However. The roots of this phenomenon reach far back in history. Brazil. www. In turn. the study aims at suggesting some HR/IR initiatives to be taken at all levels.THE IMPACT OF GLOBALIZATION ON INDUSTRIAL RELATIONS instrumentation Limited. but not least. The current scenario in the Indian Industrial panorama has been very depressing owing to increasing number of sick units and growing unionism. economy.are usually the first to be move abroad. The present study will therefore ponder upon the socio-ethical. Long-distance trade routes grew out of the transportation systems that developed out of the need to move resources by land and sea. Multinational corporations (MNCs) which operate in more than one country at once. economical. and infrastructure through transnational investment. last. and often work them longer and harder. from strategic to the grass root level. Globalization: Its Present Status Globalization has come to mean an integration and democratization of the world’s culture.market forces on local.vmoukota. popular culture. it becomes all the necessary to study the causes and affects of those healthy phenomena which have been responsible for such an achievement or whether these phenomena owe anything to globalization.such as sewing or etching computer chip. and the impacts of free. The role of industrial tribunals has also been very discouraging. The selection of organizations has been made keeping in view the impact of Globalization that they have witnessed despite severe labor and union exigencies. This study is also an attempt to prepare a critique in the discipline of industrial relations. in order to improve the performance and productivity of the organization concerned. The term “globalization” also refers to the increasing interconnectedness of nations and peoples around the w orld through trade. Many U.com . typically move operations to wherever they can find the least expensive labor pool able to do the work well.

China.that is. rights. World Trade Organization (WTO) is an international body that promotes and enforces the provisions of trade laws and regulations.level management. However.com . In spite of ore their economic benefits to the organizations.vmoukota. The BPO industry has further outlaid this phenomenon and has given rise to several issues of development. and protections for intellectual property. the WTO has a significantly broader scope than GATT. The organization provides a framework for international trade law. The WTO is also a formally structured organization whose rules are legally binding on its member states. the WTO has attracted criticism from those concerned about free trade and economic globalization. or human health. employment and economy. The WTO was established in 1994 when the members of the General Agreement on Tariffs and Trade (GATT). MNCs based in the United States have moved many of their production operations to countries in Central and south America. finance. They employ some lower. Mergers and acquisitions are also becoming m common than in the past. Members can appeal this panel’s rulings to a WTO appellate body whose decisions are final. The WTO expanded the GATT agreement to include trade in services. The world trade organization has the authority to administer and police new and existing free trade agreements. such h as international telephone service. these trends have raised serous issues of social and ethical considerations. critics also charge that WTO trade rules do not sufficiently protect workers.THE IMPACT OF GLOBALIZATION ON INDUSTRIAL RELATIONS Most U. Although the WTO replaced GATT. and human resources divisions within the United States. the present project will discuss this impact too in the context of the organization under study. GATT regulated trade in merchandise goods. to oversee world trade practices. the environment. Since it creation. Opponents of the WTO argue that the organization is to powerful because it can declare the laws and regulations of sovereign nations in violation of trade rules. a treaty and international trade organization signed a new trade pact.S. marketing. Some groups charge that www. WTO and Globalization During the study the researcher intends to examine the role of such international bodies like WTO and CII and their recommendations as forwarded to organizations. the trade agreements established by GATT in 1994 are part of the WTO agreement. and warehouses in developing countries. in effect pressuring nations to change these laws. and to settle trade disputes among member states. and nations of Southeast Asia. such as sound recordings and computer programs. India. Disputes must be resolved within the time limits set by WTO rules. creative works that can be protected legally. Multinational businesses keep the majority of their upper. The WTO was crated to replace GATT. factories.level managers and a vast number of their production workers in offices. Members can refer trade disputes to the WTO where a dispute panel composed of WTO officials serves as arbitrator.

