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Changing Management Strategies in Industrial Relations: For For
Changing Management Strategies in Industrial Relations: For For
strategies in
industrial relations
How have employers responded to deterior-
ating economic conditions in their strategies
for managing industrial relations? Here the
author, using empirical data for 1977-83, dis-
cusses the changes taking place in management
strategies and the rationales behind them.
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Following the review of previous research Two main developments within managerial
there are three main sections t o this paper. strategies can be identified: the growth of joint
First, the two main trends in these strategies are consultation a n d changes in collective bargain-
identified and analysed. Second, the reasons ing structure.
for these changes are analysed by reference to Several authors point t o the growth of joint
long run and short run pressures. Finally, in a consultation, for example Daniel and Mill-
conclusion, the results of this paper are dis- wardFl01 discovered that just over o n e third of
cussed in the context of previous findings and their workplaces had consultative committees,
future research needs. two fifths of which had been established in the
previous five years. Chadwick goes further a n d
Previous research argues that management are ‘introducing con-
sultative arrangements t o settle many of the
Perhaps the greatest difficulty encountered issues previously determined by collective bar-
when analysing recent changes in strategies for gaining’ [ 121.
managing industrial relations is the lack of up t o Few changes appear t o be taking place in the
date information. Observers have noted the level at which collective agreements are m a d e .
‘extreme paucity of information on recent Daniel and Millward[l31 found that pay bar-
developments’[3] so that ‘we still d o not have a gaining levels for manual workers were con-
clear picture of the changes which have occur- sistent with those collected by Brown three
red at company and plant level’[41. The most years earlier in 1977[141. Both surveys show
recent survey of British industrial relations that single employer bargaining was the most
adopted the workplace paradigm revealing important level of pay bargaining and within
little on managerial activities at company level, single employer bargaining agreements made
and was carried out in 1980, a time recognised at plant level were most significant. An analysis
by many as an economic watershedL51. How- of individual cases reveals n o clear pattern,
ever, some up to date information is available with some companies such a s Philips moving to
in Batstone [6] which presents useful compar- corporate bargaining, while others such as Pilk-
ative data o n developments in the workplace ington and Reed changing to some kind of
over the period 1978 to 1983. local bargaining [15l.
Two areas of interest emerge from the infor- Within the workplace Batstone shows that in
mation which is available: first, the extent a n d over 4 0 % of plants there was an increase in
depth of changes taking place in managerial union involvement and participation over the
strategies; and second, the changes in specific period of 1978 a n d 19831161. While Terry
aspects of these strategies such a s collective argues that managers are going t o great lengths
bargaining and joint consultation. t o protect the position of shop stewards to pre-
Two points of view can be recognised over serve their established relationships thereby
the extent and depth of changes taking place. achieving a ‘reduction in the power and scope
First, Chadwick[71 among others argues that a of shop steward organisations while maintain-
change in economic circumstances will lead to ing much of their formal structure’[l71.
an end of the measures which h e sees em-
ployers taking. Moreover, Batstone [81suggests Changes in managerial strategies
that there appears to have been little in the way
of ‘concerted and successful onslaught o n the
for industrial relations
institutional basis of trade unionism in the Attempts to study managerial strategies by
workplace’. On the other hand, Hyman and looking at the enterprise level encounter prob-
Elgerl91 look at the ‘increasingly radical and lems because of the lack of a n established
successful attack mounted by capital and the theoretical framework. Recent studies have
state’ in railways, steel, newspapers and motor pointed to the problems associated with the
vehicles on ‘restrictive practices’ a n d argue that concept of strategy in industrial relations. In
these changes represent a fundamental shift in particular the term strategy is thought to impute
managerial attitudes, a n employers’ offensive intention t o managerial action where none
on the very core of trade unionism. Similarly, exists; t o omit the problems involved with the
Bright et al. conclude that the changes they formulation of strategy; a n d t o assume that a
observe in the north-east ‘are more consistent strategy once formulated would be imple-
with the process of fundamental and per- mented [181.
manent change’[lO]. This paper attempts t o overcome these prob-
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Changing management strategies in industrial relations
lems by looking at the level at which strategic studied has been an increase in the central-
decisions are taken in industrial relations. isation of managerial control over two types of
Strategic decisions include not only industrial strategic industrial relations decisions. First,
relations policy decisions, but also key oper- managers at head office are more involved in
ating decisions such as limits on wage offers, making industrial relations policies designed to
the settlement of disputes, and the interpre- provide a framework for all plants in the group.
