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Unit 7: Industrial Relations

behaviour than with developing their capabilities and broadening their perspectives. In sum, Notes
they have moved beyond the old doctrine of strategy, structure, and systems to a softer,
more organic model built on the development of purpose, process, and people.
Those enterprises which have effected a successful transformation to a more ‘people focused’
organization recognize that the information necessary to formulate strategy is with their
frontline people, who know what is actually going on, whether it be in the marketplace or
on the shop floor. The chief executive officer, for instance, can no longer be the chief architect
of strategy without the involvement of those much lower down in the hierarchy.

How do these developments relate to enterprise level labour relations? In essence, they
heighten the importance of the basic concepts of information sharing, consultation and two-
way communication. The effectiveness of the procedures and systems which are established
for better information flow, understanding and, where possible, consensus building, is
critical today to the successful management of enterprises and for achieving competitiveness.
As such, the basic ingredients of sound enterprise level labour relations are inseparable from
some of the essentials for managing an enterprise in today’s globalized environment. These
developments have had an impact on ways of motivating workers, and on the hierarchy of
organizations. They are reducing layers of management thus facilitating improved
communication. Management today is more an activity rather than a badge of status or class
within an organization, and this change provides it with a wider professional base.
The present trend in labour relations and human resource management is to place greater
emphasis on employee involvement, harmonious employer-employee relations and
mechanisms, and on practices which promote them. One of the important consequences of
globalization and intense competition has been the pressure on firms to be flexible.
Enterprises have sought to achieve this in two ways. First, through technology and a much
wider worker skills base than before in order to enhance capacity to adapt to market
changes. Second, by introducing a range of employee involvement schemes with a view
to increasing labour-management cooperation at the shop floor level, necessary to achieve
product and process innovation. Achieving flexibility does not depend on the absence of
unions. Organization flexibility depends upon trust between labour and management. It
implies that workers are willing to forego efforts to establish and enforce individually or
through collective action substantive work rules that fix the allocation of work, transfer
among jobs, and workloads. Organizational flexibility also implies that workers are
willing to disclose their proprietary knowledge in order to increase labour productivity
and the firm’s capacity for innovation.
Traditional assumptions that efficiency is achieved through managerial control, technology
and allocation of resources have given way to the view that efficiency is the result of greater
involvement of employees in their jobs, teams and the enterprise. Organizations which have
made this shift tend to reflect the following characteristics: Few hierarchical levels; wide
spans of control; continuous staff development; self managing work teams; job rotation;
commitment to quality; information sharing; pay systems which cater to performance rewards
and not only payment for the job; generation of high performance expectations; a common
corporate vision; and participative leadership styles. It hardly requires emphasis that achieving
most of these requires training. In Asia too there is a keen awareness in the business
community that radical changes are necessary to sustain Asia’s dynamic growth.
The earlier generation’s recipe for success hinged on hard work, smart moves, the right
business and political connections, monopolies, protectionist barriers, subsidies, access to
cheap funds and, in many cases, autocratic leadership and a docile labour force. The global
village is this system’s nemesis. The new Global-Asian manager has to exercise greater levels
of leadership than before, and balance this with being an entrepreneur, modern manager and
deal-maker skilled at public relations. To this has to be added coaching, team-building and
motivating the company, the ability to visualize, plan strategically, market and re-engineer

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