Theory

of
Industrial Relations
 Dunlop’s System Theory of IR (1958)
• “Industrial Relations may be defined as the complex of
interrelations among workers, managers and
government”.
• In every country, workers, government & the management
---all interact to build up the country’s industrial relations
system.
• IRs is a sub-system of the wider society or the total
system.
• The Wider Society means- the provider of certain external
influences & constraints and not completely dominating
role player in industrial relations systems
 Dunlop’s System Theory of IR (1958)

•R= f (a, i, b),

• Where, R= industrial relations system,

a= actors,
i= ideology
b= body of rules
 Dunlop’s System Theory of IR (1958)
a = actors (Management)
I. The Exploitative Authoritarian System
• Labor was exploited ruthlessly
• Wage was at barely subsistence level
• No job security
• No welfare amenities
II. Benevolent Authoritarianism
• Believes in Labor Welfare
• Does not consider labor as adult who has say in their
affairs
III. Consultative Style
• Management consults with Labor
IV. Participative Style
• Labor is treated as a partner
 a = actors (Workers’ unions)
I. Sectional Bargainer
• Widely accepted role of the trade unions
• Represents the worker’s interest & bargain with management
(spokesperson role)
II. Class Bargainers
• National bargaining takes place – cover all enterprises belong
to same industry and all industrial occupations.
III. Agent of the State
• TU is considered as the apparatus of the state
• Well-defined role to ensure the fulfillment of the targets of
production ------at the enterprise level
IV. Enemy of the System
• TU encourage excessive consumption aspirations of
workers to create industrial conflict ----which contribute to
social disorder.
 Dunlop’s System Theory of IR (1958)
a = actors (The Government)
I. The Laissez-faire Philosophy
• The government follows a laissez-faire attitude to labor-mgt
relations–
• This allow labor-mgt alone to settle a dispute
• During 19th century Govt. almost everywhere used to
follow this attitude----- this attitude has become outdated
II. Paternalism
• Government showed a paternalistic attitude towards labor
• A series of protective laws were passed ----------regarding
working conditions, payment of wages & compensation for
industrial injuries
III. Interventionism
• Govt. intervened in labor dispute through the process of
conciliation & adjudication
 Dunlop’s System Theory of IR (1958)
i = ideology
In any economy there is an ideology which is shared in
common by the govt., businessmen & workers–---- Capitalism,
Socialism, a mixed of these two

b= body of rules
A body of rules is created to govern the actors

Advantage of this theory

• All important variables have been integrated into this theory
---- so it can explain the dynamics of industrial relations.
• It is also helpful in analyzing industrial conflict
 Marxist Theory of IR (19th Century)
• Industrial Relations occur within a dynamic conflict situation
which is permanent & unalterable so long as the structure of
the society remains unaltered
• The conflict situation is viewed as a product of the labor
market in which on the one hand there are workers who have to
sell labor power in order to subsist, on the other hand there are
buyers who owns the means of production & purchase labor
power
• They have a common purpose--- to increase the total revenue

• However, these two parties are engaged in a permanent

conflict over the distribution of revenue
 Marxist Theory of IR (19th Century)
• The actual distribution is determined by the power situation.
• There is no automatic distribution based on a sense of
equity
• Workers with no power may get nothing
• The concept of alienation is important in this theory
• Alienation arises from the capitalist system
• In the capitalist system labor is sold and bought by the
capitalist to satisfy his/her needs rather than workers
• Worker is estranged from the things he creates & becomes
dissatisfied
 Marxist Theory of IR (19th Century)
Causes of dissatisfaction
• Two aspects are important –
• Division of labor as a means of promoting wealth for the
capitalist but restricting the freedom of the worker
• Factory system of promotion as the most complete method
of domination of the worker by the capitalist

Solution
• Alienation will not be overcome by increasing wages, it will
simply make the worker’s a better paid slave
• Alienation will only be overcome with the overthrow of the
capitalist system when the will not be treated as a commodity
Human Relation Theory of IR (19th Century)
• Keith Davis is the main proponent of this theory
“Human relations are the integration of people into a
work situation that motivates them to work together
productively, cooperatively and with economic,
psychological and social satisfaction”.
• It encourages the small work group to exercise
considerable control over its environment
• This theory has thrown light on certain aspects such as
communication, management development, acceptance of
workplace as a social system, group dynamics,
participation in management, etc.
 The Trusteeship Theory of Mohatma
Gandhi (20th Century)
• Gandhiji had immense faith in the goodness of men. He
believed that many of the evils of the modern world have
been brought about by wrong systems & not by wrong
individuals
• The theory of trusteeship is based on a view that all forms
of property & human accomplishments are gifts of nature
& as such they belong not to any one individual but to
society
• He insisted on recognizing each worker as a human
being
• Employers should not consider themselves as the sole-
owners of factories rather they should regard themselves as
trustees or co-owners
 The Trusteeship Theory of Mohatma
Gandhi (20th Century)
• He requested the workers to behave as trustees of the
factories , to protect it & to do their level best for its
efficiency
• He believed in non-violent communism
• He laid down certain conditions for a successful strike.
• The cause of strike must be just & there should be no
strike without a grievance;
• There should be no violence;
• Non-strikers should never be physically abused.