,

Chapter 1: Nature, Scope and Importance of

Industrial Sociology

Chapter I: Development of tndusfrtgl Sociology

'
 CHAPTER COVERAGE

1.1 Definition of Industrial Sociology

1.2 Scope of Industrial Sociology
1.3 Psychological Foundations of Industrial Sociology
1.4 Social Foundations of Industrial Sociology
1.5 Industrial Sociology and Other Sciences
1.6 Importance of Industrial Sociology
1.7 Applications of Industrial Sociology

Sociology is th e science of understanding the dynamics of group

interaction and social behaviour. It focuses attention on groups, organisation,
-. . and societies rather than individuals. Areas of concern to a sociologist might
include the actual pattern of interaction (who talks to whom and for how
long), the effects of different social status on the interaction, and the effects
of different roles on the nature of interaction. The specific topics covered
under sociology include group dynamics, communication, leadership, conflicts,
organisational structure, etc.

1.1 DEFtNITION OP INOUSTRtAL SOCIOLOGY

The concept of 'industrial sociology' incorporates two terms, namely,
'industrial' and 'sociology'. The term 'industrial' means concerning the industry.
The word 'industry' implies dexterity and resourcefulness. Thus, industry is
the technique under which anything is done efficiently and smoothly.

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••
.,.-
.-
INDUSTRIAL SOCIOLOGY

Resourcefulness implies use of machinery, raw materials, etc., in an efficient

manner. Sociology deals with the society and social relations. In sociology, all
kinds of social relations ar.e studied. In fact, sociology is a scientific study
employing scientific methodology and techniques in its study of social
relations. In the words of Maclver .and Page, "Sociology is about social
relationships, the network of relationships we call society." In simple words,
sociology is a science of social relations. A group of persons who have no
relations between them would fall beyond the purview of sociology.
According to Moore, "Industrial sociology is concerned with the
application or deveiopment of principles of sociology relevant to ·the
industrial mode ofproduction and the industrial way of life". In industrial
sociology, social relations specifically concerned with industry are studied.
Of course, these relations are studied by using scientific techniques employed
in sociology.
According to Parker, Brown and others, "Industrial sociology is concerned
with how the economic subsystem is related to other subsystems, how the
subsystem is structured in terms ofparticular work organisation and roles and
how persons fit into these roles." Clarifying this definition further these authors
have remarked, "The adjective 'industrial' implies the application of sociological
theories and methods to one segment of society, i.e., concerned with the
economic function of producing and distributing the goods and services which
society requires." Thus, industrial means the organised activities concerned
with economic processes. Industrial sociology is particularly the study of
social relationships in industry. The economic organisation involves several
systems and sub-systems. Each of these include innumerable roles. Industrial
sociology studies the social processes, methods and cau se-effect relationships
concerning industrial system and sub-systems.

Definitions of Industrial Sociology

*l'n<;JustrW$Q(;/(:Jlogy is cone~ed with the application or dev.elopment ofp:rinciples

of sociology relevant to the industrial mode of pr()(juction and the ln<J.tJStrial way
of life".
,.-...Moore
"Industrial $adioJogy is concerned with industry (or any form of work organisation)
as a social ~stem, including those factors (technical.; economic, polfftcal)
which affect the structure, the functions and the changes in that system."
-J.H. Smith
"Industrial $ociology is a substantive area of general sociology wh1eh might
more acGUiately be ter-me(;) the sociology .of work orgaoi!!iations 0r the sociology
of economy."
-0.C. Miller and WJ-1. Form
 NATURE, SCOPE AND. IMPORTANCE OF INDUSTRIAL SOCIOLOGY --
•••
According to Charles B. Spaulding "Industrial sociologists. centre their
interests upon the social organisations of the work-place, including the pattern
of interaction between people who are responding to each other in terms of
their roles in work organisations or whose behaviour is being affected by
those roles."
In the present world, the industrial domain has expanded infinitely and
its problems have become complex and varied. There are innumerable problems
which have arisen because of rapid industrialisation. For example, the problem
of slums and overcrowding in cities is a direct outcome of industrial growth.
Thus, industrial sociology is a direct outcome of industrialisation over the last
60-70 years.

