Employment Relations in Globalised Economies

The Scenario and Task:The strike at Honda’s automobile plants in" rel="nofollow">in Chin" rel="nofollow">ina is one of the best known cases in" rel="nofollow">in a wave of in" rel="nofollow">industrial disputes that arose in" rel="nofollow">in that country durin" rel="nofollow">ing 2010. It was examin" rel="nofollow">ined in" rel="nofollow">in a series of contemporary media articles (two of which are attached below) and there have been more recent academic articles (some of which are listed below). You are a senior Employment Relations Advisor to the CEO of Honda in" rel="nofollow">in Chin" rel="nofollow">ina. You must write a report providin" rel="nofollow">ing the CEO with two alternative strategies towards employment relations that would avoid the problems experienced in" rel="nofollow">in 2010 while at the same time sustain" rel="nofollow">inin" rel="nofollow">ing the company’s performance. Your report should identify two options: ? one option should be based on unitarist values, and ? the other on pluralist values. Your advice should be in" rel="nofollow">informed by research, in" rel="nofollow">includin" rel="nofollow">ing articles in" rel="nofollow">in refereed academic journals, as well as in" rel="nofollow">information from relevant web-based sources. Indeed, you must cite and use at least five such quality academic articles. Failure to meet this requirement will result in" rel="nofollow">in the loss of marks. Some Hin" rel="nofollow">ints: The topic/issue of PBL 2 requires both an understandin" rel="nofollow">ing of theory and practice. The relevant theory relates to unitarism and pluralism and to the relationship between these values/frames of reference and management ER strategy. The practice relates to the ways in" rel="nofollow">in which management approach their relationships with employees and unions in" rel="nofollow">in the manufacturin" rel="nofollow">ing plants of the automobile in" rel="nofollow">industry. In this context, your account of the two management options should in" rel="nofollow">include the actions that management would take if it adopted a unitarist or a pluralist approach. In other words, you should not rely on simplistic general assertions but rather get in" rel="nofollow">into the detail of what management should do in" rel="nofollow">in to achieve their desired outcomes. In addition, you need to explain" rel="nofollow">in to the CEO (i) how these actions are consistent with the respective value positions; and (ii) the potential advantages/disadvantages or benefits/risks of each of the two options. In these ways, you are demonstratin" rel="nofollow">ing your understandin" rel="nofollow">ing of both the theory and the practical aspects of the issue. As with all ER analysis, your account of the alternative management strategies and their likely success will be in" rel="nofollow">influenced by context. In other words, given that the scenario relates to automobile manufacturin" rel="nofollow">ing in" rel="nofollow">in Chin" rel="nofollow">ina, the plans and actions of management will be in" rel="nofollow">influenced by Chin" rel="nofollow">ina’s labour laws and in" rel="nofollow">institutions. The likely success of either strategy will also in" rel="nofollow">influenced by other contextual factors, from the state of the automobile product market and changin" rel="nofollow">ing labour market conditions; to the contractual obligations and/or fin" rel="nofollow">inancial situation of the company; to the personalities and career ambitions of the managers and union representatives in" rel="nofollow">involved. Despite the importance of context, however, this exercise is not expectin" rel="nofollow">ing you to be experts on Chin" rel="nofollow">inese law or the automobile in" rel="nofollow">industry. Nor do we want you to make all sorts of assumptions about the ‘facts’ of the scenario. Initial Readin" rel="nofollow">ing from Academic Sources: To successfully answer the question you need to read as much as you can about (i) unitarism, pluralism and their lin" rel="nofollow">inks with management/government ER strategy; and (ii) employment relations in" rel="nofollow">in the automobile in" rel="nofollow">industry. The followin" rel="nofollow">ing suggestions are where you might start your readin" rel="nofollow">ing. In other words, they are the begin" rel="nofollow">innin" rel="nofollow">ing – they will not be sufficient by themselves. (i) Unitarism, pluralism and management ER strategy Bray, M., Warin" rel="nofollow">ing, P. and Cooper, R. (2014) ‘Studyin" rel="nofollow">ing Employment Relations: Values’ in" rel="nofollow">in Employment Relations: Theory and Practice, Sydney: McGraw-Hill, Chapter 3. Fox, A. (1966). Management’s Frame of Reference, excerpt from Industrial Sociology and Industrial Relations, Royal Commission on Trade Unions and Employer Associations, Research Papers 3, HMSO, London, Part 1, pp.2-14 in" rel="nofollow">in A. Flanders (ed) (1969) Collective Bargain" rel="nofollow">inin" rel="nofollow">ing. Harmondsworth: Penguin" rel="nofollow">in. Ross, P. And Bamber, G. (2009). Strategic Choices in" rel="nofollow">in Pluralist and Unitarist Employment Relations Regimes: A Study of Australian Telecommunications. Industrial and Labor Relations Review. 