Changes in the Contract Management Then And Since - Essay Example

?Contract Management Table of Contents Table of Contents 2 Introduction 3 Changes in Trade and Technology after the World War II which are affecting US Corporations 4 Changes in the Contract Management Then And Since 9 Conclusion 13 References 15 Introduction Schmidt (2001), in his journal titled “Employment in the New Age of Trade and Technology: Implications for Labor and Employment Law”, argued that external industry changes (including political as well as economic alterations) impose significant effects on employment environment, acting as major forces to drive trade and technology advancements. As illustrated by Schmidt (2001), after World War II, policies were formulated with the objective towards the growth of world economy. Correspondingly, policymakers witnessed international trade to be an essential element for the better economic growth. International trade was also observed to be developing at a rapid as well as continuous pace. For instance, during the post period of World War II, various political agreements were formulated and implemented with the intention of reducing or eliminating trade barriers amid nations. In this respect, General Agreement on Trade and Tariffs (GATT) was recognized to be the most effective trade policy for the US towards increased trade opportunities in the global periphery (US Department of State, 1999). It was also in this period that development of technology became quite apparent and swerving as it was perceived to minimize the distance among countries as well as reduce geographical constraints; thus, facilitating better trade in the international context (Schmidt, 2001). The progress in telecommunication technologies also facilitated with better communication opportunities for better exchange of goods and information amid countries. The advancement of technology was also identified to improve the transportation services between countries for effective conveyance of goods through international trade. Companies, therefore, became gradually inclined towards adopting advanced technologies for producing quality superior products and/or services to be traded internationally (Flamm & et. al., 2005). In this perspective, the paper will intend to discuss about the changes in relation to trade and technology which were observed after the era of World War II based on the changes identified in the journal of (Schmidt, 2001). Moreover, the discussion will also emphasize on the impact the changes in trade and technology have on contract management even in the current era. Changes in Trade and Technology after the World War II which are affecting US Corporations In the post World War II period, it was observed that trade agreements have been formulated by policymakers with the intention of minimizing or eliminating trade barriers amid countries. Apparently, there was rapid development in trade activities and technology since the post period of World War II. Since then, the US has been committed towards the achievement of free trade opportunities with the objective of developing its economic stability and political growth. The open trade activities were further expected to facilitate the country in developing its economy as well as building healthy relationship amid nations. It was also observed in this context that the US was more concerned about trade liberalization with the aim of conducting trade activities with minimized barriers among countries. In order to acquire a liberalized trade policy, the US further formulated GATT with the intention of reducing trade barriers which was signed by 23 countries in the year 1948. The ‘Free Trade Agreement’ also initiated after World War II, i.e. North American Free Trade Agreement (NAFTA) again facilitated the US corporations to perform their business operations in worldwide market segments with minimized trade restrictions. As a consequence, the rapid expansion of international trade activities increased market competition among corporate sectors of the US minimizing the inflation pressure for protecting the domestic economy from the drawbacks of international competition (Ferraro & Ginocchio, 2013; Urata, 2002). After World War II, the trade policy of the US government was observed to be based on certain trends on the basis of which changes were made to acquire free trade policies. These policies further facilitated in acquiring economic development and reducing political pressure on employment and trade contracts. The changed trade policy further assisted the US in obtaining a better trade power in relation to the international commercial policies formulated. The political parties of the country were also perceived to be more desirable to trade liberalization than protectionism. In this context, the US was also identified to be adopting non-tariff measures in order to control the international trade activities for the benefits of its employment environment and trade affairs (Baldwin, 1984). Thus, it can be affirmed that with the growth of international trade, countries were able to execute trade activities with other countries in an effective manner. Moreover, rapid expansion of international trade played a vital role to consolidate the economies of the different countries into a single economy. Apart from the increasing openness of economic trade policies, such alterations also influenced the significance of national sovereignty which further motivated the countries to make according changes within its economic policies. As stated by (Schmidt, 2001), international trade and advanced technologies have influenced the labor forces in relation to ‘labor and employment law’. After World War II, labor regulations were formulated in accordance with the Occupational