what is a corporate culture

8/8/2019 What is a Corporate Culture

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What is a corporate culture?

A culture forms any time a group of people meets to work together and in the case of corporate culture,

it forms when business team forms. The culture has two components. The first is that all individuals

have expectations how everyone should behave when they come together as a group and second, there

is a set of rules which dictates the ranges of acceptable behaviors when the group is together.

Putting it simple, the corporate culture can be described as the personality of the organization . The

culture also guides the employees, their thoughts, acts and feelings and vice versa. Companys culture

can be stated in the mission statement, decoration, employee outfits, titles and similar.

Why is corporate culture important for Human resource Managers and prospect employees? Because

the so called employee-employer fit in terms of culture is very important: how well the employee "fits"

the culture very often makes the difference between a successful and an unsuccessful hire. The

employee-employer fit is even more important in start-ups where there are just a few people employed

and where wrong decisions can have a huge impact on profitability or even survival.

Employees, owners acting as human resource managers and the corporate culture in small enterprise

are connected in many ways :

The hours of work per day, per week, including options such as flextime and telecommuting.

The work environment, including how employees interact, the degree of competition, and

whether it's a fun or hostile environment - or something in between.

The dress code, including the accepted styles of attire and things such as casual days.

The office space, including things such as cubicles, window offices, and rules regarding display of

personal items.

The training and skills development

Onsite perks, such as break rooms, gyms and play rooms, daycare facilities, and more.

The amount of time outside the office an employee is expected to spend with co-workers.

Interaction with other employees, including managers and/or owners.

Importance of corporate culture in SME's.

Soderquist has done a research and identified the corporate culture as part of five critical success

factors for improving performance in SMEs. The other four success factors are: the development of

networks and partnerships; creating an effective structure; analyzing competitors; developing flexibility

and speed of response to customers.

When the corporate culture is of utmost importance in a new venture (in high-tech ventures, for

instance) some management practices need to be followed :


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Management support. Employees must feel the support from all levels of management. Managers must

be trusted and employees encouraged to take risk without fear and undue punishments.

Reward systems supportive of innovation. Compensation must support innovation and the reward

system must be recognized as supportive of calculated risks - takers. When there are creative and/or

outstanding accomplishments the system must reward them and the system must be a part of theculture. Then the creativeness and innovation become a vital part of the corporate culture and its

competitive advantage.

Workload pressures. Even if the culture by itself supports innovation the excessive workload pressures

might hold back creativity and innovation when employees do not have enough time or resources to

complete assigned tasks

Small business owners in many cases fail to realize that the culture might be the most valuable asset

they have. A research done by Choueke and Armstrong showed that the SME managers recognized the

role and importance of corporate culture in the success of their companies. It was also evident that in

many cases the development of a corporate culture became an organic organizational process as more

people adapted to the owners view of the internal and external world of the business and combining

their previous work and life experience. One of the key tasks of the management and HR officials in

small and growing enterprises might therefore be to promote adaptation of corporate culture by new

employees and their successful integration. An organic culture fostering a positive environment and a

climate where staff aspirations are a central focus is l ikely to be one of the determinants of a successful

start-up business.

Culture and Ethics

Even though ethics are not the most important thing that the entrepreneur has on his or her mind it canplay an important role in the critical first months and years of a companys existence. Many larger

companies have ethics programs, officers or even departments but startups usually dont have the

resources to set up formal ethics programs. How can they make their young business both ethical and

value centered?

Usually the CEO declares himself to be the ethics officer but this does not demonstrate an effective

commitment to ethical practice. The company should follow some key steps to make ethics an

important part of their corporate culture:

Recognize the early dilemmas. When deciding how to reward first employees and their contributions

and how to divide profits between yourself and your employees, the entrepreneur is faced with aplethora of difficult decisions, for instance how to split stock ownership comparatively among the

founders and later hires and how generous can you be in employee benefits in the early days.

Make ethics a core value. Founders should explicitly emphasize that they are doing their business

ethically, ethics must be embraced in business plans, mission statements and other documents. Make

new hires understand the ethical commitment.


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Seize the opportunity and make the commitment real. If you are faced with a dilemma, make the right,

most ethical decision. Build up a superb reputation. Make that a part of the companies culture and

reward employees who follow your practice.

Anticipate ethical tensions. Ethical tensions between the truthful and the hopeful are inevitable. When

you want to attract top talents to your new business, what picture of the company do you draw forthem? Exaggerating is not ethical and providing false information to prospects is illegal too.

Welcome ethical questions and debates. Cooperate with and talk to your employees, keep an open door

so that ethical dilemmas can be solved.

Watch about conflicts of interests. With many partnerships, strategic alliances and new employees it is

hard to avoid conflicts of interests.

Weed out employees who do not embrace the ethical values of the company. Even though hiring is one

of the most important steps in a start-up business it is very likely that the venture will hire some people

who think that personal financial success is the most important value. Lay off those employees beforethey damage the reputation and culture of the company.

Renew the commitment. Do not forget that the success of the company also depends on the corporate

culture and consequently ethics. Keep on prepaing the employees to successfully deal with future

dilemmas. .

Workers who feel that the company they work for is ethical and that their ethical behavior is cherished

will feel better about themselves. The culture will improve and together with personal satisfaction

translate to higher productivity and lower employee turnover. It is also easier to attract valuable

employees when the company has a good reputation.

HP way and the HP culture from a small business to a multinational

In 1956, Bill Hewlett, Dave Packard, and a handful of other HP executives gathered at the Mission Inn in

Sonoma, California, to create a set of values and principles to guide

their company. The six objectives that this small group consequently created not only helped shape a

new kind of company, but ultimately became the foundation for what came to be known as the HP

way. As Bill and Dave understood, the real genius of the HP Way is that it's a legacy built on innovation,

bold enough to embrace change and flexible enough to absorb it.

These six objectives, which later became seven, are:

1. Recognize that profit is the best measure of a companys contribution to society and the

ultimate source of corporate strength;

2. Continually improve the value of the products and services offered to customers;


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3. Seek new opportunities for growth but focus efforts on fields in which the company can make a

contribution;

4. Provide employment opportunities that include the chance to share in the companys success;

5. Maintain an organizational environment that fosters individual motivation, initiative and

creativity;

6. Demonstrate good citizenship by making contributions to the community;

7. Emphasize growth as a requirement for survival.

Packards management style is committed to teamwork and monitoring. Packard learned about the

importance of human factor in manufacturing quality and practiced a special type of management

simply called management by walking around. He also practiced management by objectives which

gave employees flexibility to achieve broader goals. When HP moved its headquarters to an industrial

park their new building was designed to enhance employee satisfaction and performance, to support

the HP Way. Both Dave and Bill agreed that their company would focus on innovation and organic

growth rather than economies of scale. Bill and Dave even encouraged workers to work on personal

projects with companys equipment and parts.

Critically assess whether Human Resource Management is any different in SME's than large

organisations?

"The study of human resource management has been invigorated by the promise that there is a best-

practice, high-involvement management that can guarantee superior organisational performance"

(Wood, 1999).

This paper is structured to critically assess the differences of human resource management (HRM) in

small to medium sized enterprises (SME's) with comparison to large organisations. Initially this will

provide the fundamental processes involved with the implications of HRM in all organisations. The

differences, or lack thereof, of HRM polices, are derived from the vast difference in the sizes of the

respective organisations. Research shows that HR practices also vary extensively between small firms(Dumberlry and Walley, 1995; Julien, 1998; Bacon et al, 1998) and are often determined by the ideology

and pluralistic goals of the small business owner (Kock and De Kok, 1999; Wagar, 1998). Anderson

(2003) takes this one step further by claiming that HRM in SME's is not ambiguous and homogenous

phenomenon. On the other hand, HRM in large organisations is more about the relationship between

strategic management and employee relations in the firm, and focuses on the overall direction of the


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organisation in pursuit of its stated goals and objectives. Other central issues examined are recruitment,

training, performance, pay, management theories, flexibility, and employee retention.

