DYNAMICS OF INDUSTRIAL CONFLICT: PERCEPTION AND ATTITUDES OF WORKERS AND

MANAGEMENT IN NEPAL
Published in The Journal of
Prof. Shyam Bahadur Katuwal, PhD * Economic Society, issue No
7,2006
Abstract
The paper primarily examines the perception and attitudes workers and management towards
different dimensions of industrial conflict with a view to convert conflict into construction by
applying appropriate methods and strategies of conflict management. Structured questionnaire
data were obtained from 372 workers and 103 managerial personnel belonging to textile
industry. As revealed in the study, the felt sources of conflicts, factors initiating workers to
participate in industrial actions and ways of preventing conflicts were economic driven factors.
The compromise was considered as the most preferred method for resolving conflict between
them. Thus, there is a need to exercise in the line of the findings of the study to prevent
organization from the distasteful or destructive consequences of conflict.

INTRODUCTION
Industrial conflict is a state of hostility or perception of disagreement of interests between different
parties. It is an inherent phenomenon in the sphere of organisational life. Industrial conflict can take various
forms, ranging from late-coming to proletariat revolution (Kerr, 1964). There is a common notion that the
industrial conflict is distasteful to the attainment of organizational objectives and also blamed for slow pace of
industrial growth. The basic premise of official thinking is that "industrial conflict was abnormal and should be
kept minimum"(Sherlock, 1990: 117). Industrial conflict is abhorred and sought to be eliminated (Kennedy,
1966). However, modern organization theorists have recognized that conflict is not only resulted into destruction
but also can have positive effect depending on its management (Samantara, 2004: 299). Some amount of conflict
is desirable because it provides a check on the management's decision-making processes and resolving conflict
in a constructive way increases group cohesiveness and embeddedness (Singh-Sengupta. 1998).
Newstrom and Davis (2003:265-66) have considered conflict as a source of stimulating people for better
result, to be more creative, experimental and committed, and a foundation of deeper understanding among the
parties involved in a conflict. They also remind that prolonged and intense conflict may bring the deterioration
of co-operation and teamwork, distrust among people, decline of self-image to others, rise of personal stress and
decline in motivation level. Arun Monappa (1993:182) viewed that ill effects of conflict are loss of production,
and profit to the owners, loss of wages to the workers, irregular supply of goods and services to the consumers,
and aggressive loss in gross national product and income at the national level.
Thus, it is important to be aware about the dimensions of conflict and to take appropriate conflict
prevention and resolution strategies. In many cases, the study of industrial conflict has been done to observe the
quantitative aspects of conflict, like duration of work stoppage, man-days lost in work stoppages, relative

*
Then Lecturer, Faculty of Management at Post Graduate Campus (T.U.), Biranagar, Nepal

