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Hodgkinson, A, Employee Involvement and Participation in the Organisational Change Decision: Illawarra and Australian Patterns, Working Paper 99-7, Department of Economics, University of Wollongong, 1999.


There has been an increased use of employee involvement and participation mechanisms in corporate decision making in the 1990s. These are often initiated by management as a means of harnessing employee expertise in decisions to introduce new technologies and to gain employee cooperation in substantial corporate restructuring and changes to work practices which have been introduced to improve the competitiveness of these organisations in global markets. It has been suggested that managers have a preference for direct negotiations with employees rather than representational consultative mechanisms, which often involving union representatives, when negotiating organisational change. Australia has had a relatively low use of formal consultative mechanism. This may be a means of avoiding involving unions in these decisions, which are considered an area of managerial prerogative. This paper analyses the patterns of employee involvement in organisational change decisions using data from the 1995 Australian Workplace Industrial Relations Survey and a parallel survey conducted in the Illawarra Region of NSW in 1996. The initial results suggested that, while both areas had a higher incidence of direct over representational procedures, this was stronger in the Illawarra region than for Australia as a whole. This may be a reaction to the militant reputation of unions in that region. However, there was no evidence from the Illawarra survey that workplaces with delegates had less organisational change or that local union delegates or officials had more negative attitude to organisational change than employees directly affected by these changes. A further analysis of the consultative procedures associated with each of four types of organisational change was conducted using Probit regression analysis. These results indicated that while direct consultation procedures were used more often, representational procedures and discussions with union delegates or officials had a stronger, positive association with the introduction of organisational change. The relationship between consultation and participation and organisational change was stronger in Australia than for the Illawarra. The Illawarra results, however, did not provide any evidence that union activity had retarded reform in that region.