The Role of Unions in Improving and Disrupting an Organizations Culture Essay Example

The Role of Unions in Improving and Disrupting an Organizations Culture Essay The Role of Unions in Improving and Disrupting an Organization’s Culture Describing and identifying the importance of abstract terms is a difficult task because their meaning rely more on substance than form. For this and other reasons, individuals as well as organizations tend to overlook or underestimate their importance for a successful career and for the effective functioning of an organization. Organizational Culture† is one of those terms, we can’t see it, but we can feel and experience it, and it has a profound impact in the way people behave in an organization. It denotes the attitudes, experiences, beliefs, and values of the work group or team within the organization, which to an extent affect the organization as a whole. All employees whatever their grade is, and whether they are professionals or not, contribute to the culture of an organization by bringing their diverse talents, knowledge, skills, values, and beliefs to the entity. Employees may possess abilities and talents that might enable them to fit into the organization and empower it, partly as a result of socialization, but they might need assistance from others, such as Human Resource Development specialists and Union cooperative efforts, in order to learn the skills that will enable them to play their part in the team, group, or department. The culture of an organization is important not only to individuals but to the organization itself. This makes culture an important part of every organization and union leaders and management need to understand the central role it plays in forming an effective organization. Union understanding of the important role culture play for an organization is essential since the recognition of unions and the labor agreement usually means structural changes to an organization’s policies, practices, strategies, and the environment. According to Neal M. Ashkanasy, author of the book Handbook of Organizational Culture and Climate, more and more practitioners are coming to realize that, despite the best-laid plans, organizational change must include not only changing structures and processes, but also changing the corporate culture as well. 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However, it can be a big challenge for the organization and its members. Managing in a union environment can be frustrating and confusing. Managers in a unionized workplace are challenged to manage effectively within legal and contractual parameters. This make the decision-making process more difficult for managers who must count with the union approval for many decisions and changes that might conflict with the labor agreement. If managers are not flexible in outcome, or are too specialized, then the organization may become too narrowly focused and the motivation and creative thought, a necessary precursor for innovation may be stiffed. Also, although individual ideas are important, strategies for team-working are essential. One of the primary responsibilities of strategic leaders is to create and maintain the organizational characteristics that reward and encourage collective effort (Neal M. Ashkanasy, 10). Individuals should be motivated to work as part of a team sharing a common vision of the direction in which they would like the organization to develop. To this end, unions are one of the most effective institutions that can be used to bring people that share common interests, goals, and principles together and motivate them to work as a team, since the mechanism of the union itself encourages team participation. Today, organizational leaders are confronted with many complex issues during their attempts to generate organizational achievement. A leaders success will depend, to a great extent, upon understanding organizational culture. Paul Clark, author of the book Building More Effective Unions contends that â€Å"Many of the problems confronting leaders can be traced to their inability to analyze and evaluate organizational cultures. † Many leaders, when trying to implement new strategies or a strategic plan leading to a new vision, will discover that their strategies will fail if they are inconsistent with the organizations culture. For example, a CEO, SES, political appointee, or flag officer who comes into an organization prepared to shake the place up and institute sweeping changes, often experiences resistance to changes and failure. These difficulties with organizational transformations arise from failures to analyze an organizations existing culture. According to Franklin Ashby, author of the book Revitalize your Corporate Culture, â€Å"When an organization has a union, most of the culture of the organization is dictated by the union contract, and the on-going relationship with the union. Unless Union cooperation is obtained, little can be done to change the culture of an organization. However, Unions often resist change to protect the interests of their members. One of the strongest cultures in the United States is the United Automobile Workers. Over the years and through many negotiations, they have established work rules that workers and companies must follow. These are now an integral part of the organizational culture of the Big Three Automobile Makers. For example, when competition from Japanese car makers cause the Big Three U. S. utomobile firms a significant loss of market share, the organizational culture of American Auto manufacturers had to be changed. This could be accomplished only through negotiation with the union. Although some labor leaders oppose any change they feel may weaken the union’s position, more and more enlightened labor union leaders are moving from an adversarial to a more cooperative philosophy (Franklin Ashby, 3). According to Paul F. Clark, author of the book Building More Effective Unions, â€Å"Most efforts to change an organization’s culture will meet with some resistance. A systematic approach to change is most effective in meeting such resistance. Many of us are familiar with the slogans, songs, jackets, parades, banquets, and picnics of unions because they are all part of the labor movement. To some they are simply windows dressing, unconnected to the important things that build an effective union. But, in fact, these things are part of a potentially and powerful phenomenon called