Global business and private equity strategies: current challenges to labor

José Ricardo Barbosa Goncalves¹ and Maria Alejandra Caporale Madi²

¹Rua Doutor Olimpio da Silva Miranda 68, Cidade Universitária, Campinas- SP

13083-010, Brazil.

₂Rua Sergipe 627, apto 144, São Paulo, SP 01243-001,Brazil.

Corresponding author email: alejandra_madi@yahoo.com.br

Accepted 12 February 2014

Abstract

In the last two decades, the private equity buyouts as an alternative investment reveal the strategies that have been adopted to guarantee high returns founded on market mechanisms. The leveraged buyout business model of the private equity firms, as the main agent for mergers, has both evolved from and fed a broader process of increased financialisation of corporate behavior and economic activity. This paper presents an analysis of the labor challenges as a result of the private equity firms´ management model focused on financial engineering. After a brief overview of the private equity buyout investments, we discuss the labor challenges in order to highlight the growing inequality between the worsening working conditions compared to the enrichment of the private equity partners.

Keywords: Business, Private equity Strategies, Labor.