Chapter 6 - Management

Employers and management

Introduction

The study of employers in employee relations is significant in employee relations because employing organizations and their agents, management, not only make choices as to how todeploy labour but how to manage the employment relationship.However, states play a crucial function in societies in setting the parameters of employer action in employee relations, for instance through the regulation of hiring, utilisation and firing of employees. While the state and employees have the ability to impose constraints on managerial action, employers and management attempt to develop the capacity to counteract pressures that may be seen as detrimental to their conception of organisation performance. To achieve their objectives employers may act collectively with other employers in employers associations whilst at the same time developing strategies to manage the employment relationship at an organizational level.

By the end of this chapter you will be able to

Differentiate between Trade Associations and Employers Associations

Identify the reasons for employer associability Identify Management styles in employee relations Appreciate the impact of Management styles and strategies

on the nature of employee relations

Employer Associability

Capital, like labour, can be collectively organized in a variety of different types of business associations that encompass industry/sector groupings concerned with advancingor protecting common sectoral interests over matters pertaining to trade, such as interest rates, issues

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affecting the import or export of goods (trade associations). Chambers of commerce are more locally based associations of businesses that attempt to protect and advance the commercial interests of business in general (in contrast to a specific sector) within specific geographical locations. They provide opportunities for networking and information exchange and may also monitor and provide training, collect and disseminate information, as well as act as the voice of local business at national level. Employers associations focus specifically on issues of labour and will not only attempt to advance or protect the interests of employers on issues of state regulation of terms and conditions of employment; provide advice and services to member firms but may also engage in direct bargaining with trade unions. Arguably as firms become exposed to international competition with the pressures to reduce cost and enhance flexibility the employers associations role in dealing with labour issues is becoming salient for trade associations. Indeed, it could be such pressures that have given rise to the merger of the peak employers association with the peak commercial association in Japan and discussions of such in Portugal (EIRO, 2000).

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Employers Peak Body – Japan

Keidanren (Japan Federation of Economic Organizations) and Nikkeiren (Japan Federation of Employers' Associations) amalgamated in May 2002 to form the Japan Business Federation . Its membership of 1,584 is comprised of 1,268 companies, 126 industrial associations, and 47 regional employers' associations (May 31, 2003) The mission of the Federation is to achieve a private sector-led, vital and affluent economy and society in Japan, for which it will demonstrate its leadership and in setting the path for the country. Establishment of free, fair, and transparent market economy under the principles of self-responsibility is essential. This should lead to recovery of national economy into hands of the private sector in seeking healthy growth of both Japan's and global economy. The Federation, for this purpose, shall establish timely consensus and work towards resolution of a variety of issues concerning Japanese business community,including economic, industrial, social, and labor. The Goal of Nikkeiren

Nikkeiren is …an organization of employers which deals with laborand social issues in Japan, [it] is comprised of 47 regional (prefectural) employers' associations and 60 industrial organizations. It was founded on April 12, 1948, under the slogan“Employers, be righteous and strong .” The post-war confusion at the time gave rise to persistent inflation and food shortages, and labor disputes erupted frequently. Employers were striving toestablish management rights while groping to reconstruct the economy. Founded in times such as these, Nikkeiren was launched to promote solidarity among employers and build sound relationships between labor and management.

From its inception, Nikkeiren has endeavored to fulfill… three principal missions. These are: (1) to elevate of management ethics based on the solidarity of its membership; (2) to establish orderly and harmonious human relationships within corporations; and (3) to contribute to social and economic progress through corporate activities. At the root of these is our belief that, in any age, the most valuable resource for any company is its people. Thus, from the start, Nikkeiren has consistently addressed the human aspects of corporate management.While valuing the mutual trust cultivated thus far between labor and management, we seek a new labor-management relationship. However, we are not stopping with labor-management issues. In addition to our central focus on “human issues in our industrial society,” Nikkeiren is broadening its scope to include

Despite the potential significance of business associations this there has been little research on them owing to the reluctance of such associations to divulge information to researchers who they feel may be more inclined to favour theemployee’s side or feel that individual members may object to the dissemination of potentially sensitive information (Windmuller, 1984). Most business associations are organisedinto peak, umbrella, bodies and their may be peak bodies for

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trade and employers associations and chambers of commerce. The structure and relative power and functions of business associations varies across nations. For instance, in some countries there may not be a distinction between employers associations and trade associations and unitary employers’ organisations may serve both functions(e.g. France, Italy) (Bean, 1994). Furthermore the degree of employer solidarity may vary across nations, with employer solidarity most notable in North European systems. These difference do not just reflect employers choices but the nature of the business system in which firms are embedded (Whitley, 1999),which can have a significant affect on not only the relations between employers but also between employers and labour and the state.

