Management Approach and Trade Unionism in the Philippines - Assignment Example

THE MANAGEMENT APPROACH TO TRADE UNIONS IN THE UNITED S AND THE PHILIPPINES Introduction Management approach to trade unions differs across countries, and several factors are considered in this difference. Organizational culture is one factor that contributes so much to the difference in these approaches, indicating the expansive role of culture in organizational dimension. The extent and breadth of the legal realm and legislation securing the welfare of workers also play an influential role in the differences of these approaches, indicating that countries with ample legislations that aim to secure workers' rights to associations such as the trade union are expected to receive the same security from management. The reverse of this, is what certainly applies to trade unions without a stronghold of labour law or with a lack of support by such law. Distinguishing between two different models of corporate governance is now commonplace in terms of understanding management approaches to trade unions. One is the shareholder, in which the primary goal is maximization of shareholder value and only shareholders are privileged to have a strong formalized links with top management. Another is the stakeholder model in which a variety of firm constituencies (employees, suppliers, and customers) has interests that are balanced against each other in decision-making and enjoy 'voice.'1 How trade unions are viewed by management also varies according to country, alongside the extent of their influence on the organization and its decision-making and policies. With all these contentions, this paper aims to ascertain in which ways and why management approach to trade unions differ across counties, which purports to be answered with reference to two countries, particularly the United States and the Philippines. Clarifying Trade Unionism Trade unions are the principal institutions of workers in modern capitalist societies, and are referred to as collective organizations of workers with diverse interests.2 Since the days of Adam Smith, economists and other social scientists, labour unionists, and business owners have been debating the social effects of trade unionism. Many economists view it as a monopoly in the labour market whose primary impact is the increase of wages of members at the expense of the non-members and the effective management of the organization. There were frequent complaints from managers about inflexible operations and work disruptions of firms due to unions, and some social critics have painted trade unionism as socially unresponsive, elitist, and crime-riddled institutions,3 which must not be held on to by desperate workers. The other side of the contention holds that unions bear beneficial economic and political effects, stressing the significant ways in which collective bargaining agreements can pursue improved productivity and better management. Trade unionists note that unionism has the capacity to increase the retention and development of skills of the workers, improve morale, provide information on the goings-on in the shop floor, and pressure management for better efficiency in its operations.4 Besides increasing wages, trade unions provide workers with protection against unfair working conditions and arbitrary management decisions at the expense of the workers. Consequently, the presence of trade unionism in organizations gives a louder voice to the workers and enables them to pursue their demands on the management with a unified and louder voice. However, the negative view of trade unions has increased dominantly during the past thirty years.5 Several right and left advocates, while notable exceptions are considered, doubt the value and social relevance of America's organized labour movement.6 Economists have been indulged in quantifying the economic effects of collective bargaining, focusing almost exclusively on the monopoly wage impact of unions.7 Management Approach to Trade Unions in the United States Much of the seminal work on the concept of human resource management was rooted in the U. S. ideal, with the notion of organisational autonomy as its core. The seminal HRM concept developed in the U. S. alongside its reliance on specific aspects of private sector firms, adherence to a mentality of independent frontiers, and its failure to link theory in general practice.8 The literature on corporate governance originating mainly in U. S. and U. K. was initially concerned with how shareholders can monitor and motivate management to act in their interests, such as improving shareholder value through increasing share price.9 There is a general perception that unlike the monopoly firm that sets prices to maximize profits, unions rarely set wages and in fact, bargain wages with employers. In the United States where democratic principles persist in political governance and other aspects of institutions, corporate management in the workplace domain likewise adopts democratization. Given the same atmosphere of democratization, management styles are focused towards allowing workers to form associations, which is a by-product of democracy itself in the governance realm. Workers, thus possess an unprecedented and unquestioned right to labour processes acknowledged by law and other edified institutions of legitimacy. In the same manner that these laws allow workers to pursue their demands on management through trade unionism, the management often allows, if not to