1.2 SCOPE OF INDUSTRIAL SOCIOLOGY:

Industrial sociology is the study of industrial sector as a social system,
factors influencing it, its structure, roles and factors of ch ange. In brief,
industrial sociology is a particular branch of sociology in which the organization,
structure, functions and implicit social relationships of industrial and economic
systems are studied.
In the words of Amitai Etzioni, "The scope ofindustrial sociology includes
the study of those economic organisations which have the primary aim of
producing goods and services, exchanging them, or organizing and manipulating
monerary processes."
Miller and Form have described the field as being "concerned broadly
with the study of industrial society and also with the analysis of the social
organisation of work." It is suggested that industrial sociology deals with all
types of work organisations. However, Schneider delimits the field of industrial
sociology to the industrial institutions with a focus on the social structure of
large scale manufacturing organisations.
Burns has classified the subject-matter of industrial sociology as follows: · (i)
Bureaucracy, (ii) Study of functions, (iii) Study of functiona l groups,
(iv) Analysis of industrial relationships, (v) Influence of industrialisation.
According to Miller and Form, the subject-matter of industrial sociology includes
work group and interpersonal relationships in it, the role of work groups, the study
of machines and instruments in social organisation. Most of the American industrial
sociologists have adhered to this subject-matter of industrial sociology.
According to C. B ..Spaulding, the subject-matter of industrial sociology is industry,
industrial organisation, factories, godowns, sale, purchase centres, administration and
the social relationships of the individuals involved in all these activities. Industrial
sociology studies inter-related actions, interactions, methods and processes.
Thus, most of the writers on industrial sociology have covered the following
aspects :
(i) work-group,
--
•• INDUSTRIAL SOCIOLOGY

(ii) structure of industrial bureaucracy or internal organisation

(iii) organisation of trade unions and union-management relations.
In short, the subject-matter of industrial sociology is human
relations originating and developing on account of industrialisation. The
study of industrial sociology pertains to social relations in industry, though
sociology studies the entire gamut of social relationship from a general point
of view. The scope of sociology is very wide. On the other hand, the scope
of industrial sociology is narrow and limited. In industrial sociology, we study
only those social relations which either arise due to industrialisation or are
related to industry. As shown in Fig. 1.1, industrial sociology studies both
internal relations and external relations. Internal relations may be
(a) formal, (b) informal, and (c) mixed.

Social Relations in Industry

Internal Relations External Relations

+
Formal
..
Informal
...
Mixed

Fig. 1:1. Scope of Industrial Sociology.

Internal Relations
In industrial sociology, we study the interpersonal relations among
individuals connected directly with industry. If these relations are confined
to a single factory or concern, they are called internal relations. The owner,
the managerial staff and the workers of an industrial unit are lip.ked mutually
by internal relations. The internal relations are of three kinds : formal, informal
and mixed as discussed below :
Formal Relations: The formal relatio11:s are those which are established
between individuals in an industrial unit on account of their position. The
formal relations exclude personal relations. The formal relations are functional
and are determined by the hierarchical order in the industrial up.it..For example,
if two persons are doing the related work, that is, one may be manufacturing
a part of a machine while the other is polishing or finishing it, the relations
between them would be formal. The official relations between the management
and employees are also formal.
Informal Relations : The personal relations among the people in an
organisation are called informal relations. Such relations may obtain among
individuals or among groups. For example, if there is friendship between two
workers of a factory, these relations would be called informal relations. If two
or more labourers conspire against the foreman or some other officer, the kind
NATURE, SCOPE AND IMPORTANCE OF INDUSTRIAL SOCIOLOGY .,.--
of relationship which comes into being in this way is also informal in nature.
Sometimes, factions are formed in a factory and the members are divided
because of informal relations. Such relations are based on personal likes and
dislikes, tastes, language, attitude, etc.
Mixed·or Socio-technical Relations: There are certain relations which
are neither purely formal nor purely informal. Such relations are called mi-xed
internal relations. Some scholars have termed these relations as socio-technical.
These relations occur between persons connected with industry in the course
of the performance of their duties. These relations are partly connected with
the industry and are partly personal. For example, the labourers while lifting
super-heavy load sing collectively. Through song they urge each other to put
in his best effort. This collective effort is indicative of a sense of co-operation
among them. This relation of belongingness is personal but it emerges in the
course of performing job or duty. Therefore, this type of relationship is known
as mixed relationship.

