Management: Dunlop System Theory and Industrial relations



Every theoretical proposition has underpinning logic that seeks to match the premises with the conclusion. It is well known that every theory has intrinsic fallacy. Dunlop essentially views the industrial relations system as a subsystem of the wider social system, similar to the economic and political sub-systems. According to Dunlop (1958), industrial relations at any time in its development involves certain actors, contexts, the ideologies that hold the system together and the body of rules created to govern the actors at the place of work and work community.

The actors according to Dunlop are: hierarchy of managers and their representative (employers association), a hierarchy of non-managerial workers and their spokespersons (Trade union), and specialized governmental agencies. The actors operate within the constraint, and is influenced and limited by the technology of the workplace and work community, the market and budgetary constraints, a complex web of rulers, and the locus and distribution of power in the larger society.


Dunlop’s theory of industrial relations was presented in 1958 in his book entitled, Industrial Relation Systems (Anderson and Gunderson, 1982). Dunlop argued that the industrial relations system comprises three sets of actors – government, employees and their association, and employers and their association –who are bound together by a common ideology. For Dunlop, the patterned and recurrent interactions of these actors produce the main output of the industrial relations system, a “web of rules” of the work place and the work community (Anderson and Gunderson, 1982). Dunlop posited that the actor exist with the technical, market and power contexts of the system which are considered as the determinants of the web of rules, each context having a  selective impact on a subset of rules. Some of the building blocks of Dunlop theory include:

  1. The web of rules – His argument is that employment relationship in any industrial system culminates into a set of rules and regulations which will govern the relationship. The rules and regulations define and specify rights and obligations of actors in the industrial system.
  2. The actors – In Dunlop’s view, industrial-relations system is a tripartite relationship involving three actors, government, employers and their associations, and employees and their associations. Government as an actor in the industrial relations system may have dual posture. It could be a regulator establishing both substantive and procedural rules that govern industrial relationship, and could also be an employer of labour. Web of rules essentially is a consequence of action.
  3. The contexts of industrial relations – for Dunlop industrial-relations system exists within the framework of environmental or external economic, technological, political, legal and social forces that impact employment relationships.
  4. The role of ideology – This has to do with common with common sentiments or understanding that actors in industrial-relations system have that make establishment of substantive rules and enforcement of procedural rules.

Despite this elements listed by Dunlop, scholars have criticized his system theory of lacking the broad views of the subject matter, industrial relations. Below are some of the selected scholars and their criticism of the Dunlop System Approach of industrial relations.


Wood (1975) criticism: wood et al (1975) highlighted the degree to which Dunlop misunderstood the objective and structure of telcott parsons systems paradigm, but their reconstruction of theory severely restricted the definition of rules making” system. For instance, custom and practice that Dunlop, flanders and Clegg  admitted in social convention as elements of “job regulations” where rejected by Wood et al . they argued that only when custom and practice, as work norms, become part of institutional rule making process can it enter the domain of industrial relations.

Blain and Gennard (1970) criticized Dunlop’s system approach for failing to give an analysis of the process which are behavioural dynamics of industrial relations system and then incorporated the “process” variable into a system approach. Their model recognized that a system could experience instability depending on the nature and form of process adopted. These could include among others strike actions, legislation, and peaceful bargaining embarked upon by the actors.

Environmental variables as they affect the industrial relations system. Many aspects of the environment were highlighted as having influence on the IRS. In his views, these environmental variables have constraining influence. This views, simple as it is expressed, has far reaching influence on the outcome produce by the system. The environment in reality may be both constraining and facilitating of the industrial  relation system (IRS) In today’s industrial system, technology as a factor has been most facilitating of business and indeed the Web of interactions existing in the work place. E.g telephone and the internet which can moderate considerably the background to as well as the outcome of collective bargaining.