There are around 4.3 million SME's including 3.1 million sole-traders or partners with no employees, and

they are the driving force behind a large number of innovations and contribute to the growth of the

national economy through employment creation, investments and exports. Smalls firms, (0-49

employees) represent 99.3% of all UK businesses, and over 51% of all UK economic activity. Only 26,000

medium sized (50-250 staff) and 6,000 large firms (250 or more staff) exist in the UK and represent the

other 49% of the economic activity (www.dti.gov.uk/statistics). Due to the nature of SME's, each

individual employee would represent a substantive part of the workforce, thus increasing the

importance of every single HR decision (Bacon et al, 1998). In larger organisations, HRM plays an equally

significant role in larger organisations too, because of its impact on performance outcomes it has a

strategic role to play in business management, and merits careful attention by practically all types of

manager, irrespective of functional responsibilities (www.bized.ac.uk). Lado and Wilson (1994) have

suggested that HRM practices in large and multinational corporations "can contribute to sustained

competitive advantage through facilitating the development of competencies that are firm specific,

produce complex social relationships and generate organisational knowledge." Therefore, aside from

the number of employees employed by the firm, the importance of HRM is widely recognised as vastly

important to large organisations, and it has also been observed that SME's consider their HRM problems

to have top priority (Hornsby and Kuratko, 1990; Huang and Brown, 1999).

An interesting difference concerning small firms is their recruitment policies. They make extensive use of

job-tryouts (Duberley and Walley, 1995), which are inexpensive and very well suited to evaluate theactual fit of a person with the implicit demands of the job. The personal atmosphere of small firms is

reflected in the high use of informal procedures like job posting and bidding (Deshpande and Golhar,

1994). Small firms are also more likely to make the use of recruitment agencies to provide them with

temporary workers for period of heightened seasonal activity, and employ a number of part-time

workers due to the cheaper labour, and also providing more flexibility to the owner / manager and the

employees. However, within larger organisations, recruitment and selection are critical elements of

effective human resource management. Within the HRM paradigm, these are not simply mechanisms

for filling in vacancies, but are viewed as key push' and pull' levers for organisational change. The

behavioural competencies of the large workforce can be determined and gradually modified by the

management to fashion issues such as team working and company culture. Attention has switched fromrigid lists of individual skills and abilities that are much more valuable for SME's, to broader-based

competences. In general, there is greater regard for personal flexibility and adoptability a

reorientation from present to future stability (www.hrmguide.co.uk). In stark comparison to large

organisations, SME's often rely on extended social networks in attracting and retaining employees, as

many owe their survival to low labour costs (Hilbert et al, 1994) "The importance of the recruitment and

selection process which is essential of organisational competitiveness and a failure to approach this


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function effectively will have consequences for future job performance," as was aptly recognised by

Nankervis, Compton & McCarthy, (1999). "A good recruitment system is crucial to the organisation,

because the recruitment of suitable employees will improve retention and morale among the existing

workforce by accentuating to those both inside and outside the organisation the importance it attaches

to people" (Hall et al 1991). Large organisations usually have an intense recruitment system composing

of various styles of interviews such as the behavioural based criterion, the biographical interview and

the situational interview, along with assessment centres and psychometric tests (www.shl.com).

A frequently mentioned element in HRM literature is the relative lack of training in SME's (Kitching,

2000). This "economies of training", as explained by Arthur and Hendry (1990) and Storey (1999), show

that due to the fact that they offer less opportunity for career development, SME's have a much higher

probability of labour turnover. As a result, better trained employees will chose opportunities elsewhere,

leaving the small firm behind with its less trained employees and depleted training budget. Company

specific, on-the-job training has been proposed as a solution to this; however this would have little value

to other firms. Over and above recruitment and work-time arrangements, the necessity to be

completitive has forced larger firms to set up intensive training schemes leading to qualifications which

can increase the quality of the products or services provided, while keeping jobs going (Tyson, 1997).

Training is necessary to ensure an adequate supply of staff who are technically and socially competent,

and capable of career advancement into specialist departments or management positions. Another

purpose of training in large organisations is to improve knowledge and skills, and to change attitudes. It

is one of the most important potential motivators and can lead to many possible benefits for both

individuals and the organisation, and therefore, to secure the full benefits of successful training there

must be a planned and systematic approach to the management of training (Mullins, 2005). We can see

here that although the methods of training differ in style and practise in relation to SME's and largeorganisations, it is of fundamental importance.

With respect to other topics, empirical proof is unfortunately scarce. In general, SME jobs tend to have

somewhat lower employee benefits Storey (1994) and Wagner (1997) are both of the opinion that this is

compensated for by a better working atmosphere, while others such as Holliday (1995) and Wilkinson

(1999) feel this is because of a supposed traditional and realatively backward nature of SME's industrial

relations. Larger firms provide benefits to their organisations in a variety of ways including set annual

leave with maternity and paternity schemes, medical and dental care, life insurance, pension schemes,

profit sharing, stock options, child care and many more (Baron and Kreps, 1999). SME's are unable tocompete with larger firms on this basis as it would prove to costly for them to do so. This may also be

the case as a large proportion of SME's are managed in a fraternal or paternal style of management, and

these policies may exist, but not necessarily formalised. Zenger (1994) had found a positive effect in

smaller firms with respect to motivation because compensation was more directly related to employee's

performance. In comparison, employees in larger firms are provided with much more varying mediums

of motivation, ranging from not only performance related pay, but job enlargement and enrichment to,


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greater responsibility, authority and autonomy over their own work, training and career development,

fringe benefits, and a compliance with Herzberg's (1959) two-factor hygiene and motivational theories

alongside Maslow's (1954) hierarchy of needs.

SME's ability to be flexible, both internally and externally, is a highly attributed feature. The firms' ability

to adapt the organisation internally by its small scale, personal involvement and independence all lead

to an absence of bureaucracy, creating a reputation of being able to respond readily to changing

circumstances. Externally, the firm is ably to influence its external environment, albeit with much

hindrance again due to its small size and therefore reduced power (Bax and Brand, 2002). Empirical

evidence, however, is rather disappointing concerning the flexibility of small firms, as they do not use

their flexibility to their full potential. This is due to the fact, as suggested by Volberda (1998), that it is

the personal attitude of the small business owner that determines whether the flexibility potential gets

used, or whether small firm myopia gets the upper hand. In contrast, larger firms would find these

issues much harder to deal with, in a physical nature as they are considerably larger in size, and thus

would have a much superior response time. The upper hand, however, could not be lost, because larger

firms would obviously also have much larger budgets at hand, and thus could employ the use of external

consultants and / or make the use of cutting edge technologies to keep at the forefronts of their chosen

industries.

Before concluding this assessment on the differences of HRM between SMEs and large organisations, I

feel Keenoy's (1999) analogy of HRM is rather fitting: "As with a hologram, HRM changes its appearance

as we move around its image. Each shift of stance reveals another facet, a darker depth, a different

contour. As a fluid entity of apparently multiple dimensions and forms, it is not surprising that everytime we look at it, it is slightly different. This is why, conceptually, HRMism appears to be a moving

target, and why, empirically, it has no fixed (fixable) forms." I find this very fitting as it is rare to find a

distinct variety of HRM theories that do not contradict each other, as is not uncommon in the vast

majority of l iterature.

We can clearly see that there are vast differences in HRM of SME's compared to that of large

organisations. These are essentially due to the fact that because there are so many various types and

styles of SME's it would be impossible to find policies and theories to support all of them under one

roof. Also, due the important fact that they have so few employees, as previously mentioned, it would

be too expensive and involve a substantial amount of red tape, time and effort to put into place all the

formalisation of these various policies. Larger organisations, however, are able to dedicate whole teams

and departments to manage their own human resources, and would have to follow different policies for

legal reasons.