External Relations
A particular industrial unit or factory has besides internal relations,
relations with other industrial units, or factories, suppliers, government and
various social agencies. Such relations are known as external relations. Each
industrial unit has many types of such relations. From governmental agencies,
an industry may seek industrial licence, financial assistance, etc. The industries
also seek to establish contact with several groups or agencies. The industries
also have some relations with educational institutions and polytechnics. From
these they may be recruiting workers and executive trainees. Besides, each
industry has relations with the society in general. The regions in the
neighbourhood of an industrial unit have specially close relations with the
industry. Generally, in industrial areas, there are organisations which provide
cover against illegal and anti-social activities. The industries have to maintain
relations with such organisations also.
.,,.
-- INDUSTRIAL SOCIOLOGY

however, history is far more sociological and social history is the stuff of
history. It looks at social patterns, gender relations, mores, customs and
important institutions other than the acts of rulers, wars and so on.

t6 IMPORTANCE Of INDUSTRIAL SOCIOLOGY

What is the need of studying industrial sociology ? The answer to this
question is discussed in the following points which also highlight the significance
of industrial sociology :
(i) Insight into the Social Aspect of Industry. Industrial sociology adds
an entirely new section of knowledge to human mind. The present industrial
society cannot be understood without reference to such knowledge. The
labour class has its peculiar status, roles and problems. The problems of the
labour class must be addressed to have a lasting peace in industry.
(ii) Use of Scientific Methods. The use of scientific method in industrial
·sociology helps to find out cause-effect relationships in a particular area.
Industrial society requires such a scientific knowledge for understanding. The
future of every progressive nation rests upon its industries. Industrial progress
is a_general index of the progress of a nation. Industrial progress however,
requires certain conditions. Besides, it requires solution of industrial problems.
Industrial sociology studies institutions of industrial society, their social control,
social change, dynamism, inter-action, problems and remedies. Thus, industrial
progress is not possible without the knowledge of industrial sociology.
(iii) Solution to the Problems of Industrial Society. Industrialisation
has led to stratification, differentiation, change in status and role and the form
of social institutions. All this has resulted into several problems. Besides one
has to solve the problems peculiar to industry such as strikes and lockouts)
problems of recruitment, problems of accidents and problems of housing,
health, sanitation, education, recreation and .social security, etc. These
industrial problems are intimately concerned with other sections of urban
society. The remedies to all these problems require a sound knowledge of
industrial sociology.
(iv) Family Integration. Family as a unit occupies the central position in
society. Its disorganisation can lead to social disorganisation. Modern families
in urban and-industrial areas are gradually disintegrating due to social evils
such as prostitution, alcoholism, unhealthy recreation, absence of social control,
fast rate of social mobility, unhealthy conditions of living, inadequate wages,
insufficient housing, over-crowding and slums. These problems must be solved
to save urban family from disorganisation.
(v) Scientific Division of Labour. In India, division of labour has been
traditionally based upon the caste system. The caste system, however, is now
appearing to be an impediment in economic progress. Therefore, effort is
being made to eliminate the caste system. This has led to disorganisation in
the traditional division of labour. Any one is now engaged in any profession
 NATURE, SCOPE AND IMPORTANCE OF INDUSTRIAL SOCIOLOGY --
•••
whatever may be his innate ability. Scientific division of labour in the field
of industry requires a fairly wide knowledge concerning different activities.
Industrial sociology extends help in this proc~ss.
(vi) Rationalisation. India lags in rationalisation in industries. With the
progress of education among capitalists and employers and the interference
by the government, efforts are now being made for more and more
rationalisation in industries. This is helped by industrial sociology.
(vii) Employer-Employee Relationships. Industrial peace and progress
depend upon harmonious relationships between the employers and the
employees. This requires suitable attention to several factors such as rates of
wages, working conditions, behaviour of bureaucracy, security of jobs,
provision of housing and scientific method of recruitment etc. All these fall
within the scope of industrial sociology whose help is therefore necessary for
the betterment of employer-employee relationships.
(viii) Problems of Automation. With the progress of industrialisation in
India, automation is increasing. This has increased unemployment, though on
the other hand, it has increased profits of the industrialists. Therefore,
automation has been opposed by the labour unions. The solution of such
conflicts requires knowledge of industrial sociology.
(ix) Industrial Management. Success in industry de:i;ends upon industrial
bureaucracy. Efficiency of industrial bureaucracy depends upon scientific
industrial management. Therefore, industrial bureaucrats require a training in
industrial sociology. This is particularly relevant to present-day Indian
conditions.
(x) Social and Labour Welfare. Most of the urban J.iroblems are intimately
related to labour problems, since the labour class occupies an important
status in an industrial society. Therefore, social welfare and labour welfare are
intimately connected. Both these require a sound knowledge of industrial
sociology.
(xi) Sound Economic Planning. The Indian Government has launched
five year plans to bring about planned development of industries and so solve
many problems like illiteracy, over population, low level of wages, low
productivity of agriculture, absence of trained personnel, pressure of taxes,
inflation, black money, corruption etc. All these problems are studied by the
industrial sociologists. Their suggestions may be valuable in the solution of
these problems.
 CHAPTER COVERAGE