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position of strike and lockouts in total work stoppage, relative importance of different causes in work stoppage
and performance of industrial relations machinery (Jyoti and Sidhu, 2003: 59). The area of behavioural studies
in industrial conflict has not received adequate and serious attention of the researchers in Nepal. In view of this,
there has been a growing need to learn the perception of workers and management about the dimensions of
industrial conflict for managing conflict effectively and make it contributing to the organizational growth and
development.
PREVIOUS STUDIES
In Nepal, so far there has been no sufficient empirical study on the perceived dimensions of industrial
conflict. One could, therefore, get insights from the research findings obtained in India and other foreign
countries. In the studies of De and Srivastava (1967), Kanappan and Saran (1967) and Sivaprasad and
Sreeramanumurthy (1977), non-human behavior of management, deep frustration of worker with the pattern of
industrial relations, the apathetic, aggressive and resistive responses and arbitrary decision of employers to the
demands of the workers, and failure of timely intervention and control of government had been found the major
sources of industrial conflicts. Multiplicity of unions, union rivalries, indiscipline among union members,
strained union-management relationship, the functioning of trade unions on political ground, lack of mutual
adjustment and lack of proper personnel management were the major sources of bitter relationships between
labor and management relations (Tripathi, 1969:127). The other factor causing conflict between labour and
management were identified as: non-monetary factors such as supervisory attitude and behaviors, work
satisfaction, morale and group membership as important causes of industrial disputes (Mayo, 1946 quoted in
Asdhir, 1994:69); many economic and non-economic factors (Bali, 1967); dissatisfaction of workers to the
organizational factors (Dayal and Sharma, 1970); perceptions of workers on the various job factors that create
an unfair relationship with the organization (Tripathi, 1976); inadequate pay, bad working conditions and
housing facilities (Rao and Sarthi, 1976); inflationary condition (Verma, 1978); and lack of promotion was
perceived as the first reason of labor unrest (Sharma, 1978).
There are divergent views regarding the best method of conflict resolution. However, among various
methods, collective bargaining or negotiation are considered the most popular and preferred method of conflict
resolution. In their Managerial Grid, Blake and Mouton (1964) were the first to identify five possible modes of
resolving conflicts: withdrawal, smoothing, compromise, forcing and confrontation or problem-solving. The
findings of Blake and Mouton (1964), Lawrence and Lorsch (1967) and Sharma and Samantara (1994) also
pointed the fact that problem-soling is clearly the most effective method of conflict resolution. The study made
by Patil (1977) shows that direct negotiation is more preferred by employers than trade unions. The study of
Nair (1982) has identified the flexibility and broad-minded approach of management, unity of trade unions and
the constructive role of the government in employment relationship as the factors contributing to harmonious
industrial relations vis-à-vis the success of collective bargaining process at the plant and industry levels.
Conciliation is another important method of the dispute settlement.
Various studies have shown mixed result about the effectiveness of the conciliation in relations to the
maintenance of amicable relations. The studies made by Nagaraju (1981), Murthy et.al. (1986), and Asdhir
(1987) concluded that conciliation machinery, on the whole, has failed to make any contribution in the sphere of

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industrial relations by lessening the strikes and by providing adequate machinery for dispute settlement.
Voluntary arbitration has been criticized on the ground of its poor performance. Because of the ambitious,
expensive and time-consuming nature, the disputants do not prefer the labor courts and judiciary tribunal as an
ideal method of dispute settlement. It is also very difficult to get the benefits of this method of dispute settlement
in the country like ours where a large number of workers are poor, uneducated and are incoherently organized.
They could not afford the fee of the lawyer, collect the necessary fact and evidence to support their argument
and wait with patience for delayed decision of the court. Chawda (1971) titled it 'the delay method of dispute
settlement' and Giri (1972) termed it as 'the barrier for the growth of unions' and favored voluntary negotiations
instead of the adjudication. Das (1974) commented that the parties in adjudication process found the judicial
process extremely difficult to operate and judiciary in industrial disputes itself was finding it difficult to
adjudicate in the complexities of problems and played a mediator role more than that of an adjudicator.
In spite of the recommendations of the above reviewed researches, industrial unrests still have become a
common industrial problem in the country. Therefore, it is required to carry out a thorough and deep-rooted
investigation about the opinion of employers and employees in relation to the industrial conflict as to suggest
appropriate methods for dispute prevention and settlement as well as to promote and maintain harmonious
industrial relations in the country. The above meager literature available on the dimensions of conflict
management brings out inconsistencies in research findings, which need to be examined specially in the
Nepalese industrial climate. However, they indicate certain guideline for investigating on the sources, factors
initiating for industrial action, solutions and prevention of industrial conflict.
THE PRESENT STUDY
The precise mature of industrial conflict in an organization depends upon the perceptions and attitudes
of various interest groups. The article presents the dynamics of industrial conflict in a micro context. Workers'
and management's perceptions have been studied in depth about the sources, factor initiating workers to
participate in the action, and methods preferred for resolving and preventing conflict at workplace. To the extent
possible, this paper fills a vacuum of the qualitative aspect of research on industrial conflict. It is hoped that
findings of the study would provide valuable guidelines to the managers for choosing conflict management
strategies so that they will able to avoid negative effects of the industrial conflict and enhance organizational
effectiveness.
OBJECTIVES
The objectives of the study were to identify the perceived sources, valuable factors attracting workers to
participate in industrial actions, and the preferred methods of preventing and resolving industrial conflict.