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Therefore, to conclude, we can discern that there are indeed differences regarding the HRM of large

organisations in comparison to SME's, with the main differences stemming from company size, financial

capital, and general workforce and their attitudes. This is not to say that HRM department plays a critical

role in both the different types of organisations, as without it, the firms would surely have no

competitive edge to strive to be at the top of their industries.

CORPORATE SOCIAL RESPONSIBILITY IN A SMALL FIRM PERSPECTIVE

1 ABSTRACT

It has become apparent that, in the previous few years, public awareness and governmental conduct to

encourage Corporate Social Responsibility (CSR) has ceased concentrating solely on multinational

enterprises and, presently, has begun to give attention to the mainstream collection of Small to Medium

enterprises (SMEs). (Murillo & Lozano. 2006:227) SMEs are the foundation of most financial systems,

predominantly in terms of their employment opportunities and their improvement effects on the

community. In countless sectors, their snowballing communal and ecological bearings are far more than

those of big conglomerates. With the sustained manifestation of the enterprise linkages theme

within the socially responsible programme, there have been indications that larger enterprises that are

functional in developing nations will more and more be required to increase their supplies from SMEs,

as a measurement of how responsible they are as an organisation. Even though this is a good thing, itsjust not enough. For genuine improvement en route for sustainable growth, there is a necessity that

SMEs need to be seen corporate citizens themselves, with their own societal and ecological influences.

The line of reasoning that being socially responsible is too expensive or immaterial or beside the point

for small to medium enterprises should not be exploited as an excuse behind which to withhold or close

the eyes to deprived public and ecological systems. (Fox: 2004:6) Most scholars stress in their literature

that Small to Medium Enterprises conscientious conduct are concentrated notably on internal

stakeholders. For the most part SMEs are incapable of conveying to exterior stakeholders their CSR-

related conduct in which they are currently and have presently been involved. Most SMEs are

powerlessly submissive, as they are not conscious of the existing laws and legislation. (Cilliberti,

Pontradolfo & Scozzi. 2008:1580)

2 KEY WORDS:


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Business ethics, SME, corporate social responsibility, sustainable development, small business,

corporate citizenship, social capital, symbolic capital. CSR.

3 INTRODUCTION

From an individual street hawker to a complex multinational enterprise, every business entity its

stakeholders and its impacts on society, both positive and negative. - Tom Fox

It has become apparent that, in the previous few years, public awareness and governmental conduct to

encourage Corporate Social Responsibility (CSR) has ceased concentrating solely on multinational

enterprises and, presently, has begun to give attention to the mainstream collection of Small to Medium

enterprises (SMEs). (Murillo & Lozano. 2006:227). Academics consider moral principles, values and

ethics an extravagant advantage which only affluent actors (i.e. Not small and medium endeavours or

enterprises) will be able to pay for. (Fuller & Tian. 2006:288)

Not much is understood or has been researched concerning the significance of community-level

corporate citizenship of small business enterprises (Niehm, Swinney & Miller.2008: 322) The Corporate

Social Responsibility (CSR) hypothesis portrays the association connecting business and the larger

civilization. A literal description of corporate social responsibility is hard to pin down because

philosophies and approaches on the subject of the features of this correlation oscillate with the

applicable concerns of the time. Per se, perspectives have diverged in due course and now and again

are even in conflict. Nonetheless, Milton Friedman played an important role to the conception of a

universal CSR hypothesis by posing problems such as, Should corporations take the reins for communal

matters? He also contended that the only public duty of organisations is to augment proceeds by

permissible methods. (Hill, Stevens & Smith. 2003:339)

Small and medium-sized enterprises are considerably the most widespread practice of private ventures

in both industrial and developing countries. There are many diverse characterizations, but a customary

one is the European Union adaptation, which classifies small to Medium enterprises as encompassingless than fifty workers. (Spence.2007:534) Spence (1999:169) adds to this and propose that small

businesses should also be defined according to their ownership and as being independent.

Corporate Social Responsibility then on the other hand, can be classified from a broad spectrum as the

obligation of the firm to use its resources in ways to benefit society, through committed participation as


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a member of society, taking into account the society at large and improving welfare of society at large

independent of direct gains of the company. (Hill, Stevens & Smith. 2003:340) uniform to this

methodology, they go on to isolate four widely accepted constituents of Socially Responsibility namely,

economic, legal, ethical, and humanitarian or philanthropic. (Hill, Stevens & Smith. 2003:340)

Knowledge of Small and Medium organisational concerns proportionate to business principles and social

responsibility is imperative for the commercial sector. This is for the most part applicable in terms of

control over the supply chain given that frequently there is a situation where the larger customers (i.e.

large organisations) dictate the value chain and shape circumstances in which small enterprises have to

do business. These may extend from seeking reassurance that all the SMEs in their supply chain are

conforming to CSR principles (Hamann et al. 2005:2), to the equality of the handling of the contractor

and the application of authority and control in supplier associations (Cox 2004:347). Even where an

affiliation attitude (i.e. we are equal partners in this) is applied, small organisations have been

observed as being cynical regarding the advantages for them in applying CSR. (Spence.2007:534) A

probable motive for the lack of appreciation for corporate citizenship instruments by small and medium

organisations is their conflation with the concept of entrepreneurship. Entrepreneurs are universally

supposed to be short-range revenue maximizing, hard-nosed persons (Spence.2007: 539)

4 LITERATURE REVIEW / DISCUSSION

4.1 SMALL BUSINESSES AND SUSTAINABLE DEVELOPMENT

According to the Brundtland Report (United Nations World Commission on Environment and

Development, 1987), the essential message of sustainable development is that economic development

and ecological conservation are mutually interdependent. A key pre-condition for sustainable

development is based on a production system that preserves the ecological base for development. The

United Nations Conference on Environment and Development held in Rio de Janeiro in 1992 resulted in

Agenda 21, which recognized sustainability as a key business imperative (Commonwealth of Australia,

1998). - (quoted from Kerr.2006:31)

It is possible that it can be supposed that knowledge of business ethics in large conglomerates may

perhaps be merely conveyed to the state of affairs and circumstances of the small enterprise. Preceding

research of small organisations would, on the other hand, propose that this is erroneous. Small

businesses are dissimilar in nature, not just in magnitude as described earlier, (Holliday, 1995: 2), but

also in the divergence in the character of ethics in small firms. Acutely of the essence is the reality that


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in the owner-managed SMEs, command stay in the hands of one of the proprietors, possibly facilitating

him/her to make individual choices about the allotment of resources. Additionally, the propensity for

small firms to be subjugated by private associations and the favoured, and frequently suitable,

deficiency of officious jurisdiction may increase relations of honesty and sincerity in transactions.

(Spence & Rutherford. 2000:127) previous research places emphasis on the fact that SMEs are

incapable of conveying their responsible conduct to exterior stakeholders. . Most SMEs are

powerlessly submissive, as they are not conscious of the existing laws and legislation. (Cilliberti,

Pontradolfo & Scozzi. 2008:1580)

Small- to medium enterprises (SMEs) are the means of support of the majority of countries. On the

whole, they embody more than 90% of endeavours and comprise 50% to 60% of employment.

(Fox.2005:2).

Fox (2005:2) also mentions that SMEs are exceptionally vital in sustaining fiscal expansion and sources

of revenue in developing countries. This is because they:

Are inclined to employ more physical manufacturing procedures than their larger counterparts,

therefore increasing employment that makes more even-handed income distribution possible;

offer employment opportunities by means of straightforward, value-adding processing actions

in agriculturally-founded countries

develop and encourage private enterprise

Maintain the reinforcement of general prolific capabilities and the formation of durable financial

structures, by way of connections involving small and large ventures.