â€Å"organizational culture† (Paul F. Clark, 10). It is important that unions understand the central role that culture plays in an effective organization and work to build a strong culture consistent with the union as well as the organization’s values, beliefs, and objectives. This is essential to avoid conflict by having two different cultures with different organizational objectives in the same company. Although one general culture might be ideal and best for an organization, subcultures exist and they do not necessarily exist to hurt the overall culture of the organization as long as the culture that involves the common interest of most members is accepted and recognized. The existence of subcultures is normal. In an organization with a strong culture, subcultures created by union members do not cause problems because the overall values and beliefs of the group are well recognized and accepted. If the culture of an organization is week, however, subcultures can override and compete with the overall culture, which can be disruptive to the organization’s culture. In his analysis, Paul Clark mentions that the effectiveness of a culture can be measured by the degree to which that culture and its various elements and subcultures clearly communicate the values of the organization. One of the core values emphasized by unions is the welfare of the collective group. Towards this end unions emphasize the principles of solidarity, unity, and togetherness. One common aspect of union culture that helps to communicate these values is the use of the terms â€Å"brother† and â€Å"sister† to refer to union members (Paul F. Clark, 6). Other values held in great regard by unions are fairness, equity, and justice. Unions help improve an organization’s culture by enforcing these values whenever they are violated or necessary for the welfare of employees. For example, managers often complaint about the tendency of unions to challenge through the grievance procedure many of the disciplinary actions taken by management. However, such challenge simply reflects the value that unions and union members place on due process and the fairness it brings to the workplace. By challenging any questionable management decision, unions are forcing management to evaluate the fairness of every action they take, before they take it. The member-union contract has an impact not only on union attachment, attitudes, and behaviors, but also on how it affects organizational culture. In summarizing the findings of their widely cited book, What Do Unions Do? Freeman and Medoff conclude that â€Å"Unions alter nearly every aspect of an organization’s culture. † The authors suggest that unions exert effects on organizational culture through collective bargaining. The primary effects of collective bargaining are the gains that the union is able to realize at the bargaining table for the employees. For example, extrinsic benefits like wages, job security, and working conditions, are all concerns that have dominated the collective bargaining agenda of North American Unions. Gains in these areas are determined primarily by the union’s ability to acquire and use power in the bargaining relationship. For example, the union wage effect is largely dependent on the ability of the union to achieve monopoly power within an industry. It is important to note that the union effects on organizational culture are also outcomes that emerge though management’s reaction to collective bargaining provisions. Management’s adjustment to the conditions imposed by collective bargaining and the union’s counteraction to managerial action will determine the nature and extent of union effects on organizational culture. The ability of unions to achieve their goals in areas such as wages, job security, and working conditions have important ramifications for organization culture both within the union and within the organization. For example, unions have a direct effect on the level, form, structure, and system of compensation plans. Through effective bargaining unions can improve an organization’s culture by emphasizing and enforcing the values, principles, and beliefs the members of the organization consider important. For example, the union can achieve fairness and equity with wage increases and justice and dignity with provisions for job security and better working conditions. Although these effects wary across industry and individuals, some general conclusion may be drawn. First, and most important, unions raise wages. Estimates of union wage effect wary but in general wage levels in unionized industries are 10 to 20% higher than wages for comparable non-unionized industries (William Holley, 324). Similarly, unions have a positive impact on employee benefits with unionized industries spending more on fringe benefits than comparable non-unionized firms. Job security is another factor through which unions help improves an organization’s culture concern for layoffs. For example, collective agreements often contain clauses that directly influence individual’s job security such as provisions for layoffs, job transfers, and contracting out. The prevalence of such provisions indicates the high priority placed on job security by union members. Based on the Quality of Employment Survey data, union membership was the best predictor of whether individuals would trade a 10% increase in real wages in exchange for increased job security. Unions also increase the security of their members from arbitrary decision making though the provision of grievance systems. Through the implementation of grievance systems with provisions for third-party dispute resolution, unions substantially increase the costs of arbitrary management decisions. As mentioned by Julian Barling, Author of the book The Union its Members, One would expect, and empirical evidence confirms that â€Å"Management decision making in a unionized environment would be more regulated by formal procedures and based on more objective criteria. Other areas in which Union have helped to improve an organization’s culture is through their intensive efforts to improve occupational health and safety in the workplace by advocating for government regulations, negotiating health and safety provisions, and encouraging the formation of labor-management committees to deal with health and safety issues. In additional to the negotiation of clauses dealing with health and safety, unions may also negotiate compensating wage