Impact of Globalisation on Ir

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IMPACT OF GLOBALIZATION ON INDUSTRIAL RELATIONS

The globalization i.e. the changes in the world economy have substantial effects on the industrial relations thereby providing the opportunity to reiterate the significance of the  area in understanding  the effect of these changes  on the people, organizations and the nature of work. The traditional methods of IR are disturbed in several ways through the increasing international economic interdependence. Initially the IR arrangements are confined to the situations created by the national markets but the globalization has expanded the boundaries of the market place. The amount of information flows with the help of the latest technology is constructing the interconnected enterprise networks around the world, thereby doing away with the current IR arrangements. The primary drivers of change are the MNC’s. They are associations that take part in FDI and own or control profitable resources in more than one nation. The MNC’s, as producers of the universal goods and services have an influence extending beyond the urban places in the countries in which they are located. The individualism is growing in the organizations as many local enterprises in addition to the MNC’s are using the information technology to focus on the demands of the international and domestic markets. The globalization has also clearly shown the difference between the “capital” and the “labour” in all countries i.e. capital is more mobile in an open international environment while labour means it is relatively immobile. This places the “labour” at a comparative disadvantage because the “capital” can employ the “labour” in various other countries at lower cost and on basis of the continuous employment of workers in the countries. The globalization has an opposite effect on IR. It is increasing the speed of the interdependence between the countries on the basis of inter- and the intra-regional and thereby is encouraging the similar approaches by organizations in various markets. This might lead to the convergence in industrial relations methods among all the countries.

Globalization has been defined as “a process of rapid integration between countries, driven by the liberalization of international trade and by freer capital flows. It also has raised doubts on the job security in various countries as the workers were replaced by the others in order stay abreast of the competition. The impact of globalisation on industrial relations is to be understood to shape the labour markets and also the economic and social outcomes.

The ability of the trade unions to negotiate with the MNC’s; at industry and the national level have become gradually limited. Many unions at the national level have been dedicating their resources for recruitment, organizing, giving additional benefits to the members and joining the NGO’s for particular campaigns. The unions at regional and the international levels have introduced the information networks to coordinate the bargaining. In industries like clothing and textiles the unions were able to achieve the consensus with employers on the code of conduct and social labelling which mainly aimed at making the employers adapt to the acceptable labour practices.