The Impact Of The Current Global Economic Situation Commerce Essay

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Global economic recession since 2008 has marred the growth of economies the worldwide; and subsequently, the job market in most of the developed nation has seen the slump never ever seen slump as well. Though two years have passed since the onset of the economic slowdown and there have been signs of recovery and growth, the condition of western world largely remains worrisome even now. As, the market conditions fell down, job market was significantly hit leading to far reaching consequences on the recruitment and selection policies of the corporate world.

As the output fell and market became unstable, companies which used to earn billion dollars of profits registered losses. Decreasing cash flows and high losses forced companies to reduce costs. The first major blow came to the employee strength in the companies (Sherman et al., 2010). Most of the firms had a bench-strength of employees to act as a cushion against the unavailability of some employees at times or to have sufficient resources in case it was needed. As the companies looked to prune the excessive manpower, unemployment rate soared high all over the world. In the United States itself, the unemployment rate had touched 10.1% figure, the highest since 1983. Similar were the cases in the European and other nations.

As a result of all these layoffs, most of the companies were left with no extra manpower when the overall market conditions started improving in the year 2010. Even when the recession was at its peak, companies used to layoff inefficient employees and searched the market for efficient and suitable candidates.

Unavailability of jobs resulted in extremely high competition in the job market. As a result now, the companies have too much to choose from. A large array of skilled manpower could be found in the market now. The recruitment and selection process became very strict and for most of the companies, the norms became much stricter than what it used to be earlier in order to screen a large number of candidates and select only highly skilled and efficient labor force. Some of the firms went to the extents of only hiring people who were already in some other job as it showed that if they had not been laid off by their previous employers, then naturally they were performing quite well. Though no companies accepted this, these reports did surface about a lot of US companies.

Also, high competition and decreased demand resulted in low wages for the employees (Mishel et al., 2010) Even, the salaries of executives and highly skilled labor went down significantly after the recession. Even though, recently the market scenario has improved, the wages continue to remain lower than what they were in pre-recession era.

Not only the problem was from the side of employers, but also many people chose to go for higher studies during that time in order to not face the brunt of recession on their careers. Undergraduate fresher chose to go for graduate and post graduate studies. A lot of the technical manpower enrolled themselves in the management programmes such as MBA and executive MBA. This situation up to an extent balanced the act of lying off by the firms as prospective employees avoided the job market and wanted to enter the market when market conditions were good and at the same time companies wanted lesser manpower.

Major firms across the globe such as Morgan & Stanley, Lehman Brothers etc didn't give a call to the selected candidates. Though India largely remained protected against the slowdown effects, major Indian IT forms such as Infosys and TCS delayed the recruitment and joining of the selected candidates by months. Major financial and investment banking firms such as J.P. Morgan, Goldman Sachs etc recruited people for internships at their offices rather than providing full time employments.

Nonetheless, as the market now shows good prospect for future, recruitment and selection department of most of the companies are now looking busier gradually.

Briefly explain the concept of e-learning and critically evaluate its role of in human resource development, providing relevant examples?

E-learning, as the name itself suggests, is the electronic supported learning programs where the learning or teaching is done through electronic systems, whether networked or not. Most of the times, e-learning are used for out-of-classroom and in-classroom teaching programs with the use of technology.

Generally e-learning is computer based or web based learning programs. The contents for it are provided through various means such as CD-ROM, audio and video tapes, website contents, satellite TV, intranet or extranet etc. The sole purpose of e-learning programs is to help the participant learn the teachings with convenience and ease. Most of the organizations use e-learning programs to help them gain extra skills without putting much investment in training and development. (Barrows, H. S. 1994). Also, e-learning portals can serve as an aid to the main teaching programs for the participants. E-learning can also be of extreme use for the purpose of distance education programs as the unavailability of direct classroom teaching process can be compensated by virtual classrooms or video tapes or satellite TV. The participant can make use of the electronic systems and online available contents to get access to study materials (Bahra, 2001).

