Transcript Business challenges in Globalization context

Business challenges in Globalization context
 Chaotic competition,
 Radical change
 Opportunities
 Strategic alliance
 Complexity/ uncertainty
 Flexibility
 Customer focus
 Saliency of people management focus
Liberalisation Model, Stances of the State and Labour
Economic reform process initiated by Late Rajiv Gandhi LPG later strengthened in 1991
adopted LPG (liberalisation, Privatisation and Globalisation) r which resulted in
* Reduction of labour force
* Decentralization of production process.
* Sub-contracting of various operations to small business.
Reduction of Employment in the Public Sector
The state itself started the process of ‘shedding the load of surplus workers’ by adopting
various methods like freeze on fresh recruitment, by offering workers voluntary
retirement schemes (VRS). During the last decade, the public sector accounted for 60 per
cent of reduction in employment in the organised sector.
Demand for reduction of workers in the private sector, for leveraging ‘labour
flexibility’.
IR - paradigm shift
Recent trends in IR
 Forces of Globalization in 90s: There is an increasingly strategic role for industrial relations (IR) within the
enterprise.
Challenges for IR
 HRM presents a challenge to IR, because it can operate to undermine the role of trade unions at enterprise
level by emphasising the primacy of the relationship between managers and individual workers.
Changing nature of IR
IR in the global context, as influenced by the forces of globalization and liberalization, Privatisation and
Globalisation
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Rationalization of Operations
Core functions – sub-contracting /outsourcing of noncore / peripheral areas
Technology substitution for labour and Automation - Downsizing .
Strategic alliance and company merger.
Employment environment for workmen unstable.
Some recent trends in the Industrial Relations are quite disturbing e.g. fatal attacks by some employees on their senior officials in
Coimbetore, Noida & Trouble in Manesar,It appears that the HR fraternity as trustees of the Human Capital of their respective
Organisation are not taking adequate pro active measures to channelize the workforce's energy on effective engagement. Has
lost touch with the Human fabric inside their Organisations. Through this message it is advisable that colleagues to deliberate as
to the reasons of the quoted incidents as well as how to ensure that these do not reccur.
CBE Pricol ( Roy George), Noida ( Chowdry,CEO & MD of Graziano Transmission )Gorakhpur ( Labour oppression by UP govt)Gurgaon (RICO)
– all are signs of times: times where private companies, including in the prestigious automobile industry, are strongly condemned
by unions stating that that employers emboldened by the Government’s own moves to ‘reform’ labour laws, are openly flouting
labour laws, and workers who demand their rights are brutalised either by police or directly by goons hired by the companies – A
caution to management s in general for a cautious ,fair & human approach to tackle issues brewing up in their organisations
to avoid backfiring and disastrous IR scenario .
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Recent Trends in Industrial Relations
 The refusal of managements to recognise trade unions has been the trigger for
successive instances of industrial disputes. Two years ago, a workers' agitation in the
plant of Graziano Italiano in Greater Noida over the refusal to recognise a workers'
union ended with the company's managing director being killed.
 All these disputes highlight the legislative gaps in workers' freedom of association as
well as India's reluctance to ratify international labour conventions on the issue.
 Since there is neither a law for recognition of trade unions nor a procedure to verify
membership, it is not necessary for an employer to go by secret ballot to verify the
majority union.
 Industrial scenario vitiated by Lack of central values, Class struggle & unhealthy
compromises
 Management considers Trade Unions with external/political leader as nuisance or a
hurdle and prefer to promote internal/ plant level representative mechanism
 Trade union on the other hand considers management and managers as Exploiters.
 The trade unions are organs of political organizations and they follow the ideologies
of those organizations even at the cost of their own interest in the industry.
 The collective bargaining ends in either aggressive bargaining or futile waste of time
Land Mark Judgments of the decade between 1997 & 2007
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2007 - Workman has to prove 240 days working in a year to claim relief under ID act 1947
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2005 - Dismissal justified for sleeping during duty hours.
