Background of white goods and hospitality industries
On a global scale, white goods industry is a major domestic appliance industry that manufactures microwaves, large cooking appliances, dishwashers, home laundry and refrigeration appliances among others items. It is imperative to note that globally, white goods industries makes tremendous sales from their products that range from industrial or commercial products, garden appliances to small consumer appliances.
Research studies carried out in 2003 pointed out that the value of sale on domestic appliances from these industries was approximately US$163,000 million (Bray, Waring & Cooper, 2011). It is also worth to note that the white goods sector in Australia alone generated a sales value from its large kitchen appliances of approximately $2200 million in 2003.
The key players of White goods industry in concentrating ownership and restructuring production in the regional markets are group of multinational corporations (MNCs) such as the Asia-Pacific, North America and European Union. The retail sales for White goods products globally are made by LG Group, Haier, general Electric (GE), Bosch-Siemens, Electrolux and Whirlpool which are all Multinational Corporations.
The Australian White goods sector displays characteristics which are similar to that of other white goods global chains. Research studies indicate that there has been a major change in employment in this industry emanating from standardization and simplification of production platforms in which standard engineering frameworks are used.
Furthermore, introduction of just-in-time, flexible techniques and computer aided manufacturing methods used in this industry have not only enhanced the speed of product renewal but have also in conjunction with laws and regulations, reshaped employment relations in the industry.
On the other hand, one of the industries in Australia that has demonstrated rapid growth is hospitality industry. It has displayed some remarkable shift from the well known traditional secondary and primary service sectors. As a prime example, it was ranked the seventh largest employer in the period 2004-2005 from its earlier position twelve in 1989-1990 (O’Brien & O’Donnell, 2000).
Other industries in Australia that have also exhibited more rapid growth include health and community services and that of property and business services. However, in terms of employment relations and labor market, hospitality industry in Australia has continued to exhibit distinctive features.
For instance, its employment conditions have continued to be poor with more of low pay, low skilled jobs, high labor turnover and casual employments among others. In addition, its employment relations too have been immensely affected and have been characterized by poor working conditions, unemployment and low membership in unions.
In order to regulate its working conditions and wages, it has continued to depend on the award system (Waring & Bray, 2006). This essay compares and contrasts white goods and hospitality industries in Australia.
Comparisons
To begin with, both white goods and hospitality industries in Australia are facing challenges from national industrial relations following the introduction of legislations on products, employment relations, advertisements and marketing. The laws and regulations are controlling various operations done by the industries and this impact on employments relations prevailing in these industries.
The legal environment in which these industries operate has significant legal changes that affect their operations. The areas that have been most impacted by these changes include employment relations, demand for products or services bought by consumers and the cost incurred for developing new procedures and systems.
Secondly, both industries have also been able to experience growth despite changes from their microenvironments. Changes in the market and business trends today have put pressure on both firms to increase their employment relations by developing and building focus on core competencies.
Due to intensive competition and increasing uncertainty, MNCs have maintained sustainable advantage and made tremendous gains because they have improved on employment relations with their workforce. In white goods industry located in Australia, an increase in global competition affects its functional roles and other issues that deal with managerial roles or leadership in business.
According to Waring and Bray (2006), consistent provision of superior value and high quality products to customers is determined by a firm’s ability to establish strategic business decisions on employment relations as well as strategic capabilities.
Through these, successful organizations have maintained customer satisfaction, achieved overall strategic goals and increased their production processes at a lower cost.
For instance, white goods industry capabilities have been witnessed in the manner in which they have combined organizational knowledge, integrated technology and coordinated production skills at lower costs. It is imperative to note that MNCs have been able to relocate and downsize their production to locations of lower cost.
This strategic move that white goods in Australia have adopted tends to transcend both the operations which are geographically dispersed and areas of traditional functions through creation of supportive infrastructure via investments. Production capability is built on investments on employment relations. This is fundamental in transforming the processes of production into competitive weapons and reducing unions bargaining power.
Both industries have organizational structures having departments that plays host to important business and management functions. These departments include production, marketing and finance among others. These organizational structures describe the nature of strategy a company has.
A bigger and more advanced structure denotes a greater global strategy unlike a structure that will house small and domestic business functions. For instance, due to global competition, white goods industry has adopted new and better ways of organizing there structures.
