Challenges of Globalisation on Work Organisations and Labour Standards in Advanced Countries - Coursework Example

Running Head: Contemporary Globalization Student’s name Institution Course Professor Date Question 4 Globalisation is the widespread integration in the world that has brought together people from different nations to interact economically, socially and politically. People are able to undertake economic activities like investment and trade internationally. Political and international organisations like World Trade Organisation (WTO), International Monetary Fund and World Bank exist to cope with globalisation. Socially people are interconnected through the internet, TVs, films, Radios among other means. Contemporary globalisation differs between various persons and countries. Its benefits and challenges are unequal between different states. The contemporary globalisation has seen integration of economic systems driven majorly by World Trade Organisation, Nation states and Multinational companies (Edwards, 2005, p.29). Trade has increased and national boundaries are no longer present. The modern globalisation has seen great trading between developed countries while some countries like in Africa left in poverty. The levels of trade between developed countries is very high than between them and developing countries. Developed countries use tariffs and other protectionist measures like subsidies to their industries to deny market for products from emerging countries. For instance, agricultural products from Africa fetch low markets and prices in their markets. Globalisation has come with both advantages and challenges to various sectors of the economy. In the employment sector, for instance it has come with both challenge and advantages. Globalisation has come with challenges to work organisation and labour standards of employees. The challenges have accrued to both the developing and the advanced countries. Challenges of globalisation on work organisations and labour standards in advanced countries Effects of globalisation on work organisations and labour standards in these countries are contested in various aspects. Many researchers have come up with contrasting findings on its effects on these sectors and if some happenings are really attributable to globalisation or other causes. The effects of globalisation have not been deeply felt in advanced nations. Most of them have high influence in Bretton Woods institutions and world trade organisation thus influencing decision making to favour them. Some of the findings on the effects of globalisation on these sectors include the following: Maintaining of good working conditions for skilled and highly educated workers Work organisations in these countries are forced to maintain good working conditions for skilled and highly educated workers. In developed countries, most of the workers with high skills and education are not highly affected by the effects of globalisation (Edwards, 2005, p.22). Skilled workforce and educated workers in the developed countries are highly valuable and transferable in the production and management systems of economic activities. Futurists predictions of open-talent economy has come true hence need for maintaining quality in ever-shifting workforce (Peter Roebuck, Knowledge @Australian School of Business, 2013).Many multinational corporations retain them in their technological and expertise departments in order to carry out high skilled duties that will maintain their competitive nature in the market. They thus maintain their high incomes and good labour standards in order to retain them in their organisations. Growth in polarization between the poor and the rich Globalisation has contributed to growing polarization between the poor and the rich (Sklair, 2002, cited in Edwards, 2005, p.8). This has seen the emergence of great inequality in the advanced countries. Globalisation has contributed to the development of capitalist market system that largely contributed to this inequality. Development of many multinational corporations and large companies has lead to payment of low salaries and wages to workers and hence making them poor. Most of these companies earn very large profits that make their owners very rich at the expense of workers and consumers. In need of subsidies to cope with Globalisation Many of work organisations in advanced countries have been forced to get subsidies to cope with globalisation. Globalisation and other international organisations like World Bank, IMF and World Trade Organisations have advocated free trade and prevention of protectionism. Free trade has forced developed countries to adopt subsidy methods to make their companies competitive hence giving them an added advantage over those from developing countries. Subsidies are an added expenditure to the governments. Workers in the organisation in most of the cases continue to enjoy good salaries and working conditions. Countries like US have continued to put in place some protectionism and restrictions measures in some sectors to protect some work organisations from excessive effects of globalisation like in steel industries where it gives it protection. Some forms of protectionism helps in maintaining the existence of the low-wage producers through subsidies to workers and various workers benefits schemes. Existence of codes of conduct In most of the advanced states, codes of conduct of various corporate organisations exist. This helps in the maintenance of labour standards those not influenced by globalisation. Complying with these standards in some of these countries gives organisations an added advantage over other firms. This makes work organisation not