Collective Bargaining as a Method of Solving Employees' Concerns - Case Study Example

Collective Bargaining Name Course Tutor Date Collective Bargaining Background Wal-Mart Inc., now Walmart is a multinational retail company situated in the US that operates chains of large warehouse stores and department across the world (Frank, 2006). The corporation was categorized as the third largest public company in the world in 2012 by Fortune Global 500 list. Fortune also placed largest retailer and the largest world private employer with more than two million employees. The corporation has expanded its stores to other countries; this paper will focus on China, particularly Walmart in Shanghai. Since getting Chinese marketplace in 1997, the company has increased both its store base and sales in China with over 40 percent annually. Price, Bailey & Pyman (2012) clam that after getting its first major revenue in 2009, Walmart Shanghai stands as a massive expansion opportunity for the corporation. With 96 percent of the outlet base and even additional revenue the hypermarket as become dominant in that region over the recent years. This cannot only be attributed to the management only but also the employees. With changing nature of employees’ welfare and demands in the 21st century the Walmart must always be consistent with this change to make employees motivated to produce good results. Table of Contents Collective Bargaining 2 Background 2 1.0 Introduction 4 2.0 Collective bargaining 4 3.0 Unitarist values 6 3.1 Advantages 6 3.2 Disadvantages 8 4.0Pluralist values 9 4.1 Advantages 9 4.2 Disadvantages 10 5.0 Recommendations 10 6.0 Conclusion 11 7.0 References 12 1.0 Introduction One of the biggest precious properties of a company in the 21st century is the employee. Effective human resource ensures that the company performs well. As a fast rising economy companies like Walmart have had to invest Chinese market. However, the foreign companies such as Walmart have found it rough to operate in Chinese market due to difference in industrial relations policy, politics and ever changing economy (Davies, 2011, p.117). With nearly 2.2 million workers worldwide, Walmart Shanghai has experience a stream of court cases and issues related to its labor force. These concerns entail poor working conditions, low wages, and insufficient health care, together with challenges entailing the corporation's tough anti-union policies. Opponents point out Walmart's employees’ higher turnover rate as proof of unhappy employees, even though other issues could be involved (Keil & Spector, 2005, p. 342). This report has identified collective bargaining as effective method of solving employees concerns in relation to industrial relations. Therefore the collective bargaining will employ the two approaches, unitarist values and pluralist values in endeavor to solve Walmart ‘Labor unrest’ in Shanghai. 2.0 Collective bargaining Collective bargaining is a way of negotiation resulted from agreements, regulation and joint determination. It can also be referred to as the process in which relations talks happens between employers and work collective in which liberal collectivist are preferred. Employment relations in China have faced incredible change together with China’s move towards a marketplace economy since 1978 (Taylor, Kai & Qi, 2004). Following 30 years of economic evolution China has turn into the ‘world factory’. The millennium has seen a sudden rush of concentrated efforts to create new industrial relations process. This journey can be understood appropriately against social turmoil’s caused by China’s surge towards the market economy at extraordinary scale and speed for over the past 30 years. Bamber et al. (2009) advocates that one of the methods used to resolve labor unrest has been collective bargaining. However, not all companies, in particular Walmart which is a foreign company has not understood concept of collective bargaining and how they should use it in relation to employment relations and management ER strategy in the retail sector particularly in China. In the past they have made decisions that highly favor management as opposed to win a win-win situation as the concept of conflict of management demands (Price, Bailey& Pyman, 2012). Collective bargaining can be useful to Walmart in several ways. It can help the Walmart Shanghai managers in downward communication with employees. Through their representatives Walmart employees can communicate their demands; whilst the employer can also table their counter demands before both parties reach an amicable solution. If the management can employ the concept of collective bargaining effectively it could them in upward problem solving in which greater opportunities are offered to the employee to participate to the discussions with regards to their work (Bray, Waring & Cooper, 2011, p.103). It could also assist Walmart in task involvement and team work where the workers are anticipated to extend their duties at their workplace. One of the issues that have caused unrest at the company is low wages. According to Fox (1966), Collective bargaining will give employees a change through there representative to participate in financial negotiation in which success of the company is related to the personal rewards. In short, when employees are paid well, they become motivated and perform better. Walmart have to embrace the policy that was brought by Hu Jintao leadership which fight for creating harmonious and development centered on people. This can be achieved through engaging employees in democratic strategy making process in which both the employers and employees by pluralistic political method communicate their positions and create compromise resolutions (Davies, 2011, p.111). 