Alton Craig (1975) the critique refined the Dunlopian framework in  at least three major ways by introducing the within inputs which included the goals, values and power of the actors in industrial relations. Also, by showing that outputs of industrial relations system have impact on the environmental inputs through the feedback mechanism and instead of the technological, market and budgetary context, he defined the societal environment in terms of economics, social, political, and legal inputs into the industrial relations system. The context of the industrial relations system (IRS). In this view, is broader and more encompassing than as conceived by Dunlop, though psychological dimension is also noticeably neglected.

Hameed (1982) criticize Dunlop system approach in line with Gerald somers’ thinking, Hameed combined Dunlop’s functional structuralism with behaviourism, thereby absorbing the all-important personality (i.e psychological) dimension into the conception. Essentially, industrial relations was viewed as a multidisciplinary endeavour which in developing a theory, must unite theory, research and experiences from economics and lawyers, which somer classified as externalists and from sociology and psychology (classified as internalists). Hameed’s proposition is integrative of many inputs combining personality-behavioral elements with environmental inputs.

Hameed (1982), on the overall, Dunlop’s theory is well acclaimed and fulfilled most of the criteria of a good theory by setting out the relationship among variables, providing for the nature and direction of relationships,  also setting clear framework for understanding the relationships. The empirical validity and the extent to which the theory serve as a guide to prediction is however debatable. The strength as well as weakness of the theory is reflected in the pluralist assumptions and according to Hameed, other crucial issues that could be raised are:

  1. The error that all actors necessarily share similar ideology is or that the ideology is sufficiently consistent. This is in view of      the fact that values differs in many aspects; especially as     related to distributions of income and power.
  2. Inability of the system theory to deal with issues of conflict and change, a weakness from the parsonian analysis which did not deal adequately with conflict. Inability to deal with           conflict and change has continued to make the theory             conservative and biased towards stability rather than change.
  • The system approach is also weak because of apparent lack of       personality-behavioural dimension. The system therefore,         cannot account for the behaviour of the actors. The             interpretation of motives and interactions in both structural       (Walton and Mckeresie, 1965).
  1. The system approach is not predictive by saying very little about the future of industrial relations; the theory is therefore    more heuristic than operational theory.

 Richard Hyman’s criticism. Hyman (1975) views Dunlop’s approach to be explicitly “Marxist”, he respected Dunlop’s and Flanders’ analyses very much. Nevertheless he argued that their definitions of industrial relations are too much restrictive. This narrowness has the undesirable implication that industrial relations is all about maintenance of stability and containment of conflict in industry. The focus of Dunlop and Flanders according to Hyman is on how any conflict is contained and controlled rather than on the process through which disagreement and disputes are generated. Hyman argues that a conservative tendency is reinforced by the suggestion that the process of an industrial relation system are naturally at work to maintain stability and equilibrium that the various institutions and procedures are compactable and well integrated and that conflict is necessarily self-directing; a view that is reflected in Talcott Parson’s society as a self-regulating and self-maintaining unit.

Hyman thought that, the concept of industrial relations system should incorporate the contradictory processes in the capitalist system. Furthermore, instability and stability should be considered of equal importance as outputs of industrial relation systems. He emphasize that the definition of job regulations as positively as Flanders has broadened to include sources of conflict. This leads him to define industrial relations as the study of processes of control over work relations in which processes involving actions of worker organizations are of particular concern.

Equally, Hyman argues that by accepting the processes of industrial relations as maintaining stability and equilibrium, the systems theory seems to dismiss the inevitability of conflict implicit in the existing structure of ownership, and control in industry. Therefore, he argues that the systems theory is one-sided and inadequate. To him, industrial relations go beyond the recognition of formal institutions but it is necessary that personal and unstructured relationships as well as informal relationship are usually important in an industrial relations system. Hyman goes beyond job regulation in terms of command and authority and power in organizations. He justified the position of trade unions as a balance of power and argues for its sustenance as a weak union could be marginalized by the management.

