IR

Industrial relations has become one of the most delicate and complex problems of modern industrial
society. Industrial progress is impossible without cooperation of labors and harmonious relationships.
Therefore, it is in the interest of all to create and maintain good relations between employees (labor) and
employers (management).
Concept of Industrial Relations:
Definitions:
The term industrial relations has been variously defined. J.T. Dunlop defines
industrial relations as the complex interrelations among managers, workers and
agencies of the governments.
According to Dale Yoder industrial relations is the process of management dealing
with one or more unions with a view to negotiate and subsequently administer
collective bargaining agreement or labour contract.

Importance of Industrial Relations:

The healthy industrial relations are key to the progress and success. Their significance may
be discussed as under

Uninterrupted production The most important benefit of industrial relations is that this ensures
continuity of production. This means, continuous employment for all from manager to workers.
The resources are fully utilized, resulting in the maximum possible production. There is
uninterrupted flow of income for all. Smooth running of an industry is of vital importance for
several other industries; to other industries if the products are intermediaries or inputs; to
exporters if these are export goods; to consumers and workers, if these are goods of mass
consumption.

Reduction in Industrial Disputes Good industrial relations reduce the industrial disputes.
Disputes are reflections of the failure of basic human urges or motivations to secure adequate
satisfaction or expression which are fully cured by good industrial relations. Strikes, lockouts, goslow tactics, gherao and grievances are some of the reflections of industrial unrest which do not
spring up in an atmosphere of industrial peace. It helps promoting co-operation and increasing
production.

High morale Good industrial relations improve the morale of the employees. Employees work
with great zeal with the feeling in mind that the interest of employer and employees is one and the
same, i.e. to increase production. Every worker feels that he is a co-owner of the gains of
industry. The employer in his turn must realize that the gains of industry are not for him along but
they should be shared equally
and generously with his workers. In other words, complete unity of thought and action is the main
achievement of industrial peace. It increases the place of workers in the society and their ego is

satisfied. It naturally affects production because mighty co-operative efforts alone can produce
great results.

Mental Revolution The main object of industrial relation is a complete mental revolution of
workers and employees. The industrial peace lies ultimately in a transformed outlook on the part
of both. It is the business of leadership in the ranks of workers, employees and Government to
work out a new relationship in consonance with a spirit of true democracy. Both should think
themselves as partners of the industry and the role of workers in such a partnership should be
recognized. On the other hand, workers must recognize employers authority. It will naturally have
impact on production because they recognize the interest of each other.

Reduced Wastage Good industrial relations are maintained on the basis of cooperation and
recognition of each other. It will help increase production. Wastage of man, material and
machines are reduced to the minimum and thus national interest is protected.

Thus, it is evident that good industrial relations is the basis of higher production with minimum cost and
higher profits. It also results in increased efficiency of workers. New and new projects may be introduced
for the welfare of the workers and to promote the morale of the people at work. An economy organized for
planned production and distribution, aiming at the realization of social justice and welfare of the massage
can function effectively only in an atmosphere of industrial peace. If the twin objectives of rapid national
development and increased social justice are to be achieved, there must be harmonious relationship
between management and labor.
Objectives of Industrial Relations:
The main objectives of industrial relations system are:

To safeguard the interest of labor and management by securing the highest level of mutual
understanding and good-will among all those sections in the industry which participate in the
process of production.

To avoid industrial conflict or strife and develop harmonious relations, which are an essential
factor in the productivity of workers and the industrial progress of a country.

To raise productivity to a higher level in an era of full employment by lessening the tendency to
high turnover and frequency absenteeism.

To establish and promote the growth of an industrial democracy based on labor partnership in the
sharing of profits and of managerial decisions, so that ban individuals personality may grow its full
stature for the benefit of the industry and of the country as well.

To eliminate or minimize the number of strikes, lockouts and gheraos by providing reasonable
wages, improved living and working conditions, said fringe benefits.

To improve the economic conditions of workers in the existing state of industrial managements
and political government.

Socialization of industries by making the state itself a major employer

Vesting of a proprietary interest of the workers in the industries in which they are employed.

What is Industrial Relation.

Industrial relations is a multidisciplinary field that studies

the employment relationship.[1][2] Industrial relations is increasingly
being called employment relations or employee
relations because of the importance of non-industrial employment
relationships;[3] this move is sometimes seen as further broadening
of the human resource management trend.[4] Indeed, some authors
now define human resource management as synonymous with
employee relations.[5] Other authors see employee relations as
dealing only with non-unionized workers, whereas labor relations is
seen as dealing with unionized workers.[6] Industrial relations studies
examine various employment situations, not just ones with a
unionized workforce. However, according to Bruce E. Kaufman "To a
large degree, most scholars regard trade unionism, collective
bargaining and labor-management relations, and the national labor
policy and labor law within which they are embedded, as the core
subjects of the field.

http://www.leoisaac.com/hrm/indrel01.htm
https://en.wikipedia.org/wiki/Industrial_relations
http://www.naukrihub.com/industrialrelations

Industrial relationship is about the relationship between an employee and

management. This page carries information about Industrial relations and its
concept through definition and description of industrial relation.
Industrial relations has become one of the most delicate and complex
problems of modern industrial society. Industrial progress is impossible
without cooperation of labors and harmonious relationships. Therefore, it is in
the interest of all to create and maintain good relations between employees
(labor) and employers (management).

Definition of Industrial Relations

Industrial relation is defined as relation of Individual or group of employee
and employer for engaging themselves in a way to maximize the productive
activities.
In the words of Lester, Industrial relations involve attempts at arriving at
solutions between the conflicting objectives and values; between the profit
motive and social gain; between discipline and freedom, between authority
and industrial democracy; between bargaining and co-operation; and
between conflicting interests of the individual, the group and the community.