3.0 Unitarist values For Walmart Shanghai to continue operating in the context of both cohesion and making profit, the management can embrace the unitary values. This will make the organization appear as that listens to employees and work in the team platform and 'unified for a common course' (Fox, 1996). 3.1 Advantages Keil & Spector (2005, p.342) states that the relations between employers and employees are meant for success of the company. This collective bargaining approach will make the employees feel valued as part of the whole organization. Viewing employees as important while leaving out threats and firing in solving employees’ demands makes them feel motivated and loyal to their work (Bray, Waring & Cooper, 2011). This approach creates no communication barriers between employees and departments within the organization. One of the major elements of labor unrest at Walmart Shanghai has been lack of communication in decision making process which involves employees’ relations. One of these cases is one which the management did make decisions that favor them without communicating to the employees. From unitarist values, this is seen as counterproductive and dysfunctional to the company. With proper communication channel Walmart will articulate these set of objectives and values without employees unrest whilst ensuring that employees work in unison. If Walmart Shanghai involve and communicate decisions to employees at the bottom level of the organization before implementing them, employees feel valued as well since they encompass similar set of goals and values (Keil, Stanley & Spector, 2005, p.346). Walmart needs to adopt the unitarist values in dealing with their employees. Over the last few years, the organization has been making decisions favoring the management causing unrest and damaging the reputation of Walmart operations in China. The approach will make their employees change their mind about the management. This is because that the interest of the employees is necessary too though they are much secondary to the broad profitability and the achievement of the company. It is unfortunate that “the umbrella union body that the employees have subscribed to, China Federation of Trade Unions (ACFTU)” (LCL, 2007) have never been effective in the past to negotiate their rights. With this body being seen as an external agency which can help them overcome low wages, inappropriate working conditions, discrimination and intimidation, they must stop leaning towards the communist party and ensure that negotiation unites both parties and create a win-win situation. This implies that they that they have to believe the ideas of the shared values and goals should are bestowed upon both employer and employee which then reflect the national interest of the organization. Using this unitarist values is about engaging a sober union without coercing the official (Liu, 2011, p.160). In this way, Walmart Shanghai will realize that time, economic situations and cost of living have changed. The approach can also make them appreciate that the employees’ demands are just in order and that labor unrest is not intrinsic in worker relations because it is just for the performance of the company. Using this strategy will redeem the declining image of the Walmart as a foreign. 3.2 Disadvantages This approach also has its disadvantages on the Walmart Shanghai. Collective bargaining involves using the representative of the workers to negotiate employment terms for everyone. This is because dealing with every individual employee is a difficult task and decisions can never be reached. But just like before All-China Federation of Trade Unions has been a source of unrest leaning on the side of Communist party while citing lack of capacity to resolve employees’ grievances. Despite its repute as an organization-friendly union and an official body of the Communist Party, ACFTU it has been condemned for interested in official interests as opposed to protecting employees’ rights. Liu (2011, p.163) argues that In this way Walmart Shanghai was reluctant to negotiate because they had established that union was insincere and did not represent the employees’ demands. Walmart Shanghai also views union as unnecessary in the organization because they can build alternative misplaced interests for some workers. The employee could perceive the union as part of the company hence putting their allegiance to them, that could be tested should the trade union be unhappy with some issues and start the unrest. This reason places them as a needless external factor. Lastly, the approach is so soft on the employees and if embrace fully may not allow the Walmart to make independent decisions. 4.0Pluralist values The Pluralist values see company as collections of various groups. Using this perspective Walmart management view the organization as multi-structured in relation to leadership, employees, power and loyalty. Actually Walmart Shanghai has been using this approach to the advantage of the management either knowingly or unknowingly. In several occasions they have had a collective bargaining with the union in which they have always manipulated the union and make decisions that favor the management as opposed to creating a win-win situation for both parties. 