The Sphere Of Total Power

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In An Introduction to U.S. Collective Bargaining and Industrial Relations by Katz, Kochan and Colvin (K, K & C), bargaining power is divided into three spheres, total, relative and political. K, K, & C write that “total power concerns the total profits that are available to labor and management. Relative power has to do with… the ability of either side to gain a larger share of a given amount of profit. Political power concerns the ability of labor or management to influence governmental actions. (Katz Chapter 4) The sphere of total power is largely determined by two channels: the firm’s external competition and the firm environment’s overall macroeconomic state. In the case, the overall macroeconomic state of First National’s environment…show more content…
In the case of labor, their ability to do so is largely determined by the elasticity of demand for labor and how likely they are to be replaced by other workers and/or machinery. Conversely, management must possess the resources to withstand a strike by their workers in order to maintain a strong level of relative power. In our case, the economic channel of influence on relative power is strongly represented. It is mentioned that jobs at First National were once recognized as being some of the most secure in the Lake City area, but “the advantage of working at the bank in this respect compared to working at the auto plant had largely disappeared 10 years ago when the union first negotiated supplementary unemployment benefits, and… by negotiating a Guaranteed Annual Income which replaced the SUB.” The two main issues addressed during meetings held by union and management representatives with FNB employees were “the pension and profit-sharing plans and the lack of an employer-paid hospital-medical plan.” The profit-sharing plan is generally regarded as “highly valued” and contributes to management’s relative power. Conversely, the lack of an employer-paid medical plan should serve as a source of relative power for the union, as “The First National was the only bank in the area which did not have a hospital-medical
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