GLOBALISATION
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can be defined as a process of increasing global connectivity, integration
and interdependence in the economic, social, technological, cultural,
political and institutional spheres.
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It can be found to represent, for example, the process that reduces barriers
between countries and involve greater integration in world markets, thus,
increasing the pressure for assimilation towards international standards
(Macdonald, 1997, Frenkel and Peetz, 1998, Ali, 2005).
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Economic aspects of globalisation are the most visible and important ones.
These include, but are not limited to: - economic competition amongst
nations, rapidly expanding international trade and financial flows and
foreign direct investments (FDIs) by multinational corporations (MNCs),
disseminating advanced management practices and newer forms of work
organisation and in some cases sharing of internationally recognised labour
standards.
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globalisation enhances competitiveness, both at a company level and at a
national level, which leads to company managements and governments to
adopt strategies designed to increase labour effectiveness in terms of
productivity, quality and or innovation.
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In summary, globalisation involves economies that are opening up to
international competition and that do not discriminate against international
capital. It therefore is accompanies by liberalisation of markets and the
privatisation of productive assets.
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At the same time, this phenomenon has obviously resulted in high
unemployment, increasing casual employment and weakening
labour
movements according to Ali (2005)
DIMENSIONS OF GLOBALISATION AND THEIR IMPACTS TO THE WORLD
1.
Economic Globalisation - is the convergence of prices, products, wages,
interest rates and profits towards the standard of developed countries. The
extent to which an economy will globalise depends on the importance of
certain processes at play, such as labour migration, international trade,
movement of capital and integration of financial markets.
2.
Political Globalisation - this relates to the increasing number and power of
international organisations which influence or govern the relationships
among nations and which safeguards the rights of countries arising from
social and economic globalisation.
3.
Information Globalisation - refers to the rapid development of ICT
worldwide, such as global telecommunications infrastructure allowing for
greater cross-boarder data flow.
4.
Cultural Globalisation - this refers to the greater international culture
exchange and growth of cross cultural contacts between nations and people.
It also involves the expansion of multiculturalism and improved individual
access to cultural diversity, as well as the growth of international travel and
tourism, while at the same time developing and establishing a set of
universal values.
ECONOMIC IMPACTS OF GLOBALISATION
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The most economic effects of economic globalisation include the following:

Increasing integration of global economic activities (this leads to
intensifying competition among producers and a greater and more varied
offer of diverse sources and destinations of FDI. Capital movements are very
high in an open international environment that labour force, MNCs have
played a key role in this regard, through relocating their business activities
while also subcontracting and substituting technology for human labour.
Many companies have been seen to be rationalising their operations in order
to strengthen their competitiveness, by reducing both wage and non-wage
labour costs. Evidence has proved that MNCs generally pay higher wages and
employment benefits than local companies, which significantly affects the
industrial relations systems of the host country. In addition, their
relationships with trade unions are influenced by both the management and
workforce relations in the Company’s country of origin and the situation in
host country, which makes it effectively difficult to remove the rigidities of
their policies. In most instances, they do not recognise trade unions in
bargaining on terms and conditions of employment, except for when they
are complying with the labour relations regulations of that particular host
country. (Macdonald, 1997, Ali, 2005)
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Rising Competitiveness – increased competition in global markets creates
demand for more specialised and better quality products, leading to a
higher volatility in product markets and shorter product life cycles, which
ultimately requires companies to respond quicker to changes in market
demands (HR implications- the need to manage people in a quality way, to
build on audible readiness, to develop globats, the need for HR to
transcend the stewardship of taking care of conditions of employment to
look at factors that bring shareholder value and organisational
competitiveness. Production implications-the need to introduce new
technologies and increase the scope of flexibility in the production
processes and resolve any information and coordination difficulties which
previously limited the production capacities of enterprises in different
locations around the world. The main focus in on individualising and
decollectivising work through new work organisation in the form of niches,
SBUs, while on the other end, a great deal of effort is placed on reducing
the input cost to the production process by replacing people with
technologies and then emphasising on building higher value capacities and
skills on workers to perform a variety of jobs (multiskilling). This has
blurred the functional and hierarchical distinctions between different types
of jobs and between labour and management in general, Organisation of
work – efforts to improve products through innovation, quality, availability
and pricing have led companies to set up cross-functional development
TEAMS, thus transcending the traditional boundaries between engineering,
manufacturing, and marketing. All these developments have been
accompanied by standardised, segmented, stable production process which
had facilitated collective industrial relations (Macdonalds, 1997) and a
continual shift of employment from manufacturing to service oriented
industries, i.e., jobs shift from traditional manual occupations to various
forms of white collar occupations, though these have been different
amongst countries, largely because of differences in stages of development.
