DQ 6

In the 1980s Thomas Kochan and his colleagues wrote a classic article
(Kochan, McKersie, & Capelli, 1983 as a precursor to their !amous "oo#
on the Trans!ormation o! $merican Industrial %elations, (Kochan, Kat&, &
McKersie, 198'( In this article (and in the su"se)uent "oo#, Kochan et
al made a num"er o! o"ser*ations a"out changes ta#ing place in the
$merican industrial relations s+stem( The+ also suggested the application
o! the notion o! ,strategic choices- to ,help add a more d+namic component
to s+stems theor+ and in so doing help e.plain some o! the e*ol*ing
de*elopments in /(0( industrial relations(- (Kochan et al(, 1983, p( 1(
a( drawing their 1983 article in particular, "rie!l+ identi!+ the ma2or
o"ser*ations that were made a"out the $merican industrial relation
s+stem 34 mar#s5
"( re!lecting on a contemporar+ Cari""ean emplo+ment relations s+stem
o! +our choice e*aluate the e.tent to which similar trends are o"ser*a"le
in the Cari""ean situation 38 mar#s5
c( e.plain the concept o! strategic choices as Kochan et al used it and
e*aluate the e.tent to which this concept might "e o! *alue in e.plaining
those trends that are o"ser*a"le in the Cari""ean situation( 31 mar#s5
Amanda Maharaj
807020057
The Strategic choice model was developed when industrial relations in the U.S. were changing
rather rapidly. Because most of the popular theories at that time were generated during periods of
relative stability in U.S. industrial relations practice and consequently are overly static, they have
difficulty explaining behavior when the basic parameters of the system appear to be changing.
unlop!s systems view not only identifies actors "i.e. a hierarchy of managers and their
representatives, a hierarchy of non#managerial wor$ers and their spo$espersons, and speciali%ed
governmental agencies& wor$ing within contexts "i.e. technology of the wor$place and wor$
community, the mar$et and budgetary constraints, a complex web of rules, and the locus and
distribution of power in the larger society as well as the legal dimensions that exists& to develop
a body of rules but also saw them being integrated "a sub#system of society on the same
analytical plane as social, economic, legal and political systems& through a broadly accepted
common ideology'"Salamon, ())* p. *(&.
The basic framewor$ of strategic choice model is derived from the paradigm that integrates the
traditional theories of industrial relations systems with the literature on corporate strategy,
structure, and decision#ma$ing. Their model starts with consideration of relevant forces in the
external environment that affects employment relationships. +hanging external environment
induce employers to ma$e ad,ustment in their competitive business strategies. -n ma$ing these
ad,ustments, the range of options considered are filtered and constrained so as to be consistent
with the values, beliefs, and philosophies engrained in the mind of $ey decision ma$ers. .s
choice are also embedded in particular historical and institutional structures, the range of feasible
options available at any given time is partially constrained by the outcomes of previous
organi%ational decisions and the current distribution of power within the firm and between it and
any unions, government agencies, or other external organi%ations it deals with.
-ndustrial relations processes and outcomes are determined by a continuously evolving
interaction of environmental pressures and organi%ational responses. The relative importance of
either the environment or the parties/ responses can vary over time. Therefore, labor# or product
mar$et changes do not have independent effect or operate in a unique or deterministic fashion.
Then, choice and discretion on the part of labor, management, and government affect the course
and structure of industrial relations systems. 0oreover, history plays an extremely important role
in shaping the range of feasible strategic adaptations.
Their broader conception of the institutional framewor$ of industrial relations is as follows. -t
divides the activities of management, labor, and government organi%ations into three tiers1 "*& a
top tier of strategic decision ma$ing, "(& a middle or functional tire of collective bargaining or
personnel policy ma$ing, and "2& a bottom or wor$place#level tier where policies are played out
and affect individual wor$ers, supervisors, and union representatives on a day#to#day basis. -n
this framewor$, the middle tier encompasses the most traditional terrain of industrial relations,
since it focuses on the practice of collective bargaining and personnel policy formulation and on
the development and administration of the $ey public policies governing labor#management
relations. The traditional of business unionism that has dominated the .merican labor movement
has made it appear that few important strategic choices or ideologically driven decisions are
being made at the top tier. 3et the basic decisions involving such things as what businesses to
invest in, where to locate wor$sites, whether to ma$e or buy various components, and the
organi%ational arrangements used to carry out basic strategies all affect industrial relations at
lower levels of the system and therefore are central to analysis of industrial relations. Strategic
choices that are relevant to the bottom tier are those most directly associated with the
organi%ation of wor$, the structure of wor$er rights, the management and motivation of
individuals or wor$ groups, and the nature of the wor$place environment.
