About Pakistan International Airline Pia Management Essay

5103 words (20 pages) Essay in Management

5/12/16 Management Reference this

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We will have to selectd Pakistan International Airlines for our report. And we are supposed to write a report where our major area of concern is employee relations against a changing background and nature of industrial conflict and the resolution of collective disputes. Due to the prevailing strict security conditions, we were unable to visit PIA for collecting information. Therfore, information regarding PIA is largely collected from internet.

Executive summary

In the beginning of our report, we have a brief background regarding PIA

About Pakistan International Airline (PIA):

Pakistan International Airlines usually better known as PIA can sketch its beginning to the days when Pakistan had not yet achieved independence from the British Raj and is a public sector venture of Government of Pakistan. In 1946, the founder of Pakistan Muhammad Ali Jinnah apprehended the need for a flag carrier for the prospective country and for this purpose the founder of the country requested financial help from a wealthy capitalist Mirza Ahmad Ispahani. PIA was first known as “Orient Airways”, and was registered in Calcutta on 23 October 1946. PIA bought 3 DC-3 airplanes in February 1947 from a corporation in Texas and achieved a license to fly in May of the same year. Later, the airline started its operations in June, providing services from Kolkata to Sittwe and Yangon. This was the first position second-world-war airline flight by a South Asian registered airline company. Orient Airways (early name of PIA) began operations for the new country (Pakistan) when it came into being on 14 August, 1947. (PIA, 2012)

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PIA was once considered as Asia’s best airline. PIA is headquartered at Jinnah International Airport in Karachi and PIA provides services to 24 domestic destinations and 38 international destinations in 27 countries across Asia, Europe and North America. PIA’s major bases are at Karachi, Lahore and Islamabad. Whereas, PIA’s secondary bases entail Peshawar, Quetta, Faisalabad,  Multan and Sialkot. Through secondary bases PIA connects the metropolitan cities with the main bases, the Middle East, Europe, and the Far East. It is largely owned by the Government of Pakistan and is regulated by the Ministry Of Defense as an autonomous body. PIA employs 18,043 individuals as of May 2008. (PIA, 2012)

Outcome: 1st

Tasks for P1:

The unitary and pluralist perspectives of employee relations:

Since the 1980s, there has been a major standard change in managing employee relations to one stressed on more strategic and incorporated frameworks that are based on employee dedication and mutual workplace interests, as an alternative of the traditional managerial control and conflicts between employers and employees.

According to Alan Fox managers have different “frames of reference'” and everyone has a frame of reference, which can be identified as a lens with the help which one perceives employment relations. Number of other authors also argued that the manager’s frame of reference impacts how these perspectives are understood and used or not used. The two well known kinds of ER perspectives are: unitary and pluralist.

Before explaining the two main kinds of ER perspectives, we would first like to explain what frame is.


According to Alan Fox, a frame is basically a sociological point of view that may assist in building of a frame of reference with the help of which issues of industrial relations can be observed practically and placed more open to solutions. (Fox, 1966)

Unitary perspective:

According to Michael Armstrong, the unitary perspective is basically held by managements who perceive their task as that of directing and controlling the employees to accomplish economic and growth objectives. To this end, management thinks that it is the rule-making power. Management tends to observe the venture as a unitary system with single source of authority, “itself”, and single focus of loyalty, “the organization”. It admires the good quality of teamwork, where everyone struggles together for a common objective and everyone accepts their place and work willingly, following the leadership of the selected manager. This unitary view, which is basically autocratic and dictatorial, has sometimes been stated in agreements as “management’s right to manage”. The philosophy of HRM with its focus on commitment and support is based on the unitary perspective. (Armstrong, 2006)

Characteristics of unitary perspective:

First, there is only one source of power in organization, which is usually the management. Second, the function of organizational leaders is to encourage loyalty and commitment among employees. Third, organizations are observed as teams that are working together for common or mutual goals and objectives, and there are also no conflicts of interests between managers and employees. Fourth, the management must represent effective leadership to achieve organizational goals & objectives.  Fifth, Trade unions are not perceived as significant for the pleasant managing of conflicts. Sixth, conflicts in the organization are seen negatively and they are dysfunctional and results to disloyalty, thus harming the well-being of the organization.  Seventh, the state is autonomous and forms industrial relations systems (IR).

Advantages of unitary perspective:

Following are some of the advantages of unitary perspective of employee relations.

A major advantage of the unitary perspective is that it openly wants to incorporate employer and employee interests, so that it can enhance employee commitment and loyalty.

