Political and Social Factors

Political stability , political parties, and their ideologies, formation of new political parties (Telugu Desam Party in Andhra Pradesh, Trinamul Congress in West Bengal, Shiva Sena in Maharasthra, Janata Dal in Bihar), splits in and amalgamation of existing parties influence the functioning of trade unions in an organization. This in turn, leads to formation of new unions or splitting up of existing unions. Bhartiya Kamgar Sena (BKS) floated by Thakeray in 1960s owes its popularity now in Maharasthra Shramik Sena also believe in production, productivity and discipline and have a following of nearly 2.5 lakh workers. The changes in unions have serious implications for HR managers. Rahul Bajaj for example feels that BKS is very positive to suggestions from employers and conducts wage negotiations in a business like manner. In Oct 1996,after 12 years of unsuccessful negotiations with its own internal union, Bajaj Auto signed a difficult wage and productivity agreement at its Worli plant with BKS. Thanks to the awareness of workers companies like Polychem, Otis, Philips, Mahindra and Mahindra, Premier etc have successfully implemented a VRS scheme. In case of Shri Ram mills , despite union pressure the workers accepted voluntary retirement scheme (each worker got upward of Rs 2 lakhs) and allowed the management to sell its property to realtors.

Similarly, defying Datta Samant, workers of premier automobiles ltd have accepted proposals advanced by the management. HR managers from Ingersoll Rand, Blue star strongly feel that the days of single skilled workers are over. There is more demand for multi skilled workers . The new class of workers is neither gullible nor excited about trade unionism. Wage linked productivity agreements have become common, as workers are more keen to sink or swim along with the company (Mahindra and Mahindra, for example), Pure commercial interests have come to play a dominating role now in place of political and non-economic factors in union management relations.

Social factors:

HR managers have long realized the importance of conducting their business in a socially relevant and responsible manner. What do you do when the company operates in an area where a large army of unemployed people live? A philosophy of hiring workers who are capable of being trained as against hiring only qualified applicants may help reduce unemployment . It may also improve profitability in the long run. Is it possible for a person to buy a firm’s products or services if he remains unemployed? The society at large nowadays is more demanding. The actions of business are being monitored and evaluated closely. If a manufacturer claims that his product has one hundred per cent juice content (e.g. Onjus) and the rival (Tropicana) tries to contest this issue openly, the customer is ready to evaluate the issue dispassionately and decide about the future course of action. If the expectations are not met or the tall claims do not stand the test, the fate of the firm / brand is automatically sealed (as it happened in the case of Bajaj’s motor cycle, Cheetah, technologically outdated ambassador model etc). Firms do not operate in isolation. They are stuck with society. Social impacts have to be carefully evaluated before undertaking any action program. And society here includes the firms’ own employees and their friends’ relations, neighbors as well. Before cutting jobs in a big way (where, for example in National Textile Corporation 40,000 jobs have been slashed voluntarily ). HR managers have to assess reactions beforehand and come out with certain proactive steps ( explain facts, train or retrain them, give outplacements help, etc). Considerable pressure can be exerted on a firm to alter its practices (for example, in Steel Authority, of India, SBI and other State owned Banks , DTC; the slashing of jobs did not tale place in a big way) if the public believes that it is not operating in the best interests of society . A firm after all operates by public consent to satisfy society’s needs.