CHAPTER ONE

INTRODUCTION

1.1 BACKGROUND OF THE STUDY

The effect of globalization on the economy of many nations can be traced to as far back as 16th century during the time of Adam Smith, David Ricardo and Reverend Malthus. Specifically, the early influences and contributions of these scholars to labour as input of production had early globalization implications (Hoass and Madigan, 1999). The various theories of international trade evolved from these early contributors. Over the past two decades, the Nigerian economy has become more open and liberalized due to the influence of globalization of the world economy. In Nigeria, The amalgamation of the Southern and Northern protectorates in 1914 by Lord Lugard of England had globalization implications.

Furthermore, the establishment of Nigeria Breweries Plc in 1946 (Nigerian Breweries Plc (2010), Guinness Nigeria Limited in 1963 (Guinness, 2006) and other Multi-National Enterprises (MNEs) had globalization implications.

Driven by technological advances, improved communications, economic liberalization, and increased international competition, globalization has brought in an era of economic, institutional and cultural integration (Ali, 2005). Scholars are not only analyzing the benefits and the deleterious effects of this phenomenon on the employment relations of developed and under-developed nations, they have also stirred up the old controversy regarding the longer-run trajectory of employment relations systems under the pressures of globalization. The contention is whether the industrial relations systems in the context of globalization are converging or diverging. In comparative employment relations, there are contrasting arguments that there are international pressure leading to convergence and national pressures leading to divergence (Martin and Bamber, 2005).

Literally, globalization entails the process of the transformation of local or regional phenomena to global ones. The process encompasses economic, technological, sociocultural, political and biological factors (Croucher, 2004). Essentially, the process is holistic and transcends the interaction and integration among people, companies and government of different nations. Friedman (2000) in Yazdani (2009) stresses that the globalization process of today is farther, faster, cheaper and deeper. This position signals the fact that globalization is given impetus by some key drivers such as international trade and investment across national frontiers, liberalized economic policies, technological advancements, information and communication, and migration.

The multi-dimensional nature of globalization phenomenon leads to the multiplicity of the concept and definition. Ritzer (2004) characterizes globalization as the worldwide diffusion of practice, expansion of relations across continents, organization of social life on a global scale and growth of shared global consciousness. Implicit in this definition is the stress on globalized practices, social interrelationships, and the consciousness of the global world as a whole among key players that involve societies (inter governmental agencies, nation states, companies and individuals (Robertson, 1991, 1992). In consonance with the world culture theory, Robertson (1992) advocates a global world thinking that replicate pattern of socialization, internationalization, individualization and generalization of the consciousness of human kind. Ostry (1977) in Nwosu and Oludayo (2007) opines that among the many domestic policies and institutions that are being and will continue to be subject to the pressures of globalization, none is more fundamental or more politically sensitive than industrial relations.

Industrial relations comprises the institutional arrangements which govern or significantly influence labour market outcomes. In every organizational set up, two indispensable groups are easily discernible. These groups are labour and management. They constitute the pivot upon which the activities of the organization revolve. In times past, early employers saw labour solely as a factor of production to achieve their business objectives. Batstone (1979) quoted by Nwosu and Oludayo (2007), makes it clearer by saying that business objectives were personal to employer and cannot be influenced by labour. In other words, labour had no interest other than provide their services and get paid their entitlements; thus, no input or any role to play in the industrial politics. Having being employed to work, the relationship was that of master-slave. Moreover, Ojo (1990) in Nwosu and Oludayo (2007) asserts that this master-slave relationship began to give way to a formal labour relationship with the collapse of slavery and the rise of industrial revolution in the 18th and 19th centuries.

The industrial revolution ushered in the progressive formalization of the work place relationship in the form of employment contract. This gave the worker the freedom to examine the job offer, its conditions and prospects before accepting the services or work. Lee (2001) in Izuogu (2007) defines industrial relations as a process by which employers and employees relate regarding the terms and conditions of employment in order to ensure industrial peace and harmony in a workplace. He posits that industrial relations which can also be referred to as labour management relations, can be achieved through collective bargaining and participatory management through the adoption of teamwork, effective communication and good work ethics.

A range of typologies have been proposed by industrial relations experts that all include three characteristics namely union density or the percentage of union members among the employed, collective bargaining patterns such as multi-employer or individual firms, and the scope of legal mechanisms which extend the terms of collective agreements to nonunion workers. Industrial relations is as old as industry and a brief historical background suggests that it has its roots in the industrial revolution which created the modern employment relationship by spawning free labour markets and large-scale industrial organizations with thousands of wage workers (Kaufman, 2004). As society wrestled with these massive economic and social changes, labour problems arose such as low wages, long working hours, monotonous and dangerous work, and abusive supervisory practices which led to high employee turnover, violent strikes, and the threat of social instability (Betchoo, 2014).

Intellectually, industrial relations was formed at the end of the 19th century as a middle ground between classical economics and Marxism. Institutionally, it was founded by John R. Commons when he created the first academic industrial relations programme at the University of Wisconsin in 1920. Early financial support for the field came from John D. Rockefeller, Jr. who supported progressive labour-management relations in the aftermath of the bloody strike at a Rockefeller-owned coal mine in Colorado. In Britain, another progressive industrialist, Montague Burton, endowed chairs in industrial relations at Leeds, Cardiff and Cambridge in 1930, and the discipline was formalized in the 1950s with the formation of the Oxford School by Allan Flanders and Hugh Clegg (Ackers and Wilkinson, 2005).

The biggest question today is regarding the impact of globalization and its dimensions on employers, employees and their relationships. Supporters of globalization like Onah (2007) asserts that globalization enhances free trade, increases foreign direct investment, increases employment and boosts earnings while critics like Izuogu (2007); Izilibili and Okiri (2003) (also cited in Izuogu, 2007) and Ball, McMcCulloch, Frantz, Gerinder and Minor (2002) argue that globalization in reality has a deleterious effect on the wages, employment, working conditions of most, though not all developing country workers. These negative effects they believe are resulting from competition of multinational enterprises and selective opening of markets to international trade in favour of industrially advanced countries.

Going by Yusuf’s (2003) assertion, virtually all industries and sectors are affected by globalization and the banking industry is no exception. Economists believe that the onset of the global integration means the globalization of industrial services. Many banks had inherent nationality but at the beginning of the 21st century, the biggest banks in the industrial world have become complex financial organizations that offer a wide variety of services in the international markets and control huge amount of money and assets (Adekanye, 2006). Supported by latest technology, banks are working to identify new business niches, develop customized services, implement innovative strategies and capture market opportunities globally. Orya (2013) makes it clear by saying that the Nigerian banking industry has shown considerable abilities to raise capital and compete fairly that has drawn attention locally and globally. Consequently, though complex, new concepts are being introduced in the Nigerian banking industry as well as creation of branches outside the country all in a bid to compete with other banks worldwide. Thus, another important element of globalization in the banking industry is the changing attitude and perspectives of the workforce.