The system of work and relationship has changed. An individual may be required to multitask, leaders may be required strategize for investments and policies for finance and to draw strategies for development and scientific research. This new structural organization combines autonomous and semi-autonomous way of administration.
Increase in competition and MNC’s have led to an effective white goods organizational structure that has improved the level of productivity within the industry.
Employment relations in this industry have been done efficiently and effectively and as such, white goods industry in Australia has been able to produce and sell its high quality products at a low cost and still maintain a competitive advantage. Research studies attribute this to restructuring employment relations and production capabilities in such a way that productions are done at a low cost possible.
Contrasts
The hospitality industry in Australia, like in most nations in the world, has been affected by unstable equilibriums. A shift from short run to long run equilibrium is due to economic forces determined by a slight deviation in wages and prices from the equilibrium. In the same manner, employment and aggregate output causes fluctuations in the Australian economy.
The level of employment and unemployment rises and falls during such time. Unemployment has remained high in the hospitality industry and the labor market has becomes slack. In turn, this affects the ability of the hospitality industry to employ more workforces and make better sales (Thompson, 2003).
As such, the human resource management of large employers like white goods becomes formalized while in the hospitality industry, where there are many small employers, ad hoc systems are adopted in order to manage employees.
It is imperative to note that due to reliance on the award systems in the hospitality industry, employment relations are strained and workers are less inclined to perform their duties. Since hospitality industries in Australia are small in size and spread out, it becomes cumbersome for unions, which have low bargaining power, to service and recruit members.
Additionally, employment conditions in the hospitality industry have continued to be poor with more of low pay, low skilled jobs, high labor turnover and casual employments among others. Its employment relations too have been immensely affected and have been characterized by poor working conditions, unemployment and low membership in unions.
In order to regulate its working conditions and wages, it has continued to depend on the award system (Anderson, Teicher & Griffin, 2005). On the other hand, white goods industry through laws and regulations reduces the influence and power of unions in terms of bargaining. In turn, it eliminates support mechanisms that the union has that include bargaining fees and payment reduction done on union fees for non-union workers.
This creates a favorable business environment especially in terms of employment relations. White goods industry, being a large manufacturer of microwaves, large cooking appliances, dishwashers, home laundry appliances and refrigeration appliances among others things needs to have enough employees to serve the adverse clients with various needs and work towards the organizational growth; the push to reduce the scope of bargaining by the industrial relations law and regulation will lead to more money being allocated for employees as wages which will affect the organizational plans and expansion strategies (Anderson, Teicher & Griffin, 2005).
The laws and regulations set by the industry allow agreements made between non-unions and the white goods management team to be experimented.
Moreover, the organizational structure of White goods industry is a representation of a business program that has a chain of command whereby officers of the company as well as the employees are categorized in units that show their level of importance and responsibility.
The organizational structure defines relationship that should exist between the chain of command and employees. With this in place, a company stands a better chance of minimizing costs and maximizing results since everyone in the company will know how to interact with one another and with various departments in the company. In addition, workers will quite well, understand their responsibilities and their duties.
An effective system of good governance forms its foundation in an organizational structure that is competently built. This kind of organizational structure ensures that there is increased productivity through assigning areas of duty and power to the leaders as well as employees, ensuring that staff members are not under too much pressure or overworked. It is also important to build positive interaction among company leaders and employees.
On the other hand, as earlier indicated, Australian hospitality industry has over the years suffered from employment challenges such as low pay to employees, low skilled jobs, high labor turnover and casual employment among others. This can be attributed to lack of efficient and effective organizational structure alongside poor employee relations.
References
Anderson, E., Teicher, J. & Griffin, G. (2005). From industrial relations to workplace relations in the Australian taxation office: an incomplete but strategic transition. Journal of Industrial Relations. 47, 339-352.
Bray, M., Waring, P. & Cooper, R. (2011). Employment Relations: Theory and Practice. Sydney: McGraw-Hill.
O’Brien, J. & O’Donnell, M. (2000). Creating a new moral order? Cultural change in the Australian public service. Labour and Industry. 10, 57-76.
Thompson, P. (2003). Disconnected capitalism: or why employers can’t keep their side of the bargain. Work, Employment and Society.17, 359-378.
Waring, P. & Bray, M. (2006). Evolving Employment Relations: Industry Studies from Australia. Sydney: McGraw-Hill.