In the current world, multinational enterprises are in a problem increasing labor, health, and environmental standards. This is not only in their operations abroad but also in the operations with their suppliers and the sub-suppliers. There is no well defined guidance for managers concerning what constitutes good labor practice and how it should be put into use (Smith, 2007)
The nature of industrial relations policies has been influenced substantially by globalization. This has been followed by employers and also the reduced power of trade unions. Social scientists warn that in the next few decades severe social tensions could arise. The social tension will result from acute economic inequality resulting from the policies. Also, a severe weakening of countervailing power in the society can be seen as well (Meyer, 2005)
Taking a case of the Honda motorcycles and scooter India Ltd (HMSI), this involves a situation of major industrial relations (IR) violence during the industrial dispute processing. This company was started in the year 1999, and had three thousand employees in all its plant. The company provided many welfare benefits to the employees and in addition to that it also met its liabilities under different labor laws. It has the same human resource policies as its parent company, HMCL in Japan. These include two fundamental beliefs which are, respect for differences between individuals, and the joy to buy, joy to sell and joy to manufacture (Prakash & Gupta, 2007).
In 2006, workers perceived an unfair treatment for the first time, where the management offered a gift of Rs. 600. Since their company was well known, they thought that they deserved a better treatment on that occasion. Other acts of arbitrariness and nepotism practiced by the Indian managers accentuated this feeling. In addition, they felt hurt at the attitude of the Japanese vice-president who kicked a worker one day for being late in joining work.
Sermons were offered on their work behavior and the workers never liked it. A high wage difference in HMSI from the Hero-Honda for the same work was noted. Thereafter, they started a campaign for registering the union making demands by forwarding to the management a demand charter. The union formation and registration were stopped by the management but it was all in vain. In 2007, the union registration took place with the active intervention (Prakash & Gupta, 2007).
Later in the year, the worst happened when a violent battle erupted between the HMSI workers and the police. The workers had gone to protest against the alleged powers of the HMSI management in what they termed as collusion with the state administration. As a result, the management allowed several concessions to workers on many fronts where the union office bearers were given a chance to work on full-time union work. Even after the losses the workers could get a good amount of money from the management bonus (Prakash & Gupta, 2007).
A shift of focus is noticed from the different models of industrial relations that are being followed by organizations. Many organizations are busy working on policies that will dilute the efficacy of union or even result eliminating all of them together. In this way, they are making strategic shifts in their human resource management policies (Nolan & Posner, 2007).
Several factors can be used to explain the decrease of labor power all over the globe in this era of globalization in the private sector. These factors include a decline in the interests of the state labor justice and also the primacy when it comes to considerations of productivity and the efficiency, the upcoming of many service organizations that include information technology and also the information technology-enabled service organizations, and the employers’ tendency to move from adversarial to cooperative industrial. Also, the emergence of workers who are not interested in unionization, the tendency of employment on contract and casual basis and the employment of labor law consultants by the employers so that they can practice unfair labor practices (Nolan & Posner, 2007).
The international labor organization is no longer following its objectives. This is a shift from its earlier position of promoting labor justice through adversarial collective bargaining to primacy on availability of best jobs to the people. The shift portrays an approval to some extent of unitarism of the human resource management philosophy. This is in case the philosophy can provide justice in workplace without alternatively invoking collective labor power. These factors have resulted to a decrease in union density all over the world (Nolan & Posner, 2007).
The above case of HMSI is a clear indication of the presence of slavery working conditions in the company before the formation of the union. The inexistence of the union helped the pursuit of discriminatory personnel policies, which planted seeds of discontent among the workers. This is a clear indication of the importance of trade unions and they should not be considered as a thing of the past (Prakash & Gupta, 2007).
From an employer’s point of view, a union is considered as undesirable for it is seen as its purpose is to weaken managerial prerogatives thus bringing in inflexibility in the organizations working. It can be seen that in any country, the best source of labor power is a facilitative Industrial relation law and its effective working (Prakash & Gupta, 2007).
Reference List
Meyer, E. (2005). Rising above Sweatshops: Innovative approaches to global labor challenges. Howitzvej, Denmark: Copenhagen Business School.
Nolan, J., & Posner, M. (2000). International Standards to Promote. Labor Rights: The Role of the United States Government. J. INT’L L., 118.
Prakash, Y., & Gupta, M. (2007): relationship between organization structure and firm-level innovation in the manufacturing sector of India. Indian journal of industrial relations, 43(2).
Saini, D. S. (2007). Declining labor power and challenges before trade unions: some lessons from a case study on private sector unionism. Indian journal of industrial relations. 42(4).