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Abstract
This paper addresses the importance of Advanced Business Policy in organization development through establishment of sound arbitration, negotiation and mediation practice. It introduces what are the relevant advanced business policies such as
Marketing/sales policies,
Personnel policies,
Production and Purchasing policies and
Financial policies.
It then focuses on leadership which is very vital in bringing about Organization Development by setting up sound Business Policies that assist the Organization to grow up profitably and create a very good working environment within the Organization.
Finally this paper dwells on Personnel policies specifically policies relating to Employee services and Industrial relation that are relevant in bringing harmony in the Organization, it goes further to discuss policies for Alternative Dispute Resolution (ADR) namely Arbitration, Mediation and Negotiation. The paper finally gives the findings and conclusion regarding how these policies can develop an organization and therefore create a suitable working condition.
CHAPTER ONEINTRODUCTION
1.1. What is business Policy?
Business Policies contain two terms - Business and Policy. Business itself has two meanings. One in macro sense and another in micro sense. Macro business means business relating to the economy as a whole. Business means economic activity relating to production, distribution etc. Business Policy may be of two types; one is general policy, which is adopted by all. Beyond this there are specific advanced policy, which is applicable in any business unit according to its suitability.
1.. Types of business policies
Marketing/Sales Policies
Marketing Policies enables the organization to understand and solves the following
§ Understanding the Customer and Creating Goods and Services that Satisfy
§ Developing Quality Products at the Right Price
§ Using Integrated Marketing Communications to Promote Products
§ Using the Internet for Business Success
§ Buying Trouble Ethics Issues in Purchasing
§ Marketplace Ethics Issues in Sales and Marketing
a. Pricing policies
Pricing is the most important aspect of managerial decision-making. Hence having clear pricing policies is important.
b. Product policies
These are policies that answer the question of whether to Specialize or diversify on a product.
c. Customer care policies
These policies answers the questions of who are the consumer, what is the most efficient and strategic size of the customers to be served by the company, what are the channel of distribution to be adopted and what location should be served by the company for the sale of its product.
d. Sales promotion policies
These are policies that address sales appeal, how advertising is to be utilized for sales promotion of the product and what role personal solicitation would play.
Production and Purchasing Policies
These are policies that addresses the following
a. What is the extent to which vertical integration is strategic?
b. What are the general processes to be used in production
c. Setting total capacity and facility balance
d. Providing basic guides for maintenance and replacement
e. Services and supplies-questions revolving make-or-buy decisions
f. From which vendor purchases should be made
g. Correlating purchasing production and sales
h. Can a limited number of vendors supply the variety of product required
Personnel Policies
These are personnel policies that outline the procedures for selection and training of personnel, understanding Labor-Management Relations, labor Relations in a Global Context and Mediation of a Commercial Dispute.
These policies can be divided into three categories
a. Selection and Training
These are policies that govern selection and training of personnel in organization. The process of selection goes on almost continuously with hiring of new employees, selection of employees for promotion and even problem of discharging employees.
b. Employee services and Industrial relation
This relates with policies that create a suitable working conditions for employee such as providing social and recreational facilities to employees, provide protection to employee against financial risks. Further more these policies outline the relation of the organization vis a vis the Trade union in terms of its support, scope of bargaining and recourse to outside agencies in relation to mediation, negotiation and arbitration.
c. Compensation and Arrangements for Work
These are policies that outline the amount of compensation one is entitle to and the method of payment of these compensations. It includes policies outlining hours of work, Vacations and working conditions.
Financial Policies
a. Uses of Capital
Clear policies would stipulate the uses of Capital
b. Sources of Capital
Policies will spell out what are the sources of Capital whether from owners, Long-term creditors or short-term creditors.
c. Protection of Capital and Distribution of Earnings.
These are policies that protect the business against risks such as reduction of hazards, insurance, hedging and calculation of profits. These policies include how to plow back profits, distributions of dividends, retaining of earning.
CHAPTER TWO LEADERSHIP AND ORGANIZATION DEVELOPMENT
.1 Leadership
Leadership is about influencing others to follow. It is first and foremost about providing service.
Good leaders are good learners who learn by
· Seeing things differently
· Then thinking about things differently
· Then doing things differently
· And finally reflecting on their actions
According to Bateman Snell (B.Snell 1) a leader is one who influences others to attain goals. The greater the number of followers, the greater the influence. A good leader will make sure that the organization has good policies and whatever decisions he makes will be in accordance to the organizations policies. At is expected that a good leader will follow the set up policies in solving disputes in the organization.