Unions help workers negotiate the terms and conditions of their work with their employers. Later general unions. whereby workers stop working and often picket the gates of their workplace with the aim of persuading other workers suppliers. workday length. or a ban on overtime. and other professional employees. overtime rates. noting that its member nations. in single industry such as automobile or steel manufacturing. and those collecting goods for distributio n not to enter. become more common as unions broadened their membership to include people working in jobs outside the union’s original industry.THE IMPACT OF GLOBALIZATION ON INDUSTRIAL RELATIONS the WTO lacks democratic accountability because its hearings on trade disputes are closed to the public and press. bank. The best-know form of industrial action is the strike. They could be fired without cause at the whim of an employer and thus had no job security. and hospitals. Other forms of industrial action may involve a refusal to perform specific duties. in which the union negotiates with the employers on behalf of the employees. and insurance companies. rates of pay. industrial action that is sanctioned by the union is said to be official. They also include engineers. action not sanctioned by the union is unofficial. Industrial action occurs when industrial relations between workers and employers break down. Industrial unions include all workers. workers often labored for low wages and long hours in unsafe or unhealthy workplaces. teachers.vmoukota. wrote the WTO rules and selected its leadership. In the united kingdom. It can take a number of forms. restaurants. because employers in those areas have aggressively opposed unions. Industrial Action is termed as an action taken by workers. WTO officials have dismissed arguments that the organization is undemocratic. usually with the aim of achieving an improvement in pay or terms of employment. many of which put workers in breach of their contract of employment. Before unions existed. workers’ health and safety www. Public-sector union emerged in the post independence era after the government passed laws allowing government workers t organize ( to form groups to protect their rights and o interests)and bargain collectively. which represent workers from widely varying industries or occupations. know as a go-slow. Industrial Actions and Disputes and the role of unions. official action must be preceded by a ballot of the union workers.com . WTO supporters argue that it plays a critical role in helping to expand world trade and raise living standards around the world. Unionized workers include industrial and office workers and public employees in government administration. the union and the workers lose their immunity against civil claims for the damages caused by their industrial actions. In workplaces where trade unions are recognized. Employee are less likely to be unionized in private service-sector firms such as retail stores. Some forms of industrial action may be subject to legislation. professors. In unionized jobs employees work under conditions negotiated through the process of collective bargaining. school systems. The collective agreements they negotiate include clauses that outline job classifications. a work to rule in which the safety and other rules for operating machinery or doing specific tasks are painstakingly followed. if it is not. most of which are democracies. nurses. skilled as well as unskilled.

a cooling-off period of about ten days follows. A consultative council may regularly bring together labor unions and management to discuss points of mutual interest. a government-appointed mediator tries to help the two side reach an agreement. the shares and control of the company lie with its worker. In a worker cooperative. However. pay equity for women. the parties mist apply for conciliation. In addition. and environmental standards. Under conciliation. Unions also negotiate with employers to determine the level of union security (the extent to which workers are required to join or fund the union once it is established). disputes and strikes have been curtailed due to globalization. either party can apply pressure to the other through a work stoppage created by an employer is known as a lockout. Worker participation can lead to greater motivation of staff. Financially. unions have supported broader community issues. in which employees remain at work and the parties may continue to negotiate.types of union security arrangements include the closed-shop agreement. These Unions have also pushed for social welfare measures. Much of this political work is done by central labor bodies. including universal medical coverage. Such agreements also include grievance and arbitration procedures that are designed to settle conflicts that arise during the term of a contract.vmoukota. If the employers and unions cannot reach a collective agreement. These unionized organizations are fighting or legislation that is in the interest of their members and other workers. It will be evident from this study that such undesirable actions.com . unemployment insurance. organizations formed by groups of unions to represent the general concerns of unions and workers. Unions in India have also taken an active role in politics. and work distribution. Often just the threat of a work stoppage is enough to push the two sides to an agreement. in which a person does not have to be union member to be hired but mist join the union after becoming employed. and the union-shop agreement. Only after the cooling –off period ends can the employers or employees begin a legal work stoppage. in which union membership is a condition of employment in a workplace. If they do not. Worker participation can take many forms. It means involvement of workers in some way with making decisions in a business organization.THE IMPACT OF GLOBALIZATION ON INDUSTRIAL RELATIONS measures. Decision making may include even the most junior worker. and health and safety legislation. They have supported legislation setting workers’ compensation and minimum standards for working conditions. after which they are renegotiated. before a legal work stoppage can occur. including human rights. Workers can be organized in quality circles hat meet in small groups to find ways to better organize their work. giving everyone some say in how work in conducted. encouraging them to participate in the affairs of the company as stockholders. Impact t of Globalization www. It is mainly because of workers participation in management and business decisions. Lockouts are less common than strikes. workers may be given or invited to buy shares in the company. Collective agreements last for a set period of time.

