Anachronistic form of management and regulation

Over the last 20 years, the use of industrial relations (IR) as a method of management and regulation has become increasingly less prevalent. Trade union membership has steadily declined and the once solid ideal of collectivism now seems obsolete. The question of what has caused this decline has been the subject of a great deal of academic literature.

Government legislation, macroeconomic conditions, a changing employment structure and more recently the rise of human resource management (HRM) have all been blamed for this trend, but the issue that appears central to this discussion is; has industrial relations become redundant and anachronistic or has it been made redundant and anachronistic? In order to discuss the issue of change within both industrial relations and the greater macro-economy we must first look briefly at where the field has come from, how it originated.

We must then consider the debate on why such a strong limb in the body of industrial Britain has fallen so consistently since the start of the 1980's. This will position us well to discuss the value of industrial relations in the 21st century, and decide whether it does or does not represent a redundant and anachronistic view of management and regulation. Britain was the first country in the world to become industrialised; this coincided with the first attempts to establish collective organisations.

These early trade societies performed a range of friendly societal functions, the more traditional union functions only appearing later (Visser, 2000). Collective bargaining first began in some cotton textiles in the 1860's and the Trades Union Congress (TUC) was founded in 1868. Britain still remains one of the only countries to have a specific national trade union centre in the form of the TUC. Over the following century the British trade union structure evolved into a highly fragmented system, notorious for its complexity.

Mergers and legislation were constantly changing the emerging relationship between its three key actors – state, employers and unions (Kelly, 1997). The percentage of workers that belong to an organised union has fallen by 28% since membership was at its highest in 1979 (Machin, 2000). This represents a significant shift in the way labour is organised within this country. We are now entering a new era of employee relations, indicating that the old industrial relations approach is becoming redundant and certainly an out of date method of management and regulation.

However, as will be seen, a new paradigm within industrial relations could lead the way to its resurgence, and collectivism may still have a place within the new labour market. Government legislation is thought to have played a significant role in the dissolution of British union strength. Work by Freeman and Pelletier (1990) outlines the major legislative reforms of the Thatcherite conservative government of the 1980's and its impact on our unions.

A succession of eight pieces of legislation were passed between 1980 and 1993, approximately one every two years, each one gradually taking more power away from the trade unions. The Employment Act (1982) put an end to union immunity against civil court actions, while the Wages Act (1986) removed manual workers right to be paid in cash. The final piece of legislation, the Trade Union Reform and Employment Rights Act (1993) went as far as to abolish all wage councils, end minimum wage fixing, and even allowed employers to offer financial inducements to unionists to leave their union.

Freeman and Pelletier conclude by saying, "the vast bulk of the observed 1980's decline in union density in the UK is due to the changed legal environment for industrial relations", this has become a widely accepted view but does this result in industrial relations being redundant in the modern world? The mere fact that the government of this country has made it more difficult for employees to organise themselves collectively does not mean that industrial relations is of no use elsewhere.

John Kelly (1998 : 1) believes 'it is possible to show that worker collectivism is an effective and situationally specific response to injustice, not an irrelevant anachronism. ' Drawing on examples from Visser's (1994) work on industrial relations across Europe several examples of collectivism and effective trade-union action can be identified in countries where government legislation is less restrictive than it is here in the United Kingdom. Belgium and Denmark have both recorded increases in union density throughout the 1980s and 1990s, where unions play a key role in the administration of some state benefits.

In Germany and Denmark the greater prevalence of industrial relations practices is reflected in lower unemployment, while Sweden and Norway have shown rises in union density through the presence of generally less hostile governments (Kelly, 1997). While decline can most definitely be seen as the general trend, it is not universal. Further examples of this can even be seen from within the UK. Some unions in parts of the service sector have experienced consistent membership growth despite the restrictive legislation by operating in stable labour markets and buoyant product markets.

Unions in health, higher education, the state, entertainment and finance have all experienced growth to some extent. Kelly again reminds us, "decline has been the dominant but not the universal experience and in thinking about the future of unionism we should not lose sight of this fact" (Kelly, 1997 : 401). The second factor thought to have had a profound effect on the strength of IR and in particular unionisation, is that of macroeconomic change.

Richard Disney (1990 : 165) takes the position that "varying macroeconomic conditions are the dominant explanation of membership trends in the 1980s and, indeed, the post war period in general. " Through his appraisal attention is brought to the fact that the upsurge in density of the 1970s needs to be examined as well as the decline of the 1980s in order to gain a better understanding of the greater macro-level processes. The belief is that union membership density is a function of a 'business cycle' model influenced by macroeconomic variables such as wage and price inflation and unemployment.