Lane (1996:16) states “Trust and co-operation between economic actors can differ and in some societies trust and co-operation may be a collective good”, and institutions that encourage adversarial kinds of relations between competitors are likely to encourage similar kinds of connections between employers and employees (Whitley, 1999:33). Indeed some national employers value a co-operative approaches towards labour and a reluctant to lose the benefits that `partnership’ can bring while those in systems characterised by conflictual and adversarial strategies are more opportunistic in their approach to labour. Insider systems, such as those for Germany and Japanindicate greater inter employer collaboration and co-ordination than in the more outsider systems reminiscent of anglo-american countries.

Employers and their willingness on otherwise to recognise trade unions at plant level had significant implications forthe subsequent development of trade unions and the nature ofthe industrial relations system (Valuenzela, 1992). An employers willingness to recognise or not to recognise a trade union and the subsequent relationship between employerand workers representatives can become embedded giving rise

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to particular patterns off industrial relations across nations. For this reason employers and management are been viewed as significant actors in the historical development of employee relations systems (see e.g. Poole, 1986;; Bean; 1994). The degree of embeddedness and employer willingness to work through trade unions can vary between nations and within nations over time. Most accounts suggest there is a greater employer attachment to the structures and institutions of industrial relations in most Scandinavian (except Sweden see Kjellberg 1998), Benelux and Germanic countries (Visser 1992, 1998, Dolvik and Stokke 1998, Upchurch 1999, Jacobi et al 1998).

However, the extent of change called for seems to vary and in some countries the outcome of employer pressure may be `institutional tweaking' rather than institutional transformation (Ferner and Hyman 1998). In countries with less embedded industrial relations systems, employer choices

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America, Japan and Australia

America, Japan and Australia have a history and approach to labour-management relations that are different from each other. The mind-set of most American top managers is to avoid trade unionism, and companies that voluntarily recognise a union are viewed as mavericks. This trend has been taking place since the 1960s when capital started to re-locate to the southern states' anti-union social and political climates and lower labour costs (Kochan et al 1994). Much has been written about the three pillars, and in particular the nature and significance of enterprise unionism in large Japanese firms. Enterprise unionism, as an integral part of the core Japanese system, has been argued to have been sustained by the common interest in enhancing productivity and efficiency (Kawamura 1994) in a system that recognizes differing and shared interests. A system of collective bargaining and consultation exists within a welfare corporatist framework, which seeks to incorporate the union as a legitimate workers `voice' in the context of the enterprise as community (Dore 1990). Australian industrial relations have not been held up as exemplar, but unions have been an integral part of a centralised industrial relations system with a less developed workplace structure or enterprise focus. During the past decade the position of unions has been challenged by restructuring and

seem to be affected less by preconfigured industrial relations structures than by the degree of the `challenge from above' as represented in state strategies and the potential `challenge from below' from organized labour. Thusin South Africa, despite significant differences of interest, employers organized collectively to face the strong politically motivated trade unions with close ties tothe state (Donnelly 1999). In contrast a weak trade union movement with little attachment to the state, which is pro-employer (Jomo and Todd 1994) has resulted in little employer co-ordination in the industrial relations sphere.

The study of Employers and management in Industrial Relations can be undertaken by analyzing the structure and functioning of collectively organized employers in trade associations and employers associations or by focusing on management styles in industrial relations at a micro plant level. The macro, meso (industry/regional) and micro levels of industrial relations are interlinked and can mutually affect each other, macro level outcomes will be less diversethan what is occurring in the many micro locales within which the actual process of managing employees is occurring.The relative importance and impact of the different levels of employers in industrial relations seems to depend upon the historically derived strength of employers associations relative to individual employers, the strength of trade unions, the nature of state planning.

What are Employers Associations ?

