Week 5 notes
34
Copyright © 2012 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin Chapter 16 The Changing Workplace
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Transcript of Week 5 notes
Copyright © 2012 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin
Chapter 16 The Changing
Workplace
16-2
Ford Motor Company
o Ford sold 15.5 million Model T’s from 1908 to 1926
o In 1927 failure to observe market trends forced the
plant to close for 7 months while the Model A was
designed
o Henry Ford was a obstinate man, obsessed with
power, iron-willed, dictatorial, and cynical about
human nature
16-3
Ford Motor Company
o Henry Ford’s treatment of his employees led to
unionization in 1941
o In the early 1980s the firm suffered disastrous losses
due to heightened international competition
o Ford tried to change the company culture
16-4
Ford Motor Company
o Taurus rejuvenates profits from 1985 to 1995
o 1994 – Chairman Alexander Trotman instituted a
radical change program to prepare for an even more
competitive global car market
o 1999 – a new CEO, Jacques Nasser, attempts to
remake Ford’s culture yet again
16-5
Ford Motor Company
o 2000 – Ford Explorer tire failures cause disaster
o 2001 – Henry Clay Ford, Jr. restructures
o 2006 – New CEO Alan Mulally announced the need
for one more reorganization
16-6
External Forces Changing the Workplace
o Demographic change
o Technological change
o Structural change
o Competitive pressures
o Reorganization of work
o Government intervention
16-7
Demographic Change
o Population dynamics slowly but continuously alter
labor forces
o Overall labor force growth is slowing
o The number of workers in some demographic
categories is growing faster than in others, producing
incremental but significant changes
16-8
Table 16.1 – Three Snapshots of the
American Labor Force (in thousands)
16-9
Technological Change
o Technical change has many impacts on work
o It affects the number and type of jobs available
o Automation has a turbulent impact on employment
o Automation causes significant job loss in less-skilled
manufacturing and service occupations
16-10
Structural Change
o Structural change is caused by processes of job
creation and job destruction that continuously alter
the mix of productive work in every economy
o Three long-term structural trends:
o The agricultural sector has declined from
predominance to near insignificance as an occupation
16-11
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 sector
o Structural change is a critical factor in the decline of
labor unions
16-12
Figure 16.1 - Historical Trends for Employment by Major
Industry Sector: 1800–2018
16-13
Table 16.2 - Comparative Employment Structures in Nations
at Varying Stages of Development
16-14
Competitive Pressures
o Recent trends have intensified competition for
American companies
o Customer demand
o Deregulation of large industries
o Global competition
o By global standards, American workers are extremely
expensive
o Companies in some industries now contract to have
manufacturing done in a foreign country
16-15
Table 16.3 – International Wage Comparison
16-16
Reorganization of Work
o Corporations alter business processes as they adjust to
environmental changes, primarily competition
o 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
16-17
Reorganization of Work
o Because of communication technology, service work
can now be sent to low-cost locations
o Trade in services between nations is growing,
creating fears about job loss from outsourcing
16-18
Reorganization of Work
o Outsourcing: The transfer of work from within a
company to an outside supplier
o Offshoring: The transfer of work from a domestic to
a foreign location or to a foreign supplier
16-19
Figure 16.2 - Quarterly Private Sector Job Gains
and Job Losses: 1993–2010
16-20
Development of Labor Regulation in the
United States
o Historically, a strong laissez-faire current in American
economic philosophy made governments at all levels
reluctant to interfere with the employment contract
o Today, government intervention is extensive and
growing, but this is a twentieth-century trend
16-21
Liberty of Contract
o Before the 1930s, government intervention on behalf
of workers was very limited
o 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
16-22
Waves of Regulation
o First wave – Federal workplace regulation in the
1930s, which established union rights
o Second wave – Between 1963 and 1974, moved
federal law into new areas, protecting civil rights,
worker health and safety, and pension rights
16-23
Waves of Regulation
o Third wave – Between 1986 and 1996, again
broadened the scope of federal law to address
additional, and somewhat narrower, employment
issues
16-24
Figure 16.3 - A Chronology of Major
Workplace Regulations
16-25
Erosion of the Employment-at-Will
Doctrine
o 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
reason
o 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
16-26
Erosion of the Employment-at-Will
Doctrine
o 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
16-27
Work and Worker Protection in Japan
o 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
16-28
Work and Worker Protection in Japan
o In Japan, the centuries-old Confucian tradition of
harmony in relationships prevents a labor-
management fissure, therefore unions never grew
strong and unified
16-29
Work and Worker Protection in Europe
o 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 unemployment
o Forces of global competition now strain this social
welfare model
16-30
Work and Worker Protection in Europe
o European workers are so expensive to employ that job-
creating investments go elsewhere
o In much of Europe, the results of lavish social safety
nets and protections are persistent, high
unemployment and slowed economic growth
16-31
Labor Regulation in Perspective
o 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
16-32
Figure 16.5 - The Tradeoff in Labor
Regulation
16-33
Concluding Observations
o The combined impact of the six forces changing the
workplace creates both uncertainty and opportunity
o Demographic and structural changes are
uncontrollable but also slow and predictable
16-34
Concluding Observations
o Technological change is a disruptive force but it has
always created new jobs to replace the ones it
destroys
o Competition and work reorganization are reshaping
labor markets everywhere
o Experience suggests that workers fortunes will be
mixed
