New Economic Policy (module 1)

New Economic Policy 1991 The process of economic reforms was started by the government of India in 1991 for taking the country out of economic difficulty and speeding up the development of the country. The centre of economic reform has been liberalization, privatization and globalization. Definition: Economic policy refers to the policy of a given government in an economic field. It covers the systems for setting interest rates and government depicts as well as labor market, national ownership.

Globalization and HR The world is shrinking in all major respects. People, goods, capital and information are moving around the globe like never before with faster communication, transportation and financial flow, the barriers between nations have disappeared and the world is becoming a borderless market. In the 21st century, global companies seem to virtually dance all over the place. They are not constrained by national borders. Most corporations cover lot of ground while trying to exploit an opportunity in any part of the globe now. BMW builds cars in South Carolina. Mc Donalds sells hamburgers in China. Coca Cola has over 80 percent of its sales outside of its home market. Nestle has 50 percent, Proctor and Gamble 65 per cent and Avon 60 per cent. They source and coordinate resources and activities in the most suitable areas, to offer cost-effective products and services to customers all over the globe. Businesses can hire, source and sell wherever they want now. For many of these global corporations, with the entire world as a market, national boundaries have become virtually irrelevant. It is not without reason that IBM dropped in organizational structures based on country and recognized into 14 industry groups. In a borderless world, success in business increasingly depends upon offering products and services that are competitive on a global basis, not just on local basis. If the price and quality of a firms products and services are not competitive with that available elsewhere in the world, the firm might be racing towards extinction. Global competition, whether you accept or not, have become a reality in all but the most remote corners of the world. The world, in short, has become a small but a very complex and dynamic neighborhood.

Challenges in Managing a Global Corporation Managing a global corporation in the 21st century, however, could be truly challenging, Global operations have: 1. More functions: Global corporations raise money in one market, buy raw materials in other markets, manufacture in a different location, obtain components from another country and the products are being sold in several other places. The corporation has to tackle multifarious design, production, distribution and servicing problems in addition to internal issues.

2. More heterogeneous functions: There are bound to be vast differences in the way each of the above functions is being carried out, depending on country-specific cultural differences. 3. More involvement in the employees personal life. 4. More complex external influences, such as form societies and governments. 5. More cultural differences (with completely different languages foods, values, beliefs and ways of doing things). 6. Different approaches to management, since the population of expatriates and locals varies.

LPG ERA LIBERALISATION Liberalization means to unshackle the economy from bureaucratic cobweb to make it more competitive. Following are its chief feathers: To do away with the necessity of having a license for most of the industries. Freedom in determining the scale of business activities. Removing restrictions for the movement of goods and services from one place to another. Freedom to fix the price of goods and services. Reduction in the rate of taxes. Freedom from unnecessary control over economy. Simplifying import-export procedure. Simplifying the process of attracting foreign capital and technology.

PRIVATISATION

In brief, privatization means such an economic process through which some public sector undertaking is brought either partially or completely under private ownership. Broadly speaking, establishing in private sector instead of a public sector is also privatization earlier reserved for it or transferring its production, without depriving it, to the. Not only has this, depriving public sector of the job of production which was private sector also amounted to privatization.

Its chief features are given below: Reducing the role of public sector and increasing the role of private sector. Reducing fiscal burden of the government. Reducing the size of the government machinery. Speeding up economic development. Improving management of enterprises. Increase in government treasury.

Increasing competition by opening industries reserved for the public sector to the private sector. GLOBALISATION

Globalization means integrating the economy with the rest of the world. Following are its chief features: Free flow of goods and services in all the countries. Free flow of capital in all the countries. Free flow of information and technology in all the countries. Free movement of people in all the countries. The same conflict solving technique in all the countries.

Objectives of Economic Reforms Following are the objectives of Economic reforms:

Modernization of the industrial system of the country. Encouraging private investment. Attracting foreign investment. Eliminating unproductive controls. Connecting India Economy with the world economy.

Controlling fiscal deficits. (Fiscal deficit comes into play when the total expenditures of the country exceed its total incomes.) Increasing foreign exchange reserves. Controlling unprofitable industrial units in the public sector.

Political-Legal: The political environment covers the impact of political institutions on the HRM department. In a democratic political setup there are three institutions, which together constitute the total political environment. They are - 1) the legislature, 2) the executive and the judiciary.

The legislature, also called Parliament at the central level and Assembly at the state level, is the law making body. The plethora of labour acts which are in force are enacted by the legislature. The executive, popularly known as the government, is the law-implementing body. The legislature decides and the executive acts. The main function of the judiciary is to ensure that both the legislature and the executive work within the confines of the Constitution and in the public interest.

