THE UNIVERSITY OF ZAMBIA

DEPARTMENT OF ADULT EDUCATION AND EXTENSION STUDIES

INTERNAL MEMORANDUM

FOURTH HAND OUT

INDUSTRIAL RELATIONS

THEORIES OF INDUSTRIAL RELATIONS

1.0 INTRODUCTION
 It has been noted that IR in organizational management is a term that denotes a
specialist area of organizational management and study concerned with a
particular set of phenomena associated with regulating the human activity of
employment.
 Therefore, approaches or theories to analyze IR require the understanding of two
points.
i) The first point is that theories/approaches are primarily analytical
categorizations rather than causative theories or predictive models.
ii) The second point is that there is no “one right” approach or theory.
Each approach emphasizes a particular aspect of IR that can be taken together to
provide a framework for analyzing and understanding the diversity and
complexity of IR.

 The nature of employment is of three types.

i) First is the unitary perspective, which emphasizes that the organization is
a coherent and integrated team unified by a common purpose.
ii) Secondly, the pluralist perspective, which emphasizes that the
organization is an amalgamation of separate homogeneous groups. That is,
an organization is a miniature democratic state composed of sectional
groups with divergent interests over which the organization tries to
maintain some kind of dynamic equilibrium.
iii) Thirdly is the radical perspective (Marxist approach), which emphasizes
that the organization is a microcosm and a replica of society within which
an organization exists.

 Each perspective has a variation in the form of management behavior within it.
The unitary perspective can vary from authoritarian to paternalistic approach to
the role of management. The pluralist can emphasize cooperation or conflict and
 the Marxist may advocate evolutionary or revolutionary approach to the desired
social change.
 Let us now examine these perspectives in much more detail and contrast the
essence of each approach to IR.

2.0 The Unitary Theory

 This perspective assumes that the organization is an integrated group with a single
authority/loyalty structure; that is, everyone is considered to be a member of one
team with the same purpose – to serve the organization’s interests.
 Secondly, it assumes that management’s prerogative is legitimate and rational;
any opposition is regarded as irrational.
 Thirdly, it assumes that the organization comprises complimentary partners to the
common aims of production and profits in which everyone has a stake. In
summary, the fundamental belief of the unitary perspective is that the
organization is in basic harmony and conflict is unnecessary and exceptional.

This has two implications for IR and these are that:

 conflict is perceived to be an irrational activity. That is to imply that
contravention of management rules is rather deviant than nonconformist
dissenting behavior.
 Factionalism is regarded as a pathological (not reasonable or sensible, useless)
social condition, collective bargaining as an antisocial mechanism since it is
founded on the basis of existence of conflicting interest. Conflict is believed to be
factional rather than structural in nature, and is caused by such factors as: clashes
of personalities; poor communication; a lack of understanding on the part of
workers or by agitators that management action is legitimate and for the good of
all.
 Consequently, management approach to conflict resolutions is often based on
authoritarian/paternalistic style. The use of coercion is regarded as legitimate and
management does not need to consult workers.
 The role of law is to increase legal intervention in the form of regulating workers
behavior directly and enforcing this regulation by direct punitive legal sanctions,
for example, legislation against trade unions is aimed at curbing disruptive and
disorderly actions. Management concentrates on the human relations approach or
makes appeals to employee loyalty.
 Trade unions are regarded as an intrusion in organizations from outside which
compete with management for the loyalty of workers. Managers perceive trade
unions as an anachronism (old fashioned).
 Managers are reluctant to concede any role for trade unions in exercising
authority and decision-making. In this respect a trade union is seen as political
power vehicle used by a minority in order to challenge legitimate political, social
and economic structure of society. Trade unions and collective bargaining are
therefore tolerated rather than welcomed and are therefore to be resisted wherever
possible.
 The unitary approach is predominant amongst line managers and it is their
common management ideology for the following reasons:
 i) It legitimizes management’s authority by projecting the interest of
management and workers as being the same and by emphasizing
management’s role of governing in the best interest of all.
ii) It confirms that conflict is largely the fault of the governed than
management’s, and, it projects to the outside that management’s decisions
and actions are right and best and that any challenge to them is mistaken
or insubordinate.

