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Mgt-485 17-1 Mgt 470 CHAPTER 17 LABOR RELATIONS & INDUSTRIAL DEMOCRACY.

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Presentation on theme: "Mgt-485 17-1 Mgt 470 CHAPTER 17 LABOR RELATIONS & INDUSTRIAL DEMOCRACY."— Presentation transcript:

1 Mgt Mgt 470 CHAPTER 17 LABOR RELATIONS & INDUSTRIAL DEMOCRACY

2 Mgt The U.S. Approach to Labor Relations  Collective bargaining by unions –To negotiate wages, hours, and working conditions –NLRB –strikes  Grievance procedure  Mediation and arbitration  Importance of positive labor relations

3 Mgt Labor Relations in the International Arena  Labor relations –Process through which management and workers identify and determine the job relations that will be in effect at the workplace –Specific approaches to labor relations varies from one country to another  U.S. Approaches to Labor Relations –Collective bargaining  Process whereby formal labor agreements are reached by union and management representatives  Involves negotiation of wages, hours, and conditions of employment and the administration of the labor contract

4 Mgt Labor Relations in the International Arena (cont.)  U.S. Approaches to Labor Relations (cont.) –Union  Organization represents workers in collective bargaining  Has the legal authority to negotiate with the employer and administrator the labor contract  Unions gain representation rights only after certification  Unions can decertify a union with which the members are dissatisfied  Workers may strike to support union’s demands –Grievance  Complaint brought by an employee who feels that s/he has been treated improperly under the terms of the labor agreement  Settlement of grievance attempted at various hierarchical steps

5 Mgt  U.S. Approaches to Labor Relations (cont.) –Mediator  Person who brings both sides together and helps them reach a settlement that is mutually acceptable –Arbitrator  Individual who provides a solution to a grievance that both sides have been unable to resolve themselves and that both sides agree to accept –Labor relations are important because they determine labor costs Labor Relations in the International Arena (cont.)

6 Mgt  Labor Relations in Other Countries –MNCs have to adjust labor relations strategies because host countries differ in terms of:  Economic development  Political environments  Strike activity  Regional differences –Great Britain  Labor agreement is not a legally binding contract –Violations of the agreement carry no legal penalties  Labor agreements are less extensive than in the U.S. Labor Relations in the International Arena (cont.)

7 Mgt  Labor Relations in Other Countries (cont.) –Germany  Unions and management have been cooperative in the past  Labor harmony not adversely affected by unification of East and West  Union power is still quite strong  Rights of workers addressed more carefully by management –Japan  Unions and management have cooperative relationships  Contracts tend to be general and vague  Disputes regarding the labor contract usually settled amicably  Unions most active during the spring and end of the year Labor Relations in the International Arena (cont.)

8 Mgt  How Industrial Conflict Is Handled Around the World –Strike  Collective refusal to work to pressure management to grant union demands –Lockout  Company’s refusal to allow workers to enter the facility during a labor dispute  United States –Most contracts outlaw strikes –Rely on grievance procedure to resolve disputes Labor Relations in the International Arena (cont.)

9 Mgt  How Industrial Conflict Is Handled Around the World (cont.) –Great Britain  Strikes more prevalent than in the U.S.  System is not geared toward efficient resolution of conflicts  Grievance handling is informal, cumbersome, and costly –Germany  Strikes and lockouts are prohibited while the contract is in force  Contracts have different expiration dates  Cooperation between union and management is not unusual Labor Relations in the International Arena (cont.)

10 Mgt  How Industrial Conflict Is Handled Around the World (cont.) –Japan  Strikes and lockouts are very rare  Few areas of disagreement between unions and management Labor Relations in the International Arena (cont.)

11 Mgt Annual Average Days Lost Due to Labor Disputes in Economically Advanced Nations: Belgium Netherlands Britain Sweden Portugal United States Germany Austria Japan Switzerland Luxembourg Canada Iceland Spain Denmark Finland Turkey Italy Norway Australia IrelandFrance New Zealand

12 Mgt Labor Relations in Europe  European firms typically negotiate agreements on a national level  European unions have more political power than those in the U.S.  Salaried employees in Europe are often unionized  European unions have existed longer

13 Mgt Labor Relations Around the World  Great Britain –labor agreements are not legally binding –labor agreements are not extensive  Germany –Unions and management have a cooperative relationship –Union power is strong –Unions set the pay scale for 90% of workers  Japan –Social customs dictate union behavior –Disputes settled amicably –Unions most active twice a year

14 Mgt Resolving Industrial Conflict  In the U.S. Strikes and lockouts are prohibited while an agreement is in effect  In Great Britain, strikes are prevalent  In Germany conflict is resolved similarly to the U.S.  Strikes in Japan have largely a symbolic meaning

15 Mgt Industrial Democracy INDUSTRIAL DEMOCRACY involves the rights of employees to participate in significant management decisions  wages  vacation  work rules  plant closings and expansions

16 Mgt Common Forms of Industrial Democracy  Codetermination –Workers on Boards of Directors  Work councils –Workers elected to serve (common in Europe)  Shop floor participation –E.g. Quality Circles  Financial participation –E.g. Profit sharing (predominantly U.S.)  Collective bargaining

17 Mgt Industrial Democracy in the U.S.  Problem solving teams  Special purpose teams  Self-managing teams

18 Mgt Labor Costs Around the World Country Hourly Hours Compensation worked/ Week Germany $ France $ Italy $ U.S. $ UK $

19 Mgt Real Wages of Low-Paid Workers U.S Canada Australia France Austria Britain Denmark Norway Italy Germany Sweden

20 Mgt Manufacturing Labor Costs (per unit of output, annual average percentage change: ) Dollar terms Local currencies Sweden Italy South Korea Canada France United States Taiwan Belgium Denmark Germany Britain Norway Japan

21 Mgt New Labor Force Trends  Flexible working arrangements  part-time workers  shift work  temporary contracts  subcontracting  Joint partnering  virtual corporations

22 Mgt Closing thoughts  International management will be one of joint partnerships and agreements –Virtual corporation  Network of companies that exploits fast-changing opportunities and shares costs, skills, and access to global markets  Theories of international management must be continually subjected to review  An important question: “Why some MNCs do better than others?” –Strategic fit - aligning resources to match the environment –Strategic stretch - use of resources to achieve more challenging goals


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