Integrating Managerial, Organizational and Labor Relations Processes
Michael H. Schuster, Ph.D. and Greg Kesler
White paper, 1993
The Status Quo Is No Alternative
Cooperation and change is more difficult to bring about in union settings. The institutional relationship between labor and management, the long history of conflict and mistrust, management’s need to continually reduce costs and maintain and enhance profitability, and the union’s role of protecting job security and earnings of its members combine to make organization change more difficult.
The present economic environment has increased the level of cooperation throughout the United States, as both labor and management have come to realize that the real adversary is not the union or the company, but that of the marketplace and the overseas and domestic competitor. The overseas competitors most often provided with government subsidies. Major unions, such as the Steelworkers and the Automobile Workers, have found that more can be gained through cooperation than through conflict. The General Motors-U.A.W. Saturn Project is a very good example of cooperation to strengthen an industry and retain as many American jobs as possible.
Many companies have found change in union environments to be too expensive, too risky, and too unlikely to be successful to justify the effort. Mack Truck, for example, concluded that it was more costeffective to relocate its business to another area of the country or off-shore. These situations highlight the fact that companies are faced with the choice of fixing their situation, moving it, or closing it. The status quo is no longer an acceptable alternative. The impact of relocation of the business or its ultimate closing fails to fully take into account the impact on employees (hourly and salaried), the community and the preservation of shareholder assets. Conversely, firms that seek to improve their situation can find that they can simultaneously improve their business, improve employee and union relations, and enhance job security.
However, without a cooperative, participatory union management and employee-management environment, it is difficult to see how many companies will survive the manufacturing challenges of the 1990’s. Studies of employee commitment have shown that commitment cannot be achieved without the support and participation of the union.
Organizational change is much more successful in union settings where there is:
- clarity of direction
- cooperation between the company and the union;
- employee involvement;
- change in the culture of the organization;
- enhanced training for supervisors, managers and union leaders; and
- sharing of gains between employees and the company.