Trade Unions and Injustice LO7106

Mariann Jelinek (
Wed, 1 May 1996 13:45:28 -0400

Replying to LO6992 --

Bruce Wilson's recent comments on unions were striking. He wrote :

[snip some interesting stuff]

>In Australia, there has been industrial democracy legislation for only a
>decade and it has been honoured more in the absence than in actual
>implementation. Nevertheless there is some interesting evidence that
>companies with unions which have strong 'voice' on behalf of their members
>about issue other than pay have impressive records on productivity growth.
>Why do unions have a positive role in these regards ? In my view, it is
>because they offer a forum within an organisation which (if operating
>effectively) provides a democratic means for people to express views on
>organisationa health and change processes. This can be a very udeful way
>of surfacing the expertise which workers have about the organisation and
>its work processes, even when there is sympathetic management (surfacing
>the 'tacit' knowledge).

I've just concluded a semester's teaching in which we discussed GM
and Continental airlines, Caterpillar and Komatsu, Lincoln Electric and
Honda, among other cases. The data seems abundantly clear that employees
CAN be very helpful in improving an organization's productivity, quality
and responsiveness. Yet a real sticking point emerges with unions: they're
not unreasonably predicated upon an opposition between the bosses and the
workers, at least here in the US, with both GM and Cat providing
contemporary examples of enduring antagonism. It doesn't take a rocket
scientist to appreciate the sources for such animosity, either. Yet what a
difficult task managers face in rapidly changing times, to somehow shift
the paradigm of themselves as well as the unions from that adversarial
relationship to the recognition that everybody's in the same boat at the
end of the day. At Continental Airlines, Frank Lorenzo was demonized - yet
the machinists' union seemed blissfully unaware of the dramatic changes
wrought by deregulation, and the consequent shift in industry economics
that implied. After deregulation, when Continental was beset by a host of
lower-wage competitors, the IAM demanded a 36% increase (on a base of wage
rates among the highest in the industry) with no work-rule concessions,
and turned down an offer of profit sharing and ESOP. The communication
failed utterly, it seems.
I'm much persuaded that educating everybody in the company about
the economic realities of current operations is imperative. "Open book
management" is a powerful antidote, perhaps, to the cynicism that
envisions eternal acrimony as a way to "win." Still, the very same
awareness on the part of all parties that a business must operate in a
competitive environment, and make its profit by being at least competitive
in its costs, is often missing both among workers and in the strategic
plans of managers. I often see strategies that set goals - but don't
appear to realistically assess their likelihood against what the
opposition is able to do, or what the data says the environment will
"Injustice" in a work setting, it seems to me, is as much illusion
as anything else: illusion that the two sides of management and workers
really can survive without one another; illusion that wishes are not
ultimately tested against external, more or less objective realities
uncontrollable by ourselves; illusions that we don't have to do the hard
work of improving our operations, listening to our customers, or finding
the compromises that share the rewards of achievement. Unions in their
birth in the US sprang from the need to force power elites (managers) to
recognize the legitimate claims of workers. Now, it seems to me, both
managers and unions need to return to developing a shared sense of what is
just, what the market demands, and what they can do together.
Thanks to Bruce for his posting!


Mariann Jelinek
Richard C. Kraemer Professor of Business
Graduate School of Business,
College of William and Mary,
Williamsburg, VA 23185

Tel. (804) 221-2882 FAX: (804) 229-6135
The only enduring strategic advantage is the ability
to change the rules of the game.

-- (Mariann Jelinek)

Learning-org -- An Internet Dialog on Learning Organizations For info: <> -or- <>