. Organizational Development
Organizational development is concerned with the planning and implementation of programmes designed to enhance effectiveness with which an organization functions and responds to change. Overall, the aim is to adopt a planned and coherent approach to improving organizational effectiveness. An effective organization can be defined broadly as one that achieves its purpose by meeting the wants and needs of its stakeholders, matching its resources to opportunities, adapting flexibly to environmental changers and creating a culture that promotes commitment, creativity, shared values and mutual trust.
Organization Development (OD) is therefore a planned systematic process in which applied behavioral science principles and practices are introduced into an ongoing organization towards the goals of effecting organizational improvement, greater organizational competence, and greater organizational effectiveness. The focus is on organizations and their improvement or, to put it in another way, total systems change. The orientation is on action - achieving desired results as a result of planned activities. Tools that facilitate the Organization Development are advanced business policies such as policies relating to Industrial Relation/Employee relation. These are policies that assist the organization in prevention and solving of Industrial disputes and hence create favorable working condition for the Organization Development and Prosperity.
CHAPTER THREE INDUSTRIAL RELATION/ EMPLOYEE RELATION
According to Michael Armstrong (M.Armstrong 000) four approaches to employee relation’s policies have been identified by Industrial Relations Services (14)
Adversarial the organization decides what it wants to do, and employees are expected to fit in. Employees only exercise power by refusing to cooperate.
Traditional a good day-to-day working relationship but management proposes and the workforce reacts through its elected representatives.
Partnership the organization involves employees in the drawing up and execution of organization policies, but retains the right to manage.
Power sharing employees are involved in both day-to-day and strategic decision making.
Adversarial approaches are much less common than in the 160’s and 170’s. The traditional approach is still the most typical but more interest is being express in partnership, power sharing is rare.
.1 Nature and purpose of employee relation’s policies
Against the background of a preference for one of the four approaches listed above, employee relations policies express the philosophy of the organization on what sort of relationships between management and employees and their unions are wanted, and how they should be handled. A partnership policy will aim to develop and maintain a positive, productive, cooperative and trusting climate of employee relations.
When they are articulated, policies provide guidelines for action on employee relation’s issues and can help to ensure that these issues are dealt with consistently. They provide the basis for defining management’s intentions (its employee relations strategy) on key matters such as union recognition and collective bargaining.
The areas covered by employees’ relations’ policies are
-Trade union recognition- whether trade unions should be recognized or de-recognized, which union or unions the organization would prefer to deal with,
And whether or not it is desirable to recognize only one union for collective bargaining and /or employee representational purposes;
1. Collective bargaining
The extent to which it should be centralized or decentralized and the scope of areas to covered by collective bargaining;
. Employee relations procedures
The nature and scope of procedures for redundancy, grievance handling and discipline;
. Participation and involvement
The extent to which the organization is prepared to give employees a voice on matters that concern them;
4. Partnership
The extent to which a partnership approach is thought to be desirable;
5. The employment relationship
The extent to which terms and conditions of employment should be governed by collective agreements or based on individual contracts of employment (i.e. collectivism versus individualism);
6. Harmonization of terms and conditions of employment for staff and manual workers; Harmonization is the process of introducing the same conditions of employment for all employees. It is distinguished by Roberts (10) from single status and staff status as follows
7. Single status is the removal of differences in basic conditions of employment to give all employees equal status. Some organizations take this further by putting all employees into the same pay and grading structure.
8. Staff status is a process whereby manual and craft employees gradually receive staff terms and conditions of employment, usually upon reaching some qualifying standard, for example length of services
. Harmonization means the reduction of differences in the pay structure and other employment conditions between categories of employee, usually manual and staff employees. The essence of harmonization’s the adoption of a common approach and criteria to pay and conditions for all employees. It differs from staff status in that, in the process of harmonization; some staff employees may have to accept some of the conditions of employment of manual workers.
10. Working arrangements- the degree to which management has the prerogative to determine working arrangements without reference to trade unions or employees (this includes job-based or functional flexibility)
When formulating policies in these areas, organization may be consciously or unconsciously deciding on the extent to which they want to adopt the HRM approach to employee relations
. Employee relations’ processes and outcomes
Employee relation’s processes according to Michael Armstrong (M. Armstrong 000) consist of the approaches and methods adopted by employers to deal with employees either collectively through their trade unions or individually. They will be based on the organization’s articulated or implied employee relations policies and strategies. The way in which they are developing and how they function will be influenced by, and will influence, the employee relations’ climate, the concept of which is examined.