Disney claims that through the modelling of such variables both the surge of the 70s and the decline of the 80s can be explained without the need to consider other effects such as legislation. The view of Disney is in direct conflict to that of Freeman and Pelletier. However, a good argument can be constructed to show that the effect of legislation may not have been as significant as the latter stated. Firstly, it is hard to separate out 'cause and effect' when looking at the post-1979 IR legislature.

Due to the incremental method by which the legislation was brought in, it can be implied that the weakening of unions actually caused the legislation, not the reverse. Secondly, a dispute has been raised as to whether IR legislation has had the intended uniform effect of weakening union strength. While a third opposing view relates to the fact that even if the legislation could have an effect on membership density, the decline would not be seen in membership statistics for several years, and certainly not with such immediate effect as has been observed (Disney, 1990).

So, in taking the view that IR has not been forced out of relevance by legislation, it could be argued that its inability to achieve relevance in the new macroeconomic climate is indicative of its contemporary redundancy. The third factor thought to have had a significant effect on industrial relations is change within the employment market. Studies have demonstrated (Bain and Elias, 1985) that the probability of belonging to a union is higher for full-timers than part timers, men than women, manuals than non-manuals in manufacturing than services, in large workplaces than in small ones, in northern Britain than in southern (Metcalf, 1991).

From this it can be seen that if the mix of jobs and labour in this country follow these unfavourable trends then union membership will decline. In fact, these are many of the trends that have been seen in UK employment structure; trends towards smaller workplaces, the service sector, part-time jobs, non-manual occupations etc. However, Booth (1989) states that even though membership density fell by 11% between 1980 and 1986 only 4. 4% of this change is attributable to changes in the composition of industry alone. Mere shifts within the mix of industry cannot be the whole story (Metcalf, 1991).

Nevertheless, some blame for the demise of IR can be attributed to this change within the employment market, further showing that the inability of IR to continually reposition itself within the bigger economic picture has contributed to its increasingly anachronistic image. Approaches to deciding exactly what has happened to IR are varied across the academic spectrum. An eclectic approach as shown by Metcalf (1991) suggests that all three explanations (legislation, macro-economy and employment trends) are contributory factors on the grounds of plausibility.

However, the tendency of analysts to try and explain union decline within the confines of one of these factors is an under estimation of its complexity. More recent thought indicates that a complex compositional effect of all three factors is the most fitting explanation (Green, 1992). If new state controls, shifts within the macro-economy and employment trends have changed the current economic climate, leaving the role of industrial relations in doubt then perhaps industrial relations could readjust its focus to align more with the contemporary face of organisation.

This is the subject of new industrial relations. Stephen Dunn makes it clear how the old industrial relations approach appears to be dated by using metaphorical approach, comparing the traditional endless struggle between trade union and employer to that of a 'trench war' (Dunn, 1990). In the context of 21st century Britain, where the concepts of performance, quality, commitment, involvement and flexibility are of current interest to the study of organisations it is easy to see how the traditional IR method of management and regulation has waned in popularity.

The concept of new industrial relations originated in the early 1990s, around the same time as the acknowledgement of the factors that caused IR to decline in the 1980s. The increasing importance of 'high-tech' industries and greenfield sites as well as an increasing need for a 'responsible flexible' worker have caused those involved in IR to re-examine their discipline. The shift is to be from a strategy based on imposing control to strategy based on eliciting control (Wood, 1990 from Walton, 1985). Can such a new paradigm allow industrial relations to find its relevance?

Will HRM prove to be complimentary to this new paradigm, or are they merely substitutable? In order to examine the role of IR in this contemporary context we must look at how the contemporary economic environment views IR. Sid Kessler and Fred Bayliss (1995) believe there is little doubt that the early labour legislation had popular public support. There was becoming a widespread belief that the unions had become too powerful in 1970s. They go on to say, "the government's antipathy to unions went much further than this.

Given the ideological commitment to free markets, to managerial authority and to individualism, the existence of unions was considered a hindrance to the proper working of the labour market. " (1995 : 256) In reflection to this, the position of the government can be seen through a statement released in a white paper entitled 'People, Jobs and Opportunity' (1992); "There is new recognition of the role and importance of the individual employee. Traditional patterns of industrial relations, based on collective bargaining and collective agreements, seems increasingly inappropriate.