There isnt a lot of evidence that sustainable development is satisfactorily protected in small firms, even

though they set emergent consideration to ecological and value management. There has however been

research that has exposed the fact that there is only modest use of tactical forethought and universal

measurement techniques and that small firm management is often steered emotion. The grounds for

this are: currently SMEs are confronted with tricky international and provincial monetary

circumstances. (Will.2008:237)

The snowballing communal and ecological bearings of SMEs are exceedingly momentous, even

supposing their individual impacts are diminutive. This is not purely owing to the big amount of

ventures and their complete fiscal consequence, but also for the reason that SMEs are time and again

over-represented in manufacturing sectors with high ecological impacts, and since they may not be

exposed to the equivalent regulatory and enforcement procedures that help to alleviate the damaging


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influences of large companies. There is as a result the possibility for considerable growth in the

direction of sustainable development if SMEs social and environmental operation could be bettered.

(Fox. 2004: 2-3)

Hypothesis 1: Small firms are less inclined to be socially responsible than big firms Hypothesis 2: Small

firms are more inclined to be socially responsible than big firms

4.2 SMALL TO MEDIUM ENTERPRISES (SMES) AND CORPORATE CITISENSHIP

To extend our love and care beyond our narrow self-interest is antithetical to neither our human

nature nor our financial success. Rather, it leads to the further fulfilment of both. Why do we not

encourage this in our theories of business and economics? Why do we restrict our theories to such a

pessimistic and crabby view of human nature? What are we afraid of? John Mackay

The CSR conception is non-specific in description and is appropriate to associations in spite of form,

nature or size from public to private, from small-to-medium enterprises (SMEs) to multinational

conglomerates (MNEs). (Castka, Balzarova, Bamber & Sharp.2004:142)There are various descriptions of

corporate social responsibility in small business that make them unique from the somewhat overriding

view of CSR that takes a corporate perspective (as adapted from Spence. 2007:537-538)

1. Individual incentives for taking socially responsible projects are critical.

2. Seeing as small go medium enterprises can on the odd occasion undercut their bigger

contestants on price or cost as a result of size shortcomings, they have to discover other means to attain

business. Elasticity and a private service are repeatedly aspects on which small firms can distinguish

themselves

3. There is a need for codification of CSR in SMEs. They are improbable to have enlisted for CSR

covenants, regulations, and principles or to have codes of conduct or vision statements in position.

4. In the majority of small enterprises the being with supreme accountability for management the

establishment is also the chief proprietor, that is, he/she is an owner-manager. There could possibly be

other shareholders, conceivably family members or business associates, but the junction of ownership

and influence of the firm indicates that the owner-manager operates as both the leader and the

manager.


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5. Moreover, workers are very essential stakeholders in small firms. A vital feature of small

business social responsibility is to deal with their preferences in terms of compassionate support and

grants, and without a doubt directing efforts on making sure of the preservation of the living of

employees, supervisors, and proprietors.

6. The framework of the industry is for the most part significant for small businesses, manipulatingthe philosophy relative to social responsibility

7. Small businesses are usually entrenched in local communities.

The European Commissions publication on Responsible Entrepreneurship, defines the responsible

entrepreneur as one that (1) treats customers, business partners and competitors with fairness and

honesty; (2) cares about the health, safety and general well-being of employees and customers; (3)

motivates his workforce by offering training and development opportunities; (4) acts as a - good citizen

- in the local community; and (5) is respectful of natural resources and the environment (EuropeanCommission, 2003b). (Lepoutre & Haine. 2006: 259)

The SME entrepreneur may be in charge for numerous business errands simultaneously, and

responsiveness to problems outside the everyday administration of the business may be little. SMEs can

be complex to regulate as they are both hesitant to implement voluntary regulation but are also

suspicious of red tape, and are less receptive to institutional pressures, for example legal pressures,

contender benchmarking, governmental organizations, public and private pressure groups. However,

SMEs can also be very adaptive, being able to modify their trading capacities in a flash consistent with

varying market opportunities. (Goffee and Scase, 1995:18). this elasticity means that they can take

action without delay to shifting situations. (Jenkins.2006:242)

The principles and morals of the naissance tycoon / title-holder are of foremost value when determining

social or ecological tactics (Murillo et al. 2006: 237) the concept of executive uniqueness advocates that

corporations will take on in publicly accountable business procedures when to do otherwise is

unimaginable these apprehensions have been so crucial to who businesses are as an institute for so

long that they cannot envisage the establishment as anything but a good corporate citizen. Harmonizing

organizational characteristics, organizational persona is what executive representatives want theirexterior stakeholders to appreciate as most fundamental, long-term, and idiosyncratic about the firm.

Also, a firms repute is a specific kind of response, received by companies from their stakeholders,

relating to the trustworthiness of the companys character claims. (Whetten & Mackey, 2002:401). An

organizations persona is a perception of the organization, that is, deliberately proposed to interlopers

and its repute is the origin of the organization by interlopers, that is, revealed back to organizational


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members. Appearance has been repeatedly correlated to commercial tactics, and character comprise of

an imperative organizational ability. (Dyer & Whetten. 2006:788)

A business minor dimension repeatedly produces inferior bargaining power. Bigger conglomerates

have more influence to inspire socially responsible performances amongst their Supply chain colleagues.

The implementation of CSR systems and their conveyance down the supply chain can be complex for

SMEs mostly for the reason of the excessive costs that can occur. For instance, to supervise contractors

SMEs are regularly obligated to depend on third parties, e.g., NGOs or multinational companies. As

consumer, SMEs can apply their weight through the supply chain by advocating CSR and promoting

associates to agree to socially responsible activities. Dissimilar approaches are assumed to this

objective, e.g., exercising absolute coercion up and down the supply chain, behaving as a best practice

study, and offering supply chain collaborators CSR-related presentations or an open-house for equals.

Small to medium enterprises can also illustrate an eminent motivation to employ the authorization of

exchanging contractors for socially responsible grounds, and they can also classify and contribute to

cost-savings and income-generation from corporate social responsibility with suppliers. In the majority

of instances, SMEs encourage more easily ecological than social conscientiousness the length of the

supply chain. (Cilliberti, Pontradolfo & Scozzi. 2008:1580)

4.2.1 Existing perspectives, approaches and instruments to corporate social responsibility (CSR) for

small businesses

Attempting to conceptualize CSR, a variety of descriptions have been specified which respect the fact

that the organisation has to act in response to a sequence of difficulties that go further than the

strategic, financial or official needs, thus attaining social advantages in conjunction with the

conventional monetary proceeds. Small corporations will possibly have diverse lines of attack to social

responsibility depending on the vision about this matter (narrow or broad) they implement, and the

consequences (costs or profits) they connect to social obligation of businesses (Deniz & Suarez.2005:28)

Narrow =this means that the business only provides goods and services that maximise profits for

shareholders

Broad = this means that businesses aim to meet the expectations of society. They are willing to go

beyond regulation


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For that reason, we can possibly say that sustainable relationships with society means attending the

demands. Any group or individual that may affect or be affected by the achievement of business

objectives (Freeman, 1984:25).

