Managerial Control, Style and Trade Union Relation to WorkChoices Legislation - Coursework Example

Title: Managerial Control, Style and Trade Union Relation to WorkChoices Legislation I. Introduction There are mainly three types of management control these are autocratic consultative and democratic. The three key ideas of running an organisation are control, strategy and style. Modern business management involves complex labour management issues. II. Management style and strategy The challenge for the management today is to convert labour potential to productive labour. Friedman (1977) categorised strategy as direct control and responsible autonomy. Direct control is focussed into tight supervision and minimum of industrial discretion. Responsible autonomy is where workers have status and autonomy and discretion at work. According to Edwards (1979) there are four management control strategies these are Personalised control, Bureaucratic control, Commitment based control and Technical control. The strategy to be adopted by the management depends on various factors like how the particular policy is receipted by the employees whether there is any form of resistance from any specific group and the form of it, the state regulation effective which demarcates length of trading hours, superannuation policy, the minimum age of working and last but not the least on the prevailing market forces i.e. the competition pressure for in time goods delivery and the quality of goods manufactured or produced. Other than the above strategy Katz and Darbishire (2000) inculcates four types of management strategy which are widely prevalent in the automobile (car) industry worldwide. These are: Low wage pattern in employment used for cost control Human Resource Management pattern it is characterised by corporate culture, high wages, teamwork with a tendency to substitute union. Workplace plan influence by Japanese orientation. Joint team based pattern in which semi autonomous workgroups are involved, they are subject through ongoing training and development and receive high payment with constructive involvement of unions. After the discussing the different management strategies its time to move towards business level strategies and their impact towards the labour management it was stated by Porter (1998) that there are three types of business strategies these are: Innovation also called product differentiation strategy Quality improvement or enhancement strategy Cost control or cost reduction strategy. Innovation strategy: In order to successfully implement this strategy there should be close interaction between various groups. Quality Enhancement strategy: To make this strategy a success the first criteria is to assure high participation of employees in the process appraisal is carried on both at individual and group level employees are treated in an unbiased, equitable and democratic manner. Cost minimisation strategy: In this strategy the job description is rigid and categorical. The scope for the mauver in the job is limited and the job is of specialised type. There are basically two dimension individualism and collectivism of behaviour of management. These behaviour leads to six styles of management, sophisticated, paternalistic, traditional, bargained constitutional, modern paternalistic, sophisticated consultative. Individualism gives emphasis on nurturing the individual employees. Collectivism emphasises on group participation of employees and the approbation of employee representation by the management. The major difference between policy and style is that the former is what the firm do and the latter signifies how it is done. Amongst the managerial style under unitarian or non collective style, sophisticated human relation, paternalistic, tradition are included. Under collective style bargained constitutional is covered i.e. where the rules policies and procedures are developed to ascertain the link. Modern paternalistic approach finds a touch of modernism with union’s acceptation along with paternalistic features. Sophisticated consultative involves sophistication in human relation with consultation also forming part in it Purcell & Ahlstrand (1994) There are several factors which influence the management style. There is strong requirement to maintain strong bondage with workers, presence of union is important for workers, to dismantle it will cause disharmony with employees. Difference in cultures also affects style and varies from nation to nation. Regulations prevailing at a particular state e.g. work choices and fair work in Australia. Competition in the market, demand of the product as well as availability of work force. In Australian management style the managers are not to behave as suppressors or dominating type to their colleagues this will lead to authoritarian style and discontent and hostility in the workforce. It is better to have a consultative approach with everybody getting chance to express his opinion. The managers should socialise with all his colleagues and not restrain from interacting with them Australian Management Style (2009). III. Trade Unions in Different forms of Management Style and Control In respect to position of union in the management strategy it can be specified that there are two different styles unitarist or noncollective style and collective style, again within collective