The developments in technologies, for example, are affected by the
willingness of countries with technologies to provide other countries with
them (situations of sanctions), and also the extent to which economically
developed countries are seeking access to the emerging markets to sell
their products. On the other hand, developing countries face many barriers
to entry into the developed world’s markets, hense affecting their rate of
growth; hence the impact and pace of growth vary from one country to
another.
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Relocation of economic activities
Structural changes in the economy
Rapid advancements and innovation.
LABOUR MARKETS EFFECTS
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The most influential effects here include: 
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Labour market flexibility
Increasing labour migration
Rising atypical non-standard forms of employment
Changes in the content and working conditions
Skills mismatch, multi-skilling and the need for lifelong learning
Such factors vary from one country to another, but however are very fundamental
in determining a country’s competitive advantage labour market developments.
Due to growing competitiveness, many countries have become obliged to relax
their employment protection mechanisms in order to increase their labour market
flexibility (see s12-duration, particulars and termination of employment
contracts), which has also raised a need to the need to create a balance between
labour market flexibility and social protection (see Parts 11-Fundamental Rights of
employees, 111-unfair labour practices as examples). As a result, the need for cost
efficiency and value addition has necessitated reforms in the labour market thus
bringing flexibility in order for companies to be able to deliver goods at the right
time and be strategically positioned closer to their customers.
Flexibility defined: - the capacity to which an organisation can adapt to global
pressures. We can distinguish between two types of flexibility, that is, numerical
flexibility, which is when employers use non-standard contracts of employment to
match labour supply to product service demand and to parcel out work in a way
that avoids exposure to the risk of overstaffing. Employers achieve numerical
flexibility when employees work part time, fixed term and or short term contracts,
zero hours, annual hours or work from home, also including the use of short term
casualised labour, agency workers including contracting in and contracting out. We
can also talk about functional flexibility, which is the requirement or expectation
that workers will perform tasks beyond those strictly specified in their main role or
function. This might entail cross working (performing other people’s jobs at the
workplace), expanding the number of tasks performed or working in Teams. We
can also talk of geographical flexibility which results in managing across cultures as
another type of flexibility. Organisational flexibility is yet another strategic form
of flexibility, now this is a bigger form and beyond the deployment of flexible
labour. It relates to workplace change more generally (e.g Business process
reengineering, continuous process improvement, restructuring, mergers and
acquisitions, takeovers etc) as well as introduction of new forms of work
organisation, job design and redesign etc.
Complexities in flexibility in organisations have come in the form of new forms of
contracts, e.g., part time work, fixed term contracts, zero hour contracts, the
increased participation of women in the labour market, outsourcing of labour,
actualisation and subcontracting, all of which have reshaped the issue of security
of employment, from job security to employability security. However, in most
African societies, or the developing world in general, these have had a tendency of
creating permanent unemployment hence underemployment. Pillay (2006) argues
that outsourcing and subcontracting have been seen by COSATU as backdoor
attempts to introduce labour market flexibility in the country- in other words,
lowering employment standards. This is in contrast with the developed world,
which sees a shortage in labour and skills threatening their competitiveness,
productivity performance and sustainability of their economic growth, hence
resulting in them steering labour migration to cover the void from the developing
world in the form of temporary employment. This introduces flexibility into the
labour market while increasing competition between foreign and domestic labour
with varying implications for the countries sending and receiving workers. (They
put restrictions of migrant labour into their markets in order to limit competition
for work between domestic and foreign workers.
The other issue we can talk about is the issue of reorganisation of work, which
result in: -
Greater emphasis on team working
flattening of management hierarchies and the transfer of greater
operational responsibility and authority to lower level managers, supervisors and
work teams. All these are channelled at increasing workers’ commitment to the
organisation and its goals, as well as in establishing closer relationships between
managers and workers based on consultation and cooperation (Macdonald, 1997).
In addition to that, there is an argument that, while globalisation and rapid
changes in economies demand that workers become proactive, adaptable,
multiskilled, responsible and competent, these demands put additional pressure on
workers, thus exacerbating their difficulties at a time when working conditions are
deteriorating and wages are compressed. The results of this change will be on an
unbearable price, with ill health associated with a decrease in quality of life and
unfair costs for individuals and society.
