Report Structure: Technological Changes and Industrial Relations.

Executive Summary
What is IR
Actors in IR
Technology and concept of Technological Change
Impact of Technological Change
IR and Technological Change
Evolution in IR (in relation to Technological Change)
Old and recent NEWS
Examples from some companies
Data/Figures

WHAT IS IR?

J.T. Dunlop defines industrial relations as the complex interrelations

among managers, workers and agencies of the governments.
According to Dale Yoder Industrial Relations is the process of
management dealing with one or more unions with a view to negotiate
and subsequently administer collective bargaining agreement or labour
contract. He also stated that, IR is a designation of a whole field of
relationship that exists because of the necessary collaboration of men and
women in the employment processes of Industry.
Encyclopaedia Britannica explains the concept of IR as The concept of
industrial relations has been extended to denote the relations of the state
with employers, workers, and other organisations. The subject, therefore,
includes individual relations and joint consultation between employers and
workers at their places of work, collective relations between employers
and trade unions; and the part played by the State in regulating these
relations.
Through the above definitions we can understand what Industrial
Relations mean by understanding the two basic words that make it,
Industry(ial) and Relations. Industry means any productive activity in
which an individual or a group of individuals are engaged and by Relations
we mean the relationships that exist between the employer and the
employee within the industry.
For us to understand IR and how it is affected by various social, economic,
political and technological changes we must first understand the scope
and objectives of IR and understand the major actors who play a major
role in governing the same. We also need to understand the importance of
IR and its role in overall development of the society.

SCOPE OF IR
1. Labour relations, i.e., relations between labour union and management.
2. Employer-employee relations i.e. relations between management and
employees.
3. The role of various parties viz., employers, employees, and state in
maintaining industrial relations.
4. The mechanism of handling conflicts between employers and
employees, in case conflicts arise.

FACTORS GOVERNING IR

Nature of Industrial Relations Industrial Relations are multidimensional in

nature and are conditioned with three sets of determinants
I. Institutional factors (such as government policy, labour laws, unions
of workers and employers, power structure, community, etc.)
II.
Economic factors (such as types of economic ownership like
capitalist, socialist, company ownership, nature and composition of
labour force, etc.)
III. Technological factors (such as techniques of production, capital
structure, rationalization, etc.)
Thus, industrial relations are a set of rules formed by the interaction
of the government, the industry and the labour and are influenced
by the existing and emerging institutional, economic and
technological factors.

OBJECTIVES OF IR
http://www.osnacademy.com/contentImage/531409574248Industrial
%20Relations.pdf
The primary objectives of industrial relations are improving the economic
conditions of workers, increasing productivity and achieving industrial
democracy in industrial enterprises. The Labour Management Committee
of the Asian Regional Conference of the International Labour Organisation
(ILO) has recognised certain fundamental principles as objectives of social
policy in governing industrial relations with a view to establishing
harmonious labour management relations. They are:
I.

Good labour-management relations depend on employers and trade

unions being able to deal with their mutual problems freely,
independently and responsibly.

II.

III.
IV.
V.
VI.

The trade unions and employers and their organisations are desirous
of resolving their problems through collective bargaining, though in
resolving such problems the assistance of appropriate government
agencies might be necessary in public interest.
To check industrial conflicts and minimize the occurrence of strikes,
lockouts and gheraos.
To minimize labour turnover and absenteeism by providing job
satisfaction to the workers and increasing their morale.
To establish and develop industrial democracy based on workers
partnership in management of industry.
To facilitate government control over industries in regulating
production and industrial relations.

SIGNIFICANCE OF GOOD INDUSTRIAL RELATIONS

Good industrial relations refer to harmonious relations between the labour union and the
management in an organisation. In other words, in such a situation, there is absence of
industrial disputes between the two parties and presence of understanding and cooperation
between them. Thus, industrial relations in an organisation must be harmonious or cordial.
Such relations will lead to the following benefits:
I.

II.

III.

IV.

V.

VI.

