impact of globalization & it on ir

7/27/2019 Impact of Globalization & IT on IR

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Impact of Globalization & IT

on IR


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It can be called as economic integration

across the globe in term of free movement

of capital, technology ,products & people.

The impact of globalization extends from

human and social or ethical perspective to

the strategic or technological perspective


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Due to liberalization of economy, severalorganizations have taken a number of steps toimprove operational efficiency.

The wake of globalization or in the post-Neweconomic policy 1991 era was the governmentsdecision to disinvest their stake in the equities ofleading public sector undertakings.

Eventually many business houses have begunconsolidating their businesses and large numberof acquisitions and mergers have started takingplace.


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Globalization was possible

Globe has come near due to various

means of communication.

Increasing technology & managerial

abilities to cater the global market.

Global attitude has developed & nothing

is overseas anymore.


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Impact

1. On collective bargaining:

CB is used to resolve various problems related tolabour & personnel policies.

now mgmt is trying to search new ways to bypass theCB process.

Labour management cooperation to introduce the newtechnology & other changes to overcome the variouscrises.

It can be carried by consultation of workers.


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2. Participative management:

- Includes satisfying social & psychological needof the employees.

- Helps in increasing sense of belonging ness &involvement in decision making.

- Can help the organisation to get maximumutilization of employees.

- Provides the organisation a competitiveadvantage in growing competition.

- Increase in labour participation in management.


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3. Quality circles,TQM :

- Quality improvement ,up gradation &

maintenance are main requirement of new

economic policy.

- In order to match the international

standards need for quality improvement .


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3. Employment -

Firms in developed nations now promote-and are oftenrequired by law to observe-nondiscriminatory policies

for the hiring, treatment, and pay of all.Among the employment benefits that are prevalent are

VRS, ESOP and other fringe benefits.

On the recruitment front, as globalization evolves frombeing a mere corporate buzzword to basic economic

reality, more and more organizations are realizing thatthey need managers and workers with skills thatconform to the international standards


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The CEOs and senior recruitment consultants

have to talk about why selecting and developing

global managers & employees. 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.


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4. Developed corporate social responsibity:

- There is increase for business to take

more social responsibility & follow all

ethics in all the various function in the

organisation.


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5. Focus on Corporate Governance:

- Corporate governance is the set of processes,customs, policies, laws, and institutions affecting the waya corporation (or company) is directed, administered orcontrolled.

- An important theme of corporate governance is thenature and extent ofaccountability of particularindividuals in the organization, and mechanisms that tryto reduce or eliminate the principal-agent problem.

- It includes various fundamental issues like howorganisation function while dealing with customers, tradeunions, suppilers,govt, public etc.

- Quality of corporate governance should be high tomaintain industrial peace.
http://en.wikipedia.org/wiki/Accountabilityhttp://en.wikipedia.org/wiki/Principal-agent_problemhttp://en.wikipedia.org/wiki/Principal-agent_problemhttp://en.wikipedia.org/wiki/Principal-agent_problemhttp://en.wikipedia.org/wiki/Principal-agent_problemhttp://en.wikipedia.org/wiki/Accountability


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6. Increased standard of employees:

- Due to globalization, need was to have

competitive advantage to sustain in

market, which needed quality products,

ethical environment & processes, increase

in participation of employees,

empowerment of employees helped inincreasing the standard of employees.


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7. Technology:

- In this era of globalization is the interaction betweentechnological changes, micro electronic technology,&industrial relations.

- Technological changes provide unprecedentedopportunities for employers to gain control over theworkforce and workers.

- The present day high-tech information society hasresulted in a shift in emphasis away from muscle to mindin the use of human energy


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World Bank and IMF have also advised

such global organizations to focus their

attention on social and labor issues and

align themselves to the effort being madeby institutions like UNESCO and ILO.


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Other impact

Globalization has necessitated certain structural

adjustments (restructuring and

diversifications), which as led to cutting off the

jobs and recession in the employment scenario. Social security systems in most industrialized

countries have become weak.

Such large scale unnecessary things like

stopping indexation of wages, workforce

reduction and like are a major cause of concern


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the trade unions become concerned about

their job loss and potential adverse effects

on their group dynamics and their rights.

Globalization has suffered labour forces

directly or indirectly.

Led to job losses in advance economy.

Affected low skill workers more than the

high skill workers.


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Some unions initially came forward to

impede the growth of privatization in

general and restructuring and

diversification in particular.

But gradually they understood that in fact

privatization is beneficial for the trade

unions as they gain more rights.


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Globalization affect the labour & Labour

institutions in following ways:

Developed Quality management system.

Changes in the nature of employment- contract basesjob.

Change in job structure- flat structure.

Functional flexibility.

Team work started emerging.

Importance of specific skills generated.

Performance rate pay.

More emphasis on customer service, care for qualityproduct.

Changes in the composition of the workforce- highershare of women employees.

Global recruitment process.( high qualification & skills)

Empowerment


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Impact of technology.

It is an instrument of development.

It has affected various aspects social & economiclife directly or indirectly.

Technology change can be change in tools utilizedfor the production.

Certain changes which affect jobs & influence theskills in the industrial system, can be called astechnological changes.

They are: Scientific management of time & motion studies.

Change in location of plant.

Automation & Rationalization etc.


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Automation & Rationalization which are different

forms of technology introduced in Indian industry

system in 1960.

Rationalization implies a basic change instructure & control of industrial activity.

when applied brings planned

production,modernisation of production process

& sales,technology,centralised regulation of

finance, & optimum utilization of manpower.


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Automation is the highest form of mechanization.

Lowest level operation involves hand work,

operations are controlled by humans.

Highest level operation, machines provides thedata,form its own operations, control its process

& govern the production.

Thus, when a country wants to develop & want toachieve success at National & international level

technology becomes must.


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Eg: Introduction of computers.

Has a great impact on Labour

management relations in India.

Functioning of computers made the

computers important in industry.


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Response of Employees to change in

technology.

Initially it was mixed with suspicion & fear.

Apprehensive about their security of their

job,future careers.

Technology change the concept of work.

Relieved the employees from repetitive job

& made the work easier & safe.


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Attitude of employees

Prevent the introduction of automation &rationalization.

Slow down the introduction of change.

Agree to cooperate on change plan on certain

conditions. Expedite( speed up) the change.

The responses are in 3 stages ( By summer Slichter)

1. Obstruction2. Competition

3. Control.


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Impact of technology

Impact depends on

- Nature of change

- Rate & speed of change- Method employed by the management.


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Impacts are:

1. Installation of large machineries creates aserious problem of unemployment.

2. Affect the work environment & alters therelationship between management &

employees.3. Change affect the labour in two ways:

a. Economic: occupational adjustment, retrainingproblems,allocaton of gains etc.

b. Social: Psychological factors like resistance tochange, jab satisfaction, workers & unionreaction, attitudes, utilization of leisures.


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4. Resistance on the part of workers forchange. It took various forms likeaggression, leading to

strike,absentism,resignations etc.But all changes are not resisted.

5. Technology replaced man by machine.

6.Unwillingness of management to discuss& implement change- lead to industrialconflict.


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Other impact are:

Changes in job content, creating new jobs

& replacing old ones.

Fitting the jobs in to the existing incentive

scheme or piece rate structure.

New jobs created leading to dissolution of

unskilled jobs.


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While implementing change its not only

cost benefit analysis, but effect on IR

should also taken into account.

IR & Personnel manager has to be

carefully evolve in strategy formulation,

which is acceptable to workers & same

time favoring the enterprise.

impact of globalization & it on ir

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