Safety and Health Act of 1970 (OSHA) in order to offer heath as well as safety provisions to employees who are engaged with hazardous chemical compounds therefore bringing a substantial change within the employment contracts between employers and employees. Moreover, during the post period of World War II, a ‘workers’ compensation movement’ was organized as a revolutionary response to increased rate of industrial accidents. The development of communication as well as transportation services has further played a vital role to developed ‘national labor policy’ with the intention of protecting the rights of employees. Additionally, these changes in trade agreement and technological changes initiated the US workforces to compete with worldwide labor forces with the aim of acquiring better capital investment from the international traders and thus ensure economic prosperity. In this respect, contracts were formulated with the objective of executing business operations successfully in this changing business environment, where equal significance was to be rendered towards organizational efficiency and employee interests (Schmidt, 2001). In the period after the World War II, there has been a substantial development in the technological field as well within US and other western nations, primitively. The technological factors were also observed to be affecting the corporate sectors and trade activities in the US and on global prospects. As analyzed by Schmidt (2001), the development of technologies in the transportation sectors enabled international traders to transport goods at lower costs. Moreover, the technological progress also developed the communications system which was later found to be quite effective in enhancing efficiency throughout the supply chain which was by then being considered as major challenge with respect to international trade. The communication system further enabled effective exchange of important information among countries which again strengthened political collaborations and therefore facilitated trade policies as well (Terborgh, 2003). Trade and technology is observed to develop rapidly as well as consistently after the period of World War II which is today apparently present as an intertwined constituent, which is necessary for obtaining international competitiveness. The increased trade activities and adoption of advanced technologies by corporate sectors have increased market competition for firms to sell products and/or services. Additionally, these factors were also perceived to be responsible for building a competitive business environment on a global context. When assessing the similar changes in the current era, it can also be observed that the growth of trade activities and technological factors has altered the labor force policies and laws in order to protect the rights of employees when focusing on international trade and also as a measure to protect national sovereignty (Terborgh, 2003). Apparently, in its course of development, the US has acquired labor and employment laws such as the OSHA, with the intention of offering better health and safety provisions to workforces indulged with hazardous chemical components. The assembly-line technology were also developed which were incorporated by industrial sectors. However, in the initial phase, such changes gave rise to various conflicts as major significance was being provided to organizational profit concerns rather than employee interests. As a consequence, increased number of industrial accidents occurred, motivating movements to protect workers’ compensation. The nineteenth century was also witnessed with the rise in industrial revolution and trade unions for the intensity of mass production and progress of trade activates within the US economy which were executed as a measure towards international trade. Hence, in response to these revolutions, strategies were adopted by the government in terms of trade policies and employment laws (Schmidt, 2001). In the twenty-first century, with the development of advanced technology has resulted in the reformation of organizational structure. Correspondingly, changes can be observed in the managerial techniques of the corporations when attempting for or performing international trade. The modification of the organizational structures and management practices altogether has also altered employment relationship by a substantial extent. In this respect, the long-term relationship of employees has been changing due to the rise in outsourcing of employees. These aspects have intensified the market competition for workforces in the US market segments due to the availability of low-paid labor forces in emerging countries in the current era. It has been also been observed that the US firms have often deciphered their inclination towards implementing vertical disintegration approach and adopting different managerial techniques in terms of profit centric approach, benchmarking and core competencies in order to execute business activities effectively in the competitive as well as changing market segments. In this context, the US workforces have changed from ‘internal labor market’ concept with administrative policies and regulations to an ‘international spot market’ for workforces without any specific rules or regulations to govern the workforces (Schmidt, 2001). Moreover, the development of technologies has assisted the US manufacturing firms to produce superior quality of goods facilitated with the investments made by government towards the development of technological factors as well as their economic production capacity on the whole. Additionally, the free trade agreements have assisted the US manufacturing corporations to conduct trade activities successfully. The employees of