MA-SOC-SEM-III-Industry-Labour-and-Society-English-munotes

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NATURE OF INDUSTRIALIZATION,
LIBERALIZATION, GLOBALIZATION
AND RESTRUCTURING OF WORK AND
ECONOMY
Unit Structure
1.0 Objectives
1.1 Introduction
1.2 Nature of Industrialization
1.2.1 Meaning of Industrialization
1.2.2 Journey of Industrialization
1.2.3 Charact eristics of Industrialization
1.2.4 Industrialization and Urbanization
1.2.5 Cost of Industrialization
1.2.6 Third World and First World - Geopolitics
1.2.7 Industrialization in Rural Areas
1.3 Meaning of Liberalization
1.3.1 Liberalization in India
1.4 Globalization and restructuring of work and economy
1.5 Summary
1.6 Questions
1.7 References
1. 0 OBJECTIVES
1. To understand the nature of industrialization
2. To look into the effect of liberalization, globalization on the work and
economy
3. To understand the implica tions of restructuring of work and economy
through globalization.

1.1 INTRODUCTION
In this chapter, three main topics is discussed namely nature of
industrialization, liberalization, globalization and restructuring of work
and economy. Industrialization, Gl obalization has touched our lives in
some form or another. Let us take simple examples like the toothpaste we
use, clothing brands which is worn by individuals , all are machine made munotes.in

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2 products and the origin is not from India. The foreign food has also a
market now in India consisting exotic fruits . There are number of non
Indian origin vegetables which are now available in local shops of major
cities and malls. The point here to draw is that today we have access to lot
of things which was a dream before. To get something like the above
listed products people before had to wait for years, or get it when someone
was returning from abroad. As all of us are affected by industrialization,
liberalization and globalization in some way or another it makes it
necessary to study these topics. There are career opportunities too which
you as students can build, with specialization through these topics like
Labour Officer, Industrial relations officer, Personnel Manager etc.
1.2 NATURE OF INDUSTRIALIZATION
1.2.1 Meaning of Industrialization
The dictionary meaning of industrialization is the process in which large -
scale introduction of manufacturing, advanced technical enterprises, a nd
other productive economic activity into an area, society, country, etc. takes
placei.
1.2.2 Journey of Industrialization
Although Industrial Revolution the term was first used by French writers,
the English economic historian Arnold Toynbee (1852 –83) popularised
and associated it with Britain's economic progress from the years 1760 to
1840. Historians traditionally split the Industrial Revolution into two
roughly sequential stages. According to them the first Industrial
Revolution, lasted from the mid -18th century to around 1830, and it was
primarily restricted to Britain. The second Industrial Revolution occurred
in Britain, continental Europe, North America, and Japan from the mid -
nineteenth century to the early twentieth century. The second Industri al
Revolution is said to have extended to other regions of the world later in
the twentieth centuryii.
With time there was transition from individual, family, small group
proprietorship with limited production (known as cottage industries) to
large -scale pr oduction which employed large work forces and utilizing
innovations in technology, organisation, and consolidation. This resulted
in increasing the productivity and also reducing the cost price for
customers. There was also manufacturing units, built in la rge scale in
1900s. Mining also began in large scale in the 1930s, and transportation
businesses boomed in the 1950s, retailing in the 1960s - these are all
examples of industrialization (1970s) too. Vehicle production also began
with industrialisation. Pre viously vehicles were hand -built in "garages" at
high expense and with lower productivity and units. Later with Henry
Ford's development of the assembly line brought about automotive
manufacturing within the reach of ordinary Americans. However,
industrial ization with time also resulted in the transfer of product control
from the worker (or craftsperson) to a capitalistic system, which also led
to labour unrest at times in different countriesiii. munotes.in

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3 1.2.3 Characteristics of Industrialization
The Industrial Rev olution was characterized by technological, economical,
and cultural factors. Among the technological advancements which took
place were the following:
(1) There was use of new basic materials, primarily iron and steel; and
(2) Usage of new energy sources, including both fuels and motive power,
such as coal, steam engines, electricity, petroleum, and internal -
combustion engines took place.
(3) There was invention of new machines, such as the spinning jenny and
the power loom, which helped in increase in the production with a
lower expenditure of human energy,
(4) A new organisational system known as the factory system, which
entailed increased division of labour and specialisation of function also
developed with time
(5) There was significant advancement ma de in transportation and
communication, such as the steam locomotive, steamship, automobile,
aeroplane, telegraph, and radio
(6) The increasing applicability of these technological advancements
enabled a massive expansion in the usage of natural resources as well
as mass production.
1.2.4 Industrialization and Urbanization
Industrialization also lead to rise the of urbanization and it has eventually
resulted in the rapid growth of population in the cities. In other words, it
has helped in changing the soci o- cultural and change in the demographic
structure of the population. For example – People in cities prefer at times
nuclear families due to the cost of living, space constraint and even prefer
fewer childrens than villages. On the other hand, rural inhab itants have
larger families, partly because they are less educated than urban dwellers,
and partly because there exists the belief that children will provide them
with riches and stability in old life. In order, to work in industries men also
migrate from different villages and reside in the slums, streets until they
find a job or work with the informal sector or start their own local
businesses to earn livelihood. There also benefits of the industrialization
process like increase in the process of urbani sation, a higher quality of
education, and higher income. The impact of industrialisation on fertility
rates is also influenced by a number of factors like urbanisation,
education, and income. Even academics and politicians have also pointed
out that indus trialisation is the most effective approach to combat excess
rising population in the Third World.iv.
1.2.5 Cost of Industrialization
Industrialization has benefitted countries in some ways, however, at times
it is at the expense of the environment. Industr ialization has led to a range munotes.in

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4 of environmental problems like air pollution, water pollution, decline in
the natural resources. Several big corporations are involved in exploitation
of natural resources and they do not get caught too many times due to the
loop holes in the system. These companies are also able to manipulate
easily with their power and connections in the government at times. Lack
of strict implementation of rules is also one such reason for continuation
of exploitation of natural resources ev en today. Exploitation of natural
resources cannot be just restricted to home countries, it passes across
borders and developed countries exploit the natural resources of
underdeveloped, developing cou ntries by invasion, war too .
Industrialization has hierarchy within it let us look into details of it.
1.2.6 Third world and First world – Geo politics
As industrialization developed in the western countries, the developed
countries became industrialized prior to the World War II. For example –
Countries like England, United States, USSR, Germany, Japan etc. On the
other hand, the third world countries also tried to become industrialized
like others with that of their local capital however it was not sufficient. To
their rescue came the foreign capital li ke that of World Bank, International
Monetary Fund and World Trade organization and other foreign investors.
This led to dependent of the Third World countries on that of the
developed countries. In a way, such structure was purposely created so
that all e nter into the capitalism. The countries that came late had the
chances of advancing in industrialization was very less yet, the aspiration
was given to them a direction by the developed countries to achievev.
Some of the most dynamic national economies, n otably those of the
United States and the United Kingdom, have become net importers of
manufactured commodities and net exporters of technological know -how
and services. In the nineteenth -century United Kingdom, for example,
manufactured in the centralised facilities using steam power. Yet, there
was huge demand of artisanal trade inputs such as tools and equipment.
Mechanization of easier parts of business, such as spinning, fueled
household crafts that were more difficult to mechanise, such as weaving
etc. Factories in Europe, East Asia, and elsewhere also depended on old
family networks to ensure more stable labour sources. The manufacturing
units used to employ entire families who were capable of working.
1.2.7 Industrialization in Rural Areas
When bu sinesses relocated manufacturing labour to rural regions in late -
nineteenth -century Europe to cut wage expenses, industrialisation also
slowed migration to cities. Rural industries provided extra income for
families of small landowners who would not have b een able to survive in
the countryside on agriculture or crafts alone. In certain cases,
industrialization was compatible with the expansion of domestic
employment through the use of electric -powered looms, grinders, and
other household equipment.
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5 Check Y our Progress
1. List out three characteristics of industrialization
2. Discuss the environmental effects of industrialization
1.3 LIBERALIZATION
The dictionary meaning of liberalization is that of removal or loosening of
restrictions related to somethi ng, generally it connected with that of an
economic or political system. Liberalization is often associated with that
of economics. It means reducing the restrictions laid on business. It is a
kind of system in which markets are made free or the rules are relaxed
from that of state. In other words, its loosening the rules laid on
companies.
In the latter part of the twentieth century, there was a trend going on
among various countries both in terms of liberalisation and deregulation.
Trade liberalisation evolved with the signing of a series of free trade
treaties, including the General Agreement on Tariffs and Trade (GATT) in
1947, the Single European Act in 1986, and the North American Free
Trade Agreement (NAFTA) in 1992. By the 1970s, most Organization for
Economic Cooperation and Development (OECD) nations had adopted
free trade, and many developing countries followed suit beginning in the
1980s (including the postcommunist regimes of Central and Eastern
Europe and, subsequently, the People's Republic of China).
The shift occurred toward the elimination of foreign investment
regulations: According to United Nations Conference on Trade and
Development (UNCTAD) figures, 95 percent of the world's foreign direct
investment (FDI) regulations were in the dir ection of liberalisation
between 1991 and 1996. Financial markets have also been liberated from
state intervention.
In the mid -1970s, the foreign currency market was the first to liberalise,
followed by deregulation of domestic stock markets in the year 19 80s (for
advanced industrial nations) and in 1990s (for the newly industrialising
countries). Liberalization and deregulation were critical in driving the
tremendous increase in international commerce (which increased at an
average annual rate of 6% betwee n 1948 and 1997), FDI and foreign
currency and portfolio capital,with the average daily turnover of foreign
exchange markets reaching the trillions of dollars. Thus, both
liberalisation and deregulation are considered as having contributed to the
globalisa tion of the international economy.
There is much debate over the benefits of liberalisation and deregulation.
Both are essential aspects for creating a set of market -oriented policy
through neoliberal economists for developing nations seeking economic
progress. However, critics there are criticism too that regulations are being
utilised by firms from wealthier nations such as the United States to
exploit employees from poorer countries. Activists and academics have
also pointed out, that markets are neither free nor fair. For example - munotes.in

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6 Subsidies given to cotton growers in the United States and the European
Union, artificially pushes down prices, endangering the lives of African
cotton farmers. According some critics the issue is not about the freedom
of marke ts, instead the main problem is wealthier nations are basically
cheating themselves in the game they are selling to the rest of the globevi.
1.3.1 Liberalization in India
In the context of India, the liberalization began with the year 1991 through
New Ec onomic Policy. Lengthy procedures, license raj got ended. There
began free flow of capital goods from another countries. Liberalization
brought revolution through various companies entering Indian market.
New fields to work emerged like that of Business Pr ocessing Services
emerged through which lot of youngsters got employed. There also came
companies working on Knowledge Process Units and Information
technology. Liberalization also led to the privatization. Large number of
Public sector units were also pri vatized during this time. Privatization
entered several fields like electricity, transportation and even education to
list out few examples.
Check Your Progress
1. Discuss liberalization in India
2. What is your opinion about Privatization and liberalizat ion?
1.4 GLOBALIZATION AND RESTRUCTURING OF
WORK AND ECONOMY
Globalization is the free movement of goods, services, exchanges among
countries. The exchange cannot be just restricted to that of goods but there
are also culture exchanges like food, clothing etc. Restructuring is an
action taken by a company where the company modifies the financial and
operational aspects within its organization. Many a times this is done
when the business is facing financial pressuresvii.As this chapter discusses
about Globali zation and restructuring of work and economy let us look
into this more in detail.
Economic restructuring means in simple words reshuffling or changes in
the economy. In terms of Globalization it can be seen as the shift from that
of manufacturing to that of Service based industries. The uniqueness about
Globalization is that it makes countries interrelated. Some event in a
corner of the world could easily effect another. As in globalization process
the raw materials are procured from one country, the proc essing of the
product takes place in another country and that of marketing in another
country and the market being some other countries. So, restructuring in
one country easily affects another country.
The concept of contract jobs has been increased with restructuring in the
economy. Permanent jobs both in the private and public sector availability
has become a difficult task to achieve for youth. This is due to the munotes.in

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Nature of Industrialization,
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7 increasing privatization which works on profit as the main motto many a
times than welfare unlike public sector.
Let us look into some implications of restructuring in the economy.
 Growth of Service Industry
Initially, industrialization was characterised by large number of workers
moving from farmland to industries with high concentrations of capital
and equipments. Workers were committed to manufacturing. However,
with time there was there was demand for products, and employment
opportunities in the service sector. The service sector also grew faster than
the manufacturing. As a result, job g rowth in the main industrial societies
of Europe, East Asia, and North America throughout the second half of the
twentieth century was focused on services, professions, and finance. Even
in industrialized nations that were net exporters of manufactured goo ds,
such as Germany and France, the absolute number of manufacturing
workers been declining since the 1970s.
The shift from manufacturing to that of service industry has affected
countries both at national and international level. When the cotton mill s in
Mumbai or other manufacturing units have been shut down the workers
had to move to other works within informal sector. For example – Many
men started working as watchmen in buildings as real estate boomed in
cities. Many men began working as Auto driv ers to feed their families.
The problem with the growth of service industry is those who have skill
sets of that of manufacturing but not of service based industries become
sidelined. They find it difficult to cope with the changing market. The
youngsters or those who are able to equip themselves with the service
industry based skill sets would survive and rest lose jobs. This leads to
further marginalization where one group is able to rise and other falls.
 Investment and Restructuring
viii The neoliberal tu rn of the 1980s and 1990s resulted in an economy
which was led by United States capitalists brought about structural
reforms in the developing economics. It led to increase in foreign direct
investment, mergers, acquisitions across different countries. The re was
new markets, new borders, new trade opportunites. The ‘big firms’ in the
1990s invested around $33 billion from FDI outflows into developing
countries (Tussie & Woods, 2000, p. 60). Increased investment and loan
through US -influenced financial insti tutions, such as the International
Monetary Fund (IMF) and World Bank (WB), brought about economic
structural reform made and made the world into a single unified field for
global capitalism”, and build on the foundation of market liberalization.
Yet, some government did not look into the root cause of poverty and tried
addressing it, instead their economic growth planning going wrong itself
generated poverty” (Saurin, 1996, p. 670). The restructuring at the global
scale is also caused due to the kind of in vestment for example – Africa
receives less investment than other countries with in Europe. In other
words, the restructuring in the local economy is also effected through the
global capitalists groups decisions. For example – At present climate munotes.in

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8 change is a major discussion in which companies are supposed to work
upon, throughout the world as a result, those companies which are
working on the improving the living conditions, or green energy would
receive more boost than others.
Let us take the recent examp le of that of island nation Sri lanka, the
foreign debts have increased, the collapse of tourism with pandemic, fuel
crisis and other issues. The rise in the fuel prices has led to even basic
essentials not been available. There are situations like student s schools
exams has also being cancelled due to the lack of papers.
 Globalization vs. Industrialization – Work from home
Recent, advances in telecommunications and computer links have enabled
professionals in finance and research to work from home or liv e in remote
regions. Depending on the setting, industrialisation may contradict such
arrangements of contemporary trends as geographical mobility, production
centralization, personal freedom from family authority, and urbanisation.
 Technology and Restruct uring
The new technology has brought about restructuring of several tradition
businesses like online booking and home delivery of foods, clothes,
objects in other words, both perishable and that of non perishable goods.
This technology restructuring has a lso led to unemployment for a large
section of people who are not updated with skill sets or technological
know how.
The rapid use of technology can also lead to unemployment in a over
population country like ours. There is development and adoption of
technology and jobs related to that growing. Computer, Artificial
Intelligence, Robots would further bring about change in the economy,
work, all over the world. On the other side, we have migrant labourers
coming to the cities in search of jobs. So, this c ontradiction also has to be
taken into account in the process of advancement.
Check Your Progress
1. Explain Technology and Restructuring and its effects.
2. Discuss Industrialization vs. Globalization nature of work
1.5 SUMMARY
In this chapter we look ed into the role of industrialization and its effects
like growth of Urbanisation. Industrialization created massive job
opportunities and this led to people even moving away from villages to
cities and working in industries. Industrialization took place p rior to
World II in certain places like Britain, Europe, Japan while in developing
countries it took place later and this effected the developing countries
directly or indirectly. The chapter also looks into the role played by
developed countries in terms of investment and spreading of ideologies
like modernization, into the developing countries. The second topic of the munotes.in

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9 chapter is that of liberalization. Liberalization grew across different
countries which was led by developed countries. In the context of I ndia,
liberalization began with 1991 (New economic policy), with this several
companies which were managed by that by public sector was opened to
private players. This brought about several changes too. In the meantime,
there was also growth of Service in dustries across different countries. i.e.,
shift from manufacturing to that of service based industries and even
through the influence of Information technology. This leads to the third
topic of this chapter i.e. globalization and restructuring of work and
economy.
1.6 QUESTIONS
1. Discuss the nature of industrialization
2. Explain liberalization
3. Explain Globalization and restructuring of work and economy
4. Discuss how foreign investments restructure economies.
1.7 REFERENCES

i https://www.dictionary.com/browse/industrialization
ii Britannica, T. Editors of Encyclopedia (2022, March 13). Industrial
Revolution. Encyclopedia Britannica.
https://www.britannica.com/event/Industrial -Revolution
iiiNicholas A. Cummings,Economic and Policy Issues,
Editor(s): Michel Hersen, William Sledge, Encyclopedia of
Psychotherapy, Academic Press,2002,Pages 681 -701,
https://doi.org/10.1016/B0 -12-343010 -0/00082 -9.
(https://www.sciencedirect.com/science/article/pii/B0123430100000829)
iv Dragos Simandan,Ind ustrialization,Editor(s): Audrey Kobayashi,
International Encyclopedia of Human Geography (Second
Edition),Elsevier,2020,
Pages 255 -260,ISBN 9780081022962,
https://doi.org/10.1016/B978 -0-08-102295 -5.10086 -1.
(https://www.sciencedirect.com/science/article/pii/B9780081022955100861 )
v Richard Biernacki, in International Encyclopedia of the Social &
Behavioral Sciences (Second Edition) , 2015
vi Smith, N. (2013, August 1). liberalization . Encyclopedia Britannica .
https://www.britannica.com/topic/liberalization
vii https://www.investopedia.com/t erms/r/restructuring.asp
viii https://www.e -ir.info/2016/01/31/globalization -created -mechanism -for-
the-restructuring -of-developing -states/
Figura, A., & Wascher, W. (2008). The causes and consequences of
economic restructuring: Evidence from the early 21st century.

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10 2
LABOUR IN INFORMAL SECTOR IN
INDIA, MIGRATION AND WORK
Unit Structure
2.0 Objectives
2.1 Introduction
2.2 Meaning of Informal Sector
2.3 History of Informal Sector
2.4 Meaning of Labour
2.5 Informal sector and Labourers lives
2.6 Problems of Informa l Sector
2.7 Measures taken by both Indian Government and International
Organizations
2.8 Introduction to Migration
2.9 Reasons for migration - Push and Pull factors
2.10 Women and migration
2.11 Migration and Work
2.12 Pandemic and Migrants
2.13 Probl ems faced by migrants at work
2.14 Legal Rights for Migrants
2.15 Summary
2.16 Questions
2.17 References
2.0 OBJECTIVES
 To understand the meaning of Informal Sector
 To look interrelationship between informal sector and labourers lives
in India.
 To learn about migration and work
 To look into different government measures both National and
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the compulsive need for
11 2.1 INTRODUCTION
In this chapter we will learn about two major topics i.e. Labor in informal
sector in In dia and the second topic that we will learn here is that of
Migration and Work. Informal sector has been marginalized since long
and the workers dependent on it still continue to work in very unhealthy,
unsafe conditions with very little wages. This make i t very important to
learn about these subjects. Our society is going through infrastructural
upgradation as per the recent budget allocation, there Gatshakti initiatives
etc. Hence, there will be more number of workers in the future too will get
employe d in these sectors. So, this will lead to more opportunities in this
areas to find out problems and resolving them. Both these topics are very
contemporary and there are several institutes who are offering
specializations in these topics. For example – International Institute of
Population Studies at Govandi, Tata Institute of Social Sciences has
independent department working on these areas, there is Center for Urban
Studies (CDS) etc and you can approach these institutes and build career
too in these area s. This chapter would be also useful for those students
who are preparing for competitive exams like UPSC, MPSC too. Before
understanding labourers conditions in informal sector let us first look into
understanding the informal sector.
2.2 MEANING OF INFO RMAL SECTOR
The informal sector is defined as a collection of businesses engaged in the
manufacturing of products or services with the primary goal of providing
employment and income to those involved. These businesses are usually
tiny and can be even ope rated with little capital. Here labour ties do exist,
they are mainly based on informal work, family, or personal and social
relationships, rather than legal arrangements with formal assurances.
Informal sector can also be seen as those enterprises which a re not
registered under any particular forms of national legislation. The
employees or employment details also many a times need not be
registeredi.
2.3 HISTORY OF INFORMAL SECTOR
Around the end of 19th centuryii and the beginning of the 20th century the
formalization of labour had began with reference to wages and work. The
government also played an important role in looking after the interest of
both groups i.e. employers and employees. Labour laws were made, there
was discussions on working conditions, duration of work etc. in several
countries.
The history of informal sector somewhere begins with the industrialization
too. The informal sector back then operated as a waiting room for the new
entrants. It can be seen as kind of a waiting army. A reserve army of
labours. These were basically men and women who had migrated to cities
and had left back their homes where they were working in farms. The
assumption was that once they would get jobs, they would develop some
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12 become one of the member of the trade union and then their labour price
would also increase through collective bargaining. They also thought that
soon they would become permanent employees and would receive benefits
and be formalized. However, this was not the case and hence people
started to do own business, work with other individuals than just waiting
for large scale industries to get jobs. In a way, through this waiting period
the informal sector developed. When there wa s no demand in one place,
then laborers started moving across other cities and countries. On the other
hand in countries like Latin America, Continents like Asia, Africa very
few got into the formal sector jobs. So, here too the informal sector
developed.
2.4 MEANING OF LABOUR
Though Labour means work or physical work, here the reference is made
in terms of human being – like a designation – A labourer is a individual
who puts across certain degree of physical, mental, social effort to produce
certain goods or at times offers his/ her services. He/she also brings certain
degree of skill sets and many a times he/she also converts the raw
materials into finished products.
2.5 INFORMAL SECTOR AND LABOURERS LIVES
2011 -20(iv) 2017 -18
Worker Unorganized Organized Total Unorganized Organized Total Informal 82.6 9.8 9.8 85.5 5.2 90.7
Formal 0.4 7.2 7.6 1.3 7.9 9.3
Total 83.0 17.0 100.0 86.8 13.2 100.0

The above table is from that of National Sample Survey which shows that
the workers work ing in the informal sector is far greater than that of
organized (formal) sector ie. More than 82 percent of the total population
in the year 2011 -20. It also reveals that there are several policies, budget
allocation for the formal sector related jobs, em ployees however majority
of the workers are that of informal sector labourers and there is need for
urgent and more policies and fast paced implementation process for
assisting the labourers welfare.
Some studies also reveal that nearly 92.4 percent of in formal workers
work with no written contract, paid leave and other benefits in the
economy. In addition, the informal sector helps in the growth of the formal
economy, this can be seen from the fact that 9.8 percent of informal sector
workers work in the o rganized sector, indicating the level of outsourcingiii.
 Children and Informal Sector
Children are hired in the informal sector due to multiple reasons as they
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the compulsive need for
13 working conditions. Su ppressing thes e groups becomes easy. Children are
hired for jobs like carpet weaving, crackers making etc even today as their
hands are tender. Such kind of work can effect the child both physically
and psychologically. The memories of these experiences w ould even
impact the child’s personality when he/she grows up as an adult.
 Women and informal sector
Women have to face double or even triple levels of discrimination as a
labourers. There are several instances where women face problems like
sexual haras sment at work place and even violence. Women not only offer
labor outside their home specially those selling vegetables, garlands they
have to also walk long distances in a day and later after coming home they
have to cook food. If these women are from ma rginalized caste they even
have to face caste discrimination.
2.6 PROBLEMS OF INFORMAL SECTOR
1. The nature of work is more of casual in nature than a regular job.
People are often hired and when there is no need of labour they are
fired.
2. The wage payment m ay not be always on time, and it is made on piece
rate basis i.e. the labourer receives payment on the basis of his task
completed or items completed . This leads to even longer hours of
work.
3. There is no contract made before hiring a individual, the condit ions of
work is also not clear, it keeps changing depending on the
requirement, as a result the employer do not provide any social
benefits during crisis, emergency or allowances or benefits.
4. There is no collective group, agency or representation like tra de union
etc. as a result, there exists no one to voice or to bargain or question. If
the individual questions they he/she may lose his employment.
5. If the nature of work is that of self employment the work becomes
home business and women contribute a larg e amount of time and
labour to the business however, they do not get paid or withdraw any
share exclusively for their services they provide.
6. Self employment labourers work in open air, and people who visit
their shops are those of transitory in nature thi s effects the income.
(Jan Breman).During lockdowns, strikes these groups suffer the most
as the risk and reward is borne by the self employed individuals.
Check Your Progress
1. Discuss the meaning of Informal Sector
2. List out two problems associated wit h informal sector

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14 1.7 MEASURES TAKEN BY BOTH INDIAN
GOVERNMENT AND INTERNATIONAL
ORGANISATIONS
 Decent work Agenda
The United Nations on September, 2015 have discussed about the concept
of decent work. It can be classified into four main categories name ly –
Employment Creation, Social Protection, Rights of individuals at work
and Social Dialogue. These points has also been discussed with respect to
the Agenda for Sustainable Development 2030 goals. For example – The
Goal number 8 of the 2030 Sustainable Development talks about creation
of an environment where there is Decent work. Even the G20, G7,
European Union, African Union have agreed upon the importance of
decent specially for crisis recovery and for bringing about sustainable
development in the cou ntryiv.
 The Unorganized Worker’s Social Security Act, 2008
The Indian Government launched the Unorganised Worker’s Social
Security Act in the year 2008 for the welfare of the people working in this
sector. Through this Act, legalizing attempt of the mult iple businesses of
informal sector has been attempted through procedures like registration,
social security measures, even setting up a team in national social security
board in which there would be representative from different areas like
Government, Non Governmental Organisation member civil sector, labor
welfare and even members of unorganized sector. Through this several
welfare programs like provident fund housing, employment injuriy
benefit, educational schemes for children, skill upgradation, old ag e
homes, health and maternity benefits, life and disability cover and any
other benefits updated for the growth of unorganized sector will be
included. However, as of now the scheme has been attempted to be
implemented in Delhi but it hasn’t been probably put into practice in any
other cities.
As many a times labourers are also migrants. Both these topics are very
much interrelated let us look into the second section of the chapter –
2.8 INTRODUCTION TO MIGRATION
People have been moving since times immem orial in search of food, prior
to settled agriculture. People even have moved to pay respect to the gods
as pilgrims. There are even mythological stories like Noah’s Ark which
talks about human beings moving along with animals, birds etc. Even
birds migra te in search of food. Our physical structure also has evolved
because of movement. So, migration is not something new in nature.
Migration is basically movement of people from one place to another.
Migration can be of different types like seasonal, tempor ary, internal
migration i.e. within the country – rural to rural or rural to urban. External
migration – where migration takes place outside the country. This could be munotes.in

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the compulsive need for
15 forced (War, natural disasters) or even voluntary (jobs, better conditions,
educational reasons) in nature.
2.9 REASONS FOR MIGRATION - PUSH AND PULL
FACTORS
There are also push and pull factorsv involved in migration. Push includes
war, violence, poor wages, famines, lack of rain and crop failure,
pollution, natural disaster, lack of infra structure, limited opportunities in
the home etc.
On the other hand, pull factor includes higher wages, job prospects, food
availability, better environment, safety, stability, better standard of living,
better quality of life, availability of service, go od infrastructure, housing
conditions, pollution less environment etc.
2.10 WOMEN AND MIGRATION
Majority of the female migration is through that of marriage. This is the
situation both within India and outside India too. There are instances
where females get married to another country Indians and later the
marriage breaks and they lose both dowry and face multiple problems.
Recently, there is a rise in the Non Residential Indians women facing
harassment.
Within the country, specially in urban areas, the m ale member works in
the city and sends his income to his family in villages. Unless he brings
the female to the city the female continues to reside in the home at village
and look after her in -laws and children. Until a stable house or any
arrangement is a vailable the husband is an occasional visitor at the home.
There are multiple reasons that some men do not bring a female to the
city, it is due to lack of proper settlement, housing rent is high. Some other
reasons like lack of support at village for old parents in village. These
parents can't stay too long in city as houses are small.
2.11 MIGRANT AND WORK
Migrant workers support the growth and development of their destination
nations, while their countries of origin also gain significantly from their
earnings and the skills acquired throughout their migration experience.
This can be said the case of internal migration too, which takes place
within the country. Nonetheless, the migration process includes
complicated issues in terms of governance, migrant worker safety,
migration -development links, and international cooperationvi. According
to the 2011 Census nearly 54 per cent of Mumbai's population consists of
migrants who are skilled, unskilled, semi skilled and they also work in the
organized and unorga nized sectorsvii.
According to International Labor Organisation, Migrant workers are more
often vulnerable , they are even forced to work as labourers and migrant
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16 discrimination on the basis of payment and they are even times forced to
work extra hours and even in unsafe working conditionsviii.
Migrants as said earlier work in the informal sector. There are a range of
fields on which they work some of them are - Mining and Quarrying,
Manufacturin g, Electricity related industries, gas, water supply and other
utility services existing in the country. Migrants also work in the
construction sites, for trade, repair as plumbers. Transport, Storage,
communication and services related to broadcasting as hawkers etc.
Check Your Progress
1. According to you, how can we improve the conditions of Migrants
2. List out two problems of Migrants in terms of Work
2.12 PANDEMIC AND MIGRANTS
Pandemic was a difficult period for lakhs of migrants all over the country.
Many lost their jobs as there was lockdown. Many could not afford to pay
their rents as the living expenses in the city being high. Lakhs of people
started walking back to their home along with their family. Children’s,
Pregnant women too walked miles man y lost their lives in the process or
got hurt too. Some people even into accidents. The migrants conditions
reveals the scope for improvement in the migrants conditions.
During pandemic migrant were the most effected population. They did not
have enough food to eat, no proper shelter or healthcare facilities. They
also had fear of getting infected or spreading the infection if they went to
work and even people who earlier used to hire them while they stood at
Naka were hesitant to hire them as a result, e ach day was a traumatic for
them. With fear, anxiety and by taking risk they travelled back home yet
people at the home too were afraid to include them in the village. There
were instances of harassment negative reactions from villages tooix.
2.13 PROBLEM S OF MIGRANTS AT WORK
 Lack of proper documents
Migrants have documents like adhar card, ration card back in their
villages and as a result, they struggle with taking benefits offered in the
cities as address varies. They can't take the free education ben efits, or any
government concessions which a particular state offers to it's residents.
Parents even find it difficult to enroll their child into the school due to the
lack of documents. There are migrants who keep moving depending upon
the availability of the jobs and due to lack of permanent address they face
several problems. The condition was more worse for senior citizens
migrants who migrated to the city. They do not generally receive several
benefits as a migrant, which the host state would be givin g to their own
local residents like bus concessions, pensions etc.
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the compulsive need for
17  Vulnerability
To be a migrant and work is being vulnerable. Parents even find it difficult
to enroll their children into the school due to the lack of enough
documents. There are migrants who keep moving depending upon the
availability of the jobs and due to lack of permanent address they face
several problems. Let us look into this from the cases of hawkers.
Whenever the police vans appriach hawkers have to hide their vegetables,
goods a way from roads Or else the police would take away their property.
In order to take the property back they have to pay again a large sum of
money which adds to their expenses. They work in constant fear of getting
caught.
The same case is that of hawkers selling in trains. Women and men who
sell sit down and hide themselves from the police whenever a railway
station is approaching. These migrants hawkers also at times have to pay
hafta –bribe. At times, if one officer caught the hawker then he has to pay,
if the same hawker is caught again by someone else – again he/she has to
pay.
Many a times, females and men on the streets are also selling goods which
are perishable in nature, so they face loss in their business and if the goods
do not sell or lockdowns are implemented, curfew is made or even strikes
are made.
The recent Ukraine crisis of Medical Students reveals the conditions of
migrants. These students went over Ukraine to receive education. Some
students were also in the stage of getting awarded wi th their Medical
Degree. However, the crisis in the land led them to move out of the
country. The whole Ukraine crisis also revealed the gap in the education
student where students are forced to move out of the country due to the
less medical fees, procedu res in Ukraine. It also shows the structural
improvement which is needed in our society right from the education to
employment.
2.14 LEGAL RIGHTS FOR MIGRANTS
Interstate Migrant Act, Regulation of Employment and Conditions of
Service 1979
The Interstate Migrant Act, protects interstate migrant workers in varying
ways. According to this Act Labor contractors who hire migrants must:
(i) be licensed,
(ii) they should register migrant workers with government authorities, and
(iii) arrange for the worker to be provide a passbook that records their
identity. The legislation also specifies the salaries and safeguards, and
also points out housing, free medical care, and protective clothes must
be provided by the contractorx.
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18 Article 15
Article 15, of the constit ution guarantees equal rights for all citizens
irrespective of their caste, class, sex or place of birth. Yet, migrants face
violence, discrimination through at times through son of the soil
movement. Many a times migrants fill up those jobs which the loca ls do
not wish to take yet, they are seen as creating competition.
Article 19 (1)(e)
Article 19(1)(e) of the Indian Constitution, guarantees every Indian citizen
the right to live in the country and settle in any part of the territory of
India, subject t o reasonable restrictions in the interest of the general public
or protection of any scheduled tribe. However, people migrating for work
face key challenges including:
i) lack of social security and health benefits and poor implementation of
minimum safet y standards, law,
ii) lack of portability of state -provided benefits especially food provided
through the public distribution system (PDS) and
iii) lack of access to affordable housing and basic amenities in urban
areasxi.
Check Your Progress
1. Explain the I nterstate Migrant Act, 1979 in few lines
2. Explain the conditions of children who work with the informal sector
2.15 SUMMARY
We began this chapter by looking into the meaning of informal sector
which is a collection of businesses engaged in manufacturing of products
or services with primary goal of providing employment to those involved.
The size of businesses is small. The history of informal sector dates back
to 19th, 20th century were workers were like waiting army waiting for
getting jobs in the indus tries. We further looked in the problems like wage
payment issues, no collective group, loss of job, threat etc. The informal
sector employs women and children too. The second section of this
chapter discusses about migration. The reasons for migration is explained
with push and pull factors. Migrants face several problems like lack of
proper documents, unable to raise voice. There are also discussion of
Legal measures of both informal sector and migrants discussed in this
chapter.
2.16 QUESTIONS
1. Discuss the meaning of Informal Sector and the measures taken by
government in terms of both National and International to protect
them.
2. Explain the history of informal sector and list out the problems faced
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the compulsive need for
19 3. Discuss the problems of migrants in the city with reference to work.
4. Discuss the Unorganized worker’s security Act 2008
5. Discuss Migrant women and Children conditions in the terms of work
and quality of life as migrants.
2.17 REFERENCES

i International Labour Organization (ILO) Resolutions Concerning
Statistics of Employment in the Informal Sector Adopted by the 15th
International Conference of Labour Statisticians, January 1993, para. 5.
ii http://www.wiego.org/sites/default/files/ resources/files/Breman -Inf-
Sector -Global -Trend.pdf (Notes made from Presentation made by Jan
Breman)
iii Computed from NSS 68th unit level data on employment
unemployment, 2011 -12 source - Measuring Informal Economy in India _
Indian Experience By S V Ramana Murthy, Deputy Director General,
National accounts Division, Ministry of Statistics and Programme
Implementation, National Statistical Office.
https://webcache.googleusercontent.com/search?q=cache:5NKicnqSkScJ:
https://www.imf.org/ -/media/Files/Conferences /2019/7th -statistics -
forum/session -ii-murthy.ashx+&cd=4&hl=en&ct=clnk&gl=in
iv https://www.ilo.org/global/topics/decent -work/lang --en/index.htm
v https://justiceforimmigrants.org/what -we-are-working -
on/immigration/root -causes -of-migration/
vi https://www.ilo .org/global/topics/labour -migration/lang --en/index.htm
vii https://theprint.in/india/a -second -exodus -though -smaller -shows -why-
mumbais -migrant -workers -are-still-vulnerable/642271/
viii https://www.ilo.org/empent/Eventsandmeetings/WCMS_203642/lang --
en/index.htm#: ~:text=Migrant%20workers%20are%20more%20vulnerabl
e,less%20than%20the%20legal%20minimum.
ix
https://www.mohfw.gov.in/pdf/RevisedPsychosocialissuesofmigrantsCOV
ID19.pdf
x https://prsindia.org/theprsblog/migration -in-india -and-the-impact -of-the-
lockdown -on-
migrants#:~:text=Overall%2C%208%25%20of%20people%20moved,2%
25%20of%20female%20migrants).&text=According%20to%20the%20Ec
onomic%20Survey,29%25%20of%20the%20workforce).
xi Report of Working Group on Migration, Ministry of Housing and Urban
Poverty Alleviation, Ja nuary
2017, http://mohua.gov.in/upload/uploadfiles/files/1566.pdf .