In response. Owing to so many forces. more and more organizations are realizing that they need managers and workers with skills that conform to the international standards. several organizations have taken a number of steps to improve operational efficiency. The CEOs and senior recruitment consultants have to talk about why selecting and developing global managers. a concept that is multi dimensional. It includes the very fundamental issues like how organizations function in day-to-day dealing with customers. and industrial relations. Some companies are also now more aware of the economic and social benefits of being active in local communities by sponsoring events and encouraging employees to serve on civic committees. However. Another step that was taken in the wake of globalization or in the post-New economic policy 1991 era was the government’s decision to disinvest their stake in the equities of leading public sector undertakings. The present day high-tech information society has resulted in a shift in emphasis away form brawn to brain or www. as globalization evolves from being a mere corporate buzzword to basic economic reality. This includes the introduction of quality management system. corporate governance requires more internal discipline over external accountability. Businesses will continue to adjust their operations according the competing goals of earning profits and responding to public pressures for them to behave in ways that benefit society. Thus it has a wide scope and the present work attempts to highlight this impact as consequences of globalization and liberalization. Eventually many business houses have begun consolidating their businesses and large number of acquisitions and mergers have started taking place. The internal discipline implies that the quality of corporate governance must be of high order and that workers. Due to liberalization of economy. treatment.vmoukota. shareholders. With large mergers and the development of new free markets around the world. Hence organizations are keen to take care of expatriation and repatriation issues or meeting relocation costs to keep their employees motivated and to retain the best performers and keep building a global talent pool. Among the employment benefits that are prevalent are VRS. on the recruitment front. suppliers. government and the public. while looking at the consequences it is felt that technological changes provide unprecedented opportunities for employers to gain control over the workforce and workers. trade unions.com . primarily micro electronic technology. public pressure has increased for businesses to take on more social responsibility and operate according to higher levels of ethics. In this era of globalization. Firms in developed nations now promote-and are often required by law to observe-nondiscriminatory policies for the hiring. Another astonishing fact in this era of globalization is the interaction between technological changes. it is also necessary to study corporate governance. identification of NPAs and finding ways and means to transform organizations into strategic business units or profit centers. major corporations now wield economic and political power then the governments under which they operate.management relations are conceived to achieve industrial harmony.THE IMPACT OF GLOBALIZATION ON INDUSTRIAL RELATIONS The impact of globalization extends from human and social or ethical perspective to the strategic or technological perspective. ESOP and other fringe benefits. and pay of all employees.

The decisions are least unilateral and such progressive ideas like workers empowerment and workers participation in management have been adopted. Hence some unions initially came forward to impede the growth of privatization in general and restructuring and diversification in particular. and the best ways to evaluate employee performance and create incentives that motivate workers. productivity improvement. Eventually the trade unions become concerned about their job loss and potential adverse effects on their group dynamics and their rights. Accelerated growth. organizations that have entered into strategic alliances and initialed innovative practices have made huge differences to their enterprises. In India. how to promote efficient working conditions and techniques. world Bank and IMF have also advised such organizations to focus their attention on social and labor issues and align themselves to the effort being made by institutions like UNESCO and ILO. Industrial Organization Psychology To study industrial Relations. workforce reduction and like are a major cause of concern but at the same time the rise of informal sector employment and part time employment has offered some relief. It is yet to determine the negative effects of privatization on collective bargaining and trade dynamics and thus it becomes one of the objectives of this study. their workers as knowledge Workers. Such large scale redundancies like stopping indexation of wages.com .vmoukota. I-O psychology first become www. and job satisfaction. and accent on total quality have been great milestones. the confederation of Indian Industries (CII) has addressed itself to social and ethical issues and a few organizations have shown concern to these issues including those under study in this project. Social security systems in most industrialized countries have become vulnerable. how to boost employee morale. The right to strike which has been restricted or denied in public services is now made available to private enterprises. productivity. which as led to cutting off the jobs and recession in the employment scenario. in a global economy. Privatization proved a major thrust to promote global trends. Instead of conventional principles based on direction and control. But gradually they understood that in fact privatization is beneficial for the trade unions as they gain more rights like right to organize. a term that implies application of various psychological techniques to the workplace and other organizations. their products as Knowledge based products (owing to value additions)n and last but not least. right to collective bargaining. As a result these organizations.THE IMPACT OF GLOBALIZATION ON INDUSTRIAL RELATIONS from muscle to mind in the use of human energy. Modern organizations have resorted to consent and consensus. of h aving contributed to the knowledge Economy which the nation ins gradually heading towards. Globalization has necessitated certain structural adjustments (restructuring and diversifications). the researcher will frequently make use of the fundamental principles of Indus trial-organizational Psychology (I-O Psychology). However. Psychologists in this field advise businesses and organizations on a variety of subjects like the selection and training of workers. Globalization has also given competitive advantage to most organizations. Truly speaking.

