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The Impact of Collective Bargaining on the Nature of Industrial Relations

The Impact of Collective Bargaining on the Nature of Industrial Relations

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Categories:Types, Business/Law
Published by: lovebassi on Oct 04, 2010
Copyright:Attribution Non-commercial


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The Impact of Collective Bargaining on the Nature of Industrial Relations 
The prevailing trends in the international business environment during the recentdecades has contributed to greater openness in trade, investment, finance andtechnology resulting in increased international integration and interdependence inbusiness and between states. Further, the growing culture of globalization and itsperceivable effects in several areas of the world overlay the contemporary changes inthe existing world economy and standards ( 2003). Globalization is currently the tag for the promises as well as risks facing humanity in the modern era ( 1999; 2000; and2000; and 2000). As a result, there is global cooperation among independent statesdirected to improved socio-political, economic, and cultural progression.Meanwhile, a considerable number of companies have developed into anessential part of the period of global competition, increasing development, improvedbusiness paradigms, and corporate reorganization. The continuing conversion from thetraditional industrial framework – with its hierarchical companies – to a contemporaryworldwide, knowledge-founded financial system, and intelligent corporations altered theideas regarding the social contract involving employers and employees. With this fact, itrequires human resource (HR) purposes to realign and relocate itself in the surroundingarea of these affecting drivers ( and 2005). Human resources are the most importantdrivers of organizational performance and productivity. The working principle behind HRthat people are the best assets of a business organization remains true up to now. Theachievement of corporate success can only be accomplished by people ( 1998; and1996). Hence, there is a significant need for upper management personnel to maintainharmonious relationship between the employees.Among the most important factors that constitute an effective human resourceand industrial relations is collective bargaining. This paper argues that the structure of collective bargaining can have an important impact on the nature of industrial relations.In particular, it applies to the perspectives of various countries such as the USA, UK,Germany, and Japan. 
Collective Bargaining and Industrial Relations
Collective bargaining, according to and (1999) is the process and practice of negotiations among the management and union representatives to come up withconsiderably fair and acceptable wage and employment conditions for the workforce.The ever changing dynamics of business necessitates the development of collectivebargaining systems among countries so as to deal with the emerging trends andchallenges of the global business setting. , , and (1979) identified the strongestablishment of collective bargaining among nations covered. According to them, theimportant role of collective bargaining is seen on its function in maintaining harmoniousworking relationships among the companies and their employees especially inmanaging differing interests in employment relations. The ( 1997) reports that the thereare significant changes in the collective bargaining institutions among countries. Variousliteratures supports that these changes are driven by some comparative economicmerits of varied bargaining systems ( and 1996; 1993. In European countries, and(1996) and and (1995) documented the emerging changes and development. Suchchanges may initiate major alterations not only in union structure but also in theparticular goals that are set and the approach employed in collective bargainingprocesses.In employment or industrial relations, the theory of liberalism, which is aboutprotection of personal rights over government intervention is applied on probing thegrowth of workforce as it provides clues to better understanding the changing concept of work. Industrial relations analysts, according to and (2006) have long been interested inemployment conditions as minima and as rules or regulations which may limit labour market inequalities in various ways. The ( 1997) also states that “
there is a fairly robust relation between cross-country differences in earnings inequality and bargaining structures
”. With this fact, the welfare of employees as well as employers in a globalenvironment must be the ultimate focus and that regulations in industrial relations aredeliberately implemented.The current belief that the general tendency will be toward an upgrading of theemployment structure is supported by recent trends in the skill or functional distributionof the labor force. On this aspect, worldwide collective bargaining systems and structureaffects the development of the existing industrial relations philosophies. For example,conflict management requires bargaining strategies that will uphold the principles of industrial relations as it pertains to fair employment welfare. There are several ways for two parties to negotiate their sides; these methods are most often used for labor relations especially when unions are attempting to discuss with the other parties
concerning their wants and needs to be applied in their work. These bargainingstrategies are extremely helpful especially in the organizational setting; as suchdiscussions can lead to the overall improvement of the industrial relations regulationsand policies. However, at the same time, these negotiations may also bedisadvantageous when used in the inappropriate setting, especially when it has thepotential to become a major battle between the parties, with several groups of peoplebeing directly and indirectly affected by their conflicts ( 1998).On this paper, the evaluation of the structures of collective bargaining amongfour (4) countries namely United States of America (USA), United Kingdom of GreatBritain (UK), Germany, and Japan supports the argument that collective bargainingsystems affects the nature of industrial relations. Collective bargaining mechanisms areidentified to be an important determinant of national economic capabilities andconditions in relation to international industrial relations regulations as well as theorganizational or corporate initiatives. The succeeding discussion presents an overviewof the structure of collective bargaining of the countries mentioned. All facts aregathered from an assortment of literatures that directly and indirectly tackles the subjectmatter. also, they are properly acknowledge.
United States of America
The collective bargaining efforts of private sector in US are covered by theprinciples of the National Labor Relations Act. It is often characterized as decentralizedin nature ( 1993). and (1979) reported that American collective bargainingstructure serves as the primary solution in protecting the interests of the labor group.For instance, American unions depend on collective bargaining particularly when itcomes to the advancement the welfare of their members. To quote and (1979), “
Thestrength of American collective bargaining lies to a great extent in the fact that, becausemost contracts involve only one employer or even one plant, collective agreements tend to be very specific about a wide range of issues
”. and (1988 cited in 1991) added thatinformation sharing was also associated with the increasing bargaining powers of union. 
United Kingdom
(1993) and and (1992) reported that UK’s collective bargaining structure isdecentralized as similar to USA. It started in the 1960s and eventually accelerated in the

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