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CHAPTER 4
OUTLINE

I. A conceptual framework to analyze the environment‑economic context,

technological context, and the locus of power within society.
II. Bargaining power


  1. Two types of bargaining power – total power and relative power




  1. A key source of power the relative power of labor and management is the union's ability and willingness to stay out on strike versus management’s ability and willingness to stay out on strike.

C. The factors that influence each side’s strike leverage ‑ the degree to which workers and the employer are willing and able to sustain a strike.


III. The economic context
A. The microeconomic influences on bargaining power
1. Management's strike leverage -‑ ability of employer to sustain a strike; influenced by strike's effect on production, sales, and profits.
2. Union's strike leverage -‑ ability of workers to stay out on strike; influenced by alternative sources of worker income and worker solidarity.
B. The wage -‑ employment trade‑off as a factor in union decisions to seek higher wages.
C. Marshall's four basic conditions -‑ includes the difficulty of replacing workers, the demand for the product, the supply elasticity of other inputs, and labor's share of total costs.
D. Do unions and workers care about the wage‑employment trade-off?
1. John L. Lewis and his mine workers' strategy.

2. Recent concession bargaining.


E. The macroeconomic influences on bargaining power -‑ the unemployment rate and the effects it has on strikers' abilities to stay on strike.
F. Wage flexibility over the business cycle -‑ wages rise faster during prosperity than during slow periods.
G. Income policies -‑ establishment of wage‑price guideposts or wage and price controls in order to control inflation.
H. The effects of collective bargaining on macroeconomic performance
1. Do unions cause inflation?

2. The political influence of unions on the macroeconomy -‑ unions support wide range of economic and social policies that supplement its collective bargaining efforts.




IV. The legal and public policy context
A. The legality of unionism and union activity -‑ public policy plays an important role in determining union's ability to exist.
B. The NLRA's effects on bargaining power -‑ regulation of workers, unions, and employers influences collective bargaining outcomes.
C. The effects of direct regulation of employment conditions -‑ federal regulation of overtime hours, unemployment insurance, and pensions. Example is ERISA.
D. The shift to less government intervention‑emphasis on deregulation by the Reagan and Bush administrations and the effects it has had on collective bargaining and unions.
E. Debates over Clinton’s support for Free Trade Act.
F. Labor's criticism of the NLRA.
1. frustration of union leaders and desperation that most union leaders feel.

2. increase in unfair employer labor practices during union elections.


V. The demographic context
A. Labor force trends -‑ labor growth rate expected to be slower. Increased concern for baby boom workers and the increased amount of competition that will experience at the workplace for the higher-paying jobs.
B. Women in the labor force -‑ increased participation by women with children. Also, increased number of educated women in the work force.
C. Educational attainment ‑- more skilled workers and more educationally disadvantaged workers and the effects the pattern may have on future managers and unions.
D. Occupational and industry trends -‑ increasing employment in the service sector and declines in the manufacturing sector. Also, increase in the number of part-time jobs and home-based occupations.
E. Is the U.S. economy deindustrializing? Claim that the shift to lower-paying service jobs is weakening the economy and unions.
F. Demographic profile of union members -- traditional members (e.g., male, blue‑collar, manufacturing, etc.) to new members. Unions need to adapt to the changing trends.
G. Demographic challenges for unions
1. Increased conflict as membership becomes more heterogeneous.

2. New members and the difficulty to create an effective political base.

3. Unions need to organize the new entrants into the work force.


VI. The social context
A. Unions face declines in their public image but at the same time general approval of their social role by the public.
B. Dual image of unions.
VII. The technological context
A. Historical debate -‑ Marx v. Commons.
B. The influence of microelectronic technology on skill levels -‑ is the introduction a move to higher-skilled labor or the removal of control from workers?
C. The high-tech paradox -‑ the fact that the highest- technology plants in America are not always the most productive.
VIII. Examples of how environmental pressures influence collective bargaining
A. Concessionary bargaining arises out of union leaders' concerns for employment.
B. Pressure from nonunion competition -‑ for example, construction, trucking, and mining.
C. Heightened international competition -‑ growing number of imports and increasingly international economy.
D. A conservative swing in political ideology.
E. Signs of innovation in the labor movement -‑ increased participation by unions and workers and a broadening of the bargaining agenda.