Concept of Industrial Relations

The term Industrial Relations comprises of two terms: Industry and
Relations. Industry refers to any productive activity in which an
individual (or a group of individuals) is (are) engaged. By relations we
mean the relationships that exist within the industry between the employer
and his workmen. The term industrial relations explains the relationship
between employees and management which stems directly or indirectly from
union-employer relationship.
Industrial relations are the relationships between employees and employers
within the organizational settings. The field of industrial relations looks at the
relationship between management and workers, particularly groups of
workers represented by a union. Industrial relations are basically the

interactions between employers, employees and the government, and the

institutions and associations through which such interactions are mediated.
The term industrial relations has a broad as well as narrow outlook.
Originally, industrial relations was broadly defined to include the
relationships and interactions between employers and employees. From this
perspective, industrial relations covers all aspects of the employment
relationship, including human resource management, employee relations,
and union-management (or labor) relations. Now its meaning has become
more specific and restricted. Accordingly, industrial relations pertains to the
study and practice of collective bargaining, trade unionism, and labormanagement relations, while human resource management is a separate,
largely distinct field that deals with nonunion employment relationships and
the personnel practices and policies of employers.

The relationships which arise at and out of the workplace generally include
the relationships between individual workers, the relationships between
workers and their employer and the relationships between employees. The
relationships employers and workers have with the organizations are formed
to promote their respective interests, and the relations between those
organizations, at all levels. Industrial relations also includes the processes
through which these relationships are expressed (such as, collective
bargaining, workers participation in decision-making, and grievance and
dispute settlement), and the management of conflict between employers,
workers and trade unions, when it arises.

Need for Industrial Relation

Need of Industrial Relation has arisen to defend the interest of workers for
adjusting the reasonable salary or wages. It also helps the workers to seek
perfect
working
condition
for
producing
maximum
output.
Workers/employees are concerned with social security measures through
this. Industrial Relations is also needed for achieving the democracy by
allowing worker to take part in management, which helps to protect human

rights of individual.Salaries in India are much more attractive in indian

subcontinent. As India is having flourishing economy, the job opportunities
are emerging and there is huge scope of expansion. The salary pattern of
India is also growing. Even, the seventh pay commission is also spreading
the way to coming soon. The Salaries of private sector is also in the upswing
mode with the increase of 11% annually. Although, Inflation is one of the
major factor which nullify the increase in the salary. But still, the inflation is
lower than the increase in the salary. So, this can be seen as increase in the
salary.
The National Commission on Labor (NCL) also emphasize on the same
concept. According to NCL, industrial relations affect not merely the interests
of the two participants- labor and management, but also the economic and
social goals to which the State addresses itself. To regulate these relations in
socially desirable channels is a function, which the State is in the best
position to perform In fact, industrial relation encompasses all such factors
that influence behaviour of people at work. A few such important factors are
below:
In fact, industrial relation encompasses all such factors that influence
behaviour of people at work. A few such important factors are below:
Characters
It aims to study the role of workers unions and employers federations
officials,
shop
stewards,
industrial
relations
officers/
manager,
mediator/conciliators / arbitrator, judges of labor court, tribunal etc.
Institution
It includes government, employers, trade unions, union federations or
associations, government bodies, labor courts, tribunals and other
organizations which have direct or indirect impact on the industrial relations
systems.
Methods

Methods focus on collective bargaining, workers participation in the industrial

relations schemes, discipline procedure, grievance redressal machinery,
dispute settlements machinery working of closed shops, union
reorganization, organizations of protests through methods like revisions of
existing rules, regulations, policies, procedures, hearing of labor courts,
tribunals etc.
Contents
It includes matter pertaining to employment conditions like pay, hours of
works, leave with wages, health, and safety disciplinary actions, lay-off,
dismissals retirements etc., laws relating to such activities, regulations
governing labor welfare, social security, industrial relations, issues
concerning with workers participation in management, collective bargaining,
etc

Porter argues that positioning is still a notable way to shape advantages within a company and
sees hypercompetition as rather odd concept to explain shifting patterns in competition and points
out that a misunderstanding exists to distinguish between operational effectiveness and strategy. The
replacement of strategy by so-called management tools has been responsible why many firms have
increased operational effectiveness but have been unable to translate those improvements into
values for customer where profit can be earned and profitability be increased.
Differences in profitability compared with competitors arises because of activities chosen in order to
deliver customer value. Those can be either that similar activities are combined on a much lower cost
base (unit cost) or the average unit price is higher due to superior perceived value.
Operational effectiveness is not strategy
Porter refers to operational effectiveness (OE) as the means of performing similar activities
better than rivals and strategic positioning as the means to perform activities in a different
way. He uses the Japanese manufacturing during the 1980s as example to show that operational

effectiveness can be responsible for lower cost and superior quality among those Japanese
companies but question a unique strategic position of those companies.
He shows that an industry (Japanese electronic industry) has worked as cluster of competitors
within this industry. The Japanese companies could not win market share within their own industry
because most companies employed similar processes and methodology and had a similar cost-base
therefore the strategic decision of those firms was to go a broad and compete outside of Japan where
operational effectiveness seemed to be a strategic advantage.
He borrowed a concept from economics (possible production frontier) to introduce what he
called productivity frontier to show a frontier curve for a maximum possible productivity (value)
on a selected process. The combination of used methods (activities) with inputs allows to assign cost
factors to demonstrate a companies relative productivity position. Based on a companys input and
its used methods the cost factor can be compared with other best practices and indicate their
operational effectiveness.
The pure reliance on operational effectiveness as strategy replacement works only as long
competitors not employing to same process and improvements but as soon those best practices are
made common within the industry, operational effectiveness becomes mutual destructive and
counter-productive with imitations and homogeneity as end result.
Strategy rest on unique activities
Porter postulates that real competitive strategy can only be about being different with deliberately
choosing a different way to deliver a mix of values and activities.
Southwest Airlines found a position as provider for low-cost low-thrill, standardized provider of
flights within US for a value-based but low-cost position where other airlines have difficulties to met
the same cost structure and activities and therefore can not compete on the chosen activity-value
combination.
Ikea is cited as example that chooses a position as low-cost provider within the furniture industry
where customer are targeted under a self-serving model. The combination of functional design,
streamlined manufacturing and a modular furniture system have been successful deployed to gain
scale economies and a lower cost base. Those combined activities are different to established service
oriented activities within this furniture industry. Targeted on do-it-yourself, young families that look
for contemporary design and a possibility to combine various furniture into an individual style

