CHAPTER I

1 .I A synoptic view of industrial relations management

perspectives:

Basically, management is a dynamic process, that directs

the people and activities of an organisation to achieve pre- deter-

mined objectives with the opt imum use of available resources,

human and material. The management cycle has five elements

namely i) Planning ii) Organising iii) Staffing iv) Motivating and

v) Controll ing I Coordinating. This process is never ending with in-

novations and formulation of fresh objectives requir ing replanning,

reorganising, redirecting, providing appropriate motivations and con-

trol l ing. Human relations management concerns with the integration

of people into a work situation by motivating personnel t o work

as a team cooperatively and productively. With the result, the

work force becomes an instrument of the organisation and the

management provides, motivates and shapes the instrument.

1 .I .1 Classical Management Approach

The classical management approaches were spearheaded by

F. Taylor, 1947 through his principles of 'Sciantif ic Management'.

The scientif ic manager primarily makes a scientific analysis of

tasks of the workmen through systematised procedures; selects and

develops workmen, integrates tasks with workmen and perfoms

analytically to ensure larger output of higher quality per worker,

larger profit for the company and higher wages for the workers.

This approach Is oriented towards surplus value generation without

commensurate benefit accurals to the workers. The structure of the

work organisation was such that the employer had absolute owner-

ship and/or control. Though basic harmony between employer-

employee was assumed under 'Laissez-Faire', in actual pract ice

empirical reality pointed to the confl ict between the two. "Thus,

management under the capitalist mode of product ion has a strong

hold on the working class through the cult of the manager and

almost forces the belief on the working class that it has no ex-

istence apart from its management. The belief spreads that the

"wage labourer, like the slave must have a master who puts him

to work and rules over him".

1 .I .2 Socialist conception of management

Work Organisation under the socialist mode of product ion is

considered more humane relative to the capitalist mode. In Marxist-

Leninist perspect ive society was viewed as self governing system

which is commonly divided into managing and managed sub sys-

tems. Marx (1970) discerned the impact of management on a so-

cial system i n two ways, one spontaneous and the other

conscious. The spontaneous mechanism of managing act ion has i ts

instrument the market in the capitalist system which is the base

of the capitalist economy. The conscious mechanism of management

attempts at generating a purposeful impact on the system Marx

(1970) recapitulates 'Regulation and order are themselves indispen-

sable elements of any mode of product ion if it is to assume so-

cial stabi l i ty and independence from more chance and arbitrariness'.

The socialist conception of management has the fol lowing strands:

a) Dominant position of the ownership of the . factors of production

by the whole people

b) The goals of management are linked inseparably towards the es-

tablishment of a communist society

c) The principle of democratic centralism wherein

centralized planning and control is the basic principle of socialist

management

d) The management has, therefore, necessarily to work under the

direction and leadership of the communist party Lenin's concern

was democratisation of decision making process in public

enterprises

e) While capitalist management focusses on profits of

enterprises, the socialist management concerns much on human

profit or Human Resource Development particularly of the class.

1.1.3 Behavioural approach to Management:

Human relations movement in industry gained momentum

after the Hawthorne experiments. The major attempt was t o devise

ways to best utilise human resources in industry which consequent-

ly led the neoclassicists to bring under organisational control,

worker behaviour and worker productivity through humanising, much

as the classical organisation theorists attempted control of

employees through scientific management methods. The major con-

tr ibution towards understanding the mechanics of human and work

motivat ion, was made by Maslows (1954) hiearachy of needs, Mc

Gregors (1960) theroy X and theroy Y, Mc Elelland's (1965)

achievement motivation, Herzbergs (1968) Motivation Hygiene Theory,

Skinners (1953) theory of behaviour Modification and Vrooms(1964)

Valency theory besides Mayo (1 946) Gardner( l955) and Moore,

Davis (1957), Miller and Form (1951).

Industrial Policy in India:

1.2.1 Policy objectives:

The seeds of industrial development in lndia were sown by

the founding fathers of the Indian Republic whose vision, initiative

and determination have helped lndia t o develop a strong and

diversif ied industrial base, making lndia as one of the major in-

dustrial nations of the world. Industrial pol icy and priorit ies were

set out after independence specially since the beginning of the

planned era, to realise the goals and objectives of the accelerated

pace of the agricultural and industrial development of India, rapid

expansion of opportunit ies for gainful employment, progressive

reduct ion of social and economic disparities, removal of self

reliance. The successive industrial policy statements have been in-

spired by these very concerns and directed towards consolidating

the gains of national reconstruction.

