Globalisation and its Effect on Employment RelationsGlobalisation has engendered vast changes in the international economy. These changes have in turn, significantly affected employment relations. However, in the context of employment relations, there is considerable difference of opinion, as to the nature and importance of the changes that have transpired, on account of globalisation (Lansbury, Kitay, & Wailes, 2003: 62). The notion of industrial relations, originated in the US, and thereafter gradually permeated the other nations. The development of this important concept was uneven, across the world. For instance, it was not until the 1930s that industrial relations made their presence felt in the UK.
Subsequently, in the 1960s, Japan was witness to the development of industrial relations in the nation. Thereafter, in the 1970s, industrial relations developed in Germany (Kaufman, 2004: 593). The rest of the world adopted this notion, only in the 1990s. Thus, the erstwhile communist nations of Central and Eastern Europe were comparatively late in developing industrial relations. Finally, this idea was adopted in the countries of Africa, Asia, Europe and Latin America. However, by that time, there was a marked decline in industrial relations in the US, where the concept had originated (Kaufman, 2004: 593). The challenges thrown up by globalisation, in the realm of employment relations, are in general, difficult to resolve.
Therefore, it is incumbent upon the human resources manager to balance the requirements, stipulated by efficiencies; whilst ensuring the operational life of the company in the host countries. Some of the affiliate practices could bear a semblance to the practices adopted in the home country of the multinational corporation; a few of the practices could seem to akin to the practices extant in host nation; and other practices could be of a global nature (Rodwell & Teo, 1999: 311).
Business organisations have been compelled to enhance their competitive advantage, due to the growing complementarity between capital, location and technology. The value of human resources has been recognised, and they are now deemed to be crucial for achieving a competitive edge in the globalised world. (Rodwell & Teo, 1999: 310). Furthermore, the multinational corporations have to achieve a multiple faceted capability, if they are to improve their competitive advantage in the global market. In the Japanese employment relationship context, it was noticed that there was a convergence, as well as a divergence of practices.
Thus, a divergence in operational issues, with regard to the standards of the parent country was noticed. At the same time a convergence with the standards of the host country was also evident (Rodwell & Teo, 1999: 319). National characteristics have a palpable influence on the process of collective bargaining. In the UK, this proves is usually witnessed at the company level, and in its absence, procedures for the application of sectoral agreements are not to be found.
In the small and medium enterprises (SMEs), this process is present to the extent of 4%. In the Irish context, the Joint Labour Committees have had some influence on pay and working conditions (Edwards & Ram, 2006). On the other hand, Austria makes it mandatory for SMEs to acquire membership of the Chamber of Economy, and collective agreements are conducted through this institution. The situation in the Netherlands is akin to the Austrian condition, and there are sector level collective agreements, in respect of the SMEs.
In Finland, although the situation is almost the same, the pay in the SMEs is not the same as in the larger firms (Edwards & Ram, 2006).