International Business by Ball, McCulloch, Frantz, Geringer, and Minor Chapter 12 – Labor Forces International Business by Ball, McCulloch, Frantz, Geringer, and Minor

Objectives Recognize forces beyond management control that affect the availability of labor Discuss U.S. immigration policy and the procedure by which a non-U.S. citizen is admitted to the U.S. Discuss guest workers Understand the principles underlying the immigration system in the U.S. Explain how the composition of a country’s labor force affects productivity. Discuss differences in labor unions among countries Understand how labor is getting a voice in management

Introduction Labor Quality Labor Quantity Refers to the attitudes, education, and skills of available employees. Labor Quantity Refers to the number of available employees with the skills required to meet an employer’s business needs.

Labor Mobility Labor Mobility Immigration The movement of people from country to country or area to area to get jobs. Immigration Refers to the process of leaving one’s home country to reside in another country. For people who are not citizens of the U.S., the U.S. can be a difficult country to enter.

Labor Mobility U.S. citizens have the right to live and work in any state in the U.S. All people who desire to enter the U.S. for business or pleasure have the obligation to comply with U.S. Immigration laws in order to enter the U.S.

Labor Mobility The Immigration and Naturalization Service (INS) of the U.S. Department of Justice is responsible for all immigration matters, including naturalization. Naturalization deals with the process of becoming a U.S. citizen.

Labor Mobility Federal Law Immigration is a federal matter in the U.S. Congress has plenary power over immigration. Congress amended immigration laws many times. To stop illegal immigration, Congress passed the Immigration Reform and Control act of 1986. Made employment of people not authorized to work in the U.S. a crime for the employer.

Labor Mobility Nonimmigrant Visas Issued to those coming to the U.S. for temporary visit. Usually no more than six years. Most (96 percent visitors to the U.S.) come for temporary visits.

Labor Mobility Nonimmigrant Visas Major visa categories The B visa is issued for short-term stay. The E visa is for noncitizens coming to the U.S. to carrying on trade between the U.S. and a noncitizen’s home country. The F visa is for students. The H visa is for workers. The I visa is for members of the media. The J visa is for exchange scholars. The L visa is for intracompany transferees.

Labor Mobility Immigrant Visas Individuals receiving immigrant visas For individuals who want to remain permanently in the U.S. Individuals receiving immigrant visas are classified as permanent residents. Immigrant visa is often called a “green card.” Two main categories for the issuance of immigrant visas. Family reunification and employment-based immigration.

Refugees/Asylum Seekers Population Pressures One of the most important pressures forcing people to flee is the booming population growth taking place primarily in poor developing countries. Refugees are not welcome in many countries. The few countries willing to accept some refugees will take only limited numbers. Many refugees are poor.

Guest Workers Guest Workers People who go to a foreign country legally to perform certain types of jobs. Guest workers provide the labor host countries need. Guest workers are desirable as long as the economies are growing. However, when economies slow, fewer workers are needed and problems appear.

Composition of the Labor Force Labor Force Composition The mix of people available to work, in terms of age, skill, gender, race, and religion. The percentage of adult women in the American labor force increased by some 10 percent during the 1970s. The increase continued, reaching 73 percent in 1989, when it ended.

Composition of the Labor Force Labor Productivity Measures how many acceptable units are produced by a worker during a given time and the cost per unit.

Composition of the Labor Force Unit labor costs The cost in labor to produce one unit of output. Unit labor costs rose for many years and then declined. This decline did not result from reduced wages or employment but from increased productivity. Human capital has been a major contributor to economic growth in the U.S.

Social Status Caste A system under which people’s place or level in a multilevel society is established at birth to be the same level or caste as that of their parents. Caste remains a pervasive fact in India A very populous country of growing importance in the world.

Sexism Acceptability of women as full participants in the work force ranges from Relatively advanced in the U.S. and Western Europe to virtually nonexistent in many countries. Japan and Pakistan are examples of countries where women are encountering major problems in making or retaining progress.

Minorities Traditional Societies Minorities Tribal, nomadic states of people before they turn to organized agriculture or industry. Minorities Usually a relatively smaller number of people Identified by race, religion, or national origin who live among a larger number of different people.