The industrial policy resolution was introduced in 1948 out-

l ining the approach to industrial growth and development. I t em-

phasised the importance to the economy of securing a continuous

increase in product ion and ensuring its equitable distribution. After

the adoption of the constitution and the socio-economic goals, the

industrial policy was comprehensively revised and adopted in 1956.

From t ime t o time, this was modified to meet new challenges

during 1973, 1977 and 1980.

1.2.2 Role of the State:

The industrial policy resolution of 1956 had in its objec-

t ives highlighted the acceleration of the rate of economic growth

and the spreading of a socialist pattern of society. During that

per iod capital was scarce and the base of entrepreneurship was

not strong enough, the 1956 Industrial Policy Resolution gave

primacy to the role of the state to assume a predominant and

direct responsibility for industrial development. The industrial pol icy

statement of 1973, inter alia identif ied high pr ior i ty industries

where investment from large industrial houses and foreign com-

panies would be permitted. The industrial policy statement of 1977

laid emphasis on decentralization and on the role of smailscale,

and cottage industries. The industrial policy of 1980 focussed at-

tention on the need for promoting competit ion in the domestic

market, technological upgradation and modernization. The pol icy la id

the foundation for an increasingly, competitive export base and for

encouraging foreign investment in high technology areas. These

found expression in the Sixth Plan. It was Smt. lndira Gandhi

who emplasised the need for productivity to be the central con-

cern in all economic and production activities. Thus, on the eve

of the Seventh plan, a broad-based infrastructure has been built

up; basic industries have been established. A high-degree of self-

rel iance in a large number of items, raw materials, intermediates,

f inished goods has been achieved. New growth centres of in-

dustrial activity had emerged, as had a new generation of

entrepreneurs. A large number of engineers, technicians, skilled f

workers had also been trained. A number of policy and procedural

changes introduced in 1985 and 1986, aimed at increasing produc-

tivity, reducing costs and improving quality. The accent was on

opening the domestic market to increase competit ion and readying

our industry to stand on Its own In the face of international com-

petit ion. The public sector was freed from a number of con-

straints and given a larger measure of autonomy. The technological

and managerial modernization of industry was pursued as the key

instrument for increasing productivity and improving India's compe-

tiveness in the world.

The net results of these changes was that Indian industry

grew by an impressive average annual growth rate of 8.5% in the

Seventh Plan period. Government continues t o pursue a pol icy

frame work encompassing encouragement of entrepreneurship,

development of indegenous technology through investment in Re-

search and Development, bringing in new technology, dismantl ing of

the regulatory system, development of the capital markets and im-

proving the competitiveness. The spread of industrialization to back-

ward areas of the country is actively being promoted through

appropriative incentives, institutions and infrastructure investments.

Foreign investment and technology collaboration are welcomed to

obtain higher technology, to increase exports and to expand the

product ion base. Government policy endeavours to abol ish the

monoply of any sector or any individual enterprise in any field of

manufacture except on strategic or military considerations and open

all manufacturing activity to competition. In the emerging socio-

economic scenario of the country, public sector will have t o run

on business lines and flourish in an environment of economic ef-

f iciency and continuous technological upgradation.

1.2.3 Procedural reforms:

The Industrial Policy Resolution of 1956 identified three

categories of industries those that would be reserved for develop-

ment in the publ ic sector, those that would be permitted for

development through private enterprise with or without state ' par-

t icipation and those in which investment initiatives would .ordinarily

emanate f rom private entrepreneurs. Over the years keeping in

view the changing industrial scene in the country, industrial l icenc-

ing pol icy and procedures have also been liberalised as a ful l

realisation of the industrial potential of the country calls for a

continuation of this process of change. In order to achieve the

objectives of the strategy for the industiral sector for the 1990's

and beyond, major policy initiatives and procedural reforms are

called for. The policy package must be to let the entrepreneurs

make investment decisions on the basis of their own commercial

judgement. The allotment of technological dynamism and internation-

al competiveness requires that enterprises must be enabled t o

swift ly respond t o fast changing external conditions. The July

1991 industrial policy, i n the above context abolished industrial

l icensing for all industries except those specified, irrespective of

levels of investment.