say 'tolerate' these forms of associations characterized to workers.10 The emergence of a more employee-responsive human resource management has come to terms with making workers achieve their demands in a peaceable way, coupled with a democratic management style that gives importance to their participation in the production process. The granting of pay increases and benefits, alongside giving appropriate attention to the esteem needs, which characterize most firms in the United States, led to the breakage of collective bargaining, caused primarily by the lack of necessity to pursue such since the management is particularly able to provide the economic and esteem needs of workers. It was exhibited that there was a corresponding necessity for unions to undertake new strategies in organizing workers and edifying itself as a worker's source of power and an access to the levels of management who make the key strategic decisions that influence worker welfare. Moreover, a greater voice in decisions that affect their jobs and work environment is cleaved to by workers, while at the same time demanding more assurance towards job security through their unions and their employers.11 These pressures have sparked an era of conflict and innovation in labour relations in the United States, prompting the organization to start experimenting with the quality of working life, and began exerting efforts to involve employees in problem-solving groups. 12Trade unionism is seen to contribute to granting a greater participation among workers, that its purpose -attaining economic demands- is almost lost in oblivion as management provides them altogether without having to be demanded. The growing importance of people resource and workplace democratization gave a significant change on how trade unionism functions in the United States. It may be inferred that its popularity is no longer as significant and as resounding as three decades ago, which is attributed not to the workers' loss of interest in political participation in the workplace, but more significantly, in the growing ability of organizations to determine the needs of the workers and provide them.13 This is alongside the growing knowledge of the importance of people resource in an organization, whose activeness can spell the difference between high productivity and low productivity; and high output quality and low output quality. In the past, the lack of emphasis on the importance of the relationship within and among people resources led to a passive work ethics and lower productivity as compared to the times when employees' relations and development were given emphasis. As a new form of development, employee relations have tended to focus on collectivism rather than individualism as management encourages the development of collective representation by employees and allowing them a collective voice in management decision-making (Purcell 2008). This is apparently a shift from the old management tradition, in which employees were not given a voice in management decision making. The shift may explain the decline of trade unionism and collective bargaining agreement that used to characterize most organizations, since management tends to focus now on what benefits the employees. As mentioned, employee participation serves as an impact of workplace democratization in which freedom of expression is permitted. Employees developed a workplace atmosphere that gives them a venue in airing their grievances best, or simply participating collectively in an important decision that concerns their welfare and that of the management. This leads to a more cohesive relationship among them, alongside a participatory employee relationship that leads to greater productivity. This atmosphere gives employees a room for establishing teamwork, to which a group decision is usually based, and is a proven effective way to accomplish a task. Teamwork has thus become both a by-product of workplace democratization as well as a way of life among employees in a democratic work environment. In the same way that collectivism is a result of workplace democratization; organizations have tended to utilize this style as well, especially on how management policy is directed towards inhibiting or encouraging collective representation. It must also be noted that contemporary human resource management tends to emphasize sets of policies designed to maximize organizational integration, employee commitment, quality or work, and flexibility - concepts that were not given much focus in the past decades. Several organizations are trailing the path of policies of employee involvement, which has been an outcome of giving importance on people resource as a likewise important ingredient of organizational productivity. As emphasized, this has not been given importance to in the past, as organizations tended to equate employee relations management into a vast labour market, alongside how the common commodity market is treated. The stringent policies in the past that focused only on wages and remuneration undermining the other dimensions of employee needs, including their esteem and recognition, is the opposite of the new employee relations trend. We may note that this has been a result of constant study in the realm of human resources and employee relations. Management Approach and Trade Unionism in the Philippines Management approach in the Philippines cannot be generalized solely for one characteristic like that of the United States since the presence of different