differentials for workers exposed to higher risks. By doing so, they increase the incentive for management to improve working conditions by increasing the cost of dangerous work. Overall, unions substantially increase awareness of health and safety issues in the workplace. In addition to safety and health issues, unions also negotiate contact provisions dealing with a variety of working condition (William Holley, 435). For instance, hours of work, scheduling of rest breaks, and, in some cases, and rate of production. To the extent that unions are successful in negotiating these gains, unionization may have an indirect effect on occupational health and safety. Provisions such as rest breaks, minimization of overtime, and shift scheduling may all affect the risk of on-the-job injury. According to Clive Fullagar, the Neo-Classical Economic Theory suggests that â€Å"Management may react to the increased costs associated with unionization by replacing labor with capital. However, an alternate theory suggests that unionization has â€Å"shock effect† on management, whereby management reacts to unionization by becoming more efficient. † Such increased efficiency may be evidenced by the introduction of centralized, professional human resources functions and increased reliance on formalized decision making. Union involvement in the formulation of management decisions may be seen as usurping the rights of management to run the workplace. On the other hand, collective bargaining maybe e viewed as a way of managing the workplace rather than an abandonment of traditional management prerogatives. In this regard, it should be noted that through their involvement in establishing work rules and organizational policies, unions may have both positive and negative effects on organizational culture. The impact of unions in managerial decision making is seen clearly in the development of personal policies. It is commonly recognized that unions influence the use of seniority as a criteria for promotions and job transfers. Unions also have an effect on hiring decisions. For example, one managerial response to wage premiums maybe to raise the hiring standards of the firm and in particular to place more emphasis on education as a hiring criteria. The presence of a union may result in the implementation of policies that are in the organization’s best interest. Thus, the presence of a union is associated with more efficient managerial decision making. In particular, this increased efficiency is attributable to the formalization of decision making and the substitution of policy for individual judgment as a basis for decision making. As the preceding discussion indicates, unions have substantial effects on organizational culture through the negotiation of specific provisions in the collective agreement. Additional union effects on organizational culture also accrue during the administration of the collective agreement as management and the union adjusts to the new environmental conditions mandated by the collective agreement. Unions improve organizational culture by supporting, developing, and enforcing values, beliefs, attitudes that are of importance to the members of the organization. As a result, this has a direct effect at increasing productivity and performance. Freeman and Medoff have concluded that unions substantially increase the productivity of organizations. That is, after controlling for various organizational characterizes, unionized firms are more productive than their non-unionized counterparts. However, nionized firms are found to be less profitable than non-unionized firms because the increase in productive do not seem to offset the increased costs of unionization. Freeman and Medoff point out that â€Å"The union impact on the firm’s productivity can be explained by two factors. † First, unionization leads to a more stable workforce by reducing voluntary turnover. A direct consequence of this increase stability is the firm’s investment in human resources management. Second, the union effect on productivity provides a conceptual basis for the hypothesis that unionization may have an effect on individual job performance. For example, through more rigorous selection, investment in employee training, and the institution of more professional management practices, an organization attempts to adjust to the cost of unionism by increasing individual job performance. While the end result of such strategies is an increase in firm productivity, the initial effect is plausibly an increase in individual job performance. It is imperative to note that the union’s effect on firm productivity is moderated by the quality of union-management relations. When the industrial relation climate is favorable, unionization is associated with higher firm productivity. Conversely, a poor quality of union-management relations is associated with decreased productivity in unionized firms. The quality of union-management relationships influences the motivation of employees. When the quality of union management relations is poor, the potential for increments in job performance maybe be offset by decreased individual motivation, work stoppages, and work-to-rule campaigns. Perhaps one of the most well documented effects of unions in organizational culture is the reduction in voluntary employee turnover in unionized industries. According to Clive Fullagar, unions help to reduce turnover in two different ways. First, unions increase wages and improve working conditions. These primary union effects make unionized jobs more attractive and conversely reduce the likelihood of finding an equivalent job. The union affects on benefits and particularly the increase in deferred compensation schemes that favor senior workers, contribute to the union effect on turnover. Similarly, benefits based on seniority also help to decrease the voluntary turnover rate. Second, unions reduce turnover by providing individuals with a voice. Through the provision of employee grievance systems, unions provide the individual an alternative to quitting, the opportunity to redress specific dissatisfactions through the grievance system. Unions provide mechanism for individual to express their dissatisfactions and influence their working conditions. The provision of such mechanism reduces the probability that an individual will voluntarily resign his or her position. If unions reduce voluntary turnover by providing voice mechanisms to individuals then these