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Command Economies

ing. As in mediation, an impartial third party serves in the terms can occur. In these cases, a grievance, or complaint,
arbitration process. The arbitrator acts as a judge, listen- can be filed. The differences that must be resolved are usu-
ing to both sides and then making a decision on the terms ally handled through a step-by-step process that is out-
of the settlement, which becomes legally binding on labor lined in the collective bargaining agreement. The
and management. Ninety percent of all union contracts grievance procedure begins with a complaint to the
use arbitration if the union and management can not
worker’s immediate supervisor and, if unresolved at that
come to agreement (Boone and Kurtz, 2006).
level, moves upward, step by step, to higher levels of man-
agement. If no resolution is found at any of these levels,
SOURCES OF POWER
the two parties can agree to have the grievance submitted
If the collective bargaining process is not working as a way
to an impartial outside arbitrator for a decision binding to
to settle the differences between labor and management, the union and management.
both sides have weapons they can use to bolster their posi-
tions. One of the most effective union tactics is the strike Collective bargaining is a successful way for workers
or walkout. While on strike, employees do not report to to reach their goals concerning acceptable wages, hours,
work and, of course, are not paid. Strikes usually shut and working conditions. It allows workers to bargain as a
down operations, thus pressuring management to give in team to satisfy their needs. Collective bargaining also
to the union’s demands. Some employees, even though allows management to negotiate efficiently with workers
allowed to belong to unions, are not allowed to strike. by bargaining with them as a group instead of with each
Federal employees fall into this category. The law also pro-
one individually. Though traditional bargaining can be
hibits some state and municipal employees from striking.
negative and adversarial, it does produce collective bar-
During a strike, workers often picket at the entrance gaining agreements between labor and management. Part-
to their place of employment. This involves marching,
nership bargaining can lead to increased understanding
carrying signs, and talking to the media about their
demands. The right to picket is protected by the U.S. and trust between labor and management. It is a positive,
Constitution as long as it does not involve violence or cooperative approach to collective bargaining that also
intimidation. Problems sometimes arise during strikes and culminates in contracts between labor and management.
picketing when management hires replacement workers, SEE ALSO Labor Unions; Negotiation
called scabs or strikebreakers, who need to cross the picket
line in order to do the jobs of the striking workers.
The boycott is another union strategy to put pressure BIBLIOGRAPHY
on management to give in to the union’s demands. Dur- Boone, Louis E., and Kurtz, David L. (2006). Contemporary
Business 2006. Mason, OH: Thomson/South-Western.
ing a primary boycott, not only union members but also
members of the general public are encouraged to refuse to Davey, Harold W., Bognanno, Mario F., and Estenson, David L.
conduct business with the firm in dispute with the union. (1982). Contemporary Collective Bargaining (4th ed.). Engle-
wood Cliffs, NJ: Prentice-Hall.
Though it is rarely done, management may use the
lockout as a tactic to obtain its bargaining objectives. In Miernyk, William H. (1973). The Economics of Labor and Collec-
this situation, management closes down the business, thus tive Bargaining (2nd ed.). Lexington, MA: Heath.
keeping union members from working. This puts pressure Voos, Paula B., ed. (1994). Contemporary Collective Bargaining in
on the union to settle the contract so employees can get the Private Sector. Madison, WI: Industrial Relations Research
back to their jobs and receive their wages. Association.
Management sometimes uses the injunction as a Wray, Ralph D., Luft, Roger L., and Highland, Patrick J.
strategy to put pressure on the union to give in to its (1996). Fundamentals of Human Relations. Cincinnati, OH:
demands. An injunction is a court order prohibiting South-Western Educational Publishing.
something from being done, such as picketing, or requir-
ing something to be done, such as workers being ordered
to return to work. Paula Lee Luft

GRIEVANCE PROCEDURES
Once a collective bargaining agreement is settled and a COMMAND
union contract is signed, it is binding on both the union
and management. However, disagreements with contract ECONOMIES
implementation can arise and violations of the contract SEE Economic Systems

ENCYCLOPEDIA OF BUSINESS AND FINANCE, SECOND EDITION 123