While freeing lndian industry from official controls, oppor-

tunit ies for promoting foreign investments in India would also be

fully exploited. The relationship between domestic and foreign in-

dustry needs to be much more dynamic than it has been in

the past in terms of both technology and investment. Foreign in-

vestment would br ing attendant advantages of technology transfer,

marketing expertise, introduction of modern managerial techniques

and new possibil i t ies for promotion of exports. In order to invite

foreign investment in high priority industries, i t h a s , been decided

to provide approval for direct foreign investment equity in such in-

dustries. This would make lndian policy on foreign investment

transparent. For a suitable exploration of world markets to promote

exports, interaction with some of the worlds largest international

manufacturing and marketing firms has been proposed by appoint-

ing a special board to negotiate with such firms. Besides, with a

view to infecting the desired level of technological dynamism in

Indian industry, government will give automatic approval for technol-

ogy agreements related to high priority industries within specified

parameters.

1.2.4 Public Sector Policy:

The Industrial Policy Resolution of 1956 gave the public

sector a strategic role in the economy. After the initial ex-

uberance of the public sector entering new areas of industrial and

technical competence,a number of problems have begun t o manifest

themselves in many of the public enterprises. Serious problems

are observed in the insufficient growth in productivity, ,poor project

management, over manning, l a c k ' of continuous technological

upgradation, inadequate attention to Research and Development and

Human Resource Development. Public enterprises have shown a

very low rate of return on the capital invested. Hence the

government has reviewed the existing portfol io of public invest-

ments with greater realism. Government proposes to strengthen

these public enterprises which fall in the reserved areas of opera:

t ion or are In high priority areas or are generating goods or

reasonable profits. Such enterprises wil l be provided a much

greater degree of management autonomy through the system of

memoranda of understanding. Competition will also be induced in

these areas by inviting private sector participation in the case of

selected enterprises; part of government holdings i n the equity

share capital of these enterprises will be disinvested i n order to

provide further market discipline t o the performance of public

enterprises. There are a large number of chronically sick publ ic

enterprises incurr ing heavy losses, operating in a competit ive

market and serving l i t t le or no public purpose. These need to

be attended to. The Government has recognised that in the new

economic environment there would be a need for the redeployment

and retraining of workers. Annexure 1:l sets forth the list of in-

dustries for automatic approval of foreign technology agreements

and 5 1 % . f o re i gn equity approvals. Annexure 1:2 and 1:3 present

the list of industries to be reserved for the public sector and in-

dustries in resepct of which industrial licensing will be compulsory.

Labour Policy

1.3.1 Industrial Relations:

The East lndia Company virtually reduced lndia into an

'Estate' of i ts own as its unending reserve for raw materials and

a lucrative and captive market for i ts finished goods. The

managers of various establishments worked solely at mobil izing In-

dian resources to feed English trade and industry. There was

hardly any scope for sympathy or concern for the labour in such

an environment. During the period 1757-1857, the Indian workers

were in practice slaves of East lndia Company. Employees Rela-

t ions was a virgin area till the end of the f irst half of the

nineteenth century. Though there had been a series of labour

enactments with preambles, they had l i t t le in real contents to

bui ld a familiar industrial climate. To list the important ones in

seriation, there was the Apprentice Act 1850, factories Act 1881,

Workmens Cornpendation Act 1923, Trade Unions Act 192, lndustrial

Employment (standing order) Act 1946 and finally lndustrial Dis-

putes Act 1947, which replaced the Trade Disputes Act 1929.

Some of these Acts attempted a t articulating 'standards and

norms', some dealt with 'welfare and amenities' and some covered

the 'Dispute Processing' and Rights enforcement' areas. After

India became one of the founder memebers of International Labour

Organisation (ILO) in 1919, the stated objectives of all subsequent

industrial legislations have heavily drawn from ILO terminolo'gies.

Even so, the entire gamut of industrial legislations turned the

div iding lines among various interest groups sharper ad sharper.

Alien rulers were ring side spectators even looking for opportuni ty

to fuel the dividing fires.

Even during the years after independence, content of the

lndustrial Law did not undergo any Qualitative change. lndustrial

law, of course, codifies 'service conduct' and 'business

operations'rules.

