Industrial relations in

Developed Countries

PRESENTATION BY
LAKSHMI & LEELA
 Industrial relations include the whole range of relations
between workers , managers and government which determine
the conditions under which work is done in all types of
enterprise.(An organization created for business ventures)
 ‘Managers’ are those who have the responsibility for the work
of others in the organization
 ‘Workers’ are those for whose work managers are responsible
 ‘Government’ directly legislate certain terms of employment
and regulate the interaction of managers and workers in
varying degrees
Industrial relations

 Industrial relations commonly denotes

“employee- employer relations”
 Industrial relations are born out of
employment relationship in an industrial
setting
 Industrial relations with people who are the
base of the industry
 The field of industrial relations (also called
labour relations) looks at the relationship
between management and workers, particularly
groups of workers represented by a union.
Objectives of Industrial relations
 Congenial labor management relations
 Regulate the production by minimizing industrial conflict
thereby contributing to economic progress
 Workers to have a say in decision making
 Encourage and develop trade union
 Avoiding industrial conflicts
 To boost the discipline and morale of workers
There are three majors players in industrial
relations
1. Management / employers
2. Labour /workers /employees
3. Government / regulator
 To maintain harmonious relations between
all three major players.
 To contribute to economic prosperity of the
country.
IR covers some of the following
Areas
 Collective Bargaining : Negotiation about working conditions and terms of
employment between employer and employee to reach an agreement

 Role of management, unions and government

 Machinery for resolution of industrial disputes :works committee , Concillatory

officer( settlement) ,labor courts etc.

 Grievances,labor welfare and security

 Trade unions,workers participation

 Labour legislation : Internal social responsibility to provide some basic amenities

apart from pay, protect interest of workers, social welfare

Three actors to IR

 Employee

 Employer

 Government
Employee

 Improve their condition of employment

 Views in any grievances

 Exchange view and ideas with management

 Share in decision making

Trade Unions

 To redress the bargaining power of Individual worker.

 To secure improved terms and conditions of

employment.

 To secure improved status for the worker in his or her

work.
Employer
The employer see IR as
 Creating and maintaining employee motivation
 Obtaining commitment from workforce
 Achieving high levels of efficiency
 Negotiating terms and conditions of employment
Government

 The govt. regulates the relationship between the

management and the labour and seeks to

protect the interest of both the groups.

 The authority of the courts to settle legal

disputes.
Conditions for Good Industrial
Relations
 History of industrial relations (harmonious or rivalry)

 Economic satisfaction of workers (basic survival need)

 Enlightened and responsible labor unions

 Negotiation skills and attitude of management and workers (varying

backgrounds, must possess empathy)

 Legislation :Govt intervention

 Social and psychological satisfaction : supportive climate along with

economic rewards
Cause of Poor Industrial Relations
 Uninteresting nature of work : due to automation –role of worker reduced

 Political nature of unions : : inter union rivalry, multiple unions,political

parties involvement

 Poor wages : Inequity in wages , complicated wage system

 Occupational instability : donot want changes in the job-fear or insecurity

Effects
 Resistance to change, frustration and social cost , multiplier effect (total
loss)
Suggestions to improve Industrial
Relations
 Both management and union should develop
constructive attitude towards each other
 All basic policies and procedures relating to
IR should be clearly communicated to all
 Right kind of union leadership
Approaches to IR
Systems approach

 Systems framework by John Dunlop

 Actors: managers, workers and government agencies

 Actors influenced by several forces in environment – technology,

markets and power relation in society

 Ideology: Though there is conflict among the actors but there is

also a shared ideology and compatibility of ideas which help to
resolve conflict by framing rules

 The network or web of rules

Unitary approach

The organisation is, or should be, an integrated group of

people with a single authority/loyalty structure and a set
of common values, interests and objectives shared by all
members of the organisation.

