Risk Management

The potential strike action at Royal Mail by the Communication Workers' Union (CWU) concerns non-consultation on matters that impact on working hours and workers' time pressures. The CWU accuse management of bullying and pushing for change. It expects the majority of its members to strike, although the validity of such numbers is disputed.

Royal Mail profits over the previous year had been high in comparison with other European countries, but the company cites a 10% loss in traffic each year as the market changes. It recognises the need to change to keep up with the market and technology influence and seeks to become more efficient. The managers' union, Unite CMA, denies complaints were received about conditions.

Strikes would impact nationally and the likely effects would be widespread; Royal Mail risk losing business customers who are forced to find alternative suppliers to maintain their own service levels, small businesses risk financial impacts due to payment delays and postal workers themselves risk a growing pension fund deficit due to falling revenues.

Personal Commentary:

The article describes the power that trade unions have to influence outcomes of unfavourable changes. If power is 'the potential influence that one person exerts over another' (Buchanan & Huczynski 1997), and influence is 'a change in a person's cognition, attitude, or behaviour.' (Raven, 1965, cited in Steiner & Fishbein, 1966), influence can be described as an effect of power used to secure changes in another party's actions. The CWU are able to influence the decisions of managers by threatening to withhold labour.

French & Raven (1958, cited in Waring & Glendon, 1998) describe 'bases,' or sources of power. In this case, the source of the CWU's power is coercion, stemming from the Royal Mail's perception of a potential punishment (French & Raven, 1958, cited in Buchanan & Huczynski 1997). The influencing strategy of sanctions, for example the withdrawal of labour, is used here to influence upwards (Kipnis, Schmidt, Swaffin-Smith and Wilkinson, cited in Buchanan & Huczynski 1997). This is contrary to the direction of legitimate power held within the organisation's formal structure.

Royal Mail's inherent power from the organisational hierarchy may be undermined by the lack of trust described by the CWU. Likert (1976) stresses the importance of trust as a basis for the most effective management style to create positive working relationships, but it is clear from accusations of attempts to conceal plans that the CWU and its members do not feel a great deal of trust exists.

The intensity of sanctions is important (Buchanan and Huczynski, 1997) and in this case the effects would be national disruption. In the changing market Royal Mail is trying to change to keep abreast of the challenges