The Advances In Capitalism Commerce Essay

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The advances in capitalism and the transformation from property and land rights as sources of manager authority to factory system reshaped labour management theories. The spread and wide acceptance of wage labour in the newly introduced factory system brought with it bad living conditions for workers in the city slums. Worker parties emanating from social class awareness sprang with radical tendencies at times (Landes, 1980).

The antagonistic nature of the relationship between labour and capital produced brought about authoritarian labour management systems. This antagonism was a result of looking at labour power as a commodity and the employer as buyer of this commodity with the later seeking maximum utilisation and the former looking for higher price (Hyman, 1989).

So in general managers try to control the production process (including labour), while workers strive to limit and change the management policies. Terry refers to this as the 'continuous struggle between workers and employees for control over the production process ... and the determination of both parties to secure the most favourable conditions (Terry, 1995: 77).

In their drive to resist management policies on issues of pay and work conditions workers developed institutional representative bodies that evolved at the end into trade unions.

The Trade Union could be defined as a medium for exercising workers' the power to influence the work management policies as a group not individually (Hyman, 1975). This definition differs slightly from that offered by the Webbs in which the same role of Trade Unisons is accepted but without reference to power (Webbs, 1920).

The methods Trade unions have at hand in theirs strive to influence the management policies are; Mutual insurance, legal enactment and collective bargaining.

Mutual insurance: This the process by which pay their members benefits in case of worker's falling sick, lose his job or any calamity in return of paying union dues and adhering to union policy. The concept of mutual insurance compels workers to union membership and assures adherence to policies in regard to minimum wage accepted by the union (Webbs).

Legal enactment: this applies when unions work through law making bodies to pass laws protecting workers' rights. Laws passed by government are not easy to break as opposed to agreements reached through bargaining (webs).

Collective bargaining: As coined by the Webbs the term describes agreements reached between managers and unions represented by their union (Burchill, Labour relations). The Webbs noted that collective bargaining was not necessarily limited to trade unionism until the nineteen century, nevertheless after the twentieth century it became the mean of pressure in the capitalist countries. The Webbs also commented that collective bargaining is not always for the benefit of the community (219-221). According to Burchill union participation is vital in the understanding of collective bargaining.

Dubin, as quoted in Rose (291-299) go even further to describe collective bargaining as the 'greatest social invention' placed in the workers' hands to approach industrial relations conflicts in an institutionalised manner. For Dubin this conflict is permeated by concepts of power and force (Burchill). For Rose collective bargaining can be seen as a political tool when observed from pluralist point perspective, the views of Flanders, and Chamberlain and Khun to drive the point home. Noted in Edwards, Fredman and Medoff collective bargaining gives workers a voice in the management decisions (Nollan & O'Deonnel).

This view prevailed until 1979 when it was contrasted by the trend that insists on the harmful nature of unions' interference in the management of labour market. For the Unitarian group, as they were called, competition was the best tool for market organisation (Edwards).

Collective bargaining: Extent and change

Coverage rate:

The proportion of workers covered by agreements reached through collective bargaining is known as collective bargaining coverage rate. According to OECD in 1993 coverage rate fell by 20% over 12 years in the UK. The highest rate was achieved in the mid 1970's at 70%, but this declined in the 1990's to 47%. The reasons for the fall were seen by Millward (1994) to be the employers and government rethinking the usefulness of collective bargaining, added to this the statuary support for unions recognition was withdrawn ( Burchill, Labour relations).

Before world war one some forms of collective bargaining existed in shape of procedural agreements, but even at this stage issues such as wage were limited to district level ( Clegg , 1979). This changed to industry wide bargaining was brought by the 'committee on production'. The change came with restriction in the scope of bargaining to exclude issues relating to wages, in this matter the committee called for coordination rather than settlement (Phelps).

Change _1

The Whitley committee report reports of 1916-1917 on the enquiry into the matters of industrial relations was seen by Clay as an official recognition of the trade unions and the concept of collective bargaining (p154). In his view the short comings of the report were in keeping to the traditional views, namely that governments not interfere at all in industrial relations matters (p 152). On the ground the findings of the report were not followed by the industry organised sectors it was meant for e.g. miming and railways. But general labour committee and government employees association tried to benefit from the report by securing gains they made during the war.

Change 2

After world war two the issue of collective bargaining saw changes especially on the government side. First, the appointment of Ernest Bevin who was the general secretary of the transport and general workers' union in the government formed by Winston Churchill was seen as an indication of unions' status after the war.

Second, white collar workers gained collective bargaining rights in local authorities, the derived from what was known as 'order 1305' (Conditions of Employment and National Arbitration Order, Statutory Rules and orders 1940 No. 1305). 'Order 1305' stated that arbitration was compulsory for some cases.

Third, the new NHS act of 1940 included provisions for collective bargaining based on Whitley report system. The act even detailed the composition of parties when it comes to bargaining between mangers and staff (PP18-23).

Fourth, in the newly nationalised industries bargaining with the trade unions was made a legal obligation.

Bargaining levels

Bargaining can take place at many levels in any industry, e.g. covering a whole enterprise or any part of it. It can take place at a whole industry at national or local level. So level actually refer to the area of industry covered by bargaining.

Bargaining levels also relates to whether it deals with multi-employer or at many plants managed by a single employer. In this case again local or nationwide levels are relevant.