Role of e-learning in Human Resource Development:

Only hiring top quality employees is not enough, retaining them and continuously improving their skills is. It is where Human Resource Development (HRD) plays a critical role in organizations. Most of the organizations have looked up towards e-learning as the most viable and cost effective solution for it. (Barrows, H. S. 1994).

These days E-Learning has started playing a huge role in organizations towards the human resource development. Most of the companies, especially information technology firms use it as a preferred mode of training for their existing employees. (Holmes & Gardner, 2006) Even during the induction of new employees in the organizations, e-learning plays a critical role as learning aids.

For example one of the world's top most software firms, Microsoft has its dedicated web based portal for e-learning. Not only does its web portal cater to the need of its employees but also, its portal has large amount of contents for the customers who use Microsoft products. The portal aims at training the end users and the employees of organization using Microsoft products. Also, the portal has exclusive training and certification programs which would certify people in the use of the technology developed by the company. This has many advantages not only for the end users using the Microsoft products but also for other information technology firms who have to use the technology developed by Microsoft. This facility would help them by training their employees in a particular technology without much cost. (Bielaczyc, K., & Collins, A. 1999).

E-learning is also exclusively used by firms for the training and development of their own employees. For example an IT consultancy giant Tata Consultancy Services from India has its own e-learning portal which provides learning aids for its employees who has been recently inducted in the firm. To support the learning and induction program outside their designated training center, the e-learning portal serves not only as the database for learning materials but also provides tests and other resources. (Campbell, R. J. 2000)

E-learning is not only used by information technology firms but also by many non IT organizations as well. For example, Mercedes-Benz one of the world's leading car makers and arguably the safest car maker, has its own e-learning online portal as well. (Cross & Dublin, 2002) It is the part of its Global Training program where it provides its employees the updated knowledge from the fields of management, sales after sales process, Systems and Processes etc. This portal targets its entire band of employees including technicians, sales, management people etc. (Dede, C. 1996).

The use of e-learning has many benefits for the organizations and lately it has emerged as a critical aspect of their Human Resource Management programs itself. The use of learning not only saves costs, but provides faster access to knowledge, round the clock availability of learning materials and removes the place and time barrier. (Dewey, J. 1958)

To what extent should employees in the financial services sector still receive bonuses when banks have been bailed out by national governments? Support your response with appropriate examples from various companies and countries?

The 2008 recession saw many banks and financial institutions defaulting and hence these banks had to be bailed out by the respective governments. Bailout is a process where a bank or any financial institution is rescued from bankruptcy by providing monetary stimulus in the form of loan. In 2008, for example, The Goldman Sachs was bailed out by the federal government and Berkshire Hathaway. Many governments across Europe too had to bail out private banks to ensure that they do not go bankrupt. However, bailout comes with a cost. It is estimated that bailout costs around 13% of GDP to a government (Evanoff, 2010). Therefore it is worthwhile to consider the extent to which employees of financial sector should receive bonuses in this scenario. This is as much a strategic issue as it is an HR issue since decisions in this regard can have long-term impact on the organizations.

Before arriving at any decision in this regard one must consider number of alternatives available and the pros and cons of each. At one end it can be argued that bonuses for the employees should be completely withdrawn for a fair period of time till the organization can support itself on its own. The justification for this is the exorbitant cost of a bailout. On the flip side, the long term impact of this move could be detrimental to the organization since it may risk losing the best of its employees to its competition. Thus retaining the best talent in the midst of this turmoil is the most difficult challenge the organizations are faced against (Sprague, I. 1986).

On the other extreme one can consider continuing with the bonus plans of the employees as it exists. With the bonuses remaining the same the talent pool can be retained and though the cost for the same may feel high in the current situation it can be hoped that when the situation improves the same move will yield high dividends and that the company can easily recover its cost in the future years. However if it is uncertain as to how long the bailout will be required to be provided then the continuation of full bonuses may not be sustainable since the bottom line can suffer significantly for a prolonged period.