the manufacturing firms were also contracted on a permanent basis being offered with better training facilities in order to develop their competencies (Harris & Moore, 1992). The development of trade and technology has undoubtedly changed the firm structure as well as management practices in order to cope up with the changing and competitive business environment. Nowadays, the employers can be observed to be highly inclined towards acquiring adequate information in relation to the employee performance with the assistance of advanced Information Communication Technologies (ICT). Furthermore, the employers with the virtues of ICT were able to manage as well as track the activities of employees. In this respect, the employers could develop long-term relationship with productive employees with the intention of performing its business activities competitively in the worldwide market segments. However, the US companies, with the adoption of latest technologies in their production operations have been identified to negatively affect the employees indulged with the operations opting for massive reductions or layoff causing unemployment within the economy which therefore required adequate concern from the governing body (Schmidt, 2001). Changes in the Contract Management Then And Since Globalization has apparently altered the management practices in international firms in today’s context. The businesses as well as market competitions have been perceived to intensify with the integration of world economy with increased trade activities (Bayoumi, 2011). The theory of outsourcing is also argued to have influenced the workforces in the US wherein the US firms in this competitive business environment were observed to acquire low-paid competent workers from other emerging countries in production or manufacturing operations. The companies with low-paid skilled workers possessing advanced technological knowledge have reduced training facilities which also reduced the cost of these companies. In this context, companies with low-paid workers were therefore able to conduct operations competitively and profitably in the worldwide market segments more efficiently than compared to the previous generations. The US corporate sectors, with regard to these changes, in the business and market environment has adopted IT as a major constituent in designing ‘labor and employment law’ with the intention of developing better relationship with employees. Corporate sectors have also been using ICT strategies for enhanced flow of information which have been utilized by firms with the aim of providing better training services to its limited number of employees. The technological development has also assisted firms in producing innovative as well as superior quality products. Thus, the changes can be apparently observed to have affected the employment relationship and contract management of employees (Baker & McKenzie, 2011). During the twentieth century, the US firms were identified to be adopting lifetime employment management strategy with the objective of executing business operations proficiently in the competitive and changing market atmosphere. During this period, in the post occurrence of World War II, the US firms faced less competition on a global context. At that time, the manufacturing sectors of US were competitive due to better technological support in comparison to other nations or international trade markets. These corporate sectors made huge investment towards employees in relation to the development of their skills and knowledge focusing on long-term association. Correspondingly, the large-scale companies hired employees or labor forces and developed their skills in accordance with their job requirements. Illustratively, IBM is recognized to be the first corporate sector of the US to have adopted employees on a long term basis. The management of such large corporations was also identified to adopt critical appraisal methods with the objective of appraising employees for their effective performances and therefore keeping them satisfied within the organization. The employers also formulated and implemented administrative policies to be complied in order to ascertain improved performances of corporate sectors (Schmidt, 2001). The US firms, specifically from the period of 1970s to 1980s were observed to face intense competitions from emerging economies such as Asian countries. Various US corporate sectors were also recognized to be inefficient in conducting their business operations in this competitive worldwide market conditions. Contextually, the US firms were perceived to be acquiring relentless expansion of the internal structures of the current corporate sectors in relation to the external economies which were developed due to the interactions amid firms. The US firms were also observed to be facing international competition from the developed countries including Europe and Japan. Another change that was apparent in this period was the shift of consumer demand in the US market segments towards services. In this respect, the manufacturing sectors were dominated by the uprising service sectors. The increased competition in the worldwide market segments and development of ICTs further facilitated employers in managing and directing the activities of firms in the foreign market segments. With such virtues, the employers, with the assistance of improved ICTs, were also able to change the contract management laws of employees in the other countries being in trade relationship with (Sturgeon, 2002). In addition, the US corporations had also changed the life employment management practices due to the development of trade activities and technologies to outsource employees. In this regard, the employers were observed to minimize