FACULTY OF BUSINESS AND MANAGEMENT

BBHI4103 INDUSTRIAL RELATIONS

ASSIGNMENT

Name : Alexander Yang Yee Chuan @ Richard Matrix Number : 731102125021001 NRIC : 731101-12-5021 Telephone number : 013-8569072 E-mail address : sipitang@oum.edu.com.my

Tutors name: Jeffri Bin Mohamad Yusof Learning Centre: Keningau

SEPTEMBER 2011 SEMESTER

INTRODUCTION Industrial relations describes the complex, and sometimes aggravated, relationship between toplevel industry management and employee organizations. Conflicts arise between these two entities when a problem is not brought to a peaceful resolution or compromise. Therefore, industrial relations can be seen from various angles such as political, sociological, economic, legal, psychological or organizational angle. However, every approach can help clarify industrial relations as it is not influence by any policy or fundamental. The industrial relations system is an elective system which means the parties involved can choose any approach deem suitable for creating a harmonious working environment. According to Salamon (2001), generally organization can be seen through three different perspective i.e Unitary, Pluralistic and Marxist, which are each one of the perspective has different approaches to resolve conflicts or disputes at the workplace. Unitary Perspective (Paternalism) In the Unitary perspective (paternalism), the organization assumes that the employees and the employer have similar goals, objectives and values. The organizational structure has single authority form, which means that there is only one authority. In unitarism, the organization is also perceived as an integrated and harmonious system, viewed as one happy family. A core assumption of unitary approach is that management and staff, and all members of the organization share the same objectives, interests and purposes; thus working together, hand-in-hand, towards the shared mutual goals. Furthermore, unitarism has a paternalistic approach where it demands loyalty of all employees. Trade unions are deemed as unnecessary and conflict is perceived as disruptive.

Pluralistic Perspective (conflict of Interest)

In the pluralistic perspective (conflict of interest), the employer and employees have conflicting goals and objectives. This difference in goals and objectives can result in conflict at work. In pluralism the organization is also perceived as being made up of powerful and divergent subgroups - management and trade unions. This approach sees conflicts of interest and disagreements between managers and workers over the distribution of profits as normal and inescapable. Consequently, the role of management would lean less towards enforcing and controlling and more toward persuasion and co-ordination. Trade unions are deemed as legitimate representatives of employees and recognize the union in bringing up any work-related problems for discussion. Conflict is dealt by collective bargaining and is viewed not necessarily as a bad thing and if managed could in fact be channeled towards evolution and positive change. Realistic managers should accept conflict to occur. There is a greater possibility for conflict rather than harmony. Marxist (Radical) Perspective The Marxist (radical) perspective looks the relationship that exists between the employer and the employees in the organization from the social, political and economic points of view. This perspective emphasizes the importance of social change for ensuring the progress and development of the organization. In the Marxist perspective, the union in industrial relations is seen as a political movement for the development of the working class. This is because the unions goal is to achieve changes in the economic and social system. As such, this perspective says that industrial relations are combination of politics and economics, controlled by law to safeguard the importance and status of the employer.

IMPORTANCE OF UNITARY, PLURALISTIC AND MARXIST PERSPECTIVES

Importance of Unitary perspective A major strength of the unitarist perspective is that it explicitly wants to integrate employer and employee interests, so that it can enhance employee commitment and loyalty. This can be used as a basis for stakeholder management, wherein employees are seen as important stakeholders of the organisation, and so their well-being is carefully considered in ensuring the welfare of the organisation. The unitarist perspective also emphasizes the role of managers in attaining win-win situations for employees and organisations, wherein their interests can be properly aligned with each other. Managers are compelled to go beyond their managerial styles of managing employee relation and emphasise also their leadership capabilities. If they can be convincing and influential leaders in the organisation, there will be no strong demand for trade unions. Furthermore, the unitarist perspective assumes that all stakeholders are rational members, who will consider finding common interests. This belief provides a steady rationale for stressing common goals, so that a stable employee relation system can be achieved. A major weakness of this theory is the lack of realization that there are power inequalities between employers and employees which will generate diverse kinds of conflicts. Managers often exert greater power over their employees in determining work conditions, especially for blue-collar jobs, and instead of the workers acting as owners of power too, they will tend to accept decisions of the management and submit to the formers power. Furthermore, conflict is treated too negatively, and not seen as a force that reflects inequalities and which can be used as opportunities to regain work harmony. Although there are different kinds of conflicts, some authors say that there are certain kinds of conflicts that are good for organisational development. For instance, there are two kinds of conflict- one that is unhelpful to team effectiveness, also called A-conflict, and the other that is helpful to the team, termed as Cconflict (Esquivel and Kleiner 1996: 43). Task conflict, an example of task conflict, arises when team members have disparities in how tasks are defined and divided among the group, such as major decision areas and processes (Chuang et al. 2004: 28). Studies showed that task conflict can improve positive outcomes for the group (Chuang et al. 2004: 28, and Choudrie 2005: 65).