4.1 Advantages Using this approach fully makes the Walmart Shanghai realize that employees like any human being humans have different personalities and have different cultures and interests. With this in mind they also have to appreciate that they are a company from US and operating in China therefore the culture and personalities are different (Taylor, Kai& Qi, 2004). Learning and implementing Chinese laws can help them maintain the divergent interest of the employees at a dynamic equilibrium. Having different personalities and interests makes its workers and employers at opposition ends. Like their big company in US, these issues have been reduced several issues, wages, benefits, working conditions, type of employment that cause unrest to take place. The approach is advantageous because it is one which has researched about for some time and recognizes that in normal sense employees’ interests competes with organizational interests causing tensions on the labor price and working conditions. Price, Bailey& Pyman (2012) claimed that in the past the Walmart Shanghai have been unwilling to hold a collective bargaining agreement with union being reluctant that enabling employees to work with the union in China would set globally. However, the pluralist in an easy way of conducting collective bargaining since it recognizes trade unions as corporative body which if engaged well reflects and can regulate unrest between Walmart management and employees. 4.2 Disadvantages This approach is not the best when used to resolve conflict between employer and employees. This strategy of collective bargaining believes that conflict in intrinsic in employees no matter how good the working conditions can be. In fact, this approach is what the Walmart Shanghai has been using before to hold collective bargaining. They go in the negotiation table with take it or leave it demands and not giving employees chance to give their views. Another disadvantage of this approach is that most of the time the management will always views employees and issues revolving around them as conflict or problem and pretending to solve them. The problem with this is the management may not care because they assume it is normal. Davies (2011, p.113) challenges that when the problem of employees at Walmart Shanghai is not solved the management can be rest assured that employ’s turnover will be the order of the day. This labor interest at this outlet in China can damage the reputation of the bigger company in US. 5.0 Recommendations Collective bargaining is a complex task where both parties comes with their stance and want their stance to carry the day in a negotiation table. Both parties normally have to compromise in order to find resting solution. For this reason it is recommended that: Both the Walmart Shanghai management and ACFTU embrace solid labor rights that clearly ensure that both parties benefits. That ACFTU liaise with the government of China to strength the current laws to ensure that all foreign companies including Walmart to abide by them when it comes to employees relations. . 6.0 Conclusion In conclusion, unrest in the employee relations can be intrinsic dependent relative to anyone’s opinion. Using Unitarists values at Walmart Shanghai could only cause the unrest to reoccur in future due to the fact this approach only try to limit it, and employees may say enough is enough and cannot keep quiet when their rights are violated. Even though, its weaknesses unitarist perceive industrial relations as a very significant aspect of the organization. On the other hand using pluralist approach may bring a bad culture at Walmart in which management may label employees conflict as inherent, which though could be solved but cannot end. This may make the management to ignore workers grievances. 7.0 References Bamber, G. et al. (2009). Low Cost Competition in the Airline Industry. In Bamber, G. et al., Up in the Air: How Airlines Can Improve Their Performance by Engaging Their Employees. Ithaca: ILR Press, Chapter 1. Bray, M., Waring, P., & Cooper, R. (2011). Theoretical Comparisons, Chapter 3 in Employment Relations: Theory and Practice (2nd ed.). Sydney: McGraw-Hill. Davies, D (2011). Corporate Cadres – Management and Corporate Culture at Walmart China. ILR/Cornell University Press. Ithaca, pp. 97-129. Frank, TA. (2006). "A Brief History of Wal-Mart". Washington Monthly. July 24, 2006. Fox, A. (1966). Management’s Frame of Reference, excerpt from Industrial Sociology and Industrial Relations, Royal Commission on Trade Unions and Employer Associations, Research Harmondsworth: Penguin Keil, Stanley R., & Spector, LC. (2005). The Impact of Walmart on Income and Unemployment Differentials in Alabama. Review of Regional Studies; Vol. 35, Issue. 3, p. 336-355. Labour Contract Law. (2007). Retrieved 2nd July 2013 from http://www.acftu.org.cn/template/10002/file.jsp?cid=56&aid=590 Liu, M. (2011). “Where there are Workers, there should be trade unions” – Union organizing in the era of growing informal employment, Chapter 8 in Kuruvilla, S, Lee, CK and Gallagher, M (eds) From Iron Rice Bowl to Informalization: Markets, Workers and the State in a Changing China, ILR Press, Ithaca, pp. 157-172. Price, R., Bailey, J., & Pyman, A. (2012). Varieties of collaboration: the case of an Australian retail union. The International Journal of Human Resource Management, p. 1-14, DOI:10.1080/09585192.2012.743477 Taylor, B., Kai, C., & Qi, L. (2004). Industrial Relations in China. Cheltenham: Edward Elgar. Read More