Chapter 4 -- Discussion Questions and Answers
1) Define bargaining power and strike leverage.
Bargaining power is the ability of one party to achieve its goals in the presence of opposition during the bargaining process. The two key aspects of bargaining power are total bargaining power and relative bargaining power.
Strike leverage is the ability and willingness of either a union or an employer to sustain a strike. Strike leverage is an important influence on bargaining power.
2) Several microeconomic factors play a part in both a union's and an employer's strike leverage. Briefly describe some of these factors.
Strike leverage is influenced by a worker's ability to harm production, sales, and profits. If an employer is able to find alternative means of production, or if sales and profits are not affected, an employer's strike leverage increases.
A union's strike leverage is affected by workers' ability and desire to stay out on strike. If a union is torn by inter-union politics or if its members cannot support themselves while on strike, that union's strike leverage decreases.
The strike leverage of a union and an employer determine whether a union is able to press for a wage increase. To press for higher wages may actually decrease the number of jobs an employer is willing to keep open, thus decreasing the union's membership. Therefore it may not be in a union's best interest to press for higher wages.

3) Describe some of the ways the National Labor Relations Act influences the bargaining power of labor and management.


The purpose of the NLRA was to promote peaceful and orderly industrial relations. In order to achieve this goal, the act recognized the legitimacy of unions and union activity in the private sector. This act obligates employers to bargain collectively and in good faith with their employees chosen representative. The act also recognizes the right of employees to strike. In sum, this act committed the government to promoting and recognizing free collective bargaining between an employer and its employees as well as recognizing some of the special interests and rights of labor. The act strengthened labors' bargaining position.
4) Briefly discuss some of the recent demographic trends in the work force.
The growth of the labor force is slowing. This will force both employers and unions to deal with a young, but aging, workforce. As the growth in the labor force decreases, the entry-level labor market will become more favorable and the dependency ratio will continue to increase.

The number of women in the workforce is increasing. This situation challenges employers and unions to meet and adapt to their unique concerns and needs. Women may become a new focal point for union organizing.


Workers have been becoming both better educated and less educated. There is a greater number of college graduates in the workplace, at the same time the high school dropout rate is increasing. Employers will be forced to deal with both of these contingencies.
5) Is the labor law framework that was adopted in the 1930s still appropriate?
President Clinton’s support for free trade in the 1990s along with increasing internationalization of the United States’ economy has raised questions as to whether the framework is still appropriate. The National Labor Relations Act in the 1930s created a safe-haven for workers by protecting their rights to organize. However, new government policies create an atmosphere which is not as conducive to unionization due to increased competition for low product costs and the large pool of employees form which to draw from. Additionally, delays in decisions by the National Labor Relations Board on complaints, delays in representation elections, and employer practices such as filing challenges and requests for postponements all thwart the intent of the NLRA in the 1930s for timely and fair elections of representation and organization
6) What changes in the industrial environment placed unions at a disadvantage in the 1990s?
Macroeconomic recessions in 1990 and 1991 brought layoffs and sharp increases in the unemployment. Also, corporate restructuring heightened international competition and availability of outsourcing and non-union alternatives. Events exacerbated by increases in foreign competition and imports. The labor movement in the 1990s encountered a public that was often skeptical of the value of unions and worker solidarity. Unions received little help from the NLRB or the courts when seeking to prevent management practices of moving operations to other sites or abrogating collective bargaining contracts during bankruptcy reorganization.


CHAPTER 5
OUTLINE

I. Management's strategic choices -‑ theoretical considerations


A. Business strategies influence and are often intertwined with IR strategies.
B. Management values matter.
II. Alternative industrial relations systems
A. Nonunion industrial relations patterns
1. The paternalistic pattern -‑ informally administered personnel policies and much employer discretion. Found in small retail stores and in small manufacturing plants.