served as strategic position, taken into account that the service factor has been deliberately altered by
choosing a value-cost model, large store displays and self delivery to fit the chosen image.
Strategic positioning as a guiding factor to find positions that are new or not filled by products or
customers and while not easy to be identifiable, a managers ability to combine creativity, vision,
method and technology to a unique set of activities to be valuable for both the company and its
customer makes it an outstanding intellectual challenge.
Porter divides between variety-based positioning,needs-based positioningand access-based
positioning. He defines variety-based positioning as a selection process where products are selected
due to superior value chain optimization that produces a specialized product within an industry
segment. Its reliable performance and consistency makes it a subset of choices for customers to full
fill a sufficient need.
Serving all needs on a particular customer segment, is named by Porter as needs-based positioning
with a customer in mind that wants to reduce search cost and looks for a solution from one provider
with tailoring service.
Thus building a platform of activities that can deliver solutions for various needs and at the same
time can be differentiated from competitors is vital to serve as competitive advantages.
Strategy is about finding a unique position by combining a unique set of activities
A Sustainable strategic position requires trade-offs
Porter argues that only the optimal (right) mix of activities is responsible to maintain sustainable
advantages and this optimum comes with trade-offs that will not allow every company to participate
fully. This implies that a company should know its limits and that it should know that certain
sacrifices can not be made without putting other activities behind. Those trade-offs occur when
activities are incompatible[Porter 1996:68] and might come from missing skills, heritage,
inoperable change management etc..
Imitators are by far the biggest threat for a companys position, to protect ones position choices have
to be made, barriers to be raised to ensure their are not easily to overcome. Barriers such as image,
technology or intellectual property can help to protect but they need constant review in terms of
diffusion and adoption and operational effectiveness can be excluded as potential barrier since
diffusion rate is far to high to be a lasting factor.

Benchmarking can be used as yardstick to see current conditions of the productivity frontier within
an industry but rather to see as a tool to imitate and improve operational efficiency it should be used
as method to identify activities that can done differently. Benchmarking as tool but not loose sight on
developments in terms of industry wide quality improvements and technological advancements.
Continental Airlines failed an attempt with Continental Lite to maintain a full-service image
while challenging and imitate Southwest Airlines business concept.Neutrogenas rigorous decision
not to alter its image (research based, medical proved soap) and maintain a unique position with
manufacturing processes that does not uses deodorants or skin softener, put product attributes over
manufacturing efficiency.
Porters sees it as inevitable that choices are made that limit a companies offering, reach and
availability to ensure focused activities by not being everything to everybody.
Strategy is about choices and about what not do.
Fit drives both competitive advantage and sustainability
The right mix or as Porters puts it strategy is about combining activities[Porter 1996:70],
synergies that come from combining the right activities and leave other activities aside are essential
part of the strategy making equation.
Core competence and key success factors are components but only connection of a fit with
other complementary activities that full fill a companies mission to accelerate competitive advantage
and profitability.
Most companies in the same industry carry out similar activities but the company with the best fit on
complementary activities along the value chain can claim better integration and therefore can reach a
better cost base(supply) or a distinguishable customer relationship(demand). Those two factors are
main components to profitability.
Porter

distinguish

three

types

of

fits; simple

consistency

fit, activities

reinforcing

fit and optimization of effort fit. Create consistency among functional activities throughout the
company to serve the main strategic goals, an ability to reinforce activities and communication and
optimize activities on a constant basis to identify waste and eliminate redundancy. Stately reiterate
the question on how to do better and eliminate redundancy to renew fit between internal capabilities
and the external environment.

He warns that focusing too much on core competence and success factors without taken every
individual activity into account can lead to false interpretation of a companys strength in terms of its
capability and resources. The reduction on core competencies simplifies the organizational view but
at the same time clouds the understanding of interconnection of visible and non visible functional
activities.
Unrevealing those connections, Porter suggests an activity mapping as analytical process to
visualization and illustration of those interrelation. Always with the idea in mind that a company is a
chain of activities also known as value chain.
Porter suggest that those interconnections are the heart of any strategy, as those links (chains) are
hard to imitate therefore lead to sustainability which is an ultimate goal of strategy otherwise it
would be just tactical manoeuvre to overcome a barrier.
A company that focuses on a system of activities [Porter 1996:73] as competitive barrier rather
than individual selected activities (technologies, resources, skills) seems more likely to sustain and
build competitive advantages over a time.
Technology, capital or skills are important but not everything to achieve competitive advantage.
Interconnections between assets and its functional execution is as of similar importance. This
includes the ability on how to reach decisions, what to communicate etc. all are part of a system of
activities serving a particular goal and mission.
Coordinating and executing this system of activities is the real strategic capability of any organization
as it requires long-term commitment and a positioning that looks beyond currents trends and shortterm goals.
Strategy is about finding complementary activities that create an internal and external
fit.
Rediscovering strategy
The failure to choose a strategic position, the misunderstanding of competition and its related forces,
organizational mismanagement, the reliance on technology and the desire to grow exponentially are
examples for unsuccessful strategy making and execution.

Best practice and operational effectiveness have been seen as substitute and barometer for success
and misleading the direction in building a position that is different from others and would make
imitation difficult.
Growth as policy driver is useful as long as it serves the strategic position and not dilutes the focus.
Reaching a broader customer group can alter ones unique position and image. Using M&A strategies
to foster growth objectives without adding additional values for the existing activities will have
similar effects, dilution. Porter describes this as growth trap and cites Neutrogena and Maytagas
examples.
He asks for courage and leadership to make deliberate decisions to limit a companies reach and at
the same sharpen its focus. He remind us that improving operational effectiveness is a
necessary part of management, but it is not strategy[Porter 1996:78] and only the continues
effort to find a unique position will ensure a competitive standing and profitability.

Shortcomings/Criticism of Dunlops Theory

It is static, not dynamic in time.

It concentrates on the structure of the system ignoring the processes within

it.

It tends to ignore the essential element of all industrial relations that of the
nature and development of conflicts itself.

It focuses on formal rules to the neglect of important informal rules and

informal processes.

