Employment relations in The Land of the Rising Sun, and its not so friendly neighbor.

Lots and lots of change has been happening since the economic crisis hit East Asia in the 1990's. To answer the first question on our Tute schedule, it's the economic crisis that moved the politics to move the culture. A bit of a chain reaction was started as 'The East Asian Model of Capitalism' was seen more as a weakness than a strength. The era of government intervention and long term relationships instead of markets was slowly coming to a halt. There has been some debate regarding whether or not an alignment closer to the Western economic structure would benefit this part of the world, however there are as yet no conclusive remarks and Japan and Korea seek for an alternate. 

Japan's ER model for a long time differentiated itself from the west by its characteristic lifetime employment stability and seniority based wage structures. Korea's structure is also very similar to this, however employment stability was much weaker than Japan's. The major issues that have been pressuring Japan to change their ER system is the fact that seniority based pay is no longer valid in the economy shift in the 90's. The growing age of the workforce, the baby boomers, are increasing labor costs, and many flagship organisations were suffering with too large workforces. 

Korean firms, on the other hand, have been found to be reluctant to make long term commitments to its employees. This fact has actually changed since the economic downturn, and now more companies are unwilling or unable to let employees go. This has resulted in decreased turnover for many large organisations, which is being regarded as a sign of development in Korea's labor relations. Seniority based pay was now slowly destroying the glass ceiling that existed for blue collar workers around the 1980's and earlier. 

From what I could understand, only the major changes in the global environment had a small effect on East Asian policies. Generally, it seems as if Japan and Korea have been in some sort of economic bubble, having maintained their cultural ideals in spite of the ER changes. 

http://www.jstor.org.ezproxy.library.uwa.edu.au/stable/pdfplus/10.1525/as.2006.46.3.457.pdf?acceptTC=true&jpdConfirm=true

The German employment relations model- in transition or decline?

I'm sick. I don't like being sick. Ugh.

But you know what else makes me sick?

The idea that the German ER model is in decline! (Not really but you know)
I have various, various sources saying that it's currently in transition - the recent pressures from Anglo-Saxon models from the U.S. will either largely influence the current model, or it will morph into a 'more flexible' model of the current one.

Let it be noted, though, that the majority of employers in Germany actually prefer a model closer to the one pre-existing. I wonder why!

Funnily enough though, most firms haven't yet taken advantage of the flexibility the new framework has to offer. The original model is usually what is referred to post WWII, describing the collaborative efforts used between Unions and Work Councils to fuel the IR side of things, resulting in a very Consensus-based model.

The main reasons pushing Germany to reform their current IR model rests with the power that the German bank has in shaping the industrial sector, along with the record high unemployment levels at 12.6%! (Highest since WWII!!).

Honestly, the other positive argument towards Germany's ER model being great is how jealous all the other countries are of it, as they survived a bunch of famous scandals done by famous companies (I've never heard of them), along with the financial crisis of '07-'10. It survived so well in fact, that many other nations in EU have actually adopted the same or similar economic model and it has, interestingly, flourished.

So definitely, definitely the answer is the German ER model is in transition!

http://www.ribm.mmu.ac.uk/wps/papers/00-07.pdf
http://en.wikipedia.org/wiki/German_model
http://asr.sagepub.com/content/74/1/1.short?rss=1&ssource=mfc

What are employment relations like in a ‘Liberal Market Economy’ employment relations? The case of North America

So, as I'm sure we all know, the United States of America holds a great deal of influence on global economical structures encompassing ER and other regulatory models. But what exactly are these practices, and what is meant by a 'Liberal Market Economy'?

A Liberal Market Economy refers to a free market economic system which, contrary to a Coordinated Market Economy, represents a more competitive nature of business, with increased emphasis on radical innovation and a de-regulated and anti-trust climate. 

An example of an organisation that would benefit from a North American economic structure is the NewAge-Bio Research and Development Centre. An article from Research Methodology discusses how the Centre would benefit from the NA climate contrary to a CME present in EU countries such as Germany mainly due to the fact that radical changes and innovations are ideal for that specific industry, whereas the German climate would provide only a slow and gradual developmental process due to the increased inter dependencies on other companies. 

However, Employment Relations in a LME are described as highly mobile due to the deregulation of the labor market (flexible/fluid labor markets). Recruitment expenditures of organisations in the US would not be entirely justified as workers are more likely to move on as new opportunities arise, thus losing professionals to a competitive firm.  In addition to this, Cooke (2007), as cited by "Liberal and Coordinated Market Economies", mentions the individualised employment contracts that tend to limit tenure. The move from Collective Agreements to Individual Contracts can be attributed to the age of Globalisation - industry specific contracts are no longer feasible, although that's a conversation for another time. 

So basically, from my understanding, LME's facilitate a more 'cut-throat' environment where everyone is out for themselves and out to get ahead. The advantages of LME's are quite clear; the progression achieved by individual firms is paramount, but would a more stable, collaborative approach benefit some other industries in the long run? 

I leave you with a question: Is the independence of organisations in the NA climate such an issue when, thanks to the fluidity of the market and Globalisation, large companies are basically entering partnerships/joint ventures or entirely taking over smaller organisations, eventually leads to required resources all coming to one place anyway?

Out of curiosity, I'd like to know who would prefer to work in an LME over a CME. Leave an answer in the comments :D

http://research-methodology.net/liberal-and-coordinated-market-economies/
http://www.answers.com/topic/liberal-market-economy
International and Comparative Employment Relations: Globalisation and change
http://en.wikipedia.org/wiki/Varieties_of_Capitalism

Welcome Message?!

Hello! 

Suppose I'm just testing this out. I kept trying to link my student account to this... Got there in the end. Also, yay for helvetica.

Happy blogging everyone :)