effects may be logically extended to other forms of individual withdrawal from work such as absenteeism. However, unionized firms experience higher absenteeism rates. Therefore, in this sense unions hurt organizational culture. For example, increased sick-leave benefits negotiated during collective bargaining are associated with higher rates of absenteeism. Another ways in which a union can hurt an organizational culture is by causing strain and stress. While not widely researched, there are conceptual reasons to suggest that unions and the practice of industrial relations have consequences in terms of individual stress and strain. First unions negotiate contract provisions that directly affect working conditions. Management may react by implementing more formal policies and standardized job descriptions. The result of such increased formalization may be experienced as a reduction in role ambiguity and increase in role conflict, which are two components of roles stress. The consequences of worker participation in union activities also have an impact on organization performance and various behavioral outputs. Unions provide discontented workers with a participatory forum and a collective voice at the workplace by means of which they may articulate their feelings rather than exiting temporarily through absenteeism or permanently through turnover. Unions encourage member participation making employees feel valuable to the organization. Union organizations have mechanisms such as a written constitution and bylaws that ensure an opportunity for members to participate in the governance of the organization, hold office, attend meetings, vote in elections, or express dissatisfaction with the leadership. Unions help improve an organization’s culture by maintaining some balance between employer and employee’s rights and responsibilities. Although employers and employees share some common interest, each group is motivated by self-interest. The inherent conflict of interest between employers and employees inevitably creates conflict within any employment relationship, which must be managed effectively. Unions rather than an individual are more effective in managing this conflict of interest and creating an enjoyable working environment. The presence of the union formalizes the employee representation activities because employees may file a grievance if they believe the company has violated the terms of the negotiated agreement. If the company employs an accommodation and labor management cooperation strategy, unions can help by cooperating with management rather than the parties having an adversarial relationship. Management and the unions can actively work together to create an organizational climate and a way of operating that will allow employees to participate directly in decisions in their work areas as members of task teams and as members of problem-solving groups. Unions can contribute to companies’ strategic planning and implementation activities which directly affect the organization’s culture. For example, a union can provide input from a clearly defined group of employees, as well as transfer information about corporate plans and direction to those represented employees. The union leaders can help the rank-and-file employees better understand the business plan and lend credibility to the plan. According to our textbook, The Labor Relations Process, â€Å"Unions can help improve an organization’s culture by reducing the employees feeling of alienation which have resulted from the extensive use of machinery in manufacturing operations. Employees might feel alienated because they have lost contact with their own labor when the product they created were taken away from them, thereby reducing their spirit and status or when they became estranged from fellow employees when their work made them too tired and competitive that they were incapable of having authentic relationships. Unions can and do address a possible aspect of employee alienation, namely the employees’ desire to speak their minds without fear of management reprisal. For example, a union typically indicates to its potential members that the employee’s rights to voice their opinions regarding a managerial action are protected by negotiated grievance procedures and disciplinary polices. In conclusion, Unions play a crucial role in improving an organization’s culture. Therefore the union’s members understanding of organizational culture as well as management recognition of the union as a key player in improving organizational culture is imperative. The above examples indicate that failure to achieve organizational change when necessary can be accredited to the lack of management’s understanding about the important role culture plays for an organization. The most important point of this is that such as an organizational culture is made of members that might be union’s members in a unionized firm, and their approval, understanding, and acceptance of any change in their inherent or traditional culture is essential for an organization to operate effectively. Although, the majority of examples and research suggests that unions have more positive impacts in improving an organization’s culture, they can also hurt it if they don’t develop the skills needed for mutual union-management cooperation such as understanding the business and the problem-solving process. They can hurt the organization’s culture if they don’t maintain contact with the membership to better represent members’ interests. Also, if management doesn’t take steps to reorient its view from seeing unions and labor agreements as constrains to recognizing a more cooperative union-management relationship and provides the union with a secure position as the legitimate, permanent representative of the bargaining unit employees. Bibliography Ashby Franklin C. Revitalize Your Corporate Culture: Powerful Ways to Transform your Company. Golf Professional Publishing. Burlington: MA, 1999. Ashkanasy M. Neal, Wilderon Celeste, and Peterson Mark. Handbook of Organizational Culture and Climate. London: New Delhi, 2004. Clark F. Paul. Building More Effective Unions. Cornell University Press. New York: Ithaca, 2000. Julian Barling, Fullagar Clive, and Kelloway Kevin. The Union Its Members: A Psychological Approach. Oxford University Press. New York: Oxford, 1992. Holley William, Jennings Kenneth, and Wolters Rogers. The Labor Relations Process. South-Western. Ohio: Mason, 2005.