It may not be integrated and it is a problematic whether or not the actors

share a common ideology

A Critique of the Systems Theory of J. T. Dunlop Jayeoba, Foluso Ilesanmi

Department Of Industrial Relations And Personnel Management, Faculty Of
Management Sciences, Lagos State University, Ojo Email: Jay_Ife@Yahoo.Com

Ayantunji, Oyelekan Ishola Department Of Industrial Relations And Personnel

Management, Faculty Of Management Sciences, Lagos State University, Ojo Sholesi,
Olayinka Yusuf Department Of Industrial Relations And Personnel Management,
Faculty Of Management Sciences, Lagos State University, Ojo Email:
Contactyinkasho@Yahoo.Com Abstract Every theoretical proposition has
underpinning logic that seeks to match the premises with the conclusions. Theory
has dynamic interference with time and space. The time dimensionality of a theory
does not set absolute boundary on the variables under consideration. One variable
A may be held constant against another variable B to produce C. The extent to
which the third variable continues to hold true will be determined to a large extent
by the degree with which either of A and B or both can be held constant over time
and space. Viewing Dunlops theory which essential proposition is that Industrial
Relations is composed of three actors which operate in contexts that is dependent
on the ideological milieu and a binding set of rules, it may be argued that the threeactor component of this theory can be subject to further analysis in view of the
changing nature of industries and organisations that the theory may be deemed to
apply. This paper is an attempt at reexamining Dunlops view of the workplace as it
has evolved and is evolving into the 21st century. This work shows that there are
indeed many more actors in the workplace and that the contextual factors have
changed considerably since the theory was proposed. So also are the ground rules
of engagement among the many actors. Keywords: Theory, systems theory.
Introduction That every theory has intrinsic fallacy is well known. Also true is the
fact that some theories have such intuitive appeal and rather strong face validity
that it often take more than a second look to detect any form of shortcoming. The
inherent appeal of Dunlops systems theory is almost innate. There are many such
theories in existence in Management and Social Sciences. International Journal of
Academic Research in Economics and Management Sciences March 2013, Vol. 2, No.
2 ISSN: 2226-3624 98 www.hrmars.com Freuds psychoanalytic theory is one of such
theory. It has an appealing explanatory power that has continued to tickle
intellectual fancy for ages. Yet most of the constructs such as id, ego and super ego
which has taken firm position and use in ordinary language not only has surplus
meaning, but are largely not measurable, nor easily verifiable. Equally, the theory
had enjoyed little empirical support. Another popular theory with little empirical
support is Maslows hierarchy of needs theory. Dunlop assumed a three-actor stage
for industrial relations and diminishing the crucial roles of several component
entities that cooperate to bring the stage to reality. Before the stage is set in
theatre, there are several background activities and activists. Some of these are the
script writer, producer, director, engineers, costumers, prompters, players and so
forth. Actors in reality only assume the roles that are prescribed for them which in
many instances are contrived roles. However, one cannot deny that performance of
and in the roles depends on the personality, perception or interpretation of roles
and experience of the actors. Also the context (the architectural infrastructure, the
stage and spectatorship) are also important. The roles of actors in industrial
relations can be said to be impacted upon by sundry other factors other than what

has been acknowledged in literature. Aims and objectives The aims and objectives
of this critical essay is to examine the systems theory of J. T. Dunlop using ideas
from earlier critics as a starting point and from the perspectives of recent
developments that have global impacts and those that are native to the Nigerian
industrial relations system. Some of these developments call for a modification of
crucial aspects of the theory. What a theory is A theory is an objective proposition
consisting of a logically coherent statement(s) that serves as a guide for
understanding of a phenomenon. According to Kerlinger (1973) a theory is a set of
interrelated constructs (concepts), definitions, and propositions that present a
systematic view of phenomena by specifying relations among variables, with the
purpose of explaining and predicting the phenomena. Viewing the systems theory
from these perspectives one could say that attempt was made by Dunlop to provide
a coherent body of statements that aims not only at explaining certain crucial
variables in industrial relations and also predicting them. Aims and objectives of
good theory A good theory serves at least five objectives which can serve as ground
rules for its criticism. These objectives are 1. Must set out the relationships among
variables 2. Set out the nature and direction of relationships 3. Provide a clear
framework for understanding the relationships and 4. Serve as a guide to prediction.
5. Have empirical validity. International Journal of Academic Research in Economics
and Management Sciences March 2013, Vol. 2, No. 2 ISSN: 2226-3624 99
www.hrmars.com The extent to which Dunlops theory has succeeded on these
scores has been underscored in the various criticisms that it has attracted. Some of
these will be highlighted. Specific focus will be on the proposition of a three-actor
situation, which neglects the dynamic nature of such actors in terms of their
personality and psycho-social variables underlining their behaviour within the
bounds of the context, ideology and rules delineating their actions. It will be
interesting to ask, perhaps a belated question, is industrial relations indeed a
system? It will also be of theoretical, as well as practical question, to ask whether
there are indeed only three set of actors in the industrial relations system. Dunlops
theoretical propositions Dunlop essentially views the industrial relations system as a
sub system of the wider social system, similar to the economic and political sub
systems. According to Dunlop (1958), industrial relations at any time in its
development involves certain actors, contexts, the ideologies that hold the system
together and the body of rules created to govern the actors at the place of work and
work community. The actors according to him are: a hierarchy of managers and
their representatives, a hierarchy of non-managerial workers and their
spokespersons, and specialized governmental agencies. The actors operate within
the constraint, and is influenced and limited by the technology of the workplace and
work community, the market and budgetary constraints, a complex web of rules,
and the locus and distribution of power in the larger society. Earlier Criticisms of
Dunlop Richard Hymans Criticism. Hyman (1975) views Dunlops approach to be
explicitly Marxist, he respected Dunlops and Flanders analyses very much.
Nevertheless he argued that their definitions of industrial relations are too much
restrictive. This narrowness has the undesirable implication that industrial relations

is all about is the maintenance of stability and containment of conflict in industry.