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20 3
INDUSTRIAL POLICIES SINCE 1990 s
ONWARDS, SMALL AND MEDIUM
ENTERPRISES

Unit Structure
3.1 Objectives
3.2 Introduction
3.3 Importance of Globalisation
3.4 Globalisation
3.5 Contemporary Globalisation in the world
3.6 New Economic Policy
3.7 Positive and Negative Impact of New Economic Policy
3.8 Globalisation in India
3.9 Features of the New Industrial policy 1991
3.10 Small and Medium Enterprises in India
3.11 Features of MSMEs
3.12 Role of MSMEs in Indian Economy
3.13 Importance of MSMEs for the Indian Economy
3.14 Summary
3.15 Questions
3.16 References
3.1 OBJECTIVE
 To families the students that the introduction of Globalization was
through liberalization of policies.
 To emphasize that the multinationals played an important role in the
expansi on of would trade.
3.2 INTRODUCTlON
Before we study the meaning of globalization it is necessary to know the
reason for studying globalization, which is a part and parcel of today's munotes.in

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21 modern world. In the pre -industrial stages, every nation was interested in
its own progress and development. In such a situation international
relation were extremely limited. However, with the development of
industrialization modernization, urbanization, developed means of
transport, communication science and technology, the business between
the countries of the world started breaking down and inter national or
external relations between the countries developed at a rapid rate.
Globalization as a term refers to a policy adopted by the Government of
India especially since 1991. The critical foreign exchange situation,
galloping inflation and the compulsive need for external aid, prompted the
government to accept the new terms and conditions for opening up the
Indian economy. This resulted in the removal of restrictions and duty on
imports, which implied liberalizing of India's economy, interns of import
of foreign goods and permitting almost unrestricted free flow of foreign
capital in practically all the important areas of the Indian economy. Today
there is a need for close inte raction between the countries of the world.
Therefore, different nations are co -related to each other and attached to
each other through various aspects such as communication, media, social
relations, economic or is termed a globalization that is one that involves
the globe. Globalization, like socialism till recently, is currently in much
use and the collapse of socialist economics has greatly enhanced its
prestige. The economics today are seen as interlinked and economic life
now has become so competitive and interdependent that they have turned
into a world market and economies have partially or fully been globalized
or are moving towards globalization. India after independence had adopted
a policy of planned economic development and to achieve this it ha rd thed
to follow a policy of mild protection and import substitution Our economy
slowly moved towards globalization that got a boost by the policy of late
Prime Minister Shri Rajiv Gandhi and thrust with the announcement of the
New Economic Policy , under the leadership of Rao in July 1991. During
the east 10 or 15 years there has been a gradual shift of employment form
the organized sector to the unorganized sector. Within the organized sector
the proportion of casual and contract labour is increasing. Th is has been
one of the major consequences of industrial restrictions during the 1980s.
The new Economic Policy accelerated this trend with the increased
importance to experts, and more and more expect processing zones have
emerged in different parts of the country. Globalisation refers to a
worldwide phenomenon buying different countries of the 1st world and
the third world into a close network of social, economic and political
connections that crosscut borders between countries. Globalisation thus
means in creasing interdependence of the world society. Giddiness defines
globalization on the intensification of world wide social relations, which
like distant localities in such a way that local happening are shaped by
events occurring many miles away and vice - versa. McGrew also speaks
of globalization as simply the intensification of global inter -connected and
stresses the multiplicity of linkages implies -goods capital social
inspirational relationship technological developments ideas all really flow
across ter ritorial boundaries.
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22 3.3 IMPORTANCE OF GLOBALIZATION
Our lives are influenced by events happening far away from the social
context in which we carry on our day -to-day activities. T hen there is an
emergence of wo rld system or a single social order for the world.
Although globalization is rapidly developing today, it is not a completely
new concept. However, it has become very important today became the
effects of globalization are felt on a world wide basis. Major economic
referees which were considered to be nearly impossible until recently,
were introduced which are popularly known on structural adjustments or
liberalization or globalization. This globalization of the Indian economy is
the need of present times. Looking to the need of the uns atisfactory
economic record of previously closed economies like East Germany,
China, Poland and the U.S.S.R. On the country the open economies like
HongKong, Singapore, Taiwan and South Korea have progressed well
thereby justifying the process of growth un der liberalization through
globalization Indians economy must prepare itself for moving on non -
traditional lines to achieve goals of macro balances between aggregate
demand aggregate supply, saving and investment revenues and
expenditure, explain and impor ts etc. The Indian economy needs to be
totally transferred to solve its basic problems of poverty, unemployment
and inequality, Liberalization or globalization of the economy is a remedy
for all these illnesses.
3.4 GLOBALISATION
A sociological understan ding according to Hoogvelt, Sociologists have
been at the forefront in the effect of giving globalization a consistent and
rigorous heretical status. In the contemporary period, its development of a
specifically sociological concept owes the greatest debt to Roland
Robertson of the University of Pittsburgh. Curiously globalization, or a
concept very much like it, put in an early appearance in the development
of social science. Saint Simon noticed the industrialization was including
commonalities of practice s across the di verse cultures of Europe
Durkheim ’s legacy to globalization was his theories of differentiation and
culture. The state and the collective consciousness must progressively
become more weak and abstract in the order to encompass intra society
diversity. All this implies that industrialization tends to break collective
commitments and to open the way for dismantling the boundaries between
societies just on Durkheim identified differentiation, Weber identified
rationalization as the globaliz ing solvent. But even this globalization affect
was restricted to Western Europe. Of all the clinical theorists , the one
mostly explicitly committed to a globalizing the rely of modernization was
Karl Marx. Globalization caused an enormous increase in the power of the
capitalist class because it opened up new markets for it. The establishme nt
of a 'world market' for mode rn industry gave a cosmopolitan character n ot
only to production but also to consumption. In contemporary sociological
theory, one of the th eoretical debates of globalizations surrounds when it
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23 1) The emergence of new age - Martin Albrow wants us to think of
globa lization on its own terms and in its own time. He speaks 'of the
global age' which her angers have replaced the modem age'. The modem
age has been supplanted and superseded by a new global age, with its own
axial principles and specific cultural imaginary. Th e 'shift' from
premode rn to past mode rn to global lies in the axial principles that put
commercial, mobility and connectivity at the centre of our lives. Through
the mediating category of modernity under this pattern, three possibilities
can be speare d: - a) Globalisation is seen in the historical contest of
modernity. Robertson is a strong proponent of this new. Only within the
historical appearance of key mode rn institutions of capitalism, industrial
and urbanism, a developed nation state system mars network of social
relations characteristic of globalization wise. Thus, modernity understood
on the nexus of there institution is the essential hysterical contact of
globalization. Prior to this period the socio -institutional conditions and the
resource of cultural imagination enabling connectivity are simple not in
place. Robertso n does not subscribe to Gidd ens view that modernity has
led directly to Globalisation. Rather, Robertson insists that globalization
of the contemporary type was set in motion lo ng before modernity in the
economic sphere it predates even the rise of capitalism. He does not
however deny that certain aspects of modernity have greatly amplified
globalization i.e. modernization tends to accelerate the globalization
process. b) Globali sation is seen as a c onsequence of modernity. Gidde ns
has offered one of the most sophisticated analysis of modernization and its
inherently globalizing properties in his book 'consequences of modernity
using the concepts of time -space distanciation disemb odying and
reflexivity, he explains how complex relationship develop between local
ach ties and interaction takes place across distances. He sees globalization
on the result of inherently expensive characteristics of modernity. He list
for such institution al characters as an organizational cluster a) is capitalist
system of commodity production (owners of private capital and labour (b)
industrialization (technology requires a collective Private capital and
labour, (c) administrative competence of the natio n state (a good
surveillance system) (d) military order (for centralization of control wither
an industrialized society) He explains that his discussion of globalization
focuses on modernity since he sees globalization as a consequences of
modernity. Moder nity implies universalizing tendencies that make
possible global networks of relationships and basically extend temporal
spatial distance of social relationship. c) Globalization is the result of the
hegemony of modernity. Wallerstein sees globalization in its strategic role
of the maintenance of western cultural dominance and its universalizing
and hegemonic tendencies. The concept of globalization he opines is an
obvious, object for ideological suspicion, became like modernization a
predecessor and relate d concept, it is bound up intrinsically with the
pattern of capitalist development as it has ramified through political and
cultural arenas, it does not imply that every cultural/society met become
westernized and capitalist, but they must establish their position in relation
to the capitalist went. Wallerstein concentrates on the emergence and
evolution of the modern European wo rld system, which he traces from its
late medieval origins of the fifteenth and sixteenth countries to the present munotes.in

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24 day. Capitalism functions in relation to the long -term cyclical rhythms, the
central one of which is the regular pattern of expansion and c ontraction of
the whole economy .
Check Your Progress
1. Define Globalisa tion
3.5 CONTEMPORARY GLOBALIZATION IN THE
WORLD
The task of globalization theory is to understand the sources and
condition of this complex connectivity evident everywhere in the world
today Rob ertson explain that while events in any one part of the world will
increasingly have consequences " for or be referenced against events in
other distant parts, this relatirization may not always be positive. We need
to understand that globalization follows the path of its own inexorable
logic. Global connectivity then means that we now experience distance in
or different way. This particular sense of proximity can be seen in the
transformation of spatial experience into temporal existence. Robertson
looks at ho w connectivity shades into a) proximity b) unity a) Connectivity and proximity refers to the shrinking of distances through
the dramatic reduction in time taken either physically or representational^
(information technology) to cross distances. It also ref ers to spatial
proximity via the idea of 'stretching' social relations across distances . The
United Nations uses the t erm 'Global Neighbourhood ’.
Phenomenologically, proximity is described on a common conscious
appearance of the worlds, more intimate and more comprehend'
metaphorically it implies an increasing immediacy and consequentially
thereby reducing real distanciat ed relations. b) Connectivity and Unicity
for the first-time in. history the globe is becoming a single serial and
cultural setting. Thus, in all spheres of life, issues a no longer be looked at
independently from a local perspective, Globalization has con nected the
world. Local is raised to the horizon of a 'single world'. They world system
may be divided by conflicts that one more intractable than the previous
disputes between nations.
3.6 NEW ECONOMIC POLICY
Structural adjustment loan s brought forward various changes in the
policies of the Indian government. Before 1991 the Indian government
tried to have a minimum enter furnace of foreign enterprises in the Indian
economy. Foreign companies were not given a free market for their
produ cts but at the sometime, limits were maintained a rule were inued as
regards foreign collaboration. The government, due to the structural
adjustment loans, had to remove these limits of control. Therefore, there
changes were welcome and thus formed the New Economic Policy. It was
due to this policy that the process of globalization entered India at a very
rapid pace. Hence the new economic policy is considered as a significant
aspect related to globalization. The July 1991 budget incorporated the first
stages of structural adjustments of the new economic policies. The reforms munotes.in

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25 or changes introduced in 1991 have the following important elements. 1)
The major intention of the Indians government was to solve its balance of
payment crisis. 2) Its liberalized impo rt and export and policies on foreign
trade. This meant that the Indian businessmen as well as foreign
enterprises were now free to have trade relations with each other. 3) This
policy led to internal de -regulation of the market. 4) The Indian
government d evalued the rupee to encourage exports. It increased the
professional tax and reduced income tax. When the Indian government
brought about so many changes, they were considered positive because
they increased the pace of 'globalization. However, the govern ment also
had to introduce certain other changes, which had negative consequences
e.g. the Indian government had to reduce subsidies on agricultural inputs
and on prices within the public distribution system.
3.7 POSITIVE AND NEGATIVE CONSEQUENCES OF
THE NEW ECONOMIC POLICY
The new economic policy brought in its wake certain significant
consequences in the Indian society. Their consequences were both positive
and negative. Positive consequences 1) The government spent amounts
on welfare and poverty removal programmes. This meant that the extra
finance that the government had earned through reducing the subsidies
was used for positive activity. 2) One of the significant consequences was
the justification provided to the new economic policy or the policy of
liberalization. The Indian government anticipated an inward rush of
foreign capital in the form of direct investment. It was assured that this
would bring rapid growth for the economy, reduction in unemployment
and rising personal incomes. Negative conseque nces 1) The new
economic policies had to increase impoverishment. There was a
depression of wages. 2) One of the serious after affects of the new
economic policy was an increase in the amount of child labour. This,
affects the future of the nation because children are the citizens of
tomorrow. In order to ensure a proper program for the nation. It is
necessary that the young generation should have at least a decent level of
education. Due to the problem of child labour. Children are deprived of
education an d are in fact explored and deprived of their right to education.
3) The poor class suffered a lot due to the withdrawal of government
subsidies on agricultural inputs as well as in the public distribution system.
The most affected were the loudless labore rs who were dependent on daily
wages. 4) Integrated rural development also faced a setback due to the
governments policy. This resulted in a tremendous loss to the prevent
section and particularly those who depended on guaranteed work schemes
in slack seas ons. 5) The policy of liberalization can also be linked with
increasing rationalization and regions started company with each other for
favour from the union government. The basic aim of the competition
amongst the region was to receive foreign capital. Th is resulted in ethnic
movements and other serious conflicts. 6) The new economic policy
brought back caste divisions in a major way. The private sector started
becoming more and more important. However, the private secto r did not
implement the policy of renovation. As a result of this the scheduled munotes.in

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26 castes and scheduled tribes were adversely affected. On the other hand, the
brahmans or the upper caste benefited a lot when the economy was
privatized. Then there was an in ce ntre based economic division. 7) Under
the impact of new economic policy and the policy of liberalization the
MNC's entered into the Indian market at a very fast rate. Though their
entry was considered significant by the government because of the
increase is foreign capital investment, it did create a variety of negative
consequences. The MNCs had their own selfish interests. They were most
interested in local buyouts and mergers rather than in genuine new
enterprises. Their main concern was to enter the In dian domestic market
e.g. Coca Cola took over Thumbs up, Honda merged with Bajaj. Thus, the
tendency of the MNC's led to serious doubts regarding their own genuine
concerns. There were the following allegations against the MNC's. 1)
They were executing dom inance and control over the local companies. 2)
The MNG's showed a tendency to import outdated technology. 3) There
was a marine brain chain to the west, especial ly in the software industries.
4) The government had liberalized the controls on experts under the new
economic policy. Due to this, certain highly capitalized Indian farmers
started satisfying their own selfish interest. They indulged in exporting
high qualitative products to overseas markets for high profit e.g. high-
quality Basmati rice and Alph onso mangoes are exported, infact majority
of the Indian population don't even get to see this quality of rice and
mangoes. Thus, the farmers show interest in their own profits.
Check your Progress
1. What are the positive and negative consequences of Glob alization ?
3.8 GLOBALIZATION IN INDIA
The concept of globalization has affected almost all countries in the world.
The impact of globalization on Indians has resulted in various changes in
the various spheres of life. Some changes have been possible whereas
some have resulted in negative consequences. Globalization in India,
especially in th e economic or market aspect has been very significant
because of its important social consequences both positive and negative.
One of the significant impacts of globalization on India is the new
economic policy. The new economic policy is extremely signifi cant
because it has brought globalization into Indian society on a very large
scale. It means before the implementation of the new economic policy the
concept of process of globalization was limited in its structure. After the
British left India in 1947, t he situation of Indian society was not at all
favorable. Low level of growth in the economy and high levels of
deprivation among the population marked the immediate post
independence situation. It was necessary to improve the low levels for
stable economic growth. The consequences or a solution to this problem
was the creation of a planned, relatively closed economy with a high
degree of government control and of a policy of widespread subsidies. The
government of India developed the policy and the five -year plans that are
continued even today. The first five-year plans concentrated on
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27 The reason was to reduce high economic growth. Gradually the later five
years plan concentrated more on welfare and poverty removal. The Indian
economy was divided into two major sectors namely, the public sector and
the private sector. The private sector was important but it did not venture
into certain areas of the economy due to long gestation periods , high
capital investment as well as high risks. They wanted these industries to be
within the country but neither by themselves nor under the control of
foreign enterprise. Therefore, the main intention of the public sector was
to set up industries in tho se areas rejected by the private sectors. When the
Indian government attempted to raise money for this investment from the
World Bank it was referred to on the following grounds. a) India was
basically a public driven school i.e. the public sector was extr emely active
in nature. b) In the world Bank's view, India has agriculture as its major
aspects as compared to industries and therefore industrial goods should be
improved rather than produced at home. c) Help should be taken from the
multinational compani es (MNC) for setting up any industrial enterprise.
As the world Bank rejected the loan, India approached USSR & processed
the loans, I n spite of the loan clearan ce by the USSR the problem in the
Indian society did not stop . The five years plan had also resulted in certain
partial policies such as the queen revolution which favoured regions like
Punjab and it created differences between genders regions in the country.
The Government of India was also unable to effect income redistribution.
The Gulf took place in 1991. During this war, India found it impossible to
borrow from the world market. The Non-Resident Indians or the NRI's in
this situation become worried about the money that they ha d invested in
India and therefore. they quickly withdrew their deposits. The situation
made India more short of foreign exchange. With a lack of foreign
exchange, the balance of payment crisis emerged. India now found it
impossible to build up her independ ent economy and therefore was forced
to accept a stmetural adjustment loan from the World Bank. The loan
popularly came to be known on New Economic Policy
3.9 FEATURES OF THE NEW INDUSTRIAL POLICY
1991
The New Industrial Policy of 1991 comes at the center of the financial
reforms that were brought into practice during the early 1990s. All the
later reform changes were derived out of the new industrial policy. The
Policy has brought comprehensive changes in economic regulation in the
country. As the name su ggests, these reform measures were made in
different areas related to the industrial sector.
The role of the public sector has been revised as part of the policy. The
NIP 1991 established a focused reform agenda for the public sector, which
included the di sinvestment programme. Major industries that were
formerly reserved for the public sector have been welcomed by the private
sector.
Foreign investment, likewise, has been welcomed under the policy.
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28 strategy was the elimination of India's industrial licencing system.
Industrial licencing was a symbol of bureaucracy.
The Industrial Policy of 1991, often known as the new industrial strategy,
is a significant departure from the early policy of 1 956 due to the large -
scale modifications.
The new policy included reform policy directions, as well as LPG policy
directions (Liberalisation, Privatisation and Globalisation). With the
exception of three industries, it broadened the extent of private secto r
participation (modified). At the same time, the strategy has encouraged
international investment and technology. Since 1991, the country's foreign
investment policy has been gradually evolving through the phased
implementation of liberalisation measures.
The elimination of industrial licencing is perhaps the most welcome
reform under the new industrial policy. Industrial licencing was confined
to less than fifteen categories under the 1991 policy. It means that in order
to start a business, one must apply for a licence and wait only in the case
of a few specified industries. The period of licence raj, or red tape, in the
country has come to an end. The 1991 industrial policy laid the
groundwork for the country's later liberalisation, privatisation, and
globalisation efforts. Changes in the following aspects of industrial
regulation have resulted from the policy:
1. Industrial delicensing
2. Deregulation of the industrial sector
3. Public sector policy (dereservation and reform of PSEs)
4. Abolition of MRTP Act
5. Foreign investment policy and foreign technology policy.

Industrial delicensing policy or the end of red tapeism: The elimination
of industrial licencing, often known as the licence raj or red tapeism, was
the most essential aspect of the new indust rial policy of 1991. To start an
industry, private sector companies must get licences under industrial
licencing rules. This has resulted in lengthy delays in the establishment of
new industries. The 1991 industrial policy nearly eliminated the industrial
licence system. It has whittled down the number of industries that require
industrial licencing to fifteen. Only 13 industries now require a licence to
begin operations.
Industrial sector desegregation : Previously, the public sector provided
reservation, p articularly in capital goods and important industries. Most
industrial sectors were opened to the private sector as a result of industrial
deregulation. Previously, the majority of industrial sectors were kept for
the government. Only three industries, ato mic energy, mining, and
railways, would continue to be reserved for the public sector under the
new industrial policy. All other industries have been made available to the
private sector.
Changes in the public sector: reforms in the public sector were aime d at
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29 has chosen strategic and priority areas in which the government should
focus. PSUs that were losing money were also sold to the private sector.
For the reform of the country's p ublic sector, the government has
established a disinvestment policy. PSU boards have been provided
autonomy for efficient operation at the same time.
Foreign investment policy: Another important aspect of the economic
reform package is that it encourages f oreign investment and technology.
This action has improved the country's business environment while also
increasing industrial competition. Foreign direct investment (FDI) and
foreign direct investment (FDI) were both permitted. In order to attract
foreign capital, loan capital has also been introduced in the country.
The Monopoly and Restricted Trade Practices Act was repealed as part of
the New Industrial Policy of 1991. The Competition Commission was
established in 2010 to operate as a watchdog in the ec onomy, regulating
competitive behaviours.
The 1991 Industrial Policy was the most significant economic reform in
India since independence. The programme resulted in significant changes
in India, including the establishment of a robust and competitive priva te
sector as well as a large number of foreign enterprises.
3.10 SMALL AND MEDIUM ENTERPRISES IN INDIA
MSMEs ( Ministry of Micro Small and Medium Enterprises in India
account for around 8% of the country's GDP, 45 percent of manufacturing
output, and over 40% of exports. They might be referred to as the
'Backbone of the Country.'
In accordance with the Micro, Small and Medium Enterprises
Development (MSMED) Act of 2006, the Indian government has launched
MSME, or Micro, Small and Medium Enterprises. These businesses
specialise in the manufacture, manufac turing, processing, or storage of
goods and commodities.
MSMEs are a vital part of the Indian market and have made significant
contributions to the country's socioeconomic growth. It not only creates
job possibilities, but it also contributes to the develo pment of the country's
backward and rural areas. According to the government's annual report
(2018 -19), India has roughly 6,08,41,245 MSMEs.
Revised Classification applicable w.e.f 1st July 2020
Composite Criteria: Investment in Plant & Machinery/equipmen t and Annual
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30 Classification Micro Small Medium
Manufacturing
Enterprises
and
Enterprises
rendering
Services Investment in
Plant and
Machinery or
Equipment:
Not more than
Rs.1 crore and
Annual Turnover
; not more than
Rs. 5 crore Investment in
Plant and
Machinery or
Equipment:
Not more than
Rs.10 crore and
Annual Turnover ;
not more than Rs.
50 crore Investment in
Plant and
Machinery or
Equipment:
Not more than
Rs.50 crore and
Annual Turnover ;
not more than Rs.
250 crore
Source: Ministry of Micro , Small and Medium Enterprises
https://msme.gov.in/
There would be no need for periodic inspections to check the investment
in plant and machinery under the proposed reclassification or new
classification. In addition, MSMEs' operations would be transpare nt, non -
discriminatory, and objective.
New MSMEs' Highlights
The Government of India's 'Atma Nirbhar Bharat Abhiyan,' or Self -Reliant
India Scheme of 2020, has given MSMEs a new definition.
Following are a few highlighting features of new MSMEs –
1. A provisi on of Collateral Free Loans to MSMEs
2. An arrangement of loans to MSMEs worth of Rs. 3 lac crores
3. An offer for MSMEs to get a Moratorium period of 12 months
4. Consideration of Manufacturing and Service MSMEs as the same
entities
5. MSM is a granted a repayment Te nure of 48 months
6. MSMEs are assured a 100% Credit Guarantee
7. Reclassification of MSMEs will benefit approximately 45 Lac units.
Check your Progress
1. What are MSMEs ?
3.11 FEATURES OF MSMES
The following are some of the most important aspects of MSMEs:
MSMEs seek to improve the lives of workers and craftsmen. They assist
them by offering employment, loans, and other services.
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31 They encourage the growth of entrepreneurship as well as the upgrading
of skills by establishing specialised tr aining institutes.
They are in favour of improving developmental technologies, expanding
infrastructure, and modernising the industry as a whole.
MSMEs are known for providing reasonable support in gaining entry to
domestic and international markets.
They also provide quality certification services and contemporary testing
facilities.
MSMEs are now supporting product design, design innovation,
intervention, and packaging, in line with contemporary developments.
3.12 ROLE OF MSMES IN INDIAN ECONOMY
Since its inception, the MSME sector has shown to be a highly active
sector of the Indian economy. MSMEs create and produce a wide range of
items for both domestic and international markets. They have aided in the
establishment and growth of the khadi, village, and coir industries. They
have coordinated and worked with relevant ministries, state governments,
and stakeholders to help rural areas develop.
MSMEs have been crucial in offering employment opportunities in rural
areas. In comparison to huge companies, they have aided in the
industrialisation of these areas at a cheap capital cost.
The MSME sector has made a significant contribution to the country's
socioeconomic growth by acting as a complement to major industries.
MSMEs also contribute and play an importan t part in the country's growth
in a variety of ways, including minimal investment, operational flexibility,
location mobility, low import rates, and a large contribution to domestic
output.
With the ability and capacity to develop appropriate local technol ogy,
provide fierce competition in domestic and international markets,
technology -savvy industries, contribute to the development of defence
materials, and generate new entrepreneurs through the provision of
knowledge, training, and skill up -gradation thro ugh specialised training
centres.
3.13 IMPORTANCE OF MSMES FOR THE INDIAN
ECONOMY
MSMEs are widely recognised as a source of economic growth and a
means of supporting equitable development around the world. They are
noted for having the highest rate of ec onomic growth. MSMEs have
propelled India to new heights because to their low -investment
requirements, flexibility in operations, and ability to produce appropriate
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32 MSMEs employ over 120 million people, making them the second -largest
source of employment after agriculture.
It provides roughly 6.11 percent of GDP from manufacturing and 24.63
percent of GDP from service activities, with about 45 lac units across the
country.
As India strives to become a $5 trillion economy, the MSME ministr y
aims to raise its contribution to GDP by up to 50% by 2025.
MSMEs, which account for over 45 percent of total Indian exports,
encourage all -inclusive growth by offering employment possibilities,
particularly for individuals from the poorer parts of socie ty in rural areas.
MSMEs in tier -2 and tier -3 cities contribute to the creation of chances for
individuals to use banking services and goods, which might result in the
ultimate accounting of MSMEs' contribution to the economy.
MSMEs encourage innovation by assisting aspiring entrepreneurs in
developing innovative products, hence increasing company rivalry and
fueling growth.
The MSME sector in India is a silent supporter of the national economy,
acting as a buffer against global economic shocks and adversit y. As a
result, we can claim that India is on its way to becoming a strong global
economy thanks to a quiet revolution fueled by MSMEs.
3.14 SUMMARY
International economy experienced a program of international economic
integration, that is internationaliz ation of production, trade, investment
and financ e, called globalization since 1 950. However this process of
globalization is not a global phenomenon as has been finally adulated by
the World Bank in a report published in May 1996. Like limits to
economic growth, there are also limits to globalization & the economy and
the minimization of state control wherein the awareness is growing that no
nation can feel safe without the commitment to international obligations.
However there is yet long way to go befor e this consciousness is formed
into reality.The growth of MSMEs has proved to be supportive for the
enterprises to survive in the global economy.
3.15 QUESTIONS
1. Explain India’s Industrial Policies since 1990s
2. Explain the role of Small and Medium Ente rprises in Indian Economy


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33 3.16 REFERENCES
https://www.lendingkart.com/msme -loan/what -is-msme
https://msme.gov.in/
Desai V 2000, Dynamics of Entrepreneurial Development and
Management, 2000 Himalaya Publishing House, Mumbai.
Ramaswamy E.A. and Ramaswamy U 1981, Industrial and Labour,
Oxford University Press, Delhi.
Wilbert M. 1968, Impact of Industrial Prentice Hall of India Pvt. Ltd.,
New Delhi. Schnrider E.V. 1983, Industrial Sociology Mcgraw Hill, New
Delhi.



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34 4

LABOUR MARKET (INDIA, CHINA,
INDONESIA, MALAYSIA, THAILAND,
VIETNAM)
Unit Structure
4.0 Objectives
4.1 Introduction
4.2 Understanding the Labour Market in India
4.3 Future of Labour Market in India
4.4 Labour Market in Asia
4.5 Labour Market in China
4.6 LAbour Market in Indone sia
4.7 Labour Market in Malaysia
4.8 Labour Market in Thailand
4.9 Labour Market in Vietnam
4.10 Summary
4.11 Questions
4.12 References
4.0 OBJECTIVES
 To understand the meaning of labour and its associated market
 To learn about the labour market in countries like our India, Chin a,
Indonesia, Malaysia, Thailand, Vietnam.
4.1 INTRODUCTION
In this chapter we shall learn about Labour Market in India, China,
Indonesia, Malaysia, Thailand and Vietnam. This chapter would be helpful
if you are planning to build your career with Industry, p ersonnel
management or even preparing for competitive exams. As at the end
understanding labour market is all about learning the population, culture
and markets. As we are going to look into the labour market of other
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35 countries studies would help you get a perspective of beyond India
framework, i.e. International exposure. The scar city of semi conductor in
India and different parts of World reveals the complexity of policies,
labour and exp orts and imports. It also shows how problem in one country
can affect another. Same is the case for labourers, policies of one country
can also affect the home country. Hence, in this chapter we are focused
upon understanding not only studying labour mark et in India but other
countries who are developing with larger market and advanced
technologies like China etc.
With globalization and liberalization, the exchanges of goods and services
has become easier. We have relations with the above listed countries as
culture or as trade. We use several products like electronics, soaps,
deodorants, make up products which is made in other countries like United
States, Vietnam, China, Thailand and Indonesia etc. still many of these
countries receive large number of To urists from India. There is still large
number of indentured labourers who left India during Colonized
movements in countries like Malayasia. There are several white collar and
blue collared workers from India who have settled in other countries too.
4.2 UNDERSTANDING THE LABOUR MARKET IN
INDIA
A labour market is a gathering place for workers and employers to engage.
Employers fight to hire the best employees, while employees compete for
the most enjoyable jobs or high wages jobs. A labour market in an
economy is driven by labour demand and supply. Labor demand is the
organisation’s need for labour, whereas supply is the worker's supply of
labour in the market. Changes in bargaining power have also an impact on
labour supply and demand in the marketi. The Indian labour market has
high amount of out migration specially the skilled labourers.
 Labour Market at Macro level
Domestic and foreign market dynamics, as well as factors like
immigration, population age, and education levels, all impact supply and
demand at the macroeconomic level. Unemployment, productivity,
participation rates, total income are all important indicators for gross
domestic product (GDP).
 Labour Market at Micro level
Individual enterprises interact with employees at the microeconomic l evel,
like recruiting, terminating, and increasing or decreasing salaries and
hours. The link between supply and demand has an impact on the number
of hours workers work and the earnings, salaries, and benefits they getii.
 Labour Market in India
Market -oriented structural changes in India, which began in the 1980s and
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36 economy on a development path. However, the problem is that even
though we have large workforce there still exists emplo yment issuesiii.
 Women and Labor
During 2019 -20, the estimated Labor Force Participation Rate (LFPR) for
male and female of 15 year and above was 76.8% and 30.0 percent,
respectivelyiv. This shows the gap in the amount of females entering into
the labour ma rket. Females quit the work due to several reasons like
marriage, child birth, stigma, sexual harassment at workplace, lack of
enough skill sets to get job, lack of education to get any jobs, nature of
work like physical work etc.
 Schemes for Labourers
The MGNREGS Mahatma Gandhi National Rural Employment Guarantee
Scheme is a important programme through which labourers get hundred
days of work. Mahatma Gandhi National Rural Employment Guarantee
Scheme (MGNREGS) is a demand driven wage employment programme
which provides employment for the enhancement of livelihood security of
the households in rural areas of the country. This is done by providing at
least one hundred days of guaranteed wage employment in every financial
year to every household whose adult members volunteer to do unskilled
manual work. Under MGNREGS wage has been increased to Rs. 202 a
day from Rs. 182 a day to benefit 13.62 crore familiesv.
 Unemployed Labour and Social Stigma
India's low reported jobless numbers might be due to social sham e
connected to it. People's greatest difficulty is finding good jobs. Official
unemployment figures in India are widely believed to be underreported by
people. The study by Bhattacharya explains why India's unemployment
rate is so low. He views it is so be cause Unemployed people act as though
they aren't seeking for work. This technically removes them from the
assessment of the unemployment rate, which is the percentage of the
workforce that is jobless (i.e. people working or looking for a job). This
shows the complexity of the problemvi. Such social stigma would lead to
calculation error in the social policies framed for unemployed people or
employed people. We still have children as labourers let us look into it in
detail.
 Problem of Child Labour
Acco rding to the International Labour Organisation, in India, significant
progress has been made toward the abolition of child labour. Despite the
fact that the number of children working in India has reduced by 2.6
million between 2001 and 2011, the country s till has 10.1 million working
children aged 5 to 14. (Census, 2011). In addition, India has around 42.7
million children who are not in school.
Uttar Pradesh, Bihar, Rajasthan, Maharashtra, and Madhya Pradesh are the
five states with huge number of working children, accounting for about 55 munotes.in