The role and function of employers associations varies across nations and may include collective bargaining over substantive and procedural issues, particularly in relation to disputes. Multi-employer bargaining for instance exists in Germany by regional industry based employers

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associations. In contrast, Nikkeiren the Japanese employers body does not engage in bargaining, which is conducted at workplace level. Nontheless Nikkeiren and the German equivalent (BDA) can be significant in affecting the collective bargaining outcomes by acting as a co-ordinating body, which can determine the pattern of bargaining outcomes. Beyond their collective bargaining role employers associations may also act as a pressure group on behalf of employers as the collective voice of their interests, whilstproviding a servicing role through the provision of an advisory function. All of these function could be particularly important, especially for small and medium sized enterprises, where expert resources or time is unavailable within member firms and there is a complex regulatory framework.

Employers associations can be viewed as relatively permanentcollective bodies of employers, although their role, function and power may vary over time and space. Ruysseveldtand Visser 1996, suggest that the strength and success of (any) interest organizations can be measured by density rate; cohesion, finance, ability to mobilize and access to decision makers. The cohesion of employers can be sustained or undermined by such factors as size, sector, geography andideology and religion. The cohesion of employers will itselfbe an important factor in the degree to which employers are willing to fund and back their association, factors which themselves will be determined by instrumentality as well as the degree of institutionalisation of such bodies. For instance, 80% of West German employers were members of employers associations, whose collective bargaining functioncovered 90% of German employees (Tuselmann, 2000). In this case being outside such a structure meant that the individual employer has lost an opportunity to influence theemployers position, which through the extension of such agreements via the courts or indirectly by setting the norm could impact on the non member employer.

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However, employers associations are not static but reflect and change the environments in which they operate at particular moments of history. For instance, the engineeringemployers in the export orientated economies of Britain, Sweden, Germany and Japan have been particularly strong in advocating change and where sectoral agreements have been the norm they have either been largely abandoned (Britain) or the need for greater flexibility pursued (Germany and Sweden) (Visser, 1996). Changes in such major sectors can serve to provide the initial stimulus to modify a county’s collective bargaining system, if other employers emulate thechange amongst these trend setters. Employers associations however are not necessarily homogenous but diverse with different associations between within countries also varying, with some more powerful than others. This implies that a proper understanding of employers associations requires an analysis of internal employer divisions and conflicts as well the environmental factors that have spurred their formation

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German Engineering EmployersIn recent years, the Gesamtmetall employer's association has been confronted with growing criticism from its member companies, which accuse it of concluding collective agreements whose standards are too high and which are too inflexible in terms of allowing company-specific provisions. Hence, Gesamtmetall has taken the view that, given structural changes in the economy and increased international competition, existing collective agreements need some fundamental reforms in terms of scope, content and bargaining procedures. On the other hand, Gesamtmetall has also made clear that it wants to continue with the basic principles of branch-level collective bargaining - mainly because of its peace-keeping function. During the validity of a collective agreement, trade unions and employers are placed under a peace obligation (Friedenspflicht) which forbids any industrial action and thereby guarantees a relatively stable production process with no interference. This stability is also supported by the factthat only trade unions, and not works councils, have the right to call for a strike. Therefore, a change from branch-level to company bargaining might also bring industrial action back to the company level.

Gesamtmetall emphasises the need to continue with the very moderate wage policy of the recent years, and sharply reject the unions demand for an "end of modesty" in this area. According to Gesamtmetall, only moderate wage increases below the increase of productivity could help to improve the employment situation and furthermore stabilise the collective bargaining system.

IG Metall sees branch-level bargaining as being under political attack by an increasing number of "neoliberal" politicians and employers. According to IG Metall, these forces are trying to destroy the branch-level bargaining system with the clear perspective of weakening the political position of trade unions. IG Metall's analysis points to clear tendencies towards an erosion of the binding character of branch-level collective agreements at company level, where employees are, it is claimed, often forced or even blackmailed with the threat of redundancies to accept conditions of employment which are below the collectively agreed standards…many local trade unionists expressed their strong scepticism over further decentralisation of collective bargaining, because this might mean a change for the worse in terms of working conditions as well as bargainingpower at company level.

CommentaryThe German system of branch-level collective bargaining has entered a period of change.In recent years it has already become more differentiated and decentralised, but the

Why Have Employers Associations Arisen?

Employers associations arose out of instrumental reasons notall of which were under the control or to the advantage of employers, what then is their role and future in the contemporary world. An appreciation of the prospects for employers associations can be better achieved by consideringwhy they arose in the first place, and then consider which of these factors giving rise to their initial growth persistor are in decline.

