Management as an Actor in Industrial Relations Nonunion

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 1

BUSINESS STRATEGY AND MODERN (UNIONIZED) PRIVATE SECTOR INDUSTRIAL RELATIONS • TWO DISTINCT PERIODS – 1930’s - 1970’s – Since 1970’s LIR 858/Mgt Strat 2

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 3

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 4

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 5

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 6

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 7

Deunionization/Conflict Examples • • Detroit Newspapers International Paper Greyhound Continental Airlines (mid ‘ 80’s) LIR 858/Mgt Strat 8

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 9

TRADITIONAL ADVERSARIALISM • Examples – Trucking Industry – Aerospace – Airlines LIR 858/Mgt Strat 10

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 11

MANAGEMENT COLLECTIVE BARGAINING STRATEGIES Conflict/ Deunionization Institutionalized Adversarialism (Traditional) LIR 858/Mgt Strat Cooperation 12

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 13

Cooperative Interest-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 14

Administration Process • • Longer-Term Agreements Problem-Solving Teams Team-Based Production Joint Committees LIR 858/Mgt Strat 15

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 16

Fundamental Question • Does Management challenge the institutional legitimacy/status of the union? – No • Cooperation • Institutionalized Adversarialism – Yes • Deunionization LIR 858/Mgt Strat 17