Simons and Peterson (2000) asserted from their study that intragroup trust affected the relationship between tasked-related conflict and relationship conflict (cited in Chuang et al. 2004: 28). Hence, by demonising conflict, the unitary perspective delimits how task conflicts can also be used to enhance performance. In addition, it is unclear how individual worker sentiments can be adequately integrated into the organisational objectives, because the unitary perspective is very normative and lacks description of how common interests can be identified and shared across organisations (Ackers and Payne 1998: 539). For instance, it does not provide any guidelines for HR, so that it can pursue unitarism effectively (Storey 2000: 12). The unitarist perspective only assumes that members are rational enough to reach solid decisions on how personal and organisational interests are to be combined.

Importance of Pluralistic perspective Unlike the unitarist, the pluralist theory emphasises that effective industrial relation interventions can resolve conflicts. A consultative approach can be used by the management in responding to conflicts. Furthermore, it also considers other alternative decision-making processes. Conflict is not overlooked, but managed effectively through stakeholder participation. Conflict can then be used to understand underlying tensions, so that they can be identified and properly addressed. The pluralist perspective makes use of conflict management strategies to engage groups that are in conflict, so that resolutions can be discussed and implemented. The pluralist perspective embraces a wider array of employee relations policies. Some companies can adopt no-union policies, as long as there are employee organisations, while other companies can motivate the use of trade unions. The girth of employee relations policies can make pluralism specifically beneficial for diverse organisational and national cultures. For instance, trade unions can be effective allies also in aligning individual and organisational interests compared to the unitarist approach to ER (Badigannavar and Kelly 2005). The pluralist perspective is also suitable for collective IR systems, because it does not disregard the role of trade unions in managing employee-employer conflicts (Badigannavar and Kelly 2005). Weaknesses of the pluralist perspective

The weakness of the pluralist theory is the inclination to dwell on rules and procedures and disregard the processes that also contribute to the resolution of conflicts. For instance, through industrial relation, laws can be made that impose certain ways of resolving workplace conflicts. These rules, however, cannot adapt to emerging and different workplace conditions (Gennard, and Judge 2002: 56). In addition, the pluralist perspective is incapable of realising that the state also represents commercial interests and not just public interests (Kitay & Marchington 1996: 1267). The pluralist perspective may focus too much on worker interest, which can lead to the inefficiencies of collective bargaining processes.

Importance of Marxist Perspective This view of industrial relations looks at the nature of the capitalist society, where there is a fundamental division of interest between capital and labour, and sees workplace relations against this background. This perspective sees inequalities of power and economic wealth as having their roots in the nature of the capitalist economic system. Conflict is therefore seen as inevitable and trade unions are a natural response of workers to their exploitation by capital. Whilst there may be periods of acquiescence, the Marxist view would be that institutions of joint regulation would enhance rather than limit management's position as they presume the continuation of capitalism rather than challenge it. Conclusion: The Radical/Marxist Perspective has important strengths but may exaggerate the depth and intensity of conflict.

This view of industrial relations is a by product of a theory of capitalist society and social change. Marx argued that: Weakness and contradiction inherent in the capitalist system would result in revolution and the ascendancy of socialism over capitalism.

Capitalism would foster monopolies.