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37 percent of all working children in India. In both rural and urban regions,
child labour face varied problems. In rural areas, the majority of children
work as agricultural labourers and cultivators, but in urban areas, th ey are
largely involved in home and informal sectorvii
4.3 FUTURE OF LABOUR MARKET IN INDIA
Given the country's breadth and variety, analysing the Indian labour
market presents unique issues. India has witnessed concentrated
employment growth, primarily in metropolitan areas and among men,
rather than "jobless growth." This has been accompanied by a drop in
female labour force participation, which has been a source of concern.
Women's involvement in the labour field is projected to rise as they gain
more edu cation, but several obstacles prohibit them from finding paid
work. With increased informalization in the official sector, informality
remains a distinctive feature. The growth of informal sector is also due to
the nature of economic policies in the countr y. Simultaneously, structural
changes in other nations, notably those in the area, have resulted in a
larger absorption of employees, particularly women, in manufacturing.
However, in India, this has to increase to a large extent. When it comes to
the fut ure of employment, the existing state of affairs is likely to continue
in the foreseeable future. In which employees will continue to abandon
farmlands in search of jobs in cities.
The industrial sector's capacity to engage employees, is limited by the
capital and skill intensity of production. There are more wage jobs
however, the real task is that whereby people getting access to the social
security and other benefits. Instead of concentrating just on the danger of
automation to job growth, policymakers must consider the distributional
impacts of technological progress, particularly in terms of skill bias. For
example - The formal sector employees earn salaries one month which an
informal sector employee earns in two years of work or more. Improving
access to technology, which would increase productivity and working
conditions, should be the goalviii.
4.4 LABO UR MARKET IN ASIA
The unique thread which links all the countries together i.e. India, China,
Malaysia, Vietnam, Indonesia is that of all belong to the South East Asia,
or within Asia. Hence, let us look into Labour force in Asia.
With 60 percent of the world's population, Asia, stands as the most
populated continent and it is rapidly ageing. Increasing the participation of
women in the labour market is c ritical for sustaining Asia's economic
vitality and ensuring its future success, while also boosting the economic
autonomy and ambitions of its female population. According to the
McKinsey Global Institute's 2018 work titled "The Power of Parity:
Advancing Women's Equality in Asia Pacific," gender equality can
improve the yearly GDP by 12%, or $4.5 trillion, by 2025 if more number
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38 Several scholars have also pointed out that increasing the number of
women in the workforce and ele vating women to important positions may
assist, encourage, economic equality, diversify the economy, and increase
corporate profitability and efficiency. It needs to be also noted that female
involvement rates in Asia have grown by roughly 6 percentage poi nts on
average since 1990 and are now not far behind levels found in
sophisticated Western countries.
Check your Progress
1. Explain Child Labour in India.
2. Discuss women and labour in India.
4.5 LABOUR MARKET IN CHINA
China's work force is one of the important reasons due to which the
country could progress in the past few decades. Being the world’s most
populated country the availability of labour is huge. China has come
across with time as a major manufacturing hub supplying products from
all over t he world ix
Between 1990 and 1996, job situations in both rural and urban regions
improved significantly. Rural job improved more in (1996 -2002), but
urban employment conditions deteriorated significantly. The fundamental
issue was the rising incapacity of production units (family farms in rural
areas and state -owned companies in cities) which beared the surplus
labour that that previous policies had forced them to stockpile. The
process of excess labour shedding by production units, initiated by state -
owned firms, reforms and the easing of control over rural -urban migration
in the second half of the 1990s, had fundamentally divergent repercussions
for urban and rural communities. In cities, formal employment dropped,
unemployment became a serious issue, and irregular employment grew
rapidly (of both rural migrants and workers, they were also laid -off from
stateowned enterprises). In rural regions, employment in township and
village firms (which had not accumulated excess labour) grew, whereas
out-migration re duced surplus labour in family farmsx.
The conditions of China have to be seen from both pre and post pandemic
times. The use of human labour is seen as expensive and during pandemic
employing them was seen as difficult due to the fear of virus. Hence, usi ng
robots was seen as the solution.
Some industrialists view the financial advantages of automation like: one
robot can work a 24 -hour shift may replace three employees and could
produce around $43,000 to $72,000. With salaries in China increasing by
as much as 20% per year in recent years, China business consultant Bill
Edwards, CEO of Edwards Global Services in Irvine, California, sees a
drive toward robots as inevitable. The robots can work for 24 * 7 and ask
for no sick leave, maternity leave this is how the industrialist view it as.
Robots are not only replacing humans but other things like dogs tooxi. He
also adds that, "Wages in China are no longer lowxii " This shows that the munotes.in

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39 jobs loses in the future is going to be more in the coming years and hence
the labourers are going to suffer at the end.
The ideology of the government impacts the people specially labour
directly. Being a mixed capitalism and socialist, communist country the
labour protection laws are more favoring the capitalists than that of the
workers. It emphasis more on industrial welfare than labourers welfare.
This impacts massively the labour conditions. In a democractic country
like India, citizens have fundamentally rights equally, laws in place – there
is opposition party which exis ts to find the flaws and this in turn benefits
people, labours and over all the economy, however, this is not the case
with China. This makes it difficult for that of the labourers to raise their
voice though China – has the ultra cheap labour specially in electronics
and textile industry.
During the pandemic suddenly because of the Covid Virus, other countries
which were dependent upon the products from China wanted to reduce the
dependency and too led to loss of employment. Several people were
periodical ly laid off due to the loss in business. In other words, covid and
country’s image indirectly effect the labourers lives. Another factor, which
also harmed the compoisition of labourers is the one child policy leading
to discrimination towards females, gir ls.
4.6 LABOUR MARKET IN INDONESIA
In Indonesia, employment quality is a big concern, and compliance with
current labour standards is extremely low. Youth unemployment, skill
shortages, and skill mismatches are all ongoing issues. Gains in labour
product ivity have been moderate, and to promote development in higher -
value -added activities, a diversified strategy to boosting labour
productivity is necessary.
Indonesia needs to guarantee that new labor -force entrants are prepared to
contribute to economic de velopment. Labor -market institutions must
create an enabling environment for economic development and
employment creation. Social safety and social security systems must
enhance labour productivity while also assisting in the resolution of
concerns such as poverty and inequalityxiii Indonesia being a country
which has several islands and closely connected with nature, there are
periodic volcanic eruptions, natural disasters like Tsunami effects the
people and the economy immensely.
4.7 LABOUR MARKET IN MALAYS IA
Malaysia is a federal constitutional monarchy with a ceremonial head of
state—a monarch —who has the title Yang di -Pertuan Agong ("paramount
ruler") and is chosen for a five -year term from among nine hereditary state
rulers. Malaysia's fast economic gro wth has resulted in a high demand for
more labour in the industrial, construction, and service sectors. Despite the
fact that the labour scarcity has tended to raise salaries, drawing many
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40 labour, particularly from Indonesia, the Philippines, Bangladesh, and
Thailand. The presence of a significant number of foreign employees has
been also been a cause of social and political friction in Malaysia.
Furthermore, industrialization -induced rural -to-urban migration has
resulted in significant labour shortages in the rural sectorxiv.
4.8 LABOUR MARKET IN THAILAND
Thailand's working -age population was 57 million in 2019, with 67
percent of the population participating in the labour market. With a labour
force of roughly 38 million people, it is the sixth biggest in the East Asia
and Pacific area and the fourth largest in the Association of Southeast
Asian Nations (ASEAN). Thailand's labour market is confronted with a
number of issues, including decreased labour force participation, a
sluggish move away from agriculture, and high rates of informality. The
work force fell by more than 1.2 million persons between 2012 and 2019.
Agriculture still employs over 33% of all employees in Thailand,
compare d to 23% in the Philippines, 10% in Malaysia, and 5% in the
Republic of Korea. In 2019, informal work accounted for 54% of total
employment.xv A large section of employment is also through that of
Tourism industry too.
4.9 LABOUR MARKET IN VIETNAM
Vietnam stands unqiue than other countries due to its large number of
female work force. The War in Vietnam had led to loss of lives of many
men. Hence, to fill the gap the female labour force started taking up jobs.
Favorable policies also helped in increasing th e labour participation of
women in Vietnam. The performance of Vietnam is particularly notable.
Its strong female labour force participation rate outperforms that of many
best-performing advanced Western economies. It has also managed to
keep female labour force participation at over 70% for more than two
decades, an accomplishment unrivalled even among industrialised
countries. The first increase to female employment in Vietnam was
sustained over time because to policy initiatives such as economic reforms
and a big push toward enhancing education that stresses gender equality.xvi
Post pandemic when several countries were hesistant to continue to buy
products from China – it is countries like Vietnam , Indonesia, Taiwan
which filled the gap. The development an d prosperity of a country can be
seen from the various factors like unemployment data. Surprisingly, in
Vietnam the unemployement statistics reveal somewhere between 2 -3
percent only of the total population. In India it is around 8 - 11 percentage.
Check your Progress
1. Do you think robots will take away jobs?
2. How can we improve conditions of labour according to you?
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Indonesia, Malaysia, Thailand,
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41 4.10 SUMMARY
In this chapter we looked into the labour market from Indian context
which has more number of working age groups i.e. 15 -35. This chapter
introduced you to labour market in different countries. Like Indonesia,
China, Vietnam, Malaysia etc. We have touched upon it, however
intensive studies on individual countries can be made if one is interested to
build a career. The common factor among all these countries is that it is
located in Asia.
4.11 QUESTIONS
1. Discuss Vietnam labour market
2. Discuss Labour market in China
3. Discuss labour market with reference to Malayasia and Thailand.
4. Explain unemployed individual’s data issues.
5. Discuss the MNREGA scheme
4.12 REFERENCE

i https://economictimes.indiatimes.com/definition/labour -market
ii https://www.investopedia.com/terms/l/labor -market.asp
iii Anant, T.C.A., Hasan, R., Mohapatra, P., Nagaraj, R., Sasikum ar, S.K.
(2006). Labor Markets in India: Issues and Perspectives. In: Felipe, J.,
Hasan, R. (eds) Labor Markets in Asia. Palgrave Macmillan, London.
https://doi.org/10.1057/9780230627383_5
iv 2As per the Periodic Labour Force Survey (PLFS) conducted by
National Statistical Office (NSO)
v https://static.pib.gov.in/WriteReadData/specificdocs/documents/2022/
feb/doc202222418201.pdf
vi https://www.hindustantimes.com/india -news/t he-invisible -churn -in-
india -s-labour -markets -101635721976389.html ByAbhishek Jha,
Hindustan Times, New Delhi
vii India Labour Market Update ILO Country Office for India | July 2017
https://www.ilo.org/wcmsp5/groups/public/ ---asia/---ro-bangkok/ ---sro
new_del hi/documents/publication/wcms_568701.pdf
viii https://www.iza.org/publications/dp/11376/the -puzzles -and-
contradictions -of-the-indian -labour -market -what -will-the-future -of-work -
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42 February 2018 IZA DP No. 11376: The Puzzles and Contradictions of the
Indian Labour Market: What Will the Future of Work Look Like? Sher
Verick
https://data.worldbank.org/indicator/SL.TLF.TOTL.FE.ZS?locations=IN
ix Majid, N. (2015). The great employment transformation in China (No.
994892543402676). International Labour Organization.
x Ghose, A. K. (2005). Employment in China: recent trends and future
challenges. Geneva: Employment Analysis Unit, Employment Strategy
Department, International Labour Office.
http://www.ilo.int/wcmsp5/gro ups/public/ ---ed_emp/ ---
emp_elm/documents/publication/wcms_114032.pdf
xihttps://www.scmp.com/news/people -culture/trending -
china/article/3167294/robot -dogs -take-streets -china -could -they-ever -
Robots replacing dogs
xii https://www.cnbc.com/2020/03/02/the -rush-to-deploy -robots -in-china -
amid -the-coronavirus -outbreak.html
xiii Allen, E. R. (2016). Analysis of trends and challenges in the Indonesian
labor market.
https://www.adb.org/sites/default/files/publication/182935/ino -paper -16-
2016.pdf
https://www.bbc.com/news /technology -41268996 (Dubai Police Robot )
xiv https://www.britannica.com/place/Malaysia/Labour -and-taxation
xv https://www.worldbank.org/en/country/thailand/publication/aging -and-
the-labor -market -in-thailand
xvi FINANCE & DEVELOPMEN T, SEPTEMBER 2018, V OL. 55, NO.
3 PDF VERSION Asian Women at Work As women advance in Asia’s
labor force, Vietnam is a standout
Angana Banerji, Albe Gjonbalaj, Sandile Hlatshwayo, and Anh Van Le
https://www.imf.org/external/pubs/ft/fandd/2018/09/female -labor -force -
participation -in-vietnam -banerji.htm



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43 5
INDUSTRIAL CONFLICT, COLLECTIVE
BARGAINING AND LABOUR REFORMS
Unit Structure
5.0 Objectives
5.1 Introduction
5.2. Industrial Conflict
5.3 Genesis of industrial conditions
5.4 Industrial conflicts / Disputes
5.5 Definition & essentials at a Dispute
5.6 Classification of industrial Disputes
5.7 Impact of industrial Disputes:
5.8 Causes of Conflict:
5.9 Nature of Conflict and its Manifestations
5.10 Resolution of Conflict
5.11 Salient features of Collective Bargaining
5.12 Levels of Collective Bargaining
5.13 Collective Bargaining in India
5.14 Changing Role of State
5.15 Summary
5.16 Questions
5.17 References
5.0 OBJECTIVES
 To introduce students to the meaning and importance of Industrial
Relations.
 To provide an insight into the nature causes and persp ectives of
industrial conflicts.
 To acquaint students with important conflict resolving mechanisms.
 To familiarize students with the changing role of the state. munotes.in

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44 5.1 INTRODUCTION
The concept of Industrial Relations has received widespread attention in
the m odern industrial age. In fact, it has become a part of the factory
system. In very simple terms, we may say that industrial relations are
concerned with the employee -employer relations in the industry. The term
industry refers to any productive work and it includes activities like
agriculture, fisheries, transport, banking, construction, commerce and
trade. Economically speaking, industry is the sector where four factors of
production i.e. land; labour, capital and enterprise are employed for the
purpose of production.The relations and interactions of workers with their
management is a result of their attitudes and approaches regarding various
issues concerning them and their organization State intervention on labour
industrial relations had its beginning wh en the British Government in
India was constrained, to protect its commercial interest of labour, the
earlier attempts for regulate labour consisted of enactments such as the
Assam Labour Act, the workmen’s Breach of contract Act, 1859, and the
Employers a nd workmen’s (Disputes) Act of 1860. These Acts aimed at
protecting the social system against labour rather than protecting labour
against the social system. Deterioration in working conditions, because of
greater development of industrial units; unduly lo w wages and consequent
dissatisfaction of the working class; growing indiscipline of workers;
strained relations between labour and management; the formation of ILO;
the emergence of AITUC (1920) and demands for higher against wages;
improved conditions of work and living led to serious industrial troubles
and created labour problems of large dimensions. The situation became
unmanageable in Bombay and Bengal. Hence committees were appointed
to look into the matter.
11.2.1 Industrial Conflict:
Industrializat ion has brought with it some new socio -economic problems.
New divisions have emerged within society. Industrial conflict arises
when there are differences between employers and employees, between
employers and workmen or between workmen and workmen. It is usually
connected with employment or non employment, terms of employment or
with the conditions of labour. Industrial conflict is not between an
individual worker and the management. If an individual dispute is taken
up by other workmen or majority of the workers of the establishment, then
it becomes an industrial dispute.
Check Your Progress
1. Briefly explain the importance of Industrial Relations
5.3 GENESIS OF INDUSTRIAL CONDITIONS:
Modern industrialism has not been unmixed blessing it has created a gulf
between management & labour because of the absence of workers
ownership of the means of production power is concentrated in the hands
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45 insignificant position of the more wage earners the wo rkers have now
come to realize to that most of their demands can be satisfied if they resort
to concerted & aware of the fact that they can resist these demands. This
denial or refusal to meet their genuine demands has often led to
dissatisfactions on the art of the workers, to their distress & even to violent
activities on their part which have hundred productions and harmed both
the workers & the employers.
Conflict of the interest of management & labour is inherent in the
capitalistic form of organisatio n. Each entertains ambitions which cannot
be realized. As a result there is antagonism between them.” The profit
maximization of management may demand changes is the types of goods
produced, installation of new machineries adoption of newer methods of
production involving loss of hard - earned skills, transfers retrenchment &
compulsory retirement of workers on the other hand, the workers expect &
demand stability in their income security of employment, protection of
skills & improvement in their status.
Profit maximization may also require authoritarian administration of the
enterprise closer supervision of worker, maintenance of strict discipline &
complete obedience of the rules of the enterprise. On the contrary, workers
may demand a share in the manageme nt of the enterprise, a voice in the
formulation the orders. & scope for self – expression & respect for the
dignity of their individuality.
5.4 INDUSTRIAL CONFLICTS / DISPUTES
Industrial conflicts is a rather general concept when is acquire specific
dime nsions it, become as industrial dispute, various terms, such as
industrial dispute, labour dispute”, or “trade dispute” are used in different
countries to identify the differences between employers & workers. In this
book these terms are regarded as equiva lent & for the social of simplicity
only the expressing “industrial disputes” has been used.
5.5 DEFINITION & ESSENTIALS AT A DISPUTE:
According to the industrial disputes act, 1947, section 2(k), “Industrial
disputes mean any dispute or difference between employers &employers
or between employers & workmen or between workmen &workmen,
which is concerned with the employment or non - employment or terms of
employment or with the conditions of labour of any person.”
For a dispute to become an industrial disput e, it should satisfy the
following essentials.
i) There must be dispute or a differences a) between employers &
employers (such as wage –warfare where labour is square);
b) between employers & workmen (such as demarcation disputes);and
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46 ii) It is connected with the employment non - employment or the terms is
employment or with the conditions of labour of any person (but not with
the managers on supervisors’ or it must pertain to any industrial matter.
iii) A workman does not draw wages exceeding Rs.1,000 per month &
iv) The relationship between the employer & the workmen must be in
existence & should be the result of the contract and the workmen actually
employed.
The term industrial dispute has been interpreted & ana lysed differently
indifferent care situation by the courts. Some of the principles for judging
the nature of a dispute were involved by the courts as follows.
1) The dispute must affect a large group of workmen who have a
community of interest & the rights of there workmen must be affected as a
class in order words, a considerable section of employees should
necessarily make common cause within the general lat
2) The dispute should invariable be taken up by the industry union by
appreciable number of workme n.
3) There must be a concerted demand by the workers for redress & the
grievance becomes such that it turns from individual complaint into a
general complaint .
4) The parties to the dispute must have direct & substantial interest in the
disputes, i.e. th ere use of some nexus between the union which excuses
the causes of the workmen & he dispute. Moreover, the union must fairly
claim a representative character.
5) If the disputes were in the beginning an individual’s dispute &
continued to be such till the date of its reference by the government for
adjudication, it cannot be converted into an industrial dispute by support
subsequent to the reference even of workmen interested in the dispute.
By incorporating section to a in the Industrial Dispute Act, 1947, a
right has been given to the individual himself workmen himself to raise an
industrial dispute with regard to termination, discharge, dismissal or
retrenchment of his service even though no other workmen or any trade
union of workmen raise if or is a par ty to the as dispute.
Patterson observes: “Industrial strikes / disputes constitute militant &
organized protest again existing industrial conditions.
They are symptoms of industrial unrest in the same way that boards are
symptoms of discarded system.”
Industrial unrest thus takes an organized from when the work people make
common causes of their grievances against employers by away of strikes,
demonstrations, picketing, morchas, gate, meeting, gheraos etc.
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Industrial conflict, collective bargaining and labour reforms
47 Chcek Your Progress
1. Why do Industrial Disputes oc cur?
5.6 CLASSIFICATION OF INDUSTRIAL DISPUTES:
The most common practice is to make a distinction between two main
types of disputes relating to terms of employments they are
a) Disputes that arise out of head locks in the negotiation for a collective
agreement, popularly known is interest disputes, ‘ and
b) Disputes that arise from day - today workers grievances or complaints
popularly known as grievance disputes. In addition, in various
countries special provisions apply to two other types of organizational
rights.
c) Those arising from act of inferences with the exercise of right to
organize, or out commonly known as unfair labour practices &,
d) Disputes over the right of a trade union to represent a particular class or
category of workers for purpose of c ollective bargaining, simply
referred to as recognition disputes.
Contract Disputes:
These disputes are also called conflicts of interest or economic disputes.
They generally correspond to what in some counties all called collective
layout disputes. In gen eral, they relate to the determination of new terms
& conditions of employment for the general body of worker. in most case,
the disputes originate from trade union a demands or proposals for
improvements in wages, fringe benefits job security, or other te rm, or
conditions of employment. There demand or proposals are normally made
with a vie to the conclusion of agreement. A dispute arises when the
parties fail in their negotiations to reach an agreement on the outstanding
issues.
Since there are generally no mutually behind standards that can be retired
upon to arrive at a settlement of interest disputes, resource must be had to
bargaining power, compromise, & sometimes a rest of economic solution.
As the issues in their disputes are “compromise able”, they lend
themselves best to conciliation, and are a matter of give off and bargaining
better the parties.
Grievances typically arise on such questions as discipline & dismissal the
payment of wages & other fringe benefits, working time over time, tome
off ent itlements, promotion, demotion, transfer rights of seniority, rights
of supervisors, union officers, job classifications problems the relationship
of work rules to the collective agreement the fulfillment of obligations
relating of safety & health laid dow n in the agreement. In some country’s
grievances arise especially over the interpretation application of collective
agreements. Grievances arise especially over the interpretation application
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48 with in accordance with a procedure that is respected by the parties, often
result in differences of the working relationship & a climate of industrial
strike.
There is a definite standard for setting a grievance dispute . The relevant
provision of the collective agreement, employment contract, works rules
or law, or customer usage. in many countries, labour courts or Tribunals
voluntary arbitration for their settlement.
Disputes over unfair labour productive:
The most common unfair practices in industrial relations parlance are
attempts y the management of an undertaking or participate in trade union
activity. In most cases, the objects of this discriminatory treatment are
made union officials or representatives employed in the undertaking, and
trade union which have actively participated in a strike. Other unfair
labour practices are generally concerned with interference restrain or
coercion for employees when they exercise their right to organise join or
assist a union establishment of employer, supported union refusal to
bargain collectively, in good faith with the recognized union; recruiting
new employees during a strike which is not an illegal strike, failure to
implement an award, settlement or agreement indulging in out of forcer or
violenc e etc.
These unfair labour practices are also known in various countries ass trade
union victimization. In many countries a special procedure is a available
under the law for the prevention of such practices. Such a procedure
obviates or precludes concilia tion. In the absence of such procedure,
disputes one settled according to the normal procedure laid down under
the Disputes act.
Recognition Disputes:
This type of dispute arises when the management of an undertaking or an
employer’s organization refuses t o recognize trade union for purposes of
collecting bargaining.
Issues in recognition disputes differ according to the causes which has led
the management to refuse recognition. It may be that the management
dislikes trade unionism & will not have anything to do with a trade union.
The problem is then at attitude, as in the case of a trade union
victimization. However, the management refusals may be on the ground
that the union requesting recognition is not sufficient representative. Such
rules need not nece ssarily be laid down by law; they may be conventional
or derived from prevailing, practices in the country. In many countries
guidelines for trade union recognition have been laid down in voluntary
codes of discipline or industrial relations charters accep ted by employer’s
& worker’s organization
Check Your Progress
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Industrial conflict, collective bargaining and labour reforms
49 5.7 IMPACT OF INDUSTRIAL DISPUTES:
The consequence of industrial disputes is very fa r reaching, for they
disturb the economic, social & politic al life of the global economy, in their
importance they are no less than “war”. As in modern ’s wars, the
casualties & sufferings are not confined to soldier fighting on the front, so
in the case of strikes, the adverse effects are not confined to the
emplo yees. Though it initially starts locally, a war has every possibility of
engulfing the entire humanity. So industrial disputes may & do
occasionally assume national proportions affecting the entire community.
The worker, the employers, the consumers, the c ommunity & the nation
suffer in more than one way.
Industrial disputes result in a huge wastage of man days & dislocation in
the production work. A strike in a public utility service like water supply,
power & gas supply units, posts & telephone or telepho nes service
railways or railways or any system of public conservancy or sanitation
defense establishment hospitals & dispensaries etc. disorganizes public
like & throws the economy out of gear & consumes are subjected to
unhold hardships. If the community produced by a factory where workers
are on strike is used in other production operational, then other reduces
also suffer. When stoppages of work take place the short supply of
consumer goOds result in skyrocketing prices, & reads to their
nonavailability in the open market.
Workers are also badly affected in more than one way. They lose the
wages for the strike period. The workers are prosecuted, often intimidated
even victimised or kidnapped & given a serve beating by good as,
repressed by police. Firing & arrests & loss of morality result. Frequently,
the weak trade union itself is crippled & dies permanently or for a while.
Employers suffer heavy losses, not only through stoppages of production
reduction in sales & loss of markets but also in the form of huge
expenditure incurred on crushing strikes engaging strike breakers &
blacklegs, maintaining a police force & guards. A part from there so losses
the loss of mental peace, respect & status in society cannot be computed
not in terms of money.
The public /society too is not spanned industrial unrest creates law & order
problems, necessitating increased vigilance on the part of the state.
Further, even when disputes one settled.
Strike & bitterness continue to linger, endangering social relations. As
callin g has out it” The strikes & lock - outs are a great menace to public
safety. They infringe upon property tights and become malicious in their
effects if not in their purpose, & they are regarded as a war or at any rate a
blocked.”
Industrial disputes also a ffect the national economy Prof Pigou has
observed’, “when labour & equipment in the whole or any part of an
industry are rendered idle by a strike or lock – out, 225 national dividend
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50 ways. On the one hand by impoverishing the people actually involved in
the stoppage, it lessens the demand for the goods the other industries
make, on the other hand, if the industry in which the stoppage has
occurred is one that furnishes a commodity or service largely used in the
conduct of other industries. It lessens the supply to the of raw material or
equipment for their worked. This result in a loss of output, ultimately,
reducing the national incompetence development activities can not
undertake f or want of necessary finances.
Although there are multitude of causes leading to industrial conflicts. It is
not always easy in specific instances to ascertain the particular cause or
cause involve. Moreover , the relative importance of the cause, when more
than one is resent, if often very difficult to evaluate.
In spite of this observation it has been pointed out by experts in industrial
relations that the causes of conflicts between labour & management are
usually the some, wherever capitalistic prevails e.g. Mukerjee observes,
“The Development of capitalistic enterprise, which means the control of
the tools of production by a small entrepreneur class brought to the fore
the alike problems of friction between management & labour throughout
the world.”
Prof Lerter notes. “When people sell their services & spend their working
lives on the premises of the purchaser of those services, a varying amount
of dissatisfaction, discontent & industrial unrest are like to occur.
Employers are especially interested in higher wages, healthy working
condition opportunity to advance, satisfying work m some voice in
industrial affairs & protection against loss of wages, government &
arbitrary treatment. But when such things are denied to them, they are
forced tie pert their r ights & stop working to make the employers
understand their grievances & redress them - Industrial relations may be
harmonious. In the later case there may be many causes which are rooted
in historically political & socio -economic factors, & in the attitude s of
workers & their employers.
These causes may be discussed under the following heads:
A) Industrial factors.
B) Management’s attitude to labour,
C) Government machinery, and
D) Other causes.
A) Industrial Factors:
Under this category, some o the causes of a dispute may be:
i) An industrial matter relating to employment, work, wages, hours of
work, privileges, the rights of & obligations of employers & employers,
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Industrial conflict, collective bargaining and labour reforms
51 a) Dismissal or non - empl oyment of any person.
b) Registered agreement, settlement or award; and
c) Demarcation of the functions of an employee.
ii) An industrial dispute which con notes any difference which has been
fairly defined as is of real substances: i.e. a matter in which both parties
are directly & substantially intimated; or which is a grievance on the part
of a worker the employees is in a position to redress or which is such as
the parties are capable of setting between themselves or referring it to
adjudication.
iii) D isputes often arise because of a) The rapidly increasing population
which has no opportunities for gainful employment. There is, therefore, no
improvement in the standard of living of employees who put forward
demands for higher wages, which if not concede , often lead to stained
industrial relations & strikes.
b) Rising unemployment. There was a backlog of 20 million
unemployment workers at the end of the fourth five-year plan & of 30
million by the end of the fifth plan, & 56 million during sixth plan.
Idle manpower has always been a prolific source of disturbed and
acrimonious industrial relations.
iv) The galloping prices of essential commodities, their shortage & /or
non- availability all their trade the value of money s a result of which the
real wages of the workers go down. Failure to pay a head -based wage” &
D.A. all there have created dissatisfaction among workers & constrained
them to demand higher wages.
v) The attitude & temperament of industrial workers have changed
because of their education, th eir adoption of urban culture & progressive
legislations enacted for their benefit.
vi) Trade unions have often failed to safeguard the interest of workers.
The reasons for this stage of affairs are:
a) Inter -union rivalry & multiplicity of trade unions ha ve destroyed the
solidarity of the working class.
b) Non -recognition of some trade unions as “bargaining agents” of their
members.
c) Compulsory adjudication has made trade unions indifferent to the
wages & working conditions of industrial employees which can now be
determined by courts, tribunal & wage boards:
d) Trade unions generally do not bother about any aspect of the lives of
industrial labour except their wages.
e) Trade union leaders who are not themselves industrial workers have
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52 f) Trade unions generally function on the basis of caste, language or
communal consideration, which ‘divide’ rather than ‘unity industrial
labour.
g) Trade unions are unstable and ephemeral.
B) By Management attitude to labour:
i) Management generally i s not willing he talk over any dispute with the
employees or their representative or refer into ‘arbitration’ even when
trade unions want it to do so. This enrages the workers.
ii) A management’s sun willingness to recognise a particular trade union
want t he dilatory factories to which if resorts while verifying the
representative character of any trade union have been a very fruitful
sources of industrial strife.
3) Even when representative trade union have been recognized by
employers, they do not, in a n umber of cases, delegate enough authority to
their official to negotiate with their workers, even though the
representative of layout is willing to commit themselves to a particular
settlement
iv) When during negotiations for the settlement of a dispute, t he
representatives of employers unnecessarily and unjustifiably take the side
of the management intension are created, which often lead to strikes, go
slow or lock – outs.
v) The management’s insistence that is alone is responsible for
recruitment, promoti on, transfer merit awards, etc. and that it need consult
employees in regard to any of these matters, generally annoys workers,
who become un – co-operative and unhelpful and often resort to strikes.
vi) The services and benefits offered by a management to its employee’s
promote harmonious as employer worker relations.
But a large number of managements have not taken any steps to provide
these benefits and services for their workers.
c) Government Machinery:
i) Though there is a plethora of enactments for t he promotion of
harmonious relations, yet these have been ineffective or unsatisfactory I
most cases because of
a) Their irrelevance in the contest of the challenges of present industrial
climate / culture, as many have not been convinced of their unity
satisfactorily;
b) Their inability to understand & answer the imperatives of development;
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Industrial conflict, collective bargaining and labour reforms
53 ii) The government’s conciliations machinery has assisted in the
settlement of a very small number of disput es because;
a) Both employers and employees have very little confidence in
it,
b) Both have become litigation – minded
c) It is inadequate, for the number dispute referred to it is very large and
the personnel dealing with them is helplessly inadequate, pa rticularly
become in addition to labour disputes, it is called upon to see to it that
labour laws are properly implemented; and
d) The offices associated with conciliation proceedings have very little
training in handling the problems or disputes which are referred to them.
5.8 CAUSES OF CONFLICT:
Conflict between management and employees can be caused by very
minor matters where industrial relations are poor. Reasons for the conflicts
can be categorized as:
a) Economic causes: wages, bonus, overtime paymen ts etc.
b) Political causes: Political instability, various parties and their
affiliations with unions.
c) Social causes: Low morale in society, permissiveness, bankruptcy of
social values and norms.
d) Psychological causes: conflict in individual and orga nizational
objectives, motivational problems, personality and attitude.
e) Technological causes: Unsuitable technology i.e. difficulty in
technology adaption, resistance to change fear of unemployment.
f) Market situation: Rising prices and shortage.
g) Le gal causes: Inadequacy of legal machinery, injustice.
Check Your Progress
1. What is Industrial Conflict?
5.9 NATURE OF CONFLICT AND ITS
MANIFESTATIONS:
Conflicts can occur at various levels i.e. within an individual, between
members of a group and between gr oups. Organizations try to maintain
harmonious industrial relations but some amount of conflict is inherent in
the industrial structure. The three main groups in an industry – namely
owners, managers and the workers develop different orientations and
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54 conflict. It finally manifests itself in the form of a strike by workers and a
lockout on the part of managers or the employers.
Conflict is always viewed as unhealthy and dysfunctiona l. It is a fact that
strikes and lockouts result in loss of production and profits to the owners,
loss of wages to the workers, irregular supply of goods and services to the
consumers and an aggregate loss in gross national product and income at
the nation al level.
On the other hand, however when viewed objectively, conflict can be
beneficial. It can help to maintain stability of the group by forcing groups
to air their grievances and resolve their problems. In this way it can
prevent unhealthy upheavals an d ill feelings within and between groups.
Conflict also brings issues out in the open so that public opinion helps in
resolving them.
5.10 RESOLUTION OF CONFLICT:
As conflict is and will remain a fact of industrial society it has to be dealt
with for the v iability of an organization. There are various measures of
conflict resolution and these can be broadly categorized as 1) Government
sponsored guidelines. 2) Statutory measures and 3) Non statutory
measures.
1) Government sponsored guidelines: The Governme nt labour
departments both at the centre and states play an important role in
maintaining industrial harmony. The Central and State governments have
enacted and administered labour laws. The ministry of labour and
employment of the central govt is the main agency for policy for nation
and administration in all labour matters.
Together with the State governments the local bodies and the Statutory
Corporations / Boards, it sees to the implementation of these policies and
the decisions of the Tripartite Commit tees.
These four agencies are also responsible for enforcing of labour laws.
2) Statutory Measures are related to the various types of machinery set
up by the government under the Industrial Disputes Act 1947. This act has
provided for:
a) Work committees
b) Conciliation officers and Board of Conciliation
c) Courts of Enquiry and
d) Labour Courts Industrial & National Tribunals .
The first two provisions constituted conciliation machinery.
Court of Enquiry was a fact of finding agency. Labour courts and the
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55 3) Non-Statutory measures include a
a) Code of Discipline
b) Tripartite machinery
c) Workers participation in management.
d) Collective Bargaining Schemes.
The code of Discipline contains self imposed obligations formulated by
the central organization of employers and workers voluntarily. It provides
guidelines for the employers, workers and the unions.
Tripartite Machinery consists of several bodies like the Indian Labour
Conference, the Standing Labour Committee et c. which were set to deal
with specific subjects. They include government representatives from the
State and the centre and an equal number of representatives from workers
and employer ’s organizations.
The concept of Workers Participation in Management (WP M) is
considered as a mechanism where workers have a say in the decision -
making process of an organization. WPM falls into several categories –
informative, consultative, associative, administrative and decisive
participation. The experiments conducted by Blake, Mayo, Lewin and
others popularized the belief that there could be positive gains to an
organizations effectiveness and morale if workers are given an opportunity
to participate in the management process.
The concept of collective bargaining was firs t identified by Sidney and
Beat Rio Webb in Britain and also by Gompers in the USA. It is identified
as “Negotiations about working conditions and terms of employment
between an employer, a group of employees or one of or more employers’
organizations on t he one hand and one or more representative workers
organization on the other with a view to reaching agreements.”
5.11 SALIENT FEATURES OF COLLECTIVE
BARGAINING
1) It is a group process, where in one group representing the employers
and the other represent ing employees sit together to negotiate terms of
employment.
2) It is a process in that it consists of a number of steps. The starting point
is the presentation of the charter of demands and the last stage is the
reaching of an agreement, or a contract which serves as the basic law
governing labour management relations over a period of time in an
enterprise.
3) Negotiations form an important aspect of the process of collective
bargaining i.e. there is considerable scope for discussions, compromise or
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56 4) It is a bipartite process. The employers and the employees are the only
parties involved in the bargaining process. There is no third party
intervention. The conditions of employment are regulated by those directly
concerned.
According to Flandero, collective bargaining is basically a political
institution in which the rules are made by the trade union of workers,
employers and corporations or the organization. Secondly, the two aspects
of administration and legislation are interlinked.
Therefore, there is a considerable degree of joint regulation by both the
parties and this is governed by the traditions and customs that exist at the
organization level. Finally, collecti ve bargaining is not just an economic
process but also a socio -economic one. The values, aspirations and
expectations also play a significant role.
Check Your Progress
1. What is Collective Bargaining ?
5.12 LEVELS OF COLLECTIVE BARGAINING:
Collective bargaini ng is generally structural and conducted at three levels
the plant, industry and national level. The plant level is the basic or micro
level unit where negotiations are conducted between the management of
the plant and the union(s) of the plant. The pionee rs of plant level
agreements are Tata Iron and Steel Company Ltd, the Tata Workers Union
for their agreement in 1956 and 1959, the Belur Agreement between
Indian Aluminium Company and its union in 1956.
In the industry level, several units in the same indu stry come together to
form an association which negotiates with a union having a similar status.
These agreements are broader in scope and delineation as compared to
plant level settlements. Example of these agreements is the Rashtriya Mill
Mazdoor Sabha n egotiations with mill owners of Bombay.
At the National level, the terms of reference and scope are much wider but
such agreements are not so common in India. In 1956 the agreements on
bonus for plantation workers was made between the representatives of th e
Indian Tea Planters Association and Indian Tea Association and
representatives of HMS.
In India collective bargaining has been adopted by many industries as a
method of wage fixation. Of late, the scope of collective bargaining is
expanding and it now co vers issues such as wages, bonus, overtime, paid
holidays, paid sick leave, safety wear, production norms, hours of work,
performance appraisal, workers participation in management hiring and
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57 5.13 COLLECTIVE BARGAINING IN INDIA:
Collective bargaining has been widely accepted in the organized sector
since independence. It took a back seat with the declaration of the
Emergency in 1976, but it witnessed the arrival of a new chapter in 1977
when emergency ended. It was a period when labour’s po wer was at its
peak and therefore collective bargaining took on a phase of aggression
leaving employees surprised. It took some time for management to cope
with the reemerging labour movement but eventually it came up with a
strategy when it decided to mak e demands on labour.
By the late 1980’s, union power planted and employers had gained the
upper hand. If the late 1970’s and early 1980’s were marked by massive
strikes, lockouts were the dominant mode of industrial action by the end
the 1980’s. The Bombay Textile strike of the early 1980’s by the
employees was equivalent to the lockouts at Bata and Wimco in West
Bengal and Hindustan Lever in Bombay by the employers. By the early
1990’s managements were ready with their strategy for industrial
relations. Th ey converted collective bargaining into their chief instrument
of policy. Productivity has risen dramatically as a result of this, according
to Ramaswamy.
Thus, the process of collective bargaining is bipartite in nature i.e. the
negotiations are between t he employers and the employees without the
intervention of a third party. The objective is to continue is to come to an
agreement. If this process fails and the two parties do not arrive at a
mutual agreement, a third -party intervention becomes necessary. Conflicts
are then resolved with the help of State intervention. This is in the form of
the Industrial disputes Act 1947 which has provided two types of
machinery, one to improve cordial relations and prevent disputes and the
other for the settlement of di sputes. The mechanism to prevent disputes
includes a number of legislations, committees, schemes, implementation
of Awards, Code of Discipline, grievance procedures etc. The machinery
to settle disputes include conciliation, Arbitration and Adjudication
machinery all tripartite processes.
Tripartite processes to settle disputes:
Conciliation: this is a persuasive process of settling disputes in industries.
In India both voluntary and compulsory conciliation implies that the state
sets up machinery consistin g of professionals who are trained in the art of
conciliating disputes. The disputants are not obliged & accept, appoint or
resort to this mechanism. The aim of the conciliator is only to break the
deadlock, convey standpoints and messages make suggestions .
Compulsory conciliation, on the other hand imposes obligations to submit
disputes to the conciliation. A settlement arrived at in the course of
conciliation proceedings are binding on all the parties to the dispute.
Members of the Board of Conciliation who represent the disputant parties
investigate on all matters affecting the case. If an agreement is reached,
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58 of settlement signed by the parties to the disputes. If negotiations fail, then
also a full report containing the proceedings and steps taken and its
recommendations has to be sent to the government.
Arbitration Machinery: When all other machinery fails to bring about
peaceful settlement of the dispute, the government may decide t o refer the
dispute for compulsory arbitration to statutory bodies such as Labour
Courts tribunals. The disputant parties are forced to abide by the awards of
the arbitrator.
5.14 CHANGING ROLE OF THE STATE:
The State is a major store house of power in mod ern society. The power of
the state is especially impressive in a developing country like India where
it takes on the responsibility for economic development and controls the
allocation of scarce resources between competing needs.
In most societies the Sta te regulates the relationship between labour and
management in industry. In fact, no industrial relationship in the world is
entirely free from state control and regulation. What does differ, however,
is the extent of such regulations and interventions. In some societies, the
role of the state is that of a watch dog which steps in when limits are
exceeded. In some societies like India, the state enters the everyday
relationship in industry as a mediator, arbitrator and adjudicator. In India
labour and manag ement are only theoretically free to do without external
intervention. Third party mediation is readily available and the state enters
a dispute the moment the union serves notice of a strike or the
management serves notice of lockout even if both the part ies do not seek
its help. Therefore industrial relations in India are essentially triadic in
character. When the state occupies an important place in an industrial
system and exercises its vast powers, it is of great significance for both
labour and manage ment. In India, the role of the state is concerned with
issues that are for more immediate as they are directly concerned with
employment relationships.
The role of the State has undergone changes with the changing industrial,
political, and social situati ons in the country.
From 1875 to 1928 the state’s role was that of enacting protective
legislation, regulating employment and working conditions in factories,
mines and plantations. During 1929 to 1947 this role changed to
enlightened intervention because of industrial turmoil and restlessness as a
result of depression and intensification of the national movement.
After Independence, the state’s role became more active and positive in
matters relating to management, labour welfare and labour relations. This
was done with a view to establishing an egalitarian society with the
Directive Principles as provided in the Constitution and also to raise the
living standards by increasing industrial production.
Since then the state policy had fastened and promoted closer relationship
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59 Tripartite Indian Labour Conferences were formed and convened,
Standing Labour Committees were set and Joint management councils
were formed. Workers Representatives were also o f the state were
expanded in matters of industrial relations.
However, the 1990’s has once again brought major changes in the role of
the state related to industrial relations. Earlier, the role of the state was
predominantly protective and based on centra lized planning. With the
acceptance of New Economic Policy since 1991 and the resulting
Liberalization, Privatization and Globalization processes, the State is
under constant pressure from international funding organizations like the
World Bank Internation al Monetary Fund. Therefore, it has turned its back
on centralized planning.
The exit policy in terms of retrenchment and the voluntary retirement
schemes has brought in a feeling of in security among labour. The
disinvestment of some stock to meet budgeta ry d eficits has caused
uncertainty of the public sector. Earlier, the public sector was encouraged
and sick industrial units were helped to revive. Now, such units are
allowed to be sold off or merged.
The State earlier imposed controls on the production volum es and
diversification plans of companies by the centralized planning. The private
sector employers found out sourcing a convenient method of by passing
these controls of the government.
Now even public services like railways, telecommunications have becom e
the biggest employers of such peripheral labour. Companies like
Hindustan Ciba Geigy used the voluntary retirement scheme to close down
after retiring every single worker.
The motive was not so much to down size and reorganize the labour force.
The i dea was to wind up high cost operations in favour of cheap labour in
the hinter land. Even a public sector company like the National Textile
Corporation alone accounted for giving voluntary retirement to 30% of
2.17 lakh workers. As voluntary retirement sc heme s have become
lucrative and sometimes even innovative, workers put pressure on unions
not only to accept them but even to ask for them. All this has affected the
strength and functioning of the trade unions. Thus, by introducing the New
Economic Policy the state is attempting to substitute the command
economy with market forces and altering the environment in which
industry operates.
5.15 SUMMARY
Industrial relations as a discipline relatively of recent origin but has its
theoretical roots in history. I t is defined in several ways to focus on
different aspects of the relationship betweenmanagement, employees and
the state.
Industrial relations has a wide scope covering a variety of aspects. It is an
effective weapon for safeguarding the rights of workers and prestige and munotes.in