63 (1), October: 24-41. (ii) Employment relations in" rel="nofollow">in the Chin" rel="nofollow">inese automobile in" rel="nofollow">industry Zhao, S. et al. (2012). Changin" rel="nofollow">ing employment relations in" rel="nofollow">in Chin" rel="nofollow">ina: a comparative study of the auto and bankin" rel="nofollow">ing in" rel="nofollow">industries. International Journal of Human Resource Management, 23 (10), pp. 2051-2064. Lyddon, D., Cao, X., Meng, Q. and Lu, J. (2015) ‘A strike of ‘unorganised’ workers in" rel="nofollow">in a Chin" rel="nofollow">inese car factory: the Nanhai Honda events of 2010’, Industrial Relations Journal, 46 (2), pp. 134-52. ‘Honda's Chin" rel="nofollow">ina strike a lesson for Japan’ Sydney Mornin" rel="nofollow">ing Herald, 6 June 2010: http://news.smh.com.au/breakin" rel="nofollow">ing-news-busin" rel="nofollow">iness/hondas-chin" rel="nofollow">ina-strike-a-lesson-for-japan-20100606-xm9z.html After an unprecedented strike log jammed Honda's Chin" rel="nofollow">ina production lin" rel="nofollow">ine, Japanese firms in" rel="nofollow">in the country may need to redraw their plans in" rel="nofollow">in a growin" rel="nofollow">ing market that has emboldened low-wage workers, analysts say. As Chin" rel="nofollow">ina's economy surges, demands for higher wages are posin" rel="nofollow">ing a headache for Japanese companies facin" rel="nofollow">ing higher costs but could also be a boon for others bankin" rel="nofollow">ing on risin" rel="nofollow">ing in" rel="nofollow">incomes to spur demand for high-quality goods. Japan's number two carmaker on Wednesday restarted operations at its auto parts factory after offerin" rel="nofollow">ing a 24 percent pay rise to placate staff who had walked out on May 27. But Honda's Chin" rel="nofollow">inese assembly join" rel="nofollow">int ventures, Guangqi Honda Automobile and Dongfeng Honda Automobile, remain" rel="nofollow">ined closed due to a lack of key components, the company said. Honda produces 650,000 vehicles per year in" rel="nofollow">in Chin" rel="nofollow">ina but it has lost thousands of units because of the shutdown. "We never expected somethin" rel="nofollow">ing like this would happen," said Tokai Tokyo Research Centre auto analyst Mamoru Kato. After the Honda strike "Chin" rel="nofollow">inese workers will likely be encouraged to start makin" rel="nofollow">ing more demands and such situations will in" rel="nofollow">inevitably in" rel="nofollow">increase production costs there," he added. Accordin" rel="nofollow">ing to the All-Chin" rel="nofollow">ina Federation of Trade Unions, nearly a quarter of Chin" rel="nofollow">inese employees have not had a raise in" rel="nofollow">in five years. Labour issues in" rel="nofollow">in Chin" rel="nofollow">ina have come to the forefront in" rel="nofollow">in recent weeks after suicides at Taiwanese high tech maker Foxconn, which counts Dell, Sony and Panasonic among its clients, forced it to give staff a 30 percent rise. The unrest has raised questions about workin" rel="nofollow">ing conditions for the millions of employees in" rel="nofollow">in Chin" rel="nofollow">ina's factories, sparkin" rel="nofollow">ing calls for better oversight from those who benefit from Chin" rel="nofollow">inese labour and a ban on unions. "As the Chin" rel="nofollow">inese economy grows and people's in" rel="nofollow">income rises, companies are now facin" rel="nofollow">ing the need to review their strategies," said Mizuno Credit Advisory auto analyst Tatsuya Mizuno. Yang Lixiong, professor at School of Labor and Human Resources of Renmin" rel="nofollow">in university in" rel="nofollow">in Beijin" rel="nofollow">ing said opportunities at foreign companies are limited for Chin" rel="nofollow">inese staff. "In the case of Honda, the management is mostly Japanese. It's very hard for local staff to work their way up. In addition to that, salaries are very low and workin" rel="nofollow">ing conditions are not good," he added. To curb the effects of risin" rel="nofollow">ing wages Japanese busin" rel="nofollow">inesses are harnessin" rel="nofollow">ing economies of scale that would effectively brin" rel="nofollow">ing down unit costs. Nissan chief executive Carlos Ghosn recently announced plans to ramp up production to more than one million cars a year in" rel="nofollow">in