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Unions and Management Impact on Organizational Culture

written by: Matt Schmidt•edited by: Jean Scheid•updated: 4/2/2011

How do current economic conditions affect union and management impact on organizational culture? The relationship between the two have always had an impact on business. Changes in the global economy may also affect unions in the long term. Learn more below.

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    Unions and management have had a unique relationship in American business. At times, there was intense and violent conflict between both sides. Other times, matters could be worked out with good old fashioned communication. Current economic conditions have had an influence on the way unions and management impact on organizational culture. We'll explore how in the following sections.

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    Rise Of The Unions

    protest The union movement started in the late nineteenth century in response to dangerous working conditions. Workplace injuries were common in industries like mining, railroad construction, and manufacturing. The Industrial Revolution introduced innovations that increased productivity in these industries. However, there were little standards for worker safety and companies at the time were more interested in profits. Increased attention in print media on working conditions led to social awareness and legislation. Maryland passed the first workers compensation law in 1902. Workplace injuries were now a cost consideration for management and safety measures were implemented. In response to massive poverty during the Great Depression, legislation was passed in the 1930s and did indeed cause union and management impact on organizational culture. One was the National Labor Relations Act in 1935 which introduced collective bargaining.

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    Collective Bargaining

    Collective bargaining is the negotiating process between employers and a unit of employees with the goal of reaching agreements about working conditions. It is the keystone of relations between unions and management. These agreements usually deal with issues like wages, hours, and benefits. The National Labor Relations Act of 1935 gives workers the right to form unions and engage in collective bargaining. The Act covers most collective agreements in the private sector. It makes it illegal for employers to discriminate or harass employees for engaging in union activities.

    At a workplace where a majority of workers have voted to have union representation, a committee of employees and union representatives negotiate a contract with management regarding wages, hours, benefits, and other terms and conditions of employment Once the workers' committee and management have agreed on a contract, it is then put to a vote with all workers in the workplace. If approved, the contract remains in effect for a number of years. When the term of the contract is up, it is renegotiated between employees and management. Disagreements and grievances can go arbitration. In an administrative hearing an arbitrator rules if grievances violated the contract.

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    Union Decline

    The strength of unions came from its membership of middle class workers in manufacturing jobs. Economic conditions have hit these workers and as a result, weakened unions. Since the 1980s, factory jobs have been outsourced to other countries with cheaper labor markets. Automation in assembly work increased and inhibited job growth. The economy went from a manufacturing base that offered long term employment to a less stable services base. Labor unions do not have a strong presence in service jobs.

    A globalized economy has also increased foreign competition and companies are less apt to assent to improving worker wages and benefits. One factor that affects the union and management impact on organizational culture is the rise in at will employment. This is an employment relationship where either side can terminate the relationship if there is no express contract in place. Employers can terminate employees "at-will" if there is good cause.

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    Public Employment

    With a decrease in union membership in the last few decades, public employees are now the largest industry of unionized employees. In the recent recession, state and local governments face severe shortfalls in their budgets. Politicians have sought to reduce benefits and freeze salaries of government workers. Public sector employees seem to have greater job protection and benefits than counterparts in the private sector. While workers have faced job loss and reduction in retirement savings tied into the stock market, government workers have not faced these issues to the same extent. Conflict now takes place across the country where government leaders try to reduce benefits and bargaining power of employees in an effort to protect taxpayers.

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    There are questions about unions being able to regain the position they once had. Corporations and global economic trends may prevent them from revitalization. How these factors influence the economy and business will also affect unions and management in the future. It may also affect how these organizations operate in the long run.

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    Sources:

    AFL-CIO http://www.aflcio.org

    National Manufacturers Association Institute http://www.instutute.nam.org

    National Labor Relations Board http://www.nlrb.org

    Brookings Institute http://www.brookings.edu

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