2. I Social Relations

2.2 Groups and Social Relations

2 .3 Bureaucracy

2.4 Scientific Management

2.5 Human Relations Approach

~J SOCIAL RELATION~
Social relations in industry were recognised by the human relations
approach which considered organisation as a social system Social relations
in the organisation are determined by individual, work-group, leader and
work environment as shown in Fig. 2.1.

WORK
INDIVIDUAL -----94 ENVIRONMENT

WORK
GROUP

....--
Fig. 2.1. Human Relations in Action.
.,.-- INDUSTRIAL SOCIOLOGY

(i) Individual. The individual is an important element of the

organisation and each individual is unique. Behaviour of an
individual is affected by this feelings, sentiments, values and
attitudes. Motivation of employees should give due consideration
to their economic, social and psychological needs. Thus, motivation
is a complex process.
(ii) Work-Group. The work group is the centre of focus of human
relations approach. It has an important role in determining the
attitudes and performance of individual workers. The Hawthprne
studies showed that the informal groups exert tremendous influence
over the behaviour patterns of workers.
(iii) Work Environment. Human relationists advocated the creation of
a positive work environment where organisational goals are achieved
through satisfaction of employees. In general, when employees needs
are satisfied, the work environment is termed positive and when
employee needs are not satisfied, the work environment is termed
negative.
(iv) Leader. The human relationists gave great importance to leadership.
The leader must ensure full and effective utilisation of all
organisational resources to achieve organisational goals. He must
be able to adjust to various personalities and situations. He must
behave in a way that generates respect. As the Hawthorne studies
showed, a supervisor can contribute significantly in increasing
produ ctivity by providing a free, happy and pleasant work
environment.
The essence of the human relations philosophy is to cultivate and
develop an environment where the employees as individuals and in groups
would wish to contribute their best to the organisational goals. This environment
is cultivated and developed where there is an awareness of the needs,
aspirations, feelings and emotions of the employees on the part of management.

2.1.1 Formal Organisation

Formal organisation refers to the structure of well-defined jobs, each
bearing a definite measure ofauthority, responsibility and accountability.
The structure is consciously designed to enable the people of the organisation
to work together in accomplishing the common objectives. Thus, formal
oganisation is a structure to which an individual must adjust. It tells him to do
certain things, in a specified manner, to obey orders from designated individuals,
and to work cooperatively with others. Coodination also proceeds according
to a prescribed pattern in the organisation structure.
The salient features of formal organisation are·as follows:
(i) Organisation structure is laid down by the top management to
achieve organisational goals.
 SOCIAL RELATIONS IN INDUSTRY --
••
(ii) Organisation structure is based on division of labour and
specialisation to achieve efficiency in the operations.
(iii) Organisation structure concentrates on the jobs to be performed
and not the individuals who are to perform jobs.
(iv) The organisation does not take into consideration the sentiments of
organisational members.
(v) The authority and responsibility relationships created by the
organisation structure are to be honoured by everyone. The position
in the organisation hierarchy determines the relative status of the
incumbent.