The unitary perspective also focuses on the role of managers in achieving win-win situations for employees and organizations, wherein their interests can be properly associated with each other

Managers are forced to go beyond their managerial styles of managing employee relations and focuses on their leadership abilities and if they can be persuasive and prominent leaders in the organization, there will be no strong demand for trade unions.

The unitary perspective is fundamentally individualist in its employee relations approach, which works best for individualist IR systems. Many IR systems all over the world have changed from the collectivist IR standards to individualist standards. Therefore the unitary perspective will be mainly valuable for this kind of IR perspective.

Disadvantages of unitary perspective:

Following are some of the disadvantages of the unitary perspective of employee relations.

The main disadvantage of unitary perspective is the lack of understanding that there are power inequalities between employers and employees which will create different kinds of conflicts. Managers often use greater power over their workforce in shaping work conditions

In unitary perspective, conflict is treated too negatively, and not seen as a force that imitates inequalities and which can be used as opportunities to recover work harmony.

In unitary perspective, it is ambiguous how individual worker attitudes can be effectively integrated into the organizational objectives, because the unitary perspective is very normative and lacks explanation of how common interests can be recognized and distributed across organizations.

Pluralist perspective:

According to Alan Fox, an industrial organization is a plural culture, including many connected but separate interests and objectives which should be sustained in some kind of balance. In place where business unity reflected in a solitary focus of authority and loyalty, management has to accept the existence of opponent sources of leadership. It has to face the fact that a business venture has a triple personality: it is at once an economic, a political and a social organization. In the first, it generates and distributes profits. In the second, it represents a system of government in which managers jointly exercise authority over the managed, but are also themselves involved in a complex pattern of political relations. Its third personality is discovered in the plant community, which develops from below out of face-to-face relations based on common interests, attitudes, beliefs and values between diverse groups of employees. (Alan Fox, 2006)

Whereas Cave (1994) describes pluralism as, “an equilibrium of power between two controlled interests and a adequate degree of trust within the relationship for each side to value the other’s lawful interests, and for both sides to renounce from pushing their interest separately to the point where it became impossible to keep the show on the road”. (Cave, 2006)

Characteristics of pluralist perspective:

First, pluralist theory considers that the workplace is composed of different sets of beliefs, standards and attitudes. Second, there are opposite sources of leadership in organizations. Third, conflicts are expected because there are inborn opposing interests and sometimes conflicts can even be useful, if recognized and controlled within institutional reactions. Fourth, the function of the management is to arbitrate between competing interests. Fifth, Trade unions are lawful legislative body of employees, and they are perceived positively because they help employees focus on their decision-making power. Sixth, the state encourages public interest. Seventh, employee relations constancy can be achieved through a chain of negotiations between managers and employers through the collective bargaining method.

Advantages of pluralist perspective:

Following are some of the advantages of pluralist perspective of employee relations.

Pluralist theory focuses on the effectiveness of industrial relations involvements as it assists in resolving conflicts. Pluralist perspective also considers other different decision-making practices such as communication and consultation with employees.

In pluralist perspective conflict is not ignored, but are dealt effectively through stakeholder involvement. Conflict can then be used to recognize fundamental tensions, so that they can be recognized and properly rectified.

The pluralist perspective does not ignore or disregard the part of trade unions in managing employee-employer conflicts rather it embraces a broader range of employee relations policies.

Disadvantages of pluralist perspective:

Following are some of the disadvantages of pluralist perspective of employee relations.

The major weakness of the pluralist perspective is the tendency to settle on set of rules and procedures and ignore the methods that also contribute to the resolution of conflicts.

The pluralist perspective is unable of recognizing that the state also represents business interests and not just public interests. The pluralist perspective may stress too much on worker interest, which can result to the inefficiencies of collective bargaining practices.

Frame of reference at Pakistan International Airlines (PIA):

According to our findings and observations, Pakistan International Airlines (PIA) uses unitary frame of reference and following are some of the justification for proving that PIA uses unitary frame of reference.

The first and main characteristic of a unitary perspective is that the source of power in organization is with the management which is exactly the same in PIA. The power to make any major decisions is with the management of the PIA because PIA is regulated by Ministry of Defense as an autonomous body.

The management bodies of PIA encourages loyalty and commitment among employees through number of different monetary and non-monetary approaches, this is another characteristic of a unitary perspective.

Employees of the PIA struggle for one common goal which to attain profit by delivering the best possible services to their valued customers. This is also one of the characteristic of unitary perspective.

