CH11 - Globalization and Financialization
A feature of a global union federation is that it _____.
facilitates transnational collaboration via information exchange, publicity, education, and various solidarity actions
The incorporation of labor, environmental, public health, and other standards into trade agreements and the ability to impose trade sanctions on countries that violate these standards is known as
fair trade
An advantage of globalization is that _____.
foreign portfolio investment gives capital for entrepreneurs and financing for government debt
In U.S. free trade agreements after the North American Free Trade Agreement and its labor side agreement, there has been an evolution toward _____.
requirements not only to enforce domestic laws but also to abide by the International Labor Organization's core labor standards
A foreign country
Able to reduce labor costs, diversify a firm's labor pool and talent base, avoid independent unions, have an authoritarian state limit worker protest, take advantage of tax breaks, and provide access to raw materials
True or false: In the global arena, the use of corporate codes of conduct admits that working conditions are entirely dictated by market forces.
F
Which of the following is true about the corporate code of conduct that is monitored by the Fair Labor Association?
It requires that employees be informed of the standards and provided with opportunities to report noncompliance.
International trade
Cross-border flow of goods and services Exports and imports
Identify a true statement about immigration in the United States.
Since most immigrants to the United States are low-skilled, U.S. workers who are low-skilled face additional competition.
Which of the following are rejected by the use of corporate codes of conduct? (Check all that apply.)
The assumption of perfect competition that safeguards employees from abuse The market-oriented idea of labor as a commodity
Which of the following have the potential to support domestic-level collective bargaining? (Check all that apply.)
Enforceable international labor standards Transnational collective bargaining
Identify the true statements about the International Labor Organization (ILO). (Check all that apply.)
Its primary activity is to adopt and promote practices that specify minimum labor standards on specific issues. It has a peculiar tripartite structure.
The neoliberal school
Free markets
Which of the following is a specialized agency of the United Nations focused on promoting social justice and internationally recognized human and labor rights?
ILO
Which of the following are the advantages of globalization? (Check all that apply.)
Improving property rights, decreasing subsidies, and increasing wealth can result in practices that preserve the environment. Foreign direct investment enhances technology, infrastructure, and productivity.
Identify a benefit of international investment.
It boosts risk sharing across border and lets investments find their most productive uses.
Participative European Works Councils
They are the most advanced form of European Works Councils.
Which of the following refers to a global union federation?
An international association of national trade unions representing workers in certain industries, industry groups, or other sectors of employment
Financialization
Deepens global integration while increasing the pressure on organizations to search globally for ways to generate the highest financial returns
True or false: Public sector labor relations are immune to the pressures of financialization.
F
The _____ is a worldwide federation of national union federations such as the American Federation of Labor and Congress of Industrial Organizations (AFL-CIO, United States), Trades Union Congress (Great Britain), Deutscher Gewerkschaftsbund (DGB, German Trade Union Confederation), and over 300 others from more than 160 countries representing 180 million union members around the world.
ITCU
Multiple production locations
Make it more difficult for a strike to place notable financial pressure on a firm
True or false: True transnational collective bargaining is rare.
T
An effect of the implementation of the shareholder value model of financialization is that _____.
employees and unions are faced with demands for wage and benefit concessions, layoffs, and stressful restructurings
International investment portfolios
Cross-border flow of investment securities Investing in foreign stocks and bonds
Foreign direct investment (FDI)
Cross-border flow of multinational corporation investment Purchasing or establishing foreign subsidiaries and joint ventures
Immigration
Cross-border flow of people Migrating from one country to another
True or false: International investment portfolios are a form of foreign direct investment (FDI).
F
True or false: Part of the rationale for creating a North American free trade zone through the North American Free Trade Agreement (NAFTA) was to assist the expanding European Union (EU).
F
Why are the incorporation of labor, environmental, public health, and other standards into trade agreements and the ability to impose trade sanctions on countries that violate these standards labeled fair trade? (Check all that apply.)
Including these social clauses in trade agreements can avoid a "race to the bottom" in aspects such as salaries and working situations. Including these social clauses in trade agreements can prevent social dumping.
The council's size, allocation of members, location and duration of meetings, and method for consultation
Individual firms and their employees
A firm in which all units are fully autonomous, or decentralized
It does not have a source of global competitive advantage such as standardized products, economies of scale, or organizational learning.
A multinational corporation in which all decisions are centralized and all practices comply with global uniform policies
It does not have the ability to capitalize on local differences and opportunities.
Which of the following are part of the shareholder value model of financialization? (Check all that apply.)
The focal activity of executives and investors is to monitor stock prices. Executives are largely rewarded via stock options. The corporate and investment mantra is to maximize shareholder value.
Configuration
The location of several activities of the corporation Impacts labor relations through its effects on relative bargaining power between corporations and employees Refers to the location of suppliers and subcontractors and concerns whether production is concentrated in one country and exported to other markets or production is globalized into various countries through foreign direct investment (FDI)
Identify a true statement about the World Trade Organization (WTO) rulings in trade disputes.