Bargaining levels were getting wider throughout the development of industrial relations; Purchill (p94) attributed this to unions' desire to set a rate to protect workers. In this the unions' desire sometimes coincided with the interest of mangers who wanted through set rates to guard against competitors offering higher rates to attract workers. The government recommendations also encouraged unions to set terms at levels higher than the factory level also encouraged the widening of bargaining level. Even though the recommendations of the Donovan report seemed to strengthen trade unions the fact is that they came to limit a status that was present, what the report called the disorderly bargaining. Donovan view that the law should play small part in industrial relations illustrates the report recommendations aims (Burchill)

Burchill saw the nationalisations after the war made the government the central controller of the essential industries this led to wages being fixed at national level; this was also a widening of bargaining level.

Burchill draw from the study done by Brown (1995) that from 1950 to 1990 multi-employer bargaining coverage declined from 60% to 10% in the UK. He also noted a trend to abandon plant level bargaining to enterprise level, but the opposite is true in the public sector where local systems took over from national level bargaining.

Bargaining units

Bargaining units relate to employees groups whose conditions are affected by an agreement. A bargaining unit could represent one or many unions, which may lead to competition within bargaining units themselves.( Not complete)

Representatives of bargaining units are called bargaining agents. Employers prefer to deal with fewer agents who represent many units to simplify negotiations. Bargaining with all agents at the same time is referred to as single-table bargaining, this could reduce bargaining time and guard against suspicion of leapfrogging.

Collective Bargaining (From note- merge with above)

The period between mid 1970s and 1980s saw an increase in the size of the workplace and sizes of corporations as well. Prucell and Sisson used the census of production data 1951-78 which indicated that 40% of employees work in establishments with 1,000 employees or more. This led managers to focus more on industrial relations functions.

This trend continued with more increase in corporation size this increase reached huge proportions, by 1978 Prucell and Sisson noted 30% were employed in corporations with 10,000 or more.

Prucell and Sisson continue to list other reason for focus on industrial relation such as the changes in corporation ownership from family ownership, foreign ownership and changes in corporation's internal organisation. They put great emphasis on the influence of American parent companies on British which led to innovations in the areas of corporate bargaining, pay systems and personnel policies (P 99).

In the 1980s and 1990s there was a retreat from industrial relations concepts formulated in the 1970s towards more control by managers. This was the result of issues surrounding British industry which led to closures and businesses failure. Kesseler and Bayliss noted that the shift was manifest on bargaining decentralisation and pushing the use of information and consultation policies by mangers in place of collective bargaining. This trend coincided with Blyton and Turnball view that in capitalist countries managers dominate, but do not have total control, in issues of industrial relations.

Private sector

As noted earlier managers has the upper hand in influencing the conduct of industrial relations. Prucell and Sisson noted that managers decide on plants location and size and structure, as well as technologies used in manufacture. This control could be used to limit the impact of workers actions (p 102).

Even though not all factors are in favour of managers' control, one of the factors limiting this control is the decline of multi-employer bargaining. Government policies and the continuous growth of corporations' size also played a part in limiting managers' control. This

The management strategy to regain control included adoption of procedures for all aspects of grievances and complaints, and limiting collective bargaining at production point.

Another area of change by employers was the setting of pay differentials using job consultations and surveys, which limited shop stewards and supervisors, say on the matter. This process whether taken unilaterally by managers or trade unions were involved, led to more control by management over industrial relations (P & S 105).

The result of the strategy could be seen in the domination of industrial relations specialists in who stress on policies and procedures. Another result which was unintentional was the unification of shop stewards and their closer integration with the trade unions.

Management strategy to bargaining level

Two forms of bargaining could be defined if we categorise enterprise by the level of bargaining over pay. We have single employer and multi-employer depending on the number of employers participating in the bargaining. Single- employer could be divided according to the level of bargaining in the enterprise, i.e. at local or national level.


Employees' voice

Differences between workers and management are a natural product of capitalist employment environment. Workers most of the time pushes for collective representation through trade unions to limit managers' control over labour relation issues. While the management desire to limit workers' collective activities and preferred to deal with workers at individualistic level.

Where unions are present the individualism sought by managers is expressed in terms of partnership with workers and giving workers powers over the production process. This approach of managers is rooted in the unitary view which regards the parts making the enterprise as one unit with common goals and objectives. In this view trade unions are regarded as a source of troubles in industrial relations. (Purcell p 112-113).

Another view in which the enterprise is seen as dominated conflicting groups (workers and mangers) whose differences could only be solved by bargaining and compromises.

The changes in the treatment of management in industrial relations after the 1980s is described in Sisson and Marginson as management taking the initiative instead of reacting to the actions of government and unions( Sisson and Marginson ,157). They identify three models for the management role in industrial management; as system actor, strategic actor and agent of capital. The nature of the new management approach is manifest in the concept of flexible organisation. In the UK management approach is characterised by focus on short term results. This is attributed to the high value of share holders and institutional investors, ease of business take over and the dominance of financial management (p 159).


Sisson and Marginson identified the USA 'mutual gains and continental Europe's 'social partnership' as sources of the concept partnership, the other source is from the UK itself where trade unions representatives and managers produced the statement 'towards industrial partnership' (IPA 1992) (Sisson and Marginson: 172).