Theory

1. Theory COMM 381 Industrial Relations Week 3 Dr. S. Walsworth Walsworth, COMM 381

2. Lecture Agenda • The Purpose of Theory in IR • Theories of Industrial Formation and Development • Theories of Industrialization as a Working Process • Post Industrial Theories • Industrial Relations Ideologies • Group Exercise - Print out and bring WEEK 3 Hand-Out (Blackboard) • Announcement This week we will form into groups of 5 (based on numbers) Walsworth, COMM 381

3. The Purpose of IR Theory 3 broad principles anchor this lecture • A complex socio-economic exchange • Facilitate better policy making • IR is viewed at different levels Functions of theories Walsworth, COMM 381

4. Theories of Industrial Formation and Development The Capitalism Thesis • Karl Marx (1818-1883) • Views on capitalism • Concepts: alienation, specialization, control mechanisms, industrialization, exploitation • Marx on unions The Industrialism Thesis • Emile Durkheim (1858-1917) • Structural functionalism and the division of labour • Durkheim on unions Walsworth, COMM 381

5. Theories of Industrial Formation and Development The Industrial Capitalism Thesis • Max Weber (1864-1920) • Capitalism and industrialization as separate entities • Calculative rationality and bureaucracy • The rational organization • The organizational impact of industrialization and the ‘spirit of capitalism’ • Weber on Unions The Market Economy Thesis • Adam Smith: Inquiry into the Nature and Causes of the Wealth of Nations, 1776 • Rejection of the mercantilist view and the promotion of free trade • Shift to manufacturing industries • The laissez-faire economy • Smith and unions Walsworth, COMM 381

6. Theories of Industrialization as a Working Process Sidney and Beatrice Webb (1890s) • A separate working class • An evolutionary view of unions • The formation and maintenance of trade unions John R. Commons (post WW1 America) • An economic institutionalist • Reasonable capitalism and institutional modes of accommodation • Implications for unions Walsworth, COMM 381

7. Theories of Industrialization as a Working Process John Dunlop (1958) • The Systems Framework of Industrial Relations • 3 common criticisms: Walsworth, COMM 381

8. Post Industrial Theories Kochan, Katz, McKersie (Cappelli) (1986) • The Strategic Choice Framework • 3 levels of analysis • Theoretical advantages • The transformation of the American IR system Chaykowski and Verma • The Canadian context • Canadian employers and Canadian legislation Walsworth, COMM 381

9. The Pluralist Industrial Relations Paradigm (PIRP) • Defined: “The PIRP models the employment relationship as an imperfectly competitive bargaining problem between stakeholders with competing [and overlapping] interests.” (BGM p.216) • Importance of equal bargaining structures • Unions as artificial power structures • Labour is human

10. The PIRP VS. Dominant Capitalist Thought • Very different assumptions • Assumes perfect markets • Labour is a commodity • Free unregulated markets is most efficient • Union wage premium (a distortion)

11. Union Density and GDP Measures Walsworth, COMM 381

12. Union Density and GDP in SK

13. Applying the PIRP to a Union Setting • How do we equalize the balance of power in a workplace between individuals and an employer? What legal mechanisms are in place? • How is conflict interpreted? What mechanisms are in place to deal with conflict? • How is the PIRP different than human resource management philosophies?

14. Just How Left is the PIRP? • Karl Marx and unions • Recall: • unions address imperfect labour markets • Balance human needs (equity, valued, social) with efficiency needs of society.

15. In-class Exercise • In-class exercise - Please read the following scenario: • The National Lacrosse League is undergoing major structural changes. Franchises in smaller markets (mostly in Canada) are being moved to larger markets (in the US). As a business strategy the owners are attempting to compete with other sports and entertainment options in larger markets. This strategy requires players to move to larger centers in the US to play for the new teams. The National Lacrosse League Players Association (NLLPA) was formed a few years ago and is legally recognized as the bargaining agent for all the players in the league. Only some of the members of the NLLPA are affected by this new strategy, as many teams already in large centers will not be moved (such as Toronto and Vancouver). The current collective agreement will soon expire and the parties are heading into collective bargaining. The NLLPA is asking for significant wage increases for all its members to accommodate for the inconvenience caused to some of its members in relocating (around an additional $5,000 a year). The owners have refused the wage demand and are suggesting that wages will increase once the teams have established themselves in the new markets. Underlying these negotiations is a strong level of mutual resentment. The players feel that Lacrosse is finally becoming popular in the major centers only because they have played the game for most of their lives for very little compensation. The owners resent the players interfering with business decisions (that according to the owners) they know little about. Walsworth, COMM 381

16. Practice Question • In his book Inquiry into the Nature and Causes of the Wealth of Nations (1776), Adam Smith was credited with making a significant theoretical contribution to understanding industrialization. What was this contribution and what role did it prescribe for unions? Imagine the contemporary Canadian industrial relations system was solely guided by Smith’s ideas - what are some potential advantages and dangers?