The focus of Dunlop and Flanders according to Hyman is on how any conflict is
contained and controlled rather than on the process through which disagreement
and disputes are generated. Hyman argues that a conservative tendency is
reinforced by the suggestion that the process of an industrial relation system are
naturally at work to maintain stability and equilibrium. That the various institutions
and procedures are compactible and well integrated and that conflict is necessarily
self-correcting; a view that is reflected in Talcott Parsons society as a self-regulating
and self-maintaining unit. Hyman thought that the concept of industrial relations
system should incorporate the contradictory processes in the capitalist system.
Furthermore, instability and stability should be considered of equal importance as
outputs of the industrial relation systems. He emphasized that the definition of job
regulation as positively by Flanders has broadened to include sources of conflict.
This leads him to define industrial relations as the study of processes of control over
work relations in which processes involving collective actions of worker
organizations are of particular concern. International Journal of Academic Research
in Economics and Management Sciences March 2013, Vol. 2, No. 2 ISSN: 2226-3624
100 www.hrmars.com Equally, Hyman argues that by accepting the processes of
industrial relations as maintaining stability and equilibrium, the systems theory
seems to dismiss the inevitability of conflict implicit in the existing structure of
ownership, and control in industry. Therefore he argues that the systems theory is
one-sided and inadequate. To him, industrial relations go beyond the recognition of
formal institutions but it is necessary that personal and unstructured relationships
as well as informal relationship are usually important in an industrial relations
system. Hyman goes beyond job regulation in terms of command and authority and
power in organizations. He justified the position of trade unions as a balance of
power and argues for its sustenance as a weak union could be marginalized by the
management. Allan Flanders Modification of J.T. Dunlop System Approach. Allan
Flanders (1965) wrote that as for the substance of an industrial relations system,
not all the relations associated with the organization of industry are relevant. No
one takes it to include the relations which they have with their customers or the
community at large. The only aspect of business enterprise with which industrial
relations is concerned is the employment aspect, the relations between the
enterprise and its employees and among these employees themselves. The study of
the institutions of job regulations he argues is a system of rules. These rules appear
in different guises; in legislation and in statutory orders, trade union regulations,
collective agreements, and arbitration awards. Equally in social conventions,
managerial decision; and accepted custom and practice. This list is by no means
exhaustive, but rule is the only generic description that can be given to these
various instruments of regulations. In other words the subject of industrial relations
deals with certain regulated or institutionalized relationship in the industry.
However, the rules in question, like all rules, are of two kinds; they are either
procedural or substantive. The distinction can be observed in the clauses of
collective agreements, which are mainly composed of a body of rules. The

procedural clauses of these agreements deal with such matters as the methods to
be used with such matters and the stages to be followed in the settlement of
disputes, or perhaps the facilities and standing to be accorded to representatives of
parties to the agreement. The substantive clauses, on the other hands, refers to the
rate of wages and working hours or the other job terms and conditions in the
segment of employment covered by the agreement. The first kind of rules regulates
the behaviour of parties to the collective agreement whereas the second kind
regulates the behaviour of employees and employers as parties to individual
contracts of employment. Flanders concludes that a system of industrial relations
is a system of rules. This stems from the fact that rules of various kind clearly do
persuade the world of work and employment and the institutions which device and
implement this network of rules are of central importance for the study of industrial
relations. Wood (1975) criticism. Wood et al (1975) highlighted the degree to which
Dunlop misunderstood the objective and structure of Talcott Parsons systems
paradigm, but their reconstruction of theory severely restricted the definition of
rule making system. For example, custom and practice that Dunlop, Flanders and
Clegg admitted in social convention as elements of job regulations were rejected
by wood et al. They argued that only when custom and practice, as work norms,
become part of the institutional rule making process can it enter International
Journal of Academic Research in Economics and Management Sciences March 2013,
Vol. 2, No. 2 ISSN: 2226-3624 101 www.hrmars.com the domain of industrial
relations. At this juncture it suffice to mention that further attempts have been
made by scholars like Schienstock (1981), Miliband (1969), Clarke (1982) and Max
Weber towards a conceptual crisis free theory of industrial relations but then none
of these reformulations of industrial relations theory achieved this desire.
Criticisms of Bain and Gennard (1970). They criticized Dunlops system approach for
failing to give an analysis of the process which are behavioural dynamics of
industrial relations system and then incorporated the process variable into a
system approach. Their model recognized that a system could experience instability
as well as stability depending on the nature and form of process adopted. These
could include among others strike actions, legislation, and peaceful bargaining
embarked upon by the actors. Environmental variable as they affect the IRS. Many
aspects of the environment were highlighted as having influence on the IRS. In his
view, these environmental variables have constraining influence. This view, simple
as it is expressed, has far reaching influence on the outcome produced by the
system. The environment in reality may be both constraining and facilitating of the
IRS. In todays industrial system, technology as a factor has been most facilitating
of business and indeed the web of interactions existing in the work place. Typical
example is the telephone and the internet which can moderate considerably the
background to as well as the outcome of collective bargaining. Alton Craig
(1975).He refined the Dunlopian framework in at least three major ways by
introducing the withinputs which included the goals, values and power of the actors
in industrial relations. Also by showing that outputs of the industrial relations
system have impact on the environmental inputs through the feedback mechanism

and instead of the technological, market and budgetary context, he defined the
societal environment in terms of economic, social, political, and legal inputs into the
industrial relations system. The context of IRS in this view is broader and more
encompassing than as conceived by Dunlop, though psychological dimension is also
noticeably neglected. Criticisms of Hameed (1982). In line with Gerald Somers
thinking, Hammed combined Dulops functional structuralism with behaviourism,
thereby absorbing the all-important personality (i.e. psychological) dimension into
the conception. Essentially, industrial relations was viewed as a multidisciplinary
endeavor which in developing a theory must unite theory, research and experiences
from economics and lawyers, which Somer classified as externalists and from
sociology and psychology (classified as internalists). Hameeds proposition is
integrative of many inputs combining personality-behavioural elements with
environmental inputs. He developed the following four equations which constituted
a conceptual framework applicable to economic, social, political, and legal systems
in any society: I1= f(P) C = f(I1, I2, I3, E) E = f(I1, I2, I3) O = f(I1, I2, I3, E, C, F*)
International Journal of Academic Research in Economics and Management Sciences
March 2013, Vol. 2, No. 2 ISSN: 2226-3624 102 www.hrmars.com Where P =
personality factors like attitude, cognitions, IQ, emotions and response set of actors;
also including their knowledge, education and past experiences; I1 = inputs relating
to participation of individuals; I2 = inputs from other systems in the society, like
other referent unions, economic, social, political, and legal;. I3 = inputs from outside
the society; C = conversion mechanism E = internal environmental of the industrial
relations; O = output of the industrial relations. F* = the feedback mechanism which
will include impression of actors about faith in negotiation and implementation of
agreement, process of evaluating past experiences and assessment of gains and
losses. *The feedback component was added to Hameeds formulation as an
essential aspect of an input output system. On the overall, Dunlops theory is well
acclaimed and fulfilled most of the criteria of a good theory by setting out the
relationships among variables, providing for the nature and direction of
relationships, also setting clear framework for understanding the relationships. The
empirical validity and the extent to which the theory serve as a guide to prediction
is however debatable. The strength as well as weakness of the theory is reflected in
the Pluralist assumptions and according to Hameed, other crucial issues that could
be raised are: i. The error that all actors necessarily share similar ideology or that
the ideology is sufficiently consistent. This is in view of the fact that values differ in
many aspects; especially as related to distribution of income and power ii. Inability
of the systems theory to deal with issues of conflict and change, a weakness from
the Parsonian analysis which did not deal adequately with conflict. Inability to deal
with conflict and change has continued to make the theory conservative and biased
towards stability rather than change. iii. The systems approach is also weak
because of apparent lack of personality-behavioural dimension. The theory
therefore cannot account for the behaviour of the actors. The interpretation of
motives and interactions in both structured and unstructured work environment is
lost in the preoccupation with structural determinism (Walton and McKersie, 1965).