to experience poor pay schemes and unhealthy working conditions. Those that cannot cope with this in some cases relocate their production activities to developing countries where they can charge lower salaries and wages. The challenge of off-shoring of jobs Globalisation has resulted into off shoring of jobs from advanced nations to the developing countries (Nolander, 2013, p.1). To cope with the competitive nature of the global market countries like the US has adopted this technique as a measure of cost reduction. Challenges of globalisation on work organisations and labour standards in developing countries Globalisation has caused many challenges in the labour sector of developing countries. This may be attributable to the rise of capitalism, free market and the increase of multinational corporations in these countries. Poor pay and poor working conditions Globalisation has created the shifting of low paying jobs from the developed countries to the developing countries. Globalisation has created high interconnectivity and economic links between nations. This is due to the development of many transnational companies with branches in different countries. There has been development of many companies due to the increase in technology in transportation, production and communication. Development of many companies and globalisation has increased competition for the market-share; this has resulted into the need of pushing down prices in order to be competitive. Transfer of productions activities The need for reduction in the cost of production to cope with the low prices has resulted into the transfer of the production activities of many multinational corporations to developing countries. Developing countries have lower-priced labour force together with little government regulations that attracts the production activities of the multinational corporations, (Hodson, 2011, p.6). Shifting of production activities to developing countries thus creates more working organisations. Some studies however contradict this view and conclude that in some industries like steel have seen developed countries retaining jobs (Edwards, 2005, p.21). Downward pressure on wages, safety and health protections Transfer of jobs to developing countries creates downward pressures on wages, safety and health protections. Wages of workers in developing countries have been set to be lower than international set standards. Workers languish in poverty while performing many and working more than the recommended hours per day. The safety and health standards of the workers are not taken into consideration by the multinational corporations due to their profit motive and low government regulations that give them an advantage to minimise their costs. Low wages and salaries contribute to widening poverty and poverty gaps in these countries. Some economists argue that poor working standards and low payment in Multinational corporations may not be necessarily attributable to globalisation but due to the availability of conditions that permit it (Edwards, 2005, p21). Migration of workers to developed countries There is migration of workers from third world countries to offer cheap source of labour in developed countries. This frees elite members in those countries from provision of domestic tasks. Workers also work under poor working conditions (Edwards, 2005, p.20). Such workers work for most of the Multinational corporations in export processing zones and in most cases, their work rights are restricted. They do not enjoy union representation, minimum wage laws and safe and conducive working environments. Discrimination of women in some forms of employment is also rampant in most of these developing countries. Export processing zone of some countries like Philippines have greatly improved. The current nature of global environment has necessitated countries pursuing global integration to take into consideration employment issues and income of workers. This is due to the need of avoiding popular protest and maintaining industrial peace. This will contribute to attainment of social order necessary for the survival of businesses. Both developed countries and developing countries have started changing their work organisation and labour standards to take into consideration workers grievances and rights. Industrial peace, competition and employment and income security are the three logics that shape the regulation of labour (Frenkel and Kuruvilla, 2002, cited in Edwards, 2005, p.25-26). An acceptance of good labour standards is driven by consumer need for ethical investment, producers’ wishes and the policy makers. Organisations have to balance between competing forces of legitimating and accumulation. Globalisation has challenges in work organisations and labour standards of different types of countries. Some economists do not agree that some of these challenges dually result from globalisation. Most of the developed countries have come up with various adoptive measures to cope with these challenges due to their high financial resources and their influence in world institutions. Developing countries on their other side are highly hit by its challenges in their employment sector. In many cases, they have not adopted good regulatory measures to cope with the challenges. (1518 words) Reference Peter Roebuck, Knowledge @AustralianSchool of Business (2013.The Open-Talent Economy: What Price Loyalty in a Time of Employment. Edwards, 2005. Chapter 10: The Politics of Working Life. Hodson,2011. Evolution of work. Peter Norlander, Chris Erickson, Sarosh Kuruvilla, Rangapriya Kannan-Narasimhan ,2013. Offshoring Services: Reviewing a Decade In, Questions for a Decade Out. Read More