3.0 Pluralist Theory

 This theory is based on the assumption that an organization is composed of
individuals who band together into a variety of separate sectional groups, each
with its own interests, objectives and leadership.
 The organization is perceived as multi-structured and competitive in terms of
groupings, leadership, authority and loyalty, giving rise to a complex of tensions
and competing claims that have to be ‘managed’ in the best interest of
maintaining a viable collaborative structure.
 In summary, the organization is in a permanent state of dynamic tensions
resulting from inherent conflict of interest between the variety sectional groups
and requires to be managed through in variety of roles, institutions and processes.

 Conflict between management and workers is the total range of behavior and
attitudes that express opposition and divergent orientation between workers and
managers on the one hand and working people and their union on the other.
 Thus conflict is seen to be both rational and inevitable. It results from industrial
organizational factors rather than from individuals.
 The primary source of conflict is from the different managerial and worker
groups’ aspirations. The managerial group is responsible for efficiency,
productivity of the organization, and coordinating activities to achieve
organizational objectives whereas workers are only required ‘to do’ and their
main concerns are perceived in a personal terms of high pay, better working
conditions etc.
 For example, the closure of high cost operations are aimed at increased
profitability conflicts with the workers objective of greater job security, new
technology is in conflict with feelings of job insecurity, deskilling, management’s
desire to maximize power/authority in order to control gives rise to workers’
safeguards against arbitrary management actions and decisions.

 Mutual dependence of sectional groups exists in having a common interest in the

survival of the whole of which they are part. Any fundamental divergences can be
bridged by compromises.
 This compromise is a basic procedural consensus based on the principle of
negotiation. In effect this is a balance of power between principle groups. Each
group limits its claim to a level sufficiently tolerable to enable collaboration to
continue.
  The resolution of conflict though characterized by an emphasis to establish
accepted procedures and institutions, which achieve collaboration through
negotiated compromises, is through continuous compromises not to liquidate
workers’ opposition but to provide or allow freedom of association consistent
with general interest of the whole organization.
 There has to be a need for shared decision-making. Legitimacy of management is
not automatic but must be sought and maintained by management itself, that is,
management by consent rather than management by right.

 The role of law in this perspective is primarily one of defining the limits of
socially acceptable collective actions and use of power. The role of trade union is
seen as legitimate and positive in safeguarding workers’ interests.
 The trade union legitimacy is based on social values, which recognize the right of
interest groups to continue and have an effective voice in their own destiny.

4.0 Systems Theory

 The systems theory was first articulated by John Dunlop in USA in 1958. Its
purpose is to present a general theory of IR and to provide tools of analysis to
interpret and to gain understanding of the widest possible range of IR facts and
practice.
 An IR system is not, for Dunlop, part of a society’s economic system but a
separate and distinctive subsystem of its own, partially overlapping the economic
and political decision-making systems with which it interacts.
 In his view, systems theory provides the analytical tools and the theoretical basis
to make IR an academic discipline in its own right.

 An IR system at any one time in its development is regarded as comprised certain

actors, certain contests, an ideology which binds the IR system together, and a
body of rules created to govern the actors at the work place and work community.
 It is this network or web of rules, consisting of procedures for establishing the
rules, the substantive rules themselves, and the procedures for deciding their
application to particular situations, which are the products of the system. The
establishment and administration of these rules is the major concern or output of
the IR subsystem of industrial society.
 These rules are of various kinds and may be written, oral or custom and practice.
They include managerial decisions, trade union regulations, laws of the state,
awards by governmental agencies, collective agreements, and work place
traditions.

 Furthermore, they cover not only pay and conditions but also disciplinary matters,
methods of working, the rights and duties of employers and employees and so on.
It is the rules of IR which have to be explained by the independent variables of an
IR system.

 There are three sets of independent variables or factors in an IR system: the

actors, the contexts, and the ideology of the system.
 1. The actors or active participants comprise:
i) A hierarchy of managers and their representatives
ii) A hierarchy of non-managerial employees and their representatives
iii) Specialized third-party agencies whether government or private ones

a) Managerial hierarchies
Dunlop argues that managerial hierarchies need not own the capital assets of
production and may be located in either private or public enterprises.
b) Hierarchy of employees
- Dunlop also suggests that although employees may not necessarily be
formally organized, they often are. Indeed, they may be organized into a
number of competing or complementary employee organizations.
- In his view, however, totalitarian societies normally have governmental
agencies which are so powerful that they override managers and
employees on almost all matters.