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60 interests of the management. Although every effort is made to maintain
harmonious industrial relations, some amount of conflict is inherent in the
system because it involves the interaction of two classes with varied
interests. Beside thi s, there are several causes of conflict, various
approaches to the study of industrial relations have been put forward to
explain why there are conflicts in the industry. These industrial conflicts
are resolved with the help of institutional means such as collective
bargaining, conciliation, arbitration and adjudication.
In most societies the state plays an important role in regulating
relationships between labour and management. State intervention is
necessary in the interest of the wider society. What differs is the extent of
such regulations. The role of the state has undergone changes with the
changing industrial, political and social situations in the country.
5.16 QUESTIONS
1) Discuss the causes of industrial conflict and explain the institutional
mean s of resolving them.
2) Examine the role of the state in Industrial Relations and explain how it
has been changing in India.
5.17 REFERENCE
• Agarwala Dharma Vira, 1982: Industrial Relations and collective
bargaining. Deep and Deep.
• Michael V.P, 1979: In dustrial Relations in India and Workers
Involvement in Management, Himalaya.
• Pylee M.V and George A Simon, 1996: Industrial Relations and
Personnel Management, Vikas.
• Monappa Arun, 1990: Industrial Relations, Tata Mc Graw Hill
• Ramaswamy E.A, 2000: Ma naging the man resources a contemporary
text. Oup.
• Ramaswamy E. A 1984: Power and Justice OUP.
Additional Readings:
ILO: Progress Report, 1999: Network on Organized Labour in the 21st
century.

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61 6
TRADE UNION MOVEMENT SCENARIO
IN POST LIBERALIZATION PERIOD
Unit Structure
6.0 Objectives
6.6 Introduction
6.2 Meaning of Trade Union
6.3 Historical Development around the World
6.4 Legal model
6.5 Modern developments in the West
6.6 Profile of Worker’ s in India
6.7 Profile of Trade Unions in India
6.8 The role of public sector in India
6.9 Privatization
6.10 Private companies and Trade Unions
6.11 Case Study
6.12 Challenges for Trade Union in Pre -liberalization economy
6.13 Summary
6.14 Questions
6.15 References
6.0 OBJECTIVES
1. To understand the meaning of Trade Union and its role in the lives of
workers in India.
2. To learn about its History and how it operates within public and
private sector in the post liberalization period.
3. To learn about the challenges faced by trade union in post
liberalization period.
6.6 INTRODUCTION
In order to understand the nature of trade union in India of post
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62 prior to liberalization. As pre -liberalization period was an important
phase in both the trade union movement in India and the lives of workers
who were associated with iti.
6.2 MEANING OF TRADE UNION
According to Cambridge dictionary, Trade union is an organization which
stands as a representation for the people who are into an industry. It is a
group which stands for protection of the worker's rights and in order to
discuss their pay and working conditions with the employersii. In other
words, the aim is to help the workers.
The Indi an Trade Union Act – 1926 describes
"Trade Union" means any combination, whether temporary or permanent,
formed primarily for the purpose of regulating the relations between
workmen (workwomen) and employers or between workmen and
workmen, or between emplo yers and employers, or for imposing
restrictive conditions on the conduct of any trade or business, and includes
any federation of two or more Trade Unions:
Provided that this Act shall not affect -
1. any agreement between partners as to their own business;
2. any agreement between an employer and those employed by him as to
such employment; or
3. any agreement in consideration of the sale of the good -will of a business
or of instruction in any profession, trade or handicraftiii.
The main goal of trade unions is to look into the complaints of wagers and
present a collective voice in front of the management. Hence, trade union
works as important medium of communication between the workers and
management. Regulation of relations, settlement of grievances, raising
new d emands on behalf of workers, collective bargaining and
negotiations are the other key principle functions that these trade
unions perform. Other important roles that these trade unions fulfill
include the regulation of relations, the resolution of grievanc es, the
pressing of new demands on behalf of workers, collective bargaining,
and negotiationsiv.
6.3 HISTORICAL DEVELOPMENT AROUND THE
WORLD
Trade unionism began as an organized movement in the 69th century,
which emerged in different parts of world especi ally across United
Kingdom, continental Europe, and the United States. It needs to be noted
that across many countries, trade unionism and the labor movement was
used as interchangeable terms. Around 68th century, Smaller worker
organizations began to emer ge in Britain, but they were intermittent and
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63 from both employers and government groups who despised this new form
of political and economic engagement. It was a difficult time for tr ade
union members as both in Britain and United States, unions and unionists
were often tried under different restraint -of-trade and conspiracy
legislation. While union organizers in both countries faced similar issues,
their approaches evolved quite diffe rently: the British movement favored
political activism, which led to the formation of the Labor Party in 6906,
while that of American unions used collective bargaining as a method for
their worker’s growth.
6.4 LEGAL MODEL
The Trade -Union Act established British unionism as a legal entity. A
series of court rulings in the United States had the same impact, although
it was practiced much slowly. There were several court orders, conspiracy
charges, and other methods against unions. The National Labo r Union
(NLU) was founded in 1866 as an early attempt to organize a federation of
American labor unions. Several of the NLU's member t rade unions
survived until the 1870s, which represented a wide range of occupations
including shoemakers, weavers, coal mi ners, and railway employees.
In 1886, several skilled worker organizations formed the American
Federation of Labor (AFL), which marked the start of a large -scale labor
movement in the United States. National trade or craft unions established
local unions a nd negotiated salaries, hours, and working conditions for its
members.
Check Your Progress
1. Write down the meaning of Trade Union as discussed in the Indian
Trade Union Act .
2. Discuss the how the first world countries are affected by the third world
countries workers.
6.5 MODERN DEVELOPMENTS IN THE WEST
During the 20th century, craft unions lost ground to industrial unions. This
shift was both historic and controversial because the earliest unions had
developed in order to represent skilled workers. S o, they were not ready to
include workers who were semi -skilled. The strength of the labor
movement at any given moment has been linked to general economic
conditions. In times of full employment and rising wages, unionism
typically loses some of its appea l, particularly among younger workers,
while in recessionary times it becomes more attractive. By the end of the
20th century the globalization of the workforce had brought new
challenges to the labor movement, effectively weakening collective
bargaining i n industries whose workers could be replaced by a cheaper
labor force in a different part of the world. The trade unions role got
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64 the developed countries labor movement got effected b y the developing
and underdeveloped countries.
6.6 PROFILE OF WORKERS IN INDIA
Being the second largest population in the world. We are one among the
youngest nations and with a population who can work.
The marginal workers contribute nearly half of the main workers in our
country. This means that there is still a necessity for increasing the policies
and meas ures and even encouraging trade union groups for the workers
benefit. Here, main workers refer to those workers who were employed in a
given year for more than six months i.e. (one eighty -three days) or more. On
the other hand, marginal workers are those who were working for less than
six months i.e. (one eighty -three days)v in a year.
6.7 PROFILE OF TRADE UNION IN INDIA
Origin
In Indiaviin the year 1850s, abuses over workers began to emerge. During
that time, establishment of textile and jute mills, as well as the
construction of railways was also taking place. Though the origins of labor
movem ents can be traced back to the 1860s, India's first labor agi tation
took place in Mumbai in 1875. S.S Bengalee was in charge of organizing
the event. It was mainly concerned with the conditions of workers,
particularly women and children. In 1875, the first Factory Commission
was appoint ed as a result of all this. In 1886, the first factories act was
passed. M.N Lokhande founded the Bombay Mill Hands Association in
6890. This was India's first organizedlabor union. Following this, several
organizations grew out all over India.
In India, trade unions are engaged in the development of programs and
initiatives on a wide range of labor -related issues at both the national and
state levels. Workers' rights are promoted and protected in both the formal
and informal economies. Twelve main unions are recognized as key trade
union organizations in India, and they operate in a number of states:
BharatiyaMazdoorSangh (BMS) ; Indi an National Trade Union Congress
(INTUC) ; All India Trade Union Congress (AITUC) ; Hind
MazdoorSabha (HMS) ; Centre of India Trade Unions (CITU) ; All India
United Trade Union Centre (AIUTUC) – formerly UTUC (LS); Trade
Union Co -ordination Centre (TUCC) ; Se lf Employed Women's
Association (SEWA) ; All India Central Council of Trade Unions
(AICCTU); Labour Progressive Federation (LPF) ; United Trade Union
Congress (UTUC); and National Front of Indian Trade Unions – Dhanbad
(NFITU -DHN) . HMS, INTUC and SEWA are members of the
International Trade Union Confederation (ITUC). AITUC is a member of
the World Federation of Trade Unions (WFTU)vii. There are unions of
Banks, Railways too which are active and old. Let us now look into how
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65 6.8 THE ROLE OF PUBLIC SECTOR IN INDIA
The public enterprise survey published by Government of India, Ministry
of Finance, Department of Public Enterprises lists out that there are total
365 public sector unitsviii.The report also shows that only two companies
which are directly led by the Public sector units in the field of Agro based
industries i.e. National Seed Corporation Limited, HPCL Biofuels
Limited. However, there are some problems with these figures too.
As today, a t times the company may be called as public sector but many of
its work is outsourced to private sector. So, the percentage of employees
who work as permanent would be limited. Predominantly it could
functionsby giving contract, tenders and the final produ ct is done by the
core company. So, here at the paper they are public sector but actually it is
a public sector which outsources majority of its work to private sector who
further hires contract workers and gets the work done.
Let us understand this with a n example. Recently Air India has been
moved back to TATA company. They are looking into the operations of it.
You would have heard the message given by Ratan Tata regarding
inauguration of the flight message. Even though it is TATA a private
player runnin g the company still Air India would be viewed as a public
sector company. So, the argument here is that higher the privatization the
more amount of contract, lack of job security, fewer permanent jobs, lack
of reservations for the marginalized groups and m ost importantly, no
existence of trade union. Let us now look into the problems associated
with privatization and its impact to trade union in more detail.
6. 9 PRIVATIZATION
With the Liberalization, Privatization and Globalization (LPG) in India
massive changes took place in the Indian economy. Large scale
privatization has been encouraged in nearly every sector. To view this
from a little bit of statisticsix during the period 2020, there have been
nearly more than 622 thousand co mpanies which has been registered in
India in which the total authorized capital turns out to be around 2.2
trillion Indian rupees. Among these, nearly 620 thousand companies were
registered as just private companies. The unique part is that the business
and service sector had the highest number of companies being registered
that is around 38,000. This shows the rapid pace in which we are heading
towards privatization. Here, to some extent this sounds very positive and
encouraging; it can be also viewed as a indicator towards more jobs and
newer opportunities for the recent pass out graduates. However, there are
problems too associated with this. Public sector generally focuses on the
welfare aspect. On the other hand, private sector focuses more on building
business and profits as well as expansion. It also is highly competitive,
market driven and the working conditions are different compared to public
sector. In the private sector, if the performance is poor then one could lose
the jobs easily. Every day, on e has to prove his role and utility,
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66 job. Losing a job will not only affect him/her alone but the family
members who are dependent upon the person.
6.10 PRIVATE COMPANIES AND TRADE UN ION
In private companies, employee’s job security is a debatable question.
Unlike public sector jobs until retirement one can be sure of his/her job, in
the private sector there is no security. Even if it is a white collar or blue
collared job. Generally, in private companies while hiring an individual
the person has to sign a contract where it is mentioned that the individual
would not be a part of any trade union movement, Gherao, Morcha,
political parties or even discuss anything about the company in so cial
media etc. In other words, the freedom of expression related to work is
curbed. If he/she violates it or if does not agree to the terms and
conditions, the job offer would be denied. This is generally in case of
white -collar workers. Of late, instead of Trade union in the private
companies what they have is Human resource management. Traditionally,
when one has any problem then workers would go to the trade union
leaders who would try to resolve the issues with the management.
However, at present in th e post liberalization period, the Human resource
management tries to fulfill this gap. They have taken the new role of
resolving employee’s problems. However, the irony in this is that human
resource management members are hired by the same employers. Yet, we
expect them to be impartial and assist the employees. This was different
from that of Trade union members who were at times workers doing the
same jobs and even were independent bodies and had associations with
larger Trade union groups too.
In terms of blue collared workers, who are already placed in the lower
rank, earn very less. They are hired through contractors. If they ask for any
benefits other than their wages, they would lose their jobs. So, basically, in
privatization the blue collared worke rs are strategically made to be further
marginalized. Especially the population who are illiterate and live on
every day wages, these groups are very vulnerable.
As a contract employee there are several benefits denied like medical
benefits, benefits fr om employee benefit schemes, reimbursement of
school fees of children, housing rent allowance, medical benefits. Some
companies have different sick leaves for those of permanent and contract
employees. Let us look this with an example –
6.11 CASE STUDY
Here, the case study of Contract Teachers is given to make you understand
the problems associated with contract jobs. Let us take an example of
Rimmy who works as a contract teacher in a college. Her father used to
work as a blue collared worker. Suddenly h is company where he worked
for fifteen years shut down as it was going under loss. Somehow, rimmy
father managed to complete her education. She started to work as a
Assistant Professor in a college on Clock hour basis. The clock hour basis
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67 on the basis of hours one teacher. For example - The standard rate varies
from Rs. 300/ 650. She teaches in three colleges in a day, the travel time is
not included. The CHB offer also is available only for three months in a
year, rest of the time she is unemployed. She thinks may beby having
higher education would help her get a permanent job. So, she spends five
years in doing a PhD (Doctorate Degree). Again, the contract system is
implemented as t here are no new vacancies present and she gets Rs.
65,000 per month. Being a temporary employee, her seniors take
advantage of her, in order to please them and be in good books she has to
put extra effort, do extra job of her seniors like take their lecture s, assess
their papers, put additional hours for student’s activity. Beyond her
working hours she has to do exam duties, present in seminars, wait in
college for six hours. The six hours rules are for permanent employees yet
colleges/Head of the Department expect them to followed by contact
teacher. Some of these rules are for permanent employees who earn a lakh
or two salary per month. However, she is paid the same Rs. 65,000.
Contracts teacher also also discontinued every year and they do not
receive any vacation salary. They are again interviewed and depending
upon the work performance, multiple factors like likeability of seniors the
candidate is hired or loses the job. On the other hand, a peon in the same
college who got the job twenty years before and is permanent gets Rs.
30,000 monthly salary. In front of the students she is a Professor who
would bring a change in the thought process of the children, inspire them,
help them achieve their career. However, honestly, she struggles to pay
her bills and t o take care of her parents.
This is not just an example of Rimmy but thousands like her, in a country
like India where parents expect that the children would earn and support
them financially. Education is viewed as a mode through which the family
would f eel safe but they still continue to struggle.
There are multiple factorshere, that we need to look into in detail like, the
corporatization of education, the discrimination on parts of those who got
were born early when there were public sector jobs easil y available.
Growth in population but less growth in jobs available. Increasing gap
ofHighly qualified educated individuals.
The role of trade union in the teaching industry also has to be viewed over
here. There are generally two to three All India teach ers Trade Union or
even state unions and city union. However, one of the prerequisites to be a
member of the trade union is that one has to pay the annual membership
fees for these unions. Which could be around Rs 5000 to Rs. 60000?
Secondly, majority of t he members are permanent teachers those who
already have a permanent job as only those groups can afford it. So, the
contract teachers voice and as a n agenda is generally not a major focus.
So, as of now nothing is done to improvise the situation. This gap is
further going to widen up in coming years. Rimmy case is of structural
discrimination which we are witnessing. Privatization/ Contract jobsmakes
the teachers vulnerable who shape the young learns who are future of a
society. Let us now look into the di fferent challenges faced by trade union
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68 Check Your Progress
1. Do you think Trade Union is needed in organizations both formal and
informal?
2. Discuss the interaction between privatization and that of Trade Union
6.12 CHALLENGES FOR TRADE UNION IN PRE
LIBERALIZATION ECONOMY –
 Knowledge economy
One of the important phenomena of the post liberalization is that the
economy is now driven towards knowledge -based industries than
manufacturing. We are now moving towards digitalization where the labor
requir emen t would be minimal. This would further lead to loss of jobs.
The new threats which are emerging is also the application of Artificial
Intelligence and mechanization of everything. At times the workers are not
updated with new skill sets to meet these c hanges. Hence, Trade unions
need to take initiative in training the workers with the emerging changes
and threats. Periodic camps need to hold for training, at the same time they
have to be open and accept new ideas, new industrial methods. Only then
both the trade union and that of the workers would have a space in the
market and both would be able to thrivex.
 Informal employment
The growth of informal employment and contract workers, promoting the
right to organize and bargain collectively, protecting mi grant workers
(both interstate and international migrants), gender equality, a lack of
social security, and workers' safety and security are all major challenges
for Indian unionsxi.
 Foreign companies
In order to make the country more investor friendly and to invite more of
Foreign companies into the country the labor laws are made are more
favorable for the investors. As a result, the capitalist gain more power over
the labor. This further continues the marginalization which has been
happening for generatio ns what Karl Marx would call the pauperization
effect the rich becomes more richer and poor becomes more poor. Higher
the foreign company’s emergence in the country, the trade union existence
and power both would be minimized by the government to favor the
investors.
 Reducing labor rights
In the earlier sections of the chapter we learnt that there are no enough
development or encourage in the formation of union. However, there are
labor laws which are being reworked in the present times. Several existing
44 labor laws are being combined and made into new four labor law codes
– right to minimum wages, social security, right to security, industrial
relationsxii

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69 Check Your Progress
1. List out two challenges associated with Trade Union in the pre -
liberalization peri od.
2. List out some measures on your own through which we could make
the trade union more impactful for the upliftment of workers.
6.13 SUMMARY
Thus, in this chapter we began by understanding the meaning of Trade
union. Trade union is a group which works f or the benefits of the workers.
We looked into the history of Trade union which emerged from West as
the industrial revolution took place initially over there. We also learnt how
the union in the West also faced challenges from the developing countries
labor. In terms of India, the growth of Trade union is also pre
independence. The trade union is still active in different parts of India,
however it not impactful or powerful due to the lack of public sector units.
The post liberalization phases the trade un ion movement’s strength has
weakened. As at present there are few labor trade unions which are highly
active and impactful in the country. There are a number of factors because
of which this has happened. One of the prominent factors is that of
Privatizati on. We also learnt that there is a large number of workers still in
the country who have jobs less than six months in a year, so protecting
these groups rights is essential. We also saw the changes in the system like
informal sector, contract workers as a result further marginalization. We
learnt about the case study of that of teaching faculty who are
marginalization through contract jobs. The chapter ended with the updated
details of labor law codes which is encompassing several laws into four
codes major ly.
6.14 QUESTIONS
1. Discuss the meaning of Trade union and its history
2. Explain the impact of privatization and explain a case study related to it.
3. Discuss in brief the trade union in India and issues connected to it with
reference to the public s ector.
4. Explain the challenges with the trade union in the post liberalization
period.

6.15 REFERENCES

i https://www.iosrjournals.org/iosr -jbm/papers/Vol66 -issue4/Version -
6/G066464753.pdf
ii https://dictionary.cambridge.or g/dictionary/english/trade -union
iii https://www.ilo.org/dyn/natlex/docs/WEBTEXT/32075/64876/
E26IND06.htm munotes.in

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70 iv https://economictimes.indiatimes.com/definition/trade -union
v https://data.gov.in/catalog/n umber -registered -trade -
unions?filters%5Bfield_catalog_reference%5D=89 584&format=json&off
set=0&limit=6&sort%5Bcreated%5D=desc
vi https://www.clearias.com/trade -unions -history -labour -unions -in-
india/#:~:text=In%20India%2C%20now%20there%20are,crore%20(60%2
0million)%20labourers.
vii https://www.ilo.org/newdelhi/areasofwork/workers -and-employers -
organizations/lang --en/index.htm
viii Public Enterprises Survey, 2069 -20, Annual Report on the performance
of Central Public Sector Enterprises this can be accessed at
https: //dpe.gov.in/sites/default/files/PE_Survery_Vol_II_English_2069_20
_0.pdf
ix https://www.statista.com/statistics/6248272/india -number -of-registered -
private -companies -by-
sector/#:~:text=In%20financial%20year%202020%2C%20there,were%20
registered%20as%20private% 20companies.
xJit, R., Bharti, A., & Rajeev, P. V. (2068).Impact of L iberalization and
Globalization on Trade Unions in India. Global Journal of Enterprise
information system , 60(2), 53 -58.
Anand, V., &Jha, S. R. K. Trade Union Movement in India and the
aftermath of Liberalised Economic Policy of 6996.
xihttps://www.ilo.org/ newdelhi/areasofwork/workers -and-employers -
organizations/lang --en/index.htm
xii https://labour.gov.in/sites/default/files/Labour_Code_Eng.pdf