2.1.2 Informal Organisation

Informal organisation refers to the social relationship between people
in the organisation based on personal attitudes, emotions, prejudices, likes,
dislikes, etc. These relations are not developed according to procedures and
regulations laid down in the formal organisation structure; generally, large
formal groups give rise to small informal or social groups. These groups may
be based on common taste, language, culture or some other factor. They are
not preplanned, but they develop automatically through continuous interaction
between people.
Man is a social animal and cannot liv.e without social interaction. Wherever
people work or live together, they develop social relationships by becoming
members of one or more informal groups. These informal groups are known as
informal organisation. Keith Davis has described informal organisation as at
network ofpersonal and social relations not established or required by formal
organisation but arising spontaneously as people associate with one another. It
is also known as 'shadow organisation' as it exists alongwith the formal
organisation.
Generally, large formal groups give rise to small informal or social groups.
These groups may be based on common taste, language, culture or some other
factor. These groups are not pre-planned. They develop automatically.within
the organisation according to the nature of interaction between the
members in the organisation. The salient features of informal organisation are
as follows:
(i) Informal relations are unplanned. They arise spontaneously.
(ii) Formation of informal organisation is a natural process.
(iii) Informal organisation reflects human relationships.
(iv) Informal organisations are based on common taste, problems,
language, religion, culture, etc.
(v) The membership of informal organisations is voluntary. At the same
time, a person may be a member of a number of informal groups.
Thus, there can be overlapping in these groups.
.,.--
Significance of Informal Organisation. The importance of informal
INDUSTRIAL SOCIOLOGY

organisation arises from the functions performed by informal groups. The

important functions of informal organisation are as under :
(i) It serves as a very usefur c:hannel of communication in the
organisation. The informal communication is very fast.
(ii) It blends with the formal organisation to make it more effective. It
gives support to the formal organisation.
(iii) The 1nformal leader lightens the burden of the formal manager and
tries to fill in the gap in the manager's abilities.
(iv) Informal organisation gives psychological satisfaction to the
members. They get a platform to express their feelings.
(v) The presence of informal organisation encourages the managers to
plan and act carefully. Thus, iIJformal organisation supports and
supplements the formal organisation.
Table 2.1 : Fromal Organisation vs. Informal Organisation

Basis Formal Organisation Informed Organisation

1. Purpose It is created to achieve pre- It has no determined objectives.
determined objectives.
2. Structure It is an official hierarchy of Its structure is based on human
relations. It refers to the structure emotions and sentiments. It
of well-defined authority and refe rs to the personal
responsibility relationships. re lationships which develop
automatically when peopl e
work together.
3. Formation Formal relations are we ll - Informal rel ations are
planned are created deliberately. unplanned and they originate
automatically.
4. Chain of Fromal organisation follows the Informal organisation does not
Command official chain of command which have a fixed chain of command.
and can't be changed. It is based on the sentiments of ,
Communication Communication has to follow the members.There are no fixed
formal channels. patterns of communi-cation.
5. Stability Formal organisation is usually Informal organisation may not
stable. last so long.
6. Human Formal organisation reflects Informal organisation reflects
Relations techno logical aspect of the human aspect. It is based on the
organisation. It does not take care attitudes, like and dislikes,
of human sentiments. tastes, language, etc. of people.
7. Flexibility It follows a rigid structure. It is loosely structured. It is highly
flexible.
8. Leadership Managers provide leadership to Informal leaders are chosen by
the workers. the group members.
 INDUSTRIAL SOCIOLOGY

explore alternative ways of doing things. It is a breeding ground for

new ideas because the approval of fellow-workers is necessary for
supporting new ideas and innovations.

2.2.4 Social Organisation in Industry

As discussed earlier, industrial socologists are interested in the study of
social relations in industry. The pattern of social relations in industry is
determined by the type of social organisation. There are there approaches to
social organisation in industry which are as follows :
(1) Bureaucray.
(2) Scientific management (Classical approach)
(3) Human relations (Neo-classical approach)
In fact, the above approaches r epresent different schools of thought. An
overview of the features, merits and demerits of these approaches is given in
the following sections of this chapter.

