LIR 858/Mgt Strat1 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 Strat2 BUSINESS STRATEGY AND MODERN (UNIONIZED) PRIVATE SECTOR INDUSTRIAL RELATIONS TWO DISTINCT PERIODS – 1930’s ’s – Since 1970’s

LIR 858/Mgt Strat3 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 Strat4 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 Strat5 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 Strat6 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 Strat7 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 Strat8 Deunionization/Conflict Examples Detroit Newspapers International Paper Greyhound Continental Airlines (mid ‘80’s)

LIR 858/Mgt Strat9 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 Strat10 TRADITIONAL ADVERSARIALISM Examples –Trucking Industry –Aerospace –Airlines

LIR 858/Mgt Strat11 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 Strat12 MANAGEMENT COLLECTIVE BARGAINING STRATEGIES Institutionalized Adversarialism (Traditional) Conflict/ Deunionization Cooperation

LIR 858/Mgt Strat13 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 Strat14 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 Strat15 Administration Process Longer-Term Agreements Problem-Solving Teams Team-Based Production Joint Committees

LIR 858/Mgt Strat16 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 Strat17 Fundamental Question Does Management challenge the institutional legitimacy/status of the union? –No Cooperation Institutionalized Adversarialism –Yes Deunionization