Another alternative that the company can explore is marginal cut-back on the bonuses for all employees. A fixed percentage of the current bonuses may be given to the employees for some time. Also, a larger fraction of the bonus can be linked to performance. This will ensure the best talent is retained while also cutting back on the operational costs significantly. While the first method will reduce the cost by a known margin and is less complicated the second method will make the compensation structure more complex for the employees to understand. Also, the differential compensation system can be viewed by the employees with some cynicism. However it can be argued that this is perhaps the most feasible of the alternatives available that can ensure retaining talent as well as cutting down on the operational costs (Cordella & Yeyati, 1999).

The management may also consider another alternative wherein the top management own up the responsibility of the bailout payback and reduce their bonuses while continuing with the bonuses allotted for the mid management and lower management employees. This will reflect positively on the part of the organization and can, indeed, go a long way in salvaging the organization's repute. (Carrol, J. M., & Rosson, M. B. 2005).

These are some of the alternatives an organization must look into to form a better HR policy on compensation structuring. An in-depth study of the alternatives must be done covering both subjective factors as well as quantitative factors including cost-benefit analysis of the same. As they say, crucial times demand for sound judgment. (Edelson, D. C., Gordin, D. N., & Pea, R. D. 1999).

Are trade unions still relevant in the current organisational context? Identify the reasons for and against their continued existence, providing examples from personal experience and/or recent business events?

A trade union in defined as an organization or association of workers, mostly in trade and professional activities, where its job is to protect the rights of the labors or members of the trade unions. Trade unions are formed solely of the employees of the particular organization. Every trade union has to get registered with the organization and the government. Depending on a particular organization and its size, there may be one or more trade unions representing a particular organization.

Trade unions came into existence during the age of industrial revolution in Europe when the growth of technology and advanced machines required skilled labors in the factories and mills resulting in the mistreatment and laying off the mill workers at whims of the management. (Phelps, 1967) Though with time, this situation came under control, nevertheless, the oppression of workers at the hand of management continued in some form or other at the hands of management till the 20th century. However, post World War II, the condition of workers in Europe and USA improved significantly. Following are the benefits that trade unions provide to the workers and the society at large (Sandver, 1987):

Collective bargaining: It is the first and foremost benefit that trade unions provide to the workers. As the trade unions are recognized entities, they provide collective bargaining power to employees in terms of wages, working condition and any mistreatment of employees.

Industrial action: Trade unions may enforce strikes in case the management turns a deaf ear to their demands.

Provision of benefits to its members: In early years, trade unions used to provide insurance cover against illness and other forms of accidents. However, after these functions have been taken up by the government, trade unions still have the very important task of representation, professional training and even legal advice to member employees.

Political activity: Trade unions may indulge in political activities to promote legislation favorable to the labors and working class as a whole. Labor party being supported (both financially and politically) by trade unions in Britain is an example of this.

However, there are many negative aspects of trade unions as well, for example:

Ignorance of non-members: Generally trade unions only listen to the grief of member workers only. Grievances of non members fall on deaf ears. This may not be termed ethical.

Misuse of power: Sometimes trade unions may become so powerful that they get complacent against the genuine problems of the workers and clash with management more often than not, even if a clash is not required. Forceful and unjustified demand of high wages and its approval may increase the general wage level of society and hence the inflation.

Loss of productivity and profitability: Frequent strikes by trade unions may prove to be fatal for the organization and society as a whole.

Hidden unemployment: Trade unions may force the management to not get rid of workers, even when they are not required. Also, the leaders of unions may not work at all and misuse their power and influence for personal gains.

Hence, there are both positive and negative aspects of trade unions. The overall smooth functioning of trade unions and organizations depend on the cohesive functioning of both. With the freedom of media and powers vested to employees by legislation, the actual functions of trade unions have become irrelevant lately. There have been many instances where trade union strikes have caused loss of billions of dollars. In extreme trade union friendly countries like India, there have been instances where the most advanced installation of factories and plants have been delayed or altogether abandoned, whereas in Japan, where strikes are prohibited, work go pretty smooth and there have been rare cases of workers mistreatments. Hence, trade unions may be useful, but only if they are not allowed stopping work and putting on a strike at their whims and fancies.