2~3 BUREAUCRACY:
Max Weber (1864-1920) was a sociologist who contributed the theory
of bureaucracy. Weber was a German scholar trained in law, economics,
history and philosophy. He had travelled widely in Europe and the United
States and was interested in labour problems, political management, voluntary
associations and industrial sociology. He used the word 'bureaucracy' to refer
to a specific kind of a administrative organisation whose characteristics are
stated later.
Weber identified three types of legitimate authority :
1. Rational-legal authority. Obedience is owed to a legally established
position or rank within the hierarchy of a business, miliitary unit, government,
and so on.
2. Traditional authority. People obey a person because he belongs to
a certain class or occupies a position traditionally recognised as possessing
authority, such as a royal family.
3. Charismatic authority. Obediency is based on the followers' belief
that a person has some special power or appeal.
Weber's theory of bureaucracy recognises rational-legal authority as the
most important type in organisatif ns. Under traditional authority, leaders are
not chosen for their competence, and charismatic authority is too emotional
and irrational.
What is Bureaucracy?
Traditionally, the term bureaucracy is used to represent (i) State
administration ·(or Government .organisations), (ii) a group of officials in an
organisation who run administration on contract employment basis. (iii)
Rational organisation which is in accordance with Weber's type of structure.
But now the term is applied to almost all types of org~nisations . According
 SOCIAL RELATIONS IN INDUSTRY

to Talcott Parsons, bureaucracy is equivalent to relatively large scale

.,.--
organisations with specialised functions. Taken in this sense, bureaucracy
refers to a specific type of organisation structure. Dalton McFarland has
defined bureaucracy as a system of organisation and management in which
roles, tasks and relationships among people and positions are clearly defined,
carefully prescribed, and controlled in accordance with formal authority.
Features of Bureaucracy
A bureaucratic organisation is characterised by the following features :
(i) Division of Work and Specialisation. There is a high degree of
division of work at both the operative and adJ?inistrative levels.
This leads to specialisation of work.
(ii) Hierarchy of Positions. There is a hierarchy of authority in the
organisation. Each lower position is under the control of a higher
one. Thus, there is unity of command. It is like a pyramid in which
quantity of authority increases as one moves up the ladder in the
organisation.
(iii) Rules and Regulations. The rules, rgulations and procedures are
laid down by the top administration. Their benefits are as under :
(a) They standardize operations and decisions.
[b) They serve as receptacles of past learning.
(c) They ensure equality of treatment to everybody.
(iv) Impersonal Conduct. There is impersonality of relationships among
the organisational members. The decisions are entirely guided by
rules and regulations and are totally impersonal. There is no ~oom
for emotions and sentiments in a bureaucracy.
[v) Staffing. The personnnel are employed by aconractural relationship
between the employer and employee. The tenure of service is
governed by the rules and regulations of the organisation. The
employees get salaries every month which is based on the job they
handle and also their length of service.
[vi) Technical Competence. The bureaucrats are appointed on the basis
of their technical competence. Promotions in bureaucracies are
based on technical qualifications and performance.
(vii) Official Records. The administration of a bureaucratic organisation
is supported by an efficient system ofrecord-keeping. The decisions
and activities of the organisation are formally recorded and preserved
safely for future referenae. This is made possible by extensive filing
system. Written documentation and formal filing root out the
possibility of loopholes in the oral communication among the
organisational mambers.
Weber viewed bureaucracy as an ideal type because he felt that it had
certain advantages over other organisational forms. These advantages include
 i