1.3.2 Participative Management:

I t is sublime work ethics that ensures an industrial climate

where entreprenuers, managers and work force forge complete iden-

t i ty of interests and together they value and share the social

responsibilites of the enterprise also. Writings of John S t u a r t Mill

on l iberty, the socio-polit ical philosphy of the labour party, the

values that sustained French Resolution writ ings of Ruskin and

Tolstoy, advent of Marxism, had ail begun t o have impact to

evince a degree of sensitivity to the global shift that confered

primacy on human over material resources. An enlightened

entreprenuer could hold his human resources in high esteem and

work force could be cultivated t o bring about a sense of belong-

ing. All these changing global scenario helped the evolution of

Gandhian principles of Trusteeship. Besides, events in Japan after

World War I I have been keenly observed all over the world. The

Japanese sincerely believed in creating familiar industrial cl imate

pushing aside the American influenced industrial laws which they

believed to be instruments for procastination and hence counter

productive. After 1947, concern for work force over a period be-

came a part of essential managemenl activities. John Harvey Jones

(1982), former Chairman of Imperial Chemical Industries (ICI) art icu-

lates best the needed change in his "Making i t Happen" thus . i t

is neither helpful nor practicable to make people dependent on

you and remove their self- rellance but equally it is apail ing busi-

ness to be even more indifferent t o their needs than you would

be to a piece of machinery. Machinery would be inspected,. l is-

tened to, oiled and maintained. t ime is spent on each and every

mechanical part. I t is grudge of many people that some degree

of attention to the individuals who make up the company is not

generally as is given to inanimate capital goods. Bewailings of en-

l ightened entreprenuers l ike Harvey represent the growing world

view that puts concern for employees atop in the entreprenuerial

and management priorit ies. In select establishments employer -

employee relations started taking off onto a move away from con-

frontation and close t o understanding. Japsnese obviously are a

step ahead of the West in their emphasis on employees. Akio

Morita (1974) of 'Sonys' while writ ing on employer - emplsyees

relations In his book 'Made in Japan states the Japanese perspec-

t ives best "the emphasis on people must be genuine and some-

t imes very bold and daring, and It can even . b e quite risky. But

in the long run I emphasis this, no matter how good or suc-

cessfull you are or how clever or crafty, your business and i ts

future are in the hands of people you hire". Indian ethos place

l i t t le reliance on contractual view of employer-employee equations.

Every organised activity is a joint venture sustained and fostered

by shared objectives and internalised values. Entreprenuers and

managers alike are 'Trustees' but employees are also second to

none in being central to the set up. Gandhian emphaisis on "Trus-

teeship" was an echo of these pristine Indian value only. Employer

- employee relations have become the centre stage of organisation-

al dynamics. I t is a 'valued necessity'and sole instrument to en-

sure sense of belonging and spirit of comradere. This alone could

bridge the chasm between personal and collective growth and har-

monise both with social responsibilites. Even so, in practice all

over, spirit behind benevolence and motivation is ' intell igent' self

interest.

The New Industrial Policy (NIP) 1991 proposes that govern-

ment wou ld . ful ly protect the interests of labour, enhance their wel-

fare and equip them in all respect to deal with the inevitability

of technological change. Government believes that no small sec-

t ion of society can corner the gains of growth, leaving workers to

bear its pain. Labour would be made an equal partner in

progress and prosperity. Workers Participation in Management would

be promoted. Workers Cooperatives would be encouraged t o par-

t ic ipate in packages designed to turn around sick companies. In-

tensive training, skill development and upgradation programmes

would be launched. The major objectives of the new Industrial

Policy package would be to build on the gains already made, cor-

rect the distortions or weakness that might have crept in, maintain

a sustained growth in productivity and gainful employment and at -

tain international competiveness. The pursuit of these objectives

would be tempered by the need to preserve the environment and

ensure the efficient use of available resources. Government's pol icy

would be continuity with change. In this backdrop the New pol icy

proposes to amend the Trade Union Act and the Industrial Dis-

putes Act. The trade Union Act is being amended mainly to

bui ld leadership of workers from among themselves. Hence the

pol icy proposes to l imit the number of outsiders in the leadership

of the Trade Unions to two. Bipartite mechanism on the industrial

Disputes Act which is to replace the tripartite mechanism would

help t o usher in a new labour - management culture leading to

improvement in the relationship between the management and the

workers. Only disputes involving the rights of workers would be

referred for adjudication; disputes involving their interests and

demands would be referred for arbitration. The Government felt

that the voluntary scheme of workers participation has failed and

that participation needs to be legislated. Workers Participation as

an integral part of the Industrial System was recognised in 1984-

85. The Thirtieth session of the standing labour committee in Sep-

tember 1986, emphasised the need for a total participatory

management as work culture to achieve socialism in a democratic

framework.

1.4 Concept sf Workers Participation

The concept of workers participation has been evolved t o

achieve multiple objectives under labour management relations, or-

ganisational goals and forms of government. As such, the objec-

tives of the scheme are not very specific and the implementation

not effective. Any meaningful scheme of participation should have

i ts objectives definite, devoid of vague expectations. The objec-

t ives vary with the models adopted.