This instrument means that the nature of commercial dealings between SMEs and consumers, and how

market power is put into effect inside such relationships, are innermost to the CSR outline. This leads to

one of the most demanding assessments of the present CSR agenda that such supply chain principles

can prohibit SMEs in developing countries from rewarding markets. Without a doubt, investigations

propose that the almost certainly the motive for SMEs to initiate an environmental management

system is when it becomes indispensable to acquire and hold on to business, either with local or

international clients. In this sense, the concept of such principles as voluntary can be ambiguous. It may

more suitable to judge them as market entry requirements or economic imperatives. For small firms

that are confronted with such supply chain issues, either from local or international consumers, there

are several challenges, for the most part associated to affordability and applicability. Given the

magnitude of SMEs to employment and sources of revenue in developing countries, there are

apprehension that unless these issues are dealt with, the CSR agenda will carry on being innately partial

in contrast to SMEs. (Fox. 2004:4)

Spence and Rutherford (2000: 129) recommend four frames of distinguishing between the social

viewpoints of the small firm, these being: profit maximisation priority, subsistence priority, enlightened

self-interest and social priority. They propose that the rationale for being in business and managing an

organisation are far more multifaceted, and socially stimulated, than simply monetary motives and

declare that this multiplicity of perspectives needs to be deliberated if policy makers and supportorganisations are to sway the moral principles of small firms and engage them in CSR. There are

essential CSR issues that all SMEs have accountability for, in the midst of them the conception of a

positive working atmosphere where miscellany is supported, the impartial allocation of wealth in a

community, and the safeguard of the environment. SMEs are regularly represented defectively

proportionate to such necessary responsibilities. (Jenkins.2006:243|)

With the intention of passing on these ethical responsibilities, many firms have expounded codes of

conduct. A code of conduct is a text that outlines the crucial duties of the organisation with regard to its

stakeholders. Previous studies have pointed out that the workers from organisations with a code of

conduct experience a more encouraging and supportive environment for ethical behaviour than workers

without a code (Adams et al., 2001).1

A code of conduct can enclose three categories of accounts: the mission statement that defines the

function of the organisation; the value declaration that illustrate the chief morals of the firm; and lastly


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the rules of conduct that explain the sort of behaviour that the establishment requires from its

employees or contractors. (Graafland, van de Ven & Stoffele.2003:47)

Auditing is the procedure in which a business appraises, assesses, testifies and adjusts its communal

bearings and moral performance in light of the standards and expectations of stakeholders. For small

firms its frequently not easy to systematize this procedure by itself. A more sensible approach is to

make use of active certifications, like ISO 9001 and ISO 14001.2 Firms can willingly choose to subject

themselves to the ruling of self-governing organisations that are sanctioned to endorse the social or

environmental superiority of the manufacturing procedures of the organisation. Whereas ISO 9001 is

predominantly concerned with security and safety concerns, ISO 14001 relates to ecological aspects.

The benefit of the ISO 14001 model is the matter-of-fact application. It is a renowned comprehensive

paradigm, amenable to all businesses. (Graafland et al.2003:48)

A method associated with auditing is the publication of an annual social report. An exceptional case in

point is the statement of Shell. In this statement Shell gives many data, figures and statistics on the

environment like their emission of CO2 and other gases, security, functional measures to certify uniform

opportunities, gender diversity, grievance processes, social investments and reported cases of

enticement and corruption. (Graafland, et al.2003:48)

4.2.2 Family businesses and CSR: A special perspective on small enterprises

Family-centred businesses may have unique perspectives of socially responsible behaviour due to

family involvement and ties to the community. (Niehm, Swinney & Miller. 2008:331)

Family businesses embrace the most important occupant and money-making base in most country

communities. The surroundings in which they function are the same place that they call home. As a

consequence of family association in the business and connections to the society, family businesses may

hold a rare standpoint of socially responsible business conduct. (Niehm et al. 2008: 332)

Family Firms have conventionally been linked to a number of positive and negative features in their

relationships with workers, possessors, patrons, the public and other stakeholders. This could be an

indication of a distinct orientation toward corporate social responsibility and the family firm. (Deniz &

Suarez.2005:27)


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One way of appreciating CSR from the perception of a family firms operator is the enlightened self-

interest model (Kerr.2006:32). (See appendix A) This methodology propose that socially responsible

behaviour by a community-based firm will be given back in return in due course by backing from

devoted clientele, workers, contractors, and other stakeholders

An interrelated concept, affiliate recognition, assists us in comprehending how individual-level

emotional procedures could possibly explain how family firm creators, shareholders, and administrators,

navigating their businesses toward socially responsible business behaviour. Affiliates are said to have

sympathy for their organization to the degree that they see an intersect between the character of the

business and their own personal persona. (Dyer et al. 2006: 790)

In the milieu of a family firm, a great deal of an owning-familys present revenue stream and its accrued

wealth may be completely connected with the firms productivity and the familys ownership

investment in the firm. Hence, impairment to the firm through loss of repute, lawsuits, or other

detrimental proceedings, can have a considerable harmful effect on the familys wealth. To the

magnitude that a familys monetary comfort is tied to the firm, the family may be indisposed to gamble

the loss of that wealth. As a result, the family may be more enthusiastic to be hands-on in developing

constructive social capital, and the social indemnity it affords, than are managers who have no such

involvement in the firm. In the course of growing positive social and ethical capital, the family firm may

for that reason be more prepared to behave in socially responsible manner. (Dyer et al. 2006:780)

4.2.3 Social and Symbolic capital vs. Social responsibility

In most cases social capital and social responsibility are not one and the same. Social capital is

connected to the types of authority and denotations that subsists as structures. In other words, its the

type of authority that a business has in its community. Social Responsibility on the other hand is mostly

seen by scholars as existing in the realm of the ethical, a challenging theme at both the personal and the

communal level and one that must in the end sit at the focal point of discussion a propos social

responsibility. All the same, there is an obvious relationship concerning standards and ethics and the

character of reciprocated responsibilities, expectations and accountability concerning financial players

(i.e. The scale to which civilization manipulates ethical conduct). Without a doubt, much of the

structure for Corporate Social Responsibility is one of outside (stakeholder) domination of moral actions

at variance with financial necessities. There is a dear association involving individual intentions and

moral values (i.e. those motives and standards that are internally formed) and the conscientious


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conduct in small firms where the approach is fashioned through the management of the minority of

persons. (i.e. Entrepreneurs or owner/managers.) (Fuller & Tian. 2006: 287)

One theoretical standpoint from a social capital perspective is that the ties from a set of connections

afford a small business the access to resources and information which are compulsory to be socially

responsible or be a good corporate citizen. Structural social capital amounts to a priceless source of

information advantages. In other words, who you know has an effect on what you know and

therefore the who is more important than the what. It has some bearing on three of the circumstances

for exchange in many ways, including confidence, norms, responsibilities and expectations, character,

admiration, esteem, friendliness and fidelity. Fuller (2006:289) continues to insinuate that the higher

the amount of communication, the more interaction avenues are accessible for use, the more

unproblematic it is to expand, and more effortlessly information can come to pass in the set of contacts.

(Fuller et al.2006: 289)

Symbolic capital, as embellished by Bourdieu and Fuller (2006:290), correlates to ones standing and

worth as understood by others. Such worth, and the control that is adjunct to this appraisal by others, is

assembled in due course. They propose that symbolic capital has a part to perform in social

responsibility (i.e. This is that socially responsible actions may produce symbolic capital or are in

themselves a form of symbolic capital. (Fuller et al. 2006:290-291)

If stakeholders such as the employees or the community perceive an organisation or small firm as having

an immoral reputation, bearing in mind malevolent purpose in an injurious event, they are more

probable to employ harsh social vetoes. On the contrary, firms with an extensive and praiseworthy

testimony of being upright and respectable will probably be given the benefit of the doubt by all

stakeholders when a comparable episode occurs. To sum up, Dyer and the rest of the authors

(2006:791) contends that resources of goodwill, what they denote as positive moral capital, supply

assurance-like safeguard defending a firms fundamental relational capital and income streams

against loss of monetary worth evolving from the risks of business operations. (Dyer et al. 2006: 791)

4.2.4 Why should SMEs implement CSR?

Milton Friedman's (1970) declaration that the social responsibility of an organisation is simply to

multiply income is no longer laconic in a humanity where governments are anew vigorously pushing

private, free market, solutions to public problems (Harvey, 1988: 131)


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Although the mounting visibility and global effect of large conglomerates and brands has proclaimed

appeals for greater social transparency and answerability, SMEs continue to be essentially unseen and

improbable to see CSR in terms of risk to their brands persona or standing. For SMEs, topics closer to

home are far more prone to grab their interest such as motivating and retaining their workers orsomething like involvement by the community in which they function. Pragmatically, 60% of all small

firms are basically satisfied just to continue to exist, on condition that they are making a reasonable

income there is little need to diminish the triple bottom line with socially related systems (Jenkins.

