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Dr.Sitansu Panda Lecturer (HRM) Siva Sivani Institute of Management, Secunderabad-14.

Introduction Definition & Meaning Scope Approaches to Industrial Relations Models of IR IR in the Post-Globalization Phase IR-HR interface

Contextual foundation for the study of industrial relations in India. Industrialization and labour issues have been emphasized in different Plan periods. Key concerns of the Indian economy are: job creation, skill development, labour mobility, labour commitment, work culture, productivity and competitiveness. Welfare oriented economy, protection of domestic market all have been focused for betterment of the labour. In this context, it is necessary to study the relationship inside and outside the industry.

Definition and Meaning

Labour- Management relationship is IR. Various determining factors of IR. Industrial Relations is the relationship between labour and employer V.B. Singh has defined that -IR scenario varies from State to State due to different causes. -Some are generic and some are specific. -It is basically the industrialization which determine the IR. -Each country, factory, industry has evolved its own IRS.

Richard Lester has defined that -IR includes not only dealings between labour organization and industrial management but also all aspects of labour in the economy. -It includes employee security, managements employment practices, union policies and Govt. action on labour matters.
Employee Security Security


Industrial Management

Govt. action Union Policies Mgt. Practices

Encyclopedia of Social Sciences defines IR as the relationship between employees and management. The relationship directly stems from union-employer relationship.
Employee mgt relationship



ILO defines - IR as the relationship among the State, Labour and Management.



John Henry Richardson defined IR study is concerned with relations between parties in the industry. with the determination of working conditions. Emphasis is however, upon Relations which is human relations in the process of production. The process themselves, material organization of production, types of machinery & equipment, sales of the organization, banking and the transport system are all outside the subject except the improved efficiency yields more production forms the basis for better working conditions. Law of demand & supply of labour, labour market statistics, cost of labour have an important place in economics & business administration. But they are not the main concern. Centre of the stage is held by Men & Women. The Study of IR can be conveniently divided into four aspects.

Definition by John Henry Richardson:

 process  material process  machinery  sales organization  banking  labour statistics


Relationship within industry collective relationship State Role International aspect

Not important in IR

Important concern of IR

Allan Flander states that - IR deals with certain regulated or institutionalized relations in the industry. - He excluded personal unstructured relationships from the scope of a system of IR. - Further, views that only the employment aspect of a business enterprise is the concern of IR. - Relationships are either expressed or arise out of contracts of employment/service.

- Study of IR is the study of institutions of job regulations.

IR Concerned with

Employment Relationship / Job Regulation

Meaning of IR
Relationship within an industry. labour- management relationship. Employer/ owner, management and workers activities are concerned with IR. Government acts as a regulating body. workers form their collective forum as Union. Industrial Relations mostly deals with collective relationship. Managers have their associations.

Scope of IR*

Conflict Aspects Grievance Indiscipline Disputes Collective Bargaining Machineries

Co-operative Aspects Workers Participation in Mgt Trade unionism Management Association Approaches

* All the coverage in industrial relations like the actors and their activities along with the role of Govt. have to be discussed in detail so far as the scope is concerned.

John T. Dunlop has given a model on Industrial Relations. It has a tremendous impact on IR field. It is applicable to three broad areas as: - IR within an enterprise. - IR within a country. - IR in the course of economic development. Borrowed the concept of SYSTEM from Talcot Parsons. Parsons has given that every social system has four basic problems/ functions. All the four activities are also applicable to IR. These are : Adaptation, Goal Gratification, Pattern - Maintenance and Integration. (see fig.) All functions are interrelated.




Adaptation to the environmental challenges Goal Gratification is through the mobilization of resources Integration of effective operation, motivational effort and individual values Pattern Maintenance to keep the dignity, honour pride & privileges of the system.

