Business

Implications
of
Industrial
Relations

Industrial Relations in Past Phase I

Managements policy towards labor :

Autocratic, Authoritarian
Dispute settlement not amicable
No trace of Collective Bargaining
Recourse to unconstitutional means Visit courts for seeking justice
Multiple litigations - Disputes not
expeditiously resourced
Agitational
approach
of
workmen
through lockouts

Management Actions & Status

Phase I
Retrenchment of labour force
Pending
labour
matters
Tribunes,
High
Courts
Supreme Court
Continued industrial unrest
Unions No recognition/role

&

Industrial Relations in Past Phase II

Companies negotiated Labour matters with
union
Major settlement - Signing an Agreement
40% to 42% wage rise
Collective bargaining new method of
resolving disputes
Old method of unilateral decisions discarded
Committees formed to resolve matters
through mutual negotiation
Environment
of
Adjustment
&
Accommodation

Industrial Relations in Past Phase II

(contd.) :
However
Union - Management relations
cordial
But no increase in productivity
Increasing interference of local
union representatives on shop floor
Strong methods - Demoralized
supervisory staff
Restricted flexibility - Mass
employment for coping with
increased production

Industrial Relations in Past Phase III

(contd.)
Mgmts recognition of new union
Mutual negotiations but at heavy
cost
Settlements led to increase in wage
cost beyond expectation
Pragmatic approach of Mgmt
Paying initial wage led to increased
production
1980s
Marked
by
industrial
peace
(productive peace)

Industrial Relations in Past Phase III

Signing of settlements
(contd.)
Introduction of new methods Group working, Flexibility
Resistance to accept - Highly
controversial
Mass violence amongst laborers
caused injuries & hospitalization

Achievements on IR Front
Phase IV
Marked increase in productivity
Restoration of discipline
Constructive
involvement
of
workmen into certain Mgmt issues
Reduction of manpower by way of
natural
separations
Separation Schemes

Sustained
over

productive

&

Voluntary

peace

all

Summary - Phase IV
Litigations continue
Productivity stagnant
Manpower
increase
disproportionate to returns
Violent
inter
union
rivalry
predominant
Lack of universally accepted
leadership at unit level

IR Strategy
Expression of enterprises capacity
to develop sound IR mgmt plan
IR Strategy involves :
Development of Policy statement
Define responsibilities
Identify
resources
for
implementation
Minimize impacts
Identify sub-contractors capacity
to comply with IR responsibilities
Supportive Review measures
Initiate corrective action

IR Strategy Key
Elements
Commitment
&
Mgmt.
responsibility
Planning
Identification
of
legal
obligations relating to IR
IR risk identification & Mgmt.
Planning

Steps Risk Management

Assessment
Issues related to enterprise & IR envt.

Risk analysis
Risk resource planning
Action plan & Mgmt. measures
Contingency planning
- Minimize
adverse impacts
Subcontractors Compliance with IR
& employment obligations

Risk Analysis
High
impa
ct

Moderate
risk

Low
impa
ct

Minor risk

Specify IR
management
measures

Accept

Major risk
Develop
IR risk action
plan

Moderate
risk
Specify IR
management
measures

Measurement, Evaluation
& Review
Procedures
for
Records:
Identification
Filing
Retrieval
Retention

IR

Mgmt.

Internal Review

Establish internal Mgmt. system

Ensure
effective
implementation of IR Strategy
& Project IR Plan
Aims in continual improvement

IR Functions
About how people are treated
Enterprises decision long term view
Achievement of goals

IR Functions
Pluralistic in outlook
Covers relations b/w :
Employer & employee (the
individual relations)
Employers & unions
Employers, Employees & State
(collective relations)

IR Focus
Collective aspect of relations
labor law, collective bargaining
Individual grievance handling,
dispute settlement
Not in team-building - conflicting
with union loyalty
Rules governing employment
relationship prescribed by State laws
Balancing/ minimizing conflicting
interests

Basic objectives of IR
Efficient production of goods &
services
Determine terms of employment,
in interests of employer,
employees & society
Establishment of mechanisms for
communication, consultation &
cooperation

Basic objectives of IR
Avoidance & settlement of
disputes where possible through
negotiation
Provide social protection where
needed
Establish harmonious relations
b/w employers, employees,
organization & State

