Labor is an important resource for any organization. Labor has many considerations which should be taken care of in any organization. Unlike other resources labor has one important difference: it is human. It is the work done by a human. The workforce of any organization offers their services i.e. the work to the organization for which they are compensated.
A labor union is an organization that is formed by the labor of an organization or of organizations in a particular industry. Labor unions serve workers by protecting their rights and compensation and also by improving their working conditions. These have emerged from the aftermath of the industrial revolution when poor working conditions and poorly paid labor brought together workers for collectively bargain for their rights.
Labor Union in Brazil
Labor union in Brazil were started by the government in 1930 when in Getúlio Vargas’s dictatorship the government decided to create a “corporate state”. During this time, Brazil was rapidly industrializing and it is common to see the emergence of labor unions during this stage (Alexander 2003, 51). After the Second World War, strict regulations were imposed upon the labor unions which became stricter with time, especially during military regimes. The strength of the labor unions caused the transition of Brazil to a democratic form of government in the early 1980’s, and many restrictions were removed. Labor union managed to take influence not only the politics but also the multinational firms. Economic reforms and international strategies created problems for the unions in many ways. For instance, the government instituted labor laws were in line with the demands of unions and workers would turn to the government rather than the union for their rights. This can be shown by the reduction of the number of strikes in since the 1990’s (Riethof). However, the pro labor union parties managed to remain successful in the elections, even managing to elect the president, Luiz Silva from the Worker’s party.
Comparison with US Labor Union and Labor Management Relations
Labor unions in the US have been in existence since the nineteenth century and have been in power in the times around the Second World War. Since then the labor unions have continued to weaken contrary to Brazil. In the 1980’s, labor unions have been in a decline stage and today these are still on the decline (Thomas, 3). The US government unlike that of Brazil have not been pro-labor union and the labor laws in US allow provide employers in the private sector the right to fire employees without assigning any reason, although there is a higher instance of labor union membership in the public sector. The rise of globalization has negatively impacted the powers of labor unions in both Brazil and the US. Labor union strategists have responded by creating international versions of labor unions, however they have been found more paying lip service and acting largely for themselves (Eder 2002, 26). Such lobbying is more found in Brazil than the US, where economic recession brought protests against the free trade to the streets. Therefore it is more evident in the Brazil that labor unions are strong political actors that have made aligned state laws to more pro-labor whose benefits are not limited to workers in particular industries, contrary to US where benefits are limited to usually the members of unions.
Establishing American Venture in Brazil
In the late 1980’s when labor union was in power, multinational found themselves influenced by the labor unions. Looking into this fact, it is not unsafe to assume that any multinational including the ones headquartered in the US would like to venture into Brazil. However, when economic recession hit Brazil, labor unions switched to defensive collective bargaining which might have put multinational in a favorable position. But this favorable position is the result of economic cycle not any strategy and thus should not be relied upon.
The American firm venturing into Brazil will face opposition in the home country. It is often so that multinationals originating from an industrialized country attempt to close down manufacturing in home country and replace it with cheaper labor countries. Labor union in that firm US manufacturing facility might protest against speculated closure and will demand assurances. To resolve this issue, the firm should not close down their local operations and should take its local labor union into confidence. A rather better solution would be the posting of some of those workers to Brazil on better positions after necessary training, so that they can further train Brazilian workers. Such a setup would motivate the local workers to work harder to obtain such a position and might also satisfy the local as well as Brazilian labor union. Such an action stems from the historical role of multinationals in Brazil which brought new methods of unionism to Brazil in the form of organizational learning. (Seidman, 1994)
When it manages to negotiate with its local labor unions, and plans to venture into Brazil, it will have to plan ahead by meeting the labor unions and negotiating with them before hand, because labor unions exist at national level in Brazil and American firms are less willing to go into such countries (Cooke 1997, 3-17). The option of negotiating with the government should not be missed out because in Brazil government laws and labor unions are in line with each other and thus negotiating with one entity can force the other into compliance. The firm should not rely on the benefit presented by the globalization, where the firm can threaten closure of operations leading to unemployment if the labor union does not make some concessions(Riethof 2002, 145-148), because this can be damaging to the image of the firm as far as corporate ethics are concerned. The issue of “sweatshops” can cause a firm to lose its customers, investors and invite criticism and lawsuits (Bender 2003, 77).
One solution that the firm can apply is the greater use of automated manufacturing which reduces the number of labor and thus the labor’s ability to form an effective union. But in Brazil, such a solution will not be feasible because the power of the union in that industry might not support the move and can manage to make the small workforce members of their union. It is much better to look for a win-win situation where the firm does not faces much criticism and manage the labor relations with efficiency.
Alexander, Robert. Parker, Eldon M. A history of organized labor in Brazil
Published by Greenwood Publishing Group, 2003
Bender, Daniel E. Greenwald, Richard A. Sweatshop USA: the American sweatshop in historical and global perspective Edition: illustrated, Published by Routledge, 2003
Eder, Mine. “The constraints on labour internationalism: contradictions and prospects.” Global Unions? Theory and Strategies of organized labour in the global political economy. Harrod, Jeffrey and Robert O’Brien, eds. London: Routledge, 2002.
Riethof, Marieke. Responses of the Brazilian Labour Movement to Economic and Political Reforms, Amsterdam: Thela Latin America Series. (2002)
Seidman, Gay W. Manufacturing Militance: Workers’ Movements in Brazil and South Africa, 1970-1985, Berkeley: University of California Press. (1994)
Thomas, Henk ‘The Erosion of Trade Unions’, in Thomas, Henk (ed.) Globalization and Third World Trade Unions: The Challenge of Rapid Economic Change, London: Zed, pp. 3-27. (1995)
Cooke, William N. The influence of industrial relations factors on U.S. foreign direct investment abroad. Industrial and Labor Relations Review 51(1), pp 3-17 1997
Riethof, Marieke. “Labor Unions and Economic Reforms: Brazil in a Comparative Perspective” Paper presented at the annual meeting of the International Studies Association, Le Centre Sheraton Hotel, Montreal, Quebec, Canada, Mar 17, 2004;. 5 June. 2009 <http://www.allacademic.com/meta/p72987_index.html>