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71 7
A COMPARATIVE PERSPECTIVE ON
INDIA, RUSSIA, US, CHINA, EUROPE
Unit Structure
7.0 Objectives
7.1 Introduction
7.2 Meaning of Labour Market
7.3 India labour market
7.4 Russian Labour Market
7.5 United States of America Labour Market
7.6 Labour Market in C hina
7.7 European Labour Market.
7.8 Comparison between different countries labour Market
7.9 Summary
7.10 Questions
7.11 References
7.0 OBJECTIVES
 To understand the meaning of labour market.
 To learn about Labour market in China, Russia, India, Unite d States
and Europe.
 To compare and evaluate the different countries in terms of its labour
market.
7.1 INTRODUCTION
In this chapter we will be making an attempt to understand the labour
market of India, Russia, United States of America, China and Europe.
Studying these topics would be very much helpful for understanding
different countries, their policies. These chapters would help you
understand the geo politics, issues faced by different countries. Before that
in order to understand the comparison among different countries like
India, United States of America, China, Europe and Russia we have to
first learn little bit background about labour market. So, let us look into
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72 7.2 MEANING OF LABOUR MARKET
Labour market is a broa d term that refers to the interaction of supply (the
number of people looking for work) and demand (the number of jobs
available) as well as wage rates. The is just not requirement of short -term
supply and it could be long term too. This is across regions, vocations, and
sectors and this makes the labour market analysis very difficult.
Furthermore, various institutions like Government, local bodies, trade
unions also impact the labour distribution.
The capacity and desire of employees to shift from one lab our market to
another, both occupationally and geographically, also determines the
labour market. Legislation may also influence how individuals pick or are
chosen for occupations; for example, attorneys and physicians are not
allowed to practise in a prov ince unless they are certified by that
jurisdiction. The size of the overall population also determines the labour
market. For example -The size of the adult population, aged 15 and above,
determines the overall supply of labour. In many countries one need s to
also note that only a small group of population consists of working
population. As there are several factors which are involved before an
individual enters the market. For example - Attitudes, Age, Sex, Economic
conditions, location, Social Institution s – Religion, politic et. which drives
an involvement into the market. Many young people may be also attending
school or training institutes, with 60 percent of them probably
participating at a future date too.
The demand for the commodities and services that labour generates is also
indirectly influenced by the demand for labour. The geographical and
occupational features of labour demand is also important, but the
industrial distribution of demand and the organisation of enterprises are
equally important tooi.
To absorb and respond to economic shocks and take advantage of new
possibilities, labour market resilience and flexibility are very crucial. To
decrease the short -term consequences of economic downturns, resilience
is essential. Thus, Labor produc tivity is a necessary prerequisite for high
output, employment, and wage growth, as well as for long -term
improvement in living standards. Finally, the skills are critical for
increasing worker productivity and pay, as well as for indicating readiness
to meet future difficultiesii.
Let us now look into some details about Labour Market in different
countries.
7.3 INDIA
With more than 62 percent of the population in the working age group
(15-59 years) and more than 54 percent of the overall population unde r the
age of 25, India is now one of the world's youngest countriesiii. In India,
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73 90% of the country's workers are engaged trying to raise their income
levels.
The G20 studies point ou t that many childrens have not attended school,
while another third has only attended basic school. Four out of every five
new workers have never received any training. While the number of
students enrolled in technical education institutes has grown (fro m 2.1
million in 2000 to 3.8 million in 2005), the drop -out rate is still relatively
high.
Simultaneously, substantial skills shortages have also been noted across
the formal economy. At present shortage in the information technology
sector is estimated to be approximately half a million.
Though, India has launched an ambitious National Skills Development
Policy in 2009 to address these difficulties. Its principal goal, includes
according to the Union Minister for Labour and Employment, is to
empower all pe ople by improving their skills, knowledge, and provide
globally recognised qualifications, allowing them to obtain respectable
jobs and promoting inclusive national progress. Over the course of the
11th Five Year Plan, it has also planned to enhance vocati onal training
capacity to 15 million students, among other things (2007 -12) (G20 p.17)
7.4 RUSSIA
According to World Bank in the year 2020, Russia population is about
14.41 Crores. Given such a huge population still understanding Russian
Labour Market h as to be made from few perspectives. Like - Impact of
Soviet Union collapse which occurred on 26th December, 1991, pandemic
and finally the after effects of Ukraine War.
Pre pandemic
Russia did pretty well on job quantity indices before to the epidemic. Th e
employment rate was higher than the OECD average, while the
unemployment rate was lower. OECD stands for Organisation for
Economic Co -operation and Development. Unemployment also decreased
by flexible labour market regulations, limited unemployment insur ance,
and the continuous economic recovery.
Russia has the ability to increase labour utilisation as well. Despite this,
Russia fared low on metrics of employment quality. Earnings quality was
towards the bottom of the OECD, owing in part to poor labour
productivity as a result of the economy's low capital base. More over 30%
of workers also faced with high job expectations and insufficient
employment resources. This is because of the consequences of reduced
unemployment risk and poorer unemployment. Even t he labour market
insecurity was also close to the OECD average.
The Russian labour market underperformed the rest of the OECD. Poverty
has also risen, owing to recession, with 13 percent of working -age people
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74 compared to OECD nations, the employment gap for disadvantaged
groups including women with children, teenagers, older employees, non -
natives, and those with partial impairments is wideiv.
Russia's labour market, being the largest in the Eurasian area, has often
had an impact on the economic performance and well -being of various
former Soviet nations. It's difficult to comprehend Russia's labour market
dynamics from 2000 to 2017 without first understanding what happened in
the 1990s. Follo wing the dissolution of the Soviet Union, the Russian
Federation was formed, and the arduous transition from a planned to a
market economy started. The country went through a lengthy and
significant economic downturn after being hit by three major
macroeco nomic shocks (in 1992, 1994, and 1998), the last of which was
sparked by the Asian financial crisis in August 1998. By that time, the
country's GDP had increased to over 60% of what it had been in 1991, the
USSR's last year of existence.
Yet, the commonly predicted labour market collapse did not occur:
employment dropped by a "modest" 15%, but unemployment stayed at
low levels, especially considering the recession's historic severity. In
1999, the unemployment rate hit an all -time high of 14 percent, but it
quickly began to decline. The burden of adjustment was borne in large
part by real wages, which plummeted and had lost two -thirds of their
value by the end of the decade. Employers' labour expenses were devalued
as a result of persistently rising inflatio n combined with delayed wage
payments (wage arrears). Additional adjustment mechanisms, such as
administrative leaves, short -term working arrangements, and the rise of
informal employment, aided in keeping unemployment low and
employment highv. (Paraphrase d)
War Impact on Labour Market of Russia
Due to the War with Ukraine nearly 20,000 or more soldiers died from
Russia – this would have adverse impact in the population as Russia loses
these number of youths who are men and women of working age groups.
There is also a large section of soldiers who were also injured in the war.
In addition to this Russia also has a declining population trend this factor
would also affect the labourers available in the future. The War also made
Russia in limelight and seve ral sanctions being imposed upon them, this
includes – ban over oil and gas imports from Russia, travel restrictions,
ban of over exports, several companies, food chains, shut down their
operations in Russia. Over nine European Union countries and United
State s have also expelled nearly two fifty Russian diplomats and embassy
workers. There is also rise in the inflation which is around 14 percent in
Russia. All these factors would have adverse effect on Russia.
7.5 UNITED STATES OF AMERICA
The United Sta tes of America, is considered as one of the most developed
and powerful nations in the World. This is because of its influential
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75 culture etc. The biggest companies of the world MFAAN G Meta
(formerly known as Facebook), Amazon, Apple, Netflix, and Alphabet
(formerly known as Google) all are located in America. The uniqueness of
America is seen from the fact, that people from all over the world wish to
or try to migrate to United Stat es. Th e most qualified individuals in a
society are Scientists, Doctors, Engineers, Scientists, Doctorates –
individuals from India and multiple other nations get employed or try to
seek jobs in these countries. This can seen from the amount of skilled
(White co llar) occupation based individuals applying every year for
citizenship, jobs in the United States. Being the land of opportunities, the
United States of America stands as a land of opportunities.
7.6 CHINA
China has oligarchy kind of political frame work - meaning a group
controlling the government. Some Scholars point out that China, will lose
200 million employees and gain 300 million senior citizens during the
next thirty years. It is also said that on average, Chinese employees
generate six times l ess w ealth per hour than Americans. More than two -
thirds of Chinese employees have not completed high school, and one -
third of Chinese young people entering the workforce have there is also
hunger, inadequate health care, and pollutionvi.
According to the G 20 (I ntergovernmental forum of 20 nations ) data, only
4% of China's workforce is considered highly qualified. Only 36% of
employees have a secondary school diploma or less. The remaining 60%
have few or no skills and are classified as "elementary laboure rs," wh ich
includes around 200 million migrants from rural to urban regions. The
shortage of competent people is the main barrier to expansion and
competitiveness for four out of five German companies in China.
According to estimates, one -third of all seco ndary v ocational school
graduates are unable to find suitable employment, and around a third of
university graduates are unable to find work within the first year of
graduation.
Encourage a greater range of providers to give training while also
strengtheni ng curr iculum and assessment will help to solve this problem,
according to the government's "Opinion on Further Strengthening Efforts
on Highly Skilled Workers Cultivation," released in 2006. There should be
also incentives for employers to hire more highl y skill ed workers; special
remuneration schemes targeting higher -skilled workers; increased training
for migrant workers and for business start -ups; and increased investment
in migrant workers and business start -ups.
China has its own Chinese made applic ations, substitutes of face book, as
we chat etc. the problems of labourers is not upfront visible as the media is
monitored, the information passed out is monitored. Individual narratives
unlike what we are able to hear from other countries is not easily
accessi ble as several social media platforms are banned or the usage is
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76 Chinese government has also focused on manufacturing while India
focused on service -based sector. The government policies gave targets for
increasing t he prod uction. China can force its people to work – directly or
indirectly through strict measures and this led to growth of production.
However, there are recent issues which are going to affect the economic
market in future like debt – Dollar $1.06 trill ion as of Janurary, 2022
given to United States. China has also given across debt to countries like
Srilanka of 2.8 billion and even to China – Pakistan Economic Corridor to
Pakistan where it has spent a large amount of moneyviii.
The relation of China with other c ountries is that it supplies products, has
a good distribution system and it Chinese economy collapses it would
effect United Nations and further it could effect all the other countries in
different parts of the world.
Check your Progress
1. China ha s which industrial base in large quantities.
2. Why do you think people want to work in America specially the
Qualified individuals.
7.7 EUROPE
Generalizing Europe is a difficult task as there are several countries within
the Europe territory itself. T here ar e forty -four countries within the Europe
Union. The problem is that some of them are well off and some countries
are still marginalized to some extent. Europe receives huge amount of oil
and gas from that of Russia, the sanctions imposed and lack of oil ac cess
would adversely impact the inflation and the job market.
European Union labour markets are defined by a variety of problems, and
even by sproblem of unemployment. However, while there have been
some advancements, some groups in society, such as women , young folks
or older workers, continue to be under -represented in employment. There
are indeed new problems, such as bridging the skills gap and realising the
advantages of the economy's digitization.ix (Paraphase done).
During the COVID -19 pandemic , unem ployment in the European Union
was at a historic low of 6.3 percent. It subsequently continued to climb as
a result of the pandemic, peaking at 7.7% in September 2020. While
unemployment has decreased slightly since then, indicating that the
European Union is on the road to recovery in the labour market. The
structure of some occupations has also been altered, with significant
consequences for Europe. There also exists the income and age gap
between young and old workers. With pandemic the growth in t he rem ote
jobs have also led to several job losses.
According to McKinsey, 4.3 million employees in customer service and
food service might be losing jobs over the next decade, compared to
before the epidemic. This data is based on an analysis covering eig ht lar ge
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77 jobs in transportation and last -mile deliveries has also partially
compensated for the job losses. Business travel, according to McKinsey,
will not be able recover to pre -pandem ic lev els and will decline by 20% in
the post -pandemic period. Commercial aviation and airport services, as
well as hotel and food service, may see considerable job lossesx.
7.8 COMPARISON PERSPECTIVE
Why making comparison is Difficult?
Comparing different c ountri es markets is difficult as every country is
located in different locations, culture, customs, traditions, political stand
points etc. Every country has gone through different layers of
transformation - for example – China with Pandemic being hit and e ven
now it is going through pandemic with variants, lockdowns being
practiced. Russia on the otherhand, with post Ukraine conflict has invited
sanctions from several nations including United States. Population
strength being a factor which has also been affecti ng every countries
labour force of the country.
Global Warming
If there is one common factor which is affecting all the countries is the
climate change and the lack of enough resources. The developed countries
consume large amount of resources becau se of higher standard of living
and due to higher technology and vehicles. While the poorer countries
consume resources to keep themselves alive, to earn living, for
consumption of food etc in other words to survive.
Age of entry into labour market
In co untrie s like United States of America, Europe – an adult or above age
of 18/ 16 is expected to leave his/her home and find out employment,
support his own education, livelihood etc. This also leads to individuals
entering into the job market at a very earl y age. On the other hand, in the
Indian context parents many a times support the child’s education till they
are graduate or post graduate. As a result, the nature of decisions,
responsibilities associated with the adult at times becomes dependent or
subje ct to approval of parents. In addition, there is also difference in the
age of entering market.
Females in Labour force
The number of females in the labour force continues to be lesser than the
male population. In the Indian context there are several fac tors l ike caste,
marginalization, location, exposure to job market which has to be taken
into consideration to understand this. For example – If there is a better
opportunity outside the town, parents would still hesistate to send their
daughters for job. Howeve r, this would not be the case for men or boys.
There also exists a invisible social pressure which individuals have to
witness everyday like from neighbours, aunties and uncles who reside in
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78 ask about childrens, they would ask with words like any good news etc. In
other words, there exists social pressure of having children and sidelining
the career as priority. We cannot generalize this situation within all
families though, specia lly th e marginalized groups where women have to
work to add to the income of the family, or where men have deserted the
female and she has to take care of the household. However, the point to
draw over here, is that the female labour market gets effected b y a ra nge
of factors which is not clearly visible. While in countries like United
States, there exists other set of problems like Racial discrimination, lack of
social support.
7.9 SUMMARY
In this chapter we looked into the meaning of Labour Market which refer s
to the interaction of supply (the number of people looking for work) and
demand (the number of jobs available) as well as wage rates. We also
discussed about labor conditions in different countries market let it be
India, with having one of the you ngest populations in the world. We also
learnt about China – having huge manufacturing base, United States of
America, which receives most qualified skilled population from different
parts of the world. We also learnt about Russia, which has huge inflation
and s anctions being imposed with Ukraine War, and this could probably
affect their local jobs. We also learnt about Europe where the economy
and work culture are changing post pandemic. In the chapter, we also
made an attempt to compare the different count ries economy which is
technically very difficult as every country has its own set of natural
resources, population strength, political ideologies and history. Yet,
certain common lines are there that every country like search for green
energy, attempt to u se less resources due to global warming in the country.
Check your Progress
1. According to you, how can we improve the Indian Labour Market.
2. Discuss how Global Warming can impact economy, write your opinion
on it.
7.10 QUESTIONS
1. Discuss the meaning of Labou r market.
2. Explain the labour market in that of Russia
3. Explain the labour market in that of India
4. Discuss the labour market in United States and that of Europe
5. Discuss the labour market with reference to that of China.

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79 7.11 REFERENCES

i Phillips, P. (2013). Labour Market. In The Canadian Encyclopedia .
Retrieved from https://www.thecanadianencyclopedia.ca/en/article/labour -
market
ii https://www.oecd.org/countries/russia/jobs -strategy -RUSSIA -EN.pdf
iii https://www.mygov .in/ne windia/wp -
content/uploads/2017/09/newindia301634_1504694260.pdf
iv https://www.oecd.org/countries/russia/jobs -strategy -RUSSIA -EN.pdf
v Gimpelson, V. The labor market in Russia, 2000 –2017. IZA World of
Labor 2019: 466 doi: 10.15185/izawol.466
https://w ol.iza .org/articles/the -labor -market -in-russia/long
vi https://now.tufts.edu/articles/why -united -states -only-superpower
vii https://now.tufts.edu/articles/why -united -states -only-superpower
viii https://www.thehindu.com/news/international/sri -lanka -turns -to-china -
for-further -25billion -assistance/article65245714.ece
ix https://www.businesseurope.eu/policies/social/labour -markets -and-
social -policy
x https://www.bruegel. org/2021/09/remote -work -eu-labour -markets -and-
wage -inequality/


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80 8
NEW WORK ORGANIZATION,
DIVERSITY GENDER, HUMAN
RESOURCE MANAGEMENT
Unit Structure
8.0 Objectives
8.1 Introduction
8.2 New Work Organization
8.3 Gender Diversity at workplace
8.4 Human Resource Management
8.4.1 Functions of HRM
8.4.2 Objectives
8.4.3 Nature of HRM
8.4.4 Brief History of Human Relations Movement or Approach
8.4.5 Evolution -Scientific Management
8.4.6 Importance of Human Resource Management
8.5 Summary
8.6 Questions
8.7 References
8.0 OBJECTIVES
● To understand the changing nature o f the new work organisation
● To understand the role of gender divcersity in the organisation
● To explore the role of Human Resource Management in developing
the Organisations
● To evaluate the need of Human Relations for organisations
8.1 INTRODUCTION
As we all know, Society is never static. The evolution of society from
simple to complex, from purely agricultural to industrial, has led to many
changes in all walks of lives. The Industries, organizations, have also
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81 industrial revolution has also undergone tremendous amounts of changes.
Tasks which required a lot of manpower, now are being completed with
the help of fingertips. Technology, no doubt, has been ruling the world
today. We are in the “In formation Age ”, where man is controlled by
machines. In this Unit, we shall see how the industrial society has
undergone changes and how the New Work organization operates and is
being continuously transformed. How Human Resource Management
plays an impor tant role in developing the capabilities of the employees for
the benefit of the employees as well as the organisations.
8.2 NEW WORK ORGANIZATION
Many of the industries and organizations, even today, continue to apply
age-old practices of hierarchy, com pulsion of physical presence, wage
differentials, etc. However, today is the era of networked Individuals and
self-employed entrepreneurs. With the Industrial Revolution, society
witnessed a shift from fields to factories. In today’s era of digitalization,
society has witnessed a shift to Information Technology. Some companies
have noticed that the world around them is transforming and are
attempting to evolve, but others are maintaining to perform as if nothing
has changed.However, the others continue to f unction with the age old
practices are left behind, eventually losing their most productive
workforce and are being defeated by those who adapt to the changing
requirement. This is related to Darwin's Theory of the Survival of Fittest.
It is very obvious that the working conditions have transformed itself to
the extent that there is no need for physical presence at the workplace,
messages can be communicated with emails, telegrams, whatsapp groups,
etc. Meetings can be held with clients staying overseas t hrough the online
mode, examinations can be held for thousands of students at a given point
of time with the use of various softwares, applications, there is no more
need to keep loads of physical files but the same information about the
documentation can be saved in the devices . This has reduced the need for
space which was earlier occupied by the cupboards. The requirement to be
physically present at the office is replaced by the need to work from home.
However, while working from home, most of the time, there is no
limitation of working hours. This is evident with the Work from Home
scenario in the Pandemic situation of Covid 19 where employees all over
the world adapted to technology and continued to perform their tasks
without their physical presence a t the workplace. However, after the
pandemic, the employees are being forced to be physically present at their
workplace and now it is a matter of debate, whether they should be
allowed to work from home or be forced to be physically present at the
workpla ce. Most of the leading organizations have adapted to the hybrid
mode of working where the tasks which do not require physical presence
are completed online.
Despite our capacity to work from anywhere and at any time, we are
nonetheless bound by the norm s established by past generations in the
workplace. For the most part, the "normal" in the workplace is to have a
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82 employees a wage, provide perks, as well as provide a level of financial
stability in exchange for showing up and performing a job description.
However, this is rapidly being recognised as a reduced paradigm that is
both unsatisfying for employees and ineffective for employers.
It is important to note that the 21st century de mands the organizations to
be flexible, digitalized, an era of hard work, combined with smart work,
wherein there is a constant requirement for upgradation of skills and
knowledge to survive in the market.
8.3 GENDER DIVERSITY AT WORKPLACE
The term "gende r diversity" refers to a balance of men and women.
Computing, manufacturing, medicine, and science are some of the most
well-known industries where male personnel have an advantage over
female employees. It is important to note that women have always playe d
an important role in the workplace, even when they were not employed
directly in the same. Female employees are underrepresented in
organisations, which results in a lack of diversity of thought, creativity,
and even revenues. An enterprise that supports diversity is more likely to
outperform the national industry median in terms of financial returns.
Companies with gender diversity are more likely to maintain a low
turnover rate, which reduces costs significantly. Furthermore, they are
more innovative an d make better informed decisions.
In the workplace, gender diversity means that males and females are hired
at the same rate, compensated equally, and given equal opportunity for
advancement.
Women make about 40% of the global workforce, yet only about 5% of
senior management roles are held by them. Even still, annual salaries for
males in identical occupations are not comparable. Women still face
gender differentiation when it comes choosing a particular field, getting
hired, wage gaps and so on.
Today, G ender diversity is something that most businesses strive towards.
While reputation is vital, female representation provides a number of other
crucial and significant benefits for a company's bottom line. Companies
that are more gender diverse enhance their performance and make more
money!
The importance of gender diversity cannot be overstated. Fair
representation of women in the workplace can have a good impact on the
entire company. Today, it has become eminent for the organizations to
include not only ma les and females but also those belonging to the third
gender and give them the opportunity to prove themselves, which in turn
benefits the organization as a whole.

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83 8.4 HUMAN RESOURCE MANAGEMENT
To quote a few great leaders,
"You must treat your employe es with respect and dignity because in the
most automated factory in the world, you need the power of human mind.
That is what brings in innovation. If you want high quality minds to work
for you, then you must protect the respect and dignity. " -Mr N.R.
Narayana Murthy, Chairman Emeritus, Infosys Ltd.
“Our progress as a nation can be no swifter than our progress in
education. The human mind is our fundamental resource.” - John F.
Kennedy (35th President of the United States).
From the above quotes it is cl ear how inevitable it is to develop the human
resource not only for the benefit of the individual or the organization, but
for the benefit of the entire nation and global economy. We are interested
in the study of human relations, meaning and definitions. Hum an relations
are found in all social sciences. Human life depends on human relations.
In other words, without human relations nothing is possible in the world.
Since the beginning of society human relations are born and live always.
Relations are simpl e and complex. Along with human activities human
relations change. For example, human relations are different in simple
agricultural society and complex industrial society. Similarly, human
relations are different in rural society and urban society. We are also
interested to know human relations in different fields and institutions.
Family relations are different from relations in schools and colleges.
Human relations are informal and formal. Human relations depend on
situation and human actions where peopl e ar e involved in various
organizations. In all organizations human relations play a significant role.
Human resource management is a strategic approach to managing people
in a company or organisation in such a way that they assist the company to
acquire a com petitive edge. Its goal is to maximise staff performance in
support of a company's strategic goals. Human resource management
(HRM) is the process of hiring, training, compensating, and setting
policies for them, as well as developing retention tactics . HR M has
evolved significantly during the previous two decades, allowing it to play
an even more critical role in today's corporations, firms, and business
organisations. HRM used to involve processing payments, delivering
incentives to staff, organising bus iness outings, and double -checking
forms —in other words, more of an administrative duty than a strategic
position critical to the organization's success.
Man is a social animal. He cannot live alone. An organization, whether
small or big, formal or info rmal, whether afamily, a bank, an industry, is
composed of people. People are the human resources and they are the real
strength. Human resources prior and the most important factor of
production. Without human resources no organization works. No
technolog y runs on its own without human beings. The study of human
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84 consist of knowledge, skill, creative ability, talent and experience. Further
human relations are modified and established wit h the help of education,
training and experience. Human beings differ in educational qualifications,
experience and abilities. They differ in interests, talent and skill. Man is a
wonderful animal in the animal kingdom. He is smart, an emporium of
intellig ence and beauty. Man is the great artist in the world. So, the words
of Greekdramatist Sophocles are right "The wonder of wonders is Man.
He has an infinite capacityto think, to develop, to create, to invent, to feel,
to love, to respect, to destroy. In oth er words, human relations play a
significant role in every walk of life. Thus, human relations mean , a joint
effort of men and women in the development of civilization. Human
relations are peculiar and interesting. They are as old as human history.
From t he beginning of the human history, men formed the society with the
help of human and social relations. The relations are biological, social,
cultural, economic and political. Living together and working together is
the foundation of human relations. Human relations are found in the
families, in schools, with neighbors, friends, peer groups, between nations
and nations. Human relations are important, whether they are co -operative,
conflicting and assimilative. Man is a social man and also an economic
man. He needs money to satisfy his basic needs. He is a complex person.
He is humane. This human character guides his relations with his
organization, colleagues, supervisors, and subordinates. A business
organization, a factory, an industry is solely depending on human
relations. No organization run on robots and machines. So sociological
study of human relations is primary and other aspects are secondary.
Progress of any firm depends upon the richness of human relations.
Wecannot study any organizations without hu man relations. The main
objective of HRD is to integrate the individual and organizational goals.
When human resource programmes are successful, they tend to decrease
accidents, absenteeism, turnover while simultaneously raising morale
quality and producti vity. At the minimum, such programmes should
prevent undesirable behaviour such as sabotage, slow down,
insubordination, strikes, use of drugs, and alcohol on the job etc. It has
been observed that all decisions are not made in the interests of
organizatio nal productivity and profits. Sometimes employees are
favoured and hired professional managers show more interest in social
responsibility
8.4.1 Functions of HRM
Human Resource Management involves Acquisition which involves
incorporation of the Recruitmen t, Selection, Placement processes which
are required for selecting and utilizing manpower for fulfilling the goals of
organisation. Another important function of HRM is developing its human
resource by upgrading their skills from time to time by providing proper
training, supporting them in their career growth so that they remain
competent in the global market, thereby meeting the organisational goals
and requirements. HRM recognizes the potential of the hardworking
employees and serves to reinforce them by providing incentives,
promotions and perks. By creating a motivating environment, the
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85 potential to the fullest. Providing various facilities, especially facilities
related to health , safety at workplace, stress free and competitive
environment are some other factors required to develop the human
resource of an organisation. Working along with humans definitely
involves certain disputes and grievances. With the growth of competition
in the global environment, growing stress, there are several disputes
amongst the employees and employers. HRM plays an important role in
managing these grievances and disputes through various techniques so that
the overall working of the organisation remai ns undisturbed.
8.4.2 Objectives
Human relations are a sociological phenomenon. It helps to improve
morale and job satisfaction of employees and employer. It helps to
stabilize relationship between all members who are related to the
organization. Objective s of human relations help to motivate and improve
three -way communications and through employees' participation in
decision -making process. It further helps to create employment and
working conditions less impersonal. According to Kossan the main
objective of human relations is to reduce tension, misunderstanding
between employer and employees. It helps to increase efficiency and
reduce unrest in the working environment. Kossan suggests an
understanding of human behaviour between the personnel involved in t he
organization for betterment and prosperity of the company. Kossan
suggests the following points.
1) Assist the manager to develop a better realization of how his own
attitudes and behavior play a part in everyday affairs.
2) Assist human beings to dev elop a keener sensitivity towards other
people.
3) Help him to develop an improGed understanding of the problems of
reconciling his own interest and capabilities with the needs and goals of
the organization of which he is, or will become, a part.
4) Enabl e him to anticipate and prevent problems.
5) Assist him to cast aside some of the excess mental luggage that
increases his mental load. Prof Morris Raphael Cohen says about mental
luggage that "I have never discovered any royal road up the rocky and
dange rous step of philosophy; I did not conceive it to be a part of my
function' as a teacher to show my students such a road' I only convince
them that they must climb for themselves or sink in the mire. I will only
help them to make their way easier by removi ng negative ideas and
hurdles. I will convince them to remove all rubbish before construction.
The purpose of the concept of human relations is not to enable people to
discover clever or cunning techniques for winning friends and influencing
people through personality development, nor to enable them to manipulate
as though they were puppets, but to assist them in working more
effectively with other people in organization. The goals of human relations
are set in two ways. One is for the betterment of the org anization and munotes.in

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86 another is for the betterment of employees. Organizational goal is
interested in its growth and development and employee's goal is job
satisfaction, recognition and promotion.
8.4.3 Nature of HRM
As stated above, Tasks like creating Strateg ic plans, organising, leading,
and directing are all management activities that HRM entails.
● Human resource acquisition, growth, administration, and
management are all part of this process.
● It aids in the achievement of personal, organisational, and social
goals.
● HRM is a broad disciplinary field. It covers all the disciplines like
Management psychology, communication, economics, and sociology.
● It entails teamwork and team spirit.
The scope of HRM refers to all the activities that come under the banner
of HRM. The activities are as follows
Planning for human resources : – Human resource planning is the
process through which a firm determines the number of open positions,
whether it has surplus or shortfall of workers , and how to address theis
surplus or def icit.
Design of a job analysis : – Job analysis is another key aspect of HRM.
Job analysis provides a thorough overview of each and every role in the
organisation. The company creates employment adverts relying on this job
analysis.
Recruiting and hiring: – The company creates adverts and publishes
them in newspapers based on the information gathered from job research.
After the advertisement is published, a large number of applications are
received, interviews are held, and the suitable employee is chosen, hence
recruitment and selection are significant aspects of HRM.
Induction and orientation: After the personnel have been chosen, an
induction or orientation programme is held. Employees are given
information about the company's history. They are informed a bout the
company's culture, values, and work ethics, as well as introduced to other
employees.
Training and development: Each employee participate in a training
programme that enables him to perform better on the job. Existing
employees with a great deal of experience are also put through a training
programme. Refresher training is what it's called. The corporation invests
a significant amount of money on training and development.
Evaluation of performance: – Popularly known as Performance
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87 department conducts a performance appraisal, based on which all future
promotions, incentives, and salary increases have been decided.
Compensation and remuneration planning: – There are a variety of
rules tha t govern compensation and other perks. The HR department is
responsible for pay and compensation planning.
Motivation, well -being, health, and security: Motivation becomes
critical in order to maintain the company's workforce. The HR
department's job is to investigate various motivational techniques. Aside
from that, specific health and safety laws must be observed for the
employees' benefit.
Relations between workers: – Maintaining cooperative connections with
union members is another crucial aspect of HRM . This will assist the
corporation in avoiding strike lockouts and ensuring smooth operations. It
is also important to maintain healthy and diplomatic relations even with
the competitors in order to survive in the global market.
8.4.4 Brief History of Huma n Relations Movement or Approach
The human relations movement became popular in the 1940s and early
when much attention began to be paid to the worker's needs, and in
realizing the importance of human beings in total productivity. This
approach was a signi ficant departure from the Taylorian an "Scientific
Management approach " Frederick W. Taylor (1 856-1915) an industrial
engineer introduced the idea of "Scientific Management". Its main
objective was to remove antagonism between the owner and the workers .
The "Scientific Management" approach has given the management "work
management techniques, organization and methods, and assembly line
production." Taylor was an apprentice, and then worker, gang boss in a
company, and joined the evening engineering coll ege, obtained a degree in
engineering and became the chief engineer. In coming years, Taylor's
ideas received recognition and there developed separate discipline called
'Human Engineering. Human Engineering is the study of people at work
and of work method s; it includes a study of equipment design, methods of
work, hours of work, and environmental conditions of work. Its purpose is
to improve productivity and job satisfaction" F.W. Taylor, the founder of
scientific management, was of the opinion that by wat ching men, tools or
tasks they were required to perform it was possible to increase
productivity. He also realized that by time and motion studies, the physical
movements of the worker can be reduced in favour of quick performance
of jobs. This can also le ad to less physical burden on the workers. F.W.
Taylor and his associates developed well defined laws, rules and
principles established by scientific studies. Taylor's theory is known as
Taylorism. He firmly believed that by controlling wasteful movements on
the part of workers. a lot of time and energy could be saved and this can
give less fatigue to workers. This can also lead to more production during
the same time intervals ..... He suggested various controls of production,
time study methods, motion co ntrols of production, time study methods,
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88 charts, organizational schemes in order to increase productivity. He also
suggested improving lighting and ventilation aspects of work. Worke rs
can work better if the working conditions are improved. He also suggested
that by giving more money incentives to workers, their interest in work
can be increased and their aim can be focussed. Scientific management
approach was very successful and in l ater years, management adopted this
approach and their production increased. But the whole approach was
'technology oriented' and not men oriented. The workers were looked upon
as parts or instruments of machines which could be manipulated as per the
desir e of management to increase the production. The workers were not
treated as human beings with their own desires, feelings, ambitions, and
sentiments. Further fragmentation of an operation lends to each man doing
only one little job (specialisation), encour aging a mechanistic conception
of men at work. This ultimately led to a situation where at times symptoms
of alienation, frustration, conflicts were evident. This approach only
looked at economic aspects of organization and not at human aspects and
also pa id no attention to the complex social networks created by workers
within the work environment. By 1920, the image of workers had changed
drastically for the new ideal which held that all workers were complex,
unique, and possess considerable individual ski ll, abilities which could be
measured, tested and trained. In all organizations, human beings are
important and all other machines and materials get life with human touch.
So human relations are important. Human relations theory, that was
developed throug h the researches of Elton Mayo, Carl Rogers, Kurt
Lewin, Daniel Bell and C. Wright Mills, Chester I Bernard, concentrated
on the social environment surrounding the job. The human relations
programme began when a group of research scholars from Harvard
Univ ersity was invited to conduct studies at the Chicago Hawthorne plant
of Western Electric. These researches laid down the foundation of the
relationship between productivity and physical working conditions. Elton
Mayo stressed the importance for an understa nding of the needs of both
management and workers. He is rightly regarded as the founder of "the
human relations school". "Employee counselling" is one of the most
important technique developed after the Hawthorne experiments.
Problems of communication, no n-financial incentives, participation,
homogeneity of working groups etc. started to assume greater importance
with management. Interests in human relations were diminished in the
1930s during the early part of the Great Depression. The industrial
expansio n during World War II and the prosperous post -war period
stimulated and encouraged a deeper understanding of the relationship
between productivity and worker satisfaction. Douglas McGregor gave his
theory of X and Y and explained human behavioral responses in the
working system. Prof. Abraham Maslow stressed the need of 'hierarchy of
human needs'. Till today these theories are considered important in the
history of human relations. By the end of 20th century, due to sociological
and psychological research, all organizations gave importance to human
relations. Human relations played a significant role for the employers,
company directors, managers, workers and trade unions. Human touch
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89 8.4.5 Evolution -Scientific Management
Scientific Management is the greatest contribution of 20" century in
industrial and personnel management When look into the history of
management there was a traditional backing of administration. For
example, Krishna w as the great manager in all matters in Mahabharata,
Chanakya was the great manager in Maurya Kingdom. ~confucius the
Chinese scholar was the great manager in political, social and cultural
matters. After industrial revolution the management of science star ted to
grow scientifically in Europe. For that the entire contribution goes to Dr.
F.W. Taylor. Dr. F.W.Taylor, an American Scholar, wrote a book
'Principles of Scientific Management'. So, he is considered as the father of
Scientific Management. Scientific M anagement is nothing but scientific
management of industry, business organization and institutions.
Contributions of Frederic Winslow Taylor -scientific Management F. W.
Taylor the scholar from United States of America started his career as an
apprentice i n a small factory. After 3 years he was promoted as a worker
and after 2 more years he was promoted as Gang Boss. After 4 years he
was again promoted as Chief Engineer. He attended evening college and
obtained a Master's Degree in Engineering. He worked as the Chief
Engineer in Bethlehem Steel company. In 1901 he resigned. Afterwards he
passed rest of his life in developing the techniques and the concepts of
management In his career he understood that workers do not make use of
their abilities in the best p ossible way. Workers capacity is underutilized.
He felt that there was a lack of efficient work standards, absence of
division of responsibility selection and placement of workers. He
suggested that scientific management can solve problems between workers
and management and helps to increase productivity. Taylor suggested the
following ideas for the development of efficient and scientific
management.
1) Published Works: He published various articles and books. His
writings helped European and American comp anies and public
organizations to use scientific management to improve efficiency and
ability of workers. He wrote that the economy of any country is suffering
due to inefficiency in work, affecting production.
2) Philosophy of Scientific Management: Tayl or stated that management
is a true science and the principles of management are applicable to all
human activities.
3) Principles of Scientific Management: They are as follows. a) Work
Estimation b) Experimental studies c) Good working conditions d) Work
plan e) Standardization f) Functional organization g) Scientific selection
and training h) Principle of incentives, wages etc. i) Effective cost
accounting system j) Principles of mental revolution
4) Mental Revolution: Taylor Studied much about mental c onditions of
workers. He suggested that thinking and relations between managers and
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90 trust between managers and employees for the success of any
organization.
5) Objectives of Scientific Management: Taylor suggested the main
objectives of scientific management are increasing productivity and
removal of poverty. Jobs must be assigned to the workers according to
their ability. Higher wages must be paid to efficient workers. There must
be go od working conditions. Labor cost must be minimized.
6) Responsibilities of the Manager: Managers must adopt scientific
techniques; there is a need of change of traditional techniques. Managers
must extend full co -operation to the workers. There must be a clear
division of work and responsibilities between all levels of workers.
7) Functional organization system: Taylor introduced the functional
system for the success of management. Principles of specialization and
division of labor must be adopted.
8) U se of best quality materials: Quality materials must be used for the
production purpose. Best materials bring out the best products.
9) Differential wage system: Workers must be paid according to their
work. The workers who complete their work in time mus t be paid higher
wages and lower wages to the ignorant, lazy and inefficient. In conclusion,
F.W. Taylor introduced scientific management for the development,
improvement and growth of industrial and personal management and
human relations.
8.4.6 Importan ce of Human Resource Management
The goal of human resource management is to create jobs and deal with
employees (employee). It is necessary to be identified in order to do a job
in an organisation. In order to find the ideal person for a position, a
notif ication should be sent out that includes a job description (duties and
responsibilities) as well as specifications ( academic qualifications and
physical qualifications). To ensure that the candidates invited are correct,
they should be put to the test usi ng appropriate selection methods for
selecting the proper person. Following that, qualified candidates should be
given the necessary training to perform the duties and responsibilities
outlined in the notification. Following that, an evaluation of employee
performance should be conducted to see whether employees are
performing up to the management's expectations. Healthy and welfare
programmes are critical for keeping employees happy and engaged, which
has a direct impact on their productivity. Maintaining p roper and healthy
connections between employees and management reduces conflicts, which
will have an impact on the organization's overall success. The most
important thing is to follow and not break employment and labour rules,
which control all of the abo ve-mentioned job -related actions.
Contraventions of labour regulations will cost the company money and
damage its reputation. As a result, human resource management acts as a
knight in shining armor for the organization's seamless and long -term
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91 8.5 SUMMARY
Organisations worldwide are facing tremendous changes resulting from
various events taking place. Pandemics, wars, inflation, constant
competitions have made it inevitable for the organisations to switch from
the old, redundant practices and ado pt to the latest technologies in order to
cope with the demand of the growing competition. This has resulted in the
development of a new work culture which serves the global demands and
is not confined to the locals. The new work society involves men and
women, today, the efforts are made to incorporate even the third genders
into the workforce so as to develop the human resource of the entire
nation. Human Resource management, therefore becomes an inevitable
and inseparable part of an organisation which de als with its employees
helping the organisations to survive and remain successful in the world
economy.
8.6 QUESTIONS
1. Explain the Concept of New Work Organisation with special reference
to gender diversity
2. What is Human Resource Management? Explain its nature and scope
and highlight its importance.
8.7 REFERENCES
Mamoria. C. Gankar - Personnel Management
Ghanekar . A.- Human Resource Management: Managing Personnel the
HRD way
VSP Rao - The Human Resource Management
P. Subba Rao - Essentials of Human ~e source Management and Industrial
Relations.
Stephen R. Robbins - Organizational Behaviour. 3),Gary DesslerHuman
Resource Mangement