Chin" rel="nofollow">ina by 2012. Honda sold 576,223 vehicles in" rel="nofollow">in Chin" rel="nofollow">ina last year, up 23 percent year-on-year and Toyota saw sales rise 21 percent. Fashion retailer Uniqlo aims to open 1,000 stores in" rel="nofollow">in Chin" rel="nofollow">ina by 2020 and achieve more than 10 billion dollars in" rel="nofollow">in sales. And Sharp said it will double the number of outlets in" rel="nofollow">in Chin" rel="nofollow">ina for its popular Aquos televisions to 10,000 this year and boost its lin" rel="nofollow">ineup to more than 30 models from the current 24. But risin" rel="nofollow">ing wages are not necessarily bad as richer consumers have more purchasin" rel="nofollow">ing power, analysts said. Japan, which has long had a reputation for craftsmanship, "can only compete in" rel="nofollow">in the high-end market as it has already lost out to local rivals in" rel="nofollow">in terms of affordability," Okasan Securities strategist Hirokazu Fujiki recently said. "Japanese companies need to win" rel="nofollow">in out by targetin" rel="nofollow">ing the mid-to-high level consumers." They must also address Chin" rel="nofollow">inese resentment again" rel="nofollow">inst Japanese workers due to their long and tense history. Chin" rel="nofollow">inese Honda staff complain" rel="nofollow">in Japanese workers in" rel="nofollow">in the same factory earn 50 times more than them. "Chin" rel="nofollow">inese workers seem to have a strong sentiment of bein" rel="nofollow">ing discrimin" rel="nofollow">inated by Japanese employees," said Mizuno. "This may become a more emotional, fundamental issue, which could potentially develop in" rel="nofollow">into a political problem," he warned. ‘Labor unrest in" rel="nofollow">in Chin" rel="nofollow">ina reflects changin" rel="nofollow">ing demographics, more awareness of rights’ Chin" rel="nofollow">inese labor dispute hits Honda plants Chin" rel="nofollow">ina's low-wage and migrant workers have begun to assert their rights, sparkin" rel="nofollow">ing waves of labor unrest, in" rel="nofollow">includin" rel="nofollow">ing strikes and work stoppages. The conflict was highlighted by a strike in" rel="nofollow">in May at Honda Motor's transmission factory in" rel="nofollow">in Foshan, where hundreds of workers walked off the job and shut four assembly plants. By Keith B. Richburg (Monday, June 7, 2010) http://www.washin" rel="nofollow">ingtonpost.com/wp-dyn/content/article/2010/06/06/AR2010060603295.html BEIJING -- Chin" rel="nofollow">ina has been hit with a recent wave of labor unrest, in" rel="nofollow">includin" rel="nofollow">ing strikes and partial shutdowns of factories, underscorin" rel="nofollow">ing what experts call one of the most dramatic effects of three decades of startlin" rel="nofollow">ing growth: A seemin" rel="nofollow">ingly endless supply of cheap labor is dryin" rel="nofollow">ing up, and workers are no longer willin" rel="nofollow">ing to endure sweatshop-like conditions. Chin" rel="nofollow">ina's export-driven growth has long been lin" rel="nofollow">inked to its abundance of workers -- mostly migrants from the impoverished countryside who jumped at the chance to escape a hardscrabble rural life to toil long hours in" rel="nofollow">in factories for meager wages. If they were unhappy, they rarely expressed it through action, and if they did, they were quickly fired and replaced from among the hundreds of others waitin" rel="nofollow">ing outside the factory gates. Now all of that has started to change. Shiftin" rel="nofollow">ing demographics, in" rel="nofollow">includin" rel="nofollow">ing years of effective population control through the government's "one child" policy, have left Chin" rel="nofollow">ina short of younger workers, particularly in" rel="nofollow">in the crucial 15-25 age group that many factories rely on most. These young workers don't have to travel far from home like their parents did to fin" rel="nofollow">ind work. They are more aware of their rights. And havin" rel="nofollow">ing grown up in" rel="nofollow">in a more prosperous Chin" rel="nofollow">ina, they are demandin" rel="nofollow">ing a fairer share. "The first generation of migrant workers made a lot of money compared with their poor life before," said Cai He, dean of sociology at Sun Yat-sen University. "But right now the majority of migrant workers are in" rel="nofollow">in their 20s. They were born in" rel="nofollow">in the 1980s. Most of them have no farmin" rel="nofollow">ing experience" and "are more sensitive to the disparity between the wealth of the city and their own poverty." Cai added: "The younger people received a better education. They surf the Internet, use mobile phones and watch TV. Their awareness of their rights is much stronger than the older migrant workers." These young workers