Economic environment Economic environment refers to all those economic forces, which have a bearing on the HR function. Growth strategy, industrial production, agriculture, population, national and per capita income, money and capital markets, supplier, customers, and industrial labor are the components of the economic is globalization.

Economic Environment: - It is very complex and dynamic in nature that keeps on changing with the change in policies or political situations. It has three elements: Economic Conditions of Public Economic Policies of the country Economic System Other Economic Factors: Infrastructural Facilities, Banking, Insurance companies, money markets, capital markets Economic has grown faster Agriculture and allied sectors have grown at about 3.5% per annum in both seventh and Eighth plan period. Exports and imports have grown. Due to tremendous change in export and import GDP has grown.

The mad rush for talented started off in a big way after (LPG) in India, even smaller Indian companies have realized the importance of scaling up there operations, meeting global quality and standards. Automobile textile manufacturing insurance companies are widely exploring around the globe from Indian market right from 1990 onwards. ECONOMIC POLICY AND ITS IMPACT The new policy was introduced in India in the year of 1991. The policy ushered in a new era and was marked by liberalization, privatization and globalization. The new economic policy introduced economic reforms and many structural changes in the economy that considerably changed the business environment and the nature of ones business. The changing business was largely a result of economic reforms. The direction moved from a socialistic pattern of economy and nationalization of major industries towards of disinvestment and increasing privatization. The various strategies and economic reforms that were adopted as a result of liberalization freed Indian economy and industry from the clutches of control and government regulation. The changing business in the environmental context not are brought about structural changes but also changes in the attitude behavioral and values of employees

as well as employees some important changes introduced as a result of new economic policy and subsequent reforms included: a) Increased competition as a result of entry of multinational b) Changes in law c) Structural changes in the working and functioning of an organization. d) Changes in industrial relations. e) In February 1994 the Reserve Bank undertook several steps towards achieving full convertibility on current account when it announced relaxations in payment restrictions for a number of invisible transactions and liberalization of exchange control regulations up to a specified limit relating to I) Exchange earners Foreign Current Account, ii) basic travel quota iii) studies abroad iv) gift remittances and donations. f) Emphasis on consumers rejects environmental protection, improvement in quality. g) Employed commitment increased diversity and more openness to innovation and flexibility h) The Government devalued the rupee in early July 1991 which led to depreciation in the value of the rupee against the five major international currencies by roughly 22%. I) the budget for 1992-93 announced the liberalized exchange rate mechanism. The system introduced partial convertibility of rupee. A dual exchange rate was fixed under 40% of foreign exchange earnings were to be surrendered at the official exchange rate while the remaining 60% were to be converted at a market determined rate. Rationalization of Tariff Structure: The 1993-94 Budget reduced the maximum rate of duty on all goods from 110% to 85% except for a few items including passenger luggage and alcoholic beverages. The 1194-95 Budget further brought down the maximum duty from 85% to 65%. The 2000-01 Budget reduced the peak rate of basic customs duty to 35%. For the year 2002-03, the peak customs duty rate reduced from 35% to 30%. The Union Budget for 2003-04 has reduced it further to 25%. Decimalization: A large number of exports and imports used to be canalized through the public sector agencies in India. The supplementary trade policy announced on August 13, 1991 reviewed these canalized items and decanlised 16 export items and 20 import items. The Exim Policy 2001-02 put 6 items under special list rice, wheat, maize, petrol, diesel and urea. Imports of these items would be allowed only through state trading agencies. Their import will not be theoretically canalized, but for all practical purposes they would be so. Trading Houses: Under the 1992-97 trade policy, export houses and trading houses were provided the benefit of self-certification under the advance license system, which permits duty free imports for exports. Super start Trading Houses are entitled to membership of apex consultative bodies concerned with trade policy and promotion, representation in important business delegations, special permission for overseas trading and special import licenses at enhanced rate. Export processing zones (EPZs), Export Oriented units (EOUs), Free Trade Zones (FTZs), Special Economic Zones (SEZs) are granted exemptions and concessions. Some of the benefits to these units are I) Tax holiday ranging from 5 years to 10 years ii) higher domestic access iii) Duty free import of capital goods and raw materials etc.