Industrial relations processes, that is those aspects of employee relations that are concerned with the dealings between employers and trade unions, consist of;
1. Approaches to recognizing or de-recognizing trade unions;
. Formal methods of collective bargaining;
. Partnership as an approach to employee relations;
4. The informal day to day contacts on employment issues that take place in the workplace between management and trade union representatives or officials;
5. Features of the industrial relations scene such as union membership in the workplace, the check off and strikes.
The outcomes of these processes are various forms of procedural and substantive agreements and employment procedures, including harmonization of terms and conditions, and the approaches used by organizations to manage with and without trade unions.
. The role of Trade Unions
Trade unions have been view as
1. Collective employee organizations established to protect employees from arbitrary actions by employers in matters of pay and working conditions.
. As promoters of the legitimate interests of people at work. In practice, they have also played an important role in the political life of many countries, and, to a lesser extent, in its social affairs. As will all organization providing a service to the community, the ability of trade unions to exercise power and influence over users of their service depends on the relative demand for tat service. Thus, when demand for skilled labor in economy is high, trade unions are in a relatively powerful position to negotiate on behalf of that labor. They are also able in such circumstances to employ a wide range of sanctions against employers. When demand for labor is slack and unemployment is high, trade union power to influence events becomes more limited.
.4 Disputes and Sanctions
No relationship is without their difficulties, and Employee Relations is no exception. However sound the underlying relationship between a management team and their workforce may be, there is always scope for mistakes and misunderstanding on both sides. It is prudent, therefore, to devise an agreed procedure or policy to be followed by the parties if a dispute arises.
The disagreement between an employer and employee can be devided into two categories
Collective disputes - involving issues taken up on behalf of groups of employees by their representatives. (Simply referred as disputes)
Individual disputes - involving individual employees only (referred as grievances)
Dispute procedure as practiced in Tanzania is a follows
First Stage Union representative raise issue with department/section manager
Second Stage Issue is discussed by Company Personnel Manager/and the local trade union representing worker of such sector e.g. Trade union representing Hotel and tourism sector
Third Stage Issue is discussed by the Company management and the National Trade union officers or the National Labor Tribunal
Final stage If internal stages have been exhausted, either side may seek conciliation via The National Labor Tribunal or both sides may agree to seek some form of arbitration, mediation or negotiation.
CHAPTER FOUR ALTERNATIVE DISPUTE RESOLUTION (ADR) METHODS
There are alternative dispute resolution methods that are put in place to enable Employer and employee relation stays in harmony all the time in order to increase productivity as well as give employees satisfaction. In order to develop an organization advanced business policies should be put in places as regard dispute resolutions these policies should be written and clear so that employees understand the procedure to present their grievances and how they can be solved. There are some disputes which cannot be solved within the organization procedures hence the need for an alternative dispute resolution procedures like Arbitration, Mediation and Negotiation.
4.1 Arbitration
Arbitration is a dispute resolution process where the opposing parties select or appoint an individual called an arbitrator. Upon appointment, the Arbitrator will arrange the process to hear and consider the evidence, review arguments and afterwards will publish an award in which the items of dispute are decided. In some cases the Arbitrator can conduct the arbitration on documents evidence only. When published the Arbitrator’s decisions are final and binding on the parties. It is rare for an arbitration to be appealed to the courts. Arbitration may comprise a sole Arbitrator, or may be a panel of Arbitrators. Costs of the arbitration are disposed of in the Arbitrator’s award, unless the parties have some agreement to the contrary.
4. Mediation
Whereby under Arbitration it is the Arbitrator who decides the fate of the dispute under Mediation it is the parties concern that decides. Mediation is a dispute resolution process in which the parties freely choose to participate and any agreement reached to settle disputes is done solely by the parties, without interference. The parties select the Mediator and once selected, the Mediator will arrange the mediation process. The Mediator makes no decisions, instead he/she as a facilitator only assist the parties to understand the dispute, provide structured discussion and help the parties reach a dispute settlement agreement.
If the parties can’t reach a settlement agreement, they are free to pursue other options. The parties generally decide in advance how they will contribute to the cost of the mediation. Mediation is very important form of Alternative Dispute Resolution (ADR), particularly if the parties wish to preserve their relationship.
Successful mediation as an alternative method of dispute resolution has the following elements
1. An Impartial third party facilitator.
The third party neutral, the mediator, is the person who makes the entire process work. As long as there is a neutral facilitator. The parties can trusst that they have some safety and are not being abused by an interested party. All of these programs work because the mediator is in them is known to either be neutral or supportive of the parties and not an involved party.
Thus the first thing that makes a process one of mediation (and not something else) is a third party who facilitates - aids the parties in a neutral fashion to find the parties own best interest.