Collective Bargaining
Every workers right regardless
of his status in society
Arrives at a consensus affecting
2 social partners
even if not resulting in
formalized agreements
Account demands for
individualization implied by HRM

Determinants for Strategic

Approaches
Of Trade Unions - New Scenario
HRMs focus - Enhance enterprise
competitiveness
Enterprises will depend on peoples
skill & productivity
Unions involvement in consultation
mechanisms for new HRM initiatives
Unions focus
enterprise level problem & issues

Determinants for Strategic

Approaches
Unions to be
exposed to Trg. Prgs. in
(contd.)
HRM issues
Unions need - Long-term perspective
for Change Mgmt
E.g. German unions & works councils
have a structure of incentives,
including employment security,
effective representation, &
participation, continuing retraining
in broad skills, which gives them a
long-term perspective in plant
bargaining

Determinants for Strategic

Approaches
(contd.).

Union cooperation depends on mgmt.

attitudes
Management strategy
Open to union not avoidance
Unions to recognize :
Redesigning of Collective bargaining
Lesser quantum of pay increases
than in past
Involvement in flexible & skill-based
elements of pay

Determinants for Strategic

Approaches
IR means(contd.).
of maintaining industrial peace
IR avoids & settle conflicts, disputes
Unions to be active in area of conflict
avoidance, not only resolution
E.g.
HRM practiced in unionized workplaces,
rather than in non-unionized ones
Japanese practices -Blend of collectivist IR
& HRM through Joint Consultation System

Determinants for Strategic

Approaches
IR future(contd.).
- Relevance more at macro level
issues
Enterprise level / plant level bargaining
Formulating overall IR policy
Delimiting boundaries of action for two
other parties
Providing a measure of social
protection through labour law &
judicial bodies
Providing necessary framework for two
parties to function

Determinants for Strategic

Approaches
(contd.)
IR to open
its doors to other
disciplines
industrial sociology, OB &
psychology - not only by
economics & law
Future of IR may depend on
capacity to develop more
collaborative relations, move away
from adversarial ones

Trade Unions' Role Importance

The free trade union movement
democratically elected by workers
& accountable to their
membership
Unions are critical
power to deny human resource
necessary for generation of profits
Unions capacity to strike is ultimate
threat to investor class

Trade Unions' Role

Importance (contd.)
Pay attention to areas
Divides trade unions & their
allies
Competitive markets maximize
use of resources for consumption
Democratic regulation
Capital & development of longterm planning

Trade Unions' Role

Importance (contd.)

Design a "grand bargain"

Distinction b/w rights & standards
Wages & benefits depends on what
enterprise can pay
Level of minimum wage depends on
economic dev. level of country
Reach an agreement
Enforceable labor rights in
exchange for commitments of
long-term development

Roots of Management
Thinking
Many of most successful & widely
used strategy tools today :
framework
cost curves
structure
conduct
Performance (SCP) model
Concept
of
sustainable
competitive advantage

Bringing Discipline to
Strategy
Strategy is handful of decisions
that :
Drive/shape most of companys
subsequent actions
Are not easily changed once made
Have greatest impact on whether
companys strategic objectives
are met

Handful decisions
Selecting companys strategic
posture
Identifying
source(s)
of
competitive advantage
Developing business concept
Constructing
tailored
value
delivery systems

Two Concepts
of
SBU
Corporation
Basis for
Competitiveness of
competition

todays products

Core Competence
Inter-firm
competition to
build competencies

Corporate structure Portfolio of

business related in
product market
terms

Portfolio of
competencies core
products &
businesses

Resource allocation Discrete businesses

are the unit of
analysis; capital is
allocated business
by business

Businesses &
competencies are
the unit of analysis:
top management
allocates capital &
talent

Value added of top

management

Enunciating
strategic
architecture &

Optimizing
corporate returns
through capital

Industrial Relations

Relations between management & union or

between representatives of employees &
representatives of employers
My boat attitude
: Get out if you do not
like
Shared boat attitude : We sail together. Do
not rock it
Our boat attitude
: Our own common
enterprise. Let us
join in our efforts
to better it

Thank You