Lessons From Chicago and China: Management/Labor Relations

The Chinese know how to deal with managerial actions that are either inappropriate or unpopular. In 1989 there was a supposed WSJ article discussing managers of a refrigerator manufacturing company. According to the article these managers were executed for the crime of poor quality. It turns out the article was a parody written in the United States and not published by the WSJ. However, just like in this country, managers that sell unsafe product in China will be prosecuted. In 2009 a Chinese company sold melamine-tainted milk that killed at least six children. Tian Wenhuah, the former general manager and chairwoman of Sanlu Group, was given a life sentence for this tragedy.

The above events, one a hyperbola and the other truth, express how the Chinese government handles corporate or small business issues. Now it appears the people are stepping up their game in dealing with managerial decisions they don’t like.

“The co-founder of Specialty Medical Supplies has been held since Friday in the executive quarters of his factory on the outskirts of Beijing.” It appears he has decided to move a part of his business to India, but 80 of the 110 current employees believed the rumor that he intended to close the factory in China and move it to India. Thus these 80 employees are “blocking doors, locking gates, refusing to let the 42-year-old entrepreneur go until they severance packages.” This seems very similar to an event in the United States reported in Michael Moore’s movie “Capitalism: A Love Story.”

In 2008 Republic Windows and Door was shutting down. There were questions whether the employees were going to get paid. Therefore, the employees “rather than resigning themselves to their fate. . . decided to do something bold: occupy the plant until the company agreed to pay them their severance.”

The city of Chicago rallied behind these workers, and they won the battle and got what they wanted. It really was an interesting story; one that seems to have an entrepreneurial, happy ending. The employees raised the necessary capital to buy the company and reopen it as a cooperative. Its new name is New Era Window Cooperative. May 9th of this year it reopened resulting from “an amazing struggle to found a worker-run cooperative and save good manufacturing jobs in Chicago.”

The Chinese workers appear to be learning from their American counterparts. However, these events reinforce something I learned a long time ago. There was a company in Orange County named Ford Aeroneutronics. It was a non-union company that paid its employees a living wage, gave to good benefits, and provided a creative working environment. The reason they did this: it was the right thing to do and it kept the union from entering its facility. Some of my readers may not agree with this, but to me this is good leadership.

I read a blog yesterday that pointed me to another wonderful book. The title of the book is “Thriving in Leadership: Strategies for Making a Difference in Christian Higher Education.” I read the introduction and it reminded me of something. Something that I think would have helped in both the Beijing and Chicago events. “Transformational leadership typically is based on influence rather than hierarchy, with the leader appealing to higher needs or causes for the well-being of the organization.”

There are thousands of books discussing leadership.  I have taught classes on leadership, discussing the evolution of how we should view the subject. Theory has evolved from the great man understanding of leadership, to what we now see as relational and authentic leadership. In both examples discussed above, transformational leadership focusing on positive relationships would not have changed the decision, but it would have given more opportunities for dialog and possible more of a win-win result.

In so many cases managers continue to act like it is the 1950’s. However, in the modern age a competitive company is a company that has an engaged workforce. This means positive and authentic relationships, leadership not dictatorship.

And that is my thought for the day!


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