In order to answer the first question, two primary things need to be discussed first. They are such as 1) common interests and goals assumptions of unitarist values and 2) symptoms and signs of covert workplace conflict. It has been found that there are three major ideological perspectives can be used to conceptualise industrial relations. Each of these perspectives can be used to explain workplace industrial relations. These approaches are such as pluralist approach, unitarist approach and redical approach. Pluralist approach is also known as “neo-institutional” approach. Unitarist perspective is mainly related with human resource management. On the other hand redical approach is related with the “labour process” approach.
It has been found that unitarst approach is mainly related with share goals and common purpose. In this approach it is perceived that there is no conflict of interest can be found between capital and labour. According to this approach conflict can arise due to poor management decisions and poor communication. In this approach employee union is considered as unwelcome interference, as it competes with management for employee loyalty. This approach has significant role in developing strong management within the workplace of an organization. It is one of most dominant perspectives used in private organizations for the last two decades.
Some major perspectives related with unitarism approach are such as scientific management (scientific management/ Taylorism), neo-human relations (Herzberg/ Likert/ McGregor), human relations (Hawthrone experiments/ Mayo) and human resource management. Now, it is required to discuss about occurrence of covert conflict within a workplace. Covert conflict can happen on a regular basis between employer and employees, or managers and employees or employers and managers. This type of conflict can affect the performance of individuals and teams. It can reduce the overall performance of an organization. For this reason covert conflict is known as “performance opportunity cost.” In this type of conflict, two people try to avoid each other. They do not share ideas with each other appropriately. In worst case, they start to take decisions influenced by conflicts rather than taking best decision for the company. They even start to complain against each other and try to draw other people in their conflict as well. Hence, in the perspective of a company it can be stated that covert conflict reduces the capability of a company to maximise its performance. It can cause loss of opportunity, loss of resources and loss of focus towards organizational objectives. Hence, it is the responsibility of the management team of an organization to find out the symptoms and signs of covert conflict try to response as fast as possible. The major signs of covert conflicts are such as unfair allocation of task, information withholding, team manipulation and management manipulation.
It is very tough for management team to retain the common goals and interest assumptions related with unitarist approach, when they are try to resolve covert conflicts. It is due to some major issues related with unitarism approach. Lack realisation about power inequalities is the major problem related with unitarism. This approach ignores the major causes of conflict. This approach is unable to explain different conflicts within a company. They are such as managers vs. Owners, management vs. Labour and senior vs. Middle and line managers. In addition, this approach does not consider uneven distribution of power among employers and employees in the process of decision making. In reality, managers and employers have greater power over employees to determine the working condition. It is especially applicable in private sectors (blue collar jobs). Conflict is treated negatively by unitarist approach. It does not consider conflict as the method to reflect inequality or the opportunity to regain harmony of work. It only assumes that people are rationale enough to reach a decision that combines both individual and organizational objectives. This approach is unable to find out how sentiment of individuals can affect their decision making. Hence, unitarist approach is unable to solve covert conflict.
According to Kotter and Schlesinger (2008), there are four major reasons for which people resist changes in workplace. They are such as parochial self-interest, lack of trust and misunderstanding, different assessment and low tolerance to change assessment. In this question the case study related with “Introduction of new technology at FoxMeyer Drugs” has been used.
FoxMeyer is considered as one of the largest drug wholesalers in U.S. The annual sale of the company is appropriately 5 billion US$. The daily shipments of the company is more than 500, 000 items. The company has installed an ERP system to process the huge amount of orders that company is receiving every day. It will help to manage and package and the routing of the drugs from the vendors to thousand of healthcare centres, hospitals and stores. The company hired different consultants and Anderson consulting to help in the installation process. Along with the ERP, the company had also installed a warehouse automation system purchased from a vendor named Pinnacle and combined them together. It was designed to automatically select more than 80% outgoing orders from different shelves of the warehouses. However, the outcome of this project was not able to meet the desirable level. There were three major reasons for which the company was not able to get desired result. They were like poor management support, lack of corporation from the end users and change resistance from employees. In this section, the major reasons behind change resistance of employees will be discussed.
At that time, the company started to face issues related with change management due to poor planning and execution. They had not provided any extra effort to make the new technology implementation more effective. The change resistance occurred in the warehouse employees are majorly due to “lack of trust and misunderstanding.” Implementation of change without proper planning and strategy, the company has created unrest among the employees. Implementation of this huge scale technological change caused employed to feel insecure for their jobs.
