This essay has been submitted by a student. This is not an example of the work written by our professional essay writers.
Scholars have developed many conflicting views in an attempt to identify how globalisation fits into industrial relations theory and how it affects the nature of employment relationship. The employment relationship itself is one that is characterised by complexity given its uniqueness as an economic transaction. The employment relationship deviates from the conventional economic exchange, determined by forces of supply and demand, because of its distinct social aspects. In today's reality, money and in extension work, has become a major determinant of the quality of life. Work is a dominant feature of people's lives and the distinction between personal and job-related issues is often blurred. In addition, work itself is of dynamic nature, constantly changing and adopting new forms. As Dunlop (2005) demonstrates with his 'Industrial Relations System' many inputs/actors must be considered when analysing the employment relationship. As countries move into a post-Fordist production context, economies move away from manufacturing and into the service industry and this shift adds a new challenges in the intense environment of competing interests between the actors. Therefore considering the already complicated employment relationship and the dynamic nature of work, how globalisation must be perceived and included when it comes to understand the employment relations? Does it put pressure for convergence amongst countries and management practices or the distinct national socio-economic and institutional factors of each country still retain a divergence? This essay will dismiss both these views and argue that the answer is in the middle, adopting an 'interaction approach' (Lansbury, Kitay and Wailes, 2003) as to how the globalisation and the national socio-economic and institutional factors interact to shape the employment relationship differently in every country.
To begin with, one must consider what is globalisation and how truly global are its effects. In Global Transformations the writers define globalisation "as the widening, deepening and speeding up of worldwide interconnectedness in all aspects of contemporary social life" (Held, McGrew, Goldblatt and Perraton, 1999: page 2). Therefore it is argued that globalisation is a concept that departs from the common understanding of an economic integration and intensification of trade to one that is characterised by the 'accelerating pace, magnitude and intensity' of interactions and 'interdependence' of countries and to one that describes the world as "a shared social space" (Held and McGrew, 2007: page 3). However there are three separate schools of thoughts as to the understanding and consequences of globalisation as a 'social phenomenon' (Held, McGrew, Goldblatt and Perraton, 1999: page 2). The first view is that of hyperglobalisers which see in globalisation the 'emergence of a single global market' (Held, McGrew, Goldblatt and Perraton, 1999: page 2) in which the role of governments and local socio-economic and institutional factors is diminished. Under this 'borderless' and 'global economy' a convergence of nations to a 'global civil society' will rise "defined by universal standards of economic and political organisation" (Held, McGrew, Goldblatt and Perraton, 1999: page 3-5). The second view is that of sceptics and is the complete opposite regarding globalisation as an 'exaggerated myth' (Held, McGrew, Goldblatt and Perraton, 1999: page 5). What is understood globalisation to be by the sceptics is not 'a perfectly integrated global market' but rather the intense interactions of national economies that concentrate amongst regions mainly Europe, Asia and North America (Held, McGrew, Goldblatt and Perraton, 1999: page 5). Therefore the power still rests on national governments which are influenced by distinct socio-economic factors and dominant institutions. The third and final view is that of transformationalists that considers globalisation to be "a powerful transformative force", "a long-term historical process" that bring changes to nations and force economies to adapt to the new world order (Held, McGrew, Goldblatt and Perraton, 1999: page 7-9). None of the three views can be dismissed since all three describe in essence what is experienced in the world today.
The interdependence and interaction of countries is not a recent event when considering the long-standing history of trade and international economic activity. However the extend of reliance and the depth of linkages between countries and national economies is unprecedented as the impact of the recent economic crisis has suggested. Those who perceived globalisation to have a universal effect argue that deregulation and the openness of markets have led to a rising economic integration (Glynn, 2004). This claim is supported by the fact that even more countries compared to the past are now connected through increased flows of exports, financial capital and labour (Held and McGrew, 2007). One of the most significant characteristics that distinguished today's trade from earlier periods is the growing importance of multinationals and the level of the foreign direct investment (Glynn, 2004). The developments in technology and production processes gave the opportunity of expansion to large companies and their worldwide supply chains "mark a move towards a global economy" and the decline of national boundaries (Edwards and Wajcman, 2005: page 234). This new economic reality that countries must face, with increased competition for capital and investment, raises the need for global governance and international organisations to regulate the recent developments. Therefore international institutions like IMF, WTO and ILO increasingly have more impact on national matters such as employment relationship. In connection to these changes the hyperglobalist approach states that countries will converge to an optimum level of productivity and living standards where states will lose their autonomy as global institutions will replace them. Conversely, others argue that the competition between states will result in a 'race to the bottom' in terms of welfare provision and working conditions in an attempt to attract investment and thus a convergence to lower living standards (Mosley, 2005; Glynn 2004). On the other hand, sceptics argue that inherent inequalities and nationalism will never allow to convergence but the fragmentation of the world to trading blocs (Held, McGrew, Goldblatt and Perraton, 1999). It is true that "world trade remains highly concentrated" around the Triad but also "new trading powers have emerged" such as India and Russia (Held, McGrew, Goldblatt and Perraton, 2007: pages 76-77). It is clear that trade and economic integration has come a lot way in comparison to last years but poverty and inequality still exists (Glynn, 2004). Globalisation is not a "smooth process" (Edwards and Wajcman, 2005: page 233) and the world is far from being perfectly integrated even so globalisation is an adaptation process where national and international socio-economic and institutional factors co-exist and interact (Giles, 2000; (Lansbury, Kitay and Wailes, 2003).