style three styles of management namely bargain constitutional, modern paternalist, sophisticated consultative are the subheads. Unions find recognition under these three subheads. Bargained constitutional where rules policies are framed to shape a close knit bonding with unions. Modern Paternalistic has a paternalistic approach but still union finds recognition in the organisation. Sophisticated consultative where consultative approach in a sophisticated environment with unions recognised and consulted in important issues. Market condition has a lot to do with management strategy e.g. a highly competitive market emphasises large scale flexibility on working hours, use of part time labour etc. has an adverse effect on employee relation. Inconsistency in management policy and lack of human resource personnel in executive committees is also responsible for conflict with unions. Other factors like removing unions from workplace may lead to unrest among employees resulting in conflictual position as unions form a platform for interaction with employees. Demand for labour in particular industry i.e. short supply or over supply also is a factor for industrial relation. It can be added that since 1980 managers are shifting away from pluralist and cooperative approach and moving towards anti union or individual or conflictual approach. Legal changes like Work Choices and Fair Work Agreement has made a significant legal shift toward individualistic approach from collective bargaining. Recently pluralist strategy amongst managers has declined and the trend is conflictual or against unions with strong Human Resource policies enforced to tackle unions. This is more pronounced after advent of Australian Workplace Agreement with emphasis on individualism. In a major dispute resolution in Mudginberri judgement [A.M.I.E.U. v Mudginberri Station Pty Ltd (1986)], which followed the successful resolution of the long, drawn-out disputes over the export of live sheep and the use of wide combs in the shearing industry, appears to have turned the tide. Of course, that is not to underestimate the impact of the SEQEB dispute in Queensland where the union movement also suffered a crushing defeat. The unions now try to avoid major disputes. This is because employers also pursue the case in civil courts. These cases changed the face of industrial relations with greater emphasis of employers associations to increase productivity and the unions more cooperative approach. The unions also knew that they are no more invincible and they should be aware of using their funds properly to attain their objectives, McLachlan (1988). IV. Australian Workchoice Agreement and its impact on Industrial Relation The aim of the Work Choice legislation is to establish a standard national industrial relation system for the employers and employees. According to government almost 85% of all employees will be governed under this system. It is also speculated that the state government’s power of industrial relations will be transferred to the Federal Government. Many employers have to be careful to keep a healthy relation with the employees and there is an increase in the role of Human Resource personnel in the business strategy. From now onwards there is a national minimum conditions called the Australian Fair Pay conditions Standard. These standards are like conditions governing annual leave, parental leave, maximum ordinary working hours, minimum wage etc. In case of companies with fewer than 100 employees the unfair dismissal remedies is not applicable which means that the employees of small and medium sector enterprises have no remedy for unfair dismissal. This step has a massive impact as 62% of Australian employees will be affected by this Law. As the valid reason clause was removed so the employers became free to dismiss any employee in small medium enterprise any time. This gave a significant impetus to managerial prerogative and it established the rights of management to a great extent. Now the earlier safeguards of genuine operational reasons removal and other regulations of economic dismissals have reduced previous statutory protections for job security of the workers. Changes like 100 employees benchmark have left the workers exposed to the risk of unfair and arbitrary dismissal. So the management are significantly free to impose hire and fire policy. In fact employers are now free to dismiss old workers and employ new workers to perform the same work at lower wage and condition if some kind of operational reason is proved, Forsyth (2007). In collective bargaining there was a psychological advantage and the employees collectively bargained with the company. With the advent of Work Choice the employers can directly approach the employee and negotiate individually relating to work condition and varied entitlement and formulate Australian Workplace Agreement. This new approach leads the employees to be good at negotiation. Under the new legislation it is stressed that there should be a free employee employer negotiation, it will enhance productivity as by negotiating the employer and employee will chalk out the best possible arrangement that fits both of them. This system will be at national level and symmetrical for whole of Australia, Hall (2006). The main motto of this legislation is to counter the competitiveness that global market is