" This precisely defines the government's position on the subject as well as reflecting some of the more general economic trends. Such state attitude can only pave the way for the new management-orientated methods of employee relations to take control, pushing the ageing IR approach aside. The primary example of such new management-orientated methods is human resource management. The increasing influence of this as a management specialism has had a significant effect on our view of IR. HRM is a process consisting of the acquisition, development, motivation and maintenance of human resources.

By attempting to maintain the workforce, HRM is concerning itself with providing benefits, services and working conditions to keep employees happy. In traditional industrial work, union leaders collectively negotiated such issues, while in the new high-growth service sector individual methods of appraisal are seen as more appropriate. Was this to be expected? After all, the nature of work within tertiary employment is very different to that of industrial employment, it is hardly surprising that new methods of management and regulation were developed that caused less public disruption and represented a cleaner public image.

On the other hand, Ed Rose (1994) believes that the role of HRM may be overemphasised by recent studies on the decline of industrial relations by asking, "Would, for example, HRM practices have been as popular with employers, and arguably as effective, if collective bargaining structures and processes had not been disaggregated? Or if labour market profile had not changed so drastically? Or if government policy and legislation had not been so favourable to employers? It is possible that industrial relations researchers may be ascribing too much importance to the HRM phenomenon…

" (1994 : 30-31). This leads us to believe that industrial relations may not have been pushed out by the growth of HRM, but HRM may have stepped up to fill a gap that industrial relations could no longer fill. With the new service sector bias of the workplace, the idea collectivism has increasingly allowed itself to become redundant. The government has made it clear that there will not be a return to the corporatism of 1970s (Kessler and Bayliss, 1995). HRM and IR will have to continue to evolve to guarantee their place in the future of organisational practice.

Traditional industrial relations can most definitely be viewed as soon to be redundant under current national political positioning, Tony Blair believing that his party will be unelectable if it is seen to be too close to the unions. In reality, many strong unions do still exist close to the government, particularly in the public sector. However, many of these unions have far less power than the industrial unions of the 1970s, and many are unable implement any form of industrial action because of the functional importance of their work (for example, it would not be acceptable for the national nurses union to take strike action).

Although the rise of HRM and the role of other factors have made an impact on IR, there is evidence that the collective principle of trade unionism is not redundant, even in the service sector where HRM thrives. A WIRS (Workplace Industrial Relations Survey, 1990 : 365) conclusion makes this point very clear, "Employee relations in non-union industrial and commercial workplaces had relatively few formal mechanisms through which employees could contribute to the operation of their workplace in a broader context than that of their specific job.

Nor were they as likely to have opportunities to air grievances or to resolve problems in ways that were systematic and designed to ensure fairness of treatment. Broadly speaking, no alternative model – had emerged as a substitute for trade union representation. " This underlying need amongst the workforce to have a collective voice can still be considered as relevant to modern individualised workplaces. It has even been considered meaningless to ask whether people are individualists or collectivists, Kelly (1994) suggests people can be either, depending on their current situation.

This can definitely be considered evidence for the argument that IR does not represent an anachronistic form of regulation. However, it does suggest that employers, in alignment with the government, would rather consider the workforce as individuals, the result of this is a more stable industrial community without the threat of industrial action. Such a situation is of benefit only to employers and the government, and it is those who essentially control such a system. In conclusion, we see that the field of industrial relations is an extremely complex area of debate, the intricacies of which go far beyond the scope of this essay.

As has been seen, three major factors have contributed to the undeniable decline of industrial relations – legislation, employment structure and macroeconomic change. We have also seen that, though diminished, trade unionism is not yet entirely redundant. Other European countries with equally developed employment structures have successfully maintained strong levels of unionisation, and even within the UK some areas of union growth have been identified. Nevertheless, in the face of such intentionally restrictive legislation union membership has been forced in to the background, unable to reposition itself in the changing global market.

This has allowed the discipline HRM to take over many of its functions in the contemporary organisation. Employment structure in the UK has changed a great deal since trade unionism was at its strongest in the late 1970s. Industrial relations in its traditional form does now represent an anachronistic form of management although I do believe there is still a role for collectivism within future organisational paradigms. If HRM is to prove the true successor to IR within the modern workplace then some of its principles will have to be developed further.

Finally, in considering the central issue, 'has industrial relations become redundant and anachronistic or has it been made redundant and anachronistic? ' It has become clear that the demise of IR has been a combination of push and pull factors, for example legislative controls seeking to pull union membership down and new management-orientated methods seeking to push it out. Industrial relations has served its purpose well for over a hundred years, and although it may now seem that it has been made redundant, I believe it is now best that we consider it time for industrial relations to take its well-earned retirement.


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