Introduction
Every business organization has some central region where it carries out most or all of its activities. The location of the places is influenced by various factors that relate to the operations of the organization. Environmental conditions prevailing in some region have significant impact on the location of business capitals in the region.
The topography of some landscape and the climatic condition of a given region may influence the location of an organization’s capital in the region. Similarly, the social, economic, and political factors in some region or country will influence the location of the capital in the regions. The availability of resources and cheap labor in some region will attract business organization to establish an investment in the area.
Now, factors that influence the location of the headquarters of an organization are not static but exhibit a dynamic nature. The changes that are witnessed in the root factors may force an organization that had been established in some region to close down its operations in the region and relocate itself elsewhere.
The social changes that are seen in some region may lead to the relocation of the capital of a given organization. High political temperatures that have rocked a region may force an organization to relocate its operations elsewhere. Such movements of capital in response to the changing market forces have been seen in different organization throughout the last century.
Business strategies
The move of the capital of an organization to a different location has mixed effects on the different stakeholders of the organization especially the employees. The workers that served the organization in the original location may suffer unemployment and inability to support their families due to such moves. It also has different effects on the operations of the organization.
In Capital Moves: RCA’s seventy-year quest for cheap labor, Jefferson R. Cowie examines the moves that have been seen in the operations at RCA Corporation, an organization that dealt in electronics like radio and television in much of the last century. The material focuses on the organizations moves from 1930s to1990s (Cowie, 1). Cowie examines how the organization shifted its capital several times in such of cheap labor and how these moves affected the workers of the organization as well as the operations of the organization.
The book does not only focus on the movement of the geographical location of the organization’s sites but also on the changes that occurred in the cultural and gender composition of the employees owing to the social dynamics that are witnessed in the market. RCA Corporation moved its operations to three different locations from 1940 to the late 1960s.
The organization moved its location across different cultures during this period. Cowie argues that the social changes that occurred at the local level were the fundamental factors behind the relocation of the organization (Cowie, 2). He points out that the business organizations in the current market place are attracted to invest in the areas that have cheap labor.
The organizations spot the regions in which the rate of unemployment is still high and the potential workers are desperate for jobs. The organization establishes itself here for as long as the laborers remain submissive to the provisions by the management of the organization. Soon, the employees in the organization become more sensitive to the roles that they play in the organization and the need to be recognized during the decision-making processes in the organization.
The employees then form some labor union that helps advocate for their rights. They are no longer desperate for the employment opportunity and are ready to lose their jobs. In some instances, the officials of the labor union may fail to advocate for the rights of the employees and cooperate with the management. Regardless of the position of the union representatives, a disagreement between the workers and the management of the organizations often lead to strikes that can cause massive losses to an organization.
The organization then considers that the workers are no longer useful to the organization. The management starts looking for a different region that would still provide cheap labor and relocates their. This approach was used by RCA in relocating its sites and transforming its employment structure in the mid 20th century. RCA also took to the gender identity in setting the wage standards.
The workforce at the organization had been dominated by the females who are generally paid less than their male counterparts are. The organization opted to introduce males to such female jobs but retain the wages that were offered to the female employees. The males were also subjected to very light jobs that were not equivalent to their potential. The organization also used another approach in dealing with increasing demand of its products.
The increasing demand of television products in the 1960s called for increased production. In a response to this, the management of the organization imposed a lot of pressure on the laborers. The organization had offered employment to several people during the 1950s and 1960s and most of these [female] employees felt they would not be employed anywhere if they lost their jobs (Cowie, 69).
This is what added strength to the moves by the management to subject them to poor working conditions. The employees were subjected to very poor working conditions. They complained of heavy workload with no increase in the wages. The union had also distanced itself from the workers and could not forward their plea (Cowie, 68). In fact, many of the employees considered that revising these working conditions would work much better than an increase in the wages.
Impacts of RCA’s specific measures
One of the main impacts of the measures that were taken by the management of RCA over the years was a series of three strikes by the workers that shook the operations of the organization to some extent. The first in the series was the wildcat strike that was characterized by the workers’ walkout and boycott of duties in 1964.
It was caused by the long delay that was witnessed in the negotiation between the labor union’s representatives and the International Brotherhood of Electrical Workers in Florida. The negotiation was concerned with renewal of contracts and the improvement on the working conditions as well as other benefits to the workers. The workers were seen to have differences with the management of the organization and the workers union that was instituted to advocate for the needs of the employees.
The workers complained that the management exercised a lot of control over their lives and demanded freedom (Cowie, 68). The management and the union finally succeeded in restoring the situation and a new contact was signed that had benefits to the workers. The other strike by the workers came two years (in 1966) later following the violations of the requirements of the contract that had been signed.
The organization opted to cut down expenses by harmonizing the wages to the level of the female wages. The male employees were subjected to female jobs or light assembly jobs with the wages reduced to the low levels. These were contrary to the contracts that had been signed in 1964 (Cowie, 70). This strike was also concluded after few days and the employees returned to work.
The third strike also followed, in 1967, due to an increasing level of frustration that the employees got from the company. The strike was witnessed when the organization finally opted to move its operations from Bloomington to Mexico. Again, elements of poor management and distrust were evident here (Cowie, 71).
These strikes led to loss of employment as well as high costs of reestablishment by the organization. The employees at the times of the strikes considered such moves to be caused by the violations of their rights as workers. They complained of ‘contract violation, job classification mixing, and speed ups’ by the management (Cowie, 71). However, it is interesting that the management of the company considered these strikes differently.
The management felt that the workers were spoilt. They could not appreciate the availability of jobs in the region. As Cowie had observed earlier, this was a major reason for moving much of the operations of the company out of Bloomington.
Conclusion
The previous as well as the current market situations do not allow for the management approaches that were applied by RCA in the 1930s to the late1980s. In fact, even during this earlier time, the strategies did not work quite well and the organization had to meet some protests from the employees.
The current labor market is competitive and an organization has to offer remuneration package that is attractive in order to obtain and retain the skilled and potential workers. Cheap labor is often associated with lack of skills and low labor potential. Besides, the working conditions of the employees should be considered in order to ensure maximum productivity.
The increasing demands of the products of an organization should not be reflected onto the workload on the existing employees. Rather, the organization should consider adjusting its workforce to match the demands. Similarly, the union that is formed to represent the interest of the workers to the management should remain objective and focused on defending the workers. The union officials should withstand the influence of the management of the organization.
Works Cited
Cowie, Jefferson R. Capital moves: RCA’s seventy-year quest for cheap labor. New York. New Press. 2001.