2006:243)

Social responsibility is being promoted to small as well as big firms as a method to gain sustainable

competitive advantage. This move is sustained for the most part by case examples of economically

victorious organisations with a socially responsible attitude and conduct. The combined effect of CSR as

practiced by SMEs is key the capability of CSR to play a role in the creation of jobs and sustainable

development.

4.2.5 How can SMEs implement CSR?

1. Corporate social reporting: Corporate social reporting is a technique of self-presentation and

reputation/image management performed by corporations to indemnify an assortment of stakeholders

are pleased and content with the business public conduct and actions (Snider, Hill & martin.2003:176).Gray et al. (1996:3) characterizes corporate social reporting as the process of communicating the social

and environmental effects of organizations economic actions to particular interest groups within society

and to society at large.

2. Corporate Champion: To support socially responsible actions in a company, a champion is

necessary to lead the way and stanchion novel ideas. For CSR to become entrenched in the any

organisation, the workforce must buy-in to the hypothesis, something that many SMEs find tricky to

accomplish. One approach of conquering this sticking point is to channel CSR actions through workers,

for example, helping the school that the workers kids go to through monetary or other help, or by

making CSR activities directly applicable to the operational life of employees e.g., pro bono work in the

society. The pre-eminent way for an SME to start tackling CSR is to try to have an effect and change

things where they can. (Jenkins. 2006:252)


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3. Culture: The solution to coordinating an enterprise for sustainable development is for management

to create a culture that is hands-on in putting together ecological and societal objectives, to engage in a

policy of unremitting ecological and social development and to give resources that plan. Organisations

need to take on a learning culture that distinguishes between and underlines the advantages and worth

of educating, training and cultivating their workforce to have lifetime learning outlooks and aptitudes in

thinking resourcefully and holistically on ecological and social sustainability concerns. It is by way of the

instruments for interaction and stakeholder relationship-building within an accommodating business

culture that the issues of social sustainability can be tackled. (Kerr.2006:32)

4. The enterprise leadership model: (see appendix A) - The idealized leadership model was developed

through a consideration of key approaches adopted in the research literature to modelling the

sustainable enterprise. Thus, the enterprise leadership model develops sustainability objectives of

economic, environmental and social sustainability, whereas Gladwins (1992) approach to the

sustainable enterprise considers ecological, resource and socioeconomic issues and Elkington (1997)

adopts the triple-bottom-line approach for these objectives of economic prosperity, environmental

quality and social justice. (Taken from Kerr.2006:32)

4. Leadership strategies:

a. Compliance strategy: company exploits tangible principles of conduct, which are imparted to all

constituents of the organisation. The focal point is on mandatory performance. Regulation of the

performance of the leaders and workers or other business affiliates certifies the moral worth of the

organisation. Those who are found skirting or fudging are penalized. (Graafland, van de Ven &

Stoffele.2003:46)

b. Integrity strategy his strategy is based on the personal accountability and trustworthiness of

each one of the employees on the base of internalised principles and values. Truthfulness and reliability

means that owners and workers are ready to complete their responsibilities in an expert, precise and

accountable way, taking into consideration all appropriate interests. With the intention of applying this

tactic in a lucrative way, the SME must identify comprehensible core principles and prepare managers

and employees to employ them in existing situations. (Graafland et al. 2003: 47)

c. Dialogue strategy: This strategy focuses on to the requirements of the stakeholders of the firm.

It also concentrates on the receptiveness to ideas, concerns and standards of others. The firm

continuously tries to gain knowledge from new situations and from what external parties convey.

(Graafland et al. 2003: 47)

5 CONCLUSION & POSSIBLE FINDINGS


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In your opinion what is the best or most appropriate theory of industrial relations? Why?

There are many different approaches and theories regarding industrial relations nowadays. In order to

mount an opinion on which is the best or most appropriate theory of industrial relations, each theory

will have to be analyzed. The three most prevalent theories of industrial relations which exist are The

Unitarist theory, The Pluralist theory and The Marxist theory. Each offers a particular perception of

workplace relations and will therefore interpret such events as workplace conflict, the role of trade

unions and job regulation very differently. I will examine each of these theories in turn and then

formulate my own opinion regarding which is the best or most appropriate theory.

The Unitary theory is based on the assumption that the organisation is, or should be, an integrated

group of people with a single authority/loyalty structure with a set of common values, interests and

objectives shared by all members of the organisation. This is expressed by Gennard and Judge (1997),who state organisations are assumed to be harmonious and integrated, all employees sharing the

organizational goals and working as members of one team. Through the unitary approach it is assumed

that both management and employees can achieve and satisfy their common goals (high levels of

productivity, profitability, pay and job security). In the Unitarist theory management see their function

as controlling and directing the workforce and see the organisation as a unitary system which has one

source of authority which is itself and one source of loyalty which is the organisation. Under the unitary

theory the organisation system is in basic harmony and any opposition to or conflict with management

is regarded as both unnecessary and exceptional, (Salamon, 1992). As pointed out by (Gunnigle,

McMahon and Fitzgerald, 2004), the existence of conflict is not perceived to be a structural occurrence

within organisations. However when conflict does arise, it can be the result of breakdowns incommunication, clashes in personalities within the organisation or by troublemakers. As conflict is

abnormal and seen as irrational there is no need for trade union representation within the company.

Trade unionism is regarded as a threat as trade unions are seen as an intrusion into the organisation

from outside who compete with management for the loyalty of its employees. Employers are also

opposed to recognizing collective bargaining initiatives as this will only diminish their decision making

initiatives and responsibilities further. Under the Unitarist theory under no circumstances should unions

have a part to play in the exercise of authority and decision making within the organisation, as this

would represent a violation of managerial prerogative (Ed Rose, 2001). The existence of trade unions

and collective bargaining is therefore resisted wherever possible. A perfect example of where trade

unionism is resisted is with Ryanair. Ryanair have one of the highest turnover rates in the airlineindustry and in order to substantially decrease their turnover they may need to allow union

representation for their staff. Their cabin crews are not getting the wages they deserve for the hard

work they put in. Long flight hours, little rest time, all of this deserves better pay and proper

compensation. Staff in workplaces with a union and a collective agreement gets better pay and

conditions, and better income. This is true for most full-service airlines as well as low-cost carriers. Easy

jet for example has a collective agreement, and staff earns better wages there.


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Unlike the unitarist theory the pluralist theory recognizes that both employers and employees have

different interests. In pluralism the organization is perceived as being made up of powerful and

divergent sub-groups, each with its own legitimate loyalties and with their own set of objectives,

interests and leaders. Fox (1966) argued that this gives rise to a complex of tensions and competingclaims which have to be managed in the interests of maintaining a viable collaborative structure. In

comparison to the unitarist theory where there is only one source of loyalty and authority which resides

with management, the pluralist theory has many sources of loyalty and authority to management, trade

unions and other interests groups. There will therefore inevitably be continuous tensions within the

organisation arising from conflicts of interest and loyalties which requires management by a variety of

role players or representatives, procedures, processes and specialist institutions. In contrast to the

unitarist theory, pluralism views conflict as a naturally occurring phenomenon in organisations. It is seen

as both rational and inevitable. It is accepted as a characteristic of organisations which arises from

different perspectives and interests between the different groups and individuals in a society. Trade

unions are recognized as legitimate representatives of employees which can enable groups ofemployees to influence management decisions. Conflict is dealt by collective bargaining, which, if

managed successfully, can in fact be channeled towards evolution and positive change. Therefore

greater stability is given to IR by Collective Bargaining than by shackling and outlawing trade unions

(Clegg 1975). In the past in Southern Asia the focus was on achieving economic efficiency and less on

achieving better rights for workers. Unions were viewed as potential obstacles that could get in the way

of economic development and little emphasis was placed on industrial relations. However, there are

now major changes taking place across Asia as both the government and employers are focusing more

on industrial relations. It is now recognized how better managed industrial relations programmes and

cooperation with trade unions can seriously impact on the prevention of disputes, the productivity

within organisations and help to align employee objectives with the organisations objectives.

