The Relationship between Employees' Need and the Formation of Trade Union: The Malaysian Manufacturing Company's Experience

Globalization of economy has spread all over the world after the end of the Cold War and has changed the attitude of companies in managing their workforce. Increasing in foreign direct investment has spurred increasing interest in globalization (Gilpin, 2001). Globalization is the era of mega-competition, in other words, the competition among giant transnational company (TNC) which accelerates the race for the bottom to make TNC acquire more profit by further exploitation of labor including of lowering the wages, cutting the welfare benefits, laying off employees, depriving workers of their labor rights, using cheap labor such as casual and even child labor, and also by further destruction of environment which direct to the existence of workplace discrimination. In order to reduce this discrimination, the formation of trade union becomes important in industrial relations. Trade union is an organization of workers that seek through collective bargaining with employers to protect and improve of their members’ compensation, job security, protect workers against unfair dismissal and other issues relating to employment legislation and better working conditions. The two main functions of a trade union are to represent their members and to negotiate with employers. The basic concept behind a trade union is that of increased bargaining and negotiation power which comes from acting together. Hence, by utilizing theory of needs by McClelland, this study aims to examine the relationship employees’ needs and the formation of trade union.