The Impact on Economic Performance of a Transformation in Workplace Relations

Abstract

This study examines how a transformation in patterns of conflict and cooperation affected economic performance in 25 work areas of a large, unionized manufacturing facility in the period 1984–87. Unlike most studies of industrial relations and economic performance, this study clearly distinguishes conflict from cooperation but evaluates the two together, rather than focusing on only one. An analysis of data collected from union and employer records and interviews strongly suggests that work areas with “traditional” labor-management relations, rooted in adversarial assumptions, had higher costs, more scrap, lower productivity, and a lower return to direct labor hours worked than work areas with “transformational” relations, characterized by increased cooperation and improved dispute resolution.