A Social System is comprised of Political, Economic and Industrial Relations Subsystem. All are influenced by the exogenous forces and have interrelationship with one another.
PS IRS Inter relations ES Exogenous influence


According to Dunlop An IRS, at any time in its development is regarded as comprised of certain actors, certain contexts, an ideology which binds IRS together, a body of rules created to govern the actors at the workplace and work community. The algebraic equation is r = f (a, t, e, s, i) r : rules governing IR f : functions a : actors t : technical context of workplace and the work community e : market context s : power I : ideology of the actors The actors are the Govt., Management, trade union and the workers. There exists hierarchy among workers and managers. Government administers through the Ministry of Labour, and the Judicial system like Labour Court, Tribunal . Govt. role is vital as an IR regulating body.

Context: power, technology, product market, scale & size of operations, seasonal and cyclical technologies are to be considered. Labour Market: wage, availability, cost of labour all are included in the context. The system functions through the web of rules and with different ideas. The problematic aspect also constitutes a component of IRS. The model is given in a figure as follows:

CONTEXT : Technology, market, Labour, Product, Power.




M a n a g e m t.

U n i o n




Substantive rules, Procedures

Dunlops model
Accordingly, IRS involves three groups of actors as; Workers and their organizations Managers and their organizations Government agencies concerned with the workplace and the work community It creates a complex of RULES to govern the workplace. Rules take a variety of forms in different systems like Agreements, Statutes, Orders, Decrees, Regulations, Awards, Policies . John T. Dunlops Book Industrial Relations System , Henry Holt Publications, New York,1958.

Critics on Dunlops model:

Power dynamics in this system has been least emphasized though it is an important factor in IRS. How input is transformed into output is not given. Every system must have a transformation system but Dunlops model is silent about this aspect. It is theoretically acknowledged but practically least applied. Behavioural factors have not been examined. Rules are not the ultimate end of IRS rather the products and services are the end. In every system the rules are the means to an end but not an end in itself. But this model focuses that Rules are the end. Although this model has certain limitations, yet; this gives a comprehensive understanding of the IRS. On this basis, further developments have been made through different research activities.


This model is known as Input-output model. The different environmental aspects have been taken as the inputs The technological, economic and political factors and sub-factors influence the inputs. Besides, the value & power of the workers, management are the inputs. The financial, psychological, social rewards are the main constituents of output. In this model there is an evaluation system. The diagrammatic presentation of the model is as follows:

Craigs Model of IR

Technological Sub-system Economic Sub-system Political Sub-system

INPUT effects Values & power

OUTPUT Rules, Product

Workers Management Govt. agencies


Thomas A. Kochan, Henry C. Katz and Robert Mckersie have given a theoretical framework of IRS. The approach draws from the rapidly growing theoretical paradigm. It integrates traditional theories of IR and literature on corporate strategy, structure and decision making. It summarizes certain propositions. Role of environment is given more focus. The change in environment equally influences the total system. It takes IRS as an open system.

The labour market, workforce characteristics and values, product market, technology, public policies are influencing the IRS. The values, business strategies, strategic activities, collective bargaining, personnel functions, workplace activities are the firm level constituents of the system. The profit of the employer, satisfaction of the workers, labour unions and betterment of the society are the performance outcomes. The past and the current structure of the industry have impact on the IRS.

The different levels in management, union and Government determine the long term/ short term strategy. It is given as follows:
Level / Tier -long term Strategy -policy Making Employers Business strategies HR strategies Union Government


political strategies Macro economic organizing strategies social policies

-CollectiveBargaining -Personnel Policy -Work place & individual Relationship

Personnel Policies Negotiation Strategies

Collective bargaining Strategies

Labour law & administration

Supervisory Style W.P.M.

Contract W.P.M.

Labour Standard Individual Rights

External environment INSTITUTIONAL STRUCTURE OF FIRM LEVEL IR Performance Outcomes

Labour market Values Work force strategies Characteristics & Values Strategic Activities Product Collective Bargaining market Personnel functions Technology Work place Activities Public policies

Employers Workers Labour Unions Society

History and current structures

Significance of KKM Model

It recognizes the interrelationship among activities at different levels of the system. It considers the effects of various strategic decisions taken at different levels. outcome at different levels is specified. The short-term and long-term outcomes have been covered. ------------x ------------------x -----------------x --------

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