2. The bureaucratic pattern -‑ standardization of personnel policies and highly formalized procedures. Found in large firms.

3. The human resource management pattern‑formal policies designed to increase flexibility and cost competitiveness. Includes policies such as employment stabilization, team forms of work organization, skill- or knowledge-based pay, and elaborate communication and complaint procedures.
B. The role of business strategy in shaping nonunion patterns ‑- firms with high‑quality products tend to follow HRM pattern, while low-cost and high-volume strategy firms follow bureaucratic pattern.
C. Union patterns of industrial relations
1. The New Deal pattern -‑ grievance arbitration, seniority-based layoff procedures, numerous and detailed job classifications, and the standardization of pay. Provides stable labor relations.

2. The conflict pattern -‑ serious struggle over basic rights. Usually centers on whether there will be union representation or not. Example is Caterpillar Corporation.

3. The participatory pattern -‑ characterized by contingent compensation systems, team forms of work systems, employment security programs, and more direct involvement by workers and unions in business decision making.
III. Management attitudes toward unionization
A. The historical evolution of two union avoidance strategies
1. Union suppression -‑ still prevalent. Management actively resists organizing drives.

2. Indirect union substitution approach -‑ management tries to remove the incentive to organize.


B. Many firms are now only partially organized -‑ early 1970s saw growth in fraction of plants operating nonunion.


C. The influence of union structure on management's unionization policies
1. The degree of union centralization in collective bargaining affects whether or not a firm will undertake a union avoidance strategy.

2. General Motors and its southern strategy is an example.

3. The expansion of double‑breasting -‑ firms that run separate union and nonunion divisions. Examples in the bituminous coal industry.
D. The influence of the attitudes held by top executives -‑ difference between U.S. managers and their European counterparts. The latter is less anti‑union. Example is Germany.
E. Overview of the trends in management policies toward unionization
1. Avoiding unions is a top priority in nonunion or weakly unionized firms.

2. Highly organized firms tend to be less strongly opposed to unionization of new plants.

3. Firms resist all organizing drives of its white- collar workers.
IV. Management structures for collective bargaining
A. The size of the labor relations staff -‑ variation exists across firms.
B. Degree of centralization in decision making.
C. Specialization of the labor relations functions -‑ loss of power among labor relations specialists to line managers in recent years.


Chapter 5 -- Discussion Questions and Answers
1) Briefly describe the nonunion industrial relations patterns found in Exhibit 5-1.
Paternalistic Pattern

-informal personnel policies

-operating managers administer personnel

policies at their own discretion

-most common among small retail stores and manufacturing plants
Bureaucratic Pattern

-more standardized and bureaucratized

personnel policies

-highly detailed and formalized job classifications

-common in large, post-World War II expanding

nonunion companies


Human Resource Management Pattern

-brought about by efforts to increase flexibility

and cost competitiveness

-uses formal policies (employment stabilization,

team work organizations, skill-based pay, etc.)

-vigilantly avoids unionization, as do other

nonunion industrial relations patterns

(human resource management tends to be more sophisticated in its union opposition)

-attempts to create a corporate identity among

its employees

-common in firms facing rapidly changing markets and technologies
2) Describe the union patterns of industrial relations found in Exhibit 5-1.
New Deal Pattern

-dominant form of collective bargaining since

World War II

-highly formalized and detailed contracts,

grievance procedures, job classifications, etc.
Conflict Pattern

-transitory pattern because of the high costs to

both parties

-intense struggle over basic rights


Participatory Pattern

-relatively new

-uses contingent compensation systems, work

teams, and employment security, and takes a more direct union involvement in managerial decision making



