Page 156 - DMGT106_MANAGING_HUMAN_ELEMENTS_AT_WORK

Managing Human Element at Work

Notes 7.1.2 International Factors

The establishment of a sound or harmonious industrial relations system is a central theme
for governments, employers, workers and their representatives, in their endeavours to
achieve economic and social development. Several changes on the international scene
presently exert a major influence on how industrial relations need to be viewed.
The internationalization of business, intense competition and rapid changes in technology,
products and markets has increased the need for economies and enterprises to remain or
become competitive. These trends have in turn necessitated a greater reliance than before
on workers’ skills, productivity and cooperation in achieving competitiveness.
The new information technology, the limits of which are not known in terms of its potential
to effect change, is exerting a tremendous impact on the structure of organizations, the nature
of work and the way it is organized, and even on the location where work is performed.
In societies of the future information and knowledge will be - as in fact they already are-
crucial to competitiveness. Technology is already facilitating changes in organizational
structures so as to create flatter organizations. This has resulted in less management by
command and supervision, in more emphasis on cooperation, information-sharing and
communication and in a more participative approach to managing people. Modern technology
now makes it possible for aspects of work to be performed outside the enterprise, for
example from home, and even outside national borders, and this trend is being given a
further push by the influx of more females into employment and their preference in some
cases, for part-time work. Developing countries are also feel the impact of these changes.
Many countries are undergoing a process of industrial restructuring which, in some cases,
include privatization of public sector undertakings and technology upgrading. This process
has resulted in several social consequences such as redundancy, all of which have sometimes
strained the relationships between employers and workers (and unions) and between the
latter and the government.
Another feature is the changes occurring in the workforces, to varying degrees, in both
industrialized market economies and developing economies. Many countries have witnessed
the emergence of workforces with higher levels of education and skills which need to be
managed in a manner different from the way in which employees, especially blue collar
employees, have hitherto been managed. This factor will assume more critical proportions
in the future as a result of the increasing importance of the service sector and the growth
of knowledge-intensive industries. The skills of an employee are, therefore, an issue on
which the interests of employers and employees converge, and the “development” of the
employee is now of mutual advantage to both employers and employees. Consequently,
there is a greater need than before for a cooperative and participative system of industrial
relations. Further, the many emerging work arrangements do not fit into the traditional
employment relationships. Increasing numbers of enterprises are differentiating between the
core and peripheral workforce, which consists of those whose work, can be performed by
persons outside the enterprise who specialize in it. The tendency is to contract with outsiders
to perform this work. Even manufacturing companies are becoming essentially assembly
firms, and many service organizations now act as brokers, “connecting the customer with
a supplier with some intervening advice”. Another category of employees consists of the
increasing number of temporary and part-time employees in the rapidly expanding service
industries, some of which experience peak periods (hotels, airlines, shops) requiring a
flexible labour force. Thus, instead of one workforce, we are moving towards these various
groups, each with different contractual arrangements and requiring to be managed differently.
The indications are that at the beginning of the next century less than half the workforce
in industrialized countries will be in full-time employment as we know it. These trends will
not be confined to the highly industrialized countries, but will appear in the fast growing
economies of Asia as costs rise, competitiveness increases, and more women participation
in economic activity.

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