Discuss the company’s stance toward labor and any specific labor-related issues it may be experiencing.
In the labor practices, Nike is frank about dilemmas raised by its pull of responsibilities, particularly between workers and their local social; and economic contexts on the one hand, and the company’s business interests on the other hand. According to Pieczka (2006), it should not be difficult to make ethical decisions about labor practices, environmental sustainability and so on in the face of market logic and shareholder demands for profitability. Welters & Lillethun (2011) noted that Nike labor practices exemplify a significant development in the labor market. For the sweating system is now being used not only by producers like, Nike, who outsource production to low wage countries, but also by companies like Wal-Mart operating in the United States.
Conventional economics provide no point of entry into the analysis of this development and equally offers no ground for attempting to reverse its deleterious consequences for workers. Holley, Jennings & Wolters (2011) distinguished that labor unions of Nike have goals that are serving as the basis for the organizations strategic plans and organizational structure. The areas of potential conflict in labor relations for Nike and the areas of agreement create possibilities for cooperation and labor peace.
Both the company and the labor relations union want Nike to survive and remain competitive. Union agreement with this goal is logical, because the employees would lose their jobs and the labor relations union would not survive without Nike. Holley, Jennings & Wolters (2011) also state that the labor relations union wants to survive as the representative of the employees of the company and will take steps to retain this designation.
Employee empowerment in Nike is reflected in employee involvement and participation programs, which include quality circles, quality of work life efforts, labor management participation teams and autonomous work units. Unions demonstrate their capacity to confer value to their members and create wealth for all the organizations stakeholders. Labor relations in Nike ensures that unions and management focus on common goals, which include the health of the business in a changing economic environment and new issues such as adopting new technology to ensure competitiveness and business survival. Nike has chosen labor management cooperation at various sites in a multi-plant operation. Holley, Jennings & Wolters (2011) indicated that the company chooses to operate double breasted and strongly support the union at one of its nonunion plants while at the same time engaging in labor management cooperation at another plant.
Formulate a strategy for negotiating a labor agreement and dealing with potential impasses in the bargaining process
A labor agreement or union contract is created through collective bargaining. Typically, both Nike’s management and union negotiation teams are made up of a few people. One person on each side is a chief spokesperson. At Nike, bargaining begins with union and management negotiators setting a list of contract issues that will be discussed. Gitman & McDaniel (2008) noted that much of the bargaining over specific details takes place through face to face meetings and the exchange of the written proposals. Demands, proposals and counterproposals are exchanging during several rounds of bargaining.
The resulting contract must be approved by top management and ratified by the union members. Once both sides approve the contract, then it is a legally binding agreement that typically covers such issues as union security, management rights, wages, benefits and job security. Nike has to ensure union security, which is the union shop whereby nonunion workers can be hired by Nike, but then they must join the union normally within thirty to sixty days. Gitman & McDaniel (2008) indicated that much bargaining effort focuses on wage adjustment and changes in benefits. Once they are agreed to, therefore, they remain in effect for the length of the contract. In 2006, Nike and its workers union negotiated a four year contract containing modest hourly wage increases. The pay hikes should be 3% each year for the four year contract.
In addition to requests for wage increases, unions usually want better benefits. Nike should focus on benefits, which include higher wages for overtime work, holiday work and less desirable shifts, insurance programs, payment for certain non work time, pensions and income maintenance plans (Gitman & McDaniel, 2008). In the context of job security and seniority, wage adjustments, cost of living increases, supplementary unemployment pay and certain other benefits give employees under union contracts some financial security. In a unionized work environment, employees follow a step by step process for handling grievances or disputes between management and labor. Gitman & McDaniel (2008) say that conflicts over contracts however are far more challenging to resolve and may result in the union or employer imposing economic pressure.
Analyze the principle economic and administrative issues addressed during collective bargaining with your labor force and develop a bargaining position.
Nikecollective bargaining isa process in which the terms and conditions of employment are determined jointly by Nike and workers. Workers bargain for obtaining better and improved terms and conditions of employment. The mechanisms established by Nike, union are subject to the equalizing effects of union bargaining. Encompassing collective bargaining structures typically involve the extension of collective agreements and are characterized by high degree of coordination. Perlman (1996) says that collective bargaining has in the recent history produced the quickest and the best results. The most efficient administrative unit for carrying on collective bargaining becomes the most important unit in the labor movement. Perlman (1996) further articulates that the economic theory in collective bargaining is based on the idea that unions are the least costly way to achieve certain objectives.
One of the most important issues addressed during collective bargaining is how to represent the objectives of the partners to the bargaining. These actors are economic agents in the ordinary sense. Cahuc & Zylberberg (2004) indicate that economic analysis of collective decisions can shed light on the connection between individual preferences and those of collective organizations. Cahuc & Zylberberg (2004) say that the theory of collective bargaining furnishes a primarily local explanation of wage setting in the sense that it compares the strategies of two clearly identified actors.
