ment we live in that is made up of goals, norms, values, attitudes, expectations and the
situation as we interact with other people. Therefore, according to the theory, action we
observe in employment relationships has a subjective meaning. For example, the subor-
dinate may comply with instructions given by a superior not necessarily because he/she
believes or accepts to be a good thing to comply with but because of other motives in-
cluding avoiding conflict with their boss.
Systems theory (Dunlop)
The use of the systems theory in employment relationships has its genesis in physical
sciences where objects are defined in terms of their constituent parts. Systems theory as
a concept refers to a unified set of aggregates of interacting components or parts that are
interrelated and interdependent to the extent that a change in one part of the system af-
fects the other parts of the whole to which they belong. The components of the system
in industrial relations are managers and their representatives, managerial employees and
their representatives, and third party agencies such as the courts, police and the prisons.
The environment shapes the values and interactions of an industrial relationship system.
The characteristics of the environment include technology, which affects the skills and
size of the workforce, markets and resource constraints, which impinge on the actors
and the laws and the distribution of power in the wider community, which includes the
extent to which the community can question the government or take industrial action
such as strikes. It also includes the ideology which is a body of common ideas that de-
fine the role and place of each actor and that defines the ideas that each actor holds to-
wards the place and function of others in the system. Each actor in the employment rela-
tionships system may have their own ideologies but they must be compatible with each
other in order to coexist as a system.
Marxist theory
This is a Marxist-Leninist outlook towards the relationship between employers and em-
ployees in an organisation. The theory starts with the premise that labour is the essence
of human beings’ fulfilment. But under the capitalist method of production workers are
forced into an unequal relationship with owners of capital (employers and owners of
organisations). However, since the worker cannot survive without work, has to sell
his/her labour power (sell competencies) to the owners of means of production (machin-
ery, tools, files, office) through exploitative arrangements. Work becomes punishment.
Therefore, conflict between employers and employees is inevitable. The solution is for
the worker to struggle to be free from the chains of exploitation, humiliation and worth-
lessness.
A unifying psychological theory of employee-employer relations
Although we have seen that there are different theories guiding the understanding of
industrial relationships, all in all, the work of Chris Argyris in 1960s on psychological
contracts is highly informative (Guest 2001). According to the theory, employees and
employers enter into a psychological contract in which they establish an implicit set of
obligations and expectations concerning what an individual and the organisation is ex-
pected to give and receive from each other. However, since individuals and the organi-
sation operate in a system, the psychological contract is also determined by a number of
factors as shown in Figure 9.1.