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McGraw-Hill/Irwin
An Introduction to Collective Bargaining & Industrial Relations, 4e Copyright © 2008 The McGraw-Hill Companies, Inc. All rights reserved.

Management's Strategic Choices –
Theoretical Considerations
• Management considers the linkages between human resource issues and business strategies
If labor becomes organized, management will attempt to shape the bargaining process within the context of its bilateral relationship with the union
Management may alter the product mix or operate nonunion plants
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Alternative Industrial Relations Systems
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Nonunion Industrial Relations Patterns
Nonunion industrial relations systems exhibit three basic patterns
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The common element across the three nonunion patterns is that management policy is influenced by a desire to stay nonunion
• Policies are also guided by the firm’s desire to pursue objectives that have little to do with union status
• Many firms’ policies contain elements of one of more of these patterns

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Personnel policies tend to be informally administered and involve substantial discretion by operating managers
For example, they may not have a formal leave policy, but grant leaves on a case-by-case basis
Mangers would exercise a high degree of discretion over discipline and pay policies
This pattern is common among small retail stores and small manufacturing plants
The firms are often family-owned, and do not want to lose control and union avoidance is a key reason for paternalism
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Larger firms may find the diversity in personnel practices of paternalistic firms too unsettling and costly
They find it necessary to standardize and bureaucratize policies
They realize that variation of policy can cause unionization if some employees feel disadvantaged
The bureaucratic pattern is characterized by highly formalized procedures on policies such as pay, leaves, promotion, and discipline
It uses detailed job classification and evaluation

The Human Resource Management
Pattern
The human resource pattern is an outgrowth of efforts to increase flexibility and cost competitiveness while maintaining nonunion status
Companies began to adopt this new pattern in the 1970s
Relies on formal policies, but policies that are different from the bureaucratic pattern
Policies such as team forms of work, skill or knowledge based pay, elaborate communications and complaint procedures
Until the late 1980s, firms practiced employment stabilization; downsizing ended this practice
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The Role of Business Strategy in Shaping
Nonunion Patterns
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• Many firms in high technology follow the HRM pattern for flexibility
Steel mills show how practices are linked to strategies
Nonunion minimills producing a variety of products tend to follow the HRM model, while low-cost and high-volume mills tend to follow the bureaucratic pattern
Companies with sophisticated personnel systems are likely in high growth areas with skilled employees

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• The New Deal Pattern
Dominated until the 1980s
Characterized by highly detailed and formal contracts
Includes grievance arbitration, seniority-based layoff procedures, detailed job classifications, and standardization of pay
The advantage of this pattern is stable labor relations

Labor and management engage in a struggle over basic rights
Often the dispute is over union representation
Typically involved in long strikes
Imposes high cost through low productivity
Caterpillar Corporation is an example
Major league baseball also followed the conflict pattern
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A strike or lockout occurred in each of the eight contract negotiations between the 1970s and 2002

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Characterized by contingent compensation linking work group pay to economic performance
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Also may include team forms of organization, employment security programs, and more direct involvement by workers and unions in business decision making
Creates mechanisms for workers to directly solve production and personnel problems
Quality circle or team meetings may be used
Not all firms succeed, due to employee or supervisory resistance to change

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The Historical Evolution of Two Union Avoidance
Strategies
As early as the 1920s, two strategies were used to avoid unions:
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Direct union suppression (actively resisting organizing drives)
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Indirect union substitution (removing the incentives for unions)
In recent years, some firms have instituted peer review complaint procedures as part of a union substitution strategy

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There is evidence that union suppression tactics have increased in the past 30 years
Employees illegally discharged by employers during organizing campaigns increased tenfold from 1960 to
1975 and remained high during the 1980s and 1990s
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Management’s use of suppressive tactics against union activists is not merely an artifact of the pre-New Deal labor history, but a significant feature of contemporary industrial relations

The Influence of Union Structure on
Management's Unionization Policies
The degree of centralization of bargaining is a factor in whether a union avoidance strategy will be used by management
A firm with a single union across the whole company is less likely to resist unions in newly opened facilities
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In such cases, the dominant union has the leverage to engage top management decision makers at the strategic level of the firm

General Motors Tries and Then Abandons a Southern Strategy
The GM/UAW relationship is an example of top level management access and engagement
GM abandoned its strategy of opening nonunion plants in the south and resisting union organizing attempts
In return for GM neutrality, the UAW agreed to continue union commitment to quality of working life and other workplace innovations in the existing union facilities
The UAW had the strength to induce GM to make this change

The Expansion of Double Breasting
• Where unions lacked the strength to engage top management, double breasting could take place
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After becoming dissatisfied with the current union, managements would build new, nonunion plants or work with different unions in a new plant
In a typical double-breasted construction company, the commercial end would be unionized while the residential side would be nonunion

The Influence of Attitudes Held by Top
Executives
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The personal views and philosophy of top executives influences a company’s union avoidance propensities
Although their decisions are based upon costs and competitiveness, deeply held personal philosophy may be a powerful influence on corporate behavior regarding unions
The attitudes of European mangers may be different from their U.S. counterparts – as work councils, codetermination, and the extension of employment laws to eastern Germany seem to demonstrate

Overview of Trends in Management
Policies toward Unionization
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In the majority of nonunion or weakly unionized firms, avoiding unions is a top priority
Highly organized firms tend to be less strongly opposed to unionization of new plants, provided their economic and labor relations experience with their present unions have been relatively favorable
Firms are strongly opposed to organization of white collar employees, regardless of their experience with blue-collar workers

Management Structures for Collective
Bargaining
• There are three basic characteristics of management’s collective bargaining structure:
The size of the labor relations staff (those with responsibility for handling union organizing attempts, negotiations, contract administration, and litigation with unions) in relation to the number of employees in the organization
The degree of centralization in decision making on labor relations issues
The degree of specialization in decision making on labor relations

• In general, there is a high degree of centralization of responsibility for labor relations policy inside firms
Most firms place primary responsibility for overall union policy at the corporate level
In most firms, the corporate labor relations executive has primary responsibility for developing union avoidance activities, responding to union organizing campaigns, conducting contract negotiations, advising negotiators, and costing contracts

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In recent years, labor relations specialists have been losing power to line managers and, to a lesser degree, human resource specialists
Some firms seem to feel that they have less need for traditional labor relations specialists and greater need for union avoidance and cost controls

Historically, management has generally accepted the value that unions provide to
American society, yet have aggressively avoided the expansion of unionism
Management remains pragmatic; if the costs of union avoidance are too high, management will work with union leaders
Firms either follow paternalistic, bureaucratic, human resource, conflict, New
Deal, or the participatory industrial relations pattern