conflict for mutual gains

Conflict for Mutual Gains?*

Nicolas Bacon and Paul BlytonNottingham University; Cardiff University

abstract This paper adopts Walton and McKersie’s Behavioral Theory of LaborNegotiations to examine the outcomes of industrial relations negotiations to implementteamworking. Negotiations from 21 departments across two integrated steelworks are classifiedinto four negotiation patterns, each producing different outcomes from teamworking formanagers and employees. Managers secured lower manning and increased productivity innegotiations both in departments characterized throughout by cooperation and thosecharacterized by conflict. However, mutual gains were secured only where union negotiatorspursued conflict tactics during bargaining. In those departments where union negotiatorsadopted more conflictual bargaining tactics, more employees reported pay increases andgreater satisfaction with teamworking agreements, compared with employees in more‘cooperative’ departments. ‘Mixed’ bargaining approaches in other departments were lesssuccessful, particularly for union negotiators.

INTRODUCTION

Increasing competitive pressures over the past two decades have challenged managersand unions in Europe and North America to negotiate changes in working practices onthe shop floor to improve productivity. How to negotiate change that delivers benefits forboth firms and employees is now central to debate within Human Resource Manage-ment and Industrial Relations. It is widely suggested that managers and unions shouldcooperate with one another and, by working more closely together, can introduce highperformance working practices to the mutual benefit of shareholders and employees(Kochan and Osterman, 1994). Studies indicate that companies with new workingpractices or ‘high performance work systems’ report superior organizational perfor-mance, pay, job security, health and safety and employee job satisfaction (Appelbaumet al., 2000; Cutcher-Gershenfeld, 1991). In contrast, many UK critics of greater coop-eration in industrial relations have pointed out that competitive markets provide apretext for managers to exploit union cooperation and restructure working practices atthe expense of employees’ terms and conditions (Kelly, 1998; Ramsay, 1977; Schuster,1985; Taylor and Ramsay, 1998). However, even the most militant of trade union

Address for reprints: Nicolas Bacon, Nottingham University Business School, Jubilee Campus, Wollaton Road,Nottingham NG8 1BB, UK

© Blackwell Publishing Ltd 2007. Published by Blackwell Publishing, 9600 Garsington Road, Oxford, OX4 2DQ, UKand 350 Main Street, Malden, MA 02148, USA.

Journal of Management Studies 44:5 July 2007doi: 10.1111/j.1467-6486.2006.00668.x

branches cannot simply ignore the requirement to negotiate changes in working prac-tices to increase productivity and secure the long-term survival of a workplace. Managersand unions must both confront the fundamental dilemma of how to work together tosolve workplace problems, whilst also taking into account the subsequent requirement tobargain and claim a share of the gains from improvements in workplace performance.

This paper clarifies the processes through which cooperation and conflict in industrialrelations negotiations produce new working practices that deliver both improved pro-ductivity and meet long-term employee interests. Detailed studies of negotiations and thepotential impact of different bargaining tactics on the outcomes of workplace change arerare (Kelly, 1998). This paper reports on the main outcomes from four different patternsof negotiations to introduce teamworking in 21 departments of two integrated steelworks.In the literature on negotiation behaviour a common theme is that the parties to thenegotiation can display: competitive/conflictual behaviour; problem-solving/integrativebehaviour; or a mixture of both types (for a discussion of this literature, see Carnevaleand Keenan, 1992). This notion of negotiations as a potential mix of cooperative andconflictual behaviour is most developed by Walton and McKersie (1965) in their book,A Behavioral Theory of Labor Negotiations. We utilize the framework of Walton and McKersieto gather and analyse data, and capture some of the complex cooperative and conflictualbehaviours evidenced during bargaining. Other writers have overlooked the potentialvalue of Behavioral Theory in recent debates over workplace restructuring although it isacknowledged as a landmark work on labour-management negotiations.[1]

We prefer to utilize Behavioral Theory rather than the later Strategic Negotiations (Waltonet al., 1994). The latter is largely based on the earlier 1965 text, but differs significantlyinsofar as it approaches negotiations much more from an assumption of managerialchoice – whether management should adopt a ‘forcing’ or ‘fostering’ style of negotiations– and concentrates on how these different approaches can be utilized to address man-agement’s objectives (Walton et al., p. 23). Behavioral Theory on the other hand is moreeven-handed in its exploration of bargaining processes, with greater consideration oflabour’s objectives and its influence on the character of negotiations. Given the objectivesof the present study, to assess the impact of negotiations on both employee and man-agement outcomes, Behavioral Theory is thus a more suitable basis for framing this presentstudy than the later work by these authors.

The paper proceeds as follows. The first section outlines in more detail Walton andMcKersie’s framework of negotiation processes. We then describe the study, and themethods of data collection. The ensuing section presents the results of the four negotia-tion patterns. A final section draws conclusions and discusses the relevance of the studyfor cooperation over workplace change.

NEGOTIATION PROCESSES

Walton and McKersie’s (1965) Behavioral Theory of Labor Negotiations has considerablerelevance for contemporary workplaces where managers and unions face the difficulttask of negotiating changes in working practices. Behavioral Theory provides a usefulanalytical framework to organize the study of bargaining (Kochan, 1991; Kochan andLipsky, 2003). At its core is the distinction between ‘integrative’ and ‘distributive’ bar-

Conflict for Mutual Gains 815

© Blackwell Publishing Ltd 2007

gaining occurring during labour negotiations.[2] Negotiators are seen as needing to bothcooperate and share information to improve performance (‘integrative bargaining’) andalso to capture an acceptable share of the gains (‘distributive bargaining’) from perfor-mance improvements.

Walton and McKersie (1965, p. 164) view negotiations as typically a two-stage processinvolving an initial opportunity to engage in joint problem solving, followed by furthernegotiations to agree the terms of change. Each stage may be characterized by coop-erative or conflictual relations between the parties. From this depiction, four possiblenegotiation patterns are identified. These four patterns of negotiations are based uponhow much problem-solving behaviour managers and unions wish to engage in, and theirapproach to dividing gains. Advantages and anticipated outcomes are associated witheach of these four types, although all involve tactical dilemmas. The four types aresummarized in Table I.