 Management's prerogative (i.e. its right to manage and

make decisions) is regarded as legitimate, rational and
Accepted

 Opposition to it (whether formal or informal, internal or

external) is seen as irrational

 In short:
 – the organisational system is in harmony
 – conflict is unnecessary and exceptional
Pluralist approach
 Based on assumption that organization is composed of individuals
who make up distinct sectional groups , each with its own interests
, objectives and leadership.

 Recognition of diverging interests between workers, employers

and government

 Conflict is the total range of behaviour and

attitudes that express opposition and divergent orientation and it
is perceived as both rational and inevitable.

 But focus is on framework of regulating work

relationships-balance of power between management and trade
unions
Conflict is necessary ,but it can be and needs to be managed and
resolved
 Marxist Approach
 If shared ideology than why is that conflict never ceases.
 Conflicts can never cease until capital accepts that labor
has right to an equal share in power.
 Production system is privately owned and is motivated by
profit.
 IR is the study of ‘processes’ of control over work relations,
Its about who controls , how , what and why.
Trusteeship
 Proposed by Mahatma Gandhi

 Company accepts its total responsibility and

management role becomes that of balancing all the
claims upon the company.

 Inherent responsibility to its consumers, workers,

shareholders, and the community
 Greater good
Let us briefly discuss about the scenarios of
Industrial relations in developed countries
Singapore
 IR in Singapore