iv. The system approach is not predictive by saying very little about the future of
industrial relations, the theory is therefore more of a heuristic than operational
theory. Our criticisms Many of the reviewed criticisms had helped substantially to
accentuate the history as well as progression in theory formulation and research in
the field of industrial relations. Indeed, experts in the field had over the last decade
assumed the position of insouciance, as not much International Journal of Academic
Research in Economics and Management Sciences March 2013, Vol. 2, No. 2 ISSN:
2226-3624 103 www.hrmars.com development in theoretical formulations is
noticeable. Though one could say, as it also applies in several other fields of study
and disciplines, that universally applicable theories are hard to find, the field of
Industrial or labour relations is still evolving and needs concerted efforts at evolving
dynamic and predictive theories. A way forward is to regenerate lively discussions
by way of review and criticisms of existing theories with a view to evolving more
holistic theory of industrial relations. Our criticisms focused on many aspects of the
systems theory with the Nigerian industrial relations system as a context for
analysis. Industrial Relations as a system. A system essentially presents many
aspects or parts that make up the whole. Influenced by the functionalism of Pareto
and structuralism of Parson, Dunlops view of industrial relations as a sub-system of
the socio-political order has been used as a framework for analyzing the industrial
relations situation in many countries. Systems invariably subsist on the principle of
differentiation (functional autonomy) and interdependence. The industrial relations
system (IRS) is sustained in the overlap that exists among entities like the workers,
management and government. As Dunlop noticed, in spite of the clear difference
among the entities in terms of ideologies and operational context, equilibrium is
preserved because of an assumed pursuit of a common goal. In reality, the goals of
the federating units that make up the IRS are hardly similar as noted by Hameed
(1982). Indeed, they are inherently at variant. According to Fajana (2000) conflict
orientations within the work setting centre basically on the opposed nature of
interests of employers and workers. It is however noteworthy that the concept of
system as used by Dunlop is loosely applied to individuals, individual firms,
industrial branches, workers, workers union, management and so forth (Blain and
Gennard, 1974). Other requirements for a system are inputs, transformational
process, output, and the feedback procedure. A system also essentially operates
within an enveloping environment, if it is not a closed system. There are indeed two
types of system; closed and open system. A closed system is independent of the
environment. Dunlop, to all intent and purposes, meant that the IRS is an open
system. To what extent does the IRS meet the requirements of a system? The many
parts of a sub-system There are several levels and types of interaction such as;
worker-worker, worker-union, unionmanagement, management-leadership, worker
(union)-owners, worker-customer, management-customer, worker-societal (host
community), management-societal, ownerssocietal, superior-subordinate. Equally
some interactions are gender specific, ethnic specific, and age specific. Also
important is the leadership/management, management/union negotiators. In the
era of alternative dispute resolution, some neutral third-parties such as arbitrators,

conciliators and board of enquiry are introduced into the system. The exhibit below
gives indication of the complex dimensions and web of interactions of the subparts
that make up the IR subsystem. International Journal of Academic Research in
Economics and Management Sciences March 2013, Vol. 2, No. 2 ISSN: 2226-3624
104 www.hrmars.com Global environment Owner government Management union
Employers association gender society (host community) Individual worker
negotiator (other third parties) Ethnic/racial affiliation customers professional bodies
It is indeed a complex web of interactions serving as both input and feedback
mechanism for the strategic management of the business as well as industrial
relations system. On the whole, the global environment has such an impact on all
the stake holders to the industrial relations system. In view of the many network of
relationships, interactions and interfaces, it is perhaps no longer admissible to talk
of a three-actor industrial relations system. The flip side is the latest attempt at
strategic human resource management, which partially modeled the pluralist
thinking and conception of industrial relations. Pluralism as a political theory or
theory of politics envisages a multitude of pressure groups. As an economic theory,
pluralism envisaged a struggle for supremacy between diversity and uniformity.
There is therefore a deliberate underplaying of the Marxian conflict and conflictual
interests among major entities like management and union (Kerr et al,(1960). This
approach has led to the declining popularity of unionism. For instance, the trend of
de-unionism has been noticed in the Nigerian industrial sector (Fajana, 2000). The
emerging communication, educational (private primary, secondary and tertiary),
service and financial sectors are de-emphasizing unionism. The three-actor model
appears only as best reflecting public sector dominated industrial/economic system.
Budgetary constraint. Budgetary constraint affects the amount of labour that could
be hired and at what rate (Fajana, 2000). The Nigerian environment is largely
dependent on governmental budget. This probably has to do with the dominant
influence of government. In a planned economy, the state budgets for the entire
economy and as such, Dunlops view is most appropriate. In a fully capitalized
economy, governmental policies, more than the budget should have the more
impact. Nigerian economy is pseudo capitalism, with governmental budget still
presenting important indices for the development of the labour market and
industrial relations. It is important to the extent that the private sector relies to a
greater degree on patronage of the public sector. In the era of economic melt-down,
issues of firm or tight macro-economic and fiscal control have further brought the
private sector to the apron string of government. Organisations experiencing
dwindling fortunes like the financial and insurance sector, textile industries, real
estate and so forth had looked up to government for International Journal of
Academic Research in Economics and Management Sciences March 2013, Vol. 2, No.
2 ISSN: 2226-3624 105 www.hrmars.com bail outs. It is also important to
contextualize budgetary constraint by distinguishing between governmental and
organizational constraints. Government budgetary and fiscal policies though have
widespread impact on the economy, the level of industrial governance, fiscal
discipline in the choice of investment and application of fund is important

