Economics essay help: Concept of globalization
The concept and practice of globalization has brought tremendous change in the world of business such that the practice of managing its human resources also underwent noticeable transformation. The given topic aims to assess the transformation from traditional Industrial Relations system to a contemporary Employment Relations one with special reference to Japan. Disagreements within internal business system led to alteration in the working environment which impacted job structure, wages, work hours etc. This transition for employee relationships became palpable through the adopted management structure followed in Japanese companies.
Till the turn of the century management leaders tended to render their focus upon industrial relations which centered more towards increasing the level of productivity and profitability. This strive towards production relegated the actual force (human resource) involved behind production to a back seat, which in turn impacted productivity. Also such an arrangement of business rendered more emphasis upon attributes like seniority of people in the organization which was supposed to add value to the system with ageing, hence were allocated more wages which not just increased the level of dissatisfaction amongst other experienced employees but also prevented fresh talent from entering into the system. At the same time this approach also suffered from the negative connotation attached with permanence and ageing which started impacting the profitability of the firm.
Rising internal conflicts and competitive pressure from the global players started exerting enough pressure on countries like Japan which were sticking to the conventional approach of business management. It was thus this need which initiated the process of transition aiming towards employee relations as a critical attribute of strengthening the competitive positioning of a firm or a country in the global marketplace. The change was so strong that in the last two decades the global market has witnessed tremendous transformation of management practices from traditional system of industrial relations towards employee relation. Appreciating the importance of employee relation is not restricted to enhancing the productivity of Japanese companies but also in creating the differentiating element, for a motivated and satisfied employee is more likely to effectively apply their work experiences in standing ahead of the competition.
Growing Importance of Employee Relations
The focus of the management in the contemporary business world is to focus more upon the means of organizing and allocating works in a sophisticated manner such that productivity is optimal while maintaining the level of motivations amongst their employees. This change in approach has also magnified the importance of management theories which has been instrumental in enhancing the relationships of the employees with an organization (Gardner and Palmer, 1997). For instance drawing cue from the pluralist theory one can appreciate the complexity of different interest groups within an organization which makes the event of conflict inevitable. Interestingly it is through these conflicts that the management is forced to exploit the innovative avenues of addressing such issues. This approach thereby accepts the legitimate right of the employees for bargaining healthy standards of work and formation of trade unions (Abbott, 2006).
Contrasting this perspective is the approach of unitarism which renders major emphasis upon theories of scientific management and human relationship. This approach stresses the fact that focus needs to be towards maintaining a single source of authority, for both management and employee works collaboratively for common good. Considering the aspect that employees are essentially immature in nature it is the responsibility of the management in directing and maintaining their motivation level in the direction of work (Abbott, 2006). At the same time managers need to appreciate the fact that employees as a resource are distinctively different from production items, hence magnified the importance of enhancing their satisfaction level while at work. The relationship with the employees can be accomplished once they are satisfied with the management. As Maslow, has identified various stages of personal satisfaction, present day organizations are increasingly considering the attributes which considers not just the basic need of the employees but also social and safety needs. As evident from the changes evident in the Japanese companies, focused has shifted towards equalizing the wage and working hours for retaining the fresh and young talent. Furthermore the Unitarian perspective endorses management towards creation of conducive working environment which prevents and resolves internal tension at its bay.
Increasing competitiveness in the post globalized business world has also exerted additional pressure upon business firms which led to transformation of their traditional approaches and systems of managing relations in such a manner that it became capable of coping with the demands and challenges of contemporary time. The rising conflicts within the economic environment has initiated changes in the working environment that became apparent in the anatomy of job provided, levels of wages, hours of work as well as security involved with the job. The transition from the conventional approach of industrial relations to contemporary system of considering employee relationships has become evident from the management structure followed by various business communities across the globe. As defined by the American business community, employee relations refers to a corpus of functional activities related to human resource management which is based upon the association of the employees as well as their employers. Such an approach of employee relationship has an increasing tendency of exploring the relations which take place at the micro-level of relations that exists between employees and managers (Gennard and Judge, 2002).
One striking evidences in this context is the case of Japanese industries which underwent considerable changes in its structure of managing the organization and its people. Traditionally the country tended to follow a wage structure which favored tenure of employees. Higher the tenure, higher was the wage received by them. Though through this approach the concept of revering senior was considered, it started rendering negative connotation to the system which started impacting competitive positioning of the Japanese companies amongst its global peers. This was because the level of productivity started to decline with the aging employees, who as a matter of fact were also enjoying the benefit of higher salaries (Karner, 2011). The competitive pressure coupled with gradual stagnation of country’s economy led the business leaders realize the need and importance for change and switching to a contemporary approach of managing both its people and business. The novel approach that was followed in the country thereby focused upon promoting young and fresh talent emphasizing more upon their relevant experience with the task rather than loyalty towards an organization (Whittaker, 1998). This transition from the traditional system also started welcoming women workforce into the system eradicating the scope of any previously held discrimination and working towards the common good of strengthening the economy and business by means empowering its people equally.
Working in the similar vein with its American counterparts, Japan has gradually started adopting the practice of contractual workers that helped in maintaining the level of motivation amongst the employees while enhancing their productivity levels. On the other hand the industrial relations approach practiced in China started deviating from the Japanese influence with the turn of the century. As the “three pillars” model of Japanese business was increasingly questioned in the global business community, Chinese firms started shifting their focus more towards scientific management of business which carefully considered the critical role of maintaining healthy relationship with the employees (Huang, 1996). Even the individual enterprises of the country are directing their attention towards improving their existing system of human resource management which can supplement the productivity of the firm at large.
So much so it can be rightly said that over the past two decades there has been evident transformation not just in the business models but also in the models and approaches adopted for managing its critical resources ‘human’. Off late management is realizing the importance of its employees, their need, security, level of satisfaction and its correlation with productivity of the firm and in strengthening the bottom-line of business at large.
With transition taking place in the industry, management started focusing upon understanding various attributes of employee relation which can differentiate businesses in a closely competitive global market. It is interesting to note that countries like Japan which was out-an-out conventional in their approach of managing business and endorsed the concept of three pillars in the form of seniority of wages, permanence of employment and company union, had to adapt the contemporary approach of managing people for sustaining the global competition. Over the past few decades business communities across the globe have seemingly realized the need and importance of employee relations which in turn is one of the critical factors for determining organizational success.
Furthermore, unlike other resources of a production unit, human resources are sophisticated in nature. It is thereby essential for the management in catering to not just their basic needs but also social and security needs. Such an approach is considered effective in maintaining an optimal level of satisfaction amongst the employees, which enhances the productivity of the firm. When a manager is able to appreciate the legitimate right of the employees in bargaining their rights, it becomes easier in managing them. The growing popularity of management concepts and theories in the current age also indicates the fact that transition has happened and enterprises are actually consulting management theories and practices for making their organizations more employee centric while strengthening the relationship with the employees.
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