 Industrial relations in Singapore reflected the

symbiotic relationship
 Singapore has achieved substantial
economic and social progress since political
independence in 1965
 The Singapore economy has progressed
through different stages of development, from
being labour abundant and capital scarce to
labour scarce and capital abundant.
 Its industrial structure has progressed from
labour-intensive export manufacturing to
capital and technology- intensive
manufacturing and high value added services.
 Singapore has become an export
manufacturing base, regional headquarters of
foreign multinational corporations, a financial
centre, and a trading, transportation and
telecommunications hub.
 On the economic front, Singapore has
achieved high and sustained growth to result
in a per capita income and standard of living
among the highest in Asia and the world.
 Singapore has overcome its physical
constraint by adopting the region and world
as its economic hinterland, through policies
that foster free trade and free flow of
investments.
 Accelerated globalization and technological
change, together with the rapid economic
development of Southeast Asia are
pressuring the Singapore economy to
restructure and reinvent itself so as to remain
competitive.
 The free trade and free investment model
gave Singapore a competitive edge is being
increasingly emulated by countries in the
region.
 The vision, competence and probity of its
political leadership and bureaucracy promote
economic efficiency through exposures to
global competition;
 It emphasis on human resource development
and infrastructure development to support the
private sector and maintain consistency and
coherence of its FDI policies;
 Also it maintains social cohesion through its
ethnic and language policies, and ensure the
welfare of workers through policies to
promote full employment, provision of social
safety net through the Central Provident
Fund, provision of public housing, quality
education and healthcare at affordable cost
Industrial Relations in Japan
 A complicated system of Industrial Policies
was devised by the Japanese Government
after World War II and especially in the 1950s
and 1960s.
 The goal was to promote industrial
development, and it cooperated closely for
this purpose with private firms.
 The objective of industrial policy was to shift
resources to specific industries in order to
gain international competitive advantage for
Japan.
 These policies and methods were used
primarily to increase the productivity of inputs
and to influence, directly or indirectly,
industrial investment.
 Mechanisms used by the Japanese
government to affect the economy typically
relate to trade, labor markets, competition,
and tax incentives.
 Historically, there have been three main
elements in Japanese industrial
development.
 The first was the development of a highly
competitive manufacturing sector.
 The second was the deliberate restructuring
of industry toward higher value-added, high
productivity industries.
 In the late 1980s, these were mainly
knowledge-intensive tertiary industries. The
third element was aggressive domestic and
international business strategies.
 After World War II, the initial industries that
policy makers and the general public felt
Japan should have were iron and steel,
shipbuilding, the merchant marine, machine
industries in general, heavy electrical
equipment, and chemicals.
 Later they added the automobile industry,
petrochemicals, and nuclear power and, in the
1980s, such industries as computers and
semiconductors.
 Since the late 1970s, the government has
strongly encouraged the development of
knowledge-intensive industries.
 Government support for research and
development grew rapidly in the 1980s, and
large joint government-industry development
projects in computers and robotics were
started.
 At the same time, government promoted the
managed decline of competitively troubled
industries, including textiles, shipbuilding,
and chemical fertilizers through such
measures as tax breaks for corporations that
retrained workers to work at other tasks.
 Although industrial policy remained important
in Japan in the 1970s and 1980s, thinking
began to change.
 Government seemed to intervene less and
become more respectful of price mechanisms
in guiding future development
 Thus In the late 1980s, knowledge-intensive
and high-technology industries became
prominent
IR in China
 China's share of the world's business has grown
exponentially because they have and follow a
national industrial policy
 The Chinese government has reviewed its
investment priorities under the 4-trillion-yuan
stimulus package introduced in autumn last
year, with more emphasis given to social
welfare projects, rural development, and
technology advancement.
 China's top economic
planner, the National
Development and
Reform Commission
(NDRC), unveiled a
breakdown of the
revised stimulus
package spending
during a news
conference on March
6.
 Labour law in china prompts companies to
improve their management, capital-labor
relations and productivity.
 A sound market economy system in return
would benefit businesses—both domestic
and foreign companies.
 The law prompts companies to improve their
management, capital-labor relations and
productivity.
 A sound market economy system in return
would benefit businesses—both domestic
and foreign companies.
 Although China’s economic success so far
can be largely attributed to market-oriented
reforms, China has managed to preserve an
active role for the state in its economy. 
 Aside from owning and managing a vast
number of state-owned-enterprises (“SOEs”),
the Chinese government often employs
industrial policy to promote the development
of specific sectors or industries.
 Industrial policy in China takes a variety of
forms, including direct government subsidies,
tax incentives, special regulatory measures,
and market entry liberalization measures.
 However, there is one aspect of industrial
policy as exercised in China that does create
tensions with the fundamental purpose of
competition policy. 
 In many of its industrial policy plans China
has emphasized the government’s intention
to promote mergers and acquisitions that will
lead to concentration of market power in a
few extra-large companies, or “national
champions.” 
 To be sure, policies favoring the creation and
support of national champions are not unique
to China.
 Chinese system prizes centralized power and
centralized control, and in China anything big
tends to elicit pride, not fears. 
 This bias in favor of “bigness” partly explains
the bigger-is-better mentality manifest in
many of China’s industrial policy plans. 
 It is true that China has enacted its antitrust
law in the same style as the antitrust law of
the United States, but it remains to be
different from US in all Aspects
IR In United States of America
 United States labor law is a heterogeneous
collection of state and federal laws.
 Federal law is the body of law created by the
federal government of a country.
 A federal government is formed when a group
of political units, such as states or provinces
join together in a federation, surrendering
their individual sovereignty and many powers
to the central government while retaining or
reserving other limited powers.
 As a result, two or more levels of government
exist within an established geographic
territory.
 Federal law not only sets the standards that
govern workers' rights to organize in the
private sector, but overrides most state and
local laws that attempt to regulate this area.
 There is a three-tier structure of industrial
relations in the United States.
 Local unions deal with the daily interaction
with employers at the workplace level.
 Typically, these local unions are affiliated with
a national union such as the Service
Employees International Union, which, as of
2005, is the largest national union in the
United States.
 Labor federations, like the AFL-CIO, serve as
umbrella organizations for national unions and
provide overall direction for the labor
movement, as well as services like training
and government lobbying.
 However, the lack of advancement of
organized labor in recent years has caused
some national unions to leave the AFL-CIO
and attempt to form a competing labor
federation.
 USA applies many policies with an industry-
specific impact.
 But these policies do not differ significantly
from those in other countries and the process
in which US industrial policies emerge
severely limits their consistency.
What differentiates the USA is a microeconomic
business environment that enables a high
degree of regional specialization, benefits
especially knowledge-driven industries, and
raises the impact of innovation and
entrepreneurship policies.
Thank You