Management

The onset of globalization and economic liberalization has thrown new challenges at the workplace. The rapid changes in the technology and ownership patterns, the high mobility of capital, the arrival of MNCs and the gradual withdrawal of state interventions in the economy, all have complicated the management of businesses. Competitiveness, productivity, flexibility, outsourcing, parallel production and restructuring are the key business words. In such an environment, the traditional labor management relations hold no longer valid.

With the coming up of 24 hours operation system, nine to five stable jobs are slowly disappearing from the labor market. Instead what you have are part time, irregular, contractual jobs with no fixed work schedules. With e-mail and Internet connections, one can have flexitime and flexispace working systems. Mass production system is gradually replaced by flexible production system. Production is now more switched to demand fluctuations rather than supply conditions. The use of high-tech calls for knowledge organizations and the knowledge organizations demand knowledge workers. The arrival of professional white-collar skilled workers means the demise of traditional unions. The growing entry of women workforce implies another challenge to management.

In order to meet new challenges posed by globalization and economic liberalization, ILO has launched a project called SAVPOT (South Asia Vietnam Project on Tripartism). The project is funded by Norwegian government and is simultaneously launched in India, Sri Lanka, Bangladesh and Nepal. This small write up describes the launching of the project in Nepal.

Modus Operandi of SAVPOT

One of the objectives of SAVPOT is to develop and profile innovative work and dialogue at the enterprise level. The focus is on worker-management cooperation at the shop floor. In order to achieve this objective, representatives from managers and workers are invited to participate in the project.

SAVPOT is an action research project where four to six enterprises from each of the country are invited to participate in the project. During the project period, which is expected to run till 2001, the representatives, basically drawn from management and workers sides, will work together to develop action plans to meet their challenges. The representatives are expected to implement the action plans at their enterprises. The project includes organizing a series of workshops to develop action plans and review their progress during the project period. The lessons learnt from the research will be documented in the form of case studies and training materials. Each of the enterprise specific experiences will go to form a country experience and each of the country experiences will go to form a regional experience on bipartism, tripartism and social dialogue.

Launching SAVPOT in Nepal

After holding a series of discussions with the relevant actors, in June 2000, six enterprises were invited to participate in the project. They belong to hotel, yarn, textile, carpet, chemical and jute industry. These enterprises were selected on the basis of their strategic importance to Nepal’s economy. However, representatives from only four units turned up at the workshop. Table 1 summarizes the profile of the participating enterprises.

Participating Enterprises and the participants

The four participating enterprises present a unique profile. There is a smaller unit like Mahashakti Soap with only 160 employees and a large unit like Raghupati Jute Mills with 1925 employees. In term of age, there are both old and young enterprises. More interesting picture is presented by the labor-management situation in the enterprises. The participating enterprises have, respectively, no unions, one union, two unions and four unions – reflecting a kind of labor management relations prevailing in the country.

One thing that is common to these enterprises is that they all are either based on or are trying to rely on export markets. Thus they are much more vulnerable to globalization. The challenges faced by the enterprises are very much related to globalization and economic liberalization. In fact, one of the enterprises, namely, Raghupati Jute Mills was privatized in 1996. The enterprises are increasingly facing intense competition either from inside or outside the country. Concern for increasing efficiency and productivity, reducing labor turnover and upgrading the skills of the workforce are the common themes of the participating enterprises. The enterprises are labor intensive units meaning that labor productivity and good labor-management relationships are crucial for their survival.

In total, 21 participants, 7 management representatives and 14 workers representatives from five units participated in the workshop. Since management representative from one unit did not turn up in the workshop, the effective participation was from four units with 18 participants. Of the 18 participants, three were females - one representing management and two representing workers. The low turnout of women participants has to do with patriarchal nature of Nepali society.

Social Dialogue in Action

The context must be understood before understanding the process. In a society where a feeling of class runs high and where class boundaries are moreover fixed and rigid, bringing two classes of people on a single negotiating table is extremely difficult. This is an important factor looming behind the mangers’ reluctance to join SAVPOT project. Convincing the enterprises, particularly the managers, to join SAVPOT project was found to be a difficult task. This is the reason why out of six expected units, only four joined the project. The managers showed reservations that the project might disturb existing labor relationships or incur financial obligations to the company.

The enterprise readiness to join SAVPOT project is influenced by the existence of a clear and a definite pattern of labor-management relationships like the existence of the elected union, collective bargaining systems, liberal management and the absence of labor management frictions, at least, at the time of project workshop. It was extremely difficult to motivate enterprises with poor labor management relationships to join the project. So there is a catch with the project. We want to introduce the project in those enterprises where labor management relations are poor and those were the enterprises found least interested to participate in the project.

The launching of SAVPOT in Nepal provided a unique opportunity to observe three types of dialogues. (1) Dialogue between the participating enterprises. This includes the sharing of inter-enterprise experiences. (2) Dialogue between the workers and managers reflecting their concerns and interests. (3) Dialogue within enterprises that is, basically, between the managers and workers from the same unit.

The workshop provided an opportunity for the participants to share their enterprise experience on labor management relations. Since the participating enterprises differ widely in terms of business activities, age, size and production systems and challenges faced by them, the workshop provided a unique opportunity for the managers and workers’ representatives to learn about labor-management situation in different enterprises. For example, the labor management situation in hotel industry is very much different from that in the jute industry.