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We know that individual employers in the pursuit of survival, growth and profitability can act in self interested manner in which factors impeding these aims (including other employers) may be seen as potential obstacles to be avoided or overcome. However, out-with the theories of the competitive market, employers may decide that some form of inter-firm association is required to pursue common goals, which may be related to (or a combination of issues concerning trade and production, research and development, lobbying and political influence or dealings with trade unions. The associability and breadthof the issues that can bring employers together will differ across nations, although there are no nations in the world where employer of business associations do not exist. Employers are social actors developed within particular international and/or national institutional and cultural contexts. While it could be argued that private sectior employers at least have clear goals the means deployed to achieve them may be an issue of choice which is not necessarily value free but, at minimum, value constrained due to the process of value internalisation and pressure to confrorm to regional, sectoral and broader societal norms. While employers, like trade unions, may associate to advancetheir interests and are not likely to have a sword of justice role this does not imply that employers are non partisan nor non-ideological for they may have religious affliations or be attached to particular models of the economy. However, any historical compromises that have beenmade can be unmade, although the degree to which this can beachieved will depend on the degree of embeddedness/traditionand the relative power and orientation of the other `actors'.

Three main explanations are offered for the growth of employers associations, and while they are not mutually exclusive in explaining the development and present state ofemployers associations, one of the following may have provided the impetus for employer associability.

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The Challenge from Below

Employers associations are assumed to be the response of employers to the growing power and militancy of trade unionsgiving rise to the employer felt need to combine in order toface the `challenge from below'. This, `defensive' motivation giving rise to the need for employer to associatehas been noted for Germany, Sweden, UK, Australia, Japan (Garron, 1987) India, Kenya (Poole, 1986). It has also been said that association by employers, particularly though not exclusively small and medium sized firms, who might otherwise be weak against organized trade unions, provides some form of countervailing power, whilst supra-firm relations minimises the role of trade unions within the firmand sustains managerial prerogative at this level. In short the `presence of strong, centralized and independent trade unions is a spur to countervailing employer activity' (Poole, 1986:56). This indicates that if trade union power wanes, owing to economic or social factors, one of the imperatives for employer collectivism may also wane. Indeed the decline of employers associations in the 1980’s and 1990’s in the UK may be accounted for by the declining powerof trade unions in a context of lack of embedded government or employer commitment to work with and through social actors in the management of economy and society. This lack of embedded commitment, of course, has deeper historical roots, although even in countries like Germany where it is said that employers have a commitment to social partnership the initial response of employers was one of hostility.

The challenge from above

A second and related reason for employer association has been the growing felt need for regulatory intervention by states into the employment sphere. Employers may feel the need to combine in order to act as a pressure group to advance and articulate the employer interest particularly indemocratic political regimes where there has been an

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extension of the franchise to workers and where political parties have formed to represent their interests or other parties compete for the labour vote. In addition `a powerfulstate with an interventionist role in industrial relations will encourage employers to establish centralized `peak' organizations to influence government policy at source' (Poole, 1986:56). This may be particularly the case where the state is involved in economic planning, as in coporatistarrangements, and has instituted a centralized system of state management constrains and direct employer action. Where employers organisations exist under state corporatist regimes employers may be under the control of the state and therefore could be viewed as state sponsored employers organisations. In contrast under neo-corporatist arrangements the state may wish to develop a forum within which to seek representative employer voice. The condition for such representation however may be difficult to establish because of the need to avoid too many conflicting employer interests, which may make discussion, compromise and agreement difficult, as well as the need to ensure that any compromises reached at national level can be implemented. The effectiveness of neo-corporatist arrangements may require that associations are not too numerous, can unify the interests of their members and can make their members comply (Greenwood and Webster, 2000). These preconditions may be undermined owing to employer fragmentation resulting from issues such as size, orientation (import or export), sector etc. and this may be accentuated where such differences coincide with regional, ethnic or racial fragmentation as was the case in Japan (seeGaron, 1987; Low and Haggard, 2000).