1.4.1 Models of Participation

Broadly participation has been classified under five models,

each one focussing on different connotation of the concept in di f -

ferent context, representing a single 'facet of the total reality. As

no one model can be complete by itself, meaningful scheme of

workers participation necessarily has to make use of a blend o f

different strands of all models. The models in brief are given

below:

1.4.1.1 The Political Model

The evolution of the socialist thought stressed the need t o

change the mode of product ion and product ion relat ions in the

society which were skewed i n favour of the owners of the factors

of product ion. The Socialist Theory f i rmly believes that only a

basic change i n the social structure can br ing about the freedom

of workers f rom bondage. The class conf l ic t approach of the

pol i t ical model of part ic ipat ion made the employers oppose i t as

the that would lead t o ultimate total contro l by workers of the

organisations. Karl Marx and Engels were the advocates of this

model inspired by socialist ideology of the work ing class move-

ment. I n countr ies with democratic form of government, workers

part ic ipat ion is meant only t o ensure that the management of an

organisat ion is proper and just without being exploitative abetted

by vested interests. This was expected t o result i n higher eff ic ien-

cy o f the enterprises as well. However the pol i t ica l model led

to increased pol i t ic isat ion of trade unions and blurred the d is t inc-

t ion between their role as instruments of collective bargainging and

as part ic ipants in managerial decisions.

1.4.1.2 Psychological Model:

This model explores some of the psychological process of

man which participation can put t o effective use in achieving the

goals of industrial democracy. It harps primarily on the power of

psychological gap and the inner urge to f i l l the gap. Once the

management and workers commit themselves on certain goals or

plans and identify some delays and deviations in the progress and

process, they would agree to initiate steps, to bridge the gap.

One such instance is the suggestion scheme which provide the

scope for the individual to think and put ideas to effective use

to achieve goals set. However, due recognit ion should be accorded

t o workers valuable ideas and they should be actively involved in

the implementation.

Chris Argyris (1957), Maturity-Immaturity theory and the

Transactional analysis developed by Erick Berne provide yet another

psychological process in participation. The management believes that

workers have not attained a maturity level where they can help in

the decision making process. Even so, the management practic'es

are such that the workers are deliberately kept aloof f rom rnatur-

ing. Two factors are chiefly involved in this concept of maturity;

one is the job maturity which implies that the worker has

developed the abil i ty and technical knowledge to do the job

productivety; the second is the psychological maturity which implies

gaining of self-confidence and self respect about oneself as an in-

dividual. The scheme of workers participation, therefore, has a

higher probabil i ty of success as the workers move from low t o

moderate and onto higher levels of maturity. They wil l reach the

plateau in potential effectiveness, as workers attain the peak level

in task relevant maturity which is made possible by intensive

worker education and training programmes in both technical and

participative aspects.

1.4.1.3 Behavioural Science Model:

The focus of the behavioural science model is directed

primarily o n individuals and the leadership styles i n contrast t o

the polit ical model where the issue of ownership is at the centre

stage. The accent is on maximising efficiency and productivity of

the human resource by enhancing motivation within the organisa-

Maslow theory explains human needs as pr imary motivators

and there is a need hierarchy into which human needs are ar-

ranged viz: biological needs, safety needs, social needs, esteem

needs and self actualisation needs. I t suggests that the various

levels are interdependent and overlapping, each higher level need

arises after the lower level need has been completely satisfied.

However under the conventional standards of business management,

the worker has to follow blindly the orders in situations over

which he has least control. His ego is very much hurt which is

a condit ion not conducive to the attainment of satisfaction o f Mas-

lows fourth level of human needs viz. self esteem. The worker

feels that his self esteem is respected if only he is given a

sense of participation in what he is doing. This calls for some

share for workers in the management of the organisation of which

they are a part. This would make them feel that they are more

important than the equipment they, handle. This upward movement

of workers influence from physical needs to self-esteem, largely

depends on the managements leadership styles. An authoritarian

management provides little scope for workers participation in the

operational process and the plans of the organisation. This top

down approach does not help the workers to attain the higher

level needs in Maslow's hierarchy. Only an effective two way com-

muniation would help achieve effective participation and attain

higher level needs. This is amply illustrated by Bareles experiment

with the circle and star patterns of communication in an organisa-

t ion. They suggest how the mere structure of communication can

influence the feelings and action of people in terms of inde-

pendence, security and responsibility; the total operational efficiency

of a group in terms of speed, accuracy and adaptability. The

structure of communication in an organisation i s designed in an

autocratic fashion under the star pattern which provides l i t t le

scope for effective workers participation. This is structured in a

democratic fashion under the circle pattern which provides more

opportunity t o participate and take responsibilities. The workers will

tend t o have a positive effect on morale and with each ensuing

trial they will feel more important and more satisfied. The work

group will develop involvement and commitment. The alienation

process and tendency towards absenteeism under the star pattern

wil l be eliminated under the circle pattern.