They generally support the removal of national trade standards.
Producer-driven global supply chains, as in automobiles
Unions are better able to develop stable membership bases and alliances across multiple locations. Pressure is directed at a firm in traditional ways, such as job actions.
Which of the following statements directly refers to true transnational collective bargaining?
Unions in more than one country negotiate jointly with the same firm over wages and other economic factors.
What are the disadvantages of globalization? (Check all that apply.)
Volatile flows of foreign portfolio investment impair fragile developing country banking systems and economies. Low-cost competition from countries that breach labor rights causes domestic job losses and erosion of income and working conditions.
A feature of the Fair Labor Association is that it is not _____.
a corporate-controlled program
A feature of the core labor standards established by the Declaration on Fundamental Principles and Rights at Work in 1998 is that they _____.
are not legally enforceable
True or false: The nature of global supply chains is significant when thinking about why or why not corporate codes of conduct are important in various segments of the global economy.
t
What are the provisions of the North American Free Trade Agreement (NAFTA) that pertain to the countries involved in it? (Check all that apply.)
Firms based in any of the countries are allowed to invest, sell services, and bid on government contracts in all the countries involved in the agreement. Intellectual property rights are protected.
Which of the following are specified by the Charter of Fundamental Rights of the European Union? (Check all that apply.)
Freedom of movement and equal treatment and compensation for men and women Health and safety protections, annual leave, and access to training The right to engage in collective bargaining and to strike
Which of the following are part of the Charter of Fundamental Rights of the European Union? (Check all that apply.)
Guarantees of information and consultation The freedom of association to join labor unions
The _____ is a worldwide federation of national union federations such as the American Federation of Labor and Congress of Industrial Organizations (AFL-CIO, United States), Trades Union Congress (Great Britain), Deutscher Gewerkschaftsbund (DGB, German Trade Union Confederation), and over 300 others from more than 160 countries representing 180 million union members around the world.
ITUCA
True or false: Immigration allows capital to seek its highest rate of return.
t
Unlike the North American Agreement on Labor Cooperation (NAALC), the labor provisions of trade agreements that followed the North American Free Trade Agreement have _____.
their own labor chapter within the free trade agreement
Protections for workers in a globalized workplace can be pursued through _____.
transnational employee representation or unionism
What are the examples of foreign direct investment (FDI)? (Check all that apply.)
A domestic firm buying a foreign-owned company A domestic firm entering into a joint venture with an overseas enterprise A domestic firm establishing a new factory, call center, or other operation in another country
Identify a feature of a corporate code of conduct.
A firm establishes its corporate code of conduct almost always voluntarily.
Identify a situation that leads to social dumping.
A foreign competitor sells a product unfairly at a lower price than domestic producers because of lower labor or environmental standards.
Critical industrial relations school
A system that significantly alters capitalist power relations
A host country
Able to have new capital for investment, higher-paying jobs, new technology, more products and competition, and opportunities to understand new management techniques and share in research and development activities
In the United States, efforts to control or abolish bargaining rights for public sector workers in Wisconsin, Ohio, and elsewhere starting in 2010 have consistently been justified by stating the need for budget austerity. Why can this be considered an extension of financialization? (Check all that apply.)
Because more importance is given to fiscal concerns than to service delivery Because public sector pension shortfalls and budget deficits were at least partly an outcome of the financial crisis
For firms with significant operations in at least two European Union (EU) countries, a(n) Blank 1 of 3 Blank 2 of 3 Blank 3 of 3 is a transnational, company-level committee of employees from these different operations that has consultation and information rights on issues that affect workers in more than one country.
Blank 1: European Blank 2: Works Blank 3: Council
A written statement of standards that a company pledges to follow in its business activities often as part of a corporate social responsibility (CSR) initiative is called a(n)
Blank 1: corporate Blank 2: code Blank 3: of Blank 4: conduct
The pressures on labor relations brought on by globalization are magnified by a multidimensional process called Blank 1 of 1 in which financial markets, motives, results, and institutions become more important than the production and delivery of goods and services.
Blank 1: financialization
In international trade, Blank 1 of 2 Blank 2 of 2 occurs when a foreign competitor is able to unfairly sell something at a lower price than domestic producers, where unfairly means because of a subsidy, not because of greater efficiencies.
Blank 1: social Blank 2: dumping
Transfer pricing
Can conceal the true profitability of specific operations from labor unions
Buyer-driven global supply chains, as in apparel and retailing
Conditions are not conducive to traditional union campaigns concentrated on mobilizing worker power directed at a firm. Alliances of diverse groups, such as worker activists, human rights groups, and college students, are required to create publicity.
What are the core labor standards established by the Declaration on Fundamental Principles and Rights at Work in 1998? (Check all that apply.)
Correct Answer Freedom of association and collective bargaining The prohibition of discrimination in employment and pay The eradication of forced labor The abolition of child labor
Which of the following were the outcomes of deregulating the financial sector? (Check all that apply.)
Correct Answer It allowed commercial banks to become more like investment banks. It resulted in industry consolidation.