It is hypothesized that globalization has greatly contributed to framing legal and IR policies. and outlining the union Management negation procedures.com . ethical technological and environmental issues. In some cases such studies have proven that total production on particular jobs could be increased by reducing the number of working hours or by increasing the number of rest period. during the day. Objectives of the study The present study. ? To determine the adverse or negative effects. and resolving the union management disputes whenever occurred. The study is intended to be a most optimistic work carried out with a trust and faith in Indian organizations that are now setting examples of being centers of excellence at global levels. or breaks.vmoukota. Industrial-organizational psycho logists have also studied the effects of fatigue on workers to determine the length of working time that yields the greatest productivity. this may act as a base for framing IR strategies. political. This study is designed with the following objectives: ? To analyze the impact of globalization as an economic force and the reforms implied therein ? To develop a conceptual framework in the form of a guideline or code of conduct. if any. when it become necessary to recruit and train the large number of new workers who were needed to meet the expanding demands of the war industry.THE IMPACT OF GLOBALIZATION ON INDUSTRIAL RELATIONS prominent during World War II (1939-1945). such as establishing a better line of communication between employees and management. of globalization and the related reforms. improvement of Union Management relations and settlement of industrial disputes. legal. political and technological scenario as has been witnessed in Indian industry in general and the selected organizations in particular. The present study is based on the assumption the globalization has far reaching impact not only on economy or business capital or trade relations between two or more organizations but also on social. ? To examine the organizational machinery and its working to find out whether it conforms to the latest industry standards and specifications laid down under TQM and ISO ? To appreciate and highlight attempts made by organizations for acquiring higher quality work and excellence in their industrial relations. while contemplating all the ongoing factors of globalization has embarked upon evaluating its impact on socio-economic. ? To study the impact of activities conducted by agencies like WTO and CII in the area of IR. www. IO psychologists may also suggest less direct requirements for general improvement of job performance. conceptualizing the long term industrial relations.

The chapter scheme is proposed to be as follows: Chapter on will highlight the climate and conditions of Indian industries in terms of globalization and its related section in the context of the selected organizations. Chapter Four will elaborate the technological and environmental dimensions of globalization. The population shall comprise the senior managers. The chapter will be also analyze these guidelines whether the y conform to the international standards and also meet the Indian requirements. Examples shall be cited of such organizations which have been benefited by global trends.THE IMPACT OF GLOBALIZATION ON INDUSTRIAL RELATIONS The study will therefore be a contribution to that critical debate which is ongoing among the management critics and other experts who are trying to establish globalization as a western dominated movement. The inferences to be drawn will be suitably supported by case studies and real life examples form selected organizations.vmoukota. the project aims to study and put on record the behavioral patterns of organizations that have felt deeply the impact of globalization and liberalization. academicians and bureaucrats who are either working in the selected organizations or have formerly worked or have deep insight about the working patterns of these organizations. The concept of globalization will be discussed in detail in this chapter.com . It will also concentrate on suggesting such strategic and organizational changes as www. questionnaires. The data shall be collected through personal interviews. quality management and promotion of business as SBU shall be taken up in this chapter Chapter Three will discuss the social-ethical impact of globalization to show how it has managed to divert the attention of the organization towards social responsibilities ethical behavior in negotiations. The chapter will also include elaborate section on WTO and the prevalent Acts and Laws and Labor Tribunals pertaining to Trade unions and industrial negotiations. Such issues like employment . Sampling and methodology Prior to designing an effective conceptual framework and certain guidelines. Efforts will be made to suggest such measures for the organization to equip them with the necessary high tech information so as to conform to the latest demands of the industry. Chapter two shall attempt to register globalization as a great economic force for the Indian Industries. middle managers. Chapter five will attempt a conceptual framework of the study undertaken it will be attempted to theorize the issues and findings in order to frame a set of guidelines or code of conduct for organizations to follow. union management relations and settlement of disputes. Chapter Six will summaries the findings and results and results obtained of discussion and analyses. trade union leaders. literature surveys and observation.

www. liberalization . It is assumed that this study shall open new avenues of global trends in the field of economy . questionnaires . industrial relation . Globalization inherently possess such ideals and beliefs .THE IMPACT OF GLOBALIZATION ON INDUSTRIAL RELATIONS to transform these organization to the model organization. need to talk about certain things like restrictions on global trade and fundamentalism in corporate governance . As a future strategy. Whatever business an organization is engaged in. the internet customer (the employee) is a major priority . the major question arises is : how are organization going to respond? As far as the economics aspect of globalization is concerned. there will be appendices carry literature survey. which can be utilized to the optimum extent to see that the customers is satisfied. tables and graphics etc. they need to talk about redefining the industrial relation with trade unions. have learnt a lesson from the Soviet Union as well as South Asian crises.vmoukota. all members nations of WTO or at least those who advocate globalization. Future Prospects While globalization brings people together . but not least. organizational Development – each factor aiming at improving the industrial relations and harmonizing the industrial environment. it has also provoked a relation a reaction from those who feel that their life style are being threatened . workers management relations and most important their participants in strategic decision making. In the given context . India organizations.com . Last .

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