Conflicts are perceived negatively because this negatively affects their business for example, the recent strikes of the employees regarding pay increase severely affected PIA’s business. One of the characteristics of the unitary perspective is that it ignores the involvement of trade union and this what the PIA’s management did several times in the recent time which lead them to face number of problems. These evidences clearly indicate that PIA uses unitary perspective of employee relations.

Tasks for P2:

Importance of trade union:

Before we discuss importance of trade union it is important first to know what trade union is.

Trade union:

According to Michael Armstrong, the basic purpose of trade unions is to encourage and protect the interests of their members. They are there to equalize the balance of authority between employers and employees. The basis of the employment relationship is the contract of employment. But this is not a contract between equals. Employers are more or less always in a stronger position to order the terms of the contract than individual employees. Trade unions give workers with a “collective voice” to make their needs known to management and as a result bring real and preferred conditions closer together. This pertains not only to terms of employment such as pay, working hours and holidays, but also to the way in which employees are treated in such aspects of employment as the remedy of grievances, authority and redundancy. Trade unions also exist to let management know that there will be, from time to time, a substitute view on key matters affecting employees. More largely, unions may see their role as that of contributing with management on decision making on matters affecting their members’ interests. (Armstrong, 2006)

In short trade unions have two specific functions, to protect their members through collective bargaining, better terms and conditions, and to support and counsel to their members as individual employees. In additional trade union roles involves, that of providing legal, financial and other services to their members.

Importance of trade union:

Employees are not the only ones who enjoy the benefits of joining the trade union but it’s the employer or the organization that enjoys and takes advantage of the benefits of trade union as well. Employees can use trade union as tool through which their voices can be reached to the employer or management. Whereas, trade union greatly help employer or management as it saves their huge amount of time not only in solving their issues but also when they wishes to implement any new rule they do not need to inform each and every employees rather they inform only the trade union leader who then informs all their members.

The importance of the trade union can observe by the following advantages of trade union.


As mentioned earlier, trade union represent employees when they an issue at work. For example, if an employee considers he/she is being unjustly treated, he/she can ask the union representative to assist sort out the problem with the employer. In short, union is there to represent employees.


Trade union representatives negotiate the problems that affect employees working in an organization. There may be a dissimilarity of opinion between management and union members. Trade unions negotiate with the employers to discover remedy to these problems. Trade union usually negotiates for the problems such as pay, working hours and changes to working practices. In many organizations usually there is a formal agreement between the union and the management which declares that the union has the right to negotiate with the employer.

Voice in decisions affecting employees:

The economic protection of workforce is determined not only by the level of wages and duration of their employment, but also by the management’s personal rules which incorporate selection of workforce for layoffs, promotion and transfer. These policies basically directly affect workforce. In order to ensure these policies are developed fairly, the involvement of unions in such decision making is a way through which employees can have their voice in the decision making to protect their interests.

Member services:

Now a day trade unions are providing number of different services to their members in order to ensure their rights are not ignored and to make their members effectives. These services involves education & training, legal assistance, welfare benefits and financial discounts etc.

On the basis of the above benefit of trade union to the organization, we can conclude that Trade union can greatly help PIA to resolve different issues. For example, recently PIA’s employees were on strike because they wanted to increase their pay levels, if the management of the PIA had good relations with the trade union they might not had faced this problem. Therefore, considering the importance of trade union PIA must value their trade union otherwise they will face different other serious problems in the near future.

Tasks for P3:

Role of trade union in employee relations:

Trade union plays an important role in forming people’s working lives in almost every part of the world today, though their power in this respect has decreased in current times. The percentage of employees who are members of unions fell in the first decade of the twenty-first century, though this decrease was modest, and far less impressive than the decrease of the previous two decades. The experience of firms and industries to greater market pressures, a growing movement in outsourcing and the growth in unusual employment, employer supported forms of involvement and representation, and the nuisance of legal limitations on the ability of unions to recruit, organize, collectively bargain and take industrial action, has all added to a quick fall in membership. Despite the acceptance of different internal strategies and the introduction of laws pushing employers to recognize unions, the downward trend in membership all the same continued in recent years, although at a slower pace.

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As mentioned earlier that employees are not the only ones who enjoys the benefits of joining the trade union but it’s the employer or the organization that enjoys and take advantage of the benefits of trade union as well. Employees can use trade union as tool through which their voices can be reached to the employer or management. Whereas, trade union greatly help employer or management as it saves their huge amount of time not only in solving their issues but also when they wishes to implement any new rule they do not need to inform each and every employees rather they inform only the trade union leader who then informs all their members.

