Week 5 notes

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Week 5 notes

  1. 1. Chapter 16 The Changing WorkplaceMcGraw-Hill/Irwin Copyright © 2012 by The McGraw-Hill Companies, Inc. All rights reserved.
  2. 2. Ford Motor Companyo Ford sold 15.5 million Model T’s from 1908 to 1926o In 1927 failure to observe market trends forced the plant to close for 7 months while the Model A was designedo Henry Ford was a obstinate man, obsessed with power, iron-willed, dictatorial, and cynical about human nature 16-2
  3. 3. Ford Motor Companyo Henry Ford’s treatment of his employees led to unionization in 1941o In the early 1980s the firm suffered disastrous losses due to heightened international competitiono Ford tried to change the company culture 16-3
  4. 4. Ford Motor Companyo Taurus rejuvenates profits from 1985 to 1995o 1994 – Chairman Alexander Trotman instituted a radical change program to prepare for an even more competitive global car marketo 1999 – a new CEO, Jacques Nasser, attempts to remake Ford’s culture yet again 16-4
  5. 5. Ford Motor Companyo 2000 – Ford Explorer tire failures cause disastero 2001 – Henry Clay Ford, Jr. restructureso 2006 – New CEO Alan Mulally announced the need for one more reorganization 16-5
  6. 6. External Forces Changing the Workplaceo Demographic changeo Technological changeo Structural changeo Competitive pressureso Reorganization of worko Government intervention 16-6
  7. 7. Demographic Changeo Population dynamics slowly but continuously alter labor forceso Overall labor force growth is slowingo The number of workers in some demographic categories is growing faster than in others, producing incremental but significant changes 16-7
  8. 8. Table 16.1 – Three Snapshots of theAmerican Labor Force (in thousands) 16-8
  9. 9. Technological Changeo Technical change has many impacts on work o It affects the number and type of jobs availableo Automation has a turbulent impact on employmento Automation causes significant job loss in less-skilled manufacturing and service occupations 16-9
  10. 10. Structural Changeo Structural change is caused by processes of job creation and job destruction that continuously alter the mix of productive work in every economyo Three long-term structural trends: o The agricultural sector has declined from predominance to near insignificance as an occupation 16-10
  11. 11. Structural Change o The percentage of workers employed in the goods- producing sector is now in long-term decline o There is explosive growth in the service sectoro Structural change is a critical factor in the decline of labor unions 16-11
  12. 12. Figure 16.1 - Historical Trends for Employment by Major Industry Sector: 1800–2018 16-12
  13. 13. Table 16.2 - Comparative Employment Structures in Nations at Varying Stages of Development 16-13
  14. 14. Competitive Pressureso Recent trends have intensified competition for American companies o Customer demand o Deregulation of large industries o Global competitiono By global standards, American workers are extremely expensive o Companies in some industries now contract to have manufacturing done in a foreign country 16-14
  15. 15. Table 16.3 – International Wage Comparison 16-15
  16. 16. Reorganization of Worko Corporations alter business processes as they adjust to environmental changes, primarily competitiono As transport costs have fallen, manufacturers more often separate production from consumption by sending their manufacturing to low-cost countries, then shipping products back to customers 16-16
  17. 17. Reorganization of Worko Because of communication technology, service work can now be sent to low-cost locationso Trade in services between nations is growing, creating fears about job loss from outsourcing 16-17
  18. 18. Reorganization of Worko Outsourcing: The transfer of work from within a company to an outside suppliero Offshoring: The transfer of work from a domestic to a foreign location or to a foreign supplier 16-18
  19. 19. Figure 16.2 - Quarterly Private Sector Job Gains and Job Losses: 1993–2010 16-19
  20. 20. Development of Labor Regulation in the United Stateso Historically, a strong laissez-faire current in American economic philosophy made governments at all levels reluctant to interfere with the employment contracto Today, government intervention is extensive and growing, but this is a twentieth-century trend 16-20
  21. 21. Liberty of Contracto Before the 1930s, government intervention on behalf of workers was very limitedo In the late 1800s and early 1900s, strong majorities on the Supreme Court upheld the liberty of contract doctrine o The great flaw in the liberty of contract doctrine was that it assumed equal bargaining power for all parties, whereas employers unquestionably predominated 16-21
  22. 22. Waves of Regulationo First wave – Federal workplace regulation in the 1930s, which established union rightso Second wave – Between 1963 and 1974, moved federal law into new areas, protecting civil rights, worker health and safety, and pension rights 16-22
  23. 23. Waves of Regulationo Third wave – Between 1986 and 1996, again broadened the scope of federal law to address additional, and somewhat narrower, employment issues 16-23
  24. 24. Figure 16.3 - A Chronology of Major Workplace Regulations 16-24
  25. 25. Erosion of the Employment-at-Will Doctrineo Employment-at-will was traditionally defined as an employment contract that could be ended by either party without notice and for any reason – or for no reasono Federal and state laws take away the right to fire employees for many reasons, including union activity, pregnancy, physical disability, race, sex, national origin, and religious belief 16-25
  26. 26. Erosion of the Employment-at-Will Doctrineo State courts have introduced three common-law exceptions to firing at will: o Employees cannot be fired for complying with public policy o Employees cannot be fired where an implied contract exists o Courts in 11 states limit the employer’s ability to fire when an implied covenant of good faith is breached 16-26
  27. 27. Work and Worker Protection in Japano Elsewhere in the developed world, workers benefit from similar and even greater welfare guarantees than in the U.S.o Japanese males, called salarymen, enjoy virtual lifetime employment in major firms o Japanese workers are very committed and sometimes work themselves to illness or death 16-27
  28. 28. Work and Worker Protection in Japano In Japan, the centuries-old Confucian tradition of harmony in relationships prevents a labor- management fissure, therefore unions never grew strong and unified 16-28
  29. 29. Work and Worker Protection in Europeo In the aftermath of World War II, many countries adopted a social welfare model of industrial relations to protect their populations against the ravages of depression and unemploymento Forces of global competition now strain this social welfare model 16-29
  30. 30. Work and Worker Protection in Europe o European workers are so expensive to employ that job- creating investments go elsewhereo In much of Europe, the results of lavish social safety nets and protections are persistent, high unemployment and slowed economic growth 16-30
  31. 31. Labor Regulation in Perspectiveo The bare minimum for labor market regulation is compliance with four core labor standards set forth in international labor conventions o Eliminate all forced or compulsory labor o Abolish child labor o Eliminate employment discrimination o Guarantee the right of collective bargaining 16-31
  32. 32. Figure 16.5 - The Tradeoff in Labor Regulation 16-32
  33. 33. Concluding Observationso The combined impact of the six forces changing the workplace creates both uncertainty and opportunityo Demographic and structural changes are uncontrollable but also slow and predictable 16-33
  34. 34. Concluding Observationso Technological change is a disruptive force but it has always created new jobs to replace the ones it destroyso Competition and work reorganization are reshaping labor markets everywhereo Experience suggests that workers fortunes will be mixed 16-34

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