Wages (costs to the capitalist) would be minimized to a subsistence level. Capitalists and workers would compete/be in contention to win ground and establish their constant win-lose struggles would be evident.

This perspective focuses on the fundamental division of interest between capital and labor, and sees workplace relations against this background. It is concerned with the structure and nature of society and assumes that the conflict in employment relationship is reflective of the structure of the society. Conflict is therefore seen as inevitable and trade unions are a natural response of workers to their exploitation by capital.

EVALUATION HOW ORGANISATION USED THE PERSPECTIVE TO OVEROME INDUSTRIAL CONFLICTS Industrial conflict is a term which refers to all expressions of dissatisfaction within the employment relationship, especially those pertaining to the employment contract, and the effort bargain.

Unitary Perspective (Paternalism) From employee point of view, unitary approach means that:

Working practices should be flexible. Individuals should be business process improvement oriented, multi-skilled and ready to tackle with efficiency whatever tasks are required;

If a union is recognized, its role is that of a further means of communication between groups of staff and the company; The emphasis is on good relationships and sound terms and conditions of employment;

Employee participation in workplace decisions is enabled. This helps in empowering individuals in their roles and emphasizes team work, innovation, creativity, discretion in problem-solving, quality and improvement groups etc.;

Employees should feel that the skills and expertise of managers supports their endeavors.

From employer point of view, unitary approach means that:

Staffing policies should try to unify effort, inspire and motivate employees; The organization's wider objectives should be properly communicated and discussed with staff; Reward systems should be so designed as to foster to secure loyalty and commitment; Line managers should take ownership of their team/staffing responsibilities; Staff-management conflicts - from the perspective of the unitary framework - are seen as arising from lack of information, inadequate presentation of management's policies; The personal objectives of every individual employed in the business should be discussed with them and integrated with the organizations needs.

Pluralistic Perspective (conflict of Interest) Management should anticipate and resolve this by securing agreed procedures for settling disputes. The implications of this approach include:

The firm should have industrial relations and personnel specialists who advise managers and provide specialist services in respect of staffing and matters relating to union consultation and negotiation;

Independent external arbitrators should be used to assist in the resolution of disputes; Union recognition should be encouraged and union representatives given scope to carry out their representative duties.

Marxist (Radical) Perspective The Marxian analysis begins with an analysis of material conditions, taking at its starting point the necessary economic activities required by human society to provide for its material needs. The form of economic organization, or mode of production, is understood to be the basis from which the majority of other social phenomena including social relations, political and legal systems, morality and ideology arise (or at the least by which they are greatly influenced). These social relations form the superstructure, of which the economic system forms the base. As the forces of production, most notably technology, improve, existing forms of social organization become inefficient and stifle further progress. These inefficiencies manifest themselves as social contradictions in society in the form of class struggle. Under the capitalist mode of production, this struggle materializes between the minority who own the means of production (the bourgeoisie), and the vast majority of the population who produce goods and services (the proletariat). Taking the idea that social change occurs because of the struggle between different classes within society who are under contradiction against each other, the Marxist analysis leads to the conclusion that capitalism oppresses the proletariat, the inevitable result being a proletarian revolution. Marxism views the socialist system as being prepared by the historical development of capitalism. According to Marxism, Socialism is a historical necessity (but not an inevitability). In a socialist society private property in the means of production would be superseded by cooperative ownership. The socialist system would succeed capitalism as humanity's mode of production through worker's revolution. Capitalism according to Marxist theory can no longer sustain the living standards of the population due to its need to compensate for falling rates of profit by driving down wages, cutting social benefits and pursuing military aggression. A socialist economy would not base production on the accumulation of capital, but would instead base production and economic activity on the criteria of satisfying human needs - that is, production would be carried out directly for use. Eventually, socialism would give way to a communist stage of history: a classless, stateless system based on common ownership and free-access, superabundance and maximum freedom for individuals to develop their own capacities and talents. As a political movement, Marxism advocates the creation of such a society.

