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occurred during “regulated capitalism”, with the focus on capital over labour. Finally, the co-respective from of corporate behaviour should cease in favour of unrestrained competition. Neoliberal ideology, which worships the free market, denies any positive function of the state apart from its coercive functions (McDonough and Dundon 2010).
Globalization has led overall to a weakened role and position of labour throughout the world. The greatest threat to labour is the constant relocation of production location which is a control strategy employed by transnational corporations. As a result, it has become challenging for labour to organize and this goes in hand with the decline in trade union density, influence and power across many developed countries (Lapavitsas 2013). In addition, new production regimes such as world class manufacturing reduce collective labour organisation.
Financialization has led to a growing amount of accumulated wealth in the possession of a few financial institutions and people. This resulted a redirection of investment into the economic financial sector rather than the productive sector. The measures of success in a corporation have become short-term performance goals and quarterly returns (Clegg et al. 2015). In addition, managers continue to move jobs quickly due to an increased mobility thus also to losing stakes and interest in a health of the corporation. Through financialization, regulations that restrict the unrestrained movement of finances across borders have been systematically eliminated (McDonough and Dundon 2010). The neoliberal SSA has paved the way for financialization to take root in all aspects of life and across all institutions which is manifested that there is an increasing focus of finances across traditionally non-finance enterprises.
Challenges and debates for HR
Neoliberalism along with financialization, which grew out of it, pose great challenges to corporations and especially to HR departments. Increasingly, financialization and HRM have conflicting and contrasting ideas about the resources and employment relations in a company.
Corporations and employee relations are much affected through shareholder value orientation. Firms must engage in a range of short-term targets and metrics along with constant restructuring to minimize costs and increase the return of investments for shareholders. The perpetual restructuring involves often a headcount reduction, centralization, precariousness of work, outsourcing and the use of fixed-term and peripheral employment (Van der Zwan 2014), even when the organization is strong in regard to growth and profit, thus reducing employment protection and stability (Palpacuer et al. 2011). Financialization has led to a wage reduction of common employees across capitalist nations which resulted in a shrinking of labours share on national income.
Macroeconomic inequality is reflected in corporations where there is a consistent pattern of wage inequality due financialization. Employee wages have been falling in recent decades whereas top managements remuneration has dramatically increased. Financialization has greatly benefitted managers of large corporation because their reward has been tied to the corporations performance on the stock market (Van der Zwan 2014, 107) and therefore managers have become the champions of constant organizational restructuring. The effects of constant restructuring are negative for corporations as well as employees (Cushen 2013 .
Thompson (2003) developed the “disconnected capitalism thesis” which provides an explanatory framework to connect the increasing significance of financialization in the economy to largely negative outcomes for employment relations. He sees a triple disconnect in the industrial relations system “between employer objectives in the work and employment spheres; between managerial levels and layers within firm governance; between corporate dynamics and state regulation in national business systems” (Cushen and Thompson 2016, p. 354). The core disconnect are the objectives of the manager who are looking for employee engagement, commitment and discretionary effort but at the same time lack the ability to support their employees in establishing a trust and support relationship with job security, investment in training and development along with career development (Thompson 2016).
Thus, financialization undermines the ability of a corporation to adopt “human capital” or “resource based” approaches to HRM (Thompson 2013). These approaches see employees as valuable resources and a potential competitive advantage. Therefore organizations should invest, engage, develop and commit to its employees. However, due to financialization and performance metrics, employee-related expenses are viewed not as investments but rather as costs to be minimized (Cushen and Thomson 2016).
Blackburn (2006) argues that corporations have become “disposable” which means that financial gains are not reinvested into the corporation but rather are distributed among shareholders. Managers must keep corporations share prices high for current and potential investors through constant restructuring and increasing control over costs. Shareholder value orientation and constant organizational restructuring severely weakens the HRM position which promotes sustainable high-performance work systems.
The dominance of financialized pressure create problems for HR to generate highly committed and motivated individuals. Cushen (2013) argues that this is a difficult and a counterproductive endeavour as employees “increasingly view themselves as an insecure disposable commodity rather than a valuable organizational asset”. Such processes and views “erode the ability to sustain high-trust relationships at work between employers and employees” (Dundon et al. 2017, p. 37). Palpacuer et al. (2011) found evidence in their study that through the marketization of HRM practices and policies, junior employees were distancing themselves from the companies to the extent that there was no trust relationship with their managers which led to unsatisfied work force and low job performance (Palpacuer et al. 2011). Furthermore, some workers in management positions are more treated as internal customers. They may not feel disposable but they are seen as contractors and not as somebody who has a stake in the company and therefore they are the object of many training initiatives in order to maintain a decent level of motivation to get a sufficient work performance.
Lastly, Palpacuer et al. (2011) argue that financialization, globalization and the marketization of HRM have proven to be destructive for collective dynamics and values because individuals are more exposed to corporate performance pressures to achieve financial targets and to perform more work with less resources in an environment that is already characterized by much uncertainty. Individual exposure along with other factors such as outsourcing or the externalization of labour limit the prospects of collective labour action and a decreased level

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