Abolition of Industrial Licensing: The 1991 Industrial Policy abolished industrial licensing for all but 18 industries. With the passage of time, most of these industries licensing for all but 18 industries. With the passage of time, most of these industries have also been deli censed. As of now, licensing is compulsory for only 6 industries. These are alcohol, cigarettes, hazardous chemicals, electronic aerospace and defense equipment, drugs and pharmaceuticals and industrial explosives. Dilution of Public Sector: The new industrial policy states that the government will undertake review of the existing public enterprises in low technology, small scale and non-strategic areas. Sick units will be referred to BIFR for advice about rehabilitation and reconstruction. A greater degree of management autonomy will be accorded to the enterprises remaining in the public sector. The government has also announced its intention to offer a part of government shareholding in the public sector enterprises to mutual funds, to offer a part of government shareholding in the public sector enterprises to mutual funds financial institutions, general public and workers. A beginning in this direction was made financial institutions, general public and workers. A beginning in the direction was made financial institutions, general public and workers. A beginning in this direction was made in 1991-92 itself by divesting part of equities of elected public sector enterprises. MRTP Limit Scrapped: The new Industrial Policy scrapped the threshold limit of assets in respect of MRTP and dominant undertakings. These firms will now be at par with others, and not require prior approval from the government for investment in deli censed industries. The amended MRTP Act gives more emphasis to the prevention and control of monopolistic, restrictive and unfair trade practices. Free entry to Foreign Investment and Technology: The 1991 Industrial Policy prepared a specified list of high technology and high investment priority industries wherein automatic permission was to be made available for direct foreign investment up to 51% foreign equity. The industries in which automatic approval was granted included a wide range of industrial activities in the capital goods and metallurgical industries, entertainment electronics, food processing and the service sector having significant export potential. Besides these included a number of other industries which are important for the rapid growth of the economy. But all is not well with our economy at the same time. The industrial sector is facing too many problems like threat of closure political interference in public sector units, unhelpful government machinery (in supplying power or clearing a project), tax burden lack of infrastructural facilities and the like. About agriculture, it has been remarked that the phenomenal increase in production of food grains is only in rice and wheat. Coarse, cereals which are consumed by vast majority of villagers have not registered impressive increase in production. The country has a huge unemployed population of 39 million (1995). Al l other is developing countries to have a problem of unemployment but not as much as India has. All said and done but what should not be lost sight of is the fact that our economy has remarkable relevance. This is borne by the fact that it has faced two wars, successive droughts and floods, enormous expenditure on defense and is sustaining more than 100 crore plus people. The lifestyle and levels of living of the people has vastly improved. Population below the poverty line too has declined. Therefore better growth prospects for India lies ahead. Environment analysis Environmental analysis involves a detected and in depth analysis of factors that affect business decisions, particularly strategic ones. The analysis of these factors helps one to understand their impact and implication for the organization.

Benefits i) Environmental analysis helps to understand the transformation of the industry environment ii) Environmental analysis helps organization to identify the present and future threats and opportunities iii) Environmental analysis makes one aware of the environment and organization linkage. iv) Environmental analysis keeps the managers informed, alert and dynamic. v) Environmental analysis contributes towards identification of risks Limitations i) Environmental analysis does not foretell the future, or does not eliminate uncertainty for any organization. ii) As such reliance is often placed on the information collected through environment scanning. When there is overloading of information one is likely to get lost and become inactive. iii) Environmental analysis an end of itself is not a sufficient guarantor of organizational effectiveness. Therefore, success lies in adventure and strategic risk-taking. Environmental analysis often makes a person too cautious in his approach and he is likely to be overtaken by events. So this analysis should be strategically done. Socio-Cultural Environment: - Influence exercised by social and cultural factors, not within the control of business, is known as Socio-Cultural Environment. These factors include: attitude of people to work, family system, caste system, religion, education, marriage etc. encourages and individualism in organization. It is said that American culture encourages individualism and Japanese culture encourages collectivism. Culture and social system determines whether the people are ambitious. The technology of an economy is dependent on the social and cultural framework. Beliefs and values deal with what is right and what is wrong. The action and reaction of businessman are largely guided by their high value system it depends on attitude of people People are created by culture. The ethos of people has a greatest significance on business. People with their blend of heredity, cultural experience, sub-culture experience influence the working of an organization. Ethical values in business Cultural and social system determine the ethical values in a business. Strong cultural roots infuse ethics. The integrity, honesty of a manager is influenced by ethics. The social and cultural framework determines the extent of exercise of authority. Culture determines the concentration of power and authority. Our society was known for authority and power being concentrated with the king. Socio environment on HRM

