This chapter covers:
12
•Forces that affect
availability of labor
•Reasons people
leave their home
countries
•Guest workers
Labor Forces
•The U.S. immigration
system
•Labor productivity
•Women’s labor
•Labor unions
•Labor’s voice in
management
International Business
by Ball, McCulloch, Frantz,
Geringer, and Minor
McGraw-Hill/Irwin
Copyright © 2006 The McGraw-Hill Companies, Inc. All rights reserved.
Chapter Objectives
 Recognize forces beyond management control that affect the
availability of labor
 Understand the reasons that cause people to leave their home
countries
 Discuss guest workers
 Understand the basics of the immigration system in the U.S.
 Discuss labor productivity
 Understand women’s labor, employment and social roles
 Discuss differences in labor unions among countries
 Understand how labor is getting a voice in management
12-2
Introduction
 Quality, quantity, and
composition of labor force of
great importance to an
employer
 Labor Quality
 Refers to the attitudes,
education, and skills of
available employees
 Labor Quantity
 Refers to the number of
available employees with
the skills required to
meet an employer’s
business needs
12-3
Labor Mobility
 Labor Mobility
 The movement of people
from country to country
or area to area to get jobs
 Immigration
 Refers to the process of
leaving one’s home
country to reside in
another country
 For people who are not
citizens of the U.S., the
U.S. can be a difficult
country to enter
12-4
 The Immigration and
Naturalization Service (INS)
in 2003 became
 The Bureau of U.S.
Citizenship & Immigration
Services (USCIS) as part of
the Department of
Homeland Security (DHS)
 USCIS has two conflicting
missions


Allow legal immigrants in
Keep illegal immigrants out
Immigration
The U.S. is a nation of immigrants
 Immigration is a federal matter in the U.S.






12-5
The first law limiting immigration passed in 1921
Congress amended the immigration laws many times
through the years
In 1965 Congress adopted a system based on family
reunification and employment skills
In 1986 Congress passed the Immigration Reform and
Control Act making it a crime to hire unauthorized
immigrants
Employment eligibility is verified by completion of an I-9
form
Nonimmigrant Visas
 Nonimmigrant Visas
 Issued to those coming to
the U.S. for temporary
visit
 Usually no more than
six years
 Most (96 percent
visitors to the U.S.)
come for temporary
visits
 Major visa categories
 The B visa is issued
for short-term stay
12-6
 The E visa is for noncitizens
coming to the U.S. to
carrying on trade between
the U.S. and a noncitizen’s
home country
 The F visa is for students
 The H visa is for workers
 The I visa is for members of
the media
 The J visa is for exchange
scholars
 The L visa is for
intracompany transferees
Immigrant Visas


For individuals who want to
remain permanently in the
U.S.
Individuals receiving
immigrant visas are
classified as permanent
residents


12-7
Often called a “green card”
Two main categories for the
issuance of immigrant visas
 Family reunification
 Employment-based
immigration
Refugees/Asylum Seekers
People fleeing persecution may request asylum
 The reasons people move include

Economic globalization
 Population growth in developing countries
 New technology that allows immigrants to maintain
contact with family
 Technological improvements in transportation
 For political reasons
 To escape adverse situations

12-8
Standard for Admission


For asylum, must establish a
well-founded fear of
persecution based on
 Race
 Religion
 Nationality
 Membership in a
particular group
United Nationals High
Commission for Refugees
(UNHCR) created by UN
 Assists refugees
12-9


Refugees are not welcome in
many countries
 Poor
 Uneducated
 Hard to find work
Refugees, however,
supported U.S. economic
growth
 Many U.S. business rely
on non-U.S. citizen
workers
 Many high-tech workers
come under H-1B visa
Brain Drain

Record numbers of immigrants are moving to
OECD countries in search of jobs
When skilled workers migrate from developing
countries they do so for professional opportunities
and economic reasons
 This “brain drain” has become a serious problem for
developing countries


Reverse “brain drain”

12-10
The growth of outsourcing and the movement of
highly educated, technologically skilled employees
and research scientiests to other countries
Guest Workers


People who go to a foreign
country legally to perform
certain types of jobs
Guest workers provide the
labor host countries need
 Guest workers are
desirable as long as the
economies are growing
 However, when
economies slow, fewer
workers are needed and
problems appear
12-11
Labor Force Productivity

Measures how many acceptable units are produced
by a worker during a given time and the cost per
unit
U.S. led other industrialized countries in rise in labor
productivity
 Up to a quarter of income growth per worker in the
U.S. can be attributed to better education
 Greater productivity results in greater investment in
Research & Development (R&D)