trans-national and multi-national corporations ordains a specific management style for a specific organization. Firms owned by Japan, U. S., Korea, Germany, and Britain vary in their management approaches. Despite the fact that workers are secured by the Labor Code of the Philippines, contrary rules pervade in the company disallowing Filipino workers not to form trade unions and other similar associations.14 Trade unions are generally seen by management as a potential disruption of production activities and an economic threat through financial losses by the time workers opt to hold strikes and mass demonstrations due to unfair labour treatment and low wages. A 'no union-no strike policy' exists in regional areas where economic and industrial zones thrive, owned by indirect foreign investors that are import-oriented. The lack of job security experienced by workers through Contractualization Law allows them to be employed by a contract of four to five months, which is seen as a signification of not permitting the worker to become regularized in his job, enjoy sick leave, vacation leave, paternity and maternal leaves, and other benefits accrued only to regular workers. It was inferred that workers on contractual basis have a lesser voice (if not none at all) in the policies that the management provides, given his job that allows him to stay for only 4 to 5 months. On a greater scale, this may be read as a management scheme to obstruct workers from establishing trade unions that secure their rights and permit them to raise certain demands, such as a higher wage and fair treatment. Hence, restraining the worker from the access to regularization is disempowering him, preventing him from holding trade unions that might scare foreign investors away, potentially thwarting the current industrialization schemes by the Macapagal-Arroyo government. The management approach to trade unions is not at all generally tolerated in the Philippines, with a general perception that trade unions are only resorted to by people who want things done their way, is anarchical, and creates nothing but chaos.15 Management Approaches on Trade Unions in the United States and the Philippines: A Comparative Analysis Trade unionism is generally an unwelcome term in the tenets of organizational walls. However, different approaches by management are exhibited by the United States experience and that of the Philippines. We may infer that with this management dislike, trade unionism is able to be put in the sidelines by both countries, diversely however. The emergence of effective human resource strategies focusing on the economic, social, and psychological needs of American workers has consequently driven away the formation of trade unions, or has kept them in silent solitude for a long while. The American workers needed only economic modifications as a constitution of their management demands, but new human resource trends review their motivation in line with not only the economic domain but also other salient realms that drive the worker towards productivity and quality. On the other hand, the presence of trade unionism in the Philippines is seen as a problem and is resolved by management through denial of a secure job to a Filipino worker, legitimized by legislation, such as the Contractualization Law. As an American worker halts to set up a union by the fact that his demands are accounted to by the management peaceably, the Filipino worker refuses to institute it for it may cause his job. The prevalence of joblessness, mounted at 7.3 million, and lack of job opportunities prompt the Filipino worker to stay in his current job, tolerate the unfair labor conditions, receive a very low wage, and refuse to join unions. Staying in the job is tantamount to not holding demands to the management and not joining workers' unions. Conclusion Approaches to trade unionism by management vary in the United States and the Philippines. Although both have democratic governments, trade unionism in the United States is not restrained as it is recognized both by law and to some extent, by practice, as compared to that of the Philippines. American workers are able to exercise freely their democratic rights in the workplace, given that it is democratized in itself through the onset of democratic management style that permits their voice and participation in decision-making. This is undertaken without imposed restraints or a probable threat that may make them think otherwise. On the other hand, the presence of trans-national and multi-national corporations in the Philippine soil along with indirect foreign investments prompts the Philippine government to structure legislations that restrict an 'excessive' exercise of freedom by the workers, such as forming a workers' union, holding a strike or a production boycott. These democratic rights, which may be invoked when violated, are now seen as causes of chaos and disruptions in a pursuit to protect foreign investments. References Booth, Alison L. The Economics of the Trade Union. Cambridge University Press, 1995. Blyton, Paul and Turnbull, Peter. Reassessing Human Resource Management. The Free Press, 1992. Brewster, Chris. Towards a European Model of Human Resource Management. Journal of International Business Studies, 1995. Vol. 26. Dejillas, Leopoldo J. Trade Union Behavior in the Philippines, 1946-1990. (Ateneo de Manila university Press, 1994) pp. 72 Rubinstein, Saul A. and Kochan, Thomas, A. 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