3) Contrast the primary two union avoidance strategies used by management.
One strategy is indirect union substitution. In this approach management tries to reduce the incentives for unionization by improving work conditions and personnel practices. The HRM nonunion pattern entails a sophisticated version of this strategy. Management tries to weaken the appeal of unions by keeping employees satisfied with their employment conditions and by avoiding gross violations of due process.
An alternative approach is union suppression where management is more short-run-oriented and focuses on defeating union organizing drives when they appear. Management relies on the harassment of union sympathizers or the aggressive use of an anti-union campaign during the organizing drive. The union suppression approach uses the "stick" of threats and intimidation to induce employees not to support unionism, while the substitution approach uses the "carrot" of favorable employment practices.
4) Describe the three key aspects of management industrial relations staff structure.
Organizations differ in the size of the staff they devote to industrial relations issues and functions. Most companies have industrial staff at the plant, division, and corporate levels. Staff size tends to be larger where unions can impose substantial costs on the firm.
There is generally a high degree of centralization of responsibility for labor relations policy inside firms although firms do vary. Most firms place primary responsibility for developing overall policy at the corporate level. Contract administration and general troubleshooting, however, tend to be decentralized to the division or plant level.
Firms also differ in the degree to which they specialize the handling of industrial relations issues. There has been a shift in power away from labor specialists toward operating managers over recent years. Contract negotiation and grievance handling are among the staff responsibilities that generally remain within the responsibility of industrial relations staff specialists.
5) What tactics did the Caterpillar Corporation use in its dispute with the UAW? What factors gave Caterpillar management bargaining leverage?
First off, management at Caterpillar was able to use replacement workers during the 1992 walk out since the issue being discussed was over wages and other economical issues rather than working conditions. Secondly, management had an elastic supply of labor thanks to the continued production of machinery in its plants in other countries. By sustaining production in other plants, the sense of urgency to settle the strike was felt heavily by the UAW, not management. Thirdly, due to technological advances, management was able to replace some the striking skilled workers with machine operators who are less skilled and require lower wages. Each of these three conditions allowed for management to refuse wage increases. Since management had no need to concede wage gains, they have the bargaining leverage. Again, management has high strike leverage since they can easily replace workers with foreign production of the product and with machinery.

CHAPTER 6
OUTLINE

I. Unions and politics


A. U.S. unions have devoted much of their attention on collective bargaining as opposed to political action. Emphasized a business unionism approach.
B. American unions do have a political agenda -‑ unions are successful, ardent supporters of federal laws that protect and improve employment conditions. Examples include minimum wage laws, the Occupational Safety and Health Act, and the Davis‑Beacon procedures, to name just a few.
C. Current debates in unions over the appropriate role of politics -‑ some have argued that unions should take a more active political role instead of relying so much on collective bargaining.

II. Union growth and membership characteristics


A. Union membership figures -‑ union density levels vary widely across industries, occupations, regions, and worker skill categories.
1. By industrial sector -‑ unionization declined in manufacturing while it increased in the public sector.

2. By occupation -‑ within blue collar, the highest unionization is in the semi -‑ skilled occupations, while within white collar, professional occupations were the most unionized (e.g., public teachers).

3. By demographic group -‑ female unionists have been rising. Blacks disproportionately join unions.

4. 10 largest unions in America account for three quarters of all union members.


B. Union membership declines -‑ union membership drops from a high of 35.5% in 1945 to 14.9% of the total nonfarm labor force in 1990. Examples of declines -- steel and auto industries. Union growth occurred only in the government service sector. Growth of the nonunion sector in the coal, trucking, and in other companies and industries (e.g., GE).
III. Models of union growth
A. The cyclical factor
1. Noted by John R. Commons.

2. Union membership rose and fell in sync with changes in the business cycle.


B. Structural factors
1. Historical and legal influences -‑ much union growth has occurred in spurts.

2. Examples include depression, world wars, and other major social upheavals.

3. The influence of laws and public policy -‑ such as right-to-work laws and public sector laws giving public sector employees the right to organize.