facing, the logic behind is that such negotiations will enhance the productivity through flexibility. These amendments encloses with it the procedural simplicity to pen down an agreement as well as flexible statutes to decide the working condition best suited for both the employee and employer, Wooden (2006). If it is linked to the previously discussed management strategy it can be said that the approach adopted here is that of cost minimisation. It will lead to unambiguous and fixed job description, squizzed specialised job and payment fluctuations according to market demand. Little or no care is given to employee training or development. Such situation can be because of the result of domestic and international competition. It will lead to reduced earning of employees and limited career progression. The unions are aggrieved because of Work Choices as their entry is restricted and role insignificant as the legislation stress on individual negotiation. There is another no strike provision, if it can be shown that the third party will be harmed because of the strike, by taking away the power to strike it further weakens the union. Lastly a minister in government has power to call off the bargaining period on the pretext that it affects essential service or endangers the economy of the country. The behaviour of management is tilted towards individualism with emphasis on the employee with three kinds of approach sophisticated human relations, paternalist, traditional. After Work Choices legislation pluralist ideology of management has declined and shifted to anti union or no union strategy. Individualism is legally authenticated by Work Choices law, collective bargaining to one to one negotiation are predominantly the role played by employer’s association. The main concern of the employers association is lack of information, confusion about the complex nature of Work Choices legislation, concern about additional administrative cost because of compliance with law. In the past few years there have been wide spread transformation in Industrial Relations, there has been increase flexibility in agreement, conditions and work practices. The Arbitration and Conciliation authority’s power of enforcing binding agreements have been diluted. Structural efficiency principal brought about changes in cost of living to the capacity to pay, increase in productivity, long working hours and reduction in role of unions, increase in individual contract, decrease role of Industrial Commission, restriction of third party i.e. union from negotiations, increase in social inequality ass competitive flexibility, Industrial Relations in Australia (2008). According to employer bodies these measures will lead to a growth of small business resulting in higher employment and productivity, low prices more demand resulting maintenance of a more expansionary monetary policy, Wooden (2006). V. Conclusion However the impact of the amendment is good or bad will depend on the environment in which it will be introduced. It will succeed if there is cooperation amongst employers and workers and high level of trust prevailing. However many managers will be attracted towards AWA as it will immune them from dealing with unions and need not to worry about employee relations. VI. Reference: Abbott, K, Hearn MacKinnon, B, Morris, L, Saville, K & Waddell D 2007, WorkChoices: Its Impact within Australian Workplaces Survey Results, Bowater School of Management and Marketing, Deakin University, Melbourne. A.M.I.E.U. v Mudginberri Station Pty Ltd (1986) 161 CLR 98 at 106 High Court of Australia Australian Management Style 2009 http://www.worldbusinessculture.com/Business-in-Australia.html Dalton, D R & Todor, W D 1985, ‘Gender and Workplace Justice: A Field Assessment’, Personnel Psychology, vol. 38, no. 1, pp.133-51. Edwards, R - Heinmann, London, 1979 Contested terrain: The transformation of the workplace in the 20th century Forsyth, A. 2007 Freedom to Fire: Economic Dismissals under Work Choices Report for the Victorian Office of the Workplace Rights Advocate August Department of Business Law & Taxation Monash University Friedman, M (1977), Inflation and Unemployment: The New Dimension of Politics Hall, R. 2006 Australian Industrial Relations in 2005 - The WorkChoices Revolution Journal of Industrial Relations JIR; 48; pages 291-298 Industrial Relations in Australia 2008 University of Sydney http://www.eng.usyd.edu.au/currentstudents/InnoManage/ENGG4005/lectures/IR.pdf Katz, H.C and Darbishire, O Ithaca, Converging Divergences: Worldwide Changes in Employment Systems Labor Studies Journal (September 2001, 26 [3]) http://lsj.sagepub.com/ McLachlan, I 1988 After Mudginberri the turning of the tide Institute Of Public Affairs Vol.41.No.4 February-April Porter, M.E Competitive Strategy: Techniques for Analyzing Industries and Competitors (1980) International Journal of Electronic Commerce Volume 9,  Issue Fall 2004 Pages 163-180   Purcell & Ahlstrand (1994) Management industrial relations policy in highly unionised companies in Britain Journal: Year: 2000 Volume: 29Issue:5Page:543 - 564 Southey, K 2006 WorkChoices and the Negotiation Challenge Confronting Employees School of Management and Marketing Faculty of Business, University of Southern Queensland Wooden, M 2006 Implications of Work Choices Legislation Volume 13, Number 2, pages 99-116 Read More