First, managers and unions may initially engage in integrative bargaining to solve jointproblems and then adopt what Walton and McKersie (1965, p. 15) term a ‘soft’ approachto dividing gains (Type 1 Cooperation). Second, both parties could reject a problemsolving approach and engage in distributive bargaining from the outset, continuing withwhat Walton and McKersie term a ‘hard’ approach to dividing gains (Type 2 Conflict).The other two types of negotiation pattern (Types 3 and 4), Walton and McKersie referto as ‘mixed situations’ involving contrasting styles of approach at the two stages ofnegotiation. In Type 3 situations, the parties initially engage in cooperative, integrativebargaining but then subsequently change to a ‘hard’ approach to dividing gains. In Type4 situations, both parties pursue a distributive approach at the start of negotiations beforechanging to a ‘soft’ approach to dividing the gains.

The first two patterns of negotiations (Type 1 Cooperation and Type 2 Conflict)appear less problematic because they are internally consistent and present few tacticaldilemmas for negotiators (Walton and McKersie, 1965, p. 164). In the Type 1 pattern,negotiators pursue joint problem solving to create maximum joint gain and then rely onfurther non-distributive bargaining to divide gains. Successful integrative bargainingrequires a maximum gathering and exchange of information between management andunions in order to: help identify problems and areas of mutual concern; search foralternative solutions and assess their implications; and achieve an openness about pref-erences to select optimal solutions. For Walton and McKersie, the main advantage of

Table I. Walton and McKersie’s four patterns of negotiations

Type 1: Cooperation Type 2: Conflict

Cooperative approach toproblem solving‘Soft’ bargaining to divide gains

Conflictual approach toproblem solving‘Hard’ bargaining to divide gains

Type 3: Mixed situations –

cooperation, conflict

Type 4: Mixed situations –

conflict, cooperation

Cooperative approach toproblem solving‘Hard’ bargaining to divide gains

Conflictual approach toproblem solving‘Soft’ bargaining to divide gains

N. Bacon and P. Blyton816


such an approach is that it can increase the net positive value of the initiative. However,the main risk associated with this approach is that the information sharing may beexploited by negotiating opponents. Walton and McKersie (1966, p. 377) note, forexample, that full and open cooperation may result in increased vulnerability in thesubsequent bargaining process to agree the terms for implementing identified changes.Many negotiation researchers have also made this point (Cutcher-Gershenfeld, 1994;Fells, 1998). It has arisen too among recent critics of union–management partnershipagreements (for example, Kelly, 1998, 2004), arguing that managers take advantage ofunion cooperation in the allocation of shares. Thus, although integrative bargaininghelps to ‘create value’ it may undermine the ability of negotiators to ‘claim value’ (Laxand Sebenius, 1986). This is an important point because recent advocates of cooperationand partnership appear to make a unitarist assumption that all issues are positive sum,whereas fixed-sum outcomes may involve one side gaining only at the expense of theother. Notwithstanding this problem, advocates of mutual gains bargaining suggest thatintegrative bargaining and a ‘soft’ approach to dividing gains (cooperation) will delivergreater gains for both management and union negotiators (Kochan and Osterman,1994).

Where managers and unions engage in Type 2 negotiations, involving distributivebargaining and a ‘hard’ approach to dividing gains, they ignore the potential for jointgains and treat the situation as fixed-sum throughout. By deciding to engage in fewerproblem-solving activities the negotiators ‘effectively accept whatever joint positivevalues are already available’ (Walton and McKersie, 1966, p. 377). In so doing, nego-tiators aim to minimize their vulnerability in bargaining. Conflict may hold certainadvantages for the parties such as: clearly defining different options and positions; it mayavoid one party dominating the agenda; facilitate an identification and resolution of keyinterests; stimulate a more active engagement in the negotiation process; and result intrade-offs and concessions that allow both sides to secure their highest priorities (Coser,1956; Kriesberg, 1998). Successful distributive bargaining requires both influence strat-egies to alter the other party’s position, and commitment tactics to adopt a bargainingposition whilst preventing the other party from fixing their position. Further tactics arethen needed to make this position credible, such as persistence in discussing a positionand mobilizing one’s party in support. The main drawback of this distributive approachis the lost opportunity to realize the integrative capacity in a situation, potentially leadingto a sharing of a smaller set of gains and the possible failure to reach agreement (Waltonand McKersie, 1966, p. 377).

Types 3 and 4 negotiations involve ‘mixed’ bargaining situations and are likely to arisewhere an issue contains the scope for both integrative gains and conflict (Walton andMcKersie, 1965, pp. 161–2). Cutcher-Gershenfeld (1991) among others has commentedthat, given the employment relationship is a mix of competing and common interests,mixed bargaining situations are more typical than either purely cooperative or conflict-ual situations (see also, Fells, 1998). In this respect, the Walton and McKersie frameworkimportantly acknowledges inconsistency and contrasting approaches in many bargainingsituations rather than a uniform pattern of cooperation or conflict. Integrative bargain-ing and a ‘hard’ approach to dividing gains (Type 3 Cooperation → Conflict) may beseen as potentially producing optimal outcomes, because it faces squarely both the reality



of joint problem solving to generate an alternative set of solutions, and the need for eachparty to secure a share of the gains. Yet, while such a ‘mixed’ bargaining approach mayappear attractive, in practice the ‘tactical requirements’ of integrative and distributivebargaining are contradictory. As McKersie and Walton (1992, p. 280) note, ‘if thenegotiator pursues integrative bargaining in a single-minded manner, being totallycandid and completely forthcoming with information, he/she can be taken advantage ofby the other party’. As a result, integrative bargaining followed by a ‘hard’ approach todividing gains may be unlikely in reality to maximize gains for both management andunions.