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92 9
ORGANIZATIONAL AND WORK
CULTURE: IT INDUSTRY,
RECRUITMENT, SELECTION AND
TRAINING AND MANAGERS, WORK
COMMITMENT, PRODUCTIVITY AND
CHANGE
Unit Structure
9.0 Objectives
9.1 lntroductlon
9.2 Meaning and Definitions of Organizational Culture
9.3 Features of Organizational Culture
9.4 Levels of Organizational Culture
9.5 Functions of Organizational Culture
9.6 How is Organizational Culture created?
9.7 How Culture affects work?
9.8 Importance of Organizational Culture
9.9 Impact of Organizational Cul ture
9.10 IT Industry
9.11 Work Culture in IT Industry
9.12 Recruitment, Selection and Training in IT Industry
9.13 Summary
9.14 Questions
9.15 References
9.0 OBJECTIVES
 lntroduce concepts of organizational culture and climate to
students.
 2. To st udy the meaning and features of organizational culture.
 3. lntroduce the levels of organizational culture. munotes.in

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culture: IT Industry ,
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93  4. To study the functions of organizational culture.
 5. Awareness about how work culture develops.
 6. To understand the functioning of IT Industry
9.1 INTRODUCTION
It is vital to understand the importance and working of an organization in
order to be a part of the workforce. The changing nature of organizations
to adapt to the demands at the global level has also led to changes in the
ways these org anisations operate giving rise to a totally new culture. With
the advent of Information Technology, the organisational culture has
changed even further where there is an emergence of the knowledge
society, controlled by the “Technical Elites”.
9.2 MEANING AND DEFINITIONS OF
ORGANIZATIONAL CULTURE
The concept of culture is broad one. According to British anthropologist
Edward B.Tylor, culture is "a complex whole, which includes art, religion,
science, order, law, morality and any other capabilities acquired by man as
a member of the society." B. Malinowski another anthropologist says that
"culture is the creation of man." The word culture is derived from 'cultra'
which means 'doing something'. In other words, man has many activities
in his life. All activiti es are depending on organizational skill. The human
organizational skill is developed through culture. So Pitirim Sorokin called
culture a super organic phenomenon. The term organizational culture is
borrowed from the wider experience of many individuals i n daily life.
Culture differs from society to society, nation to nation. So also,
organizational cultures differ from firm to firm, society to society.
Peoples' lifestyle, economic and political, social organizational activities
are affected by the culture .
The Following are some of the important definitions of organizational
culture.
Edgar Schein defines organizational culture as "a pattern of basic
assumptions invented, discovered, or developed by a given group as it
learns to cope with its problems of ex ternal adoption and internal
integration that has worked well enough to be considered valuable and,
therefore, to be taught to new members as the correct way to perceive,
think and feel in relation to these problems."
Turnstall defined organizational cultu re as "a general constellation of
beliefs, morals, value systems, behavioral norms, and ways of doing
business that are unique to each corporation."
According to Joanne Martin organizational culture is "that individuals
come into contact with organization s, they come in contact with dress
norms, stores, people tell about what goes on, the organization's formal
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94 systems, jargon and jokes only understood by insiders, and so on. These
elem ents are some of the manifestations of organizational culture."
According to Denison, organizational culture refers to "the set of values,
beliefs, and behaviour patterns that form the core identity of an
organization." According to Becker "organizational culture refers to a
system of shared meaning held by members that distinguishes the
organization from other organizations."
From the above definitions we can make out that organizational culture is
about containing experiences, values, common beliefs, exte rnal and
internal behavior of the people involved in the organization. It is unique
and set a standard for the organizations. It is the heart and mind of the
organization and is pervaded everywhere all the time in the organization.
Check your progress: -
Q.1. Define the term organizational culture.
9.3 FEATURES OF ORGANIZATIONAL CULTURE
The following are important features of organizational culture.
1) Universal: Organizational culture is found universally everywhere
where people live and work. Organiz ational culture is work oriented
culture. It is a system where people have been systematically engaged in
various productive units. It reflects in all human activities. Organizational
culture expresses various work styles, agricultural, industrial, and all
activities of men in daily life.
It is learned and shared behaviour: Organizational Culture is learned
one. It is not a gift, b ut a result where a ll people live, work and enjoy life.
Organizational culture is shared between individuals. It is shared in t he
form of education, art, literature, discoveries and inventions. Customs,
traditions, laws which are imitated and shared.
Passed on from generation to generation: Organizational culture is
passed on from generation to generation. It is dynamic and conti nuously
changing from inferior to superior, and better to the best. However, there
is a vertical and horizontal change in organizational culture due to many
changes in human resources and capabilities. However, traditional family
occupations are changing n ow, since generations they were engaged in
family works. industrial revolution, science and technology and economic
development is responsible for discontinuing family works. A barber's son
has not remained as a barber; a carpenter's son has not remained a s a
carpenter. Individual talent and skill have become very important. Thus,
organizational culture is varied.
Innovation and risk -taking: Some organizations are more interested in
taking risk and encourage employees for new innovations. Attention to
more detail: In some organization’s employees give more attention to
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95 Some bosses are very particular about cleanliness, discipline, and
punctuality. So, they keenly observe all details.
Team Orientation: Organizational work is a team work. So, team
orientation is more important which helps for all time success. Stability: In
the modern world many organizations prefer growth and development to
maintain the status quo. So, such organizati ons have their own strategies.
Many organizations have stable philosophy, ideology and values,
expectations etc. and they strictly stick to them
Management support: There are many managements support each and
every worker. They have their clear aims and a spirations and expectations
from every worker. So, employer support is very important.
People orientation: In some organizations, people are more focused and
the effect of outcomes on people is given more importance while making
decisions.
Risk tolerance : The degree to which employees are motivated to be
aggressive, innovative and risk seeking.
Integration: The degree to which units within the organisaton are
encouraged to operate in a coordinated manner.
Reward System: The degree to which reward alloc ation are based on
performance or age.
Conflict tolerance: Sometimes employees are critical and discuss openly
the limitations of the organization.
Communication pattern: At times management is very formal but, in
some organizations, they are free to be approached and easily
communicable.
Check Your progress: -
Q.1. Explain the features of organizational culture.
9.4 LEVELS OF ORGANIZATIONAL CULTURE
Edgar Schein has suggested the following three levels of organizational
culture. 1) Observable artifact s of culture 2) Shared values 3) Common
assumptions
To understand more about organization's culture there is a need to study
different levels of culture suggested by different thinkers.
1) The following are observable facts of the organizational culture:
a) Observable role models: Culture in any organization shows the
behaviour of all members. But the leadership qualities of top management
influence other employees. These leaders become role models and a
personification of an organization's culture. They represent what the
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96 behavior is a powerful learning tool and such cultural aspects permeate
throughout the entire organization.
b) Ceremonies and rites: Ceremonies and rites reflect cultu re and various
repeated activities on important occasions. Works and achievements are
recognized. Colleges and universities distribute degrees and diplomas. In
the similar way, companies organize picnics, retirement dinner parties and
entertainment program s to encourage interpersonal communication and
togetherness and bring about a common cultural bondage. Award and
reward ceremonies are organized to exhibit the unity and integrity of the
organization. Such ceremonies encourage workers to work honestly and
efficiently. Similarly, festivals and traditional activities create opportunity
to manufacture goods as required. For example, Ganesh Chaturthi, Rakhi
Pournima, Holi, Deserra, Dipawali attract industries to manufacture
Rakhis, colors, sweets, textile goods , ready made dresses etc. In other
words, ceremonies bring a greater change in business organizations and
they modify and refresh organizational culture from time to time.
c) Cultural Symbols: Symbols are unspoken messages. They are in terms
of pictures a nd signs. Companies arrange chambers, passages, meeting
rooms, function halls, seminar halls and adopt dress codes, name plates.
Status quo is maintained for different authorities. So, the Director's
Chamber is separate, manager' office, general office, va rious departments
and offices are maintained. All workers have to wear uniforms, buttons on
jackets. The best examples are Rotary Clubs, and Lions Clubs, L & T,
Gcdrej, Army, Navy, Air -force, Parliament, Court etc. Even company
buses and trucks are labeled and designated with the name of the
organization.
2) Shared Values: Without values culture is meaningless. Values and
morals are shared. Ideas, ideals and ideologies are shared with everyone.
Values consist of beliefs. There are two types of values. One is
instrumental value where the behaviour is appropriate irrespective of the
result. The other one is terminal. In this case tangible objectives are more
important than intangible objectives. Values are emotionally charged
priorities. These are learned whi le socialization through family
environment, upbringing and religious influences. Values are useful in
finding the rightful actions. Mahatma Gandhi, in promoting khadi against
textiles produced by machineries, expressed human living values rather
than econ omic progress. Butthe first Prime Minister Jawaharlal Nehru
opposed the ideas of Gandhi saying that 'you can't get hold of a modern
tool and have an ancient mind. It won't work'. Even famous Indian
mathematician Ramanujan had faced a difficulty in going to England
because of the religious belief that crossing the ocean was sinful. In other
words, one has to change with the changing world. In India machines are
worshipped as they are related with a strong belief that tools are useful and
all useful things ar e w orshiped. All managements suggest their
organizations should develop a set of values. All individuals in the
organization should have strong faith and trust in the nobility of their work
and benefits they earn. 3) Common Assumptions: Assumptions are the
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97 This assumption is reflected in the company's emphasis on trust. The
second assumption is that people are willing to learn, grow and achieve if
they get proper opportunities. The thir d assumption rests on the belief that
people are motivated by challenges and enjoyable work. This assumption
is reflected by the process of common goal setting and goal achievement
by participation of members. These common assumptions can be traced to
larger social and cultural values held by a particular society. For example,
in America, the emphasis is on individualized achievement. In Japan, the
emphasis is on collective achievement.
Check your progress : -
Q.1. Explain the levels of organizational cult ure.
9.5 FUNCTIONS OF ORGANIZATIONAL CULTURE
ORGANIZATIONAL CULTURE HAS MANY
FUNCTIONS. THEY ARE AS FOLLOWS
1) Culture helps to establish a systematic organization. An organization is
a system. It is a dynamic and stable organization. So, it functions
systematically to maintain stability and dynamism.
2) It unites all workers to work for the common benefits. Organizational
culture helps to maintain unity and integrity of the organization. There
are many differences between subculture and counterculture gr oups.
However, the important function of culture is to unite all workers
under one nomenclature.
3) It adopts all tangible goods and intangible goods such as tools,
machines, materials. The plantation, place of the work, its
surrounding environment helps workers to work for the benefit of the
organization. Similarly, workers' ideas, ideals, ideologies are useful
for more productivity.
4) Organizational culture always functions to maintain the organization's
identity in the world.
5) Culture provides shar ed patterns of cognitive perceptions about the
values and beliefs held by the organization. This enables the
organizational members to think and behave as expected by them.
6) It also provides shared patterns of feelings to the organizational
members to m ake them know what they are expected to value and
feel.
7) Organizational culture provides a boundary that creates distinctions
between one organization and the other. Such boundary defining helps
identify members and nonmembers of the organization.
8) O rganizational culture facilitates the generation of commitment to
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98 9) It enhances social stability by holding the organizational members
together by providing them appropriate standards for which the
members should stand for.
10) It serves as a control mechanism that guides and shapes the attitudes
and behaviour of organizational members. It helps them to stick to the
conformity to the prescribed and expected mode of behaviour.
11) Finally, organizati onal culture provides responsibility, sense of duty,
recognition, stability of life, permanency of employment, adherence,
obedience, sincerity towards the organization.
12) Organizational culture is learned, imitated, shared and
behaviororiented. So, all members work together in the same direction
and fashion as required by the company.
Check your progress: -
Q.1. Explain the functions of organizational culture.
9.6 HOW IS ORGANIZATIONAL CULTURE
CREATED?
Development of organizational culture is an out come of daily work and
transaction in an enterprise and productivity in an industry. No doubt it is
a new concept, but it is as old as human history. When man started to live
on this planet, he started to do some or the other thing for his livelihood.
Orga nizational culture is not developed in a day or two. It is developed
gradually over a long period of time. Today's organizational culture
reflects past history and altogether influences the future. An organization's
culture is shaped by the philosophy, val ues and attitudes of its founder
members. Some of the examples are as follows.
1) The culture of Reliance Industries was greatly shaped and influenced by
Dhirubhai Ambani who was very conscious of time and efficiency,
2) Microsoft's Culture is largely a reflection of co -founder and CEO, Bill
Gates who is aggressive, competitive and highly disciplined.
3) Similarly, Tatas, Birlas, Godrej have established their work culture with
discipline and diligence in dealing with different sets of people in different
countries in the world. Immediately after the industrial revolution, in all
business and industrial organizations culture was traditional. 'The entire
organization was controlled by the owner. Owner was the manager and he
was the entrepreneur, director et c. In the traditional society owner -
managers were more interested in taking maximum work with minimum
expenses with less number of workers. When all organizational works
became liberal, all aspects in company and business organizations have
been changed. G overnments also passed various industrial and company
acts. All governments in the world have taken interest in the welfare of the
workers. Trade unions were registered. Slowly owner -manager was
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99 legally approved by the appropriate government. Today all over the world
organizational culture is democratic, socialistic, secular and based on
human dignity and welfare of all. In different countries, different types of
work theories were born. For example, McGregor gives X and Y theories.
Prof Maslow suggested the need -based theory' and some psychologists
and philosophers wrote about the importance of motivation. But all
theories were introduced by western and American writers. America
developed its own theory known as A type and then modified as Z type
where the individual worker is important. Japan developed the J type,
where all workers are collectively important. India is still not able to
develop any theory. However, in Indian democratic set up various
organizations have been developed with their own work culture. China
captured the global market with its supply of small goods like pins, pencils
and was able to earn name, fame and wealth from the global market.
Organizational culture is develo ping and growing daily. Its growth and
extension are endless and never fading. Once the organizational culture is
developed its sustenance and survival depends upon all members. So to
keep organizational culture alive the following ideas are followed.
1) Selection criteria: One of the best methods of maintaining one's
organizational culture is to be highly selective about the people whom
an organization would select.
2) Top Management: The actions of top management play a significant
role in transmitting and -sustaining its organizational culture.
Employees learn the following qualities from the top management. a)
How much risk is taken? b) How much freedom is exercised? c) How
to deal with clients and customers
3) Socialisation: The new candidate must be properly indoctrinated into
the organization for further assimilation.
Check your progress: -
Q.1. How is organizational culture created?
9.7 HOW ORGANIZATIONAL CULTURE AFFECTS
WORK?
Organizational culture affects the work of every individual worker in the
organization. Individuals carry individual differences in the organization.
After appointment, all workers adopt and learn the culture of the
organization and live and work according to the requirements of the
organization. The following conditions af fect organizational culture.
1) Economic condition: An organization's economic condition influences
workers. The more prosperous organization spends more on education,
research and innovation for more prosperity. A poor organization cannot
bring well mann ered cultural traits. In other words, liberal economic
situation is necessary to develop the best possible organizational culture.
One can make out compared with a foreign bank and Indian bank in
Mumbai, IT Park and Municipal offices. So economic condition , spending munotes.in

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100 capacity and liberal mind to maintain posh offices with few acres of
beautiful garden and fountains.
2) Leadership style: leadership plays a significant role and forms a
different optimistic work culture and makes every individual work
accordin g to the aims and aspirations, and status of an organization. In
various departments, different personnel work directly or indirectly to
fulfill the targets put by the leader. Pioneers and founders influence all
workers.
3) Organizational policies: Organi zational policies are affected by the
work culture. Plans and policies arrange the work system and workers
have to follow it judiciously.
4) Managerial understanding: Organizational culture helps the
management to solve the problems between workers and th e management.
Management, workers and the union at one side and the government at the
other side arrange the work system, and accordingly, legal departments
continuously work for the betterment of workers and the organization.
Keith Davis points out certai n v alues that affect work are as follows,
1) Freedom 2) Equality 3) Security4) Opportunity
1) Freedom: Freedom is a basic cultural value that affects work in all
organizations. In all organization’s workers are expected to have some
freedom and the authori ties give freedom for workers to know and
establish their innovation and power of creation. But freedom is a different
thing to different people. For example, for an employee freedom may be to
have a voice in the general meetings, for a nother it may mean t he right to
work without restrictions etc. Underfreedom, people hold suppressed
resistance to strict organizational controls.
2) Equality: All people are born equal and have equal rights in every
aspect of life. However, this value giv es due recognition t o different
mental, emotional and social differences and hence different rewards.
Equality and equity cannot be maintained because rewards are given away
on the base of performance.
3) Security: People prefer full employment that is th e real point of
security. Some type of tension prevails always. The most important
security is economic security.
4) Opportunity: People expect good many opportunities in the
organization. Modern education system, policies of promotion from within
and sim ilar factors affect the opportunity of employees.
Check your progress: -
1. How organizational culture affects work?
9.8 IMPORTANCE OF ORGANIZATIONAL CULTURE
For any organization to grow and prosper must have its own mission and
philosophy. All workers must be respected in the organization. In other, munotes.in

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101 words, growing and changing importance of organizational culture arises
spontaneously. In all establishments different people work who belong to
different religions, caste, state and language. In other words , an
establishment i s a place for conglomeration of various cultures. Here all
cultures together have become one culture, optimistically called an
'organizational culture'. importance of organizational culture is understood
and expressed in terms of co -operation, mutual trust , conflict and
antagonistic forces between managers, proprietors, personnel, workers,
and allied partners. Leaders in all organizations play a continuous
significant role to improve human relations. Human relations are nothing
but cultu ral relations. So, S orokin is right in saying that 'culture is the
highest art of man and superorganic body'. All organizations are found on
discipline, education, cooperation, mutual trust, sincere efforts and hard
work. So, everyone possesses cultural co nsistency and strong ly adhere to
values and beliefs. It becomes easy for them to play strong role models.
Employees often emulate leader behavior and look up to them for
guidance. By being strong role models and by guiding, teaching and
coaching, leaders r einforce the values that support the organizational
culture. Importance of organizational culture year by year and decade by
decade enrolling its role from inferior to superior and superior to the most
superior. Cultural strength is measured specially by h andling crisis
situa tions. The best example is Chrysler Motor Company faced a financial
crisis in 1970. The American government was against protecting private
business organizations with government funds but the company was
successful in obtaining funds by a strong point of c ultural commitment to
its employees. Managers are also important persons in enhancing the
importance of organizational culture. They handle different situations with
workers with rewards and punishments and maintain a strong
organizatio nal culture. Some of the topmost organizations are well known
not only because of their productivity, but for their cultural order.
Organizational cultures are developed and reinforced in a variety of ways.
Some of the mechanisms are as follows.
1) What l eaders pay attention to, measure to, and control
2) Leaders' reactions to critical incidents and organizational crisis.
3) Deliberate role modeling, teaching and coaching.
4) Criteria for allocation of rewards and status.
5) Criteria for recruitment, s election, promotion etc.
6) The organization's design and structure.
7) Organizational systems and procedures.
8) Design of physical space, facades and buildings.
9) Stories, legends, myths, and parables about important events and
people.
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102 The role of culture in an organization is:
1) Specify the goals and objectives of the organization.
2) To specify the relations that exist within the organization
3) To specify qualities that are valued such as loyalty, confidentiality,
dynamism, hard work, and so on. Organizations have social ethos.
Without society no organization is possible. Organizations are social
systems that have shared understandings, norms and values and have a
common language. The histo ry of the organization, its past values and
beliefs also influence the present culture of the organization. Each of the
different cultures may express the roles that organizations perform.
Check your progress: -
Q.1. Explain the impor tance of organizatio nal culture.
9.9 IMPACT OF ORGANIZATIONAL CULTURE
Culture represents the national character. It reflects on the institutions built
by men. Organizational culture is affected by families, religion, education
and national heritage, histo ry, economy and poli tics. It is difficult to
separate a person from his cultural character. He is born with a particular
culture and adopts various cultural aspects. So wherever he goes and
works he carries his culture. Due to cultural upbringing individua ls are
different. So me of them do what others say, some of them initiate the
work on their own. Still some of them are courageous to take risks for the
benefit of the organization. Some of them are selfish and some of them are
selfless devotees towards the organization. The v alues that reflect the
organizational culture should support the global view because the
expanding business and industrial horizons incorporate the diversity in the
global cultural backgrounds and expressions. S.H.Rhinesmith has
suggest ed the following six guidelines in creating global culture within an
organization.
1) Create a clear and simple mission statement. It unites all workers into
one organization.
2) Create systems of effective flow of information.
3) Create "Matrix minds" among managers. Mana gers with international
experience share that experience when they return to home
organizations.'
4) Develop global career paths.
5) Use cultural differences as a major asset for research and development.
6) Implement worldwide educa tion and team develo pment programs.
Impact of organizational culture is reinforcing and strengthening the
entire organization and developing unity and integrity of workers for
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103
Check your progress: -
Q.1. Expla in the impact of org anizational culture.
9.10 IT INDUSTRY
Information and Technology have become a foundation for the economic
advancement of a nation and most importantly, for survival in the
economic markets, it is inevitable for every industry to adap t to the
increasing IT demands, not only at the global, but also at the local level.
Firms that develop software, hardware, or semiconductor equipment, as
well as companies that provide internet or related services, are all part of
the information technolo gy (IT) sector. Glob alization and the shift to a
post-industrial economy in the advanced countries of the North have been
closely intertwined with the emergence of the global IT industry and the
spread of contemporary information and communication technolo gies
(ICTs). Not onl y have new ICTs facilitated the emergence of global
manufacturing networks, but they have also transformed the way that
production is undertaken. Further than specifics of labour and organisation
in the 'changing economy,' several theor ists believe that p ost-industrialism
and globalisation have generated an entirely new type of society – what
Castells made reference to as the 'informational' or 'network society' – that
really is innately different from the previous industrial society. Th e
informational soc iety is founded on a unique organisational structure in
which information generation, processing, and transmission are key
sources of productivity and power.
9.11 WORK CULTURE IN IT INDUSTRY
Professional developers, Programme Developers , call centre opera tors,
and others employed in India's IT and ITES industries can be considered a
new 'knowledge' workforce that serves the global informational economy
on a broad basis. The information economy has changed the labour market
around the wor ld, increasing dema nd for certain information goods and
services, and hence for specific skills and specialised labour. Software and
IT-enabled services are two types of services that are already popular. Due
to intense competition, many IT and ITES activi ties are being outs ourced
to low -cost regions in the developing world, altering the labour market in
nations such as India (Basant and Rani 2004). To grasp the structural and
functional properties of this new workforce, it's critical to differentiate
betwe en the wide variety of jobs, work activities, and employment
conditions that fall under the umbrella of 'IT,' ranging from 'high -end'
computer science research to very 'low -end' services like data entry and
backend processes.
The IT workforce's major qual ities stem largely from its role in the
international 'informational' economy, which necessitates mobile and
flexible, skilled and competent workers while also fostering a new
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104 'geographic loca tions.' The outsou rcing industry's major trend is toward
offshoring: rather than workers moving to where the jobs are, jobs are
increasingly moving to where the workers are, with workers working
remotely with co - workers and clients in other locations, t he majority of
whom they will never meet in person.
9.12 RECRUITMENT, SELECTION AND TRAINING
Just like every sector, Human resources are regarded as essential to the
software outsourcing sector as well and software businesses devote a
significant amount o f time and effort t o recruiting, training, and retaining
their resources' — particularly during peak years like 2004 to the present.
IT firms, particularly large Indian services firms, have developed
sophisticated processes for finding and hiring employees with the correct
combination of technical, communicative, and social intelligence. Apart
from direct recruitment, an extensive "ancillary business" of employment
consultants or popularly called as "headhunters" has evolved to meet the
IT industry's workfo rce needs.
Based on their requirements, IT companies prefer both, freshers as well as
experienced. They recruit through a variety of methods, including campus
placements, print and online job ads, walk -in interviews, recruitment
consultancies, and employee recommendations. W ith most organisations'
quick ramp -up in staff strength over the previous two years, the bulk (55 -
75% in large companies) of new hires have been entry level, with the
remaining 25% -45% being experienced personnel hired from other
compani es. About 35 -40% of entry-level candidates come from campus
placement, with the rest coming from other sources such as temporary
staffing. While the large firms or new startups may hire many fresh
graduates, some MNCs and products companies prefer only wel l
experienced emplo yees. Although IT companies frequently argue that the
industry has created jobs for people from many walks of life, including
those from the lower middle class, semi -urban, and even rural areas,
research reveals that the IT workforce is largely similar in terms of socio -
economic profile. However, it should be acknowledged that the needs of a
'global' offshore or outsourcing firm tends to exclude workers from non -
urban and less wealthy backgrounds, who lack the social and cultural
capital necessary to work i n an 'international' environment. Industry
executives have frequently requested that appropriate 'soft skills' be taught
in education, indicating that there is such a filtering mechanism.
9.13 SUMMARY
The concept of culture is broad one. The term organizat ional culture is
borrowed from wider experiences of large number of people. Culture and
climate affect our daily life and working conditions. In the right cultural
environment people will be happy and more productive. Organizational
culture and climate inf luence the entire working conditions and helps the
management to make various policies and programs for more productivity
and a happy working atmosphere. Features and functions of organizational
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105 in a broad way. Culture is internal doing and climate is creating an
external atmosphere for the smooth operation of the enterprises. Whether
it is the government body or a private organization, both culture and
climate decid e the working envir onme nt and satisfaction of workers in
daily life. Individual skill, talent is appreciated in such management where
the culture and climate intermixing in the best possible manner. With the
changing nature of societal requirements, Organi zational culture ha s also
undergone a lot of changes. Appropriate recruitment process and constant
training, especially in the IT Sector, is inevitable for the survival of the
organization as a whole.
9.14 QUESTIONS
1. Explain different types of organization al culture.
2. Is the Indian type of organizational culture democratic? Is it changing?
Discuss.
3. Explain the concept of Organizational Culture, with special reference
to IT Sector.
9.15 REFERENCES:
1) Human Resource Development P.C.Tripathi
2) Organizatio nal Behavior Jit S. Chandan
3) Organizational Behavior - R.Y.Suri and ~anjiv~erma.
4) P. Subba Rao - Essentials of Human Resource Management and
Industrial Relations.
5) Mamoria and Gankar - Personnel Management.
6) Stephen Robbins - Organizational Behav io


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106 10
EMPLOYMENT RELATIONS, AND
INNOVATIVE STRATEGIES, E -
COMMERCE AND LABOR
Unit Structure
10.0 Objectives
10.1 Introduction
10.2 Meaning of Employment Relations
10.3 International Labor Organization on Employment Relations
10.4 Examples of Employment Relations
10.5 Innovat ive Strategies used to develop engagement among employees
10.6 Ecommerce and Labor
10.7 Problems of Laborers working in Ecommerce industry
10.8 Summary
10.9 Questions
10.10 References
10.0 OBJECTIVES
 To learn about the employment relations and its role in the
organizati on
 To learn about Innovative Strategies used in the organization for
employees engagement
 To understand the meaning of Ecommerce and the conditions of labor
10.1 INTRODUCTION
An individual joins a company mainly for three reasons, firstly due the
high p ayment secondly work culture in the organization and thirdly due to
the nature of work in the organisation. One or all of the factors makes the
individual to remain in the organization or quit. It is said, that an employee
doesn’t quit the organization but he/she quits his manager. Hence the
behavior of colleagues, team leaders also matters a lot in. Having a space
to voice out, raise opinion, becomes very important for the smooth
functioning of the organization. With pandemic several organizations are
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107 are several employees who want to continue working in remote. These are
some of the emerging new challenges for organizations now to bring back
their employees back to their offices. Hence, different strategies are being
used like – asking employees to come down to office once a week, Senior
managers are expected to be on office everyday as they are the involved in
key decision making etc.
Given this background let us now look into the deta ils of this chapter.
Here we will discuss three main topics related to the companies, like
Employment Relations, Innovative Strategies used by companies and
Ecommerce and Labor. All these topics will help you to understand the
new changes happening in dif ferent industries. In addition, as students
you will be also entering the job market sooner or later, this chapter will
help you to get a picture of how organizations operate, what are their
innovative practices, strategies etc. We will also look into new age billion
dollar industries of E commerce. The aim of the chapter is to make you
aware of the changes happening in the nature of work specially pre and
post pandemic.
10.2 MEANING OF EMPLOYMENT RELATIONS
According the dictionary of Cambridge, employme nt relations refers to the
behavior and communication which takes place between an employer and
the employee, especially with reference to employees rights and their job
satisfactioni.
Several scholars also point out that employment relationships are base d on
contract between two parties and each of them are obliged in some ways.
It could also be seen in relation to work, pay. This rules are generally in
the form of writing. However, there are also instances in which verbal
agreement are also made. These agreements make all the details clear and
can be considered as valid proof in the courtii
10.3 INTERNATIONAL LABOR ORGANISATION ON
EMPLOYMENT RELATIONS
According to the ILO the relationship between employer and that of
employees is a legal one. In which an individual performs certain work or
offers services and in return he/she receives payment.
Reciprocal rights and duties are established between the employee and the
employer through the employment relationship. It is through this
relationship employees r eceive employment -related rights and benefits in
the fields of labor law and social security. The presence of an employment
relationship is an important criterion which determines whether or not the
laws of labor and social security legislation can be applied to
workers. Thus, employment relationship remains one of the primary
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108 The employment relations has become more important with time due to
the increase in the number of dependent workers who do not have much
protection because of one or another reasons as listed below -
1. At times the scale of the law is too narrow or it is too narrowly
interpreted which doesn’t fulfill the purpose;
2. The law at times is not completely clear and there exists scope for
multiple interpretations.
3. The employment relationship is at times in a concealed kind of state.
4. The relationship between employer and employee is at times
ambiguous as a result, we can question whet her there exists a healthy
relationship itself among them.
5. It needs to be noted that the employment relationship exists however,
still it not clear as to who the employer is and what rights the worker
has in this system.
6. There also exists the problem of lack of conformity and forced
execution.
There have been conferences held periodically by the International Labor
Organisation to improve the above discussed points. In the year 2003,
2006 there have been conference held like the International Labor
Confe rence. They also have made some recommendations (No.198) like –
1. There is a need for formulating a national policy which could be
applied and periodically revised with time. This in other words, helps
in creating an atmosphere of trust, guarantee, effectiv e protection for
that of the workers.
2. There also needs to be certain set of criteria on which the policy
should be built. It should rely on facts, performance of work,
remuneration for the worker etc. the determination - via a listing of set
criteria - of the existence of such a relationship, the performance of
work and the remuneration of the worker, that may have been agreed
between the parties; and
3. There needs to be an established appropriate mechanism - or the use of
an existing one - for monitoring developments in the labour market
and for the organization of work so as to be able to formulate advice
on the adoption and implementation of measures concerning the
employment relationship.
It is estimated that the employment market is going to be billion -dollar
industryiii in the coming years. Hence, employment relation is a important
step one has to take for welfare of laborers. Let us now look into some of
the examples of employment relations.

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109 10.4 EXAMPLES OF EMPLOYMENT RELATIONSiv
1. Ensuring that the n ew team members are made aware of the
organizational culture. In addition, all the things necessary for making
him/her a good team player is also ensured.
2. Enough support is provided for constant recruitment and even training
them and assisting them to gro w and express their skill sets like
mentoring, coaching.
3. Analyzing the performance is also very important specially on yearly
basis. The team of employee relations monitors the colleague’s
performance and offers all the help possible. At times even certai n
software can be used for this purpose.
4. It is necessary to deal with employee misconduct if any. Such as
violation of health safety, regulation and harassment of any junior
colleague, female by senior colleague etc.
5. There should be a platform for resolv ing conflicts. When an employee
is not able to approach a manager, he/she needs to have a space to
express, may be a third person who has a neutral opinion and assists in
resolving the problem here the employment relations team can help.
6. As job satisfacti on improvement is directly connected with
productivity. Organizations have to figure out ways to make the
employee happier like having events, mental health courses, offering
incentives etc.
7. Encouraging employees into extracurricular activities like sport s,
dance, yoga sessions or any physical exercises which would help to
improve the mental and physical well being of the employees. As a
result, the rate of absence on the grounds of health would decline and
the productivity, creativity, problem solving cap acity of the employees
would increase.
8. It is also the duty of employee relations professionals to take measures
to increase the safety of the employees. Proper training has to be
provided for dealing with uncertain times.
10.5 INNOVATIVE STRATEGIES USED T O D EVELOP
ENGAGEMENT AMONG EMPLOYEES
Transparency
Establishing transparency is very important. Instead of keeping individuals
waiting till the date of appraisal clearing it on the first day itself becomes
easier and it helps in increasing the employee pr oductivity. The manager
of a section like Finance, HR makes a list of increment details on which
the employee would get the raise, this is then shared with the hired
employee. For example – If the employee performance is excellent then
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110 percent. This approach would build certain degree of trust and respect and
a clear plan among both individuals to perform.
With Remote work becoming more popular after pandemic when
individuals work at home the team leader is not able to view the amount of
hours and individual has put on the work. An employee could have spent
whole night and not slept properly for completing the work for two or
three days. These number of hours when spent in a office would b e visible
clearly as the human presence is there. But in a remote kind of atmosphere
such things would not be visible hence, here transparency and trust help
from both the part of employees and the team leader and manager.
Activity during Remote
During Covi d 19, pandemic employee engagement was not available due
to work from home and people hence different methods had to be
developed. In one company every weekend they would spend have half an
on doing non work related activity which two employees from one
department had to perform. Some companies have Coffee chat with the
top most leaders of the organization virtually.
Corporate Social Responsibility
Organizations at times makes use of the creative individuals in the
company to improve the society with their skills. Employees visit
children’s home, old age homes and then they paint the wall, some sing
and perform dance and do some similar fun filled activities. Some
employees also remain in an organization because they are able to do such
kind of CSR wo rk. Or ganizations also sponsor poor children’s education.
During floods, famines, when employee’s family were stuck in villages
during uncertain times organizations assist the families during such time to
recover both mentally, monetarily etc. During pande mic t oo several
organizations held camps for employees and their family members.
Counseling session
Organizations have started hiring full time counselors for providing
counseling to their employees. Frequent workshops are also held on issues
related to ment al health to keep the employees motivated to perform better
and to avoid being burnt out. During the pandemic when employees were
not able to go out and they just stayed at home and worked daily , several
new set of challenges had emerged hence organi zation s increased the
number of mental health workshops during such uncertain times.
Quarterly meeting once –
The cost of the company has reduced with work from home. Companies
do not have to spend on the cost involved for office property, electricity,
statio nery and other staff expenses like cleaners, peons, canteens etc.
Hence the amount saved from the above expenses are saved and some
companies have quarterly once periodic meet up. The accommodation,
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111 This creates both bond and the employees are also happy to to meet their
fellow colleagues and even the expenses born by the employees are nil as
a result it is a win - win situation.
Making employee Shareholder
Several organizations ma ke emp loyees as the owners of the company.
They issue shares for their own employees at a discounted price. As a
result, whenever there is a profit at the organization, the employees too
benefit out of it. In some instances, like that of IPO launch some
employee s who owns share of their own company turn out to be
millionaire or Lakhpati after the company get listed in share market.
Owning the share of the company in which one works also gives special
rights to the employees like they are able to have a right to vote, voice out
their opinion in the share holder’s meetings etc.
Service Charge
In the service industry like restaurant, hotels there is service charge
included in the bill. This is written at the end of the bill and it added to the
main bill. This servic e charge is further distributed by all the employees.
Though it is optional to pay, but often customer is unaware of this and
they pay it. Specially when one is employed overseas the individual would
receive money in the form of dollars as service c harge. Hence, at times the
core salary turns out to be less but the individuals earn more through that
of service charge and monthly income increases.
Upgrading through education
Certain companies have tie up with B schools and help their employees to
do certifi cate courses, complete degree, Masters and many a times this is
for free or offered at a discounted price. The classes are held during
weekend or during evening. This hence, in turn helps the employees to
remain in the organization and the new set o f skill s acquired by the
individuals also helps in building the organization too.
Companies retaining college vibe
There are companies which retain the college kind of atmosphere like
having a party once in three months where the company provides food,
drink an d even transportation. There are events frequently like Short Skit
competition, sports day, Music dance, Short film competition, Comedy
show, Talent Scan where college like youth festivals are held. Fun
activities like banana eating, pillow fight li ke coll ege annual celebration,
company annual celebrations are held. Hence several fresher’s join such
organization so that they have the continuity of college like atmosphere
and do not feel like getting into a corporate job. Some employees remain
in the company even though they get paid less just because of the culture
of the organization.