. A third party who protects the integrity of the proceedings
Usually this means that the facilitator or mediator protect the confidentiality of the proceedings. Thus, not only does the mediator not take sides against any party to the mediation, the mediator does not usurp the parties’ rights to disclose, or not disclose information. The mediator preserves the integrity of the proceedings in all ways.
Generally this means things - such as there are no records kept by the mediator. When there are no record, it becomes much harder to breach confidentiality or to try to use the mediator to prove or force a particular point not finalized in the parties agreement. In fact, some ADR groups and centers require the parties to take all notes on provided paper and then take and destroy even the notes after each session.
Confidentiality also means that the facilitator is not subject to subpoena and thus cannot be made a witness. Without notes or the facilitator, the only method to breach confidentiality is the testimony of an interested party who is usually bound by law (and thus subject to being quashed) not to disclose more than is agreed.
. Good faith from the participants
Good faith includes not only entering into the ADR method with the intent to work towards a resolution, it also includes not using the process for outside purposes. Thus there are rules that provide for no service of process during ADR, and for similar bars to the abuse of the mediation process by attorney and non-attorneys alike.
What makes all of the proceedings mediation is that the parties are in the process to seek solutions rather than for an ulterior purpose (e.g. to abuse the other party by use of the process). Both the behavior and integrity of the neutral are important in creating, and preserving good faith.
4. The presence of the parties
Those with full authority to act for the parties must attend so that the parties can work toward resolution. If the decision makers do not attend the process becomes something other than mediation.
All parties necessary to resolve the problems should interact with the mediator. In a family dispute, if a party always checks with his parents before acting, the parents should attend (and may need a referral to additional counseling). In a labor matter, if a company chief executive checks with the majority shareholder, the majority shareholder should attend.
It is the parties who are being resolved as much as it is the problem that is being settled.
5. An appropriate site or venue
Generally this means a neutral site that is conducive to the process. It must mean a place where neutrality, confidentiality and inclusiveness may be obtained. The place is some times as important as the persons and is a part of the process often overlooked.
4. Negotiation
Negotiation is a less structured form of Alternative Dispute Resolution (ADR). The facilitator’s role is to keep the parties talking and bargaining. The parties may be individual or teams. The facilitator keeps record of party positions, and points of agreement they reach as discussions proceed.
The process can be lengthy, as in labor or sports negotiation. The facilitator will prepare a memorandum of agreement by inserting a condition that will be binding. The parties generally share equally in cost. On any matters unresolved, the parties are free to pursue other options.
CHAPTER FIVE FINDINGS AND CONCLUSION
Advanced business policies are very important in setting a clear path for the development of organization, this is be because if the policies are clear the employer, employee and other interested parties to the business will know in advance what will happen if a certain situation arises. It is important that policies are set and made transparent so that people will be able to predict the outcome of a certain situation.
In this paper policies regarding industrial relation/ employee relation have been discussed in particular policies regarding arbitration, mediation and negotiation. These policies or procedures are very important in bringing about harmony and solving industrial disputes so as to bring about a good working environment. Employers and Employees have to sit down together and come up with policies that will guide them as to when they have to go for an alternative dispute resolution method. However internal dispute resolution through usual work procedure and trade union are more advisable. Only when these methods have been found unworkable then alternative dispute resolution methods should be applied.
Good leadership is the key to Organization development. A good leader will involve the workers in formulating the organization policy that will be a guide to all the operation of the organization. In organization development it is important that the leader make sure that conflict or disputes are resolved at a very early stage of their devolvement. When disputes are left to grow they divide the organization and therefore work efficiency is reduced and if left to grow out of proportion they may lead to the collapse of the organization. Disputes are the cause for Strikes, Sit-ins and demonstrations. When workers strike many activities of the organization are at a stand still. If it is a production organization production of product is stopped hence causing a lot of inconvenience to the consumers. This can cause consumers to shift to another product and cause the organization that has been in strike once the strike has been settled down to drop in business sales, which may lead to insolvency.
BIBLIOGRAPHY
1. Bateman Snell (1) Management Building Competitive Advantage United States Irwin McGraw-Hill
. Curtis E. Tate, Marilyn L. Taylor (18) Business Policy Administrative, Strategic, and Constituency Issues Dallas Texas Business Publication, Inc
. Devendra Thekur (18) Business Policy Principles and Practice India
4. G.A.Cole (00) Personnel and Human Resource Management London Book Power/ELST
5. Internet resource Various papers and documents
6. Michael Armstrong (000) Human Resource Management Practice Trowbridge, Wiltshire Redwood Books
7. Mike Leat (001) Exploring Employee Relations Linacre House, Jordan Hill, Oxford Butter worth Heinemann
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