Walton and McKersie (1965, p. 164) also suggest that the other mixed bargainingstrategy of an initial distributive approach, followed by a ‘soft’ division of gains (Type 4,Conflict → Cooperation) is likely to produce the lowest possible outcome and has‘nothing to recommend it’. Elaborating this point in a later publication, they argue thatthe initial vigorous pursuit of conflict may lead a negotiator to ‘gain the greater share, butof a smaller set of joint gains: even worse, the negotiator may generate an outcome inwhich both parties lose’ (McKersie and Walton, 1992, p. 280). Other writers haveoverlooked this fourth pattern of mixed bargaining (see for example, Fells, 1998).However, in principle it could represent an effective defensive strategy if, for example,negotiators have advance information that their opponents will initially be very difficultto deal with (Walton and McKersie, 1966, p. 377).

The four patterns of negotiations may thus be associated with different outcomes forthe parties involved. The remainder of this paper explores these four patterns of nego-tiations and assesses their impact on outcomes in 21 separate negotiations over theintroduction of teamworking.

CASE SITE

The fieldwork studied negotiations in 21 departments in two large integrated UK steelplants (Scunthorpe and Teesside) owned by the Anglo-Dutch steel producer Corus. Westudied the nine main departments at Teesside and 12 at Scunthorpe. Both sites containsimilar raw materials departments, iron-making, steel-making and casting departments,mills for the further processing of steel, and energy services; the only structural differencebetween the plants is that Teesside has fewer types of finishing mill than Scunthorpe,hence the former’s smaller number of departments overall. Teamworking was alreadyoperating in many other steelworks in the UK (Blyton and Bacon, 1997; Bacon andBlyton, 2000); typically this involves the integration of craft workers into productionteams, the replacement of earlier job grading structures with two new grades of teammember and team leader, with management selection of team leaders replacing theformer seniority promotion system. Teams become responsible for all aspects of produc-tion, together with inspection, day-to-day maintenance and resolving the majority ofbreakdowns.

Initial teamworking negotiations were abandoned at the Scunthorpe and Teessidesites in the 1980s after management and unions disagreed over payment. However,continued financial crisis in the later 1990s eventually led to an agreement paving theway for the implementation of teamworking. Two ‘Works Teamworking Enabling



Agreements’ covering the Scunthorpe and Teesside sites were signed in 1998. These setout the basis for each department at the two sites to negotiate the introduction ofteamworking. Thus, the final responsibility for negotiating teamworking agreements wasdevolved to departmental level. The Works Enabling Agreements committed the unionsto reach agreements on teamworking in response to the company’s poor financialperformance, with falling demand and continued over-capacity in the industry. At thesame time, senior works management mandated departmental managers to deliver a 20per cent manning reduction in each department, in order to cut costs. To assist reachingthis target the Works Agreements included an early retirement provision with fullpensions available to those aged 55 years or over. This requirement for achieving asubstantial manpower reduction, together with a restriction on any pay increases (seebelow) clearly reflected the poor economic conditions prevailing in the steel manufac-turing sector, within which the negotiations were undertaken.

Each of the 21 departments subsequently negotiated the introduction of teamworkingbetween 1998 and 2000. Departmental negotiations followed a set formula laid down inthe Works Enabling Agreements, which involved two distinct but related stages: an initialproblem-solving stage termed the Key Task Analysis (KTA), followed by a bargainingstage to reach a Departmental Teamworking Agreement. This clear identification of twodistinct stages in the negotiation process made the research sites particularly well-suitedto interpretation through Walton and McKersie’s framework.

For the first stage, each department established a project team, comprising nomineesfrom management and the departmental union branch, to conduct a separate KTA.This was conceived in the Works Agreements as a vehicle for a joint approach betweenmanagers and unions at departmental level to solve the problem of implementingteamworking. The KTA project teams conducted detailed work-study analysis, inter-viewing employees to identify their main work tasks and the time spent on each activity.Using this information the project teams collated the necessary skills, planned essentialtraining and made non-binding ‘proposals’ on the structure of teamworking. A man-power utilization figure was calculated from the key tasks identified, the time taken toperform these tasks and the current manning levels prior to teamworking. This man-power utilization figure provided an indication of the potential extent of demanning asa result of teamworking.

After completing a KTA, each department commenced the second stage of depart-mental negotiations to reach a Departmental Teamworking Agreement. Manning levelsand payment for teamworking were the two main contentious issues in these negotia-tions. Works management sought a 20 per cent reduction in manning from teamworkingto improve the financial performance of the sites. In contrast, the unions (primarily theIron and Steel Trades Confederation, ISTC) insisted there should be no compulsoryredundancies with any manpower reduction found from those applying for earlyretirement.

On pay, management insisted at the outset on no pay increases and that the totalsalary bill would not be greater than before teamworking. In contrast, the union positionwas that employees should receive increased pay for extra duties and any employees‘demoted’ by the introduction of teamworking should not lose pay. The site-wide Team-working Enabling Agreements addressed the pay issue by agreeing a ‘weighted average’



approach. This involved calculating the wage bill for a department and using this as thebasis for allocating rates to the two new grades of team leader and team member. It wasalso agreed that those employees earning more prior to teamworking than their newgrade would have their earnings protected (known in the company as ‘red circled’) at theformer level. In practice, the precise determination of which jobs to include in thecalculation of the departmental wage bill, and the appropriate differential betweenthe team member and team leader rate, provided considerable scope for negotiation.

In design, the two-stage negotiation process of the KTA followed by teamworkingnegotiations intuitively followed Walton and McKersie’s (1966) own recommendation tofacilitate joint problem solving by separating integrative from distributive bargaining byrole, agenda, and phase of negotiations. First, the separation of role was achieved by theKey Task Analysis involving departmental nominees rather than union representatives.Second, the KTA agenda was focused on the possible design of teams, work tasks,manpower utilization and identifying training requirements, while manning and payissues were negotiated as part of the Departmental Teamworking Agreement. Finally,the KTA was timed to occur prior to the more difficult negotiations over the Depart-mental Teamworking Agreement.