Industrial Peace: Cordial industrial relations bring harmony and

remove causes of disputes. This leads to industrial peace which is
an ideal situation for an industrial unit to concentrate on
productivity and growth.
Higher Productivity: Due to cordial industrial relations, workers
take interest in their jobs and work efficiently. This leads to higher
productivity and production of the enterprise where they are
working. Thus, they will contribute to the economic growth of the
nation.
Industrial Democracy: Sound industrial relations are based on
consultation between the workers and the management. This assists
in the establishment of industrial democracy in the organisation
which motivates employees to contribute their best to the success
of the organisation.
Collective Bargaining: Cordial industrial relations are extremely
helpful for entering into long-term agreements as regards various
issues between labour and management. Such collective bargaining
agreements and association of employees in decision-making
process will bring about cooperation between labour and
management.
Fair Benefits to Workers: The workers should get sufficient
economic and non-economic benefits to lead a happy life. It is
possible when the relations between workers and management are
cordial and the productivity is high. The employers can afford higher
benefits to the workers.
Higher Morale: Good industrial relations imply the existence of an
atmosphere of mutual co-operation, confidence, and respect within

VII.

the enterprise. In such an atmosphere, there are common goals,

which motivate all members of the organisation to contribute their
best.
Facilitation of Change: Sound industrial relations, by creating a
climate of co-operation and confidence, make the process of change
easy. Hence, full advantage of latest inventions, innovations and
other technological advancements can be obtained. The workforce
easily adjusts itself to required changes for betterment.

TECHNOLOGY AND THE CONCEPT OF TECHNOLOGICAL CHANGE

http://eid.sagepub.com/content/8/3/411.extract
Technological change may be defined as the process by which economies
change over time in respect of the products they produce and the
processes used to produce them.
Technlogical change may involve any change in equipment or process,
through the application of knowledge and skills which result in a
significant alteration in the relationship between labor, capital and raw
materials.
Haber, Ferman and Hudson have identified certain changes which affect
jobs and influence skills in the American Industrial System which can be
called technological changes. They are:
1. Scientifc Management or time and motion studies
2. Changes in location of plants
3. Shifts in product demand
4. Changes in Machinery
5. Automation

With the liberalization of Indian economy in 1991 a number of private

players started carving a major role in the economic output and
simultaneously governments both at the centre and state levels started
assuming a smaller role in running businesses. Increased domestic and
foreign competition resulting from the economic reforms induced

domestic manufacturers to improve efficiency and bring into use

advanced technologies on a larger scale. This is supported by the fact that
during the period 1991-98 there were about 3250 technical approvals in
India with the top five technical collaborators. The subsequent break down
of trade barriers, globalization, advancements in Information and
Communications Technology (ICT) and well accepted management ideas
such as TQM on quality, JIT, Computer Integrated Manufacturing(CIM) &
Lean Production(LP) have served to magnify the impact of technology on
employment relationship globally and India in particular.

FORMS OF TECHNOLOGICAL CHANGE: RATIONALISATION AND

AUTOMATION
Rationalisation implies a basic change in the structure and control of
industrial activities. In application, it brings together the advantages of
planned production, pooling of research, scientific and technical knowhow, centralised regulation of finances, modernisation of productive
processes and optimum use of manpower.The techniques of
rationalisation are applied not only to material and methods but also men
in the production process. The Advisory Committee on the Management of
ILO defines it as any reform tending to replace habitual antiquated
practices by means of methods used by systematic reasoning.
Automation is another form of technological change. It is also considered
as the hughest form of mechanisation. At the highest level of
mechanisation, i.e. Automation, the machine provides data from its own
operations and feeds it back to its own control which govern the
production process. Technological change especially through automation
has both advantages and disadvantages. Automated systems allow few
skilled individuals to do the work, which previously required numerous
unskilled and semi-skilled workers. They also allow tasks that are beyond
human capabilities or those dangerous or monotonous jobs that would be
considered inhuman for people to perform. Further the labour intensive
ways of production are expensive and restrict the market for the product,
which has a negative effect on the employment in the long run.

IMPACT OF TECHNOLOGICAL CHANGE

Technological changes affect the industrial activity in several ways. They
affect the work environment and alter the relationship between the
employers and the employees. They affect the labor in two ways- social
and economic. To understand the impact of technological changes in
Industry and thus Industrial Relations as a whole we will need to
understand the impact in the following areas:

1. Employement Level
2. Skill Profile
3. Worker Acceptance
4. Union Response

EMPLOYMENT LEVEL
Labour employment is affected by many factors, two major directly relevant factors are per unit labour
requirement for a product (man hours per unit) and the total demand for the product (Kumar Arun 1999:806). It is
likely that technological improvement leads to reduction in per unit labour requirement but at the same time
because of the increased demand made possible by the lesser cost of the technologically advanced product, it
can lead to rise in overall demand for labour. This expected rise in demand for labour has however not been
equally true for all sectors/ industries.