HYPOTHESIS
The proposed hypotheses for the study were:
(1) Ho1: The perception of workers and management do not differ in terms of the factors causing
industrial conflict.
(2) Ho2:: Workers and management do not have significant differences regarding the preferred methods
of the prevention and settlement of industrial conflict.

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METHOD
Sample: 372 workers and 103 managerial personnel selected through the Multi-stage Stratified
Proportionate Random Sampling Method constituted the sample (respondent) of this study. For sample
selection, four textile factories (two each in public and private sectors) were selected from the 14 such textile
factories (11 in private and 3 in public sector), which were in operation and employing more than 100 persons.
The sample is about 20 percent of the employment in the sample factories. The respondents were proportionate
to their number in departments, processes, sections and sub-sections of each factory selected for the study.
Measures: The views of the respondents on various dimensions of the conflict were measured through
the interview schedule developed by the researcher in Likert-type fashion. The number of the schedule items
related to the sources of conflict and reasons to participate in industrial actions were eight each. The items for
the method of resolution and prevention of conflict were seven and eleven respectively. The respondents were
required to evaluate all items given in the schedule in terms of rank assignments by putting numbers such as
1,2,3 and so on according to the relative impotence of the item perceived by them. For the purpose of
quantifying the responses, the rank is converted into score. Finally, the score of all respondents to the particular
item was summated and averaged to assign the rank of the item in the given dimension of conflict, based on the
weighted or mean score.
Analysis: The data collected were analysed by using the descriptive statistics, like percentage, weighted
score (WS), rank, weighted average scores (WAS) or mean score and rank correlation.
RESULT AND DISCUSSION
Sources of Industrial Conflict: Depending on their context, management and workers may perceive different
views regarding the sources of conflict. Their perception is given in the Table 1.
Table 1: Perceived Sources of Industrial Conflict
Perception of Workers (N = 372) Perception of Management (N = 103)
Rank
Sources of Industrial Conflict Mean Score Sources of Industrial Conflict Mean Score
1. Wages, allowances, bonus, insurance, etc. 7.09 (88.6) Wages, allowances, bonus, insurance, etc. 4.58 (57.3)
2. Poor working condition/ and welfare facilities 6.46 (80.8) Poor working condition and welfare facilities 4.41 (55.1)
3. Defective personnel policy 5.44 (67.9) Political influence in the trade unions' activities 3.57 (44.6)
4. Improper implementation of agreement/ laws 5.04 (63) Inhuman and irresponsible behavior of workers 3.03 (37.9)
5. Unnecessary disciplinary action 4.31 (53.9) Challenge to personnel policies 2.96 (37.0)
6. Discriminating behavior of management 3.54 (44.3) Disobedient behavior of workers 2.80 (35.0)
7. Inhuman behavior of management 2.85 (35.7) Improper implementation of agreement/ laws 2.06 (25.7)
8. Political influence in management 2.29 (28.6) Discrimination to distribute fringe benefits 1.92 (24.0)
Notes: (1) Figures in parentheses indicate the percentage to the maximum possible scores.
(2) The maximum possible scores = 8.
The ranking of the workers and management to the factors causing conflict was perceived differently in
some issues. However, they had shown common views in respect to the issues of wages, allowances, bonus,
insurance, provident fund, other monetary fringe benefit, working conditions and welfare facilities for causing
conflict. From this, it can be concluded that though the workers and management were different in ranking of
the sources of conflict, they agreed upon the blame imposed by other party for creating conflict.

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 The perceptions reflected in the Table 1 give message that discontent of workers was maximum in the
economic benefits, welfare facilities and policy of employment awarded by the management. From the side of
management, it is the same for economic matter but functioning of trade union on the political ground,
irresponsible and inhuman behaviour are also the factor causing bitter relations between them. Thus, it is
perceived by the respondents that the important reasons causing industrial conflict in the units understudy are
guided by the unsatisfactory monetary benefits, facilities and behaviour of the other parties.

Workers' Reasons for Participation in Industrial Action: The factors, which attracted workers to take part in
industrial actions like, strike, picketing etc organized by trade unions for achieving their demands, denote the
relative importance of the factor they give in their working life.

