Question

Explain why private-sector labour union memberships are decreasing over time, while public sector labour union memberships remain strong. What are the implications of this trend to the overall firm-level strategy in international business?

Answer 1

There has been a significant decrease in the unions in the private sector because the historical cases have shown to demonstrate the unions in particular industries such as manufacturing among others. However, the shift of the labor from traditional manufacturing industries to newly developed industries such as healthcare, Information technology, or services have shown lower rates of unionization. The workforce has shifted to these industries over the years and because of which there are fewer cases of unionization in these industries resulting in an overall decrease in the unions in the private sector. However, the public sector composition of occupations remains the same as the historical employments and hence the unionization in the public sector has not changed a lot and still remains approximately similar. Hence, the decrease in private-sector unionization can be attributed to the composition of the employments that have shifted from traditional manufacturing industries to healthcare industries and hence the reason for a decrease in unionization. The same isn't valid for the public sector because the composition of occupations has not changed in the public sector and hence the unionization remained the same as it was historically.

With the decrease in unionization practices in the private sector the firm-level strategies can be altered to ensure that the necessities for the formation of unions are reduced and the organizations are able to cater to the employees well and address their needs viably. A firm-level strategy should include the strategies for human asset departments to ensure the work culture and worker engagement practices within the organization are kept at their optimal stages urging no need for union formation and catering to their employees in the best possible manner. Hence, these are the cases that need to be included in the firm-level strategies to ensure that capitalize on the reduced rates of unionization.