determinant of the industrial relations atmosphere of any organisation. The labour

market. In any economy, the labour market trend is dictated by certain dynamics,
one of which is the underlining employment/unemployment situation; that is, the
labour participation rate. Also here, the rate at which wage is hired is an important
determinant of supply and demand. This macroeconomic variable i.e.
unemployment, has taken such a dimension that wage rate is depressed to the
extent that labour is ready to be hired at any rate and for any purpose, disregarding
skill and specialization the case of Dangote Groups of Companies interviewing
M.Scs and PhDs for a drivers job is a case in point. Also see Jayeoba (2013) for
some of the reasons for perennial low wages in the Nigerian labour market. To the
extent that unemployment has worsened significantly since Dunlop wrote, the
constraining effects of the labour market cannot be overemphasized. Rules of
industrial relations. It is perhaps more probable to talk about rule than complex
rules. Workplace rules can be complex, though unnecessarily so, in their both
substantive and procedural applications. Technology had to a large extent,
simplified rules and made it more available to all and sundry. There are diverse
mode and sources of rule in the workplace; they range from the popular employee
handbook to, rule of collective bargaining and rules that are derivable from new
mode of job designs, organizational structure and so forth. For instance, complex
rules are more amenable to tall bureaucratic organisations. In flat, virtual and
boundariless organisations, individual initiative and expertise is fast replacing long,
tedious rule and procedures. Locus and distribution of power. Locus of power as well
as distribution of power is an issue that exists both within the organization and the
larger society. Both loci of power have significant influence on the IRS. Dunlop
appears to put his emphasis on the locus of power in the society. Jayeoba (2008)
noted the significant implication of locus of power on the IRS. For instance, the most
traditional locus of power and authority in most organizations is management.
Power to make decisions, set the rules of work, determine reward is skewed in favor
of management. Industrial democracy is not an attempt at parity of power, but a
mode of load shedding part of the traditional power and prerogatives of
management to generate greater inclusiveness. Such inclusiveness has been shown
to bring about greater job satisfaction, job commitment, job involvement and by
implication higher productivity. Conclusion Hameed (1982) had commented on the
absence of personality-behavioural dimension as well as lack of predictive validity.
This second point has been shown, by using information from the Nigerian industrial
relations system, to be so because of the dynamic nature of the industrial relations
environment; this also being as a result of rapid global changes and changing
nature of International Journal of Academic Research in Economics and Management
Sciences March 2013, Vol. 2, No. 2 ISSN: 2226-3624 106 www.hrmars.com
organisation and knowledge base of workers, owing to changes in technology. It is
also seen that the three-actor model of industrial relations is hardly tenable in the
midst of several stake holders that are part of important input into the system. Also
noted is the declining popularity of unionism as pluralism appears to be taking
ascendancy in the ambit of strategic human resource management. References

Blain, A. and Gennard, J. (1970) Industrial Relations Theory: A Critical Review. British
Journal of Industrial Relations, 8 (3) Dunlop, J. T. (1958) Industrial Relations Systems.
New York: Holt Rinehart and Winston Fajana, S. (2000) Industrial Relations in
Nigeria: Theory and Features (2nd Ed.). Lagos: Labofin publishers Fajana, S. (1995)
Industrial Relations in Nigeria: Theory and Features, Lagos: Labofin publishers
Flanders, A. (1965) Industrial relations: what is wrong with the system? An essay on
its theory and future, London: Faber Hameed, S. M. A. (1982) A critique of Industrial
Relations Theory. Relations Theory. 37 (1), 15-31. Hyman, R. (1975) A Marxist
Introduction to Industrial Relations. London: Macmillan Jayeoba, F. I. (2008) NeedGoal Integration Hypothesis. Management Discoveries 2, 48-65. Jayeoba, F. I.
(2013) Need-Goal Hypothesis and Organisational Types; the Industrial Relations
Implications. European Scientific Journal, 8(28). Jayeoba, F. I. (2013) Wage Trend
in Nigeria; Historical Perspectives and Factors. Hybrid Consult, Kerlinger, F. N.
(1973) Foundations of behavioural research, (2nd Ed). New York: Holt, Rinehart and
Winston, Inc. Otobo, D. (2000) Industrial Relations Theory and Controversies. Lagos:
Malt house press. Walton, R. E. and McKersie, R. B. (1965) Behavioural theory of
labour negotiations. New York: McGraw-Hill. Wood, S.J et al (1975) The Industrial
Relation System; concept as a basis for theory in Industrial Relations. British

Dunlops Contribution
To Industrial Relations
Journal of Industrial Relatio

One of the significant theories of industrial labor relations was put forth by
John Dunlop in the 1950s. According to Dunlop industrial relations system
consists of three agents management organizations, workers and
formal/informal ways they are organized and government agencies. These
actors and their organizations are located within an environment defined in
terms of technology, labor and product markets, and the distribution of
power in wider society as it impacts upon individuals and workplace. Within
this environment, actors interact with each other, negotiate and use
economic/political power in process of determining rules that constitute the
output of the industrial relations system. He proposed that three partiesemployers,
labor
unions,
and
government
are
the
key actors in a modern industrial relations system. He also argued that none
of these institutions could act in an autonomous or independent fashion.
Instead they were shaped, at least to some extent, by their market,
technological and political contexts.

Thus it can be said that industrial relations industrial relations is a social sub
system subject to three environmental constraints- the markets, distribution
of power in society and technology.
Dunlops model identifies three key factors to be considered in conducting an
analysis of the management-labor relationship:

1.

Environmental or external economic, technological, political, legal

and social forces that impact employment relationships.

2.

Characteristics and interaction of the key actors in the employment

relationship: labor, management, and government.

3.

Rules that are derived from these interactions that govern the
employment relationship.