The main object of collective bargaining is the determination of terms and conditions of employment through negotiations and process of give and take. Sinha (2004) says that if negotiations succeed Nike and its employees arrive at an agreement, which is known as collective agreement. Collective bargaining has considerably helped in securing a wide variety of economic benefits for the workers in the form of higher wages, liberal allowances, fringe benefits, economic security, shorter hours of work, better terms and conditions of employment and physical working conditions. Through collective bargaining workers can get economic and administrative benefits and facilities, over and above the standards set by labor laws or industrial awards (Sinha, 2004).
The main administrative issue addressed by collective bargaining is putting effective check on workers and employers auto cry in regard to the lying down of terms and conditions of employment. Sinha (2004) also noted that initially, the employer’s freedom of action was curtailed only in a few areas such as wages, hours of work and working conditions, but during the course of time a number of subjects came under the purview of collective bargaining and these subject matters are expanding day by day.
According to Sinha (2004), collective bargaining has contributed towards improving administrative efficiency and solution of specific problems facing the management. Researchers say that there are difficult situations when the management has to face a hostile trade union, opposed to administrative measures. In such occasions, collective bargaining provides an opportunity to the management to take the trade union in confidence and seek its cooperation in tackling the problem.
Recommend policies and procedures to administer a labor contract and resolve disputes.
The main way Nike Inc. can handle and resolve disputes is the grievance procedure. Gitman & McDaniel (2008) say that a grievance is a formal complaint by an employee or the union that management has violated some part of the contract. In a nutshell, the employees should start by presenting the dispute to the supervisor by writing. If the dispute is not resolved, the grievance is put in writing. The employees at Nike or more union officials including, for example, the supervisor and the plant manager then can discuss the issue. If the matter is not still resolved, another meeting should be organized, which takes place with higher level representatives of both parties present. Gitman & McDaniel (2008) say that if top management and the local union president can not resolve the dispute, then it goes into arbitration.
Arbitration is the process of settling a labor management dispute by having a third party a single arbitrator or a panel to make a decision. Gitman & McDaniel (2008) say that decision is final and binding on the union and Nike Inc. The arbitrator reviews the dispute at a hearing and then makes the decision, which is presented in a document called the award. According to Gitman & McDaniel (2008), the arbitration might rule that the discipline was improperly made, because the employee’s attendance record for the month was not accurately maintained by Nike.
Determine the most likely interest dispute and determine how you could leverage economic pressure to help resolve that dispute.
The most likely interest dispute between Nike and its workers is compensation. Gitman & McDaniel (2008) say that when a compensation and wage contract expires and a new agreement between Nike and its workers has not been reached, the union is free to strike or to engage in other efforts in order to exert economic pressure on the company or employer. Gitman & McDaniel (2008) say that a strike will be appropriate economic pressure to help resolve the dispute. In addition to a full strike, the union can implement a selective strike strategy, which will involve striking only at a critical facility. For example, those at the Nike’s production line can decide at the production line. This can cause the company to stop production of sports ware. At the same time, Nike can put pressure on the union through a lockout or hiring strike replacements.
Sinha (2004) indicates that strikes and lockouts are the methods adopted by workers and employers respectively to settle their differences. When the workers fail to secure a good compensation or a redressed of their grievances and fulfillment of their demands by peaceful negotiations with the employer, they try to force the employer to come to a settlement by temporarily withdrawing their services in the form of strike. This issue can give rise to the dispute that is settled either in the favor of the workers or in the favor of the employers (Sinha, 2004).
In some countries were Nike has opened its subsidiaries, multi-employer agreements may be extended to all firms in a particular industry or geographic area either through law or other administrative means. The degree of coordination within a dispute resolution and its interaction with other institutional variables such as union density and the coverage of disputes also play an important role in determining the effects of the bargaining structure on the compensation point of view.
As a result of pressures of competition experienced by Nike, there are number of related phenomena occurring in the labor relations management that seem to be encouraging change in the workplace. Wheeler (2001) notes that these include the creation of an increased number of proportions of skilled jobs, declining or stagnant real wages, long hours of work and the growth in revolutionary part time and temporary employment. Also changes in technology are generally believed to have on balance raised skill requirements for workers in Nike. In addition, it is important to note that the new industrial composition of employment has led to greater demand for more highly skilled workers who are able to assume multiple responsibilities and fewer high paying jobs for manual workers.
Real hourly compensation for the future labor relations has been essentially stagnant. Studies indicate that although it is clear that temping is attractive for at least some workers, because its fits their lifestyle or because it may lead to a permanent job, temporary employment is not without disadvantages. Labor relations are thus changing, for the reason that the slow change in the culture of the union is coming about in response to the change in membership from predominantly full time workers in a job of life to a mixture of full-time and part-time job. In the previous labor relations disputes were taken out of control of the individual or group experiencing the problem to have their day in the industrial tribunal sparring with the employer. The revolutionary labor management practices is giving this confrontational strategy way to female approach of search for compromise in informal discussion using local procedures in a more collaborative problem solving way. Recent labor management practices offers opportunities for openness and fairness and more participation in debate by members. Issues such as voluntary redundancy packages equal opportunities and health and safety concerns are negotiated locally and all involve a new style of negotiation aimed at conflict prevention in Nike Inc.