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2004 - A teacher is not employee, hence not entitled to gratuity.
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2003 - Back wages on reinstatement is not automatic.
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2002 - Termination of workman engaged for specific period will not be retrenchment.
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2001 - Abandonment of employment by an employee without holding of enquiry will not be permissible.
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2000 - Contract labour will not be automatically absorbed on its prohibition by Government.
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1999 - Unless the service rules so provide a workman cannot be represented by an advocate in an enquiry.
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1998 - Non-furnishing of enquiry report to employee on dismissal will not vitiate the same.
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1997 - No wages to employees when they resort to illegal strike. Subscribe "Business Manager" Today and get
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Supreme court’s observations on
contract labor engagement:
Globalization cannot be at the human cost of exploitation of workers”The
Supreme Court on Friday deprecated the unfortunate state of affairs
prevailing in the field of labour relations in the country wherein employers
often resorted to contract employment and thereby curtailed the statutory
rights of workers.
A Bench of Justices Markandey Katju and C.K. Prasad in its judgment said:
“in order to avoid their liability under various labour statutes, employers are
very often resorting to subterfuge by trying to show that their employees
are, in fact, the employees of a contractor. It is high time that this subterfuge
comes to an end.”
Evil effects of outside leadership and multiplicity of union
 Outside leaders have hijacked the trade union movement right from the beginning.
 absence of strong leaders from the ranks of workers, inability to represent the woes
of workers in a forceful manner,
 the presence of towering political personalities willing to serve the cause of
workers,
 the illiteracy of workers, by and large, contributed to this peculiar phenomenon.
 inability to remain a responsible and strong union capable of delivering win - win
 weakening of the overall goals for which unions existed
 coming in the way of nurturing strong leaders from the ranks of workers
 inability to understand the problems of workers
 inhibiting the development of one union in one industry
 personal agendas of leaders gaining priority over workers & overall interests
 Multiple unions: This comes in the way of a healthy and democratic growth of
labour /union movement in the industry . The presence of splinter unions is always
to detrimental to industrial peace.
Fading of Trade union activism, a reality
Of late, trade unions have been pushed to the wall due to factors such as:
 global competition,
 restructuring exercises carried out by companies from time to time just to
survive,
 rising costs of manufacturing,
 lack of support from the general public and the government;
 Privatisation, failure to deliver results in case of a prolonged battle etc.
 Trade Unions And Employers’ Associations Current Trends In Trade Unionism
 Reasons for the Paradigm shift
 Militancy does not pay
 Political base shrinking
 Public sympathy disappearing
 Jobs vanishing at an alarming rate
 Membership figures sinking
Priorities
 Develop leaders from the ranks of workers,
 Design your own mechanism ( in the absence of legislation for union recognition)for according
recognition as sole bargaining agent / Representative Union on the basis of strong membership
figures, in pursuit of promoting “one union one industry policy”
 Plant level Unions - Employer to train and develop members of union in mutual interest
 Obtain data on wages and conditions of work in industries attached to them and evolve bench
mark.
 Take up projects for social and family welfare for workmen
 Focus on safety and health at work place and working environment.
 Initiate steps to improve public image and improve public relations.
 Educate the public regarding the character, scope, importance and needs of industry ,
 Keep off external forces against surreptitious skyjacking ,by constant vigilance and intelligence.
A relook into IR objectives, a compulsion
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To bring better understanding and cooperation between employers and workers.
To establish a proper channel of communication between workers and management.
To ensure constructive contribution of trade union operating in the units.
To avoid industrial conflicts and to maintain harmonious relations.
To safeguard the interest of workers and the management.
To work in the direction of establishing and maintaining industrial democracy.
To ensure workers’ involvement in company’s growth activities
To increase the morale and discipline of workers.
To ensure better working conditions, living conditions and reasonable wages.
To develop employees to adapt themselves for technological, social and economic
changes.
 To make positive contributions for the economic development of the country.
 To reach out to family members of the society to win their emotional support.