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112 Practicing Inclusiveness
Companies have started practicing inclusiveness in terms of diversity
whereby the LGBT community, Transgender individuals are given the
same status , salary and benefits. There is a change in approach in terms of
having washroom than the binary model of male or female. These benefits
are not restricted to the employee who work on white collared work but
also for those individuals who are into b lue col lared work in the
organization.
Improving communication skills
Companies have events like Toast masters where through which
employees learn to improve their communication skills. Specially those
organizations where client facing activities are mor e over their special
workshops are held to improve the soft skills of employees. Some
companies even have portals in which all the events are visible which
company is organizing and individuals can join those events depending
upon their interests.
Check Y our Pro gress
1. Do you think the relationship between employee and employer is legal
one? If yes then explain Why?
2. According to you is counseling facility needed in an organization,
explain?
10.6 E COMMERCE AND LABOR
Meaning of Ecommerce
E-commerce is a busines s which is conducted through internet or any
other electronic networks. It originated as standard for exchange of
documents in the year 1948 -49 with Berlin blockade and airlift. Later
several industries carried out research on this and the first sta ndard w as
published in the year 1975. The electronic data interchange is a platform
which is independent of any specific machine and is capable of handling
simple electronic transactions. There are now many virtual companies and
business built through this .v The ecommerce industry is expected to reach
40 billion dollars by 2030 in India. This is because of the heavy growing
internet demand in the country vi. Currently the ecommerce market is of
more than 4 billion in India. This shows the growing market ass ociated
with Ecommerce. Ecommerce industry like fintech is booming everyday.
For example - Phone Pay, Paytm, google Pay, Bhim etc. They provide a
range of services which were far more time consuming in the earlier times.
There are three typesvii of ecommerce busine sses –
Firstly, business to business (For example - Shopify , Indian Mart etc) and
also known as B2B
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113 Thirdly, Consumer to Consumer (Oxl, E bay.com)
There are several companies which have mil lions of c ustomers today
popular ones include Ecommerce giants like Ola, Uber, Swiggy, Zomato,
Flipkart, Snapdeal, Nyakaa, Zepto, Frazoo.
Ecommerce related business will be more in demand in the coming days
as it tries to bring about behaviorial changes i n the cust omer. Everything is
available at the door step and if one doesn’t like the product too the
cancellation procedure is very simple. In a swipe or in a click of a button
in the smart phone one can get vegetables to clothes and even products in
10 to 20 minute s from platforms like Zepto or Insta mart etc. It operates
on creating convience for customers and even creating a hook, habitual
change so that customers continue buying the product. There are also
subscription models with delivery change offe rs- so that a customer would
think everything is available at MRP why should one go out and buy the
product.
Kirana shops vs Ecommerce business
The Ecommerce business has both advantages and disadvantages. From a
customer point of view there are multiple options of app, products etc. The
supply chain has become more organized, quick and efficient and the time
gap has also reduced in the product from ware house to that of the
customer. The Ecommerce business has been worsening the conditions of
that of the small busin esses and kirana shops. Kirana shops are suffering
because of the decline in the customers. As kirana shops have a small shop
and serve in nearby locality and when large amount of people would be
buying products from that of eplatforms they los e business.
10.7 PROBLEMS OF LABORERS WORKING IN
ECOMMERCE INDUSTRY
E commerce has no doubt created lot of new jobs especially for delivery
agents (partners) anyone with a vehicle can work with a ecommerce
company. Especially companies like Zomato, Swiggy and Amazon,
Flipkart hires both male and female employees. However, there are
problems associated with it too. Like if one company becomes monopoly
then employees would not have space for bargaining their salary.
Competition helps individuals to work at di fferent comp anies even if one
company pays less then they can switch over to another company. In the
Gig economy the laborers are hired as contract laborers as a result, they
are denied of the facilities which a permanent employee gets like Housing
benefit s, medical, Employee Provident funds etc. Being contract laborers,
they can be fired any time if there is under performance. For example – If
a pizza delivery employee fails to deliver the product on time, he would be
losing his incentives, increments. Just to be on t ime the laborer at times
puts himself at risk like driving fast etc. There are other health related
problems to these laborers also which we cannot ignore. As employees
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114 public toilets, they have wait till they find a toilet. Such problem are more
severe for women who work as delivery agents.
Many a times the ecommerce companies are startups and when the
startups are not able to scale or survive due to multiple factors like wrong
decision taken by the CEO or increase in competition like same service
provided by another player, the company could go under loss. The lower
level laborers may not be aware of all these things and one fine day they
would lose their jobs. This would not only affect the worker but all the
dependents. For example - If the earning member of the family, father
loses his job then the youngest eldest child of the home at times quit his
studies or stops studying further and starts working to run the househol d.
As sta rtup business models are aggressive and policies are not so much in
place, profit is the main goal than reputation hence workers condition are
often not the priority. Often unachievable targets are given which makes
individuals to over time, they become burnt, frustrated etc. Being contract
workers if laborers go on strike, they could lose jobs. As the supply of
labor is more than the demand due to heavy population. The increase in
the commission charged by the ecommerce companies directly effects the
labor ers dependent on it. The companies many a times make profit but the
workers continue to remain marginalized.
However, we cannot ignore the newer opportunities available in the
ecommerce industries. Ecommerce business like ola, Uber has created lot
of job o pportunities even for students. Using a scooty they can provide
services in morning and go to college in afternoon and again work at
night. Let us now look into a case study.
Check Your Progress
1. Discuss some of the problems faced by Kirana shops wi th the g rowth
of Ecommerce business.
2. Discuss the problems faced by Laborers in the Ecommerce industry.
3. List out three types of Ecommerce businesses.
Case Study of cab aggregator
Nowadays when people want to go out, even before getting down their
building or house people book a cab, auto online. There are several
household cab aggregator companies which are used by large section of
people every day; however, they are also several controversies and issues
with them.
Some cab platforms are banned by sever al coun tries. There are cases
pending on the court regarding the cab aggregators and in some instances,
they are also found to be manipulating the price of fare depending upon
the battery of the mobile user. For example – When there is low battery
the custo mer ou t of fear of dead battery ends up booking whatever price is
available on the screen. These companies also operate through technology,
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115 company rather than transportation provider, as a re sult they are exempted
from the extra taxes they are bound to pay to the government of any
country. In addition, the model on which these companies operate is that
of the vehicle used is of the driver himself rather than that of the company
many a times as a result, any repair, maintenance cost is born by the
driver. With all these factors taken into consideration they are able to offer
cheaper price to the customer and try to get customer acquisitionviii.
10.8 SUMMARY
In this chapter, there are three main to pics discussed first employment
relations, second is that of Innovative Strategies and third is of
Ecommerce. According the dictionary of Cambridge, employment
relations refers to the behavior and communication which takes place
between an employer and the employee, especially with reference to
employee’s rights and their job satisfactionix. The ILO views it as a legal
agreement. We saw also examples through employment relations are
maintained. The second section focuses on that of the Innovative prac tices
specially during pandemic like online meeting, counseling, fun activities
etc. The third section deals with the billion -dollar industry which has
boomed with time due to offers, convenience, accessibility and its effect
on kirana stories and laborers lives.
10.9 QUESTIONS
1. Discuss ILO view on Employment Relations
2. Discuss meaning of Ecommerce and the Case study of Cab
Aggregator.
3. Explain the meaning of Employment Relations and list out some
examples of it.
4. Explain few innovative practices for employ ee enga gement.
10.10 REFERENCES

i https://dictionary.cambridge.org/dictionary/english/employment -relations
ii Glynis D Morris, Sonia McKay, Andrea Oates, (2009) Chapter 10 -
Employment Law,
Editor(s): Glynis D Morris, Sonia M cKay, A ndrea Oates, Finance
Director's Handbook (Fifth Edition),CIMA Publishing, Pages 419 -464,
iii https://www.betterup.com/blog/employee -relations
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116 vBritannica, T. Editors of Encyclopaedia (2020, May 2). e-commerce
summary . Encyclopedia Britannica .
https://www.bri tannica.com/summary/e -commerce
vi https://timesofindia.indiatimes.com/business/india -business/value -e-
commerce -in-india -to-touch -40-billion -by-2030 -
report/articleshow/85391496.cms
vii https://www.internetconsultancy.pro/blog/what -is-ecommerce/
viiihttps://www.o yster.com/articles/where -is-uber-banned -around -the-
world/
ixhttps://dictionary.cambridge.org/dictionary/english/employment -relations



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117 11
WORKERS PARTICIPATION IN THE
MANAGEMENT
Unit Structure
11.0 Objectives
11.1 Introduction
11.2 Meaning of Worker
11.3 Meaning of Management
11.4 Meaning of Participation
11.5 History of Participation
11.6 Objectives of Worker’s Participation
11.7 F our types of Participation
11.8 Areas of Participation
11.9 Approaches in Worker’s Participation with management
11.10 Government Intervention
11.11 Hurdles in Worker’s Participation
11.12 Workers of Mumbai
11.13 Case studies
11.14 Summary
11.15 Questions
11.16 References
11.0 OBJECTIVES
 To learn the meaning of worker, participation and management.
 To understand the government measures to enrich this.
 To explore the different dimensions of it like history, types, hurdles,
goal of workers partici pation in management.

11.1 INTRODUCTION
Workers are found in every society. They play an important role in
building the infrastructure for an economy and society. Workers here in
this chapter, include composition of both men and women. Before enough
policies and regulation, even children worked in factories of developed
countries. In India, however, we have the Child Labor Regulation and
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118 years from performing any work. Especially those wo rk which are life -
threatening or hazardous in nature. Classical sociologists like Karl Marx
has written volumes of literature for the upliftment of the workers. Marx
talks about the alienation of the workers in the capitalist structure; he
explains concept s like the historical materialism, class struggle, etc. He
explains his study on the background of the Industrial Revolution which
took place in the Western countries, though his theory can be looked at
from the context of any society in the world. Even to day, political parties
worldwide have based their ideologies on the development of worker's
situations.
One of the most crucial aspects of the manufacturing process is
labor/worker. Previously, they were handled as if they were machines.
They were denied basic rights such as socioeconomic status and
communication or freedom (Dave,1958). They would be ordered to leave
their employment if they raised their voicesi at given point of time.
Even though it is the workers who form the backbone of the Nation.
Havi ng a working population with a younger age group is an asset to the
country at large. In India, we have this benefit that the majority of the age
group is that of the working population who are young. Studies show that
nearly 67.27 percent of the populatio n is in the age group of 15 -64 years
and nearly 26.16 percent of the population is in the age group of 0 -14
years. On the other hand, 6.57 percent of the population are above 65
years oldii. This shows that the amount of labor force we have is far
greater, being the second most populated country in the world. Hence,
there needs to be enough policies, programs and measures to employ,
channelize, and utilize these groups more positively. Before we get more
in detail, let us look into the meaning of worker firs t.
11.2 MEANING OF WORKER
According to the Indian Factories Act, Section 2(l) of the year 1948, A
worker -
(l) means a person [employed, directly or by or through any agency
(including a contractor) with or without the knowledge of the principal
employe r, whether for remuneration or not], in any manufacturing process,
or in cleaning any part of the machinery or premises used for a
manufacturing process, or in any other kind of work incidental to, or
connected with, the manufacturing process, or the subje ct of the
manufacturing process [but does not include any member of the armed
forces of the Union]iii
A worker is a respectable human being. He/She wants to use work as a
tool to satisfy his moods, emotions, and goals. He spends a significant
portion of his life in the factory or at work. One -third of a person's awake
hours are spent at work. As a result, it is only reasonable for him to expect
to get involved in government or industrial matters. Hence, the notion of
worker engagement in undertaking choices h as emerged (i).
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119 11.3 MEANING OF MANAGEMENT
Management can be seen as a group of individuals who may own the
company or manage the company. Otherwise, they may have some kind of
authority or role to perform in the factory. They take the key decisions in
the organization. These are the groups who lead the company and their
leadership skill sets influence the junior most staff in the organization.
Through their approach and behavior at large employees either quit the
organization or continue to work in the o rganization.
11.4 MEANING OF PARTICIPATION
There is no clear definition of participation. The term participation is
generally seen as a conversation between subordinates and superiors. In
which one group may agree or may not agree, but giving an opportun ity
can be seen as a form of participation. It symbolizes openness,
encouragement, respect and builds trust. Including worker's in
participation is very important as they are the groups who are going to be
most affected by any decision of the management.
11.5 HISTORY OF WORKERS PARTICIPATION IN
MANAGEMENT
The history of workers participation in management is far old. Worker's
participation in management emergence could be seen during the
Britisher's time itself. Hence, some organizations still carry the attitude of
servant and boss treatment. The Britisher's bias has also influenced the
functioning of the system. In other words, even today, companies treat
their employees with a traditional mindset which emerged both from the
Britishers trainingiv and from the continuation of the caste system.
In the Second World War, the high and sudden demand of production
gave some scope for discussion between employees and management.
Proper bodies were being created to encourage such discussion. The
Father of our Nati on, Mahatma Gandhi, brought the concept of
Trusteeship post the First World War. This concept was being tried in
Ahmedabad textile mills.
During the 1950s, it was realized that the workers' education had to be
developed so that the worker's knew the lega l rights and benefits to which
they were entitled too. Hence the Worker's Education Scheme was created
in the year 1950. The Indian Labor Conference further adopted it and a
central board for worker's education with the help of the National Institute
of La bour and the Institute of Training was created. So, the first training
session was held in May 1958, where five hundred and two officers and
one forty union nominees attended the workshop. Later the Joint
management councils was set up. The work committees set up also
discussed major issues like proper lighting, enough ventilation options,
proper sanitation, availability of clean drinking water, good mess, clean
toilets, health care facilities, safe working conditions educational and
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120 11.6 OBJECTIVES OF WORKER’S PARTICIPATION
The objectives differ from one location to another and that from one sector
to another. Yet, certain common objectives which could be observed are
as follows -
1. To increase productivity and morale by helping employees have much
more control and engagement in their jobs create an environment of safety
and enjoyment, learning in their work.
2. To ensure that employees and employers work together to achieve
industrial peace, increased efficiency, and productivi ty in the interests of
the company, for employees, consumers, and the nation (i).
Check Your Progress
1. List out the two objectives of Worker’s Participation
2. Explain in few lines on Worker’s Participation in Management during
the British era.
11.7 FO UR TYPES OF PARTICIPATION
There are several scholars who talk about workers participation in the
management some of them are - Workers' participation, according to Keith
Davis, is a person's mental and emotional involvement in a group situation
that encou rages him to contribute to the group goals and openly discuss
the responsibility for achieving them.
Sidney Webb and Beatrice Web's book is titled Industrial Democracy.
According to them, Industrial democracy is a right of workers through
which they can pa rticipate in the decisions or issues which are related to
them. Let us now look into the different types of participation.
1) Informative Participation: At the outset, participation is generally
informative and associative, with members having the right to receive
information and express opinions on issues of broad economic
concern.
(2) Consultative Participation: The second step is that of consultative
participation, in which members communicate their opinions with
management on different issues that influ ence their well -being. It
demands a greater degree of viewpoint exchange. However,
management has the final say on whether or not to adopt the
employees' ideas and proposals.
(3) Administrative Involvement: Administrative participation is the third
type in which a bigger share of authority and responsibility in
management responsibilities is exchanged.
(4) Decision Involvement: This is the greatest degree of participation, in
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121 making processes. As the title suggests, this level has total decision -
making authority and maximal delegation of power and execution.
It is important to note here that the involvement in management is often
understood as merely a broad dialogue on issues relating to the w orkers'
safety, welfare, and so on, and nothing more and the management bears
the final accountability.
All other issues, such as pay and bonuses, are the topic of collective
bargaining and are not included in the global overview of worker
involvement prog rams. Individual complaints are also not covered by itvi.
11.8 AREAS OF PARTICIPATION
Workers' involvement in management may be seen in terms of the areas
covered, such as people, productivity, purchasing, financial, market, and
so on. In a bigger institut ion, this is more common than in a smaller
informal sector organization. The character of engagement in public sector
units would also be different from that of the private sector. As the
government and the state would have a major control in the public se ctor
units (i).
11.9 APPROACHES IN WORKER’S PARTICIPATION
WITH MANAGEMENT –
Approaches can be formal as well as informal in nature. In terms of formal
participation, meetings are held formally according to the government and
company's acts and regulation s. In terms of the informal approach, the
discussion is a communication where the interaction is not recorded often
and even can take place at any time; it is not generally pre -decided. In
informal discussions, managers may just take consultation of the wo rkers.
(Dachler and Wilpert, 1978).
Check Your Progress
1. Explain Worker’s participation according to Keith Davis
2. List out the four types of Worker’s Participation
11.10 GOVERNMENT INTERVENTION
The Government of India also recognizes the particip ation of workers in
the management from the year 1976. Article 43A states that " Participation
of workers in the management of industries - The State shall take steps, by
suitable legislation or in any other way, to secure the participation of
workers in th e management of undertakings, establishments or other
organizations engaged in any industryvii.
The government took major steps to regulate the workers’ rights and even
made enough programs and schemes to develop interaction between
workers and management. H owever, at times it was more on paper. There
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122 workers' opinion, they just ask it, but it is not put into action. As
implementation could increase the expenses on the part of the com pany's
owners. (x).
Several strategies have been encouraged by the government from time to
time. The initial phases looked more of collective bargaining than worker's
participation with the management, though things changed with time . One
of the methods is that of the workers/ employees and even making them a
shareholder in the company/ factory in which they are working. Generally,
the company's founders own a major stake of the company's share.
However, here the goal is to make employees feel more connecte d to the
organization, to develop a sense of belongingness to the company in which
one works; some companies offer their own share to one's own employees.
This will, in other words, give them a sense of ownership and their
productivity would also increase. In addition, they would also have the
right to vote and have the right to join in the key decisions made by the
management. Several companies follow this practice in the formal sector,
where companies offer their shares to their own employees. However,
companies offer shares at a lower price than the public offering.
The Industrial Policy Resolution, 1956 discusses the worker's participation
in management; according to which, participation 'is a part of its overall
endeavor to create a socialist society, w here sharing of powers is
necessary. On the other hand, the second five -year plan discusses the
Worker's Participation in Management and the development of industries.
Some few points which are discussed prominently are like – Measures
which would be taken to increase productivity for the general good of
society and employees —describing the multiple roles of employees and
community at large. Ensuring the workers' needs are also taken into
account for retaining industrial peaceviii.
11.11 HURDLES IN WORKER’S PA RTICIPATION IN
MANAGEMENT
Every institution in order to grow and maintain the position, it has have a
good bond and communitarian beliefs. Yet, there are some problems
which they have to work upon -
1. Dealing with the multiple trade unions which is also a part of a large
trade union movement within the country is at times viewed as a
problem by the management.
2. Lack of enough education in front of both workers and management
regarding their rights and measures needed to develop a stable and
healthy relation ship with each other is a hurdle.
3. Figuring out steps to needed to bring a positive change in the
behavioral pattern among the workers and management, letting the
need for control on the part of the management and at the same time
providing a platform for the workers to express their views. In other
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123 4. Disclosing all the details about the organization, progress, loss with
the employees and having proper communication. Absence of this
could b e a problem.
5. Emergence of a trade union where the leadership is strong in terms of
communication.
6. Having a set up through which any differences and disagreement
would be dealt smoothly without any diversion towards the company's
production.
7. One of the im portant aims of the participation from both the sides is
to reduce the exploitation on the front of the workers. As it is a rare
instance where one hears that the workers exploited the owners;
majorly, it is the other way round. Hence, the goal should be a
healthy, safe organization where no one is exploited.
8. One of the organization's important goals needs to be to be able to
create a sense of attachment towards the organization. It is like a
partnership where both are developing equally in their own lives, yet
the organization is also developing (vii).
There are several others concerns too, like lack of enough training and
exposure on the part of the worker's related to their own rights. Lack of
proper communication and clarity in the expression towards the part of the
workers and mangement. At the same time, lack of empathy listening
skills on the part of the management is also problematic.
There are several areas where workers have to be consulted majorly.
Generally these are related to - Safety and welfa re of the workers within
the premises of the factory. In terms of the different issues which are
related to work like – the amount of production in the shop floor, quality
and standard, machine conditions, financial details like wages, allowances,
bonus, i ncentives, goal – targets of the organization, a timeline of
production, pricing, technological improvement, advancement if any. If
the organization needs diversification, merger, export of goods or even
disinvestment, lay off, or expansion.
11.12 WORKERS OF MUMBAI
In the late 60s, 70s Mumbai, Thane had several big manufacturing units.
In Thane, areas like Wagle Estate had one of India's largest amount of
factories. Many workers who had been pushed from their hometown out of
poverty and the caste system ca me to Mumbai in search of work. Many of
the migrants who have now settled in the city lead their lives living in the
slums of Mumbai, which lack enough facilities. These workers just had a
cycle through which they would commute to their work. However, with
time, several companies either got shut down or other states where the tax
is less and the subsidies are given more by government there the
companies were shifted. The companies which have been shut down are
now either lying unused. Very few large -scale u nits are still operating like
Rashtriya Chemical, Asian Paints. In some instances, the owners of the
companies saw the opportunity in the emerging real estate boom in the
city and ended up selling their companies to Malls or builders who were
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124 they earned large sums of money or even had continuous income. Some
thought that this was easier than negotiating with the workers through
trade unions or running the factory. However, as a resul t, several workers
were unemployed, and they ended up further taking odd jobs like security
guards in the newly built complexes, drivers and even auto drivers. Due to
the loss of the employment of the male member in the household, women
who were homemakers in order to supplement the income they also started
working outside their homes. They worked as housemaids and similar
other informal work.
When the company is shut down even the children suffer, their education
is stopped, especially the eldest one and h e/she has to enter the job market
at a very early stage. As that income, would also help in the family's
revenue at large. In some instances, when the man has been working for
several years and suddenly is unemployed, it becomes a big emotional
trauma for him and his family. There are psychological problems like
stress, depression and even suicidal behavior which could happen due to
the lack of social status as people would call him unemployed. In India,
coincidentally, when manufacturing units started shut ting down the IT
revolution was beginning. The middle class, which generally gives
importance to education, had stories where the father lost his job, the son/
daughter who had learned few computer courses or had basic English
speaking skills got jobs in t he newly emerged MNCs like BPO, KPO etc.
One can even witness the Bollywood movies of the sixties to eighties
where the main protagonist used to be a worker in the factory and would
fight for the worker's right. You can compare it with the present time
where movies of different themes like patriotism, family, diasporic
population, teenage exists now. As Bollywood generally picks up topic
what's happening, trending. One can observe the change over the period of
time.
Check Your Progress
1. What's your view on worker's participation in the management? If
positive, then why and if negative, establish the reasons for the same.
2. How can we improve the worker's and management's hierarchical gap
in an organization? Suggest some measures to be taken from both si des, in
a few lines.
11.13 CASE STUDIES
Case study of Public Sector
HTL – Hindustan Teleprinters School is a public sector company set up in
the year 1960 and it is as of now located in Chennai. Here, there are
several benefits given to the workers like quarters to the workers, workers
education scheme, festival advance, higher studies encouragement, school
fees reimbursement till 12th standard for two children, family planning
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125 Case study of Steel Authority of India
A study carried out by –Haque (2020) revealed that females are higher in
number than males and these women are in the age group of 21 -30 years
old. The study points out that the workers involved in the decision -making
are fewer. Employees pointed out that they should be included in the
organization's decision -making, which the company had missed. The
study also revealed that workers who are involved in the organizational
communication had a lesser amount of anxiety related to their permanency
of the job.
Thus, the whole goal behi nd the participation process is to create a value
system of being equal and breaking the division between the two groups.
As Bhattacharya writes, it is basically industrial democracy where an
atmosphere is created of being healthy and greater value.x.
11.14 SUMMARY
One of the classical thinkers in Sociology, Karl Marx, wrote about the
workers who worked in the Industrial setup. His theory discusses the
emergence of Capitalism through historical materialism, property control,
and he also talks about the al ienation concept that workers witness during
the process of production. He also adds that class struggle would elevate
the worker's from where they are located. Karl Marx's writing itself shows
the importance of workers in our society. It is the worker's w ho form the
backbone of the Nation. India has a high working population at present,
which is 67.27 percent in the age group of 15 -64. The meaning of worker
is given in the Section 2(1) of the Indian Factories Act, 1948, where
worker is seen as an individua l who is generally associated with a
manufacturing unit. We learned about management, which is generally
some group with higher authority. Further, the meaning of participation
has been discussed, which is a discussion between subordinates and
management. This could be informal or formal in nature.
The whole goal behind the participation process is to create an equal value
system and break the division between the two groups. As Bhattacharya
writes it is basically industrial democracy where an atmosphere i s aimed
to create a healthy and greater value environment (xiv).
11.15 QUESTIONS
1. Discuss the meaning of Worker and explain the history of Worker's
participation with management
2. Explain in brief the Government role and acts related to Worker’s
participat ion in
management
3. Give in brief the hurdles associated with the Worker’s Participation in
Management.
4. Explain participation and management and workers' lives in the
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126 11.16 REFERENCES

i Mann an, M. A. (1987). Workers' Participation in Managerial Decision -
making: A Study in a Developing Country. Daya Books.
ii https://www.statista.com/statistics/271315/age -distribution -in-
india/#:~:text=Age%20distribution%20in%20India%202010%2D2020&te
xt=This%20s tatistic%20depicts%20the%20age,over%2065%20years%20
of%20age.
iiihttps://indiankanoon.org/doc/1980271/#:~:text=(l)%20%E2%80%9Cwor
ker%E2%80%9D%20means,manufacturing%20process%2C%20or%20in
%20any
iv Viramani, B. R. (1982). Workers' Participation in Management. Cochin
University Law Review, 6, 222 -243.
v Virmani, B.R.; Voll, Klaus. 1989. Workers’ Education (Vision Books).
Available at: http://www.medcindia.org/Draft_Labour_Policy 2010.pdf
vi https://www.yourarticlelibrary.com/management/4 -levels -of-workers -
particip ation -in-management/26094
vii https://www.india.gov.in/my -government /constitution -
india/amendments/constitution -india -forty -second -amendment -act-
1976#:~:text=%2243A.,engaged%20in%20any%20industry.%22 .
viii 1505113302Module18Quadrant1.pdf (inflibnet.ac.in)
ix Venkataramana, P. (2007). Workers Participation In
Management. India: APH Publishing Corporation.
x Bhattacharya, J.B. 1986. Participative management and industrial
democracy – concepts and practices (Calcutta)
https://www.ilo.org/ifpdial/information -
resources/publications/WCMS_187873/lang --en/index.htm


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127 12
ADVANCE MANUFACTURING
TECHNOLOGY AND WORKERS
RESPONSE
(INDIA, CHINA, TAIWAN, SOUTH
KOREA, & JAPAN)

Unit Structure :
12.0 Objectives
12.1 Introduction
12.2 Advanced Manufacturing Technologies (AMTs)
12.3 AMT and Workers’ Response – India
12.4 AMT and Workers’ Response –China, Taiwan, South Korea, & Japan
12.5 Summary
12.6 Questions
12.7 References and Further Readings
12.0 OBJECTIVES:
 Understanding how advanced manufacturing technologies have
influenced the workers.
 Understanding how these workers ha ve reacted to these technologies.
 Understanding the special cases of India, China, Taiwan, South Korea
and Japan in this context.
12.1 INTRODUCTION:
The adoption of suitable Adv ance Manufacturing Technologies (AMT)
requires utmost care in human related iss ues as it becomes the key
necessityfor maintaining sustainable growth ofMicro, Small and Medium
Enterprises (MSMEs) which in turn contribute enormously to socio -
economic development of any country. There are many challenges for an
economy as it sets to ado pt AMT. Generally, the while implementing the
suitable AMTs in the industrial processes, workforce generally did not
accept the allied technological changes, resulting into resistance, chaos as
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128 With ever increasing globaliza tion, commercialization and
industrialization, there has been strong emphasis on the adoption of
AMTs throughout the world so as to increase the production, at relatively
lesser costs, amongst other things. However, in manyAsian countries,
these AMTs pose newer problems for its government as well as the
people. The workforce is not always comfortable in adapting to these
AMTs as traditionally these economies have been dependent upon non -
mechanized modes of production. More so, the emphasis on more and
more mechanization is often perceived as hostile by the economies which
are labour extensive. And issues such as these have been observed in
countries like India and elsewhere, where workers have reacted to these
AMTs with resistance and suspicion.
Here, in th is unit, we will attempt to understand how workers in countries
like India, China, South Korea, Taiwan and Japan have reacted to the
adaptation of AMTs and how these AMTs have impacted the lives of these
workers in multiple ways.
12.2 ADVANCED MANUFACTURI NG TECHNOLOGIES
(AMTs):
Advanced Manufacturing implies the use of extensive technology in order
to produce more efficiently, in shorter time and at lesser costs. Technology
gets innovative and advanced, making it possible to reduce the costs and
increase t he profits. This peculiar aspect of AMTs has attracted the
industrialists as well as capitalist’s world over. Industries have been eager
to adapt this as it makes them competitive, innovative and profitable.
AMT refers to computeraided technologies used b y manufacturing
organizations. The consumers of 21st century demand products and
servicesthat are fast, right, cheap and easy. To respond quickly
andeffectively to the rapidly changing needs of the customer andto
maintain a high level of competitiveness in the global arena,
manufacturers are adopting AMT. Manufacturers have been investing
significantly inthe implementation of AMT in an attempt to reduce costs
andgain a competitive advantage in their organization. AMT plays a major
role in quality and flexib ilityimprovements in SMEs as well. Motivated
from lucrative benefitsoffered by adoption of AMT, it has been introduced
inmanufacturingenterprises to have a competitive edge in the globalmarket
(Singh et. al., 2014).
There various kinds of AMTs, which incl ude multiple manufacturing
processes such as automation, various computer technologies, IT, robotic
and artificial intelligence, rapid prototyping, green, sustainable
technologies and massive production processes. Traditional manufacturing
can be considere d as a basic factory or workspace – the process of
converting raw constituents/materials into a finished product through
mechanized and manual fabrication techniques, with the end goal of
adding value. Advanced manufacturing also tends to be tied to specif ic
cutting -edge industries such as medical, aerospace, pharmaceutical, and munotes.in

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129 other sectors, and is based on scaling, labor skill, research and
development, and dynamic/flexible production.
In other words, AMT offers customization and is customer -oriented, is
also low cost while becoming highly dependable, and further it requires
more and more digital infrastructure making it possible to make use of
newer ideas and processes. With AMTs, highly precise blends of metals,
plastics, glass, ceramics, etc. that serv e specific applications have become
possible. With the use of robotics, heavy lifting, precision movement &
joining, and improve the consistency of work across many production
units basically through automated systems.
Further, as the demand for smaller d evises multiply, nanotechnology
becomes important as designers are aiming to add more functionality into
as small a profile as possible. It is also used in chemical and biological
applications, where nanoscale particles can enhance material properties,
control light spectroscopy, and affect chemical reactivity. Nanotechnology
allows advanced manufacturing systems to reduce their overall footprint
and maximize functionality across the production line.
With all these and much more specializations, AMTs have b een proved to
be highly valuable in industries like pharmaceuticals, robotics, electric
vehicles, etc.
Check your progress:
1. What is AMT?
12.3 AMT AND WORKERS’ RESPONSE – INDIA:
There has been mixed reaction of the workers towards the adaptation of
AMTs.So me studies (R. A. De Pietro and G. M. Schremser, 1987)have
shown that the introduction of AMT was associated with significant
increases in the amount of information to process, increase in informal
communication, decreases in some forms of formal communica tion,
increases in both intraunit and interunit communication (especially the
latter), more face -to-face and machine communication (e.g., use of
VDT's), more supervisory communication, more working together on
teams, and more feedback on job problems.
Many of these increases are accentuated for those skilled workers who
spend more of their time with industrial robots, an advanced form of
AMT. Finally, many of the changes in communication and interaction
were positively related to workers' job satisfaction. However, the effect of
these factors on job influence and job control was mixed. The factor of
more avenues or opportunities to communicate informally about job
problems was related positively to job influence and control. However, the
presence of more su pervision during early implementation and tighter
monitoring of job performance was related negatively to job influence and
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130 Today, India has become a strategic market for all —a manufacturing base
for enterprises and a hotbed of innovation for tech nology leaders.
Advanced and emerging technologies such as Artificial Intelligence (AI),
the Internet of Things (IoT), robotics, machine learning (ML), etc., are
gradually catalysing transformation across industry segments such as
healthcare, manufacturing , transportation, and retail. This has opened new
avenues for Indian manufacturing companies to design products and come
up with disruptive solutions that have global potential.
To keep pace with the digitization and adoption of emerging technologies,
several industry sectors have undergone a sea change. For instance, some
Indian technology manufacturers have created a niche for themselves by
leveraging robotics. Through innovative solutions they have not just
transformed warehousing but are all set to chan ge other industry segments
such as shipping and logistics, automobile and manufacturing units, etc.
Similarly, integration of AI and natural language processing in consumer
products offer a plethora of opportunities to the electronics industry to
devise in novative solutions that address household and enterprise usage.
Research findings reflect that the effectiveimplementation of AMT
depended upon factors like employmentsecurity, a clear business rationale
for using AMT and the effectivecommunication and dis cussion for this at
all levels, prioritygiven to planning of human resources issues in
comparison withtechnical and physical issues, management efforts to
effect culturechange and to support and guide the development
process.Worker empowerment should be co nsidered to be critical
supporting elementin supporting AMT investments.
The factors that have affected the morale of employee andindirectly
productivity are safety, ergonomic working conditions, hygiene working
environment, less fatigue, human -friendly s ystems, health hazards,
superior light and ventilation and clean air,water and canteen facilities.
Many enterprises fail to invest properly in workers andtheir training for
usage of new manufacturing technologies, which can lead to an alienated
workforce. The failures are often attributable toenterprises not making
changes that support AMT, for instance notdeveloping skills, not
exploiting the machines to make customizedor higher quality products and
not searching formarkets for new products the machine co uld make. The
barriersthat affect the manufacturing system significantly includescarcity
of skilled/expert workforce, training to managementand its employees,
lack of related infrastructure, resistancefrom employees to the changing
conditions and disparity inpay scales of employees.
It cannot be rejected that employees of various sectors of MSMEs of India
are generally not willing to accept the adoptionof newer technologies and
oppose and motivate others to oppose. Most of the employees remain
unaware rega rding the adoption of AMT whose decision is made solely by
management without consultingtheir employees and taking them in
confidence. Employees feel themselves to be unfit to newer technologies
and seek noguidance, motivation and training. It generates fe eling of munotes.in