The Marxism theory concentrates more on the structure and nature of society rather than the actual

workplaces in the society and assumes that conflict in the employment relationship is reflective of the

structure of the society. It embraces the political, social and economic structures of society and

therefore according to Rose, views and analyses industrial relations not only in organizational job

regulation terms but also in social, political and economic terms. Marxism focuses on the fundamental

division of interest between capital and labor, and views workplace relations against this background.Conflict is therefore seen as inevitable and trade unions are a natural response of workers to their

exploitation by owners. According to Wallace, Gunnigle and McMahon trade unions may perform a

central role in the wider political process for the attainment of significant alterations to the economic

and social system on behalf of the proletariat. Conflict is the result of an uneven distribution of wealth

and power between the dominant establishment group (employers, shareholders) and workers. The


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Marxist view is that trade unions and collective bargaining would enhance rather than limit

management's position as they presume the continuation of capitalism rather than challenge it.

In conclusion it is clear that the Unitary, Pluralistic and Marxist theories make quiet different

assumptions about the nature of organisations, work and society and consequently view conflict and the

role of trade unions differently. The unitarist theory is unrealistic in its outlook. It assumes that

organisations will be harmonious and integrated and views conflict as abnormal whereas in todays

society conflict is seen as a naturally occurring phenomenon. One of the major weaknesses of this

theory is that it does not acknowledge the fact that employees and employers will have different

objectives which is one of the main reasons for industrial conflicts. The Marxist theory is considered to

be outdated as the whole nature of the class conflict has changed, as a result of contemporary society,

with its mixed economy and welfare state, is now more open and socially mobile, (Wallace, Gunnigle

and McMahon 2004). The theory which in my opinion is the best or most appropriate theory of

industrial relations is the Pluralist theory. This theory has been in pole position in western societies for

over thirty years. In todays environment it is the most realistic theory as it assumes conflict is inevitable

and recognizes that both employees and employers will have different objectives unlike the unitarist

theories beliefs. It is now recognized that better managed industrial relations programmes and

cooperation with trade unions can seriously impact on the prevention of disputes, increase productivity,

quality and the motivation of workers within organisations and help to align employee objectives with

the organisations objectives.

CONTENTS

1. Introduction

2. HRM activities

2.1 Employee relations

2.2 Handling organisational conflict

3. Conflict resolution: a theoretical framework


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3.1 Techniques HR managers use for conflict management

3.2 Types of collisions they manage

3.3 Role of trade unions in regulating employee disputes

4. Conflict resolution: a comparative case study of UK and Russia

4.1 British approach to the employee relations

4.2 Employee relations in Russia

5. Conclusion

6. List of references

|

1

2

2

2

3

3

4

5


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employee relations differ from industrial relations to the extent that there is an inclination on direct

communication with the labour and liaison with the staff at the level of individual (Bright, 1993, p.42).

On a more general note, Bright (1993) argued that organisations need to be capable of handling with

employees on both an individual and a representative basis.

2.2 Handling organisational conflict

There may be some justification for claiming that conflict might dissipate precious human resources that

would be better focused to other activities, including the pivotal objective of the organisation. Thereby,

managing conflict in an organisation is regulated by the rules and established procedures (Edwards,

1994). Sparrow and Hiltrop (1994, p.186) identify two levels of conflict in organisation: the collective

level and the individual level. With regard to the collective conflict, it can provoke industrial actions

including walkouts, go-slows and overtime bans. Likewise, individual conflict may expose itself astruancy, high personnel turnover and other subversive actions.

3. Conflict resolution: a theoretical framework

3.1 Techniques HR managers use for conflict management

Several effective conflict management techniques can be executed at all levels of an organisation. As a

case in point, Wilson (n.d., p.4) advocates to adopt five methods to curb certain types of conflict in the

workplace. The first technique is "straight speaking". In other words, manager should embolden his staff

members to abstain from "beating around the bush." His second concept is generous listening. It

involves sincere listening without prejudging others or their flow of thoughts, this, by-turn, eliminates

negative misconceptions that can lead to prejudice. Honouring agreements is the third method that

urges employee to honour internal and external agreements as well as oral and non-oral. The next

technique is making requests. It suggests that employee failing to fulfil agreements should devise

alternatives, make adjustments and set forth counter offer for consideration. Ultimately, another

approach that can be practised by HR management is mentoring. Setting up a successful mentor system

where fresh employees can "learn the ropes" guarantees that core practices are realised and

accomplished from the moment a new employee becomes the piece of the organisation.

3.2 Types of collisions they manage


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Leopold, Harris and Watson (2005, p. 410) believe that conflict is a facet of cooperation and

cooperation is a facet of conflict. To illustrate this apparent paradox, we can closely examine the types

of conflicts and classify them clearly into six categories (see Figure 1). Research confirms that HR

managers face specific conflicts in each kind of dispute (Business Horizons, 1997).

|Types Of Conflicts |Specification |

|Interpersonal |Communication difficulties, personal irritations; jealousy, embarrassments,

insults, |

| |fights. |

|Operations issues |Work assignments, vacation scheduling, overtime, union rules, work load,

sick leave. |

|Discipline |Attendance, drug use, theft, policy violations, sleeping on the job. |

|Sexual harassment/ |Touching or offending person of the opposite sex/ |

|Race relations |Alleged bias because of race. |

|Pay and promotion |Compensation, transfers, seniority, bumping rights, promotion.

|

|Work flow |Scheduling, quality of work, work speed, responsibilities, dependencies.

|

Figure 1 Types of conflicts handled my human resource managers

*(Source: Results of the research conducted by Business Horizons magazine (BHM), May-June 1997)

3.3 Role of trade unions in regulating employee disputes

According to Flanders (1975, p.274), trade unions seek to control or influence the framework of the

employment relationship through a number of methods including collective bargaining, joint

consultation and individual representation.


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When dispute between employers and employee remains unsolved, employer can take actions against

employees and their unions make take measures against their employer. Farnham (2000, p.7) assume

that unions balance the power between management and employees. For instance, if an employee is a

member of a trade union, he or she could tell workplace representative about complaint before taking

any formal action. The trade union can advise on how best to raise grievance and go with employee to

grievance meetings. Many employers, especially those which recognise trade unions, have written

procedures in place to discuss with representatives collective grievances or other significant issues

affecting all or part of the workforce. Those procedures are important and can be used to address

emerging problems at an early stage.

4. Conflict resolution: a comparative case study of UK and Russia

4.1 British approach to the employee relations

British employees were ones infamous for industrial quarrels and strikes (Price, 2007). Hollinshead,

Nicholls and Tailby (2003) denote that in the UK a worker is free to take industrial actions, but she or he

must acknowledge certain legal and practical aftermaths. But Brown (1994) argues that in the UK

withdrawing trade unions leads to worse people management. Inevitably, unions force managers to

manage.

An impressive body of evidence tells us that UK businesses are being badly affected by poorly managed

conflicts in the workplace (McHenry, 2008). McHenry (2008) also observed that:

the average British employee is spending more than two hours a week dealing with conflict. This adds

up to the loss of more than 370 million working days a year, costing UK employers more than 24

billion. (p. 19).

The table below indicates that UK employees are more likely to experience unfavourable emotions as a

consequence of conflict. Two thirds of UK employees (65%) confess to feeling animosity anddisappointment in the face of dispute at work, as opposed to 57% across total surveyed. This suggests

that UK employees are not easily irritated, but ones they are, the emotional tensity increases

considerably. Generally, only 12 % of UK employees see conflict as a constructive occasion where they

feel invigorated, energized, compared with 24% on average in other countries considered. It is also

interesting to note, that as much as 22% of respondents got used to conflict and do nothing to remedy

the collision. One of the reason for this could be that UK employees suppress their emotions rather then


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trying to find the conflict resolution in the workplace. On the other hand, one can assume that poor line

management is culpable when conflict occurs. However, research concludes that of all the countries

surveyed the UK employees experience conflict the least, 20% claimed they never have faced with

conflict, versus 14% on average, whereas 27% asserted there are never any collisions among their top-

management, as opposed to 21% on average.

