Presentation on theme: " BUS 430 Summer 2013 Dr. Rajiv Krishnan Kozhikode."— Presentation transcript:
BUS 430 Summer 2013 Dr. Rajiv Krishnan Kozhikode
Peer evaluation info Critical reflection report 1 Critical reflection report 2 Different IR Systems
o Significant differences in pay distribution across countries Even among advanced industrial economies o What explains this difference? o Level at which wages are set differ across these countries Individual level Plant level Industry level Entire private sector o Level of centralization Collective bargaining or government involvement o Union concentration o Share of labor force covered by collective bargaining institutions
Centralization of wage setting reduces inequality i.e., either through collective bargaining agreements or through government involvement Wage-setting at higher level reduces inequality o i.e., industry wide wage setting is higher level, individual/firm specific wage setting is at lower level Union concentration (few unions) reduces inequality Union density (unionized workers to un-unionized workers) reduces inequality Union coverage (percent of work-force covered by collective bargaining agreements) o Density and coverage are not the same but are related
Ratio of wages received by the worker at the 90 th percentile, to the wage received by the worker in the 10 th percentile. There could be other means as well such as o Gini coefficient (ranges from 0 to 1 for low to high wage dispersion) o Variance of the log of wages in a country.
National IR systems are viewed as the basis in most cross- cultural examinations But there could be sub-national differences in IR systems Local realities dictate union activities and outcomes In Italy, national unions rose to prominence but later lost prominence due to local changes Fiat vs Alfa Romeo Both were union heavy auto makers Fiat got rid of union involvement in wage setting Alfa Romeo continued to work with unions
Recession in Italy affected both firms Changes in local situations o More workers laid off o Greater resistance from workers Responses of unions to these requirements i.e., shifting responsibility from national to local union structures Fiat held a strong stance against unions In Fiat, local unions were unable to help the workers They had to give up their prominence after a losing battle with Fiat management Workers held the local unions responsible for their poor bargaining position with the firm
Similar situation in Alfa Romeo But Alfa worked with local unions Increased productivity through cooperation Employees were allowed to up skill and make themselves more relevant again Alfa was later acquired by Fiat but the union-firm relationship still persists.
Next session we will look at: Comparative Business Ethics