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This also known as systems theory.John Dunlop developed it in 1958.The theory attempts to to provide tools of analysis for interpretation and understanding of the widest possible range of industrial relations facts and activities.The theory tries to explain why particular rules are established in a particular industrial relation system.The systems theory is divded into four inter-related components namely:Actors;certain context;an ideology and a body of rules created to govern the actors at the place of work.The actors are divided into three main groups;

(a) Hierarchy of management

(b)Hierarchy of non-management employees and their representatives (usually trade union members),and

(c)Specialised government agencies concerned with industrial relation.

dunlop criticism

  • 1. Over-emphasis on stability of the system
  • --Not very useful when roles of actors are changing
  • --With changing business environment new actors (such as customers and community also play important role in IR process and outcome)
  • 2. Does not talk about different strategic choices actors make at different levels (Kochan's Model elaborates this)
  • 3. Ignores existence of other actors in Industrial Relations
  • 4. More emphasis on roles than people (thus ignores behavioral aspects like human motivations and preferences)
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