2. The context
Dunlop also describes three environmental contexts that play a decisive
part in shaping the rules of an IR system and with which these actors
interact. These are:
i) The technological characteristics of the work place and work community
ii) The market or budgetary constraints which impinge on the actors
iii) The locus and distribution of power in the larger society.
a) Technology, work place and work community
- He regards particular technologies as having far-reaching consequences in
determining IR rule making. Technologies, for example, affects the size of
the workforce, its concentration or dispersion, its location and proximity to
the employees’ places of residences, and the duration of employment.
- It also influences the proportions of skills in the workforce, the ratio of
male to female workers.
b) Markets/budgetary constraints
- An IR system also has to adapt to the product markets or to the budgetary
constraints of the enterprise. Although these impinge on management
initially, they ultimately concern all the actors in a particular system.
- Such constraints may be local, national or international.
c) The locus and distribution of power
- By the locus and distribution of power in the larger society, Dunlop means
the distribution of power outside the IR system which is given to that
system
- This is important because the relative distribution of power in society
tends to be reflected within the IR system itself. Yet it need not necessarily
determine the behavior of the actors in IR. It is, rather, a context which
helps to structure the IR system itself.
- The distribution of power within the larger society is particularly likely to
influence the state’s specialist IR agencies
 3. The Ideology
- The final element in the Dunlopian systems theory is the ideology or set of
ideas and beliefs held by the actors which binds the system together. More
precisely, in Dunlop’s words:
- The ideology of the IR system is a body of common ideas that defines the
role and place of each actor and that defines the ideas which each actor
holds towards the place and function of the others in the system.
- The ideology of an IR system, he says, must be distinguished from that of
the wider society. Nevertheless, they would be expected to be similar or at
least compatible with each other.
- Each of the main sets of actors in an IR system might even have its own
ideology. But the hallmark of a mature IR system is that its constituent
ideologies are sufficiently congruent to allow the emergence of a common
set of ideas which recognize an acceptable role for each in the system.

However, critics say that Systems theory lacks analytical rigor and its static view
of IR. They have suggested that the model requires refinement and development.

5.0 The Radical or Marxist Theory

 This approach to IR concentrates on the nature of society surrounding

organizations. It assumes that the organization exists in a capitalist society where:
production systems are privately owned; profit is key influence on company
policy and, the owner’s managerial agents enforce control over production
downward.

 The general theory of radical perspective argues that class/group conflict is the
source of societal change – without conflict, society as a whole would stagnate.
The second argument is that class conflict arises from the disparity in the
distribution, and access to economic power within the society – those who own
the capital and those who supply this labor.
 The third argument is that the nature of society’s social and political institutions is
derived from the economic disparity and reinforces the position of the dominant
establishment group, for example, through differential access to education and
medical care, the media, and employment in government etc. The fourth argument
states that social and economic conflict in whatever form is merely an expression
of the underlying economic conflict within the society.

 Under this radical perspective industrial conflict is subsumed to be a reflection of

the inherent nature of capitalist economic and social systems. All conflict comes
from the division within the society between the owners of capital and those
supplying labor. Therefore, conflict is understood to be continuous and
unavoidable.
 Trade unionism is seen as an inevitable workers’ response to capitalism. It
enhances collective industrial power and it provides a focus for the expression and
protection of the interest of workers. However, trade unionism and IR are viewed
as political activities associated with the development of the working classes. The
two are part of the overall political process for achieving fundamental changes in
the nature of the economic and social systems. Thus, the radical perspective
criticizes pluralism for maintaining an illusion of a balance of power between the
various interest groups and hides the imbalance in social power.

 Furthermore, the radical perspective perceives the establishment of processes and

institutions of joint regulation within the organization as an enhancement in
management’s position. Management is able to achieve its objective of greater
effectiveness by satisfying workers marginal aspirations, thus strengthening the
system. Collective bargaining is seen as a temporary and limited accommodation
process for inherent and fundamental divisions within capitalist-based work and
social structures. Both collective bargaining and trade unionism are seen as
supportive of the capitalist system rather than a challenge.

 The role of law is that it is supportive of management’s interests rather than being
an independent referee. The obligations of the employers are precise and specific
whereas those of the worker are imprecise. In sum, the radical perspective views
and analyses IR in social, political and economic terms and not in organizational
and job regulations.

END