PLURALISTIC AS SUGGESTION OF THE MOST APPROPRIATE PERSPECTIVE Conflict exists in the workplace as it does in many other parts of life. Most of industrial conflict is resolved in a spirit of cooperation between employees and employers. The most appropriate perspective to overcome their industrial conflicts is by using the

Pluralistics perspectives as process of resolving any conflict will involved the following ;

Negotiation This involves a formal or informal discussion between the employee and employer level in which both parties agree to a mutual agreement to resolve the dispute. Under the process of negotiation parties require the assistance of unions or other assistance.

Mediation Mediation follows if negotiation is unsuccessful. Mediation occurs when a neutral third person is introduced who helps the parties to find a basis for an agreement that is acceptable to the disputing parties to reach a final agreement.

Conciliation Conciliation is the formal means of settling a dispute when it cannot be resolved and may be referred to a third party, such as the AIRC, usually an industrial commissioner with the necessary qualification and skills who encourages the parties to negotiate their own agreement and brings the parties together.

Arbitration

If conciliation fails, the matter may be referred to arbitration, arbitration is very similar to the procedures of conciliation, where the independent third party again comes from the Industrial Relations Commission. The main difference here is that the arbitrator considers the arguments of both sides and makes the final decision, which is legally binding on the parties involved.

Common Law Action This is where a dispute goes beyond the boundaries of a quick resolution such as conciliation, arbitration; grievance procedures, negotiation and mediation, and needs to be settled in court, where common law applies. Here the legal system will be used if the party believes that the dispute or action has broken the law. This could be a breach in tort law or contract law.

Business/Division Closure If the dispute is impossible to resolve it may result in the closure of that division or business. Closure of a division or a business permanently or temporarily may also be a resolution or outcome of a dispute.

Costs and benefits of industrial conflict Industrial conflicts have both costs and benefits although in many cases they are difficult to measure. The costs and benefits may be financial, personal, social, political and international.

Financial Costs

Cost could include loss of production and reduced productivity due to bans, and loss of wages for the employee if the dispute results in cutting production and work. Firms reputation may be damaged. The cost associated with legal representation is a financial burden upon the firm.

Benefits Benefits could mean better work practices and increased productivity, and for employees through higher wages. It could result with fewer disputes and less absenteeism and labour turnover.

Personal Costs Could include a high level of stress for employer and employee and reduced job satisfaction and could result with an increase in absenteeism.

Benefits Could mean improved working conditions for employees, including better occupational health and safety, and better more efficient production processes for employers. Greater employee involvement and motivation.

Social Costs Tensions and dissatisfaction at work can lead to breakdowns at home, even domestic violence. Employers could suffer from vandalism of the workplace and conflict in the community.

Benefits For both employers and employees could be that the conflict clears the air and leads to improved communications systems.

Political Costs Cost could include damaged reputations for some politicians and political parties associated with industrial conflicts. Bitterness between unions and government can lead to political conflict.

Benefits Could flow to politicians and political parties who present policies that reduce industrial conflict.

International Costs Nations reputation for stability can be lost and Gain a reputation as being an unreliable supplier. Productivity levels drop increasing costs and making business less competitive against overseas efficient businesses. Furthermore a loss of export income could occur after periods of disruption.

Benefits Conflict improves businesss international competitiveness presenting opportunities for international expansion and improved production.

CONCLUSION When studying the theories of industrial relations, there are three major perspectives that contrast in their approach to the nature of workplace relations. The three views are generally described as the unitary, pluralist and Marxist perspectives. Each offers a particular perception of workplace relations and will therefore interpret such events as workplace conflict, the role of trade unions and job regulation very differently. In my opinion, the conclusion for the best approach to resolved industrial conflict is by using the Pluralistic Perspectives.

References Open Universiti Malaysia (OUM), June 2010, BBHI4103

http://bizcovering.com/management/origins-of-industrial-conflict-and-conflictresolution-methods/#ixzz1d2q4CwnB GORDON MARSHALL. "industrial conflict." A Dictionary of Sociology. 1998. Encyclopedia.com. 7 Nov. 2011 <http://www.encyclopedia.com>. Types of Industrial Conflict | eHow.com http://www.ehow.com/list_7207041_typesindustrial-conflict.html#ixzz1d2n2SVgn

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