METHODS

Between 2000 and 2001 we recorded and fully transcribed 54 separate interviews withmanagement and trade union negotiators covering each of the departments at the twosites. The shortest interview lasted 45 minutes and the longest two and a half hours. Inaddition, personnel directors and lead trade union officers at the two sites were repeat-edly interviewed at different points throughout the fieldwork in order to clarify the keyissues arising. We concentrated our union interviews on the main union, the ISTC, withseparate union branches of the ISTC negotiating in each department.

The semi-structured interviews of management and union negotiators contained thesame questions relating to both the KTA and Departmental Teamworking Agreementstages of the negotiations. The majority of these questions were derived from a closereading of Behavioral Theory of Labor Negotiations; in combination these questions produceda profile of the overall character of each stage of the negotiations. In relation to the KTA,five questions explored problem-solving activity in the KTA, asking: to what extentinformation was perceived to have been openly shared in the KTA; whether a jointsearch for solutions occurred; if management and unions had tried to gain at the expenseof the other; any difficult issues the KTA had to resolve; and the perceived mainachievements of the KTA. Six further questions covered the negotiations to reachDepartmental Teamworking Agreements. These sought: the main aims at the start ofnegotiations; the key issues discussed; whether the process was mainly cooperative orconflictual; the perceived relative bargaining strength of the negotiators; the main con-cessions made; and the perceived main achievements arising from the process. Theresponses built up a profile of whether the KTA process was an example of integrativeor distributive bargaining; and likewise for the negotiations over the DepartmentalTeamworking Agreements. The responses of the management and union negotiators tothe pattern of KTA and negotiation activity were on the whole remarkably similar. Any



discrepancies were discussed further with the parties involved or with the PersonnelManager or local union officers with knowledge of the departmental activities, in orderto establish an overall categorization of the two stages as more integrative or distributive.

Two outcome measures were collected for management in each department asfollows: (1) manning reductions calculated by comparing extant manning levels in the KeyTask Analysis documents prior to teamworking with manning levels for teams agreed inthe Departmental Teamworking Agreements; (2) labour productivity calculated frommonthly departmental output both prior to and following the introduction of teamwork-ing divided by manning levels at the time. Service departments are excluded.

Two employee outcomes were collected: (1) pay increase measured as the percentage ofemployees gaining a pay increase accompanying the move to teamworking, calculatedfrom company sources; (2) employee satisfaction with teamworking. A survey of all employeesin 2002 elicited responses on five-point Likert scales to questions on satisfaction withthree aspects of teamworking: manning levels in teams, payment for teamworking andthe teamworking agreement in their department. The survey was sent to all employees,posted to their homes and returned directly to the university. It was supported by thetrade unions and the plant management (both parties providing covering letters ofsupport). A distribution of 7,041 surveys resulted in 2,060 replies, a response rate of 29per cent. A comparison of the survey set, together with a comparison with personnelrecords, indicates that the survey respondents are satisfactorily comparable in terms ofresponse rates for site, department and grade. The survey invited respondents to identifytheir department allowing us to link employee attitudes to the negotiations.

OUTCOMES OF NEGOTIATIONS

Before exploring the different types of departmental negotiations we will summarize theoverall changes in the two sites resulting from the Departmental Teamworking Agree-ments. Teamworking reduced manning by almost 20 per cent, and labour productivityincreased by over 15 per cent (Table II).

Almost one quarter of employees (24 per cent) received a pay increase, the remainderkeeping their former earnings due to the earnings protection provision (Table III). Interms of overall employee attitudes to aspects of the change, more employees weredissatisfied than were satisfied with manning levels in teams (61 per cent dissatisfied and19 per cent satisfied), payment for teamworking (63 per cent dissatisfied, 14 per centsatisfied) and the teamworking agreement in their department (48 per cent dissatisfied,18 per cent satisfied) (Table III). Predictably, there was a considerable degree of inter-correlation between these satisfaction items. For example, satisfaction with the team-working agreement was correlated positively with both satisfaction with manning levelsin teams (0.27), and satisfaction with payment for teams (0.49), both significant at thep < 0.001 level.

FOUR TYPES OF TEAMWORKING NEGOTIATIONS

On the basis of the interviews with departmental managers and union negotiators, eachdepartment was classified into one of the four negotiation processes. The allocation of



Tab

leII

.M

anag

emen

tou

tcom

esof

team

wor

king

asso

ciat

edw

ithfo

urba

rgai

ning

stra

tegi

es

All

dept

s(n

=2

1)

Mea

n(s.

d.)

Typ

e1

Coo

pera

tive

dept

s

(n=

5)

Mea

n(s.

d.)

Typ

e2

Con

flict

dept

s(n

=8

)

Mea

n(s.

d.)

Typ

e3

Coo

pera

tion

–co

nflic

t

dept

s(n

=5

)

Mea

n(s.

d.)

Typ

e4

Con

flict

–co

oper

atio

n

dept

s(n

=3

)

Mea

n(s.

d.)

F

Perc

enta

gere

duct

ion

inm

anni

nga

19.6

(10.

19)

20.0

(8.0

)20

.5(1

1.47

)16

.8(9

.37)

21.0

(10.

54)

0.17

0

Perc

enta

gein

crea

sein

outp

utpe

rm

ana

15.3

(13.

96)

13.8

(12.

47)

20.6

(15.

44)

11.3

(11.

35)

16.0

(18.

39)

0.78

9

aT

aken

from

com

pany

sour

ces.



Tab

leII

I.E

mpl

oyee

outc

omes

ofte

amw

orki

ngas

soci

ated

with

four

barg

aini

ngst

rate

gies

All

dept

s(n

=1

03

2)

Mea

n(s.

d.)

