Post on 28-Dec-2015
Copyright 2000 - South-Western College Publishing Module 26 - 2
Overview Core Concepts
• Key Actors
• Employees and Unions
• Employers and Associations
• Government
• Institutions
• Collective Bargaining
• Culture
Strategic Issues Case Applications
• Germany
• Korea
Copyright 2000 - South-Western College Publishing Module 26 - 3
Employees and Labor Unions
How did unions evolve? Political or business unionism Level of collective bargaining Power of labor unions
• Ability to mobilize members• Institutional security• Union density• International linkages
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Employers and Employers’ Associations What encouraged employers to associate? Do they engage in collective bargaining? Power of employers’ associations:
• Employer association density• Membership cohesion• Comprehensiveness of association
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Government
Three types of government roles in employment relations:• The passive state• Active state involvement• Statism
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Collective Bargaining
Who determines or negotiates the terms and conditions of employment?
At what level does bargaining occur? What is the legal framework governing the
bargaining process? What effect has increased globalization
had on collective bargaining?
Copyright 2000 - South-Western College Publishing Module 26 - 7
Culture Definition
Relations with IR• Determinants• Co-Relations
Benefits of Cultural Analysis• Help understanding foreign practices• Help explaining differences in IR
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Culture (cont.)
Cultural Analysis (study by Hofstede, 1980)
• Individualism/Collectivism• Power Distance• Uncertainty Avoidance• Masculinity/Femininity
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Culture (cont.)
Co-Relations Between Culture and IR (example)
Culture IR
Individualistic Diversity among USA Masculine institutions
Low in PD & UA Collective actions
Asian Collectivistic Homogeneity among
Countries Feminine institutions
(Korea) High in PD & UA Collective actions
avoided
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Effects of Employment Relations on Workplace Practices Low union density and low government
intervention• Greater managerial autonomy to set wages
and structure jobs
National, regional, or sectoral bargaining• Low wage variation and greater
standardization of human resource practices
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Effects of Employment Relations (cont.) Extensive rights of participation and
consultation by labor• Negotiated solutions to workplace practices
High government involvement in employment relations outcomes• Greater constraints on human resource
policies and practices
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Case of Korea
Historical Shapes• Modern development from 1960s• Government-centered developments with a
focus on export and quantitative development• “Chaebol” as a product of the fast
development
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Case of Korea (cont.)
Role of “Chaebol” in IR• Most of the Korean economy• Family owned and managed• Highly centralized and paternalistic
management• Highly unrelated diversification strategy• Strong link with the government• Heavy dependence on external funds
Copyright 2000 - South-Western College Publishing Module 26 - 14
Case of Korea (cont.)
Drives for Changes• External Drive
• Asian economic crisis effect from 1997
• IMF agreement in 1998
• Requirement for flexible market
• Internal Drive• New government in 1998
• Drive for disaggregation of Chaebols and support of small businesses
Copyright 2000 - South-Western College Publishing Module 26 - 15
Case of Korea (cont.)
Actors in the Korean IR• Employees and Unions
• Increased activities after the 1987 declaration
• Employment stability as the major issue
• Two associations:– Federation of Korean Trade Unions
– Korean Confederation of Trade Unions
• Allowed for political activities from 1998
Copyright 2000 - South-Western College Publishing Module 26 - 16
Case of Korea (cont.)
Employers and Associations• Decisions highly centered in Chaebols• Less interactions across Chaebols• Association among employers:
• Korea Employers Federation
• Increased interactions among employers expected
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Case of Korea (cont.)
Government• Central roles• Depression of labors for the fast development• Turnaround for new management from 1998
• Disaggregation of Chaebols
• Tripartite Commission
• Support of small businesses
• Allowance of lay-offs, etc.
Copyright 2000 - South-Western College Publishing Module 26 - 18
Case of Korea (cont.)
Management and Training• Hierarchical and centralized structure• Less focus on individual CDP• Seniority-based systems• Changes
• Move toward performance-based and flat systems
• Training• Training institutes within Chaebols• Formal outside centers: Korean Productivity Center,
Korea Management Association
Copyright 2000 - South-Western College Publishing Module 26 - 19
Case of Germany
Employment relations system• Sectoral bargaining between unions and
employers’ associations• Codetermination at the workplace
• Labor representatives on the supervisory board
• Work councils
• Unions enjoy quasi-public status and constitutional legitimacy
• Comprehensive employers’ associations• Large firms dominate
Copyright 2000 - South-Western College Publishing Module 26 - 20
Case of Germany (cont.)
Effects of ER on human resources practices• High value-added production strategies• Negotiated solutions to HR problems• Diffusion of innovative HR practices
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Case of Germany (cont.)
ER system can hinder the ability of companies to experiment with high performance work practices• Representative participation hinders
experimentation• Interaction of management and works council
constrained by collective agreement• Efforts being made to increase local flexibility
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Strategy Development Game
Purposes• To increase analysis skill through case
application• To have opportunities to develop strategies
through teamwork• To enhance mutual understanding through
presentation and class discussion
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Strategy Development Game (cont.) Structure of the Game
• Strategy Development (60 minutes)• Formation of team & warm-up (5 minutes)
• Development of strategy & action plan (45 minutes)
• Wrap-up & preparation of report (10 minutes)
• Presentation & Class Discussion (30 minutes)• Debriefing (10 minutes)
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Strategy Development Game: DebriefingKOREAN MARKET Differences
• Homogeneity among the institutions• Strong influence of the government• Centralization in Chaebols• Less mobility in the labor market
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Strategy Development Game: DebriefingKOREAN MARKET Action Plans
• Step 1: Starting a Business (macro-level)• Understanding the tight laws and regulations
regarding foreign businesses
• Start contacts with someone at the center of the Chaebol
• Use connections in business
Copyright 2000 - South-Western College Publishing Module 26 - 26
Strategy Development Game: DebriefingKOREAN MARKET Action Plans
• Step 2: Managing Korean Employees• Understand the changing attitudes of people
– Collectivistic, but increased concern for individual performance
• Combine management techniques for the group and the individuals (e.g. Group incentives and individual bonus)