investments on training facilities in order to acquire flexibility in the production process. The employers also intended to acquire employees possessing adequate knowledge and competencies required to perform activities effectively in such competitive business conditions wherein the workforces employed were paid on the basis of their productivity. It has been observed in this regard that Volkswagen adopted subcontracting or outsourcing management practices with the objective to build superior products to compete successfully in the worldwide market segments. Volkswagen also acquired four subcontractors for assembling and producing operations of trucks (Sturgeon, 2002). Focusing on the present business scenario, highly competitive and changing market conditions can be observed being strongly influenced by globalization and development of technologies which has further altered the contract management process of the US firms in order to compete in the worldwide market segments (Free, 2012). In this respect, the corporate sectors of the US are seemed to adopt a new American model with the intention of executing their business operations successfully in the competitive business conditions. The US firms were also observed to adopt the concept of outsourcing in an immense manner which resulted in ‘deverticalization’ of the industrial sectors. In this context, companies were segregated into small segments or firms which were specialized in certain core competencies (Sturgeon, 2002). The US corporations were also witnessed to adopt ‘modular production network model’ in order to manage the continuous changes occurring in terms of employment contracts. In accordance with this model, the US firms shifted their manufacturing activities to other competent firms with the aim of producing superior goods and/or products at lower costs than the costs it had to incur through in-house production (Gangnes, 2004; Sturgeon, 2002). The large corporations also diversified their business operations in subsidiaries in various countries for executing business activities in a cost-effective manner (Assche, 2004). To be illustrated, in the case of Apple Incorporation, the company had adopted a contract manufacturing policy with the intention of producing an increased volume of products in order to meet the augmented demand in the worldwide market segments. Contextually, Apple had established contract with an electronic company named SCI Systems (Sturgeon, 2002). Taking this particular example, it can be further stated that the US firms outsourced their production or manufacturing activities to other competent firms to produce an augmented quantity and superior quality of products. The US branded companies were further observed to focus on reducing their internal manufacturing processes owing to the virtues of contract manufacturing which enabled these companies in effectively managing the production activities in accordance with the demand in the market segments (EMSNow Media, LLC, 2007). Conclusion Every sphere of the business environment has been witnessed to transform since the occurrence of World War II fundamentally owing to the rising effects of globalization facilitating international trade and development of technologies. Various political and trade agreement have been implemented in these decades with the intention of reducing or eliminating trade barriers and therefore, obtain the complete benefits of international trade relations. For instance, in the US, free trade policies have been formulated with the purpose of executing trade activities amid nations with minimum government interventions which has created an apparent influence on employment contracts in the global periphery. It was in the similar context that the manufacturing sectors of the US firms have developed with to adoption of advanced technologies. Increased international trade and technological progress, even in this current era, continue to intensify trade relations as well as business conditions in the global context. However, these changes have today become a continuous notion equally apparent than that observed in the post World War II period. Notably, the level of completion augmented drastically in the present day context than that witnessed in the previous centuries. Undoubtedly, the intense market conditions and changing business atmosphere have altered the management practices and organizational structures substantially which also had a strong effect on employment contracts. For instance, the US corporations outsourced in order to acquire low-paid skilled workers for the production or manufacturing process. These changes have further impacted contract management with respect to employment relationship and production processes. The US firms were also observed to depend more on outsourcing or subcontracting procedures for acquiring competent employees in the 19th century than that observed in the recent phenomenon. References Assche, A. V., 2004. A Theory of Modular Production Networks. Journal of Economics and Management Strategy. [Online] Available at: http://www.academia.edu/912099/A_Theory_of_Modular_Production_Networks [Accessed May 21, 2013]. Baker & McKenzie, 2011. U.S. Employment Law for Global Employers. Doing Business in the United States. [Online] Available at: http://www.bakermckenzie.com/files/Publication/568081e6-9132-4b3d-9a78-38c921ce9dcf/Presentation/PublicationAttachment/e0838913-10c5-46aa-9ce2-3e88559b4b59/bk_employment_uslawglobalemployers_aug11.pdf [Accessed May 21, 2013]. Baldwin, R. E., 1984. The Changing Nature of U.S. Trade Policy since World War II. Chapters. [Online] Available at: http://www.nber.org/chapters/c5828.pdf [Accessed May 21, 2013]. Bayoumi, T., 2011. 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