Typ

e1

Coo

pera

tive

dept

s

(n=

20

2)

Mea

n(s.

d.)

Typ

e2

Con

flict

dept

s

(n=

46

5)

Mea

n(s.

d.)

Typ

e3

Coo

pera

tion

–co

nflic

t

dept

s(n

=2

11

)

Mea

n(s.

d.)

Typ

e4

Con

flict

–co

oper

atio

n

dept

s(n

=1

34

)

Mea

n(s.

d.)

F

Perc

enta

gew

ithin

crea

sed

earn

ings

a24

1630

2616

5.45

2***

Satis

fact

ion

with

man

ning

leve

lin

team

b3.

65(1

.04)

3.74

(0.9

2)3.

50(1

.09)

3.93

(0.9

6)3.

59(1

.02)

9.33

5***

Satis

fact

ion

with

paym

ent

for

team

wor

king

b3.

72(1

.06)

3.78

(0.9

9)3.

57(1

.13)

3.77

(1.0

6)4.

04(0

.86)

7.29

3***

Satis

fact

ion

with

Dep

artm

enta

lT

eam

wor

king

Agr

eem

entb

2.96

(1.1

6)3.

01(1

.07)

2.87

(1.2

1)2.

94(1

.16)

3.25

(1.0

8)9.

047*

**

***

p<

0.00

01.

aT

aken

from

com

pany

sour

ces.

bT

aken

from

the

2002

empl

oyee

attit

ude

surv

ey.S

atis

fact

ion

with

man

ning

leve

lin

team

,pay

men

tfor

team

wor

king

and

the

team

wor

king

agre

emen

tmea

sure

don

afiv

e-po

ints

cale

(1=

very

satis

fied,

5=

very

diss

atis

fied)

.



departments into one of the four categories was then checked both with plant-levelpersonnel managers and union officials familiar with the form that departmental nego-tiations had taken. A cooperative approach across both the KTA and DepartmentalTeamworking negotiations (Type 1) was identified in five departments, while a conflict-ual approach was evident at both stages in eight departments (Type 2). Five departmentsreported cooperation during the KTA process followed by conflict during the Depart-mental Teamworking negotiations (Type 3), while three departments reported conflictduring the KTA followed by cooperation in the Departmental Teamworking negotia-tions (Type 4).

Tables IV and V summarize the bargaining process of each of the four types ofnegotiations. Although it is necessary to collapse some inter-departmental variation topresent overall trends, clear differences were reported across a number of issues support-ing the classification of departments into the four types of negotiations.

The distribution of departments into the four types is not random and reflects varia-tions that exist in ongoing relationships between management and unions (Sayles, 1958).In general, cooperation was more widely reported at Scunthorpe. Previous studiesascribed the differences in industrial relations climate at the two plants to fewer alterna-tive job prospects at Scunthorpe where the site is the town’s major employer (Bacon andBlyton, 2006). This has encouraged a moderate industrial relations tradition comparedto Teesside. In addition, workers at Teesside have had a greater sense of job security asthe steel plant also has a coastal location with port facilities, in contrast to the inlandScunthorpe site. However, any general, site-wide predisposition to cooperation or con-flict was not reflected within every constituent department across the two stages of thenegotiation process.

A detailed analysis of the four types of negotiations explains variation in managementand employee outcomes from the introduction of teamworking.

Type 1: Cooperative Negotiations

In cooperative negotiations (Type 1), union branches accepted from the start of the KTAprocess that teamworking and demanning were, as one union respondent put it, ‘inevi-table given the hostile economic environment’ (Table IV, column 2). Union represen-tatives regarded the work study process of the KTA ‘as the only way to do it [achieve themanpower reductions] because you had to look at the workload to decide how manypeople were needed in teams’. These union branches encouraged employees to provide‘full and frank information’ on tasks and activities and gathered ‘a range of ideas’ onimproving the work process. This provided what one manager respondent described as‘ideas we wouldn’t have thought of’ in generating alternatives for the design of team-working. The union representatives in these departments felt that cooperation in theKTA ‘allowed employees to be involved’ and ‘alternatives to be aired’ in the belief thatthis would create well-designed teams that were both productive and, with employeesfully trained, more safe to work in. The information that employees in these cooperativedepartments provided for the KTA revealed both a comparatively low level of man-power utilization (69 per cent) and specific areas of excess manning (Table IV, column 2).



Tab

leIV

.C

hara

cter

istic

sof

the

KT

Apr

oces

s

Typ

e1

Coo

pera

tive

depa

rtm

ents

Typ

e2

Con

flict

depa

rtm

ents

Typ

e3

Coo

pera

tion

–co

nflic

t

depa

rtm

ents

Typ

e4

Con

flict

–co

oper

atio

n

depa

rtm

ents

Key

elem

ents

ofth

eK

TA

Uni

ons

desc

ribe

dth

e‘in

evita

bilit

y’of

man

pow

erre

duct

ions

.O

pen

and

accu

rate

info

rmat

ion

shar

ing.

Join

tse

arch

for

job

desi

gns

tore

duce

man

pow

eran

dim

plem

ent

team

wor

king

.

Info

rmat

ion

man

ipul

ated

and

conc

eale

d.A

rgum

ents

over

mea

sure

men

tof

jobs

.R

egar

ded

asde

man

ning

nego

tiatio

ns.

Uni

ons

coop

erat

ebu

tm

anag

ers

conc

eale

dis

sues

,e.g

.clo

sure

ofse

ctio

ns,i

ncre

ases

inw

orkl

oad.

