Case Study On Historical Background

Issue in Global Development

Summary
Jack Ewing, a New York Times journalist, reports about the escalating labor issue between Amazon and its German workers last 2013 in his news article, ‘Amazon’s Labor Relations Under Scrutiny in Germany’. Amazon Inc., considerably the world’s largest e-commerce site is under scrutiny in Germany because of its unfair labor practices. In 2013, Jack Ewing of the New York Times reported that there was an escalating battle between the largest labor unions of Germany versus the Amazon, which, according to Ewing, employs 8,000 workers in its eight distribution centers in the country. One of the major issues that brought the labor dispute is the hiring of foreign employees, which, according to locals, deprive them of the opportunity to compete since foreign workers can be paid at a lower rate. Also, the mass hiring of foreign workers would strain the worker’s efficiency because they would have to meet whatever expectations the company sets or else they risk losing their jobs as they can be easily replaced. Evidently, German workers are concerned that Amazon’s American-style management is threatening to lower Germany’s labor standards.

Amazon was founded by Jeffrey P. Bezos in 1995. Since then, the company’s growth became phenomenal and in just ten years, it was able to establish several fulfillment centers in major cities of Europe and America. Perhaps one of the most notable aspects of Amazon’s clash with German’s labor is the fact that Amazon’s American way of treating their employees does not coincide with Germany’s labor culture. As observed, Amazon employs Taylorism or scientific management, a production strategy popularized by Frederick Taylor, which regards workers in production line and other repetitive work environment as mechanized labor . Unfortunately, this production strategy does not work well with the German people. Accordingly, many Germans resent the American style management and so-called Anglo-Saxon capitalism. In fact, the Amazon labor dispute is not an isolated issue. Wal-Mart, another American company was reported to have backed-out of Germany in 2006. As observed by Ewing, Wal-Mart abandoned Germany because of numerous issues that include a legal battle with one of Germany’s labor organization.

Implication

The scrutiny of Amazon’s labor relations may stain American companies that are operating internationally. There are numerous American companies that have outsourced their production abroad. The catch is, the conflict between Amazon and German workers may trigger similar issues with other American companies that operate in Europe or in any part of the globe. On the other hand, it is also possible that the issue would be detrimental to Germany’s economy since the labor dispute could send a strong message to multinational companies to stay away from Germany in order to avoid labor issues. As a result, there will be a constant struggle between capitalism and labor as companies and labor unions try to seek for an advantageous position.

Relation to Course

The news article provides an opportunity to analyze and reflect on how important labor relations are in achieving business goals. Apparently, this issue is within the scope of business and may apply to local and international business scenarios. Evidently, aspiring businesses should strive to achieve harmony with their environment so they can function effectively and avoid possible losses due to labor disputes.

References

Dodge, M. (1999, July). Finding the Source of the Amazon.com: Examining the Hype of the "Earth's Biggest Bookstore". Retrieved September 2014, from www.bartlett.ucl.ac.uk: https://www.bartlett.ucl.ac.uk/casa/pdf/paper12.pdf
Ewing, J. (2013, March). Amazon’s Labor Relations Under Scrutiny in Germany. Retrieved January 2015, from http://www.nytimes.com/: http://www.nytimes.com/2013/03/04/business/global/amazons-labor-relations-under-scrutiny-in-germany.html?pagewanted=all&_r=0
Pruijit, H. (2000). Repainting, modifying, smashing Taylorism. Retrieved September 2014, from http://m.truty.org/: http://m.truty.org/PDFs/Management/RepaintingModifyingSmashingTaylorism.pdf