Renis Likert of the Institute for Social Research, University

of Michigan implemented organisational change programmes in di f -

ferent industrial settings, considering human and capital resources

as assets requiring proper management. Likert moved from Theory

X to Theory Y from fostering Immature behaviour t o encouraging

and developing mature behaviour, f rom emphasising the hygiene fac-

tors of Herzberg to motivational factors, dominant among them is

the participative leadership styles and personnel policies conducive

to participation. How the individual or the group behaves is the

concern of success. But, effectiveness on the other hand refers to

the internal state or predisposit ion of an individual or a group

which is attitudinal in nature and implies personal power. While

personal power is generated upward from below, posi t ion power

tends t o be delegated down through the organisation. In the long

run productivity and organistion development depends on both suc-

cessful and effective manager. Thus, effectiveness. is a function of

both output variable i.e productivity performance in the short run

as also the intervening variable viz. the condit ions of human

resources in the long run. The concern of the management has

to be directed against both the short and long term goals. Less

or l i t t le attention to human resource development in the organisa-

t ion would lead to developing new restraining forces like absen-

teeism, host i l i ty and antagonism resulting in further detoriation of

the internal state of the organisation and declining productivity

after sometime. The vision of the management should help to

build a solid edifice to achieve both short and long term goals.

1.4.1.4 Conflict Model:

Differences of opinion are inevitable in a decision making

process where both management and workers are participants and

the decision relates to areas of vital interest to both. This need

not necessarily be a destructive conflict, for, confl ict serves the

purpose of bringing irritations and frictions on issue to the fore,

pointing to the need for stabilising the relationship of the confl ict-

ing parties viz. the manage and the managed by removing dis-

sociating elements in the relationship and establishing unity.

Blake, Sheperd and Mouton (1964) Model identifies three at -

t i tudinal sets or basic assumptions that people can have towards

group confl ict. They are:

i ) Confl ict is inevitable and agreement is possible

ii) Confl ict is not inevitable, yet agreement is immpossible

iii) Although there is conflict; agreement is possible.

Given the attitudinal sets, and the intensity of the stakes involved

as perceived by the contending groups, behaviour could be predicted.

In a win - lose power struggle situation as mostly happens in collective

bargaining where the stakes are high, the contending groups might think

that agreement is impossible. Any interventionist measure should help

to shift their attitude from the impossible to 'though there is conflict

agreement is possible', by lowering the 'stakes' so that the conflicting

parties will agree t o have provision for mutually acceptable mediation to

settle differences and disputes. Once such an attitudinal shift is

achieved, further attempts to increased commitments will tend t o move

them into an active problem solving mode, that constitutes the basic

objective of, participative management.

Marz Parker Follet (1963) has developed the group concept

as a new principle of association. However 'group thinking' and

togetherness "are not purported to eliminate confl ict as she saw

conf l ict as an expression of differences between individuals and

their fai lure to make such differences contribute to the common

cause. Absence of confl ict would lead to a state of dormancy

pointing to eventual disaster". Differences are valuable in as much

as they represent the specific contribution of individuals in a

group t o help mould the group opinion. The differences are in-

tegrated to form a new whole and there is a real new group

opinion and synergy. She contended h a t authority as an act of

subordination was offensive to man's emotions and hence could

never form the foundation for participation in an organisation. In -

stead of personal authority, she proposed an authority o f funct ions

wherein the individual has the authority over his job area. She

advocated the depersonalisaton of order and authority so that per-

sonal desires and whims would give way to logic and reasoning.

Thus Follet 's exposit ion was an early approach to the system con-

cepts of management.

1.4.1.5 The Economic Model:

The primary interest of the employer is to maxirnise profit

and that of the employee is in increased wages, bonus, security

of employment and other economic benefits that the management

considers would eat into the profit. The workers will lose their in-

terest in participative management if i t fails to secure the

economic benefits. On the other hand management would like t o

turn away from participation towards authoritarian way to achieve

the objectives of increased production, productivity and profits.

The fact remains that the size of the 'cake' is the common

denominator. The path to achieve this may be authoritarian or par-

ticipative. Because of the commitment and involvement ingrained in

participative management in jointly agreed goals, participative style

has been perceived to ensure the urge t o increased .productivity.