The dialogue between management and workers’ representatives shed important insight into their perceptual differences. The managers viewed social dialogue as an opportunity for motivating and gaining commitment from the workers. Instead of focusing on their overlapping issues, the managers want to see the "merging" of the issues so that the differences no longer exist. They see social dialogue both as an end itself and also as a means to achieve better work place cooperation. However, the workers’ representatives see social dialogue as a means to solve differing labor management issues at the workplace. This is a fundamental point in labor-management conflict situation.

The dialogue within enterprises, that is, the dialogue between the managers and the workers from the same enterprise, provided another opportunity for the participants to review and figure out some important challenges faced by the enterprises and to work out action plans to deal with challenges. Differences of opinion between management and workers did emerge during the discussions but the management is forced to take into consideration the differing views of the workers.

In the end, SAVPOT project provided a unique opportunity for initiating social dialogue between the workers’ representatives and management. In a culture where management and workers see each other in an adversary role, coming for a dialogue itself is an achievement. However, the real success of SAVPOT project hinges largely on implementation of the action plans prepared jointly by the management and workers’ representatives.

How Japanese Work

Tackling Product Liability Problem

By Madan Lamsal

Recently a child died when he involuntarily swallowed a "whistling lollipop". The TU Teaching Hospital is reported to have carried out bronchoscopy operation three times in the year 2056 BS alone for those children who had swallowed such lollipops. And the government has ordered that production of such goods be stopped.

We hear or read similar kind of incidents about different products - pin in biscuits, dirt in mineral water, and so on. As per the Consumer’s Protection Act, 1998, and the regulations under it, manufacturers of such products are liable for punishments in many cases.

In connection with quality assurances, Japanese companies think it necessary to consider consumer safety (the absence of risk of a product causing injury, sickness, death, fire, explosion etc.) and environmental disruption (exhaust gases, noise, vibration, electromagnetic radiation, waste materials etc.) caused by products. It is termed as product liability, which concerns the responsibility of the manufacturer or seller for making reparation for body injury or damage to property incurred by the final consumer of a defective product sold.

Nepali society is not like those of Europe, America or Japan, which are said to be litigious, contract conscious societies in which people are always ready to take their grievances to court. We have no product liability laws as such. But gradually consumers are becoming conscious. In this situation, Nepali manufacturers and distributors must therefore take a fresh look at their product liability prevention strategies, not only for export products but also as a matter of social responsibility. To achieve this, Japanese experts suggest taking three main steps:

1. Not to ship products (including published materials), issue advertisements or make performance promises likely to result in product liability claims.

2. To guard against claims, collect data proving that products are not defective.

In developed countries, especially in the US, the premium for product liability insurance have gone through the roof, and some companies, doctors, and others in particularly high risk lines of work, have been blacklisted and refused insurance. Whereas in Nepal, product liability insurance concept itself is yet to develop. Sunil Gupta, Assistant Manager for Nepal of National Insurance Company says that as there are many complications, product liability insurance coverage has been provided to only a very few products. There are very few companies that offer this type of service. "Because there are no clients," says Deep Pandey, General Manager of Everest Insurance Company.

To ensure that product liability problems do not arise in the first place, Japanese experts suggest manufacturers for following actions:

Safety and possible misuse of products should be thoroughly investigated in order to eliminate design faults. It should be checked that all products are at least as safe as any comparable product in the market. Important parts that are highly likely to give rise to product liability claims should be put aside (e.g. safety parts on automobiles) into a special category and reliability and failure analysis should be performed. Safety of these parts during the life of the product also needs investigation.

Similarly, products should be provided with easily understood warnings about likely dangers or misuse. Operating manuals, catalogs, service manuals, maintenance procedures, advertising posters and other written materials, photographs and illustrations need to be checked carefully from the product liability prevention standpoint. It is also necessary to indicate clearly the product safety and the first-aid measures to be taken in the event of injury.

Moreover, sales staff should be instructed properly about making no exaggerated claims, and a list of forbidden words and phrases should be prepared. When written materials concerning the product are provided in foreign languages, especially English, they should be checked by a lawyer whose mother tongue is English.

Likewise, it is necessary to have preparation to show that products are defect free and to investigate methods of recalling defective products rapidly. And finally it is very important to take out product liability prevention insurance.

Based on AOTs Training course

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*Enterprises*	Year of Establish ment	*Nature of Business*	*Market*	*Employees*	*Ownership*	*IR situation*	*Challenges*
1. Ami Apparels Ltd	1997	Garment	100% Export	927	Pvt. Ltd.	No unions No Collective Bargaining Good L-M Relationships	Quota system, Infrastructure, Labor Efficiency, Increased production and cost reduction
2. Hotel Soaltee	1966	Hospitality	90% foreign currency from tourists	699	Pub. Ltd.	Two unions with collective bargaining effected every two years. Good L-M Relationships	Growing competition, labor turnover, high expectancy of workers
3. Mahashakti Soap and Chemicals	1975	Washing soaps and bathing soaps	95% domestic with 5% Indian	160	Pvt. Ltd.	One union with collective bargaining, strong union, good L-M relationships	Competition from multinationals, increasing export, technology upgrading
4. Sri Raghupati Jute Mills	1946 but privatized in 1996	Jute products	90% Indian and 10% domestic	1925	Pub. Ltd.	Four unions, L-M is taking new shape with new management and recent election of the CBA.	Productivity, survival, competition and capacity utilization

An Action Research on Social Dialogue

By Narayan Manandhar*

Introduction