LABOR MANAGEMENT RELATIONS

Labor Management Relations

Labor Management Relations

Introduction

The globalization of markets accelerated during the 1980s and there are no signs that this movement is slowing down. The coming of Europe 1992, the shift of former communist countries from planned economies to free markets, the gradual implementation of the Canada-U.S. Free Trade Agreement, and the possible extension of such an agreement with Mexico all offer firms new opportunities but also new problems. Flexibility, adaptation, quality, technology, and productivity have become the key words reflecting the values and ideas inspiring and driving entrepreneurs eager to perform and to profit from a competitive and open market. The most meaningful concept of competitiveness at the national level is productivity because it is by becoming more productive that a nation can experience a higher standard of living. The outcome of struggles for competitive advantage fought by thousands of small and medium-sized firms "underpins the process of upgrading national productivity" (Porter, 2000, p. 85).

Productivity is one measure of the extent to which technology and human resources are being efficiently used. Managers generally agree that industrial relations at the shop floor level may contribute to their competitive problems (Katz et al., 2007, p. 686). The controversy is not about the existence of a connection between industrial relations and the economic performance of the firm; the more controversial issue among stakeholders and researchers is about the nature and direction of unions' influence on productivity. Freeman and Medoff (2004) conclude that unions, by providing a collective voice to workers, have a positive impact on productivity; these authors stress that it is not unions per se that affect productivity but rather the nature and quality of labor -management relations at the plant level.

McKersie and Klein (2003) come to a divergent conclusion in a survey they conducted. Presenting a summary report of a three-year research study, Kochan et al. (2005, pp. 276-268) concluded that the performance of workplace-level industrial relations systems can significantly affect the economic performance of the firm; in the firms sampled in their study, non-unionized companies achieved a better economic performance than the unionized ones; the authors stress that the non-union plants held an advantage from enjoying lower labor costs, greater flexibility in work organization, more communication, and more worker participation in production decision making; however, they acknowledge that their findings cannot imply that there is a inherent disadvantage caused by the presence of a union. Others could also find no support for the proposition that a union environment is more or less productive than a non-union environment (Bemmels, 2007, p.251). As Brian Bemmels puts it: "To date, the empirical score is about even ... the mechanisms through which unions affect productivity remain a 'black box'". We feel that there is a need to open this "black box" and to look into labor -management practices at the shop floor level.

Research and methodology

Current research deals mostly with the situation in medium-sized and large companies. However, small companies (fewer than 500 employees) constitute an essential part of the industrial ...