Job

cutt

ing

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Following the KTA process, these departments subsequently reached the first set ofteamworking agreements after five months of negotiations on average, in what werejudged to be straightforward and comparatively friendly negotiations (Table V, column2). Managers felt in a strong bargaining position and used the relatively low manpowerutilization figures to justify manpower reductions. Generally adopting ‘final offer first’tactics, managers insisted on an approach summed up by one respondent as ‘look, theKTA says we can do this with this amount of manpower’. The union branches, whosenominees had jointly produced these figures described feeling ‘totally and absolutely overa barrel’. Managers in these cooperative departments reported that they ‘didn’t have tonegotiate on pay’; they ‘laid on the table’ a pay offer calculated using the weightedaverage system, to which unions reported that ‘we had to concede . . . on pay’. However,managers did maintain a cooperative approach in a number of important respects, mostnotably working with unions to fulfil manning reduction numbers from the grouprequesting voluntary redundancy, even where the areas of identified reduction and thosewishing to leave did not match closely.

As a result of these negotiations (Table II, column 3) management achieved its targetof a 20 per cent reduction in manning through teamworking, while labour productivity(output per man) increased by 14 per cent (output declined by 6 per cent due to changesin demand). However, ANOVA tests reported in Table II show that these results werenot specifically associated with cooperation, but rather that broadly similar managementoutcomes from teamworking were also reported in departments where other patterns ofnegotiation had prevailed. Put differently, across both cooperative and conflictual nego-tiation patterns, management achieved sufficient of one of its key objectives – theintroduction of teamworking with substantial manning reductions. As noted below,however, on its other main objective – not paying for teamworking by a general wageincrease – outcomes did vary to a greater extent.

Turning to employee outcomes (Table III), fewer employees received a pay increasefollowing cooperative negotiations (Type 1) compared with employees in departmentswhere managers and unions reported conflictual negotiations (Type 2). Marginally lessthan one in six employees received a pay increase in departments where unions andmanagers cooperated to reach teamworking agreements, compared to over one-quarterof employees following conflictual negotiations (t = 3.82, p < 0.001). Compared to con-flict departments (Type 2), employees in cooperative departments also reported lowersatisfaction with manning levels in teams (t = 2.79, p < 0.01) and payment for teamwork-ing (t = 2.26, p < 0.05).

Type 2: Conflict Negotiations

In departments where conflict characterized the entire process of negotiations (Type 2),managers sought to manipulate information in the KTA process to demonstrate thepotential for demanning, while unions did likewise in an attempt to protect theirmembers (Table IV, column 3). Managers, for example, sought to exclude walking timebetween jobs because they ‘did not perceive it to be a job’; they also counted workers asfully utilized only when the job was ‘running’, excluded monitoring jobs, classified



non-routine tasks as non-essential, and subtracted natural breaks and rest periods togenerate lower utilization rates. Both unions and their employee informants in thesedepartments viewed the KTA as ‘just about manning and whether and where manage-ment could reduce it’. As a result, task levels were exaggerated, by recording ‘five-minutejobs . . . as a 20-minute job’ and by ‘throwing in work they weren’t actually doing’. Inthese conflict departments, unions won most of these arguments in the KTA discussions;‘all the little 5 or 2 minute jobs were added up in the end’ and as a result, the KTA teamsrecorded a much higher (81 per cent) manpower utilization level than in the cooperativedepartments (Table IV). Although managers did not believe the KTA findings it did startto clarify the extent of demanning unions would be prepared to negotiate.

Following the KTA reports, negotiations in conflict departments lasted 13 months onaverage as militant union branches were among the last to sign agreements (Table V,column 3). A high degree of distrust on both sides contributed towards hostile andunfriendly meetings. The outcomes of the KTA had left managers in a relatively weakbargaining position and unions in a stronger position. Managers sought to force manningreductions, partly by insisting that ‘it doesn’t really matter about the KTA’, and ‘thosefigures are irrelevant’. The management respondents in these departments (like theirunion counterparts) clearly felt that the manpower utilization data in the KTA reportswere not based on accurate information. Managers were forced to offer concessions, oras one management respondent put it: ‘we did have to compromise our view’. Unionbranches made it clear that operating at manning levels below those indicated by themanpower utilization rate in the KTA required concessions on pay. For example,whereas unions in Type 1 (cooperative) departments accepted that the weighted averagesystem ‘automatically’ set pay levels for teamworking, in Type 2 (conflict) departments,several features were renegotiated. For example, certain low paid jobs were excludedfrom the formula whilst various high paid jobs were included to maximize pay in thedepartmental ‘pot’ from which the average was calculated. In addition, ballots in half ofthe relevant departmental union branches rejected the initial pay agreements, forcingmanagers to make further concessions to reach a teamworking agreement. At the sametime, the conflict behaviour of militant union branches in negotiations did not prevent a21 per cent reduction in manning and the changes negotiated by management resultedin an identical 21 per cent increase in labour productivity (Table II).

Thus, militant union branches used conflict tactics in the KTA that resulted in highermanpower utilization levels and established the basis for trading increased pay fordemanning and teamworking. As reported above, this trade-off led to more employeesreceiving a pay increase, and greater employee satisfaction with pay and manning forteamworking (Table III). This contrasts with more cooperative union branches wheremanagers were able to extract job concessions without an equivalent pay increase. At thesame time, management in conflict departments, like their counterparts in cooperativedepartments, were able to secure desired levels of manning reduction and productivityimprovement. Overall, conflict in these eight departments during the negotiations didnot appear to reduce the sum of available gains from teamworking and proved functionalin a number of respects (Coser, 1956). Confrontation focused the negotiations towardsthe main priorities of job reductions for management and a pay increase for a maximumnumber of employees.



Type 3: Cooperation, Conflict Negotiations

Five departments exhibited ‘mixed situation’ negotiations of cooperation in the initial(KTA) stage giving way to conflict in the Departmental Teamworking negotiation stage.In several cases, this was argued by union respondents to have arisen by union branchescooperating openly in the KTA, but then finding that management had withheld vitalinformation, for example on the future closure of sections of the department or increasesin workloads (Table IV, column 4).