1.4.2 Definition of Workers Participation in Management.

The following definitions of participative management are

worthwhile t o be considered to facilitate synthesis at a later

stage:

The International Institute of labour studies views part ic ipa-

t ion as any process whereby workers have a share in the reach-

ing of managerial decisions in the enterprise.

Mhetras (1966) defines participative management as practises

which increase the scope for the employee's share of influence i n

decision making at different tiers of organizational hierarchy with

concomitant assumption of responsibility.

Hem C. Jain (1980) defines i t as a process by which

employees can influence managements decision at various hierarchi-

cal levels in an enterprise.

Keith Davis (1957),views participation as a mental and emo-

t ional involvement of a person In a group situation which e n -

courages him to contribute to group goals and share

responsibilities in them.

Aziz. A (1980) views it as sharing of management authority.

According to C.B.Mamoria and Satish Mamoria (1987) "Par-

t ic ipat ion is a system of communication and consultation, either

formal or informal, by which employees of an organisation are

kept informed about the affairs of the undertaking and through

which they express their opinion and contribute to management

decisions".

Dale S. Beach (1965) recognises it as "a process in which

people contribute ideas, towards the solution of problems, effecting

the organization and their jobsu.

Douglas Mc Gregor (1960) puts it as a "formal method

providing an opportunity for every member of the organization t o

contribute his brains and ingenuity as well as his physical efforts

for the improvement of organizational effectiveness".

S K Roy (1973) goes to the extent of saying that "In

reality participation is a social psychological concept which essen-

t ial ly denotes power equalization. I t denotes not only the more

democratic usage of power eg; referent power, but also the shar-

ing of power per se".

According to Tannenbaum (1968) it is a "zero sum game"

in which sharing of authority increases the total amount of con-

trol.

The definitions outlined by different authors though differ in

degrees, .processes and purposes, yet the thrust given t o them is

centered on the growing need t o have workers influence in

management.

1.4.3 Forms, Level and Content of Participation

Direct or individual participation and Indirect or repre-

sentative participation are the basic forms of participation. The

major forms level and content of participation fal l ing within these

categories as summarised by David Guest and Kenneth (1979)

Knight are presented below:

Table 1 The level, content and form of participation

executive terms

Supervisory board

bargaining: joint

shop floor level

consultation, work

councils

Breifing groups Problem

solving

groups,

autonomous

groups, job

enrichment

Kenneth F. Walker (1967) has classified participation into

formal, informal, ascending, descending, disjunctive, individual or

collective, direct or indirect. In ascending part ic ipat ion workers

may be given an opportunity to influence managerial decisions at

higher levels, through their elected representatives t o works coun-

cils or the boards of enterprise. In descending participation they

may be given more power to plan and make decisions about thier

own. They may participate through collective bargainging (disjunc-

tive participation). They may also participate informally when, for

example a manager adopts a participative style of supervision or

workers supply unofficial restrictive practises. Based on the

various forms of participation, Kedia (1992) has classified levels

into the fol lowing

a) Informative Participation.

b) Consultative Participation.

c) Associative Participation.

d) Administrative Participation.

e) Decisive Participation.

These levels are arranged in an increasing degree of

workers say i n t h e management the lowest degree mov ing u p to

decis ive part ic ipat ion representing the highest f o rm of part ic ipat ion.

The inter re lat ionship between form, level, and content are summed

by David Guest and Kenneth Knight (1979) as under.

Tabl

e la

: Th

e fo

rms

of p

artic

ipat

ion

on a

par

ticip

atio

n co

ntin

uum

.

Rep

rese

ntat

ive

form

s

Indi

vidu

al

form

s

I I

Uni

late

ral

Com

mun

icat

ion

Info

rmat

ion

Mee

tings

Brie

fing

grou

ps

I

Tota

l M

anag

emen

t C

ontro

l

The

Mili

tary

Ill

Bila

tera

l C

omun

icat

ion

and

disc

ussi

ons

Join

t co

nsul

tatio

n;

min

ority

w

orke

r di

rect

ors

Attit

ude

surv

eys

IV

Lim

ited

Join

t de

cisi

or~

mak

ing

wor

ks

coun

cil

Prob

lem

s so

lvin

g gr

oups

v

Del

egat

ed

cont

rol

Auto

nom

ous

wor

k gr

oup;

jo

b en

richm

ent

VI

Join

t C

ounc

il

Parit

es w

orke

r di

rect

ors;

co

llect

ive

barg

aini

ng

VII

Tota

l W

orke

r C

ontro

l

Wor

ker

Co-

op

erat

ives

The development of schemes for participation in general is evolu-

tionary in character; adapting to changing circumstances or contextual

factors, which may turn out to be facilitators or constraints. The

recent policy changes in economic and industrial spheres at macro 'level

in lndia signify a total change in policy stance which might warrant in-

troduction of new forms of participation, depending on the perception of

parties to participative management whether the new policy thrusts are

conducive to or constraining factors of participative culture.