tation of policy[l9]. In particular attention is Second, senior managers at group level are
focused on the allocation of discretion on now more likely to be involved in making key
strategic industrial relations decisions through- operating decisions on issues such as the hand-
out the organisation and how and why this ling of disputes and the awarding of pay in-
changes over time. creases which affect directly industrial relations
To study this the analysis will focus on three in the plants. Strategic industrial relations
specific areas. First, the formal organisation for decisions are, it appears, becoming too impor-
making strategic industrial relations decisions, tant to be left in the hands of plant managers
and in particular the size and location of indus- who find some important decisions have been
trial relations staffs. Second, the co-ordinating taken away from them and their discretion
controls used by managers at head office and reduced on some of those issues which they
divisional level to restrain actual decision retain.
making in the plants. Finally, the specialist col- To achieve this, changes have taken place in
lective bargaining structures developed to two areas: first, alterations to the managerial
negotiate agreements with trade unions, and in organisation for industrial relations leading to
particular the level at which agreements are changes in the way in which decisions are
made. Table 1 summarises the changes in the made at group and plant level; second, modifi-
cases studied [201. cations to the co-ordinating controls regulating
the implementation and administration of
Centralisation of managerial industrial relations policies in the plants.
control over industrial relations Management organisation
One clear trend observed in the organisations In all four companies studied, management
Brief details of the companies studied, which are all in the engineering industry, are as follows. Integrated produces a
narrow range of closely related products in around thirty highly interdependent plants. Amalgamated manufactures a
narrow product range in around a dozen plants which are partly interdependent. Federated produces a wide range of
related products in over seventy plants, some of which are interdependent. Autarky manufactures a highly diversified
product range in over 130 usually independent plants.
The term group refers t o the most senior level of decision making within the organisation, while division is an inter-
mediate level between group and plant which, while not present in all organisations, is usually based on product range
or geographical area.
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have been simplifying the organisation used to Co-ordinating controls
structure decision making o n industrial re- Alterations to co-ordinating controls regulating
lations issues. Most of these changes have industrial relations reflect the changes in
centred around the decision making discretion management organisation [21I. These controls,
of the divisional tier of management. In some which require only a very small staff to operate,
cases the divisions have disappeared to be re- appear to have changed in two ways: first, they
placed by other mechanisms of control result- are exercised from a more senior level within
ing in a substantial decline in the importance of the organisation; second, there are fewer co-
and numbers employed at the divisional level. ordinating controls, but those which remain are
In other companies, previously separate enforced more strongly. Examples of change in
divisions have been merged leading t o major these controls are given in the areas of pay,
modifications in the responsibilities and plants conditions of employment, customs and prac-
covered by divisional managers. Three tices, and industrial relations advice.
examples of the impact of these changes o n In Amalgamated, the wage limits for each
strategic decisions making are given below: o n plant are now set at group rather than
key operating decisions; the interpretation of divisional level a n d group managers are giving
industrial relations policy; and the setting of more precise instructions t o local managers
efficiency targets. over what they can and cannot d o . Originally,
Fundamental changes have been made to divisional managers simply tried to limit the
the managerial organisation in Federated amount of money available for wage increases,
where originally there were eight separate but more recently group managers have tried
divisions each with its own board and per- to intervene to influence the distribution of
sonnel specialists. Six of these boards have available money between basic, premium and
since been dismantled and the rump of their bonus rates. In the words of o n e plant industrial
responsibilities transferred to senior managers relations manager, ‘when the “tablets of stone”
who report directly t o the board. These senior come down, we’ve got very little room to man-
managers direct the activities of plants arranged oeuvre’. Group guidelines in Federated are
in business areas and are held personally res- now enforced more strictly o n conditions of
ponsible for their financial performance but n o employment issues so that local managers have
longer have personnel specialists working for little or n o scope for discretion o n subjects such
them. In the words of o n e senior group as the length of the working week and holiday
manager: “We’re trying to remove the ‘cotton entitlements.
wool’ between head office and the plants.’’ In In Integrated the newly formed divisional
the industrial relations context this means that it organisation has extended the previous
is now group rather than divisional level which attempts to identify and restrain customs and
is responsible for making policies a n d key oper- practices negotiated in the plants. There is now
ating decisions such as the handling of indus- a closer monitoring of issues dealt with locally
trial disputes at plant level. such as discipline and working arrangements
In two of the companies, previously separate with the aim of making these practices more
divisions have been combined. Initially, Inte- consistent between plants. The expanded
grated had four product divisions, each with its specialist staffs in Autarky now provide more
own specialist industrial relations manager, extensive advice to plants o n issues such a s dis-
covering plants in several European countries. putes procedures a n d industrial tribunals.