IV. Explanations of recent union membership declines
A. Structural changes in the economy and the labor force -‑ changes in the nature and location of jobs have made it harder for unions to organize. Movement away from northeast regions to south and southwest regions.
B. Union avoidance through employer election campaign practices 1) management hiring of consultants and direct discussion with employees have contributed to low win rates for unions; 2) labor feels that management will go to great lengths to defeat union organizing drives.
C. Employer substitution through personnel practices ‑- example is the human resource industrial relations pattern.
D. Government substitution -‑ such as equal employment opportunities and health and safety may reduce the incentive to join unions. There is little actual evidence of this.
E. American worker ideology -‑ individualism.
F. Internal union affairs and actions -‑ unions have acquired a bad public image as a result of union corruption. Also, unions have not have devoted enough resources to organizing new members.
V. Union structures for collective bargaining
A. The AFL‑CIO -‑ federation of national unions. It has no formal power to become involved in the collective bargaining of the national unions. Main role is to political lobbying.
B. The structure of national unions
1. National union is the key body and the center of power within most trade unions.

2. Craft v. industrial unions -‑ craft is limited to workers of specific trade -- while industrial union's jurisdiction includes all workers in a specific firm.


C. The governance of national unions -‑ guided typically by constitution and bylaws and unions include elected presidents and other officers.
D. The local union -‑ usually a branch of the national union.

E. The division between local and national union responsibilities.


1. Individual employee is usually covered by both national and local contract.

2. National union usually assists the local union in bargaining of the local union contract.




F. The governance of local unions


  1. Role of the business agent in negotiations.

  2. Funded by dues paid by unionized employees.

3. Role of the shop steward.

4. Elections determine shop stewards and local union officers.


G. Union democracy
1. Very democratic, contrast with how executives of private companies and corporations are chosen.

2. National elections tend to be more stable than local union elections.


H. Union corruption -‑ notorious example is the Teamsters unions.
I. Union mergers
1. Advantages -‑ economies of scale, reduced rivalry, improvement in bargaining power.

2. Disadvantages -‑ simply opportunistic in nature.


VI. Election of John Sweeney and Reorientation of AFL-CIO
A. New Labor Agenda
1. Sweeney emphasizes aggressive union organizing, i.e., Union Summer, Organizing Institute.

2. Services through political action such as Center for Strategic Campaigns and Central Labor Councils.


B. Servicing vs. Organizing Model of Unions
1. Traditional emphasis on grievance and benefits administration.

2. New heavy focus on organizing and mobilization.


VII. Division in the AFL-CIO and the Formation of the “Change To Win Coalition”


  1. Split in AFL-CIO

1. Proposal for reforms by SEIU, UNITE HERE, Teamsters, and Laborers unions, including union mergers and rebate of half of AFL-CIO dues to active organizing unions; proposals rejected by AFL-CIO.


2. Split at 2005 convention with the four unions, plus UFCW, Carpenters and United Farmer Workers, leaving AFL-CIO to form the “Change-to-Win” (CTW) Coalition.


  1. Implications of the Split – danger of divided political voice for labor, but some political coordination in 2006.

Chapter 6 -- Discussion Questions and Answers
1) What is the basic union philosophy in the United States? Discuss some of the debates surrounding this philosophy.
The basic union philosophy of the U.S. is that of "business unionism." This philosophy focuses on attaining immediate benefits rather than long-term goals.
Some argue that since unions have historically supported different social welfare programs, the term "business unionism" is not proper.
Others cite the fact that unions are among the staunchest supporters of legislation to improve working conditions as a way of decreasing the appropriateness of the business unionism label.
Still others claim that since some unionists are now calling for a basic philosophical reorientation to increase the political interests of unions and union members, the business union label is really an unfair label.
2) Various demographic features or characteristics, such as type of occupation, physical location, and other demographic trends, play a large role in union membership. Briefly describe some of the characteristics or features.
In the blue-collar sector, semiskilled workers are the largest organized group. In the white-collar sector, professional employees are the largest organized group.
Most union members are concentrated in a relatively small number of states in the northeast and mid-west. In addition, a large fraction of union members belong to only 10 unions, with public sector unions having the largest recent membership gains.
A greater percentage of men relative to women are union members. Yet, since 1970, the number of union women has increased by 9%, whereas, the number of union men has decreased by 8%. Women now account for a sizable fraction of all union members and of the total work force. Minorities are also slightly more likely to become union members.
3) The text gives seven possible explanations, offered by Fiorito and Maranto and others, for the recent decline in union membership. Briefly discuss these possible reasons.
A) Structural changes in the economy and labor force
Changes occurring in the type and locations of jobs as well as in the types of employees account for approximately 40% of the union decline (at least according to some studies). These factors are not independent of management or union action or inaction.
B) Union avoidance through employer election campaigns