1.5 Participative Management in the Context of the Changing

Economic Secnario

1.5.1 Constitutional Imperative:

Article 43A was inserted as a Directive Principle of State

Policy in the Constitution of lndia which reads as under. "The

State shall take steps by suitable legislation or in any other .way,

to secure the participation of workers in the management of un-

dertakings, establishments or their organizations engaged in any in-

dustry". i n the Indian context, the Government promoted it

because in its view, "the creation of industrial democracy is a

prerequisite for the establishment of a socialist society (Second

Five Year Plan 1956). Mr Gulzarilal Nanda (1958) observed when

workers participation was adopted at the Philadelpia charter of the

ILO in 1944" the scheme of Workers Participation is the culmina-

t ion of a series of steps aimed at giving the workers a feeling

of having a place of their own in providing the social base for

the building up of the country's industrial base". The Government

of lndia thus considers participative management as a means of

resolving industrial disputes and of increasing product iv i ty sirnul-

taneously.

1.5.2 New Economic Policy and Participative Management

lndia has been going through a structural adjustment of the

economy since the 1990's opened up a transit ion to a market -

oriented economy by ending i ts isolation from competit ive forces

both local and foreign. Market friendly growth strategy has come

to stay. The policy of economic liberalization is dispensing with

the plethora of l icensing rules in terms of its stress away from

discretionary controls and on search for encouraging direct foreign

investment and foreign technologies. lndia has got to stand on

its own feet and face the competition. The days of l icence

protect ion is on the decline. Intensif ication of competit ion will

link fortunes of the firms with their performance and it would not

be possible any longer to insulate the workers altogether f rom the

fortunes of the firms for which they work. Organisation wi l l have

to be customer-oriented and market-guided and hence will have to

aim at fostering productivity mission and ensuring productive be-

haviour. Productivity in both its technological and human aspects,

lies at the core of the managerial responsibility.

Development calls for productivity. Organisations which

have developed sound HRD policies, attain product ive excellence.

What India would be at the turn of the century would depend

not merely on the material resources, but on the abil i ty t o create

a climate where individuals could draw out their ful l potent ial and

contr ibute their best to the quest for a longer role for the

country in the international market and economic growth of the

nation. These call for a stable and healthy industrial relations

climate.

I t is against this backdrop the New Industrial Policy (NIP)

1993, envisages i) amendment of the Industrial Disputes Act t o

facil i tate forthcoming of direct foreign investment and technology.

i i ) to achieve higher levels of industrial efficency t o enhance ex-

port growth which assumes highest priority. iii) to facil i tate fu r -

ther l iberalisation of the economy through intensif ication of

competit ion, l inking the fortunes of the firms with their performance

by privatising the incalcitrant and chronically s ick publ ic sector

units, iv) the transit ion from tripartism to bipartism envisaged, to

encourage total involvement and commitment to quality from the

top executive to the shop floor supervisor and the worker using

the Total Quality Management (TQM) concept, and v) t o con-

stitute an Industrial Relations Commission (IRC) t o resolve differen-

ces between management and workers, even as tr ipartism is to

give way to bipartism.

In brief, the transit ion from the paternalistic management to

participative management has to be reexamined in the changed

context of economic liberalism. The participation of the labour

movement in the nationalistic drive during the pre and post inde-

pendece era led t o close ties between the national Government

and labour organisations and the adoption of a protective and wel-

fare legislative and voluntary measures directed t o strengthen the

working class movement. Steps were Initiated t o promote a gradual

but def ini te sharing of powers by labour in decision making and

t o restrict the unlimited powers the employers were enjoying in a

free but a labour surplus market economy. In the liberalised en-

vironment the emphasis has been shifted t o productivity and

quality improvements.

Various studies on the working and effectiveness of the

scheme of workers participation in management pr ior to the New

Scheme Policy, New Industrial Policy (NIP) have been made.

However, research gap exists in the assessment of the organiza-

tional climate for participation and participatory orientation and at-

t i tudes of workers and managers, Trade unions and employers, in

the changed economic scenario. Systematic research in the f ield

of participative management in the changed economic environment

is essential for formulating and imp!ernenting a sound strategy for

the future. The present study attempts t o f i l l this research gap.