The challenge within

Employers have been argued to form into employers associations for market reasons, in particular because the may want to take wages out of competition and collectivise the risk of the impact of action rather be picked off one byone (Duffy, 1984). There seems to be industry variations

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here with industries characterised by relative ease of entry, high degrees of cost competition, and relatively labour intensive industries having a greater need to take wages out of competition and collective risk arising from the industrial relations sphere (Sisson 1987). Thus despite a relative antipathy towards trade unions the construction, retail and road haulage sectors in the USA have employers associations. However, it has been argued that in the systemof centralised bargaining in Germany large employers may have a vested interest in using high wage centralised strategies to deter lower wage, but less efficient former East German firms from entering the market (Haucap et al, 1999). It may also be the case that centralised wage strategies encourage firms not only to look at productivity enhancing innovations but also market differentiation strategies built around such factors as quality, innovation,market responsiveness etc. rather than the issue of human resource costs per se.

The above explanations for the emergence of employers associations indicate that employers are not necessarily allpowerful but subject to pressures from other `actors’ (including other employers), to which they need to develop strategic responses. One of these reponses is employer collectivism, although this need not necessarily be the case, particularly where high levels of corporate concentration can give rise to a small number of large firmswith sufficient expertise and resources to control their environment as happened in the United States (Bean, 1994).

Conflicts amongst employers

While small and medium sized firms may have certain benefitsfrom these services it has been argued that large firms not only would have such resources in-house but their need to ensure common wages may not be to their advantage. For instance large firms by virtue of economies of scale may be able to pay more and thereby utilise wages as a form of labour market competition. However large employers may still

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gain from the fact that disputes procedures are available which can tie down trade union action and possibly keep trade unions out of the workplace and retain managerial prerogative at micro level (Poole, 1986). In most countries where employers associations exist disputes have arisen as to the amount of control exercised by large employers by virtue of the fact that individual representation within theemployers association may be based on size of the member. Insome countries this has given rise to different employer centres, which may be organised around size (eg France, India) although factors such as religion have also been the basis of employer organisation (eg Holland), such basis of formal organisation are the exception rather than the rule. Even in countries with deep religious or ethnic division divisions where trade associations may be formed on the basis of ethnicity (as in Malaysia), no separate employers associations exist on this as an organisational principal indicating the labour problem overides other aspects of capitals identity in its dealing with trade union or labour issues.

Unlike individual employees, employers are powerful and do not necessarily need to combine and there are tensions between the desire for individual firm autonomy and the needfor employer commonality. These differences can result from size of employer and sectoral and sub sectoral differences. Large employers may have in house specialist resources that smaller firms cannot afford, in addition the fact opf size may also indicate a degree of market success which implies that they have some form of process or product market monopoly position enabling them to pass on or absorb labour costs. Different sector may be more or less labour or capital intensive, labour costs will be less significant in capital intensive sectors than labour intensive ones therebyleading to a lower priorirty on labour costs in the former. However even within sectors there will be differences depending upon issues of size as previously managed and other factors such as whether the firm is producing for overseas or domestic markets. Where firms produce for

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overseas markets they will be concerned with international competitiveness and how domestic economic policy over interest rates, inflation, the social wage and labour marketregulations etc affect their international standing. For these reasons employers associations and the peak-unbrella- organisations to which they are affiliated may adopt a a minimalist approach where agreement is obtained on the lowest common denominator as in the case of France (Ruysseveldt and Visser 1996) or come to be dominated by particular sectors or interests as has been argued to be thecase with Japan (Suzuki, 1999). Despite such division there in some business systems there can be high degrees of co-operation amongst employers. For instance it has been arguedthat many German employers co-operate over issues of Research and development, training etc giving rise to subvstantial areas of co-operative co-ordinative adjustmentsin areas seen to be in the wider interest of the employer grouping (see associational economy) and these areas may give rise to the propensity and inclination to settle differences. Recent years there has been conflicts between medium sized firms and large firms in Germany such that Jacobi (1998) argues inter-employer bargaining and organization is fragile. In contrast in the UK multi-employer bargaining has disappeared from the main historicalemployers association the Engineering Employers Federation. Whether these are secular or cyclical trends is not yet known although the level of bargaining vacillates between local and centralized level depending on the nature of the labour market and strength of unions.

Management

But management industry relations styles

Management employee relations style can be defined as "a coherent approach to the problems of motivating and controlling employees" (Poole, 1986). Many textbooks assume

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that management principles are applicable worldwide. However, alternative views argue that the management of people follows a socio-cultural logic, which has arisen overtime and become embedded. In this conception, Managers and those they manage are seen as socially embedded agents, withtheir own norms, values and beliefs which underpin notions of organizing and managing (see Whitley, 1999, Maurice Et Al1985, Whitley 1992, Min Chen 1996). The main proposition of cross national researchers is that management styles Across Nations show Ideological and Cultural and Institutional Differences, which have arisen over time and become embedded.

