External and Internal environment factors in Industrial Relations

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HRM 466 Industrial Relations

1.0 Introduction

Definitions

Industrial relations

  • A set of phenomena, operating both within and outside the workplace, concerned with determining and regulating the employment relationship. (Michael Salamon,2000)
  • Relations between the management of an industrial enterprise and its employees. (Alistair McMillan)
  • Relations between management and labor unions or between management and individual workers. Sometimes called labor relations. (Rose E., 2001)

Trade Union

  • “Any organization, whose membership consists of employees, which seeks to organize and represent their interest both in the workplace and society and, in particular, seeks to regulate the employment relationship through the direct process of collective bargaining with management.” (Michael Salamon,2000)

Employer

  • An employer is a person or institution that hires employees or workers. (Michael Salamon,2000)

Management

  • Management/ Employers Association are a party consists wholly of employers owners and they are regulated of relation between employers and Trade Union. (Michael Salamon, 2000)

Government

  • Government is the third and most important “actor” within the industrial relations system. (Michael Salamon, 2000)

2.0 Discussion

2.1 External environment factors in Industrial Relations

In industry, the external environment factors will influence the company’s policies, strategies and management style. Policies typically described as a deliberate plan of action to guide decisions and achieve rational outcome(s). (Wikipedia, 2009) Strategy is a whole range of organization activities that help managers to organize or manage the internal and external environment. (Michael Salamon, 2000) While management style is a set of proposals and actions that establishes the organization’s approach to its employees and act as a reference point for management. (Michael Salamon, 2000)

How industrial relations are conducted within a particular organization is determined by the frame of reference through which its top managers perceive the formal relationship with individuals and/or their representatives. Alan Fox (1966) suggested that managers may adopt one of two basic views: the unitary and the pluralist perspectives. Unitary perspective which is managers who take this view regard themselves as the only legitimate source of power and authority which they value and protect; pluralistic perspective which is managers may allow and actively foster freedom of expression and the development of groups, which establish their own norms and elect their own informal leaders. (Likert, 1961)

Political

        "Politics", in this sense, is a concept that can be defined as "A process involving the exercise of control, constraint and coercion in society". (Michael Salamon, 2000)

According to Datuk Seri Najib Tun Razak, “economic downturn influence on our exports and industrial output, at the same time investments declined so it brings a big impact on unemployment rate which is to increase the unemployment rate in 2009 to 4.5% compared with 3.7% in 2008.” (Mini Budget, 11 Mar 2009)  The slowdown in global economy and rising of unemployment has been affecting the livelihood of ordinary Malaysian. Therefore, governments have the obligation to set new rules or improve existing rules in order to secure their country or citizen.

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For the impact on public and private sector, the policies will be more open and flexible.  Malaysia had been improving on such as adopt “Reducing Unemployment and Increasing Employment Opportunities” and “provide training and creating employment opportunities in public and private sectors”. Moreover, government provides tax incentives to employers who engage retrenched workers. By the way, government also putting efforts to reduce foreign workers. (Mini Budget, 11 Mar 2009)  

For the impact on this, they will follow human resources management strategies because competitive pressures within public and private sector have increased the strategic value of a skilled, motivated and adaptable workforce, and ...

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