Following are some roles of trade union in employee relations:

Member services

Voice in decisions affecting employees



The roles of the trade union mentioned above are briefly explained earlier in our report.

Tasks for P4:

Role of main actors in employee relations:

According to (1966), the term employment relationship basically explains the interconnections that exist between employers and employees in the place of work. These interconnections may be formal, for example contracts of employment, procedural agreements. Or they might be informal interconnections as well in the form of the psychological contract, which states certain assumptions and expectations regarding what managers and employer have to provide and are willing to deliver. Employer and employee may also have an individual dimension, which pertains to individual contracts and prospects, or a collective dimension, which pertains to relationships between management and trade unions. (Kessler and Undy, 2006)

Whereas according to Michael Armstrong, the parties of the employee relations are managers, employees and employee representatives (union). The “substance” includes the job, reward and career of individuals and the communications and culture of the organization as it directly affects them. It may also involve collective agreements and mutual employee relations like works councils etc.

The formal aspects contain rules and procedures, and the informal dimension contains understanding, expectations and assumptions. At last, the employment relationship exists at different levels in the organization such as management to employees usually, and managers to individual employees and their representatives. The function of the relationship will also be affected by practices such as communications and consultation, and by the management style existing throughout the organization or implemented by individual managers. (Armstrong, 2006)

Parties in the employee relations

Role of the parties in the employee relations:

The role of the employees in the employee relations is to consult their representative or union at times when he/she feels they are treated unfair or if they wish for a demand such pay increase, decrease in working hours or holidays etc. Another role of employees in the employee relations is they must obey the orders from trade union.

Whereas union or employees representative have two specific functions, to protect their members through collective bargaining, better terms and conditions, and to support and counsel to their members as individual employees.

Similarly, the role of managers or employers is to maintain good relationship with the unions representatives which otherwise leads to different major issues. The role of managers or employers in employee relations is to communicate new policies and regulations to their employees through employee representatives or unions.

Tasks for M1:

An effective judgment of PIA:

Due to the prevailing strict security conditions in Pakistan, we were unable to visit PIA’s office for collecting data. Therefore, we had to collect data via electronic sources.

Disputes at PIA:

According to the report of Mr. Qasim Moini the correspondent of the Dawn News that five flights were affected on Friday after a clash over pay and a working agreement between the management and pilots of PIA threatened to have an effect on the flag carrier`s plan. (Dawn News, 2011)

The Pakistan Airline Pilots` Association (Palpa) the delegate body of most of PIA’s 450 or so pilots advised its members to go by the book, read articles that allow them to take 10 days off in a month and not fly until given notice 12 hours before a flight in writing.

Another dispute at PIA was very shocking in terms of financial cost and passengers’ dissatisfaction. According to Dawn News on 10th of February 2011, employees strike at PIA that lasted for four days, trapped thousands of passengers and abandoned nearly three dozen domestic and international flights on Friday. PIA spokesman Mashhood Tajwar said 33 flights were canceled. No PIA planes were flying to or from the capital, Islamabad, while the timetable in the southern city of Karachi has been disturbed. Even though PIA is at the brick of bankruptcy but this strike cost PIA a loss of about $22 million. (Dawn News, 2011)

The problem was later resolved by federal Interior Minister Rehman Malik by meeting with the employee’s association leader Suhail Baluch.

Being an HR manager of PIA our decision:

An ideal manager is one that never gives a chance to the birth of dispute, but since we know that managing human is not an easy task and their behavior is not constant and it changes situation to situation. It is also a believe at large that where human exist there must be some sort disputes because of the nature of human being is they often challenges or perceive things wrongs or take things personally.

Our decision for the dispute of the pilot over pay increase and employment hours, we would first look at our policies and employment contract in order to know what they state. After doing so we will critically analyze the party that is wrong (the management of PIA or the pilots). Even if the management of PIA is right, we will still not try give a chance to disputes because it badly effects not only the business but it also dissatisfy customers because as a result of dispute customers may not be served with in the scheduled time.

Whereas, even if the pilots were right then we being HR managers of PIA would try to the best of our abilities to carefully and effectively rectify this issue because as mentioned earlier the dispute can result in delays of flights which will financially affect PIA and it will dissatisfy customers as well. In order to rectify this issue, we would humbly request pilots to carry out their tasks on time. For this reason we would like to provide them with some extra incentives because they are working extra hours. And to rectify pay increase issue, we would have contacted employees’ representative of PIA and being ideal HR managers of PIA we would have adopted “win-win approach”. This approach basically states that some aspects must be tolerated by the management and some the by the employees representative (employees). We believe our decision will not only help PIA to rectify the arising issue but it will also help them not dissatisfy their employees and their customers as well.