Hickson and Pugh (1995), suggest five cultural dimensions across which managing and organising may differ.

Values placed on authority. Authority raises issues of mutualexpectations in sub-ordinate-superordinate relations, where differences can arise on the source of authority(for instance, position or competence), the expectation over the legitimate exercise of authority (should inequality be emphasised or de-emphasised).

Values placed upon other people; What are the obligations of the super-ordinate to the sub-ordinates, should this be based on an acceptance of the employee as a human where work is but one part of his/her humannessor should workers be viewed as resources purchased for a particular instrumental purpose in a fair market exchange. These factors clearly affect the nature of trust and loyalty, as well as define the extent to which relationships are collectivist or individualist.

Values placed upon oneself; raises issues of self identity of the manager, which may be derived not only from ones earlier socialisation but also ones later internalisation of learning from other

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managers and colleagues who will impart notion of appropriate behaviour that can affirms or disaffirm managerial identity. For instance, what should be the balance between achievement and nurturing; between taking and giving; between ends and means. These factors suggest a moral and ethical dimension to culturally appropriate behaviour in general and managerial behaviour particularly.

Values placed upon certainty. This concerns notions and approach to the future, which is by definition not known and thereby uncertain. The issue is how the role of management is perceived in different societies, should the role of managers, for instance,be one of reducing the uncertainty or embracing it and creating the future. The different conceptions ofmanagerial roles may well affect how managerial success and competence is viewed, as well as expectations as to what communication is of particular significance.

Values placed upon time can differ between nations with some more concermed with time past, others with the present and yet others with the future. Those concerned with time past may tend to see the importance of history and tradition, those with the present on the other hand may be more tactical and opportunistic and those with the future may be more long termist strategic planners.

While some authors emphasise a culturalist explanantion of cross national differences others have highlighted the impact of political economic technological and social structures on management behaviour. Such authors may point to how societal structures have come to give rise to low capital/low discretion/low value added/low skill/low wage business strategies that require either supervisory or technical control as opposed to high capital/high discretion

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high skill/high value added/high wage forms of labour control that give rise to labour strategies based upon relative autonomy and a respect for professionalisation. This implies that societies may differ according to how skills and professional careers are valued which will affectinterpersonal and intergroup behaviour between workers and managers, workers and workers, managers and managers and ultimately between managers and trade unions. These factors in turn may have an impact upon the managerial commitment and employee expectations over issues such as to job security, skill enhancement, communication, these issues maybe a reflected in, and be a reflection of, the social and legal context that direct behaviour by providing a structureof acceptable actions.

While there is much in management theory about motivation, the fact that motivation is about directed behaviour it is but another form of control. The issue of labour control is important because while workers bring with them capacity to work the actual work that management can extract can be malleable and subject to resistance. The manner in which mangements can attempt to deal with this is through externalised control involving strategies based on supervisory control, or control through technical control (whereby the worker is an appendage to the technology and the technology drives the pace of work, whilst absence or inadequate performance can be monitored not through direct supervision but by a failure or sub-optimal performance of the technical system. In contrast to external control, if employee commitment to the task can be achieved then controlcan become internalised and workers can be trusted to exert control over themselves and workers can be seen as responsible agents and given relative autonomy.

Strategies of direct control and responsible autonomy (Friedman, 1987), raise issues of how best to manage the relationship between workers and management. If responsible autonomy is to be sustained workers need to feel valued and trust needs to be build and sustained if such a strategy is

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to survive. This then has implications as to how management relate with workers and their representatives and may need to accord workers status, autonomy and responsibility to wintheir loyalty to the firm.. On the other hand direct controlstrategies implicity send the message that workers are not to be trusted and in this case the need for control may provoke resistence giving rise to trhe need for yet more control systems in a cycle of increasing external discipline. This may or may not be agreed with the employeesrepresentatives, in either case the the relationship betweenworkers and managers will be one characterised by relativelylow levels of trust.

