III Semester Examination: 2019- 21 batch

Course Code & Title: HR 20

TRADE UNIONS

Discussion forum report

(04 October 2020)

Prof. Johnson Minz

Submitted by;

Akhil Damodare (M2019HRM008)

2nd year M. A. HRM and LR,

SCHOOL OF MANAGEMENT AND LABOUR STUDIES

Tata Institute of social sciences, Mumbai

Forum 3: Economics of Unions
 
Topic: Can a monopoly union effect a monopsony business. Discuss what kind of
characterisations of unions emerge from this.  
Understanding Monopsony: Monopsony:
A monopsonist is a single buyer of labour. Because of their buying power, monopsonists are
able to influence the price they pay compared with buyers in more competitive markets. A
monopsonist in inputs must have a corresponding monopoly in outputs. Hence, Navabi
(2017) has concluded that ‘A Monopsony is Necessarily a Monopoly’.
It is natural to infer that monopsony business can also exercise a strong employer power
which can result in growing wage suppression and inequality if it is accompanied by a
collapse of workers’ market power.
How it impacts Business:
 Monopsony affects other aspects of a business in its environment and hence exist in
markets for factors other than labor. The military in different countries, for example, has
considerable monopsony power in the market for sophisticated military goods. Major
retailers often have some monopsony power with respect to some of their suppliers.
Employer market power called “monopsony,” harms economic growth and raises prices. It
does so because it works much like a monopoly by reducing production. To increase its
profits, the monopolist increases prices and thus reduces production because a lesser
number of consumers are willing to pay these inflated prices for the goods. Similarly, to
raise its profits, a monopsonist lowers the wages below the market value of the workers to
the employer. Because not all workers are ready to work at these depressed wages. As a
result, monopsony leads some workers to quit.
Bargaining Power and Monopsony
If a union is introduced into a labour market which has a monopsonistic buyer of labour the
wage rate is likely to be determined through collective bargaining, with representatives of
the monopsonistic firm bargaining with representatives of the monopolistic union. This
situation is referred to as a bi-lateral monopoly.
The final outcome of negotiations will depend upon the relative power of both sides, and
the specific objectives they have. If the balance of power rests with the union it may wish to
raise the wage rate for all its members as well as secure an increase in employment. The
goal would be to raise wages and employment to the competitive level.
The condition where there is a monopoly union (i.e. single supplier of labour) and
monopsony firm (i.e. single buyer of labour) is a classic case of Bilateral Monopoly. In
bilateral monopoly, there is only one supplier and one buyer. Here, the supplier will try to
increase the wage rate and buyer will try to reduce the wage rate. In a company town,
employer would try to monopolize the businesses and workers would try to form trade
unions to get equal power at bargaining table with regards to wages.
Here, both union and a firm will have particular wage in mind. However, after sometime
both will come to consensus as there is always a threat of strike and lock-down both.

CONCLUSION

Thus, a monopoly union can affect a monopsony business/firm to an extent.

Forum 1: Trade Union vacuum

Topic: Ideology (as understood and defined by Slavoj Žižek), as a strong contender of the
union vacuum, makes one believe that trade unions are gone for good (referring to the
dwindling space of unions across the globe) and that there is or was no real utility of having
one in any business organisation. In Industry 4.0 with automation and robotics picking pace,
would ideology make Human resource function go the same direction as unions?
Getting the definition Understood
 Žižek is building the concept off Althusser, who fused the idea of ideology with the
psychology of Jacques Lacan. According to Lacan, we don't interact with the world as it is,
but rather as we represent it through language. Because of this disconnect, ideology moves
down from being about the world as it is to being about how we view the world to begin
with.
For Karl Marx, ideology is a series of discourses that push false ideas on people. When
people buy into these false ideas, they develop a "false consciousness" about the world,
how it works, and their place in it.
HR and Ideology
Human resources fundamentally looks to improve the conditions of work and pf workers so
that the organization becomes more competitive. In the 21st century the focus of HR has
shifted to a gamut of new spheres such as Wellbeing, employee experience, employer
branding to name a few and these ideologies of workplace have transcended international
boundaries and have managed to make inroads into nations that are ideologically
different.
Changing role of HR:

- There will be a shift in the mode of the activities currently performed by HR. e.g. the activities of HR
appear to be and often are disconnected from the business work of the organization. The shift,
however, would mean that every one of HR’s activities would in some concrete way help the
company better serve its customers or otherwise increase shareholder value.

Smart HR 4.0 It is essential that companies develop a successful Smart HR 4.0 strategy in order to be
able to cope with the transformative challenges of Industry 4.0. New technologies like Big Data and
Artificial Intelligence will automate most human resources department processes, resulting in more
efficient and leaner HR teams.
 Hence more than a threat/ideology the HR department shall actively engage with the AI.
We need to consider how AI and machine intelligence can enable disruptive business ideas
and customer experiences, unlock new ways of working and augment teams to innovate
and solve problems more effectively. Thus HR should build it competencies in the area of
strategy and environment where individuals can flourish with this tech and are well place to
leverage the benefit of AI
Industry 4.0 and HR evolving
Industry 4.0 in terms of Ideology is well in stage 2 where various organizations, institutions,
and talks are going on over the superiority of Industry 4.0. this is a real threat for the HR
function going the same way and lose its strategic importance.
However, it won’t be wise to say that the HR function will meet the same fate as the
Unions, and thus for the ideology to become part of our social world would not be that
easy. there is a strong need that HR function evolves and incorporates the technologies
available. There is a need to see emerging technologies as opportunities and not as a threat.
If we become apprehensive of these then definitely the function will be at a dangerous spot.
We have seen that technology has always aided the human being and similarly, these
technology will also aid the HR function by upgrading itself and also create opportunities for
people within the function.
Unions and HR
Trade Unions have restricted themselves due to the ideological leanings, whereas HR has
adapted itself to the changing nature of work and also to the socio-cultural changes that
have taken place in the past century or so, HR has strong link with the both business and
people-concerns. HR will continue to flourish, as long as HR is able to add value to both the
stakeholders in the ever-changing world of work.
When we look at HR in the 4.0 automation there are for sure some areas of HR that will be
automated, and HR professionals will need to find new ways of adding value. The function
itself will need to find a new way of working, by incorporating the new innovations. But if
we keep believing that automation cannot outdo us, then we will be stuck in our ideologies,
and eventually what happened with the unions can happen to us. We need to be able to
view our work and contributions from a different lens and constantly come up with new
alternative ways to show that the HR function is valuable. 

Concluding remarks
In the long run, the quantity and quality of the workforce will increase. Intelligence will
increase the level and quality of education. In the long run, highly qualified individuals will
be employed. Humans and robots will work together in harmony. And it is up to each
business to deal with the situation.

In order for companies to be able to cope with the transformational challenges of Industry
4.0, it is essential that they develop a successful Smart HR 4.0 strategy.
Conclusion: If HR fails to assume a lead variable role in the 4th Industrial Revolution, it is
going to go the same way as that of Unions in the present day.