Table 2: Worker's Reasons for Participation in Industrial Actions

Reasons for Participation Weighted Scores (N=372) Rank
Financial benefits 2976 (100) 1
Better welfare facilities 2589 (87) 2
Better working condition 2464 (82.8) 3
Personnel policies 1786 (60) 4
Implement previous agreement 1554 (52.2) 5
Implement labor laws 1183 (39.8) 6
Protect rights of unionization 764 (25.7) 7
Support other factories union 612 (20.6) 8
Notes: (1) The figures in parentheses indicate the percentage of maximum possible scores.
(2) Maximum possible scores= N x 7.
(3) Weights of 8 to 1 have been assigned to the first to eighth orders of priority respectively.

In this regard, workers were asked to rate their preference to participate in industrial actions. As
revealed in the data in the Table 2, workers' preference to join in the industrial action was highest for obtaining
better financial benefits (Rank 1) followed by welfare facilities (Rank 2), working conditions (Rank 3) and
personnel policies (Rank 4). Other activities in which workers involvement bordered high participation were for
implementing previous agreement (Rank 5) and for the proper implementation of the provisions of labor laws
(Rank 6). They rarely took part in the industrial action for protecting their rights of unionization and supporting
fellow workers in the other factories. It may be said, on the basis of priority, that workers' involvement in
industrial actions was substantial for bread-and-butter reasons whereas they showed a low concern for the rights
of unionization and sympathetic strikes.

Preferred Methods for Conflict Resolution: It is common to say that the environment of harmonious
industrial relations can be obtained through the settlement of industrial conflict in right time and with preferred
methods. Therefore, for this, the workers and management were asked to specify their preference on the seven
different methods of conflict resolution. Their preferences are given in the Table 3.

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 Table 3: Methods Preferred by Workers and Management for Dispute Settlement
Workers (N = 372) Management (N = 103)
Methods
WS Score as % Rank WS Score as % Rank
Struggle (Strikes) 1362 52.3 6 215 29.8 7
Mutual Negotiation (collective bargaining) 2244 86.2 1 598 82.9 1
Conciliation 1612 61.2 2 504 69.9 2
Arbitration 1504 57.8 3 315 43.7 5
Adjudication 1336 51.3 7 292 40.5 6
Committee 1482 56.9 4 462 64.1 3
Third party interference 1401 53.8 5 455 63.1 4
Notes: (1) The overall ranking is based on the percentage of maximum possible scores.
(2) Maximum possible scores =N x 7.
(3) Figures in parentheses indicate percentages to the maximum possible scores.
(4) rs = 0.857143, P < 0.05
As depicted in the Table 3, the most preferred method among the workers and management for the
settlement of disagreement between them was collecting bargaining followed by conciliation. However, there
was reservation among them for other methods of settlement. The strike like struggle and adjudication were the
least favoured methods among the management and workers respectively. Incase of the third, fourth, fifth and
sixth alternatives, there was marginal discrepancy between them.
On the whole, value of rank order correlation (i.e. 0.857), which is moving towards the perfect positive
correlation, indicates very similar perceptions of workers and management regarding the priority of dispute
settlement methods. Statistically, the value of rank correlation was found significant at 0.05 percent. Thus, we
could reject null hypothesis and conclude that the workers and management had, to some extent, the same
preferred method of conflict resolution.

Preferred Methods for the Prevention of Conflict: 'Prevention is better than cure'. Being influenced by this
quotation, a question covering with the alternative methods as shown in the Table 4 was administered to the
subjects with a view to seek their suggestions regarding the mode of the prevention of conflict and thereby
promoting harmonious industrial relations in an organization. As perceived by workers and management, better
economic benefits followed by provision of job security and adequate welfare facilities to the workers could
decrease the strife relationship between them in an industrial setup.
However, the range of priority for the methods of preventing industrial conflict between worker and
management is quite different. The fourth to ten preferred ways of preventing industrial conflict in the views of
workers were good working conditions, timely and duly settlement of conflict, better personnel policies and
programs, involving workers in management, adopting cooperative and human relations behavior in
approaching the problems, prompt and proper handling of grievance of workers and communicating the
limitation of management to workers. The least preferred method, in the view of workers, for preventing conflict
was the third party involvement.