While for the second dispute (strikes of the employees of PIA), our decision is almost the same. We will first not give a chance to raise such issues. This issue clearly indicates that the management of PIA is not good towards their employees as a result they were on strike and faced PIA will loss of millions of dollar.

According to our deep observation regarding the strike of the employees that lasted four consecutive days creates both a huge advantage and a huge disadvantage. The advantage of this issue for PIA could be a lesson that they should focus and give values to the issues of employees’ and the disadvantage of this strike is that employees showed their power that they are capable of doing anything with PIA if their wishes were not considered or valued in the future.

We being HR managers of PIA would have consulted the union leader prior the issue had reach to a crucial level and in such situation we would have adopted “you win-I lose” approach because this approach would at least have saved the amount of loss that resulted as a consequence of the strike.

Outcome: 2nd

Task for P5:

Importance of framework approach in industrial relations:

Before we discuss why framework approach is importance in industrial relations, we would first like to explain what industrial relation is.

Industrial relations:

Industrial relations may basically be considered as a system of rules regulating employment and the behavior in which individual behave at work. The systems theory of industrial relations, as put forwarded by Dunlop (1958), described that the function of the system is to create the regulations and practical rules that govern how much is distributed in the bargaining practice and how the parties contributed to one another. (Dunlop, 2006)

Industrial relations is described in many more or less formal or informal forms; in legislation and statutory orders, in trade union regulations, in collective agreements and arbitration awards, in social conferences, and in managerial decisions. The “rules” in industrial relations may be defined and logical, or ill-defined and illogical. Whereas, the only issue with industrial relations is that it does not adequately focus on the distribution of power between management and trade unions.

Importance of framework approach in industrial relations:

A framework is basically a supporting arrangement around which something can be constructed or a system of rules, ideas or principles that is used to plan or decide something. Framework approach is significant in industrial relations because it will help not only employees, employees’ representative but also the management or employer in showing them direction of their rights or authorities.

Suppose an employee feels he/she treated unfairly such paid low or no holidays are given to him/her, the employee can consult their representative for this issue in order to rectify it. Similarly, if employer feels his/her legal orders are not obeyed, will consult employees’ representative in order to rectify this issue. This is all because of the proper framework, if there is no proper framework in industrial relations then, both employees and employers may not be able to resolve any issue.

In simple words, we can say that framework approach to industrial relations helps in balancing the use of power both for employers and employees. It often observed that employers misuses their power and dictate their employees, to avoid such situations framework approach is used in industrial relations to maintain the balance of power between both the parties.

Tasks for P6:

Types of collective disputes:

Before we discuss different types of collective disputes, it is important first to know what is a dispute and collective dispute.

Employment disputes are basically divided into two main types

Individual disputes:

Collective disputes:

As the name indicates, individual disputes are generally those that involve a single employee whereas collective disputes involve groups of workers – usually represented by a trade union.

The definition of a collective dispute is pretty wide and can involve issues in dispute such as terms and clauses of employment, physical working conditions, commitment, termination, duties of service, provision of work, regulation and a group of other issues associated with employment relations.

Collective disputes are further divided into two sub-types which are:

Rights disputes:

Interests disputes:

A rights dispute arises where there is disagreement over the implementation or understanding of legal rights. Whereas in contrast, an interest dispute involve disagreements over the determination of rights and responsibilities of those already exist. Interest disputes generally arise in the perspective of collective bargaining where a collective agreement does not exist.

Dispute and their different types

Elements of collective disputes:

Elements of the collective disputes are usually the grievances between employees and employers. These grievances are usually formed either due misuse of power by the employer or by the disobeying the orders of employers by the employees. Following are some of the elements of collective disputes:

When the normal methods of argument or negotiations between an employer and employee representatives fail to reach a conclusion a “failure to agree” must be recorded and a proper dispute course of actions should be appealed.

The dispute methods must be in writing and, depending on the degree of the organization, it must give an opportunity for a dispute to be forwarded to a higher management-employee representative level.

If the higher level of management-employee representative negotiation does not resolve the dispute then the issue should be forwarded to external conciliation.

Logical time limits must be set for reference to the internal and external levels of a dispute method.

In many cases employers and employee representatives may wish the dispute practice to provide for arbitration or mediation. It is advised for both the parties to try to resolve a dispute through conciliation before using these other types of dispute resolution.


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