Dunlop emphasizes the core idea of systems by saying that the

arrangements in the field of industrial relations may be regarded as a system
in the sense that each of them more or less intimately affects each of the
others so that they constitute a group of arrangements for dealing with
certain matters and are collectively responsible for certain results..
In effect Industrial relations is the system which produces the rules of the
workplace. Such rules are the product of interaction between three key
actors workers/unions, employers and associated organizations and
government
The Dunlops model gives great significance to external or environmental
forces. In other words, management, labor, and the government possess a
shared ideology that defines their roles within the relationship and provides
stability to the system.
ns. Xiii (3)

Synopsis of John Dunlops Industrial Relations Systems

ANTO COMETA

John Dunlops analysis and study of the concepts, structure, function, practices, outcome and the
institution that are constitutive of the employment relationship have paved the way in
theestablishment of the main framework of an industrial relations system.
According to Dunlop, the system is composed of three main actors and their organizations, the context
or setting in which they interact, the common ideology held by the actors and the body of rules that
govern the system. These are the fundamental components that shape or outline the industrial
relations system in which they belong to.
The actors - hierarchy of managers, the hierarchy of workers and the specialized government agencies
are the central personas in an industrial system. The interaction and relationship within the three
creates the set of rules of the workplace or the principles of the system. Establishment (and
development) of the set of rules is the focus of an industrial relations system. The body of rules in the
system administers the actors in the place of work. The function of experts and professionals are very
crucial in order to establish and govern the body of rules in the system. This are organized and consists
of (a) procedure and authority for making rules (b) substantive rules - related to market or budgetary
constraints and related to distribution of power in larger society such as compensation, duties and
discipline as well as the rules of discipline and (c) administration of rules governing work place and the
work community which involves policies of management hierarchy, laws of worker hierarchy,
regulations / decisions/ orders by government agencies, collective bargaining agreements and the
customs and traditions of work place and work community.
The entire industrial relations system becomes (or mandated to be) stable because of the common
ideology or beliefs shared by the three actors of the industrial relations system. It should be fitting and
consistent to allow a mutual set of ideas that identifies an acceptable role for each actor. This also
characterizes and delineates both the position and function of each in the entire system or their
relationship with the rest of the actors. These set of ideas or beliefs are the factors that integrate the
system as a unit. Displacement of the existing ideological equilibrium takes place when a belief has a
significant modification. Accordingly, this will create a new position or set of rules within the entire
system.
The system operates within or prescribed by technology, product markets as well as the locus and
distribution or power in society. These are the contexts or environments in which the main actors
interact. The technological characteristics of the place of work may influence the type of management
of a particular work community as well as the organization of its workers. Moreover, this may also
dictate the required labor force of the organization, the requirement for supervision and possible
regulation of the government or government agencies. Product markets for the most part affect
management group, however, this is dependent on the type of system in which it operates. The
distribution of power is not within the confine of the industrial relations system. This operates outside
of the system yet influences the key actors of the system itself. These are types of power orientation
or authority that has direct influence over the key actors.

The industrial relations system necessitates unison, interdependency and equilibrium of the
components. Even if the balance in the system is displaced, it would be re-established on condition
that no major alteration would occur in the actors, contexts and shared ideology.

What is John Dunlop Systems Theory in Industrial Relations about?What is he trying

to say about the relationships with the actors an the ideoligies?
TOPIC:

BUSINESS
Asked on October 3, 2009 at 8:38 AM by ctashanna
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Kay Morse | College Teacher | (Level 1) Senior Educator

Posted on January 13, 2015 at 12:57 AM
In its most basic terms, the Dunlop Systems Theory in Industrial Relations is about the
structure and development of relationships among the three integral members of labor relations
(labor, management, government) and about resolving labor-management problems based
upon agreement on a common set of facts that affect or are affected by labor, management and
government.
In his industrial relations system (IRS), Dunlop defined industrial relationships as an analytically
sub-strata of industrial nations. Hedefined the sub-strata as operating under the same logic as the
discipline of economics; since Dunlop was primarily an economist, this is a significant element
of his definition because he is positing that labor relations problems can be resolved through a
system of logic, not chance, and that the development of labor relationships over time can be
guided through logical steps and by logical means, with nothing left to disruptive chance.
Dunlop's definition and system centralized the rules and norms--theagreements--of industrial
relations at the heart of analysis. Thisdiverged from the previous system, which made labor-

management conflict and resultant collective bargaining the heart of industrial relations, which
left a good deal to chance and to the illogical emotions of conflict.
Dunlop's definition and system identified what he called a "web of rules" that are the
elementary components that govern industrial labor relationships. He identified the institutions
and norms that constitute the framework within which industrial relations are carried out and
which govern the outcomes of these relationships.
substantive norms: wages and wage rates, working hours, OSH regulations,

etc

procedural institutions: governmental regulating agencies, conciliation and

arbitration boards, etc

As Walter Mullen-Jentsch says in "Theoretical Approaches to Industrial Relations":

[T]he IRS was conceptualized in terms of both process and product: as a rule-guided process
generating as its product other rules governing the actors and administered by the systems of
industrial relations at the national, industry, or plant level.
Dunlop identified the "actors" he referred to in his system as:

managers,

workers and their labor union representatives,

government institutions that oversee labor-industrial relations.

According to Dunlop, these actors are active in what he identified as the three "contexts" of
industry: (1) technologies, (2) industry markets and (3) power distribution (e.g., labor unions and
corporate organization). Finally, Dunlop posits an "ideology" that "binds" an industrial relations
system together, binding them with a common set of beliefs about society, human worth, and
government oversight.
While Dunlop's IRS does not account for the means or mode by which rules come to be made, it
might be assumed that the rules devolve from the ideological commonality between actors.
Because of Dunlop's IRS foundation in economics and logic, he developed a formulation
representing all these components: rules (R), actors (A), contexts (T, M, P) and ideology (I): R =
f(A, T, M, P, I).
What Dunlop is saying relating to actors and ideologies is, as briefly stated above, that all actors
(managers, workers, governing bodies) share a common society, thus share a common ideology.

Ideology is defined as the set of beliefs common among members of a society in relation to
philosophy, religion, politics, culture, art, etc.
While our societies are more complex, especially Western societies, Dunlop's post-World War II
society was far more homogenous with less divergent roots in religion, politics, culture, art and
philosophy than ours today. Still, it might rightly be said that there is a common ideology that
governs the premise of how management, labor and government is expected to, ought to, should
and/or must relate among one another.