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 Table 4: Preferred Methods of Preventing Conflicts
Workers (N=372) Management (N=103)
Methods
Weighted Scores Rank Weighted Scores Rank
Prompt and proper handling of workers grievances 1525 (82.0) 9 436 (84.7) 5
Involving workers in management 1594 (85.7) 7 399 (77.5) 9
Better economic benefit 1678 (90.2) 1 464 (90.1) 1
Job security 1666 (90.0) 2 462 (89.7) 2
Better personnel policies and programs 1601 (86.1) 6 440 (85.4) 4
Good working conditions 1636 (88.0) 4 428 (83.1) 6
Adequate welfare facilities 1641 (88.2) 3 457 (88.7) 3
Timely and duly settling of conflict 1624 (87.3) 5 371 (72.0) 10
Aware workers about the limitation of management 1508 (81.1) 10 370 (71.8) 11
No third party involvement 1449 (77.9) 11 409 (79.4) 8
Cooperative and human relations behavior to each other 1593 (85.6) 8 423 (82.1) 7
Notes: (1) The overall ranking is based on the percentage of the obtained scores to the maximum possible score.
(2) Maximum possible scores =N x 5.
(3) Figures in parentheses indicate percentages to the maximum possible scores.
(4) rs = 0.7091, P < 0.05
For the management, the fourth to ten preferred ways and least prioritised method of preventing
industrial conflict were better personnel policies and programs, prompt and proper handling of workers'
grievance, good working condition, cooperative and human relations behavior, non interference of third party in
industrial problems, participation of workers in management, and timely and duly settling of the conflict and
communicating managerial limitations to the workers respectively.
On the whole, there was a strong similarity between the views of workers and management regarding
the means of promoting industrial peace. It is supported by the significant (at 0.05 percent) Spearman's Rank
Order Correlation Coefficient value, i.e. 0.7091. Because of the greater calculated value of rank order
correlation than table value, our null hypothesis is rejected and we come to conclusion that workers and
management have the same preferred ways of the prevention of industrial conflict.

CONCLUSION AND IMPLICATIONS

It can be concluded that the sources of industrial conflicts in the textile factories under study are driven
by the lack of economic benefits, facilities and job security to the workers. Therefore, most of the workers took
part in the industrial action organised by trade unions for the purpose of fulfilling these economic benefits,
welfare facilities, job security and so on. In spite of the weak differences (but not significant) in their views
regarding the priority of the methods of settling industrial conflict, collective bargaining and conciliation
methods are the best and the second best methods among the workers and management. Both the parties have
believed that better economic benefits, job security and welfare facilities to the workers could prevent
organization from the adverse effect of conflict and thereby help to establish industrial peace and harmony in the
country.

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 The findings have wide implication value in the present context of the industrial organizations in Nepal.
Basically, the workers and management should cooperate with each other from humanitarian ground for
achieving mutual benefits and profit. When conflict arises, the concerned parties should try to identify the
reasons for it and resolve the fundamental issues.
While trying to resolve conflict, workers and management should ensure that the other's feelings
emotions are not hurt. They should respect their dignity along with the provision of participative management,
compensation based on market price, welfare facilities, good personnel policies, practices of immediate
grievance handling system, and dealing labor problems from humanitarian ground.
Establishment of effective communication system between workers and management would also be
helpful in maintaining harmonious relation between them and maintain industrial peace in the country. The
collective bargaining and workers' participation scheme will be effective means to resolve and prevent industrial
conflict in an organisation. Therefore, these aspects should be introduced effectively, making detailed revision
of the existing Labor Act, 2048 in Nepal, if necessary.
It is necessary to immediate stop industrial violence by developing good understanding and faith
between workers and management as two wheels of the same cart. It is the responsibility of management to take
workers into confidence and involve them in the decision process in the issues of decisions related with the
interest of workers. The labor court should be established at convenience places of the workers and try to give
verdicts by analysing the labour problems from different angles including humanitarian and behavioral aspects.
The role of government should be encouraging to maintain sound labor-management relations. The
programs, policies and rules should be developed by the government in such a way that workers and
management resolve their misunderstanding and problem collectively, voluntarily and without intervention of
the government or third party.

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