Understanding Basic Labor Forces in International Markets

To help facilitate the best methods of communication, it is important that we have an introduction of international labor and understand the basic labor forces that influence international business. The basic labor forces that influence international business, that will be covered here, include labor quality, labor quantity, labor mobility, minorities, labor markets, and labor unions.

Labor Quality and Labor Quantity

Employers in international business must be efficient, profitable, and competitive; because of this, the quality and quantity of the labor force become of great importance (Ball, McCulloch, Frantz, Geringer, & Minor, 2006). Ball et al. (2006), defines labor quality as to the attitudes, education, and skills of available employees. Knowing the type of work force we are hiring or communicating with is important so we know how to approach issues and make resolve concerning issues that may require personnel with higher education or skills. Not having this information can place international businesses in positions that leave them without competitive edge, paying high wages to the only available skilled or educated workers. Labor quality considerations lead to the importance of labor quantity. Labor quantity is the amount of available prospective employees that have the skills required to help meet the businesses needs (Ball et al.). Labor quantity differentials can determine wage scales, production counts, effect training cost, and management levels. In communicating with the various groups of different foreign countries, labor quality and quantity must be evaluated when determining the how efficient profitable and competitive international businesses can become in these markets.

Labor Mobility

What may seem as a smaller component in labor forces that influence of international business is labor mobility. Labor mobility is "the movement of people from country to country or area to area to get jobs (Ball et al., 2006)". Labor mobility can impact international businesses in both negative and positive aspects. Positively, skilled workers from other areas seeking jobs bring companies experience and education that is needed in many areas and departments. Unskilled laborers seeking jobs can also provide benefit by taking positions in areas that require less education and skill, but are able to be provided effective training for employment. A negative impact of labor mobility includes educated and skilled workers leaving to different areas or countries.

Minorities

Many times minorities tend to be an immediate advantage to international businesses because they are the most readily available for immediate employment (Ball et al., 2006). Minorities help foreign businesses because they speak the local language and tend to be less nationalistic than the majority (Ball et al.). However, according to Ball et al., relying solely on minorities can cause isolation from the world of the majority. A healthy balanced workforce would be advised and needs to be communicated effectively to the management of foreign firms.

Labor Markets

The impact of labor markets on international business needs to be heavily scrutinized by any foreign business investing in another country. Labor markets, as described by Ball et al., (2006), are "the pool of available potential employees with the necessary skills within commuting distance of the employer". These labor markets should be evaluated by researching the work histories, culture, religion, language, and histories of strikes (Ball et al.). Insight on these different areas will reveal how workers handle situations such as striking: violent actions, reasonable notice of strike, or organized by industry unions. The labor market is a strong labor force for international business and these businesses should be well informed on how foreign country's labor markets work or how they are being developed.

Labor Unions

Labor unions are an effective labor force made up of groups of organized workers. Labor unions can be formed from pragmatic or political reasons, but are nonetheless formed to protect the ideology of the organized group of workers. Labor unions use process like the, collective bargaining process, to negotiate labor agreements or to improve wages, improve working conditions, or order strikes (Ball et al., 2006). Effective communication skills are needed when dealing with this labor force.

Conclusion

Understanding these basic labor forces that affect international business is important in procuring successful foreign investments. Given this information, international businesses dealing with these foreign markets need to be sensitive to how these forces interact differently in other countries. Maintaining successful investments means understanding these forces and accommodating changes as they happen.

References:

Ball, D. A., McCulloch, W. H. Jr., Frantz, P. L., Geringer, J. M., & Minor, M. S. (2006). International business: The challenge of global competition (10thed.). New York: McGraw- Hill.