Since then, two of these European divisions
have been combined to form a single organ-
Decentralisation of managerial
isation and the interpretation of group-wide control over industrial relations
policies now takes place at this new divisional
level. Following similar organisational changes A second trend observed in the companies
in Amalgamated, managers at head office studied has been an increase in the decentral-
launched a group-wide efficiency drive setting isation of some aspects of managerial control
targets for productivity improvements in each over industrial relations. In all the companies
of the plants. In the fourth case, Autarky, studied, local managers find that they are
where there are n o formal divisions, the size of subject to less detailed control from group and
the group personnel department has been in- divisional levels and are able t o exercise their
creased following the group’s resignation from discretion over a wider range of issues than in
its employers’ association. the past. Local managers are becoming more
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Changing management strategies in industrial relations
involved in introducing new practices and plant to devise its own plan to meet the targets
rationalising production and find less need to set for it by head office. In one plant local
be concerned about the problems of consist- managers identified over fifty working practices
ency between plants for what are essentially which they wanted to change, leading to inten-
local issues. In addition, local managers find sive negotiations with local union represent-
they are being encouraged to take a more atives.
active and visible role in the negotiation and Local managers in Federated found that
administration of collective agreements. Group while many personnel restraints have dis-
managers are exhorting them to adopt a higher appeared, new and stronger financial limit-
profile in collective bargaining than in the past. ations have been placed o n their autonomy so
Meanwhile managers at head office find that that their freedom to meet tightly enforced pre-
there has been a reduction in the number of determined targets increased. In order to stay
issues settled at plant level which they are able within their budgets managers in many plants
to influence. were forced to engage in extensive redundancy
Changes have been made in two areas to programmes, leading to reductions in the
improve the reality and appearance of dis- workforce of up to 50% in some plants. Inten-
cretion of local managers: first, alterations to sive negotiations and consultations were essen-
the co-ordinating controls exercised by group tial in plants of this kind faced with the need to
and divisional management; second, changes reduce numbers employed
to the collective bargaining structures
employed with greater emphasis placed on Collective bargaining structure
collective bargaining conducted at plant level. Changes in bargaining structure, particularly
bargaining level and form, have also been
Co-ordinating controls made to improve both the reality and image of
In the companies studied, reductions in the local managers’ discretion.
number and strength of many co-ordinating In only one company, Autarky, were major
controls have led to a genuine increase in the changes made to bargaining level leading to a
autonomy of local managers. Plant level man- genuine increase in local autonomy. In the past
agers have demanded and frequently received Autarky had pursued the policy of having a
the freedom which they feel is necessary to single set of agreements for each of its large
negotiate the changes required to respond to multi-establishment sites. Midway through the
the challenges they face. Bargaining in the period this practice was discontinued as the
workplace is becoming more active as shop single agreements were broken up so that each
stewards and local managers are more in- establishment o n site negotiated its own
volved in solving problems which can only separate agreement. These agreements were
really be solved at plant level. Three areas of negotiated by the newly appointed local per-
change can be recognised: the introduction of sonnel specialists and were based upon the
new technology; improving efficiency and establishment rather than the site ability to pay.
changing working practices; and reducing This change, leading to pay differentials be-
numbers employed. tween establishments o n the same site being
In Integrated local managers found their dis- disturbed, was not achieved without cost since
cretion increased on issues primarily concerned there were major strikes on two large sites.
