1. Copyright  2005 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Industrial Relations 3e by Bray, Deery, Walsh and Waring Part two The parties CHAPTER FIVE MANAGEMENT

2. Copyright  2005 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Industrial Relations 3e by Bray, Deery, Walsh and Waring Overview  Goals and functions of management  Management of labour  Management control strategies  Business strategies and industrial relations  Evidence on managerial practices  Understanding management practices  The role of market conditions  Managerial style and attitudes  Structures for the management of industrial relations  Final observations  Summary

3. Copyright  2005 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Industrial Relations 3e by Bray, Deery, Walsh and Waring 5–3 Goals and functions of management  Why study management? – A more assertive approach in recent years:  international competition  labour costs  flexibility. –Employers have choices:  subject to some external constraints.

4. Copyright  2005 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Industrial Relations 3e by Bray, Deery, Walsh and Waring 5–4 Goals and functions of management (cont.)  Management policies and practices need to be understood within the broader content of business objectives.  Much debate about: –separation of ownership from control –implications for organisational goals –reassertion of shareholder control.  Forms of ownership and control: –Anglo-American/Australasian ‘outsider’ system –Continental European/Japanese ‘insider’ system.

5. Copyright  2005 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Industrial Relations 3e by Bray, Deery, Walsh and Waring 5–5 Management of labour  Management’s role is to combine, allocate and utilise resources to achieve organisational objectives.  Labour resources: –converting labour power into productive labour –structures of control/methods of consent –underlying conflict of interests.  Use of specialists by the organisation to manage employees and their unions.

6. Copyright  2005 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Industrial Relations 3e by Bray, Deery, Walsh and Waring 5–6 Management control strategies  Basic difficulty for management: the open-ended nature of the employment relationship.  Categorisation of strategies: –direct control:  tight supervision  minimum of industrial discretion. –responsible autonomy:  workers have status and autonomy  discretion at work.

7. Copyright  2005 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Industrial Relations 3e by Bray, Deery, Walsh and Waring 5–7 Management control strategies (cont.)  Forms of control –‘Personalised control’: workers under the direct and personalised control of supervisors. – ‘Technical control’: work design and production system limits worker discretion, sets the pace for worker effort, and identifies poor performance. – ‘Bureaucratic control’: controls embedded in the system of work rules, company policy and rewards. – ‘Commitment-based control’: selection and cultivation of worker discretionary efforts to be better aligned to the organisation’s interests.

8. Copyright  2005 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Industrial Relations 3e by Bray, Deery, Walsh and Waring 5–8 Management control strategies (cont.)  Factors affecting the choice of strategy—management’s choice of strategy is influenced by a variety of factors, including:  employee acceptance/resistance  state regulation  market forces.

9. Copyright  2005 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Industrial Relations 3e by Bray, Deery, Walsh and Waring 5–9 Business strategies and industrial relations  Business-level strategies impact on the management of labour.  Porter’s three types of business strategies: 1.innovation (or product differentiation) strategy 2.quality-enhancement strategy 3.cost-reduction strategy.

10. Copyright  2005 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Industrial Relations 3e by Bray, Deery, Walsh and Waring 5–10  Implications of innovation strategy: – jobs require close interaction among groups of individuals – performance appraisals emphasise group-based achievements – emphasis on skill development – importance attached to internal pay equity – employees as stockholders – broad career paths. Business strategies and industrial relations (cont.)

11. Copyright  2005 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Industrial Relations 3e by Bray, Deery, Walsh and Waring 5–11  Implications of a quality-enhancement strategy: – high levels of employee participation – individual and group criteria used in performance appraisal – egalitarian treatment of employees – ongoing training and development of employees. Business strategies and industrial relations (cont.)

12. Copyright  2005 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Industrial Relations 3e by Bray, Deery, Walsh and Waring 5–12  Implications of a cost-reduction strategy: – explicit and tight job descriptions – narrow specialised jobs – short-term results orientation – emphasis on market pay – little employee training and development. Business strategies and industrial relations (cont.)

13. Copyright  2005 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Industrial Relations 3e by Bray, Deery, Walsh and Waring 5–13 Evidence on managerial practices  From a control perspective to a commitment perspective.  Transformation of business and industrial-relations strategies: –due to market changes –away from mass production for mass markets to specialised production for niche markets.  Take-up rates of the new approach: –partial versus complete adoptions.  Implications for employees: –work intensification.

14. Copyright  2005 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Industrial Relations 3e by Bray, Deery, Walsh and Waring 5–14 Understanding management practices  Limited evidence of integration of business and industrial relations strategies. Why? – Use of multiple strategies at one time. – Management’s strategies are not always consistent:  need for continual adaptations to changing circumstances. – Uncertain willingness of organisations to embrace change:  ‘pick and mix’ approach  bundles of practices.