According to the Chief Operating Officer of Pinnacle Christopher Cole, failure of the FoxMayer was not due to failure of the commercial software or automation. It was due to management failure and their inappropriate expectation. The management of the organization did not communicate properly with the warehouse employees about the technological change. They did not provide adequate information about the reason of change. They not even consult with employees about their willingness about ERP implementation. It gave rise to a massive misunderstanding.
Lack of skill was another major issue that caused this failure. Most of the warehouse employees of the company did not have necessary skills to implement this new technology. Hence, it had become one of the major issues for resistance against change. The company was not able to execute the technological implementation appropriately due to the shortage of knowledgeable person and skilled employees. The company FoxMayer did not have the required skills in house and they have to depend on the Anderson consulting to implement this new technology. Although at the peak of the project, there were more than 50 consultants at the company FoxMayer, most of them are inexperienced.
In the perspective of employees, it can be stated that, implementation of this new technology had threatened their job in the company. It caused lack of trust among employees about the organization and its management. It gave rise to various issues such as loss of inventory, poor processing of order and gave rise to a morale problem among employees. It also reduced the interest of employees towards change and they became less committed towards their work. It had increased the number of mistakes occurred during work. Due to this reason, turnover rate of the organization had increased drastically at that time. The new system struggled with the volume transaction. It had been found that more than $34 million worth inventory were lost due to the implementation of this new technology. Due to this ERP failure, FoxMayer was driven to bankruptcy during 1996.
There are various frameworks like VOC devised to assess the national difference in the economic performances and policies of various organizations. In order to find out the usefulness VOC framework in understanding contemporary change, first it required to find out what is VOC framework. VOC framework is also known as Varieties of Capitalism framework. VOC framework is mainly used to understand the institutional differences and similarities among the developed economies.
There are mainly two types of capitalist economies exist in the world. They are such as coordinated market economizes (CME) and liberal market economies (LME). CME include countries like Austria, Germany, Sweden and Japan. On the other hand, countries like UK, US, Canada, New Zealand, Canada and Ireland belong to LME. These two distinctions are developed depending on the way in which companies coordinate with each other. For example CMEs have higher percentage of membership in trade unions. On the other hand, LMEs firms harmonize their endeavors by using hierarchies and mechanism of markets. There are five major ways in which organizations extend their relationship with others. They are such as industrial relations, vocational education and training, corporate governance, developing relation with employees and inter form relations.
From the research work developed by Krish and Wailes (2012), it had been found that VOC framework always have difficulty to address and explain institutional changes. This approach is mainly focused on institutional stability. VOC framework indicates that organizational change is highly path dependent and it is highly incremental. It is far more challenging in the context of globalization as organizational changes in global market far reach and far more frequent. However, the VOC formwork is unable to analyze these changes. For example, VOC framework is unable to show how notions of dynamism, change and transformation can be include in the national and organizational framework.
The contemporary approach of VOC formwork is often criticized for neglecting issues such as organizational and institutional change. According to this framework, changes that have significant impact on the organizational capability should only be considered by the management team. However, it is not true in many cases. This is an approach of organizational change that often lies beneath the radar of various analytic approaches. It is also known as “reinterpretation”. In this type of change, the management team gradually changes their interpretation of rules. Hence, it does not affect the organizational capability much.
In the recent development of the German collective bargaining, many examples of reinterpretation can be found. In these cases employers and employees try to combine their existing work practices that suit their interest without abolishing them. “Favorability principle” mentioned in German labor law is one of the best examples of reinterpretation. According to this act, an organization can provide wages to their employees, excess to the industry rate, but they cannot demand concession bargaining for that. In present days, German employers try to take advantage of the “favorability.” They provide packages that offer employees grater job security in cost of low rate of wage. Although, this type package is totally illegal, it is quite popular in German industry due to the high rate of unemployment. Hence, it can be considered as reinterpretation of polices. The impact of reinterpretation and their impact on the global and international economy cannot be described by VOC framework.
In addition, there was another visible method of institutional change can be found. It is known as the reform process. The process of institutional changes can be described as the method to adopt changes by organizations in order to enhance its performance and productivity. From the VOC approach, it has been found that the alignment central to any conflict within an organization can be influenced by the persons exist in a company. However, most of the actors do not consider these proposals for organizational reform as if the new structure will work on a blank slate but in context of other spheres of political economy. However, these aspects of change management and reformation cannot be described using Varieties of Capitalism framework.
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