Wednesday, December 30, 2009


Introduction:-Industrial relationship is a field which basically deals with the relationship between the management and work force. like any other field of social science it has been subject to change since its inception, initially labor was thought just as a mean for production, and the idea was to exploit it to the highest degree possible, this kind of mindless exploitation gave rise to militant unionism, strikes and gheraos .With time it was realized that that labor is not a resource to be exploited but an ally to be utilized in a proper way to achieve higher goals and gradually there was a change in the dynamics of industrial relations. In present scenario when the Indian economy is globalizing very rapidly followed by the massive influx of technology, capital and ideas the dynamics of Industrial relationship in India again calls for a paradigm shift. One fifth of all those born between 2007 and 2030 will be an Indian. By 2030, India will become the biggest source of labor thereby attracting a huge degree of investments from the global market.[1] Under such a scenario, Industrial relations in India will require major changes to streamline itself with the needs of vast globalization. This change has to be implemented from both sides that is from the end of management as well as from the end of labor force so that it can become a win- win situation for both, along with the growth of the nation.

Paradigm Shifts in Negotiations:

As we know that globalization is followed by huge investments of capital, technology and ideas, so one of the major aspect on which globalization survives is Competitiveness. If India wants to leverage its potential in the classic age of globalization, Indian companies need to be highly competitive. This competitiveness has to be shown in every aspect of the organization ranging from innovative measures to process alignment to efficiency of workforce. If the workforce will remain unsatisfied, and will exert means like strikes and gheraos, then productivity will be hugely affected and a lot of man-hours will be lost along with incurring bureaucratic costs to deal with it. Practically speaking, modern Indian industries simply cannot afford this kind of wastage. So the new Industrial policies call for minimizing to a large extent this unwarranted loss. To have almost a zero rate of such activities is easier said than done. Given the kind of history Capitalism has, this neo-Capitalism will have some sort of inclination to exploit the labor force which might create unrest in the workforce. They need some means to address their grievances. For this they need to design such intelligent ways which will not only solve their problems but will also avoid man-hour loss. An excellent example would be the case of strikes in Japanese shoe factories where if the workforce has to protest, they simply don’t go for a strike as their Indian counterparts, but they produce shoes for only one leg. Once their grievances are addressed, they produce the shoes for the other leg to complete the pair. Thus during the time of their so called strike, they hamper the sales of the company temporarily, thereby gaining the attention of the top management, but the best part is that once their problems are resolved it doesn’t lead to any man-hour losses and the company doesn’t lose out on its Competitive advantage.

Paradigm in Labor rules:

Globalization calls for flexible labor rules with hiring and firing as a norm. So our labor rules has to be flexible enough to give proper room to the process of rapid hiring and firing, so that the industry may not lose out on its competitiveness. But at the same time, the industry also has some obligations towards its employees. One beautiful aspect of Globalization is that it generates a lot of new and diversified avenues for employment. With the help of ample technical knowledge as well as soft skills, anyone can leverage on it. What the industry needs to do is that it should keep on innovating as well as providing the required training for its workforce. This will not only ensure better opportunities for a fired employee to search for a new source of employment but will also help in the productivity of the company. One important point to be noted over here is that since globalization calls for flexibility in hiring and firing, it has to be played on a level ground where the rules are same for the employer as well as the employee. Generally it is often seen in Indian IT companies that before hiring an employee the company signs a bond with the new recruit, according to which if the employee quits the company within a particular time period he needs to pay a bond amount. Such kind of practices are not only highly biased against the employee but are also a mis-fit in the world of globalization. If a company has the right to fire an unproductive employee for reducing its losses, so should an employee have the right to switch from one company to another smoothly for his individual growth.

Paradigm shifts in Reporting Relations:

To gain a high degree of efficiency in a globalizing economy it is vital for the Indian industries to have a workforce that is highly motivated and which sees an alignment in their personal interest and the goals of the company. This can only be done when employees have a say in the decision making process as well as vital functions and processes. This can be implemented with the help of an organic, non bureaucratic and informal structure that does not differentiate between management and the workforce and facilitates smooth flow of information from the workforce to the management. This will not only result in psychological satisfaction (as important as economic satisfaction)of the work force but will also have a lot of positive impact on the industry itself. One of them could be the detection of changes in the market. As we know that globalization is always accompanied with a great degree of frequent changes, so it is imperative that such changes be detected as soon as possible so that the proper course of action be followed. It is not the top management but the common workforce which has the direct link with the market that detects such changes. But unfortunately due to mechanistic and bureaucratic structure, the information doesn’t go upwards which in some cases might end up in huge losses. An example that supports this is the “Sony Way”, which encourages the product engineers to ‘self promote’ in the company by seeking projects in different departments of the company where they feel can contribute more and hence promote the flow of ideas in the company.[2]

Paradigm shifts in managing cultural diversity:

Unrestricted flow of labor is one of the pillars on which globalization is based upon. Today mainly we see outflow of labor from India. But with time we should be ready for considerable amount of labor inflow also. So far our industrial relation policies are not accustomed to deal with a diversified workforce, with varying backgrounds in geographies, culture and thoughts. So we need to adapt our industrial policies in view of these demographic shifts. Our policy should be modified in such a way that it can accommodate workforce from various geographies amicably and can extract the best out of each of them. Since the philosophy of India has always been Unity in Diversity, this will not be a very tough task. So far we have dealt with our own regional diversities, now we need to deal with diversity across borders.


Along with China in this coming future, India has a very crucial role to play. India has the potential to be benefitted hugely by not only outsourcing but also by other models of globalization such as off shoring and global sub contracting model. Right now the world perceives India as a destination where the forces of globalization can play a constructive role that will not only boost Indian economy but will be in favor of the world economy as a whole. The basic reason for this is the cultural aspect of India (which has always been the melting pot of various cultures), the democracy of India, secularism of India, sound fiscal policies and last but not the least, the huge amount of Indian workforce which is not only very talented but also economically viable. We should also consider the fact that Indian economy can be benefitted not only from the influx of capital and technology, but also from the influx of the global workforce and innovative ideas in the near future. But to make these things happen a very vibrant, flexible, unbiased and technically sound workforce is needed. But at the same stage of time to fulfill these above objectives regarding our workforce we also need a very flexible, vibrant, unbiased and knowledge friendly industrial relationship. As we know that the forces of globalization as well as industrial relationship are mutually dependant, we need to design our industrial relationship policies in such a way that not only we are in a position to strike a beneficial deal for ourselves, but can also fulfill the expectations of the globalized economy.


1). Organizational Behavior – Robbins, Judge and Sanghi , Pearson Publications

2). Organizational Theory, Design and Change – Jones and Mathew – Pearson Publications.

3).The World is Flat – Thomas Friedman

4).Kautilya Today – Jairam Ramesh


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