15. Copyright  2005 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Industrial Relations 3e by Bray, Deery, Walsh and Waring 5–15 Understanding management practices (cont.)  Limited evidence of integration of business and industrial relations strategies. Why? – Lack of IR representation at executive levels  limits input into strategic decisions. – IR managers can lack understanding of the goals of the business and may lack broader business skills.

16. Copyright  2005 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Industrial Relations 3e by Bray, Deery, Walsh and Waring 5–16 Understanding management practices (cont.)  Katz and Darbishire (2000) point to four types of management strategy employed across the global car industry: 1.‘Low-wage employment pattern’: cost-control, Taylorism, high turnover and opposition to unions. 2.‘HRM employment pattern’: corporate culture, teamwork, high wages and union substitution. 3.‘Japanese-oriented workplace pattern’: standardisation, teamwork, seniority pay and enterprise unionism. 4.‘Joint team-based approach’: semi-autonomous workgroups, ongoing training and development, high pay and union involvement.

17. Copyright  2005 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Industrial Relations 3e by Bray, Deery, Walsh and Waring 5–17 Role of market conditions  Pressures of domestic and international competition.  Emphasis on change in working hours and numerical flexibility: –definition of standards hours –growth in the use of part-time labour.  Employee reactions: –reductions in earnings –unequal impact –limited career progression –access to training.

18. Copyright  2005 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Industrial Relations 3e by Bray, Deery, Walsh and Waring 5–18 Managerial styles and attitudes  Importance of management values and philosophies.  Two dimensions: 1.individualism 2.collectivism.  Six management styles: 1.sophisticated human relations 2.paternalist 3.traditional 4.bargained constitutional 5.modern paternalist 6.sophisticated consultative.  Evidence on management style.

19. Copyright  2005 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Industrial Relations 3e by Bray, Deery, Walsh and Waring 5–19  Two dimensions – Management strategy can be described in terms of the extent of: 1. ‘individualism’—emphasis on the employee 2. ‘collectivism’—emphasis on employees as a group.  Individualism ranges from: – nurturing of individual employees through to commodification.  Extent of collectivism is measured by: – extent, form and level of employee participation – degree of managerial acceptance of employee representation. Managerial styles and attitudes (cont.)

20. Copyright  2005 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Industrial Relations 3e by Bray, Deery, Walsh and Waring 5–20 Six management styles –Unitarist/non-collectivist styles: 1. ‘sophisticated human relations’:  employees as a resource to be developed 2. ‘paternalist’:  union avoidance  emphasis on welfare and stability 3. ‘traditional’:  employees are a cost to be minimised. Managerial styles and attitudes (cont.)

21. Copyright  2005 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Industrial Relations 3e by Bray, Deery, Walsh and Waring 5–21  Six management styles (cont.) –Collectivist styles (i.e. recognise trade unions): 4. ‘bargained constitutional’:  development of rules, policies and procedures to closely define the relationship 5. ‘modern paternalist’:  paternalist approach but with unions recognised  stress on developing cooperative relationships 6. ‘sophisticated consultative’:  sophisticated human relations approach supplemented by structured consultative approaches. Managerial styles and attitudes (cont.)

22. Copyright  2005 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Industrial Relations 3e by Bray, Deery, Walsh and Waring 5–22 Evidence on management style –There has been little research on management style in Australia, but:  little management interest in dealing with unions  management attitudes affect the presence or absence of unions in workplace. Managerial styles and attitudes (cont.)

23. Copyright  2005 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Industrial Relations 3e by Bray, Deery, Walsh and Waring 5–23  Factors impacting on management style 1.Need to maintain relations with employees:  removing union workplace presence may harm ongoing relationship with employee. 2.Cultural factors (organisational and national):  distinct approaches between organisations  distinct approaches between nations. 3.State regulation. 4.Product-market and labour-market conditions:  competition based on price, innovation or quality  labour shortage or over-supply. Managerial styles and attitudes (cont.)

24. Copyright  2005 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Industrial Relations 3e by Bray, Deery, Walsh and Waring 5–24 Structures for the management of IR  Two aspects: 1.resources and staff:  larger organisations are more likely to have specialists 2.division of responsibilities:  centralisation versus decentralisation  corporate function.

25. Copyright  2005 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Industrial Relations 3e by Bray, Deery, Walsh and Waring 5–25 Final observations Research into management’s role in IR has refocussed our understanding of the processes involved in employment regulation: – labour-process theorists led this development. Increased management interest in IR due to changes in broader business context: – increasing international competition – increased need to align IR/HR strategies with business strategies. Wide range of management practices: – employer behaviour is not clearly understood – varies between industries and nations, and within organisations.

26. Copyright  2005 McGraw-Hill Australia Pty Ltd PowerPoint Slides t/a Industrial Relations 3e by Bray, Deery, Walsh and Waring 5–26 Summary  ‘Management style’ refers to the guiding principles for management IR approach.  Managers and organisations possess degrees of choice in the conduct of IR, but shaped by: – business objectives – market conditions.  Modern organisations typically have a separation of ownership from control.  Australian management more assertive in past two decades.