In one department for example, the union branch claimed to have ‘worked from theheart’ to cooperate in the KTA because the imminent closure of a section of thedepartment required management goodwill to relocate employees threatened withredundancy. The union nominees on the KTA team put forward suggestions on sig-nificant changes in working practices, supported increased workloads and demanning,and had ‘leant on’ colleagues to take early retirement. However, when presenting theKTA results management announced the closure of a further section in the depart-ment and the transfer of some of this work to other teams without an increase in themanpower identified in the KTA. The ‘disgusted’ union branch (who felt that thisinformation was purposely withheld from them) then sought to bargain hard overan agreement. However, by this stage managers had committed the union to agree itwas possible to work areas of the department at significantly reduced manninglevels.

Notwithstanding cooperation (by the union more than by management) in the KTA,conflict then ensued in the Teamworking Agreement stage in these departments whenmanagement selectively used information contained in the KTA reports, which theunion felt was gathered deceitfully and was inaccurate (Table V, column 4). Unfriendlynegotiations lasted 11 months on average (more than double the average length ofnegotiations where cooperation was maintained at both stages).

Teamworking resulted in 17 per cent demanning and an 11 per cent improvementin labour productivity in these mixed bargaining departments (Table II). Table IIIreports that compared to departments where conflict characterized both stages (Type2), employees in these Type 3 departments were less satisfied with both manning(t = 4.897, p < 0.001) and pay for teamworking (t = 2.105, p < 0.05). Initially cooper-ating in joint problem solving in the KTA appears to have reduced the effectiveness ofsubsequent union conflict behaviours in these Type 3 departments when negotiatingthe Teamworking Agreement – an outcome that McKersie and Walton (1992, p. 280)predicted. Cooperation in joint problem solving was associated, as critics of union-management partnership have suggested, with management gaining an advantage bysecuring information from employees whilst withholding vital information themselves(Kelly, 1998). Although unions sought to bargain hard over the subsequent division ofgains, these mixed situations, where joint problem solving was followed by conflict overdividing the gains, proved difficult in reality for the union negotiators. Table IV showsthat these Type 3 departments calculated the highest average manpower utilizationfigure of the four types in the KTA, but still found it more difficult (compared with theType 2 conflict departments) to bargain higher pay for teamworking in return fordemanning. However, conflict in the negotiations in Type 3 departments did ensure



that more employees received increased pay in cooperation–conflict departments com-pared to cooperation departments (t = 1.9, p = 0.059).

Type 4: Conflict, Cooperation Negotiations

In the three (Type 4) departments where conflict in the KTA gave way to cooperationto reach a departmental agreement, unions (and management) recognized the job-cutting agenda and knew the KTA methodology would reveal low apparent man-power utilization figures. In these departments, managers and unions argued over howto measure jobs and eventually agreed that most jobs involved one person monitoringa work station who was fully utilized and teamworking would have little impact on thelabour process. Moderate job reductions with increases in salary for a smaller thanaverage proportion of employees were subsequently agreed in cooperative negotiations(Tables II and III) after 12 months of negotiations on average. Reductions occurred inmanning (21 per cent) while labour productivity increased by 16 per cent (outputdeclined by almost 6 per cent). Compared with consistently conflict departments (Type2), employees in Type 4 departments reported lower satisfaction with pay forteams (t = 4.49, p < 0.001) and the teamworking agreement (t = 3.31, p < 0.01),consistent with the lower percentage (t = 3.76, p < 0.001) receiving a pay rise (seeTable III).

Employees in Type 1 (cooperative) departments were also more satisfied than theircounterparts in departments where conflict prefaced a more cooperative approach, withboth pay for teamworking (t = 2.54, p < 0.05) and the teamworking agreement (t = 1.96,p < 0.05). Overall, conflict in the KTA restricted joint problem solving in the Type 4departments but it did help to establish bargaining preferences and laid the basis forcooperative negotiations over the departmental teamworking agreement. FollowingWalton and McKersie (1966, p. 377), this conflict then cooperation approach facilitatedan explicit trade-off between forceful managers and militant union branches to sacrificea wider pay increase in return for minimizing demanning and job change. In these threedepartments, initial conflict brought both sides towards a shared view that teamworkingshould not involve fundamental work reorganization.

Comparing the two mixed bargaining strategies suggests that a trade off occurredbetween pay and jobs. Where cooperation preceded conflict (Type 3), employeesreported greater satisfaction with pay for teams (t = 2.53, p < 0.05), a larger percentageof employees received a pay increase (t = 2.14, p < 0.05) and were more satisfied with theteamworking agreement overall (t = 2.53, p < 0.05) compared with their counterparts inType 4 departments. Conflict tactics to reach the teamworking agreement appear tohave helped to secure a pay rise for more employees in Type 3 compared to Type 4departments. However, employees in Type 4 (conflict then cooperation) departmentsreported greater satisfaction with manning levels in teams compared to employees inType 3 departments (t = 3.16, p < 0.01). Having deterred excessive demanning recom-mendations by using conflict tactics in the KTA, the union in these departmentsaccepted less of a pay improvement, reflecting the fact that employees’ jobs did notchange radically.



Thus, this form of mixed bargaining over teamworking did not lead to fundamentalchange and may have restricted gains for both sides; however, it did suit departmentswhere teamworking involved limited change to the labour process.

CONCLUSION

A key question in contemporary employment relations is the extent to which cooperationor conflict in negotiations acts to produce new working practices that improve both firmperformance and the terms and conditions for employees. Advocates of mutual gains and‘partnership’ encourage unions to cooperate with managers in joint problem solving tointroduce new working practices. However, the mechanisms by which cooperation innegotiations deliver positive outcomes for all parties, or a greater share of positiveoutcomes for only management or unions, are rarely studied.