[pic]

Figure 2 How does conflict may be felt by British employees

*(Source: Result of the report by business psychology firm OPP and the CIPD, 2008, p.19).

4.2 Employee relations in Russia

In Russia employee relations are regulated by the Labour Code. Alasheev (2005, p.11) explains that

Labour Code provide a comprehensive framework of regulation of terms and conditions of labour and

extending unprecedented rights and protection to trade union bodies while the plan and collective

agreements enjoying juridical status. Interestingly, Russia pride itself on the fact that the legal

regulations and protection given to labour is the most advanced in the world.

The current Russian Labour Code is very employee directed and if conflict arises, the court predominate

the Code clauses over the individual labour contract and usually also sides with the employee.

Information relating to the employee, the work implemented by them, recruitment and layoff dates are

to be inserted in the employee labour book and/or labour contract.

According to the final body of research, on the one hand, Russian HR mangers could be unconfident,

dragging their feet until the problem became conspicuous at a senior level. On the other hand, they

could expediently take notice of the conflict and seek its resolution (Alasheev, 2005, p.23). Although,

Russian managers are knowledgeable and affirmative, they often lacked impartiality. Specifically, in

conflicts that pitted an employee against the organisation or a member of it, the HR manager often

assist the firm in information collection, communication with disputants, decision making, or resolutionexecution. Paradoxically, but such a bias is comprehensible, given that the HR manager is paid by the

firm, is hold as a member of the managerial class, and is expected to vindicate the firm's interests.

Howbeit, this partiality does, occasionally, seem to erode an HR manager's effectiveness in handling

conflict.


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5. Conclusion

Conflict in the organisation can be on personal and collective levels and it is up to HR manager to

respond to conflict situations swiftly and professionally. Moreover, each manager has its own store of

techniques, such as straight speaking, generous listening and honouring agreements. Likewise, types of

conflict manager experience every day are diverse, starting from interpersonal difficulties, operational

issues, and finishing by work flow dilemmas. On the other end of the scale, the power of trade unions

should be taken into consideration as well. In fact, HR managers can view trade unions as a favourable

factor, contributing in the process of communicating and involving employees.

British approach in employee relations suggest that employees experience the conflict the least, and the

least likely to have seen a conflict escalate, but on the other hand they are the most likely to experience

negative emotions as a result of conflict. However, they are not easily aroused. If the conflict occurs theyare more likely to see compromise in disagreement. Moreover, the reluctance to get involve in conflict

stands British employees out. Whereas Russian levels of workplace conflict are relatively high.

Nonetheless, the possibility for conflict in the fast-paced Russian workplace is identified and dealt with

in a structured way. Russian employees are also most likely to have a formal direction in dealing with

conflict. The most striking feature is that Russian employees view conflict handling as crucially

important leadership skill (Alasheev 2005, p.41).

By and large, this paper, however, provided only the basics of employee relations and conflict resolution

and further research would be necessary, because the circumstances in which employee relations are

conducted vary considerably.

Employment Relationships- Problems and Perspectives

Introduction

The employment relationship is the heart of any industrial relations system. It is the relationship

between the employer and the employee. A successful employment relationship has always been the

foundation of any successful business or organisation no matter how big or small. Variety ofphilosophers and writers of management have written a lot of theories relating to employment

relationship. These theories have changed vastly from the classical era to the modern era, addressing

issues that have evolved through changes driven by the nature of work, technology, and globalisation.

Managers have adapted diverse management styles as the time has passed by which reflect the

environment in which work is carried out. In this paper I will be analysing classical and modern theories


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of employee relationship and various management styles and discussing the different factors that have

brought about changes in these theories and styles of management.

Before industrialization, industries and companies had an environment in which the employees

were basically ruled on by the employers, submitting themselves to the rules and regulations imposed

on them by the management. Interests of the employers always prevailed over the interests of theemployees. In the post war era there was little globalisation and technology, which hadn't played a big

role in the industrial world. The employees had to bear the entire workload, which included mental and

physical labour, on top of that they had minimum support by their managers due to the management

styles they had adapted. Compared to the post modernisation era and nowadays there have been vast

improvement in the industries. Today a number of forces influence the workplace environment, such as:

political systems, legislation, economics, technology, globalisation, labor unions, and professional

organisations, which includes remarkable new technological advances, enhanced working places,

educated, trained, and experienced managers and employees with superior competence than those of

the classical era.

Unitary Theory

One of the earliest theories was the Unitary theory that described the work relationship of the

employer and the employee as that of a parent and son. Even though it required harmony in the

employment relationship, it agreed with the management exercising authority over the employees.

Since the employees weren't as educated as needed to be it demanded the employees to be dependent

on the policies of the management. Unitary theory was based on an idealised and a fix situation, with

management adapting oppressive approaches. If an employee acted against the interest of the

management it would most probably cause a conflict, which would hamper unity in the organisation and

would put himself at the brink of losing

his job. Therefore the Unitary theory was based on an idealised situation and didn't consider any

flexibility or changes brought into the industrial world due to environment, technology, and or

expansion of business.

Pluralist Theory

Theories kept evolving as the size and scope of businesses expanded, taking into consideration

technology and the nature of work of the employees. One of the theories that came about was the

pluralist theory, which acknowledged the complex situations such as conflict of interest between the

management and the employees. It suggested that these kinds of complex situations could only beresolved through the involvement of government. Pluralist theory originated in the UK when the

country was going trough cultural and social reforms. Pluralist theory recommended resolving any

complex conflicts of interest by negotiation, compromise or agreement. This also brought about the

formation of trade unions and other groups that considered the interests of both the management and

the labour. Even though the pluralist theory tried giving some kind of rights to the employee to speak

out and be heard, it still couldn't overcome the conditions of capitalist tendencies which always tilted


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the balance in the employers favor. The formation of these institutions and trade unions helped the

employees on a limited base that included areas like wage bargaining or conflict of interests between

employees. The increased level of trade unions and institutions were beginning to be questioned and

were blamed to have contributed to the low levels of productivity in British companies.

Fredrick W. Taylor (Scientific Management)

The essence of all these classical theories of management styles is that there exists a single, best

approach to management, and the research was aimed at finding this best approach. One of the

recognized theorists was Fredrick W. Taylor. His purpose and idea was to maxamise efficiency, he

believed that the principal object of management should be to ensure maximum prosperity for the

employer, coupled with the maximum prosperity for each employee. He considered that the best

approach was for the employee to fulfill optimum goals, which would result in higher wages for them,

and managements' gain will be higher productivity. Therefore the employee himself will work harder

and try his level best to produce more since he is getting financial benefits for doing so, this was his

differential piece-rate system.

Elton Mayo(Human Relations Movement)

Various other theorist included Henri Fayol, Max Webber, and Rosemary Stewart, but one of the

standouts was Elton Mayo with his Human relations approach to management. Elton Mayo opposed the

writings of Taylor and thought that in spite of its aids to efficiency Taylor's system was an imposed one,

which took no account of employee's own views. Hawthorne experiments with which Mayo's name is

lined are one of the widely quoted researches in history. In this research his experiments included

separating six female operatives to assess the output and morale of changes in the nature of work. At

first an incentive payment scheme was introduced comparatively of Taylor's writings, as expected

output increased. The second experiment consisted of the same women but with original workingconditions with no incentive payments, no pauses for rest or for refreshments and yet the output was

the highest ever recorded. Therefore it proved that the nature of work which includes work satisfaction,

development of personal friendships, and a good social atmosph

what is a corporate culture

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