Minorities Traditional societies Sometimes present opportunities along with problems for employers. Indians and Pakistanis in East Africa, the Chinese in Southeast Asia, and the Greeks in Turkey.

Minorities Traditional societies (cont’d) An advantage for the foreign employer moving into these societies is that Such minorities may be immediately available, bringing financial and managerial skills to the employer.

Employer-Employee Relationships Labor Market The pool of available potential employees with the necessary skills within commuting distance from an employer. Companies planning to invest in traditional-society developing countries need to examine the cultural, religious, tribal, and other factors of the country.

Labor Unions European Labor Unions Identified with political parties and socialist ideology. A sense of worker identity is common in these unions. Probably because European labor gained freedom from feudalism as well as various rights and powers through collective action.

Labor Unions U.S. Labor Unions Laborers already possessed many civil rights, including the vote, by the time unions became important. Unionism in the U.S. has been more pragmatic than political. Also more concerned with the immediate needs of workers.

Labor Unions Collective Bargaining The process in which a union represents the interests of everyone in a bargaining unit in negotiations with management.

Labor Unions Labor Legislation in the U.S. Labor Legislation in Europe Mostly confined to the framework of collective bargaining. Labor Legislation in Europe Government’s role is more active. Wages and working conditions are frequently legislated.

Labor Unions Labor Legislation in Latin America Governments are very active in employer-employee relationships. Frequently because the unions are weak and the union leaders are inexperienced or uneducated. Labor Legislation in Germany and France Labor negotiations are conducted on national or at least regional levels.

Labor Unions Labor Legislation in Japan Japanese unions are enterprise-based rather than industry wide. As a result, unions tend to identify strongly with the interests of the company. However, Japanese workers are reported to be the least satisfied with their jobs in the developed world.

Multinational Labor Activities Steps taken by unions to combat the firm’s relocation of production to another country to avoid union reach. Collect and disseminate information about companies. Consult with unions in other countries. Coordinate with those unions’ policies and tactics in dealing with some companies. Encourage international companies’ codes of conduct.

Multinational Labor Activities The U.S. union federation, the AFL-CIO Cooperates with labor organizations worldwide including the European Trade Union Confederation. the International Confederation of Free Trade Unions. the Asia Pacific Regional Organization. the Latin America Regional Organization..

Multinational Labor Activities International Labor Organization (ILO) Purpose is to promote social justice and internationally recognized human and labor rights worldwide. Founded in 1919 and is the only surviving major creation of the Treaty of Versailles. Became the first specialized agency of the UN in 1946.

Multinational Labor Activities International Labor Organization (ILO) Formulates international labor standards in the form of treaties and recommendations Freedom of association. The right to organize. Collective bargaining. Abolition of forced labor. Equality of opportunity and treatment.

Multinational Labor Activities Trade Union Advisory Committee to the OECD An international trade union organization with consultative status with the OECD and its various committees. Role is to ensure that labor issues are considered in global markets. Represents the views of trade union movement.

Worker Participation in Management Codetermination Participation by workers in a company’s management. Worker participation in management began in the German coal and steel industries in 1951. The law gave worker and shareholder representatives 50 percent of the directorship.

Worker Participation in Management Codetermination (cont’d) Other European countries and Japan are seriously discussing codetermination-type legislation or practices. The terms industrial democracy and worker participation are now being used in the U.S.

Worker Participation in Management Work Councils in the EU In 1996, there came into effect in the EU a directive requiring most international companies operating in the EU to set up work councils. The aim is to improve employers’ access to information and rights to consultation.

Worker Participation in Management Two Distinct Work Council Models The first model is a council made up solely of employee representatives. This is the most common system found in companies from Germany, the Netherlands, Portugal, and Spain.

Worker Participation in Management Two Distinct Work Council Models (cont’d) The second model involves a company-based joint management/employee council. Companies based in Belgium, France, and Luxembourg are going in this direction.

Worker Participation in Management Developments in the U.S. During the 1970s and into the 1980s, the concept of industrial democracy spread in America.

Worker Participation in Management Developments in the U.S. Chrysler Corporation and American Motors have had UAW officers as members of their boards of directors. Workers at GM get together in “quality circles” to help make decisions about their jobs and production quality.