Academic journal article Journal of Economic Issues

A Comparative Analysis of Cases of Conflictual Labor Relations in the Corn Processing, Steel, Paper, and Coal Industries

Academic journal article Journal of Economic Issues

A Comparative Analysis of Cases of Conflictual Labor Relations in the Corn Processing, Steel, Paper, and Coal Industries

Article excerpt

The role of strategic choice in firm responses to competitive pressures, the changing character of approaches to labor relations, and the effects of both of these on organizational performance have gained widespread attention in the globally competitive environment that has prevailed since the 1970s. A primary focus has been on labor-management cooperation as the best solution for poor performance. Cooperation, it is argued, increases the organization's competitive edge through improved productivity, product quality, organizational flexibility, and responsiveness to changes in the external environment [Konzelmann Smith 1995; Delaney, Ichniowski, and Lewin 1988; Kochan, Katz, and McKersie 1986; Katz and Sabel 1985].

Studies of the relationship between cooperative labor-management programs and organizational performance have yielded mixed results.(1) Most reveal insignificant long-term gains associated with cooperative initiatives. Part of the problem may be that what constitutes a truly cooperative system has yet to be developed in the United States. Nonetheless, the belief that cooperation benefits performance continues to dominate popular opinion as well as professional literature, and the benefits of cooperative approaches remain the focus of most studies, often without adequate consideration of the actual costs that such approaches may entail.

At the same time, it is well known, especially among workers and organized labor, that many firms continue to employ relatively adversarial approaches to labor relations as part of their efforts to solve competitive problems. Such approaches include hard bargaining with threats of mass layoffs and plant closures if concessionary demands are not met. At times, they have resulted in lengthy, violent strikes and union decertification. Cutcher-Gerschenfeld, McKersie, and Walton [1989] note an emerging dichotomy in labor-management relations with both relatively cooperative approaches and increasingly adversarial ones being used. Freeman [1986] explains the decline in the unionization of the U.S. work force and unions' increasing inability to organize new locals primarily as the consequence of firms' aggressive anti-union strategies. Surprisingly, however, in-depth analyses of the determinants and consequences of increasingly aggressive labor relations strategies are relatively rare in the literature [Adams 1988; Birecree 1991, 1993; Bandzak 1992].

This article presents a comparative analysis of four case studies of companies operating in four different industries where notably adversarial strategies were employed and/or adversarial outcomes realized in labor-management relations. The four firms are Clinton Corn Processing Company (CCPC), a leading producer of high fructose corn syrup (HFCS) and a subsidiary of Standard Brands, Inc. (SBI); U.S. Steel Corporation's (USS) Gary Works steel-producing unit; International Paper Company (IP), the leading commodity paper (paper grades used in producing paper bags, boxes, etc.) producer in the United States; and Pittston Coal Group (PCG), the largest U.S. producer and exporter of metallurgical coal and subsidiary of the Pittston Holding Company. The purpose of the analysis is to uncover elements common to the four cases and to determine if adversarial labor relations affected firm performance/viability in both the short and long run. We first describe the method that guided the analysis of the individual case studies and the identification of patterns across them. We then present the patterns discerned and the conclusions that can be drawn from them.

The Productive Systems Framework

Each of the original case studies was conducted using a productive systems framework [Wilkinson 1983; Tarling and Wilkinson 1987].(2) The productive systems approach, unlike more mainstream methodology, is built upon historical and empirical investigation of how firms, industries, or economies have behaved, rather than upon a priori assumptions about how they should behave. …

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