Management resistance to unions and unionization has increased, especially during election campaigns for union recognition.
C) Employer substitution through personnel practices
These practices have more long-term effects than election campaigns. Management will not usually wait for an election campaign to pursue union substitution practices.
D) Government substitution
Although some people argue that the more direct involvement the government has taken in shaping employment conditions -- through regulations concerning equal employment, pension rights and funding, safety and health, and so on -- recently may account for some of the union decline, the evidence seems to be to the contrary.
E) American worker ideology
Some argue that one of the reasons unionism has been declining is due to a basic American worker ideology which does not include unionism. The lack of an aristocratic tradition and the strong sense of individuality actually work against unions in America. But there is some argument over whether the American worker ideology is so drastically different from that of workers in other countries.
F) Internal union affairs and actions.
Some people claim that the unions themselves are to blame for their reduced membership. Unions have a reputation for internal corruption and resistance to change and have not devoted enough of their time and resources to changing this reputation and recruiting new members.
G) Limitations of the Standard Organizing and Representation Model
There may also be inherent limitations built into the traditional approaches unions use to recruit and retain members. Under American labor law, unions need to convince 50 percent of workers in a potential bargaining unit to join a union before it gains representation for any one worker. These features of labor law and union organizing require considerable union resources to organize workers. And, membership turnover is a particular problem.
4) The structure of a national union is extremely important in its ability to negotiate successful contracts with employers. Discuss the role union jurisdiction plays in this structure.
Jurisdiction determines the legitimate range of members and whether the membership will be more of a craft union or an industrial union. In a craft union, membership is limited to the individuals actually engaged in a specific craft or trade. In an industrial union, membership encompasses all skill levels among the union work force. One of the reasons for the AFL-CIO merger was to reduce the number of jurisdictional disputes, thus leaving the individual unions more resources to devote to contract negotiations.
5) Since the merger of the AFL-CIO many unions have merged and consolidated their memberships and structures. What are some of the arguments the proponents use in defending this practice? What are some of the arguments against this practice?


Those in favor of union mergers have argued that the administrative benefits alone make it worthwhile. Both unions will benefit from larger economies. There is a decreased interunion competition which brings about more organizing and bargaining resources. A smaller union that is not very powerful may be merged with a larger union, thus increasing the smaller unions’ power and funds.
Those opposed argue that mergers do not necessarily consolidate memberships, since the mergers themselves may be opportunistic or expansionistic in nature. Also the increased benefits in administration and bargaining are unproven.
6) Describe the new initiatives launched by the AFL-CIO under President John Sweeney’s leadership.
Sweeny’s goal was and, as of the time of this printing, continues to be

aimed at aggressively organizing new union members. He has done this through a $20 million advertising campaign directed at electing a more labor sympathetic Congress. He started Union Summer, a program to allow college students to intern and assist unions in organizing and in political activities. He also created the Center for Strategic Campaigns to spur on new corporate campaigns. Finally, Sweeny tried to involve the Central Labor Council in assisting in union organizing and in other community political activities.


7) Do you think the split between the AFL-CIO and Change-to-Win (CTW) will strengthen or weaken the labor movement?
Having two different union federations may produce a divided weakened political voice for organized labor. The unions in the two federations may also compete for members among already organized workers rather than organizing new previously unrepresented workers, or alternatively duplicate their efforts by targeting the same groups of unrepresented workers. On the other hand, the existence of two different union federations may spur more innovation and dynamism in organizing activity. Some AFL-CIO member unions that have done less organizing in the past may be spurred to greater organizing efforts by competition from the CTW unions. The last period in labor history when there were two major competing union federations, the AFL and CIO in the 1930s to 1950s, was also the period of most rapid growth in union membership.


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