Definition of socio economic environment: Socio economic environment refers to the social conditions and economic situation of a country which influences the organizational functioning. Socio economic environment includes how social and cultural factors influence economic activity and production. Influence of socio economic environment Attitude Behavior Values which influence commitment quality and quantity output of employees dedication towards work. Technology used. Socio economic environment also include the following. a) Economic problems like poverty, malnutrition, inflation, etc. which influence on the organization. b) The quality of available human resource in organization and as their knowledge, education level, skills, norms, beliefs etc. c) Social belief, customs, rituals and its influence on working and function of an organization. d) Educational level standard of living, degree of westernization and influence of mass media will considerably influence the demand of certain goods which in turn will influence the organizational productivity of different goods. e) Government policies and programs which in turn influences the economic activity and the organizational functioning. Socio economic environment is today in a fluctuation state and is changing at a very rapid rate due to processes of globalization, technological revolution and developments in the field of media and mass communication.

Culture creates the type of people who become members of an organization. 1. Culture trains people along particular lines, tending to put a personality stamp upon them. 2. The attitude of workers towards work is the result of their cultural background. 3. Time dimension, which influences HRM, has its roots in culture. Hence Socio economic environment is closely related to political environment and which in conjunction with it considerably influences the way in which organization functions and its human resources are managed.

Technological Environment: A systematic application of scientific knowledge to practical task is known as technology. Every day there has been vast changes in products, services, lifestyles and living conditions, these changes must be analyzed by every business unit and should adapt these changes. Technological environment presents the impulsive potential for development of technology. It is one of the important determinants of success of the firm as well as the economic and social development of a nation. Technology is the systematic application of scientific or other organized knowledge to practical tasks. (The technological environment consists of those forces that affect the technology and which can create new products, new markets, and new marketing)

Technology affects the HR function by the following ways 1. With the advent of technology, jobs tend to become more intellectual or upgraded. 2. The employees who pick up and acquaint themselves with new technology, the job will be challenging and rewarding. 3 Technological environments can create innovation that can lead to competitive advantage for an organization 4. Technology lays down the requirements for much of the human interaction in organizations. 5 Jobholders will become highly professionalized and knowledgeable. 6 The impact of technical environment is widespread. Technological impact stretches far beyond the immediate point of technological innovation. 7 Technological environments have a large impact on the natural, cultural and social environment.

Political environment

(i) Political Environment: - It affects different business units extensively. Components:

(a) Political Belief of Government (b) Political Strength of the Country (c) Relation with other countries (d) Defense and Military Policies (e) Centre State Relationship in the Country (f) Thinking Opposition Parties towards Business Unit

Impact a political-legal environment can have on business can cause so many craters so as to make that business look like the moon. It was a political-legal environment that gave birth to the corporate personhood doctrine and that gave rise to the corporate world we live in today. Political-legal environments can only hope to regulate markets, and market regulations will most certainly have profound impacts on business organizations. An example of the kind of bone headed impact a political-legal environment can have on a business one need look no further than American auto makers, the electric car and California. For whatever reasons, several of the auto manufacturers in the United States began developing electric cars which they leased to satisfied customers. Then, California decided it would be a good idea to mandate to American auto makers that if they expected to sell their cars in California they would have to invent some new technology reducing carbon dioxide. Presumably, California expected to see an increase of electric cars being sold by auto makers. What happened is quite the opposite and the auto makers took a hard look at their electric car program, uncertain how to market a "clean vehicle" without admitting the piston engine vehicles are dirty, realizing that much of the profit from a piston engine vehicle comes with the replacement of parts and not so with electric cars and finally, realizing that a State, not even the State of California can make them build technology they don't have, nor can any state even make them keep building the technology they do have, and so, the auto makers killed their own electric car program and this was the impact of a political-legal environment. Legal environment Different legislative policies governing child labor, night shifts work, and bonded labor contract reservation have brought legal environment to be looked by all the companies intending to recruit people for various positions. Legal environment refers to the legislative measures, laws and the legal machinery available to regulated employer employee relationship as well as human resource activities. India has adopted multiple and variety of laws to regulated human resources provisions. The entry of individuals such as women, scheduled caste and scheduled tribe candidates, reservation policy of governmental has raised many legal issues. Not only the structure of employment has been changed but new issues have been developed heading to rise in employment related litigation. The factor act 1948: The act prohibits the employment of women (night work, undergone work, carrying heavy loads.ect) The apprentices act 1961 The Act provides for machinery to lay down syllabi and specific training mutual obligation of apprentices and employees. The employment exchange act, 1959: The act allows all the employees to know about vacancies available in the organization to be prescribed before they are filled, covers all establishment public, nonagricultural establishment employing 25 or more. The contract labor act 1970:

