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"Management strategy towards collective bargaining is now characterised by decentralisation and flexibility" Discuss.

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Introduction

"Management strategy towards collective bargaining is now characterised by decentralisation and flexibility." Discuss. The 1980's brought with it a major shift in traditional industrial relations. In the 1970's there was a trend in management towards greater acceptance of pluralism and collectivism in response to the power of trade unions and government corporatist strategies. Industry wide agreements on pay were the main feature of collective bargaining. The aim of collective bargaining was to create a political institution to provide a means of bringing together at least temporary reconciliation of the divergent interests of employers and employees. In this way a socially stable working environment could be achieved through this wide spread consensus, facilitating the employer's aim of eliciting labour productivity and the macroeconomic objectives of the country (if the government involved). However the changing political and economic environment of the late 70's and early 80's brought with it a more unitarist and individualistic approach. Features of this was an emphasis on human resource management, decentralisation of pay determination and the de-recognition of trade unions in order to create greater flexibility. The neo-liberalist stance of the Conservative government meant that it was anti-trade union and in subsequent years eroded the power of trade unions. The rigours of world competition placed further pressures on firms to improve the quality of their products and to elicit greater labour productivity from their workers. ...read more.

Middle

Guest (1987) describes HRM as consisting of a combination of policies designed to produce strategic integration, high commitment and high quality and flexibility among employees. The central theme to this is that is the integration of employees on the basis of commitment rather than instruction and a more devolved business structure is likely to be able to do this against a centralised one. HRM has its hard and soft versions. The hard version views the employee as an economic resource and is normally associated with cost reduction strategy. The soft version places more emphasis on the human aspect and is what the usual rhetoric describes as motivation and commitment measures for employees. This 'psychological contract' between employers and employees has been combined with financial incentives (efficiency wage idea) to stimulate best practice and worker effort. HRM has led to a bypassing of unions and made them less important to workers since 'good' management means the employees' needs for a union to protect them from 'poor' management is reduced. Has the move to greater decentralisation and trade union de-recognition (generally speaking since specific industries have different forms which maybe more appropriate for them) increased flexibility? Hendry (1990) argues that when product market pressures intensify (e.g. in a recession) corporate internal labour markets can reduce flexibility and increase costs but that plant level internal labour markets have a greater degree of flexibility and cost-effectiveness, promoting the argument for further decentralisation. ...read more.

Conclusion

Multi-employer bargaining has ceased in many industries and now firm decentralisation is the main debate. The weakening of the trade union movement through de-recognition and falling subscription levels has also led to a fall in the coverage of collective bargaining and the employer attitude of safety in numbers. However extreme decentralisation does not always lead to the full flexibility of firms to respond to changing product market influences, technology or the labour market. The combination of decentralisation and the individualistic approach (e.g. emphasis on performance related pay) can create incentives for greater worker effort and commitment however there are negative externalities from these such as de-motivating pay comparisons which undermine solidarity between workers. Therefore decentralisation at the firm level appears to be carried out at an appropriate level for appropriate parts of the firm but under close central monitoring. This dualist approach is part of the 'sophisticated modern' model and is continuing to be developed. Remember Soskice (1990) Corporatism debate- what matters is strong 'de facto' co-ordination of either employer organisations or unions- whichever is the stronger (Behind the scenes 'centralization' permits consideration of inflationary and employment impacts of pay bargaining. - unlike individual isolation bargaining. When collective sacrifices are required, sentiments of solidarity do not flow easily across linguistic and national barriers. - Edwards Tighter management control over bargaining has led to pay rises becoming increasingly conditional upon productivity improvements. ...read more.

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