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Unionism for Labor Management

Unionism is the idea of forming labor union or trade union, which is the organization or an association of workers, recognized and certified by labor board and have come together to achieve common goals in collective, rather than individual bargaining with the management on key issues such as wages, working conditions or hours of work.

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There is confusion on the roles that a successful union should play. A good union however is considered to be one that do not just support employees when they go on strike, but one that can ensure that strikes do not occur, work to get better wages for employees and advocate for employees’ benefits.

Many economists consider unions as monopolies in the labor market whose main function is to raise member’s wages at the expense of unorganized labor and of the proper functioning of the economy. During the past twenty five years however the negative view of trade unions has become increasingly dominant. Despite this dominance there are still some positive aspects of unionism for management.

Positive aspects of unionism

Unions that show a corporate association towards the organizations management can play a significant and a positive role in enhancing organizations competitiveness through facilitating the implementation and effectiveness of high performance work practices.

Organization that want to capture the value that unions can add to the performance of the organization must avoid pluralist and autocratic management, hostile unions and adversarial industrial relations beyond a unitarist model that sees no role for unions and must instead adopt a corporative partnership with unions that shares the gains of implementation of high performance work practices, (Lewis, H.G., 1963 p. 5)

Sisson, D. (1999) found that flexible working practices were as strongly correlated with independent representation by unions and work councils as with foreign competition for organization productivity.

The American public and adults in household union supports the labor unions for working towards increased wages for workers and for advocating for better working conditions.

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Unionization is an important aspect to management since unions form a group of people which provide an accomplished service with companies that sign an agreement that they may only acquire workers from the union. This leads to higher wages. The work supply is usually higher than the demand for work.

A union negotiates agreements with employers on pay and conditions of payments. The union may also provide to its members legal and financial advice, sickness benefits and education facilities through collective bargaining rather than individual bargaining. The employees share a community of interest and the management must therefore recognize any certified union by the relevant labor board as the bargaining representative for the workers.

Through unions the employees get involved in certain organizational programs. The employee involved program is being implemented in an attempt to remedy a variety of problems facing the U.S. industry.

Management theorists and researchers have promoted the concept of employee involvement in decision making beginning with the Hawthorne experiment of 1920s. The employee involvement in decision making and participation in other programs is best achieved through trade unions i.e. there are more participation schemes in unionized organizations than in non-unionized organizations. Unionization thus becomes an important aspect in management since the employees develop greater sense of ownership, greater involvement in their work and better understanding of both how their work can be done most effectively and management perspective on the operation of the business.

Research also shows that there is high probability of using good employment practices such as job rotation, organization consultative committees, and quality circles by the management when the organization is unionized.

Negative aspects of unionism

While the public feels positive towards unions due to some factors, the evaluation of the unions shows that there is more to the negative aspects than to the positive aspects.

The following are some of the criticisms about the unions; Unions tend to be too much engaged in politics than in fighting for their members’ rights. They seem to fight for change rather than bring about change itself.

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Many Americans adults who are employed and many union households’ rate labor unions negatively. Some negative aspects of unionism for management are experienced during labor strikes by union workers, which have become a part of American history. The labor strikes were initially conducted for the sake of workers’ rights but now they are more circled on the issues concerning salaries and the health care. Unions organize strikes as an effective way of stumbling or hampering the management’s operations so that their demands may be met.

Motivations for strikers vary for instance more benefits, increased salaries, negotiation rights, being in charge of their jobs, including coming together to fight for other workers of another tribe, religious conviction or nation. The outcome of such strikes are wide ranging from motivating revolutionary legislation that defined new rights for the public as well as workers, to the demolition of workers association and loss of lives.

One of the problems managers experience when dealing with trade unions is their ability to adapt to change. Such changes could be political e.g. “how dependent is the system on a certain party or coalition holding power?” technological e.g. “what do we do when an industry employing half the population becomes obsolete?” or economic e.g. “how do we respond to globalization?”

Guest, D. et.al. (1989), proposes that writers regard unions negatively and empirical research has produced some evidence that unions have negative impact on productivity and return to capital markets at organization level and unemployment and output at national level.

The managers operating in unionized firms face the problem of reduced efficiency. (Friedman, Milton 1951). Unions operate by centralizing labor thus forming a monopoly on the commodity. The effect of monopolizing labor is that of a decrease in employment thus raising the price in short term leading to a reduction in efficiency.

Where the unions have become monopolies, the worker is not allowed to decide to be a non member and it is unacceptable for the company to employ workers who are not members of the union. The result of this is similar to problems faced by other monopolized commodities.

Promotions in unionized firms may be done on the basis of seniority without putting into consideration individual qualification. This exposes the management into the risk of giving top jobs and responsibilities to unable personnel which lowers a company’s productivity and thus low profitability.

Unlike the United States, some countries allow the union to hire only union members. The union in this case becomes a middle person where the worker is forced to forfeit to the union to get a job. The impact on the management is that the job will be given on the workers ability to pay for the job other than on the worker’s ability to perform the job. This affects the productivity and thus the profitability of the unionized firms.

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Profitability in unionized firms tends to be lower than the profitability in non-unionized firms. Unions tend to relocate payment from shareholders to workers. This may hinder the investment needed to run the company. The analysis of the shareholder risk and returns in unionized and non-unionized firms shows that shareholders in more unionized firms realized lower rates of returns compared to that realized by non-unionized firms. During the 1980s management had attempted to limit the degree of unionization due to low shareholder returns in the 1970s.

Trade unions are accused of improving the welfare of the union members, those with secure job and high productivity at the expense of non-unionized workers and users of goods and services, and the shareholders of the unionized companies. Management in this case suffers the risk of losing customers leading to the reduction on return on investment.

Though the negative aspects of unionization outweighs the positive aspects of unionization, it is necessary for managers or employers to accept that employees should form unions for the following reasons: negotiation of better terms and conditions of employment through collective rather than individual negotiation, enhanced economic security because of provisions in the collective agreement related to grievances, the application of seniority in the event of layoffs, interference with employees’ rights, the ability to exercise the strike weapon effectively and a compulsory requirement within the negotiated collective agreement that requires union membership at some point.

Reference

Friedman, Milton. Importance of Labor Unions for Economic Policy, in David McCord Wright, Impact of Unions. Harcourt, Brace and company. 1951.

Guest, D. et.al. Relations at Work: Support and the Balance of Advantage. British Journal of Industrial Relations 39, 2, 200-236.

Lewis, H.G. Unionism and Relative Wages in the United States. Chicago: University of Chicago. 1963.

Sission, D. and Erwin, P. Industrial Relations: Role of Labor Unions and the Attendance Behavior, British Journal of Industrial Relations. 1999.

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