with the introduction of new technology. Ex- Changes in collective bargaining in Feder-
tensive investment in new technical processes ated, Amalgamated and Integrated were more
meant that the burden for negotiating changes subtle and aimed at promoting the image of
in the organisation of work required fell o n local plant management autonomy. In Feder-
local managers. This situation was not always ated and Amalgamated, local managers were
greeted with outright enthusiasm by local encouraged t o negotiate agreements, out-
managers: “Group spend the money, but it’s us wardly the result of their own initiative, o n
who have to spend half the night solving the issues which were highly significant for pro-
nitty-gritty problems,” was a typical comment. moting the uniqueness of each plant. In Amal-
Nevertheless, decisions and agreements were gamated, changes were introduced in the
ultimately made which were highly specific to salary structures involving the addition of incre-
each plant and shop. ments based on service which were incon-
The group-wide efficiency drive launched by sistent between the plants. Trade unions found
senior managers in Amalgamated forced each it difficult to carry out comparisons o n a like for
like basis, since the new salary structures tiating agreements at industry level and having
introduced an element of what was referred to as little contact as possible with trade unions in
by o n e manager as ‘studied blurring’ between the plants. After 1945 this practice became un-
agreements. Similarly, in Federated differences workable for two reasons. First, the emergence
between redundancy packages in each plant of shop steward activity in the workplace led t o
were introduced deliberately to frustrate trade the development of informal bargaining at
union arguments about comparability between plant level. Second, the growth via merger and
plants. acquisition of the multi-divisional and holding
In Integrated the changes made t o stress the companies produced organisations covering a
uniqueness of each plant included quality wide variety of industries a n d services which
circles to increase employee interest in their were unsuited t o industry level bargaining.
own jobs and their attachment to the plants Gradually, in the 1960s, a new pattern of two-
and, in some plants, producing local employee tier bargaining emerged with agreements being
newsletters encouraging employees t o identify made at both industry and plant level. How-
with their own plant a n d its products diverting ever, this pattern itself began to change in the
attention away from the comparisons of terms 1970s because of the further decline of industry
and conditions between plants. level bargaining a n d the increasingly formalised
nature of bargaining at plant level. This latter
development in particular meant that shop
Pressures from within and without stewards became more closely involved with
The changes observed in managerial strategies managers who made key decisions at plant
are responses not only to influences peculiar t o level. Consequently, the separation between
industrial relations, but are also part and parcel the institutions of decision making and
of the wider restructuring taking place within collective bargaining was under threat as shop
organisations. Industrial relations consider- stewards sought to challenge increasing
ations revolve largely around the policy of pre- numbers of plant management decisions.
serving managerial prerogative by maintaining In response to this challenge to their
a separation between the levels at which authority, employers tried t o re-establish their
strategic decisions and collective agreements institutional separation by redefining strategic
are madel231. Changes in managerial structure and operating decisions a n d ensuring that
are influenced strongly by the business strategy union negotiators and strategic decision makers
of the organisation which is in turn affected sig- were kept apart.
nificantly by product market conditions[241. Group a n d divisional managers, while still
As a consequence of these pressures senior largely avoiding the development of strategies,
managers have adopted two key control tech- began to get involved in strategic decisions
niques traditionally associated with the multi- such as policy changes, pay awards and indus-
divisional organisation: the separation between trial disputes, which affected directly plant
strategic and operational decision making, and industrial relations. Employers also adapted to
the use by head office of co-ordinating con- industrial relations existing co-ordination tech-
trols. These developments will be analysed by niques such as close financial monitoring of
looking at the evolution of managerial strategy plant performance and the use of internal pro-
since the 1950s, and the more recent changes motion of managers to reward good profit
in the last five years or so. records. These co-ordinating techniques make
a n essential contribution t o institutional separ-
ation by allowing plant bargaining t o continue
Multi-divisional organisations a n d encouraging local managers t o follow
and bargaining structure group policy.
Traditionally managers of industrial relations This inconsistency between the levels of
have sought to maintain their prerogative by strategic decision making a n d collective bar-
keeping separate the institutions of collective gaining could prove a problem for managers as
bargaining and strategic decision making, In shop stewards try t o organise outside the plant
the last thirty years a combination of changes in a n d challenge managers who actually make the
management organisation and bargaining key decisions[261. However, in the present
structure have placed this policy in jeopardy. economic climate, this is unlikely because
Before World War Two, managerial pre- stewards find it difficult t o organise sympathetic
rogative at plant level was maintained by nego- action and to form combine committees[271.
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Changing management strategies in industrial relations
and taking control over key decisions, such as that 'an amazing amount of centralisation exists
pay, affecting costs. Plant managers were then regardless of the type of bargaining
given the task of implementing these changes structure"281. O n e characteristic of the
by devising efficiency packages involving American model is, however, unlikely t o
changes in areas such a s the flexibility and appear in the near future. A trend towards
mobility of employees. group bargaining looks to be improbable since
Finally, there was the pressure from changes such a move would erode the institutional
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