This three#tier framewor$ helps identify an important development that existing industrial
relations systems theory does not specifically address1 the apparent inconsistencies and internal
contradictions in strategies and practices occurring at different levels of industrial relations
within firms. 4irst, this framewor$ recogni%es the inter#relationships among activities at the
different levels of the system and helps explain the origins of any prevailing internal
contradictions or inconsistencies among three levels. Second, this framewor$ considers the
effects that various strategic decisions exert on the different actors in the system. The three#tier
framewor$ encourages analysis of the roles that labor, management, and government play in
each other/s domain and activities.
uring the *52)s, Trinidad and Tobago suffered severely from the effects of the worldwide
depression. 6iving standards deteriorated as wor$ers were laid off from the plantations. The
situation was aggravated by un,ust labor practices. 7ages on the sugar estates and in the oil
fields were $ept low while shareholder dividends in 6ondon rose. 7or$ers moved away from
moderate policies, and the labor movement became radicali%ed. Between *528 and *529, there
were stri$es and riots on the sugar plantations and in the oil fields throughout the +aribbean. The
trade union movement in Trinidad and Tobago really came into its own in the *52)s. :rior to
this, the relationship between operators or owners of businesses, whether agricultural or
otherwise, and those who were employed by them, tended to be along the lines of masters and
servants. .t the onset of the *5;)s the socio#economic conditions in Trinidad and Tobago were
relatively good< the country en,oyed one the highest standards of living in the developing world
due to its large number of natural resources, in particular oil. Before the oil boom of the early
*59)s, unemployment was as high as *=.8> "*592& and under *)> only during the early *5;)s. .s
the employment effects of ad,ustment policies began to ta$e hold within the labour mar$et in the late
*5;)s, the unemployment rate hit a high of over ((> in *5;;?*5;5. Unemployment has remained
acute, notwithstanding economic growth due to the traditional emphasis on investment in heavy
industry and capital#intensive pro,ects at the expense of investment in rural and smaller scale
enterprises. The decline in oil prices coupled with the problems common to almost all developing
countries over the *5;)s, namely debt crisis and the world#wide recession, provo$ed a
considerable reversal in these relatively good economic conditions. 4or instance, the
unemployment rate more than doubled from 5.* per cent in *5;( to ((.) per cent by *5;5. There
is some evidence that this period was also accompanied by considerable movements of
employment from the formal to the informal sector, particularly since there is no formal system
of unemployment compensation in Trinidad and Tobago.= -n terms of the s$ill composition of
employment this meant for many a move from the relatively s$ill intensive formal industrial
sectors to ,obs of lower levels of technological sophistication and productivity in the informal
sector. The economic recession was also reflected in a considerable fall in the real wage rate in
practically all sectors< for example, from *5;2 to *55= the real wage rate fell by over 5 per cent<
a trend apparent in almost every other sector of the economy.
-n recent years, however, the Trinidad and Tobago economy has, relative to other
+aribbean countries, managed to recover noticeably. .gainst this economic bac$drop, one must
also consider the Trinidad and Tobago labour mar$et institutions. .s noted by @ambarran "*55;&
the Trinidad and Tobago "formal& labour mar$et has traditionally been characteri%ed by
politically strong, oligopolistic firms producing for the domestic mar$et and an equally powerful
and aggressive trade union movement concentrated in the energy#related, capital intensive
manufacturing and public sectors' "p. (*)&.
The concept of strategic choices as Aochan et al used in explaining those trends that are
observable in the +aribbean situation begin with the changes at the level of collective bargaining,
where, the central feature of emerging labour management relations is a substantial
decentrali%ation of contract negotiations from the industry to the company level and from the
company level to the plant or economic unit. Bargaining should ta$e place on a more continuous
basis rather than by the former pattern of master negotiations. -n the wor$place, where quality
circles, to productivity tas$ forces and ,oint labour management committees guide the
introduction of new technology. -t is clear that certain plateau effect occurs for quality of wor$
life, and for the transformation process to move further, requires at all levels of the system
towards problem solving and the maturation of new roles for management and union leaders.
7hen the wor$ rules change, they must be changed in such a way that the parties are able to
change them on a continuing basis. Therefore the concept of flexibility and the ability of the
system to adapt to a changing environment on a continuing basis become the $ey features of a
robust new system at the operating level.
Unions have been brought into a formal role, such as designating representatives to the board of
directors and becoming involved in an ongoing basis through briefing sessions and the receipt of
$ey information about the business outloo$. This involvement by unions at the strategic level is
very different from the role played by unions in the traditional model. The amount of change that
has occurred in the past several years suggests that strategic access by unions will be a $ey
frontier of labour management relations. -t is also possible to envisage a happier scenario where
a new system of industrial relations emerges and unions once again are able to attract new
members. This will require new roles and s$ills for union leaders as well as for $ey management,
especially at the middle and supervisory levels. -f it is able to adopt a long#run orientation, then it
is more li$ely that changes in heavily unioni%ed situations will involve the constructive
involvement if unions officials and these changes will be done in a way that does not lead to
confrontation and to the fracturing of established relationships.
References
+appelli, Aochan, and @obert 0cAersie. *5;8. Strategic +hoice and -ndustrial @elations Theory
and :ractice. -ndustrial @elations1 . Bournal of Cconomy and Society Dolume (2, -ssue *, pages
*E?25.
Aohan, Thomas. *5;E. The Transformation of American Industrial Relations. +ornell University
:ress.
Thomas, @..1 Survey of Contract Labour in Trinidad and Tobago. Paer resented to the
!ational Triartite Symosium on Contract Labour. "inistry of Labour# Trinidad and Tobago#
*55;.
Salamon, 0ichael. ())*. Industrial Relations$ Theory and Practice. 4inancial Times :rentice
Fall.
0oonilal, @. "())E, .pril%. Changing &or' Arrangements and the Scoe of the (mloyment
Relationshi in Trinidad and Tobago$ Trends ) Challenges.