The act applicable to the entire establishment (contract employees) employing 20 or more persons this act tries to regulate employment and abolition of contract lab out in certain circumstances. Bonded labor system (abolition) act, 1976: This act provides for abolition of labor of bonded employees forced or liquidity debts payable to parties who are bent on exploiting the vulnerability of the victim or his family members. The child labor act, 1986: This act prohibits the employment of children below 14years of age in certain circumstances. This has become serious issue in India recently when German firms refused to accept carpets from utter Pradesh because due to the employment of child labour in the carpet industry. Important issues a) Is quality of life important as compared to quantity of work? b) Equity and justice for employee over economic efficiency. c) Plurality and diversity over infirmity standardization and centralism. d) Whistle blowing e) Following ones values or indulging in organizational corruption etc. As a result of globalization and process of liberalization mergers, joint ventures, downsizing etc. have become very common phenomenon. The result in reduction of workforce, forcible termination, changes in work schedule, job conditions, etc. This often leads to many legal consequences inviting litigation from employees or employers. Increased diversity, flexibility of hiring and firing of employees or employers. Increased globalization of work, entry of multinationals etc. has given rise to new legal issues and problems which need to be addressed either through legislation or intervention of judiciary. Thus legal environment and associated structural reforms have influenced HRM policies and programs in India Unions a trade union may be understood as an association of workers or management formed to protect their own individual interests. The role of a union is too well known, not needing and elaboration here. All HR activities- recruitment, selection, training, compensation, IR and separation- are carried out in consultation with union leaders. The role of unions becomes pronounced when a new wage agreement needs to be signed.

INTRODUCTION As the II World War was ending, in 1944 the conference at Bretton Woods proposed to restructure the International economy and created international regimes for money and trade. This proposal gave birth to two Institutions in Washington, D.C. (USA) - the World Bank and the International Monetary Fund (IMF) popularly referred to as the Bretton Wood twins as lenders of last resort to nations in need. The World Bank is a development institution. Some prefer to call it the teaching bank rather than merely a lending bank because it is supposed to be a resource where policy makers round the world are expected to learn sound economic development policies. The primary function of the IMF is to maintain an orderly system of receipts and payments between nations. On the trade front, the General Agreement on Tariffs and Trade (GATT) was launched. Safeguards were also provided to protect workers from unfair practices and to assist those who were displaced. The post-war social contract for workers sought to ensure full employment and comprehensive social welfare. For a greater part of the 1950s and The 1960s the dominant belief in several industrialized countries was that macro-economic monetary and fiscal policy should be geared to secure full employment, while micro-economic policy is expected to regulate inflation. As the post-war recovery boom began to taper off and as the oil prices inflicted heavy blows on most industrial Countries, the inadequacy of the Bretton Woods order began to become apparent. Since 1970s, the world economic scene became volatile and increasingly uncertain (Kurgan, 1988; 54-6): The industrial countries experienced two major recessions since the 1930s. Sharp decline in commodity prices, with the exception of oil and some food items. Volatile exchange rates since the end of the Bretton Woods system of fixed exchange rates in 1973 (also See: IMF, 1996b). Dollar fell sharply against other industrial country currencies during the 1970s and rose Equally sharply during the 1980s. Inflation in the industrial countries rose during the 1970s. Interest rates too rose, but less steeply. Inflation industrial countries decelerated, but not interest rates on a comparative scale. These changes caused external shocks to most developing countries. Krugman (1988; 54-108) classifies them as Following: A. Shocks arising from the Goods Market (both exports and imports): 1. Export shocks: Recession in industrial countries had adverse impact on both the value (price) and the Volume (quantity) of commodity exports from developing countries. Even the export of manufactured goods And services also suffered. 2. Import shocks: Mainly countries importing oil and food suffered from steep rise in their prices. Oil and food Exporting countries benefited. 3. Exchange rates and trade: When the dollar rises, dollar import prices of developing countries seem to fall Less than their export prices. The adverse export effect outweighs the favourable import effect. This is Possibly because prices of commodities are relatively more flexible than the prices of manufacturers. 4. The terms of trade: The terms of trade is defined as the ratio of the average price of a country's exports to the average price of its imports. When a given volume of exports pay for a smaller volume of imports the terms of trade for that country can be deemed to have declined.