Edwards identifies three control types. Technical controlensures managerial control by the standardisation of workprocesses and is associated with machine paced repetitivesemi skilled jobs, as is commonly portrayed in massproduction type systems. Bureaucratic control can occur viastandardisation and formalization of rules, procedures andpolicies, rather than through the production technology,such controls may be associated with better paid and moreskilled jobs. Simple control via direct supervisionassociated with unorganised or casual labour. Friedman(1977) identifies two strategies of control- ResponsibleAutonomy and Direct Control that he distinguishes as follows

The responsible autonomy type of strategy attempts to harnessthe adaptability of labour power by giving workers leeway andencouraging them to adapt to changing situations in a mannerbeneficial to the firm. To do this managers give workersstatus, authority and responsibility. Top managers try to wintheir loyalty, and co-opt their organisations to the firmsideals ideologically. The direct control type of strategytries to limit the scope for labour power to vary by coercivethreats, close supervision and minimising individualresponsibility. The first type of strategy attempts to capturebenefits particular to variable capital, the second tries tolimit its particular harmful effects and treats workers asthough they were machines

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Burroway (1985) identified two types of `factory regime -`market despotic’ where price competitive market pressureslead to arbitrary management exercising whims and fancies.Before this can exist there is a need for laboursubordination to capital, worker dependence on sellinglabour and state preserving external conditions ofproduction and not regulating the social relations ofproduction. `Hegemonic regimes’ develop when the stateintervenes to reduce worker dependence on sale of labourpower as a result of social insurance or/and stateintervention in regulating the social relations ofproduction. The approach has been criticised for failing toacknowledge that managerial control may be mitigated byresistance (storey 1985) and socialisation (Baldamus 1961)or achieved by consent. However, at a very general levelthis work makes the point that in some societies thesocietal effect can be minimal while in other exert agreater influence indicating that there may be crossnational differences in management perceptions which affectmanagement styles and strategies in the management oflabour. These themselves may reflect different institutionaland cultural contexts such as the nature size and power ofemployers, nature and power of trade unions, the state andthe more subtle influence of systems of education andtraining (Sorge, 1977), family and religion (Whitley, ) inreflecting and imparting wider societal values. The framingof notions of legitimate and ethical management, whichconstrains the individual through a form of self controlacquired tghrough social learning and disciplined by peergroup norms and expectations rather than be driven solely bytechnical organizational criteria.

Poole (1986) identify 4 different types of management styleswhich emanate from one of two employee relations perspective. Where management has a Unitarist perspective anauthoritarian or paternalist style may be adopted. The characteristics of an authoritarian style approaches labour as a commodity to be bought and sold like any other resource

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with no obligation other than to pay wages, the employee is required to have a natural subordinate and deferential role.A paternalist style on the other hand while supplements the authority structure of the master/servant inherent in authoritarianism with a degree of management social responsibility for the benevolent welfare care for the employees (Salamon,1998). A pluralist orientation can be incorporated into these strategies and while paternalism maybe perceived as a non-union strategy, it need not necessarily be the case. However, while unions may be present they may be incorporated by management and rather than presenting a challenge to management act as a loyal representative group. This is argued to be the basis of the standard large firm Japanese employee relations approach where management recognise trade unions but generally in-house unions, which are viewed as an integral part of the enterprise community commited to achieving enterprise goals whilst ensuring employee interests are represented in a manner that does not undermine the pursuit of growth and profits (Sako, 1997)

Pluralist management styles accept that management need to accommodate the different interests of employees, however their approach to empoloyees can vary and this can be broadly identified according to whether the style is constitutionalist or participative. The constitutionalist style seeks to institutionalise conflict through procedures although the aim may be to minimise union influence and restrict the relationship to terms and conditions, although in some cases this may be extended to consultation. The participative style actively seeks the employees input to decision making. This sees people as responsible agents. Clearly there are intra countrty differences in the way thatfirm may approach their employee relations. Nevertheless, educational, social, technological, legal, political and historical factors may give rise to a dominance of a particular style, which could be said to be characteristic of that particular company. Thus, while firms in the US do

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recognise unions, some adopt a constitutionalist approach while others are non union, which combines with an anti-union approach where this is deemed necessary. In contrast Germany is associated with a collaborative/participative approach to employee relations, while Britain is less weddedto any particular style and tends to be more pragmatic, which in turn is in contrast to the traditional hostility ofFrench and Italian employers to trade unionism and independent workers’ collective voice.

Linking the control strategies with management styles can beachieved as below.

