1. 0 Employee Relations Copyright 2000 - South-Western College Publishing

2. Module 26 - 1 Overview w Core Concepts Key Actors Employees and Unions Employers and Associations Government Institutions Collective Bargaining Culture w Strategic Issues w Case Applications Germany Korea

3. Copyright 2000 - South-Western College Publishing Module 26 - 2 Employees and Labor Unions w How did unions evolve? w Political or business unionism w Level of collective bargaining w Power of labor unions Ability to mobilize members Institutional security Union density International linkages

4. Copyright 2000 - South-Western College Publishing Module 26 - 3 Employers and Employers’ Associations w What encouraged employers to associate? w Do they engage in collective bargaining? w Power of employers’ associations: Employer association density Membership cohesion Comprehensiveness of association

5. Copyright 2000 - South-Western College Publishing Module 26 - 4 Government w Three types of government roles in employment relations: The passive state Active state involvement Statism

6. Copyright 2000 - South-Western College Publishing Module 26 - 5 Collective Bargaining w Who determines or negotiates the terms and conditions of employment? w At what level does bargaining occur? w What is the legal framework governing the bargaining process? w What effect has increased globalization had on collective bargaining?

7. Copyright 2000 - South-Western College Publishing Module 26 - 6 Culture w Definition w Relations with IR Determinants Co-Relations w Benefits of Cultural Analysis Help understanding foreign practices Help explaining differences in IR

8. Copyright 2000 - South-Western College Publishing Module 26 - 7 Culture (cont.) w Cultural Analysis (study by Hofstede, 1980) Individualism/Collectivism Power Distance Uncertainty Avoidance Masculinity/Femininity

9. Copyright 2000 - South-Western College Publishing Module 26 - 8 Culture (cont.) w Co-Relations Between Culture and IR (example) CultureIR IndividualisticDiversity among USAMasculineinstitutions Low in PD & UACollective actions AsianCollectivisticHomogeneity among CountriesFeminineinstitutions (Korea)High in PD & UACollective actions avoided

10. Copyright 2000 - South-Western College Publishing Module 26 - 9 Effects of Employment Relations on Workplace Practices w Low union density and low government intervention Greater managerial autonomy to set wages and structure jobs w National, regional, or sectoral bargaining Low wage variation and greater standardization of human resource practices

11. Copyright 2000 - South-Western College Publishing Module 26 - 10 Effects of Employment Relations (cont.) w Extensive rights of participation and consultation by labor Negotiated solutions to workplace practices w High government involvement in employment relations outcomes Greater constraints on human resource policies and practices

12. Copyright 2000 - South-Western College Publishing Module 26 - 11 Case of Korea w Historical Shapes Modern development from 1960s Government-centered developments with a focus on export and quantitative development “Chaebol” as a product of the fast development

13. Copyright 2000 - South-Western College Publishing Module 26 - 12 Case of Korea (cont.) w Role of “Chaebol” in IR Most of the Korean economy Family owned and managed Highly centralized and paternalistic management Highly unrelated diversification strategy Strong link with the government Heavy dependence on external funds

14. Copyright 2000 - South-Western College Publishing Module 26 - 13 Case of Korea (cont.) w Drives for Changes External Drive Asian economic crisis effect from 1997 IMF agreement in 1998 Requirement for flexible market Internal Drive New government in 1998 Drive for disaggregation of Chaebols and support of small businesses

15. Copyright 2000 - South-Western College Publishing Module 26 - 14 Case of Korea (cont.) w Actors in the Korean IR Employees and Unions Increased activities after the 1987 declaration Employment stability as the major issue Two associations: –Federation of Korean Trade Unions –Korean Confederation of Trade Unions Allowed for political activities from 1998

16. Copyright 2000 - South-Western College Publishing Module 26 - 15 Case of Korea (cont.) w Employers and Associations Decisions highly centered in Chaebols Less interactions across Chaebols Association among employers: Korea Employers Federation Increased interactions among employers expected

17. Copyright 2000 - South-Western College Publishing Module 26 - 16 Case of Korea (cont.) w Government Central roles Depression of labors for the fast development Turnaround for new management from 1998 Disaggregation of Chaebols Tripartite Commission Support of small businesses Allowance of lay-offs, etc.

18. Copyright 2000 - South-Western College Publishing Module 26 - 17 Case of Korea (cont.) w Management and Training Hierarchical and centralized structure Less focus on individual CDP Seniority-based systems Changes Move toward performance-based and flat systems Training Training institutes within Chaebols Formal outside centers: Korean Productivity Center, Korea Management Association

19. Copyright 2000 - South-Western College Publishing Module 26 - 18 Case of Germany w Employment relations system Sectoral bargaining between unions and employers’ associations Codetermination at the workplace Labor representatives on the supervisory board Work councils Unions enjoy quasi-public status and constitutional legitimacy Comprehensive employers’ associations Large firms dominate

20. Copyright 2000 - South-Western College Publishing Module 26 - 19 Case of Germany (cont.) w Effects of ER on human resources practices High value-added production strategies Negotiated solutions to HR problems Diffusion of innovative HR practices

21. Copyright 2000 - South-Western College Publishing Module 26 - 20 Case of Germany (cont.) w ER system can hinder the ability of companies to experiment with high performance work practices Representative participation hinders experimentation Interaction of management and works council constrained by collective agreement Efforts being made to increase local flexibility

22. Copyright 2000 - South-Western College Publishing Module 26 - 21 Strategy Development Game w Purposes To increase analysis skill through case application To have opportunities to develop strategies through teamwork To enhance mutual understanding through presentation and class discussion

23. Copyright 2000 - South-Western College Publishing Module 26 - 22 Strategy Development Game (cont.) w Structure of the Game Strategy Development (60 minutes) Formation of team & warm-up (5 minutes) Development of strategy & action plan (45 minutes) Wrap-up & preparation of report (10 minutes) Presentation & Class Discussion (30 minutes) Debriefing (10 minutes)

24. Copyright 2000 - South-Western College Publishing Module 26 - 23 Strategy Development Game: Debriefing KOREAN MARKET w Differences Homogeneity among the institutions Strong influence of the government Centralization in Chaebols Less mobility in the labor market

25. Copyright 2000 - South-Western College Publishing Module 26 - 24 Strategy Development Game: Debriefing KOREAN MARKET w Action Plans Step 1: Starting a Business (macro-level) Understanding the tight laws and regulations regarding foreign businesses Start contacts with someone at the center of the Chaebol Use connections in business

26. Copyright 2000 - South-Western College Publishing Module 26 - 25 Strategy Development Game: Debriefing KOREAN MARKET w Action Plans Step 2: Managing Korean Employees Understand the changing attitudes of people –Collectivistic, but increased concern for individual performance Combine management techniques for the group and the individuals (e.g. Group incentives and individual bonus)