WHAT IS STRUCTURAL ADJUSTMENT? Adjustment refers to bridging the gap between what exists and what is required. Structural adjustment is a term which is often used to describe a package of reforms usually advocated by the World Bank and the International Monetary Fund (IMF) while granting loans to countries in deep debt or acute foreign exchange crisis. Adjustment loans are for two different purposes: For stabilization and for structural adjustment. Stabilization refers to short-term measures for instant or quick relief. Stabilization loans are usually Provided by the IMF. The instant measures include devaluation to make imports costlier and exports Cheaper or sudden lifting of state subsidies to balance the domestic budget. Usually stabilization loans have a short-span of 18-months.

Structural adjustment measures are related to adjustment with a long-term focus. These measures take time to make an impact. Structural adjustment lending is usually done by the World Bank. Privatization is one such measure. Structural adjustment lending (SAL) is non-project lending to support programmes of policy and Institutional change necessary to modify the structure of an economy so that it can maintain both its growth rate and the viability of its balance of payments in the medium term (World Bank, 1982). Sectorial adjust Stabilization refers to short-term measures for instant or quick relief. Stabilization loans are usually provided by the IMF. The instant measures include devaluation to make imports costlier and exports cheaper or sudden lifting of state subsidies to balance the domestic budget. Usually stabilization loans have a short-span of 18-months. Structural adjustment measures are related to adjustment with a long-term focus. These measures take time to make an impact. Structural adjustment lending is usually done by the World Bank. Privatization is one such measure. Structural adjustment lending (SAL) is non-project lending to support programmes of policy and Institutional change necessary to modify the structure of an economy so that it can maintain both its growth rate and the viability of its balance of payments in the medium term (World Bank, 1982). Sectorial adjustment is another term associated with structural adjustment in one or more specific sectors. Sectorial adjustment loans are for policy changes in specific sectors like energy, telecommunications and Steel. Social adjustment, a relatively new phenomenon, refers to lending for financing/setting up social Development funds aimed at mitigating or averting adverse human effects of structural adjustment. Such Funding is available for improving education, health, training and retraining of workers affected by SAP and the provision of affordable social safety nets. Enhanced structural adjustment facility refers to increased lending to take care of special Problems/emergency situations such as in several sub-Saharan countries or, for instance, in the case of the December 1994 crisis in Mexico.
In the short-term, stabilization policies are adopted to check the immediate negative consequences in business cycles. They are aimed at reductions in the current account deficits in the balance of payments and the fiscal deficits to sustainable levels. In the long-term, SAP focuses on strategies for balanced and sustained economic growth with due regard for equitable distribution of incomes and wealth through economic reforms. The economic dimensions of these reforms are briefly described later in this volume. Of late, even the IMF has begun to realize that the gigantic and complex problems of heavily indebted

countries require much longer-term focus. Therefore, it too began to advocate longer-term measures on the lines of structural adjustment, statement are another term associated with structural adjustment in one or more specific sectors. Sectorial adjustment loans are for policy changes in specific sectors like energy, telecommunications and Steel. Response of workers to structural adjustments in environment has been studied in following three ways. i) Individual negotiations over collective bargaining: One important structural adjustment is with respect to growth of individual negotiation. Over collective bargaining. The post globalization has weakened the process of collective bargaining has been replaced by individual negotiation. Such individual bargaining is seen in organizations like Dr.Reddys laboratories, Satyam Computers etc. with regard to monetary issues collective bargaining institutions in public sector has also shifted to individual bargaining with respect to non-monetary issues. ii) Individual Grievance Redressed over Industrial dispute: Another important response of workers to structural adjustment is with respect to individual grievance redressed. Employees who are dissatisfied with their employer or have grievance or industrial dispute prefer to either quit the organization or settle the issue on their own through individual discussion with management. If conflict still persists. They prefer to adopt legal measures which again are highly individualistic. iii) Preference to participation in management: Another important response of workers to structural adjustments is the participation of workers in the management. A large number of employees are being involved in the process of management decision making of various types. Management has also involved the workers in the process of sharing of ideas, information or knowledge and development of multi-skills. Response of union to structural adjustment in environment: Union has also responded to variety of structural adjustment in the environment. Instead of taking confrontation, union has been adoption cooperation strategies. The position of the trade union in the post globalization period has been considerably measured. The trade union movement is itself undergoing considerably change as a result of changes, mergers and joint ventures. Trade union as mobiliser of workers strength and unity has now become a statutory tool to regulate the function of employees. --------------------------------------------------------------------------------------------------------------------------------