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131 laying off and to save their jobs, they start opposition. Older workers feel
that they cannot learn even when training will be offered, cannot be as
promising and useful to enterprise as younger ones and promote unions to
oppose and motivate other to oppose.
Although the importance of MSMEs in the growth of advancing nations is
undisputed, this sector suffers from the lack of technology adoption.
Check your progress:
1. What are difficulties for Indian workers with AMTs?
12.4 AMT AND WORKERS’ RESPONSE –CHINA,
TAIWAN, SOUTH KOREA, & JAPAN:
The Japanese model of development has transformed not only its own
economy but also that of the entire region. In the 1960s, Hong Kong,
Singapore, Taiwan, and South Korea (later known as The Four Tigers)
followed thei r Japanese counterparts through a similar developmental
path, with comparable strengths and endemic problems. Like their
neighbor Japan, the Asian Tigers embarked on a strategy to build cheap
export manufactures using the same low -wage labor that could und ersell
First World products. Japan had captured its markets by underselling
textiles made in the United States and Europe in the 1950s. Like the
Japanese, Hong Kong, Singapore, Taiwan, and South Korea began in the
textile industry. It required little capit al investment but a large number of
low-skilled workers willing to work long hours assembling ready -to-wear
garments.
In the 1970s, the group continued to follow Japan’s lead from a decade
earlier. By this time, they had accumulated sufficient capital to e mbark on
the next phase of capital -intensive development. By the 1980s, the Gang
of Four were beginning to encroach on Japan’s high -technology industries
with the production of computers and biotechnology. By 1976, the Asian
Tigers produced an astonishing 60 percent of the Third World’s
manufactured exports, with only 3 percent of its population. From 1963 to
1976, their combined growth rate was higher than 6 percent, compared to
less than 2 percent for India and other South Asian nations.
One of the keys to the success of this growth development was the ability
to repress potential labor unrest arising from this low -wage strategy; here,
the authoritarian state played a crucial role. All of the countries in the
region had some form of an authoritarian or so ft-authoritarian state —at
least in the initial decades of industrialization —that could perform this
repressive function. Starting in 1961, South Korea, like Japan, had a
democratic constitution —but it had a military -dominated, one -party
system. Thus, each government’s ability to prevent labor pressure from
rising wages and improving conditions was critical to maintaining its edge
in the global market and, thus, was critical to its development strategy.
In 2011, China officially became the world’s largest ma nufacturing nation.
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132 production. However, there have been reports which alleged that, for
example, toy factories producing for brands such as Disney, Mattel,
Hasbro, Crayola (part of Hall mark) and other companies were exploiting
workers.Concerns included mandatory overtime, wages below the legal
minimum, unpaid overtime wages, unpaid insurance, harsh and high -
pressure working conditions, poor living conditions, and abusive
management.
South Korea is developing its AI capabilities and has expressed its
ambition to position itself as a global contender in AI technologies
markets. The major Korean ICT companies are aggressively pursuing AI
technologies. Whereas Singapore has a highly -skilled a nd adaptable
workforce, ranked 2nd in the 2017 Global Talent Competitiveness Index.
Through national initiatives such as the Skills Future Series in Advanced
Manufacturing, the Singapore Government continues to work alongside
industry players and institute s of higher learning to equip our people with
the necessary skills for advanced manufacturing.
The emerging economies of Southeast Asia have long been destinations
for manufacturers seeking abundant low -cost labor, while Singapore has
served as a hub for h igh-value R&D -intensive industries and trade -
supporting services such as finance and logistics.
Studies’ results show that in Thailand, the impact of advanced technology
in pushing workers out of the job market is limited. Instead, it tends to
affect reall ocation of workers between skilled and unskilled positions. The
results vary amongst proxies of technology and sectors. It seems that
workers in comparatively capital -intensive industries, including
automotive, plastics and chemicals, and electronics and m achinery, are the
most affected by advanced technology. Dampened wage/income is found
only in some proxies of technology and sectors.
Interestingly, so far empirical studies on the impacts of advanced
technology on labour market outcomes as well as worker s’ reaction, which
are mostly based on developed countries, are mixed. Technological
advancements could change employment status – from being employed to
unemployed (and vice versa), from being employed in one task/job to
another job – or maintain the stat us quo. On changing tasks/jobs, workers
can change skills in both directions, i.e. from skilled to unskilled and vice
versa.
When the whole manufacturing sector is concerned, there is no evidence
that advancement in technology had so far pushed workers ou t of the job
market in Thailand. This implies that statistically no worker becomes
unemployed when more advanced technology is introduced in supply
chains. However, when each sector is investigated separately,
advancement in ICT use seems to increase the p robability of workers in
the food and beverage sector moving from employed to unemployed.
Although the impact of advanced technology in pushing workers out of
the job market in Thailand is limited, it tends to affect the reallocation of
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133 In manufacturing, automation reduces the demand for labour migration.
The Thailand 4.0 economic model has been seeking to attract high -tech
companies to set up advanced manufacturing facilities. This will create
sizable opport unities for skilled workers, entrepreneurs and existing
companies able to take advantage of sectoral shifts, but is unlikely to
generate significant low -wage employment for migrants.
Check your progress:
1. What have been different possibilities with AMTs w.r .t. the South
Asia?
12.5 SUMMARY:
There is a long history of industries being revolutionized by waves of new
technology. Clearly, the world is experiencing the Fourth Industrial
Revolution that allows innovation invented in the three previous
industrial re volutions connect to each other. This fourth revolution has
witnessed major advances in technology, which will likely transform
the structure and dynamics of many industries. Industry 4.0 is the next
wave of digital and online transformation as industries are changed
through, for example, further automation, artificial intelligence,
robotics, cloud computing, 3D printing, big data analytics, and Internet
of Things. The advancing technologies tend to enable and facilitate a
broad range of business activities related to the storage, processing,
distribution, transmission, and reproduction of information. However,
there are concerns about the impacts of advancing technologies on
economic development in both developed and developing countries,
especially on labo ur market outcome.
12.6 QUESTIONS:
1. What happened with the advent of AMT?
2. What is significant features of AMTs?
3. What has AMT done to the Indian workers?
4. Describe the interaction between AMTs and workers of Taiwan and
China.
12.7 REFERENCES AND FURTHER READINGS

 Gilboy, G. J. (2004). The Myth behind China's Miracle. Foreign
Affairs, 83(4), 33 -48.
 R. A. De Pietro and G. M. Schremser, (1987) "The introduction of
advanced manufacturing technology (AMT) and its impact on skilled
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134 outcomes at a large manufacturing plant," in IEEE Transactions on
Engineering Management, vol. EM -34, no. 1, pp. 4 -11.
 Singh, B., Singh Amar and Yadav R, C. (2014). Reluctant Workforce
May D erail the Adoption of Advance Manufacturing Technology in
Micro, Small and Medium Enterprises of India. Global Journal of
Enterprise Information System, 6(2), 12 -25.
 Kennedy Gunawardana, 2006, Introduction of Advanced
Manufacturing Technology: a literature review, Sabaragamuwa
University Journal, vol 6, no.1, pp 116 -134.
 https://www.thegreatcoursesdaily.com/asian -tigers -economics -asian -
nations/
 https://www.thomasnet.com/articles/services/what -is-advanced -
manufacturing/
 https://www.fortuneindia.com/opinion/ high-tech-growth -is-driving -
the-manufacturing -sector -in-india/103520
 https://www.edb.gov.sg/en/our -industries/advanced -
manufacturing.html
 https://www.eria.org/uploads/media/discussion -papers/Technological -
Advancement%2C -Import -Penetration%2C -and-Labour -
Markets_Evidence -from -Thai-Manufacturing.pdf


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135 13
SUB -CONTRACTING AND
OUTSOURCING (BPO AND KPO) IN
GLOBAL ECONOMY
Unit structure :
13.0 Objectives
13.1 Introduction
13.2 Types of Outsourcing
13.3 BPO & Global Economy – Background
13.4 Advantages and Disadvantages of Outsourcing
13.5 BPOs – the Indian C ontext
13.6 Summary
13.7 Questions
13.8 References and Further Readings
13.0 OBJECTIVES:
 To understand BPOs and KPOs
 To understand the process of outsourcing
 To understand the process of sub -contracting
 To understand the significance of these processes in global economy
13.1 INTRODUCTION:
Outsourcing is defined as the delegation of non -core operations or jobs
from internal prod uctionwithin a business to an external entity (such as a
subcontractor) that specializes in that operationi.e. execution of an entir e
business function by a third -party service provider. Business
ProcessOutsourcing (BPO), which means delegating the ownership,
administration, and operation of aprocess to a third party, is developing
rapidly these days. In a world where informationtechno logy (IT) has
become the backbone of businesses worldwide, 'outsourcing' is the
processthrough which one company hands over part of its work to another
company, making itresponsible for the design and implementation of the
business process under strict gui delinesregarding requirements and
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136 Business process outsourcing (BPO) is a business practice in which an
organization contracts with an external service provider to perform an
essential business task.
Typically, an organization first identifies a process that is necessary for its
operations yet is not part of its core value proposition in the market; this
step requires a good understanding of the processes within the
organization and strong business process manage ment.Processes that are
performed the same or similarly from company to company, such as
payroll or accounting, are candidates for BPO.
Because these commodity processes don't generally differentiate one
organization from another, enterprise executives oft en determine there's
little value in having their own staff perform them. Indeed, companies
calculate that outsourcing these processes to a company specializing in
these processes could deliver better results.BPO has its roots in the
manufacturing industry . Manufacturers hired third -party vendors to handle
parts of their supply chains after determining that the vendors could bring
more skills, speed and cost efficiencies to that process than an in -house
team could deliver. Over time, organizations in other industries adopted
the practice.
BPO contracts can involve outsourcing an entire functional area, such as
the HR department, to a single vendor. Organizations also often outsource
specific processes within a functional area. For example, an organization
may outsource its payroll process but perform all other HR processes
itself. Commonly outsourced processes include the following:
 accounting
 administration
 customer services and call centers
 HR
 IT management and services
 manufacturing
 marketing
 research
 sales
 shipping and logistics
In recent years, the BPO phenomenon has accompanied the increasing
globalization of the world economy and has spawned a shift in the way the
United States and Europe view the developing countries of the East. For
instance, the incr easing movement of companies wishing to outsource
their back -office work to India and Philippines has meant that the people
in the West have a favorable impression of the work ethic and
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137 Of course, with the first wave of outsourcing in the IT industry and the
manufacturing companies to India and China respectively had done their
bit to alter the perceptions of the West towards the East. What has added
further emphasis to the way in which the Westerners perceive the Eas t, has
been through the BPO phenomenon which has demolished several
stereotypes associated with Asian countries.
The other aspect of the BPO phenomenon is that increasingly countries in
the Asian hemisphere are moving up the value chain as far as performin g
work related to back -office operations are concerned. This has resulted in
greater accent on doing high end work and given the number of patents
being filed on behalf of technology and KPO companies has meant that
the East is no longer the laggard that i t was and instead, it competes on
even keel with the West.
13.2 TYPES OF OUTSOURCING:
Professional Outsourcing - Any specialized, professional service is
covered by professional outsourcing. This type of outsourcing includes
legal, accounting, purchasing, and administrative tasks, as well as any
other tasks that are too complex for your team.
Business Process Outsourcing - Business Process Outsourcing (BPO) is
one of the most popular types of outsourcing. BPO can help you with
more menial business tasks li ke administration, correspondence, and
scheduling. BPO can also provide customer service and lead generation.
IT Outsourcing - IT outsourcing is one of the most common services
today. It entails contracting an outside organization to handle all or part of
its IT needs, ranging from software development to maintenance and
support.Almost every type of business today requires IT or works with
technology on some level, making it a frequently outsourced department.
Most companies find it is less expensive to hir e a third -party IT
management team than to build one in -house.
Manufacturing Outsourcing - In-house manufacturing can be
exorbitantly expensive for small businesses, especially as demand
grows. Indeed, outsourcing is frequently the only way to compete with
large corporations.
Operational Outsourcing - Because it includes services such as
equipment repairs, operational outsourcing is widespread in the
manufacturing industry. On the other hand, service -based businesses can
benefit from operational outsourcin g for tasks such as landscaping and
delivery.
Project Outsourcing - Companies may experience difficulties managing
one of their projects or even completing a portion of a specific project. As
a result, many people will outsource the project to a project ma nagement
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138 Knowledge Process Outsourcing (KPO) –This is the outsourcing of core,
information -related business activities. KPO involves contracting out work
to individuals that typically have advanced degrees and expertise in a
specialized area. The inf ormation -related work can be carried out by
workers in a different company or by a subsidiary of the same
organization. The subsidiary may be in the same country or in
an offshore location to save costs or other resources.
Check your progress:
1. What are dif ferent types of Outsourcing?
13.3 BPO & GLOBAL ECONOMY – BACKGROUND:
Economic integration of global markets has prompted busin esses to be
more agileand competitive so as to penetrate foreign markets and establish
a market niche. The'buzz -word' in the world of business is 'cost -efficiency'
and the most compelling reasonfor outsourcing is to reduce or control
operating costs. The se ed for outsourcing was planted by Adam Smith
(1776) when he spoke of thevirtues of the division of labor. In his "Wealth
of Natio ns" he illustrates the example ofan individual performing a
specific task, which eventually raises the productivity andtotal pr oduction.
Hence, the application of Smith's idea of outsourcing or contractingout
could be viewed as a measure of total factor pr oductivity across firms and
acrosscountries.
Being an essential part of today's global economy, outsourcing has been
occurringf or decades. Back in the early years of U.S. history, the making
of America's coveredwagon covers and clipper ships' sails was a j ob
outsourced to workers in Scotland, withraw material imported from India.
England's textile industry became so efficient in t he1830's that eventually
Indian manufacturers could not compete, and the work wasoutsourced to
England.
More recently, in the U.S . in the 1970's, it was common for computer
companies tooutsource their payrolls to outside service providers for
processing. T his had continuedinto the 1980's where accounting services,
payroll, billing and word processing becameoutsourced job.
Check your progress:
1. Elaborate on the historical background of Outsourcing.
13.4 ADVANTAGES AND DISADVANTAGES OF
OUTSOURCING:
Outsourcing most commonly known as offshoring has pros and cons to it.
Most of the time, the advantages of outsourcing overshadow the
disadv antages of outsourcing.
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139 ADVANTAGES –
1.Swiftness and Expertise: Most of the times tasks are outsourced to
vendors who special ize in their field. The outsourced vendors also have
specific equipment and technical expertise, most of the times better than
the ones at the outsourcing organization. Effectively the tasks can be
completed faster and with better quality output
2.Concentr ating on core process rather than the supporting
ones: Outsourcing the supporting processes gives the organization more
time to s trengthen their core business process
3.Risk -sharing: one of the most crucial factors determining the outcome
of a campaign is risk-analysis. Outsourcing certain components of your
business process helps the organization to shift certain responsibilities t o
the outsourced vendor. Since the outsourced vendor is a specialist, they
plan your risk -mitigating factors better
4.Reduced O perational and Recruitment costs: Outsourcing eludes the
need to hire individuals in -house; hence recruitment and operational cos ts
can be minimized to a great extent. This is one of the prime advantages of
offshore outsourcing
DISADVANTAGES –
1. Risk of exposing confidential data: When an organization outsources
HR, Payroll and Recruitment services, it involves a risk if exposing
confidential company information to a third -party
2.Synchronizing the deliverables: In case you do not choose a right
partner f or outsourcing, some of the common problem areas include
stretched delivery time frames, sub -standard quality output and
inapprop riate categorization of responsibilities. At times it is easier to
regulate these factors inside an organization rather than wi th an outsourced
partner
3.Hidden costs: Although outsourcing most of the times is cost -effective
at times the hidden costs invol ved in signing a contract while signing a
contract across international boundaries may pose a serious threat.
4.Lack of custome r focus: An outsourced vendor may be catering to the
expertise -needs of multiple organizations at a time. In such situation’s
vendors may lack complete focus on your organization’s tasks.
Check your progress:
1. What are the advantages of Outsourcing?
13.5 BP Os – THE INDIAN CONTEXT:
The outsourcing history of India is one of phenomenal growth in a very
short spanof time. Since the ons et of globalization in India during the early
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140 economic reform comm itted to liberalization and privatization. Economic
liberalization of 1991 did open a new era forthe Indian economy, although
the seed for the emerging market economy was planted in the 1980's. Up
until 1991, India's policy -makers followed economic policies thatwere
detrimental for open trade but rather favorable towards state controlled
inefficient industries and public utilities. It was later, due to a balance of
payment crisis, thatpolicy -makers began the process of liberalizing the
economy. By1999, the Ind ian telecom sector was under direct
governmental control and the state -owned unitsenjoyed a monopoly in the
market.
In 1994, the government announced a policy underwhich the telecom
sector was liberalized and private participation was encouraged. The New
Telecom Policy of 1999 brought further changes with the introduction of
IP telephony and thus ended the state monopoly on int ernational calling
facilities. Although the IT industry in India has existed since the early
1980's, it was the early and mid -1990s that saw the emergence of
outsourcing and one of the first outsourcedservices was medical
transcription. Outsourcing of busi ness processes like data processing,
billing, and customer support began towards the end of the 1990's when
MNCs established wholly owned subsidiaries, which catered to the
process off -shoring requirements of their parent companies.
Some of the earliest e ntrants into the Indianmarket were American
Express, GE Capital and British Airways. The BPO industry is a relatively
young and vibrant sect or in India and has been in existence for over 6
years. India, which was once a closed and over -regulated economy, i s
today at the threshold ofsustaining and deepening an ongoing process of
economic growth.
India has been consolidating its position as a wor ld leader in Information
Technology (IT) Services. As regards IT enabled services; India renders
two thirds of all off shored services worldwide. Indian companies have
also made rapid strides in securing shares in theworld markets for
communication and manage ment services. In recent years, India has
undergone structural transformation whereby serviceshave assumed a
dominant position in the production structure and as a key motivatorof
growth. Income from financial assets, information technology and
advances inc ommunication technology is rapidly catching up with
merchandise exports as theprincipal foreign exchange earner s for the
country.
Check your progress:
1. Elaborate on India’s journey into the BPO market.
13.6 SUMMARY:
Outsourcing is an allocation of specific business processes to a specialist
external service provider. Most of the times an organization cannot handle
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141 are temporary and the organization does not intend to hire in -house
professionals to perform the tasks.
13.7 QUESTIONS:
 What is outsourcing?
 Compare the advantages with the disadvant ages of outsourcing.
 Give a brief description of the background of outsourcing.
 List and elaborate three most popular types of outsourcing.
 Elabo rate: India and the BPO market.
13.8 REFERENCES AND FURTHER READINGS:
 Anandkumar, V., & Bis was, S. (2008). Business Process Outsourcing:
Oh! BPO - Structure and Chaos, Fun and Agony : SAGE Publications.
 Aron, R., Clemons, E.K & Reddi, S (2005) ‘Just Right Outsourcing:
Understanding and Managing Risks’.
 Journal of Management Information Systems; Vol. 22 Issue 2, p37 -55
 Dias, R. (2015). Outstanding Outsourcing: Business Process
Outsourcing Trends And Strategies Of The Professional Services
Sector In Western Europe : Randev Dias (MBA).
 Kurien, J. (2010). Business process outsourcing (BPO) in India:
Success and Challenges. Bilingual journal of Humanities & Social
Sciences, 1 (1), 1 -5.
 Mehta, A., Armenakis, A., Mehta, N. and Irani, F. (2006). Cha llenges
and Opportunities of Business Process Outsourcing in India, Journal
of Labor Research , 27(3), 291 -304.
 Mehrotra, N. (2005). Business Process Outsourcing - The Indian
Experience : ICFAI University Press.
 Shanthi, N. M., E, S. N. M. K., & Kumar, E. N. (2007). Knowledge
Process Outsourcing: Perspectives and Practices : ICFAI University
Press.
 Sandeep, V. (2005). Outsourcing: From BPO to KPO. National
Seminar on Strategic Outsourcing, APJ Institute of Management,
Jalandhar.
 https://www.managementstudyguid e.com/bpo -and-global -
economy.htm
 https://www.flatworldsolutions.com/articles/advantages -
disadvantages -outsourci ng.php

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142 14
GLOBALIZATION AND LABOUR
STANDARD, DECENT WORK
Unit structure :
14.0 Objectives
14.1 Introduction
14.2 Why we need International Labour Standards?
14.3 Types of International Labour Standards
14.4 Founding of the ILO
14.5 Globalization and Decent Work
14.6 Globalization and the Indian Labour
14.7 Summary
14.8 Questions
14.9 References and Further Readings
14.0 OBJECTIVES:
 To understand how globalization affects labour
 To understand the labour standards globally
14.1 INTRODUCTION:
Globalization has g iven rise to a number of interrelated concerns with
respect to its social repercussions. These include its impact on
employment, the distribution of income, and the role of labour standards.
The proponents of global economy insist on free trade, capital mo bility
and so on whereas the proponents of global standards to protect labour
insist on having some basic standards to safeguard labour as well as
environment. Thus, the battle between the two continues with the former
being more powerful and the latter ha ving no power to influence policy -
making.
The anti -globalization forces frequently claim thatcompetition induced by
globalization leads firms to ignore (or fail to comply with) labor standards
in efforts to cut costs. Exporters facing the challenges of in ternational
markets as well as multinationals facing cheap imitators from low -wage
regions may each cut costs by paying lower wages, hiring child labor, and
imposing unsanitary working conditions on their workers. From this
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143 labor standards. Even if countries are successful in passing legislation that
introduces or raises labour standards, global pressures may prevent firms
from adhering to them. This is likely to be the case when penaltie s for
noncompliance are low.
Hence, finding justice forworkers in a globalizing world raises many
questions. Should there be international standards for conditions of work?
What form and content should international labour standards have? Whose
mand ate shoul d international labour standards fall under? And, how
should compliance and non -compliance with international standards be
monitored and remedied or penalized? Thereis no general model for
international labour standards. Currently, countless initi atives,
implemented by various actors, seek to address the problem. Current
approaches to labour protection result from workers, employers or
governments negotiating together, or where that is not feasible, acting
unilaterally. Furthermore, politically and economically pow erful actors are
able to impose their models on others withoutregard to the rights of others.
14.2 WHY WE NEED INTERNATIONAL LABOUR
STANDARDS?
There is nearly universal consensus within the international community
that people are entitled to work under certa in labour standards by virtue of
their humanity. As such, most countriesagree that fair labour standards are
needed in our society. International labour standards are viewed as a tool
to upholdfundamental human rights across the globe. T he human it
arianargu ment is timeless and self -explanatory of the inclusion oflabour
standards in Article 23 of the Universal Declaration of Human Rights.
However, beginning in the 1970s, globalization and the expansion of trade
shifted the focus of the de bate towards economic justifications for
international labour standards. Developed countries became concerned
that poorer labour standards, and lack of enforcement, create an unfair
comparative advantage in global trade. Others argued that permitting trade
based on poor labour standa rds promotes “social dumping” which is an
attempt “to gain international competitiveness by cheapening labour
inviolation of fundamental rights at works….”. This can lead to a “race to
the bottom”, which is the downward harmoniz ation of labour standards
cause d by the need to remain competitive in theglobal market. Thus, in a
globalized economy it is argued that poor labour standards in one country
have negative consequencesfor the workers in other countries.
Additionally, some ac ademics contend that much of the global evidence
over the last century suggests that higher labour standards are positively
correlated with economic prosperity.
Check your progress:
1. Why are labour standards necessary worldwide?

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144 14.3 TYPES OF INTERNATIONA L LABOUR
STANDARDS:
Labour standard s may be conceptualized at two levels: basic and
comprehensive. Basic standards involve setting up a ‘floor’which
individual units are free to exceed, but cannot fall below. Alternatively,
comprehensive standards involve a process for continual regulation and
improvement. Basic standards are more likely to be workable and
acceptable as internationallabour standards because they leave space
above the ‘floor’ within which national governments can legislate.
Most countries ha ve labour legislation stipulating labour conditions that
may include, among other issues, minimum wages, maximum hours of
work, occupational health and safety standards, and employee
representation arrangements. It is not clearif any set of international l abour
standards could cover allaspects of wo rk. Rather, it may be that only
certain standards lend themselves to be regulated internationally. The
International Labour Organization’s (ILO) Core Labour Standards have
attracted substantial attention in recen t years. Despite not being ratified in
all countr ies, the core standards are regarded asbinding on all ILO
members. The ILO Core Labour Standards consist of:
(a) Freedom of association
(b) The elimination of all forms of forced or compulsory labour;
(c) Th e effective abolition of child labour; and
(d) The elimination of discrimination in respect of employment and
occupation;
(e) Right to collective bargaining.
Although there is a growing movement recognizing these standards as
fundamental human rights, it i s important to note that the ILO core
standards are, t o some extent, controversial. Specifically, freedom of
association, the right to collectively bargain, and the ban on child labour
are all problematic. Freedom of association and the right to collective
bargaining are controversial because many countries recog nize them
onlywithin certain limits and not as a universal right. The ban onchild
labour can be also problematic, in that it ignores thecontext in which
children are pushed into the labour force ind eveloping countries. There is
evidence that abolishing chi ldlabour, without addressing its root causes,
can throw children from the factory floor into a life of prostitution and
crime.
These problems not withstanding, the ILO’s core labour standards are an
effective point of departure for future models. The ILO stan dards have the
greatest potential of transcending the strictly inter -governmental
framework. This is so because they spell out the standards without
specifying an implementation procedure. Furthe r, the ILO core standards
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145 also be used by other global actors, such as financing agencies,
nongovernmental organizations (NGOs), and multinational corporations
(MNCs).
Check your pro gress:
1. How are the labour standards viewed internationally?
14.4 FO UNDING OF THE ILO:
The ILO was founded in 1919, in the wake of the First World War. In
1919, the achievement of social justice was seen as essential prerequisite
for the maintenance of worl d peace. The ILO was entrusted with working
towards this objective an d was given the task of adopting international
labour standards as its principal means of action.This vision was set out in
the preamble to the ILO’s constitution,as a specialized agency of the
United Nations to promote social justice and internationally re cognized
human and labour rights.The ILO has a tripartite structure – its governing
institutions, the
International Labour Conference and the Governing Body, reach decisions
on the basis of discussion and negotiation between government, employer
and worker representatives. The ILO provides unique opportunitiesfor
different views on the social and economic challenges of the day to be
aired – and for decisions affecting theworking lives of billions of people
worldwide to be taken through consensus. Clearly, glo balization has
brought widening opportunities, great prosperity and development for
some economies. Economies and individuals that have been able to take
advantage of the expanding glo bal marketplace have benefited
considerably – as a result many see globali zation as an instrument of
progress.
However, we should also be cognizant of some unpleasant facts from the
world of work – the ILO estimates that more than a billion women and
men a re unemployed, underemployed or what we term the working poor.
Some120 mill ion migrant workers and their families have left their homes
in search of finding a job elsewhere. The information economy absorbs six
out of every 10 new jobs created globally, mos tly in unprotected, low -
income, self-employed service sector occupations. Eve rywhere, the cost of
occupational injuries and illnesses is heavy. Blatant violations of trade
union rights are a sad reality in many countries and more than 120 million
childrena ged 5 -14 years are working full time in developing economies.
Check your prog ress:
1. Describe ILO.
14.5 GLOBALIZATION AND DECENT WORK:
It is against the background of the challenges and opportunities posed by
globalization that the ILO hasdeveloped the conc ept of Decent Work to
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146 women and men to obtain decent and productive work, in conditions of
freedom, equity, security and human dignity. Thus ‘Decent Work’ implies
access to employment in conditions of freedom, the recognition of basic
rights at work which guarante e the absence of discrimination or
harassment, an income enabling one to satisfy basic economic, social and
family needs and responsibilities, an adequate level of social prote ction for
the worker and family members, and the exercise of voice and
participati on at work, directly or indirectly throughself -chosen
representation organization.
Decent work sums up the aspirations of people in their working lives. It
involves opportuni ties for work that is productive and delivers a fair
income, security in the workp lace and social protection for families, better
prospects for personal development and social integration, freedom for
people to express their concerns, organize and particip ate in the decisions
that affect their lives and equality of opportunity and treat ment for all
women and men.
Productive employment and decent work are key elements to achieving a
fair globalization and poverty reduction. The ILO has developed an
agenda fo r the community of work looking at job creation, rights at work,
social protection and social dialogue, with gender equality as a
crosscutting objective.There has been an increased urgency among
international policy -makers, particularly in the wake of the global
financial and economic crisis of 2008, to deliver quality jobs along with
social protection and respect for rights at work to achieve sustainable,
inclusive economic growth, and eliminate poverty.
During the UN General Assembly in September 2015, de cent work and
the four pillars of the Decent Work Agenda – employment creation, so cial
protection, rights at work, and social dialogue – became integral
elements of the new 2030 Agenda for Sustainable Development. Goal 8 of
the 2030 Agenda calls for the pr omotion of sustained, inclusive and
sustainable economic growth, full and productive employment and decent
work, and will be a key area of engagement fo r the ILO and its
constituents. Furthermore, key aspects of decent work are widely
embedded in the targe ts of many of the other 16 goals of the UN’s new
development vision.
Check your progress:
1. Elaborate on the concept of ‘Decent Work’.
14.6 GLOBALIZATION AND THE INDIAN LABOUR:
Labour market deregulation has been an important feature of the structural
adjust ment programme, particularly introduced 1991 onwards.
Deregulation and privatization of state enterprises have been key
components of structural adjustm ent programmes introduced by
International Financial Institutions as conditionality’s attached to aid
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147 Opening up of the market and free flow of trade and low tariffs
encouraged flow of foreign goods lowering the employment opportunities
of Indian labourers. For example, th ousands of silk spinners and twisters
of Bihar have totally lost their job due to the import of China -Korea silk
yarn as weavers and consumers prefer th is yarn because it is somewhat
cheap and shiny. Women have entered the labour force in large numbers
in countries that have embraced liberal economic policies. Investors have
demonstrated a preference for women in the soft industries such as
apparel, shoe - and toy -making, data processing, semi -conductor
assembling industries that require unskilled to semi -skilled labour.
Nevertheless, this did not ensure a better status for women in any way.
In theory, globalization, by promoting economic growth in developi ng
countries, tends to reduce poverty Some scholars have argued that trade is
good for growth, growth i s good for the poor and so trade is good for the
poor. The empirical experience of developing countries generally supports
this proposition as the incide nce of poverty declined significantly in many
fast-growing countries like China, India and Vietnam. On the other hand,
slow growing countries in Sub -Saharan Africa registered an increase in the
incidence of poverty after globalization.
The Indian economy h as been undergoing a process of development and
diversification for a long time. This process accelerat ed after
independence when the country recorded a major increase in its growth of
GDP and per capita income. The policy makers in India initiated the
process of economic liberalization and globalization in 1991. These
policies consisted of liberalizing the economy, encouraging exports and
imports, promoting FDI and increasing incentives for investment and
innovations with a view to accelerating the growth o f the economy.
Although total employment recorded a perceptible increase during 1999 -
00 to 2004 -05, th e quality of employment has deteriorated. There are no
precise standards for quality of employment specially for the informal
workers. The International L abour Organization (ILO) has been playing an
important role in setting standards for working condition s of workers.
Thus , some serious questions have been raised regarding the nature and
quality of increased employment in India.
Check your progress:
1. What ha s been the condition of Indian labour in the context of
globalization?
14.7 SUMMARY:
All kinds of der egulation, introduced throughout the world, have been
based on the belief that excessive government intervention in the labour
market through such measures as public sector wage and employment
policies, minimum wage fixing, and employment security rules is a serious
impediment to adjustment and should therefore be removed or relaxed.
States around the world have felt compelled to ease labour standards,
modif y tax regulations and generally relax standards of security and munotes.in

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Industry Labour and
Globalisation
148 oversight in the bid to attract more and more FDI. This progressively
lowered labour standards.
The big corporate companies like TNCs and MNCs have evolved a vendor
system of subcontracting fo r their production. The companies give out
their work to labourers, through contractors, who in turn deliver the output
to the company. This results in job insecurity of the labourers and
worsening of labour welfare since there is no checking system for th eir
welfare. Liberalization of the economy has in some sectors caused loss of
employment without crea tion of new employment.
Globalization affects the employment situation through trade
liberalization, through encouraging exports and imports and through
increasing incentives for investment and innovation. It also encourages
FDI which supplements domestic investment and leads to higher growth
of the economy. Globalization, which is often combined with domestic
liberalization, also results in reducing the pow er of trade unions and
encourages informal contractualization and lock outs. No wonder, the
advocates of globalization have always been of the firm view that
globalization would result in significant increases in labour intensive
exports thereby promoting employment and income generation in
developing countries.
14.8 QUESTIONS:
 What are the universal idea s about International Labour Standards?
 Why do we need universally accepted labour standards?
 What is the meaning of the term ‘Decent Work’?
 Explain the i nternational body ‘ILO’.
 How has Indian labour performed under globalization?

14.9 REFERENCES AND FURTHER READINGS:

 Ajit Singh & Ann Zammitt, 2003. "Globalisation, labour standards and
economic development," Work ing Papers wp257, Centre for Business
Research, University of Cambridge.
 Banks, K. (2006). The impact of globalization on labour standards. In
J. Craig & S. Lynk (Eds.), Globalization and the Future of Labour
Law (pp. 77 -107). Cambridge: Cambridge Universi ty Press.
 Bhalla, G. S. (2008). Globalization and Employment Trends in India.
The Indian Journal of La bour Economics, 51 (1), 1 -25.
 Cutcher -Gershenfeld, J. (1991). The Impact on Economic Performance
of a Transformation in Workplace. munotes.in

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Globalization and Labour
Standard, Decent Work


149  Relations. Industrial an d Labor Relations Review , 44: 241 – 60.
 Harrison, A., Scorse, J., Collins, S., & Elliott, K. A. (2003) .
Globalization’s Impact on Compliance with Labor Standards [with
Comments and Discussion]. Brookings Trade Forum , 45–96.
 Verma, Anil, and Gail Elman. “L abour Standards for a Fair
Globalization for Workers of the World.” The Good Society 16, no. 2
(2007): 57–64.
 Singh, A. (1995b) Institutional Requirements for Full Employment in
Advanced Economies. International Labour Review, 134/4 -5:471 -96.
 https://www.i lo.org/global/topics/decent -work/lang --en/index.htm
 https://www.sociologydiscussion.com/globalisation/ impact -of-
globalisation -on-the-condition -of-labour -in-india/1005


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