Labor Markets in a Globalized World – 2/4/09
Lenovo is a truly global company in the following sense. It originated in China but is so global that it has
no world headquarters anywhere. It operates in a virtual setting. The chairman of the board and CEO both
live in the same place in North Carolina. The head HR director lives in Seattle. Other directors live all
around the world. They do so by using technology to connect on the Internet.
Lenovo was once called Legend. IBM realized it could get into a new market by starting to develop
business services. It decided to get out of the business of making computers. It sold the Thinkpad
trademark and the manufacturing facilities for the Thinkpad to Lenovo. Lenovo suddenly became a truly
Production in a Globalized World: Chinese company with nine production plants, five in China, producing
computers that U.S. customers buy.
Lenovo had two types of employees: regular workers (3000) and contractors (1000). The contractors
were temporary and Chinese labor law reg’s do not apply (like severance). Lenovo hires the contractors
to tell which employees it wants to keep, and will promote contractors to regular workers when regular
workers decide to leave
Each of these people had a particular job to do.
Everyone was at their workstation non-stop for two hours, then had a fifteen break, then worked for
another two hours, another fifteen break, etc. for nine hours
A Lenovo employee earns $.80/hr., so approx. $7/day
“whatever it is that we might have been doing at home, the reason we are at lenovo is because we earn
more, are safer, etc.” – attitude of the employees prof. fields interviewed (they also mentioned non-
economic benefits of this job)
The job is truly global. Product orders come in from all over the world, and the products go out to all over
Definitions of economic globalization:
Joseph Stiglitz (p. 6): The closer economic integration of the countries of the world through the increases
flow of goods and services, capital, and even labor
Thomas Friedman: Globalization 1.0, 2.0, 3.0; one is countries and muscles, second is multinational
companies, and three is newfound power of individuals to collaborate and compete globally, enabled noy
by horsepower or by hardware but by software
Yale Global Online: Globalization is a relatively new term used to describe a very old process…
Capital can move freely, products can move freely, digitized documents can move freely, ideas can move
freely. But people cannot move freely from one place to another. So we have a world that is very
globalized but is not completely globalized yet.
One of the implications of globalization is that there is much more competition for anything, because as