Globalization, nowadays, has emerged as one of the growing phenomenon and has gained significant importance for organizations and their development. Globalization has been the driving force especially in regards to global economic development. It covers all the factors that are part of the economy and it concerns everyone that is associated with the economy either the individuals or the government. A large impact of globalization is affecting the social partners as well, as a new and efficient system is developed and the labor will have to get associated with it (Beck, 2000).
The social partners are facing some critical challenges like migration from place to place, relocating themselves, changes arising or occurring in the human capital and technology. However, there are also some factors that are rapidly changing the labor force composition. These factors include a shift from blue-collar to white-collar jobs availability especially in developed countries, encouraging concept of self-employment and a the growth the informal sector is receiving or witnessing in the economy in especially in developing countries.
These changes have affected the trade unions and have put them under real pressure, which is increasing rapidly and forcing them to expand in order to maintain the membership levels and ensure the coverage rates.The restriction or the rigidness shown by developed economies towards the industrial relations and did not emphasize or focused on changing or transform according to the global economic conditions saw a rapid shift of companies. Thus, globalization provided an opportunity to global players to search for new options that are also cost effective. However, the companies searched for low cost ad labor intensive nations that allowed under developed and developing countries to move forward.
Globalization defined by different writers as a process of that enhances global connectivity that also creates integration in the economic, social, technological, cultural, political and institutional domains. Globalization refers to or emphasizes on reducing barriers between countries and encourages integration at a high level in world markets. However, this situation creates assimilation to international standards necessary and vital for success forcing companies and countries to follow the trend (Appadurai, 1996).
The most important and vital aspect of globalization is the economic aspect that holds immense significance. However, the economic aspect has some major areas to cater that include making the competition among countries intense, enhancing trade among countries or to be specific international trade, flow of FDI done primarily by multinationals organizations or corporations and financial inflow and outflow. Apart from that, it also covers or introduces some new concepts especially regarding management and publicizing advanced management practices. Furthermore, it also introduced new form of organizations and allowed the labor standards to be internationally recognized (Rodrik, 1998).
Competition has increased and it has also brought significant increase in competitiveness, not just at company level but also at national level. This rise in competitiveness is leading the management of organizations and also governments to become strategically strong. The commanding authorities are in search of strategies that can facilitate them in enhancing labor effectiveness to enhance productivity, increase quality and adopt innovation. Thus, this concept has benefited the companies to adopt international capital and is favoring companies that are encouraging competition (Amin, 1995).
Therefore, liberalization of the markets and the privatization of productive assets are accompanied by globalization. At the same time, globalization has obviously contributed to raising unemployment, increasing casual employment and weakening labor movements (Amin, 1995).
Globalization can be defined as a process that encourages rapid economic, cultural, and institutional integration among countries. The main drivers of globalization include liberalization of trade, investment and capital flow, technological advances, and pressures for assimilation towards international standards. It has made trade easier by reducing barriers between countries that has resulted in increasing or encouraging economic competition among nations. Apart from that, development of organizations and labor favoring policies also emerged due to this factor (Bauman, 1998).
On the other hand, there are drawbacks to globalization as it has contributed evidently in increasing unemployment, contingent labor force and making the labor movements weak. According to some authors, globalization is a word that can be pronounced easily by everyone but is very hard to define at occasions. The reason is the assimilation of various concepts in one word as it covers contexts like economic, sociological, political, cultural and environmental. A broader definition presents globalization as “the growing inter connected ness of all aspects of society”, and also presents a view that all the above listed contexts can be submerged in a single phenomenon (Friedman, 2000 )........................
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