Management Styles and Control Strategies

ManagementPerspective

Pluralist

Constitutionalist Participative

Unitarist

Authoritarianism Paternalism

Direct Control Responsible Autonomy

Control Strategy

Although it should be remembered these are analytical categories while in reality there may be degrees to which a particular perspective, control strategy and management style occurs, while there may be differences in the extent to which a perticular style is pervasive of a particular employee relations system. The advent of human resource management, with its roots in Japanese management techniques

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with its roots in continuous improvement there is an increasing recognition that for employees to fully engage intask participation they need to be recognised as assets to be invested in. This implies a change in the manner in whichemployers not only manage employees in the productive process but how the psycological contract is constructed so that employees develop a commitment to the job, colleagues and or the organisation. However while some firms in national systems have attempted to develop new approached tomanaging employees they have differered in the degree to which the indirect participation structures that involve trade unions have been seen as crucial to this project.

Employers are significant actors and in many parts of the world employers are seen as the main force for change in employee relations. The tendencies for restructuring and reconfiguring industrial relations institutions is arising from the pressure of international trade, intensifying competition, the decreasing rates of profit (Upchurch 1999; Ferner and Hyman, 1998; Marginson and Sisson 1994) . While there seems to be a common tendency for employer's in countries where collective bargaining is established to pushfor decentralisation from multi-employer to single employer or even individual bargaining (Traxler, 1998). While this tendency may be driven by particular sectoral interests (Sisons, 2003) it remains to be seen whether decentralisation in the embedded systems will lead to the disorganization of employee relations patters or whether oldprocesses of mutuality and co-operation will be retained in a relatively intact manner while the level and content of bargaining are modified.

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Good employer-employee relations?

KoreaThe management style of the LG group is based on a hierarchical delegation of power and authority with superficial employee participation, and management adopt a short term use of employees, employees training is insufficient and they feel that they are given little power or discretion to do their jobs and are merely expected to follow orders. Hyundai also employs a strong hierarchical structure with a “top-down” management style and employees have little say in decision-making. Since democratization in the late 1980s, Korean employees have been more vocal and sometimes directly challenge managers’ unilateral authority. Unions have gained political power, and increasingly ask for a larger role in decision-making. Both companies have a history of strained relations between management and labor, which have sometimes erupted into violent, bloody strikes. Korean CEOs are thus very much concerned about active and militant unions and are therefore likely to prefer non-union (right-to-work) areas. If there are unions active in the region, Korean CEOs must be assured that the power of the union is minimal and that the union will not play a large role in negotiating salaries and benefits…Korean CEOs expect loyal, self-disciplined employees. For example, unexcused absences, periodic tardiness, and lack of professionalism are unacceptable in most Korean firms.

Compiled from Jung and Sumners, (2003), Kim (2000)

Germany

In the German "stakeholder" system of corporate governance, shareholders are only one of a number of important groups that influence company decision-making …Since post-war reconstruction, a style of governance based on co-operative decision-making has evolved in most large German companies. A high level of trust has developed between the works council and management, and consultation often goes beyond the legal minimum. In many companies one can even speak of joint management, particularly in labour and social affairs. In these firms a dense network of management-employee committees has been established for dealing with specific issues such as training and workplace safety.

This consensus-based style of governance differs quite sharply from the shareholder-value system which has evolved in many US and UK companies over the past decades. The basic management philosophy of shareholder value is to both decentralise authority and clearly assign it to specific individuals. Managers are given high levels of responsibility, but also considerable power over subordinates in order to achieve their performance targets. A detailed system of quantitative indicators for setting goals, measuring performance, and determining remuneration is imposed byhead office to help align the interests of shareholders, managers and employees. The theoretical literature has suggested that shareholding and stakeholding systems are mutually exclusive […but…] it is possible for a learning process to take place to help reduce the conflicts between the twomanagement philosophies. Shareholder-friendly practices can be negotiated between management and employees while at the same time preserving key principles of German labour relations, such as fair pay and working conditions, employment security, and (increasingly) training for new skills…Works councils are accustomed to take a share of responsibility for "their" company. Thus they often find themselves having to correct or to compensate for management decisions that might have negative local consequences. Since the personnel department is overburdened, the works council often finds itself taking over the role of personnel administration

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http://www.unternehmenskultur.org/mitbest/kluge_vitols_engl.pdfJacobi et al 1998). Jomo and Todd 1994Jung and Sumners, Taking Advantage of the Hyundai Opportunity 3 accessed at http://web6.duc.auburn.edu/outreach/edi/hyundai.pdf July 03Kawamura 1994

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