LIR 858/Mgt Strat 1

Management as an Actor in Industrial Relations

• Nonunion or Union• Nonunion

– Direct Effects• Lowers profitability

• Indirect Effects– Productivity– Wage Distribution– Internal Labor Markets

LIR 858/Mgt Strat 2

BUSINESS STRATEGY AND MODERN (UNIONIZED)

PRIVATE SECTOR INDUSTRIAL RELATIONS

• TWO DISTINCT PERIODS– 1930’s - 1970’s– Since 1970’s

LIR 858/Mgt Strat 3

Unionized Labor Relations Models 1935 Through 1970’s

• Institutionalized Adversarialism (New Deal Model)– mutual recognition of institutional legitimacy of other

party– sharply defined roles

• Management manages the organization• Union protects and represents the workers

– Long-term contracts • Rights of each party• Workplace laws

– structured communication - negotiations and grievance procedure

LIR 858/Mgt Strat 4

Nonunion Models Developing in 1960’s

• Emulate Union Models in some ways

• Written Policies– Corporate or Division Wide– Removed discretion of first-line supervisors

• With flexibility because policies can be changed or interpreted to fit changing environment

LIR 858/Mgt Strat 5

Bifurcated Private Sector ER System

• By late 1970’s– Unionized (partially) sector

• Older Manufacturing Companies

• Construction

• Utilities

• Transportation

• Old Telecommunication

– Nonunion sector• Newer Manufacturing Companies

• Retail

• Business Services

– Emerging Unionized Sector• Health Care

LIR 858/Mgt Strat 6

THREE POST-1970’S EMPLOYER CB STRATEGIES

• DEUNIONIZATION– CONFLICT– INVESTMENT

• TRADITIONAL ADVERSARIALISM• COOPERATION• MANAGEMENT NO LONGER

NECESSARILY WILLING TO ACCEPT “NEW DEAL” SYSTEM AS THE MODEL OF BARGAINING

LIR 858/Mgt Strat 7

DEUNIONIZATION - Conflict

• Use of legal right to bargain without concessions• Union Options

– accept an “unacceptable” contract

– strike and risk replacement

• Er may permanently replace strikers• Claim “good faith doubt” about union’s majority

status• “Pyramiding” of legal rights by employer

LIR 858/Mgt Strat 8

Deunionization/ConflictExamples

• Detroit Newspapers

• International Paper

• Greyhound

• Continental Airlines (mid ‘80’s)

LIR 858/Mgt Strat 9

DEUNIONIZATION -Investment

• Company invests in nonunion facilities– “greenfield”– older nonunion facilities

• Examples– rubber tire industry– some paper processing firms– auto industry (Mexico)

LIR 858/Mgt Strat 10

TRADITIONAL ADVERSARIALISM

• Examples– Trucking Industry– Aerospace– Airlines

LIR 858/Mgt Strat 11

COOPERATION

• Creation of non-adversarial structures for communication

• Reduce labor costs by reducing the costs of adversarialism

• Permits firm to better exploit knowledge of workers

• Focus on common, rather than conflicting, interests

LIR 858/Mgt Strat 12

MANAGEMENT COLLECTIVE BARGAINING STRATEGIES

Institutionalized Adversarialism

(Traditional)

Conflict/ Deunionization

Cooperation

LIR 858/Mgt Strat 13

Different Bargaining and Contract Administration Models

• Bargaining– Adversarial: Positional Bargaining

• Each side provides position to other party

• Listens

• Modifies position– rationale

– bargaining power

LIR 858/Mgt Strat 14

CooperativeInterest-Based Bargaining Processes

• Example: Mutual Gains Bargaining– Define problems and interests - separate– Discussion of problems and interests - joint– Brain-storming of solutions - joint– Recommendations of possible solutions -

separate– Presentation of recommendations and selection

of solutions - joint

LIR 858/Mgt Strat 15

Administration Process

• Longer-Term Agreements

• Problem-Solving Teams

• Team-Based Production

• Joint Committees

LIR 858/Mgt Strat 16

Examples of Cooperative Relationships

• National Steel and United Steelworkers of America

• Ford and UAW

• GM and UAW

• Philip Morris (Trenton, Ohio) and UAW

LIR 858/Mgt Strat 17

Fundamental Question

• Does Management challenge the institutional legitimacy/status of the union?– No

• Cooperation

• Institutionalized Adversarialism

– Yes• Deunionization