12-12
Considerations in Employment Policies

Social Status
 Culture important with
respect to labor force
 India operates rigid caste
system





12-13
Level established at birth
Cannot change during
lifetime
Impacts employment
Japan still maintains caste
system
Great Britain classifies
based on accents

Sexism
 Acceptability of women
as full participants in the
work force ranges from
 Relatively advanced in
the U.S. and Western
Europe to virtually
nonexistent in many
countries
 In Japan and the Middle
East women are
encountering major
problems in making or
retaining progress
Women’s Education


12-14
Studies show a direct
correlation between
women’s education and
 Birthrates
 Child survival
 Family health
 A nation’s overall
prosperity
Low levels of education are
present where girls are
forced into prostitution or
brutalized
Minorities
 Traditional Societies
 Tribal, nomadic states of people before they turn to
organized agriculture or industry
 Minorities
 Usually a relatively smaller number of people
 Identified by race, religion, or national origin who live


12-15
among a larger number of different people
Such minorities may be immediately available, bringing
financial and managerial skills to the employer
However, minorities are often unpopular with the
majority and discrimination is common
Employer-Employee Relationships
 Labor Market
 The pool of available potential employees with the
necessary skills within commuting distance from an
employer
 A company must study the labor market when considering
whether to invest in a country
 Sources include
 Foreign Labor Trends
 Handbook of Labor Statistics
 Yearbook of Labor Statistics
12-16
Labor Strikes

Questions to ask





12-17
Was the period of the
strike abnormal?
Were the strikes
peaceful?
Were the strikes industry
wide?
Were the strikes wildcat?
Do the unions and
workers abide by the
labor agreements?
Labor Unions
 European Labor Unions
 Identified with political
parties and socialist
ideology
 U.S. Labor Unions
 Unionism in the U.S. has
been more pragmatic
than political
 Also more concerned
with the immediate
needs of workers
12-18

Japanese unions are
enterprise-based rather than
industry wide
 As a result, unions tend
to identify strongly with
the interests of the
company
 However, Japanese
workers are reported to
be the least satisfied with
their jobs in the
developed world
Labor Legislation
 Collective Bargaining in the U.S.
 The process in which a union represents the
interests of everyone in a bargaining unit in
negotiations with management
 Labor Legislation in Europe
 Government’s role is more active
 Wages and working conditions are frequently
legislated
12-19
Labor Legislation
 Labor Legislation in Latin America
 Governments are very active in employer-
employee relationships
 Frequently because the unions are weak and
the union leaders are inexperienced or
uneducated
 Labor Legislation in Germany and France
 Labor negotiations are conducted on national or
at least regional levels
12-20
Labor Trends


12-21
Strikes or labor disputes
have fallen dramatically in
the last 10 years
Union membership has been
in steady decline
 Employers have made
efforts to keep union-free
 More women and
teenagers in workforce
 Unions have been
successful
 Industrial jobs are
declining
Multinational Labor Activities
Internationalization of companies creates
opportunities for them to escape the reach of unions
 To combat this danger unions have begun to






Collect and disseminate information about companies
Consult with unions in other countries
Coordinate with those unions’ policies and tactics
Encourage international companies’ code of conduct
Multinational unionism is developing
12-22
Multinational Labor Activities
 The U.S. union federation, the AFL-CIO
 Cooperates with labor organizations worldwide
 International Labor Organization (ILO)
 Purpose is to promote social justice and
internationally recognized human and labor
rights worldwide
 Trade Union Advisory Committee to the OECD
 An international trade union organization with
consultative status with the OECD and its various
committees
12-23
Worker Participation in Management
 Codetermination
 Participation by workers in a


company’s management
Began in Germany
Has spread to other
European countries and
Japan
 Referred to as worker
participation in the U.S.
 European Union requires
Works Councils
12-24
Female labor force participation rates by age
group, selected economies
12-25
Annual hours worked per person, selected developed
(industrialized) economies
12-26
Percentage change in real wages, selected
economies
Labor productivity, total economy, selected developed
(industrialized) economies
12-28
Top 10 States With Most Union Members
in 2000 (in thousands)

California
2,295

Pennsylvania
870

New York
1,958

New Jersey
762

Illinois
1,046

Texas
505

Michigan
938

Washington
471

Ohio
879

Wisconsin
446

Total
10,170
Source: U.S. Bureau of Labor
Statistics
12-29