Allan Flanders (1965) opines that as for the substance of an industrial relations system, not all the relations associated with the organization of industry are relevant. No one takes it to include the relations which they have with their customers or the community at large. The only aspect of business enterprise with which industrial relations is concerned is the employment aspects, the relations between the enterprise and its employees and among these employees themselves. These rules appear in different institutions of job regulations he argues is system of rules. These rules appear in different guise; in legislation and in statutory orders, trade union regulations, collective agreements, and arbitration awards.

Equally, in social conventions, managerial decisions; and accepted ‘custom and practice.’  This list is by no means exhaustive, but ‘rule’ is the only generic description that can be given to these various instruments of regulations. In other words the subject industrial relations deal with certain regulated or institutionalized relationship in the industry. However, the rules in question, like all rules, are of two kind; they are either procedural or substantive. The distinction can be observed in the clauses of collective agreements, which are mainly composed of a body of rules. The procedural clauses of these agreements deal with such matters and the stages to be followed in the settlement of disputes, or perhaps the facilities and standing to be accorded to representative of parties to the agreement. The substantive clauses, on the other hands, refers to the rate of wages and working hours or the other job terms and conditions in the segment of employment covered by the agreement. The first kind of rules regulates the behaviour of parties to the collective agreement whereas the second kind regulates the behaviour of employees and employers as parties to individual contracts of employment.

Flanders concludes that “a system of industrial relations is a system of rules”. This stems from the fact that rules of various kind clearly do persuade the world of work and employment and the institutions which device and implement this network of rules are of central importance for the study of industrial relations.

 Fajana (2000) criticize Dunlop system theory when he opine that conflict orientations within the work setting centre basically on the opposed nature of interest of employers and workers. It is however, noteworthy that the concept of “system” as used by Dunlop is loosely applied to individuals, individual firms, industrial branches, worker, workers union and management and so forth. (Blain and Gennard, 1974).

Other requirements for a system are inputs, transformational process, output, and the feedback procedure. A system also essentially operates within an enveloping environment, if it is closed system. These are indeed two types of system; closed and open system. A closed system is independent of the environment. Dunlop, to all intent and purposes, meant that the industrial relations system (IRS) is an open system.

Rogowski (2000) has criticized Dunlop for considering the industrial-relations system as an analytical subsystem of an industrial society on the same logical plane as an economic system. This, according to Rogowski, deviates from Parsonian view in which industrial-relations is a subset of the economic system. This criticism holds because Dunlop leveraged on Parsonian social system analysis while developing his theory.


Different scholars have criticized the Dunlop system theory approach and presented their argument on the subject matter.

However, Hameed (1982) had commented on the absence of personality-behavioural dimension as well as lack of predictive validity. This second point has been shown, by information from the industrial relations system, to be so because of the dynamic nature of industrial relations environment; this also being as a result of rapid global changes and changing nature of organizations and knowledge base of worker, owing to changes in technology. It is also seen that the three-actor model of industrial relations is hardly tenable in the midst of several stakeholders that are part of important input into the system. Also noted is the declining popularity of unionism as pluralism appears to be taking ascending in the ambit of strategic human resources management.


Blain, A. and Gennard, J. (1970) Industrial Relation Theory: A        Critique Review. British Journal of Industrial Relations

Dunlop, J.T. (1958) Industrial Relations System. New York: Holt    Rinehart and Winston.

Fajana, S. (2000) Industrial Relations in Nigeria: Theory and           features (2nd Ed), Lagos; Labofin Publishers.

Flanders, A. (1965) Industrial Relations: What is wrong with the   system? An easy on its theory   and future, London: Faber.

Hyman, R. (1975) A Marxist Introduction to Industrial Relations.  London: Macmillan.

International Journal of Academic Research in Economics and        Management Science, March 2013, Vol. 2. No. 2

Rogowski, R. (2000). Industrial relations as a social. Industrielle    Beziehungen.

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