The strategic negotiations framework proposed by Walton et al (1994) gives a vigorous theoretical framework that can be used to explain the formation of labor relations in modern firms and how management approaches labor negotiations at the workplace. Strategies related to labor negotiations result from an amalgamation of labor-management interactions at the individual and institutional level (Boxall & Purcell, 2011). The institutional component essentially revolves around collect bargaining and its legitimacy in sustaining the shared understanding or the social contract between the two negotiating parties. The current regulatory environment equips employers with more freedom and discretion on how to deal with or respond to employee trade unions. In this case study, the old management initially adopted the accommodation strategy in dealing with the negotiation process. According to Walton et al (1994), this strategy relies on the acknowledgement by both parties of the legitimate role that each plays of the formulation of substantive agreements and contracts (Boxall & Purcell, 2011). The management proposed their strategy to the trade union about their plan to annualize the employee’s salary. The trade union had no official policy on this strategy. Hence, if it was adequately explained to them including the benefits accruable to employees, there was high likelihood that the trade union would have no problem supporting the strategy. However, it appears that the damage had already been done, and the relationship between the old management and the trade unions was tense and filled with suspicion. For instance, the trade unions were convinced that the management was solely concerned with short term profits rather the long-term sustainability of the company. Therefore, in spite of the accommodative strategy used by the company’s old management, this strategy did not ultimately work in the negotiations process, and there was a deadlock.
As mentioned earlier, the trade union was extremely suspicious of the management. This was in spite of the management’s insistence of the fact that the new strategy would sustain the current employees’ earnings or even improve them significantly and not decrease them as delegates from the trade union thought. In fact, the management fully explained that employees would benefit from reduced working hours. However, the trade union thought that the management was not concerned about the interest of the workforce or the long-term health of the industry. The management made an understandable choice of using the accommodative strategy because they understood the importance of involving both parties equally in the negotiation because the ultimate purpose of a negotiation is to gain mutual value. This is why they decided to call a meeting with the union delegates who represented the interests of the employee. However, based on the analysis of the outcomes, it is clear that this was not the best choice. The reason for this is because, from the case, it emerges that the second party (the union) was unreasonable and un-receptive of beneficial change. In spite of the greater benefits offered by the proposed strategy, the union was unwilling to compromise because it wanted to maintain the old plan because “it suited employees” in terms of work hours. For example, the employees did not wish to change the current standard working times because of family reasons while others wanted to continue “milking” extra cash from the company in terms of overtime. An accommodative strategy is rendered useless if one of the two parties shows unwillingness to compromise or does not have an open mind. Consequently, the old management should have potentially gone for an entirely different strategy that was perhaps not so inclusive.
Once the old C.E.O left, the relations between the company and the employee seemed to significantly improved. There was increased collaboration and trust between the two. The parties were able to avoid confrontations and were able to make compromised decisions in a very short time. However, the major compromise was on the company’s and the management’s part as it made clear of the fact that it would not be pursuing any moves towards the annualization of employee’s salary. Since the entire strategy was meant to increase productivity and reduce costs, the management made an alternative proposal about assessing the current staffing levels to identify any occurrences of redundancy and eliminate then. The improved relations were once again exhibited by the response of the trade union which agreed to the move since it trusted the new management more unlike the previous management which it felt challenged legitimacy of the union and avoided the sharing of information. Here, it appears the new management rather than using the accommodative strategy used the previous management used the cooperative strategy. This strategy essentially encourages trade unions and the management to develop genuine partnerships and in doing this, the influence of trade unions is extended deep into the organization (Creanor & Walker, 2005). Such a strategy also helps to legitimize the workplace reform initiatives that are employer driven (Gennard, 2006).
Using the framework of voice systems and management style, the style that would most probably work and that is therefore be recommendable for this company going forward is the one recommended in the sixth box. This style calls for high commitment from the management. While showing commitment to the organization’s overall objectives, the management also needs to show a lot of commitment from the employees to remove the tension and suspicion that characterized the relationship between the old management and the employees (Boxall & Purcell, 2011). Commitment on the organization’s part will foster exemplary relationships with the employees, and when a new strategy is proposed, there will be increased plausibility of acceptance from the employees’ part (Devereaux et al., 2006). This style also calls for partnerships with unions and non-union representatives. As shown, the trade unions obviously have a huge influence on the negotiations process and if any future negotiation are to bear any positive fruits, there must be effective partnerships between the two parties. Partnerships can be created by, for instance, by continuous collaborations that are meant to benefit the employees (Kochan, 1973). In essence, meetings between the management and trade unions should not only take place when a negotiation that is on the table. Collaborations that are not just based on negotiation facilitate effective partnerships. The other element of this style should include extensive direct and indirect voice systems (Lewin & Mitchell, 1992). Management should encourage the existence of extensive systems meant to put forward the opinions, views and concerns that employees have. When the employees have the feeling that they can freely express themselves using the direct and indirect voice systems, they are likely to be receptive of new strategies as they know that they can raise any issues that they have regarding the strategies later (Stewart, 2010). This will create an overall good relationship between the management and the employee, and both parties will accrue the benefits of a good relationship.
References
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Creanor, L., & Walker, S 2005, Learning architectures and negotiation of meaning in European trade unions, Research in Learning Technology, vol. no. 132, pp. 56.
Devereaux, C., Lawrence, R. Z., & Watkins, M 2006, Case studies in US trade negotiation. Washington, DC, Institute for International Economics.
Gennard, J 2008, Negotiations at multinational company level? Employee Relations, vol. 30, no. 2, pp. 100-103.
Gunderson, M. M 2013, Labor & management. Minneapolis, MN, ABDO Pub.
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Kochan, T. A 1973, Resolving internal management conflicts for labor negotiations, Chicago, International Personnel Management Association.
Lewin, D., & Mitchell, D. J 1992, Systems of Employee Voice: Theoretical and Empirical Perspectives, California management review, vol. 34, no. 3, pp. 95-111.
Stewart, P 2010, Employee relations, vol. 32, no. 6. Bingley, UK, Emerald.
Walton, R. E., Cutcher-Gershenfeld, J., & McKersie, R. B, 1994, Strategic negotiations: A theory of change in labor-management relations. Boston, MA, Harvard Business School Press.