However, to become aware of the benefits arising from global integration,
countries will need effective education and training systems in order to supply the
higher skills levels, which underpin strong and flexible labour markets, economic
growth and high unemployment, address inequalities and ensure social cohesion
(HM Treasury, 2005). In countries where competition is based on quality and
innovation, governments emphasize the need for adequate skills training to
improve workers’ competencies, esp. for those countries where shortages of
qualified labour exist, hence we have LIFELONG LEARNING-which is based on
continuous learning, as well as updating and upgrading of skills as a viable
alternative to lifelong employment (Senge-learning organisations, Blanchardtoday’s organisations share a commitment to constant improvement.......)
EFFECTS OF GLOBALISATION ON INDUSTRIAL RELATIONS
In any event direct labour costs are not a big part of the price of
many products and low wages alone are rarely decisive for most producers
(although they are important in particular industries, for examples for
garment producers and electronics assembly.) The major factor in the loss
of manufacturing jobs is technological change. Domestic U.S. manufacturing
output today is five times what it was in 1950 even as fewer workers are
needed by the manufacturing sector. This is overwhelmingly the result of
labour displacing technology, not of runaway shops. The lack of unionization
in the fast growing high tech industries weakens all workers. The
importance of such growth has
Robert Blackburn in his new book, The Making of New World Slavery,
informs us that by 1770 profits derived from slavery furnished a third of British
capital formation. In what might be called a new international division of labour,
slaves produced rice, coffee, sugar and other products central to the living
standard and personal fortunes of many Europeans. What is interesting is not how
much globalization changes things but the continuities in capitalist mentality and
practices. As Eric Foner has written: "Today's Chinatown sweatshops and Third
World child labour factories are the functional equivalent of colonial slavery in
that the demands of the consumer and the profit drive of the entrepreneur
overwhelm the rights of those whose labour actually produces the saleable
commodity."9 Working people have always resisted such demands. At the end of
the 20th century resistance will be stronger to the extent to which we do not allow
the scarecrow of "globalization" to disempower us. The system is the same, its
logic is the same, and the need for workers of the world to unite has never been
greater. It is time for greater clarity in our critique of the basic workings of what
are called "free markets" but are in reality class power. We need to counterpoise
the need to control capital and to have the economy serve human needs rather
than accept the continuous sacrifice of working people to such ideological
constructions as competitiveness, free markets, and the alleged requirements of
globalization.
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THE HUMAN RESOURCES MANAGEMENT AGENDA
DEFINITION OF GLOBALISATION
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is a driving force in global economic development today
concerns all actors in the economy, ranging from individuals and households
to governments
globalisation has greatly affected social partners, as traditional labour
relations would have to deal with entirely new and very dynamic situations, which
include, but are not limited to; Migration, relocation, changes in human capital and technology. Also
included are changes in labour force composition, where there is an increase in
white collar jobs from blue collar jobs, particularly in the developed world,
coupled by an increase in self employment and the growth of the informal sector
of the economy in developing countries. All these have put a significant pressure
on trade unions to maintain and expand their membership levels and coverage
rates.
if industrial relations systems do not adjust to globalisation, the danger
arises that companies will relocate their production to countries with fewer
restrictions on business activities, such as countries with less regulated labour
markets and lower labour costs.
Characteristics of globalisation
internationalisation of markets, increasing competition, free movement of
capital and labour, information globalisation through rapid development of
information and communication technologies (ict), the rising importance of
markets- all influence working lives of employees and represent serious challenges
to the national industrial relations systems.
GLOBALISATION
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Internationalisation of
markets
Increase
in
competition
Free movement of
capital and labour
across borders due to
less
stringent
regulations.
As
a
result, markets are
internationalising,
competition
is
increasing,
global
markets
are
integrating and ICT
promote networking.
Informational
globalisation through
rapid development of
ICT
IMPACTS
OF
GOBALISATION
 Increasing
integration of
global
economic
activities
 Rising
competitiven
ess
 Relocation of
economic
activities
 Structural
changes
in
the economy
 Rapid
technological
advancement
s
and
innovation
 Knowledge
society,
networking,
social capital
 Labour
market
flexibilisation
 Increasing
labour
migration
 Rise
of
atypical and
non standard
employment
forms
INDUSTRIAL
RELATIONS
SYSTEM
 ACTORS
-Trade
Unions,
Employers
Organisations,
Government
 ACTIONS/PROCESSES
Collective Bargaining,
Workers Participation,
Industrial
Actions,
Conflict Resolution
 CONTEXT
-Political,
Economic,
Legal, Socio-Cultural,
Technological
Environments
 OUTCOMES
-Scope of regulation of
employment,
i.e.,
wages, working time,
working conditions etc
 IMPACTS
-Productivity, job and
employment security,
industrial peace and
democracy


Changes
in
working
conditions
and
work
content
Job-skills
mismatches,
multi-skilling,
need
for
lifelong
learning