are assertin" rel="nofollow">ing those rights in" rel="nofollow">in the form of work stoppages, slowdowns and demands for higher wages and shorter hours. The unrest was highlighted by a strike that began May 17 at Honda's transmission factory in" rel="nofollow">in the city of Foshan, where hundreds of workers walked off the job. The Japanese carmaker had to shut its four assembly plants in" rel="nofollow">in Chin" rel="nofollow">ina. Around the same time, the Taiwanese-owned Foxconn electronics plant in" rel="nofollow">in Shenzhen, which assembles Apple iPhones and iPads, was struck by 10 suicides among its workers and three suicide attempts, which labor activists blamed on the stress of long overtime hours. Bus and taxi drivers also have staged strikes this year, affectin" rel="nofollow">ing tens of thousands of passengers. The recent cases -- particularly the Honda strike -- are also noteworthy for receivin" rel="nofollow">ing extensive coverage in" rel="nofollow">in the Chin" rel="nofollow">inese media. While labor unrest has become in" rel="nofollow">increasin" rel="nofollow">ingly common across Chin" rel="nofollow">ina in" rel="nofollow">in the past two years, experts said, most in" rel="nofollow">incidents typically go unreported. "We're havin" rel="nofollow">ing major problems with labor unrest right now," said Sunil Balani, a Hong Kong-based busin" rel="nofollow">inessman who exports garments to Europe from Chin" rel="nofollow">inese factories. "Some of our factories are runnin" rel="nofollow">ing 30, maybe 40 percent empty at times." Although the Honda and Foxconn plants are in" rel="nofollow">in southern Chin" rel="nofollow">ina, Balani said that most of the five plants he subcontracts are in" rel="nofollow">in the north and that "they're still facin" rel="nofollow">ing the same problem," in" rel="nofollow">indicatin" rel="nofollow">ing widespread unrest . In mid-2008, Chin" rel="nofollow">ina in" rel="nofollow">introduced a labor law that allows workers with grievances to file complain" rel="nofollow">ints and opens a new mechanism for mediation. Publication of the law probably made workers more aware of their rights, experts said. Sin" rel="nofollow">ince the law went in" rel="nofollow">into effect, the number of known complain" rel="nofollow">ints has doubled to about 700,000, and they "are goin" rel="nofollow">ing up even faster now," said Mary Gallagher of the University of Michigan, an expert on Chin" rel="nofollow">inese labor. Busin" rel="nofollow">inessmen and academics predict that the wave of unrest would probably in" rel="nofollow">increase, main" rel="nofollow">inly because of Chin" rel="nofollow">ina's shiftin" rel="nofollow">ing population trends. "This is the thin" rel="nofollow">in end of a very long wedge," said Arthur Kroeber, managin" rel="nofollow">ing director of GaveKal-Dragonomics, a research firm. He said the number of 15- to 24-year-olds in" rel="nofollow">in Chin" rel="nofollow">ina is set to fall by one-third over the next dozen years, from 225 million today to 150 million in" rel="nofollow">in 2022. Kroeber noted that as the number of young workers declin" rel="nofollow">ines, the number of factories needin" rel="nofollow">ing laborers has in" rel="nofollow">increased rapidly. "This is the begin" rel="nofollow">innin" rel="nofollow">ing of a long process in" rel="nofollow">in which bargain" rel="nofollow">inin" rel="nofollow">ing power is goin" rel="nofollow">ing to shift from the company to the workers," he said. The labor unrest poses an acute challenge to Chin" rel="nofollow">ina's rulin" rel="nofollow">ing Communist Party and a dilemma for the All-Chin" rel="nofollow">ina Federation of Trade Unions. That group, Chin" rel="nofollow">ina's only officially sanctioned union, is supposed to represent workers but in" rel="nofollow">in practice has worked more as a partner with the government to enforce labor disciplin" rel="nofollow">ine and keep production high. Zhang Jianguo, a top official with the federation, said the reason for the current unrest is the huge in" rel="nofollow">income disparity in" rel="nofollow">in Chin" rel="nofollow">ina. He said the portion of the country's gross domestic product that has gone to wages has declin" rel="nofollow">ined by almost 20 percent in" rel="nofollow">in the past two decades. But some say Chin" rel="nofollow">ina's official union is itself part of the problem. "The labor union should promote fairness in" rel="nofollow">in society in" rel="nofollow">instead of promotin" rel="nofollow">ing economic development," said Lin" rel="nofollow">in Yanlin" rel="nofollow">ing, a professor at the Chin" rel="nofollow">ina Institute of Industrial Relations. "But in" rel="nofollow">in Chin" rel="nofollow">ina, the labor union doesn't do that." Researcher Zhang Jie contributed to this report.