IC333 Essay 6 - Essay 6 Thesis: The recent unionization of...

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Essay 6 Thesis: The recent unionization of Wal-Mart in China highlights the challenges of organized labor in the developing world as well as its international effects; however, it also offers a glimpse of future obstacles and future opportunities for success in industrial relations. What is the role of Wal-Mart in the Chinese economic development and why have they accepted unionization in China? Wal-Mart is a huge driver of economic growth in China due to its vast appetite for supply of consumer goods. Most of these suppliers are now located in the Pearl River delta region in China. That is to say that most of the employment generated is from the growth in Wal-Mart’s suppliers which are located mostly in China and are mostly state-owned enterprises. Wal-Mart’s place in China is likened to a joint government-business venture both because its suppliers are mostly state-owned and also because the company depends on China’s government to promote a stable and favorable business climate. Lichtenstein explains that Wal-Mart’s mastering of the manufacturing process and its immense buying power has transformed its suppliers, who are nearly always paying extremely low wages- yet higher than domestic agriculture – into price takers. The result is that labor standards go unenforced. Suppliers and vendors subcontract and labor standard enforcement gets pushed to the back burner, with Wal-Mart paying scant attention. Also, Wal-Mart’s labor standards are lax because they are less susceptible to criticism as they do not depend on a brand image in the sense that Nike or Pepsi does. It is important to note that the lack of standards has promoted labor unrest all over, and rising wages have not curbed this unrest. Wal-Mart did not allow its stores in China to be unionized; rather, this came about after a hard-fought battle with the All China Federation of Trade Unions (ACFTU), which has about 6,000 workers from Wal-Mart alone and draws on the resources of more than 150 million members. The ACFTU is the only recognized trade federation in China, it is state-sponsored, and workers are not allowed to independently organize. Many
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This note was uploaded on 05/19/2008 for the course ILRIC 4330 taught by Professor Turnerl during the Spring '06 term at Cornell University (Engineering School).

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IC333 Essay 6 - Essay 6 Thesis: The recent unionization of...

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