What are the intentions of the North American Agreement on Labor Cooperation (NAALC) that is included in the North American Free Trade Agreement (NAFTA)? (Check all that apply.)
Correct Answer To result in widespread plant closings To address labor's concerns that low Mexican wages might undercut U.S. competitiveness
What are the minimum standards for companies as specified by the European Works Council directive? (Check all that apply.)
Councils must meet with management at least once a year. Councils must be informed and consulted about the business' progress.
Identify the true statements about the International Trade Union Confederation (ITUC). (Check all that apply.)
It gives education and training to union leaders and financial assistance to developing labor movements. It gathers and publishes data and research to keep unions abreast of developments in other countries.
Which of the following statements is true about international investment?
It gives working capital to local firms and financing for foreign government operations.
Identify a true statement about an international investment portfolio in contrast with foreign direct investment (FDI).
It is carried out by institutional and individual investors who own foreign stocks and bonds or invest in international mutual funds.
Which of the following is true about the World Trade Organization (WTO)?
It provides a platform for negotiating and enforcing global trade agreements.
Pluralist industrial relations school
Labor unions and government regulations
Labor relations processes are decentralized.
Local managers are required to create networks across their firm to facilitate coordination and learning.
Formal labor relations processes and structures are centralized.
Local managers are required to strive for ways to integrate the aspects of local responsiveness and problem solving.
Which of the following countries are parties to the North American Free Trade Agreement (NAFTA)? (Check all that apply.)
Mexico Canada The United States
Which of the following are true about the effects of the North American Free Trade Agreement (NAFTA) and the North American Agreement on Labor Cooperation (NAALC), its labor side agreement? (Check all that apply.)
NAFTA provides the basis for unions in the United States, Canada, and Mexico to cooperate in repeated, concrete ways. NAFTA led to a shift in the attitudes of the Canadian and U.S. labor movements.
Globalization
Opens up greater financial opportunities while adding competition that can reduce financial returns
Which of the following lead to benefits from free international trade? (Check all that apply.)
Reducing the monopoly power of domestic firms Expanding the size of markets
Which of the following is a result of private equity funds using leveraged buyouts to take over firms that are seen as underperforming, installing their own cost-cutting leadership teams, stripping off assets, and then selling the pieces at a remarkable profit?
Shareholder value ethos is pushed to the extreme.
True or false: Globalization and financialization are each a group of interrelated structural changes that have similar effects in the distribution of power, income, and wealth, and in the pattern of economic growth.
T
True or false: International trade lets consumers and producers benefit from specialization.
T
Identify the true statements about the North American Agreement on Labor Cooperation (NAALC), a side agreement of the North American Free Trade Agreement (NAFTA). (Check all that apply.)
The NAALC specifies procedural rules that necessitate cross-border contact. The NAALC machinery gives a legitimate mechanism to labor to express and request resolution of grievances.
Coordination
The degree to which activities of the corporation in various countries are harmonized or autonomous Signifies an important conflict in multinational corporations between centralization and decentralization The extent to which human resource management policies and production methods are needed to follow one consistent model throughout the local operations of the corporation
Which of the following merged to form the International Trade Union Confederation (ITUC)? (Check all that apply.)
The World Federation of Trade Unions The International Confederation of Free Trade Unions
Which of the following is the dominant institution for reducing trade barriers and pursuing free trade on a global scale?
The World Trade Organization (WTO)
Symbolic European Works Councils
The council representatives refrain from trying to engage in a dialogue with management.
Identify an element of the dimension of financialization called profits via financial transactions.
The increased significance of the financial activities of nonfinancial firms
The requirements for what data must be given to the council and whether employee representatives are elected by the employees or appointed by elected union officials
The national law of the country in which a firm is headquartered
In contrast to free trade arrangements under the World Trade Organization (WTO) and the North American Free Trade Agreement (NAFTA), residents of the European Union (EU) _____.
are allowed to freely work in any EU country
Which of the following signify that financialization is like globalization? (Check all that apply.)
They both have an impact on economic and political power. They both include a group of interrelated structural changes in the economy.
What is the primary intention of the European Works Council directive?
To build a cooperative dialogue between labor and management
What is the primary objective of the International Trade Union Confederation (ITUC)?
To promote consultation, communication, and cooperation among unions
Why do private equity funds use leveraged buyouts?
To take over firms that are considered underperforming
Identify the effects of globalization and financialization. (Check all that apply.)
Traditional industrial unions such as the United Steelworkers and United Auto Workers are now general unions with very diverse memberships. Financialization has broadened inequality and diverted investment away from the shop floor.
The World Trade Organization (WTO) system lets individual countries institute standards that are "necessary to protect public morals [or] ... human, animal, or plant life or health" or conserve "exhaustible natural resources" as long as such standards _____.
are not trade barriers
A feature of European Works Councils is that they do not _____.
negotiate certain terms and conditions of employment such as wages
The North American Agreement on Labor Cooperation (NAALC), which is included in the North American Free Trade Agreement (NAFTA), is intended to _____.
prevent social dumping