This paper has compared four types of negotiations to explain the outcomes ofteamworking for management and employees. The findings show that, even when theeconomic position of a firm forces unions to accept change, bargaining strategies play animportant part in influencing the extent to which employees benefit from that change.The outcomes depended on the relative bargaining approaches and positions of thesetwo parties in such a way that, for example, one party could find itself worse off despitejointly-achieved improvements in productivity. In the difficult economic circumstancesfacing these plants, we found no evidence that the teamworking programme in itselfoffered automatic ‘win–win’ solutions for management and labour, or that cooperationdelivered greater mutual gains, as advocates of partnership suggest. In departmentswhere managers and unions cooperated throughout the process, compared to wherethey were in conflict, employees were more dissatisfied with aspects of teamworking, andproductivity gain was no higher. Unions had to adopt conflict strategies in bargaining toachieve mutual gains.

Notwithstanding the extent to which the social partners in the UK and elsewhere haveembraced the agenda of partnership and mutual gains, the findings of the present studydemonstrate the rationality of conflict, if not militancy, as a strategy of worker represen-tation. Our evidence is consistent with the argument that union militancy is required toforce managers to share the gains from new working practices with employees (Kelly,1996). The ability of workers, in this case and many others, to compel firms to share thegains from new working practices by cooperating with managers, is undermined by therequirement of firms to restructure and reduce costs (Handel and Levine, 2004, p. 7). Insuch circumstances it is difficult for unions to ensure that employees are rewarded forintroducing productivity-enhancing working practices. In our case sites, consistentlyhard bargaining delivered greater gains for employees and was required to ensure thatmanagers made concessions. In line with the mixed motive assumption that the employ-ment relationship simultaneously contains both shared and competing interests betweenemployer and employee, managers did not resist the temptation to take advantage ofunion cooperation and depart from a mutual approach in order to force agreements thatminimized the extent to which employees gained from workplace change. Integrativebargaining elicited greater effort from employees through new working practices but did



not ensure that they shared in productivity gains through higher wages (Handel andLevine, 2004).

The frequently-neglected link between industrial relations negotiations and newworking practices is usefully conceptualized through a theory-informed analysis of thenegotiation process utilizing Walton and McKersie’s Behavioral Theory framework. Theresearch demonstrates the continuing relevance of Behavioral Theory. Given the centralityof negotiations to the conduct of collective employment relations, the direct study ofnegotiation behaviour remains limited. No doubt this is partly due to the sensitive andconfidential nature of ongoing negotiations, their sometimes protracted nature, and themix of formal and informal negotiation episodes, all contributing to the difficulty ofinvestigating patterns of negotiation in ‘real time’. What the present study has shown isthe potential for examining the conduct of negotiations by interviewing all parties to thenegotiation following the completion of the negotiation activity.

What the study also demonstrates is the potential value of the Walton and McKersieBehavioral Theory framework for highlighting different patterns of negotiation. The frame-work proved amenable to operationalization, and by examining the negotiation processthrough interviews, we were able to gain a richer account of the bargaining activity thanhas been achieved by questionnaire methods (for example, Peterson and Tracey, 1977).Further, a detailed knowledge of the institutional context of the negotiations allowed usto demonstrate that the bargaining processes needed to be understood within theirorganizational context – an understanding that bargaining theorists in the past have beencriticized for not taking sufficient account of (Martin, 1992, p. 23).

At the same time, it should be recognized that the organizational context itselfrepresents a limitation of the study. With its well-developed system of union represen-tation and very high levels of trade union membership, coupled with a long industrialrelations tradition, some of it characterized by periods of intense conflict as well aswidespread cooperation, the steel industry is not typical of a growing number of sectorsthat are not only much more recent in origin, but are contexts where trade unions are lessprominent (or not present at all) and where industrial relations traditions are far lessestablished. One effect of this may be that similar studies in other negotiation contexts,particularly where trade unions are less securely established, would demonstrate a lessfunctional outcome for employees from conflictual behaviours, than was the case here.

The research also indicates possible limitations of using the Walton and McKersieframework, not least that in many other contexts there would be a much less clear-cuttwo stage process than was the case here. However, the framework was helpful inexplaining that cooperation delivered fewer gains than conflict for employees because ofthe tension between problem-solving processes (in this case the integrative bargaining inthe KTA) and the division of shares (distributive bargaining in the teamworking nego-tiations). Cooperation in the first stage of the negotiation process allowed managers toexploit employee participation and use productivity-enhancing suggestions to weakenthe bargaining power of unions during subsequent negotiations, especially to reducemanning levels for teams. The theory also provided an explanation as to why the twomixed bargaining strategies were less effective than a clear strategy of conflict. As Waltonand McKersie correctly predicted, a failure to develop cooperation and joint problemsolving restricted the search for alternative job designs and employees sacrificed



significant pay increases as teamworking created fewer gains to divide in Type 4 depart-ments. More generally, union cooperation failed to deliver gains for employees becauseit overlooks the potential conflict of interest over the division of the productivity increasesfrom new working practices. This helps to explain why ‘partnership’ with unions isattractive to managers and why unions sometimes resist such invitations in the interestsof their members.

NOTES

*The financial support of the ESRC for this research is gratefully acknowledged. Thanks are also due to theuseful comments provided by the Editors and the anonymous referees which helped to clarify the paper.[1] Little testing has occurred of its formal propositions (Burchill, 1999; Kelly, 1992; exceptions include

Hyman, 1972; Peterson and Tracey, 1976, 1977) and it is preferable to begin by testing the usefulnessof existing models of negotiation before creating new models (Lewicki et al., 1992). Burchill (1999, p.159) suggests the best ‘test’ of Walton and McKersie’s Behavioral Theory is ‘the organizing value of theiranalytical framework’ and in this paper we demonstrate how it can be used to assess in rather greaterdetail the implications of cooperation and conflict in industrial relations.

[2] In addition to these two principal bargaining processes, Walton and McKersie identified two furtherprocesses: attitude structuring, concerning the efforts by each side to influence the thinking of the other;and intraorganizational bargaining, relating to the need for each side to agree its priorities and tactics.The present study however focuses on the two main union–management bargaining processes identifiedof integrative and distributive bargaining.

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