·--
WJnl INDUSTRIAL SOCIOLOGY

efficiency, speed, unambiguity, rational decision-making, strict discipline,

reduction of material and personnel costs. Weber also advocated the use of
bureaucracy as a means of carrying out control over human beings.
Types of Bureaucracies
Mintzberg identified two kinds of bureaucracies: (a) Weberian or Machine
bureaucracy, and (b) Professional bureaucracy.
(a) Machine Bureaucracy. It represents the Weber's type ideal
bureaucracy. The mechanistic structure is characterized by : (i) highly routine
operating activities, (ii) formalized rules and regulations, (iii) functional
departmentation, (iv) centralised authority, (v) formal chain of command,
(vi) sharp distinction between line and staff activities. The machine
bureaucracy is suitable for all types of organisations in relatively stable
environment.
It is characterised by the following features :
(i) Operating tasks are standardised and complex.
(ii) There is decentralised decision-making and less degree of
formalisation.
(iii) Greater emphasis on professional competence and authority is
placed.
(iv) Standards of performance are set by the professional bodies.
The examples of professional bureaucracies are hospitals. law,
accountan cy and other professional firms. In such cases, the external
environments are subject to change and satisfactiona of the client is of utmost
importance. Professionals in various areas are employed to provide efficiency
services to the clients. A professional bureaucracy is generally decentralised
as the professionals are free to take decisions at their levels regarding the
services to be provided to the clients. ·
Merits of Bureaucracy
Bureaucracy is an administrative device that can help in achieving the
following advantages :
(i) Distribution of Authority and Specialisation. There is a proper
delegation of authority in the organisation. People are given tasks
according to their cometence.
(ii) Uniformity. Because of rules and regulations, all actions are taken
carefully. There is consistency of actions.
(iii) Rationality. The behaviour of the employees is rational. They take
decisions as per laws, rules and regulations. They don't go by their
whims, emotions or prejudices.
(iv) Predictability. The behaviour of the employees is predictable. It
is known how they will react under different situations as guidelines
are already there is writing.
 .,,,--
,

SOCIAL RELATIONS IN INDUSTRY

(v) Efficiency. Bureaucracy leads to efficiency in the organisation.

There is division of work leading to specialisation which results
in efficiency.
(vi) Impartiality. Officials are guided by the policies, rules and regulations
rather than their personal whims and faces. They are not supposed
to shower personal favours on anybody.
Demerits or Dysfunctions of Bureaucracy
Bureaucracy is not free of drawbacks. It may lead to many undesirable
consequences such as:
(i) The rules may be followed in letter and not in spirit. Thus, instead
of providing guidelines, the rules may become source of inefficiency.
The rules may be misinterpreted by the officials concerned with .
the implementation of rules. Red tapism and technicalism may
follow as a results.
(ii) A bureaucratic organisation requires strict adherence to the
organisational rules and regulations. This goes against the
development of individual personality as he can't take any initiative.
Mature people have their goals and needs which may conflict with
the organisational goals. The bureaucracy does not place any
emphasis on the goals of individuals.
(iii) Bureaucracy does not consider informal organisation and
interpersonal relations.
(iv) Bureaucracy discourages innovation because every employee is
supposed to behave in a specified manner.
(v ) Goal displacement takes place in a bureaucratic organisation. The
bureaucrats may give priority to rules and regulations or the
secondary goals over the primary goals.
(vi) The bureaucratic structure is tall consisting of several layers of
executives. Thus, communication from the top level to the lowest
level will take a long time.
(vii) Bureaucratic structure is not effective under turbulent or dynamic
environment. It can't undergo the change demanded by the fast
changing environment.
Bureaucratic organisation is .a n important tool of adminstration which
is used by Governments of many countries. Bureaucracy is found in different
degrees in many business organisations also. Its features such as division of
work, specialisation, rules and regulations, technical competence, etc., are
found in several modern organisations. However, bureaucracy is often criticised
as being impersonal as it does not consider human sentiments and expectations.
It encourages goal dispacement by emphasising on rules and regulations
and puts a curb on innovation. It is further said that bureaucratic structure
is static and often _fails to meet the requirements of fast changing external
environment. · ·
 INDUSTRIAL SOCIOLOGY

2.4 SCtENTIRC MANAGEMENT

F.W. Taylor was the first management thinker who insisted on the
introduction of scientific methods in management and it was he who,
alongwith his associated, made the first systematic study of management.
He launched a new movement in 1910 which is known as 'Scientific
Management'. This is why, Taylor is regarded as the father of scientific
management.

Meaning of Scientific Management

According to F.W. Taylor, "Scientific Management is the substitution
of exact scientific investigations and knowledge for the old individual
judgement or opinion in all matters relating to the work done in the
shop." It implies the application of science to management of a business
concern. It aims at replacement of traditional techniques by scientific
techniques.
Scientific Management is a process of directing human efforts which
employs scientific methods for getting highest productivity. In the words
of Peter F. Drucker, "The thread of scientific management runs through
operational study of work, the analysis of work info simplest elements
and the systematic improvement of the workers' peeformance of each
element."
Scientific Management is a throughtful, organised human approach
to the job of management as contrasted with hit or miss, rule of thumb. "It
is the art of knowing exactly what you want men to do and then seeing
that how they do it in the best and cheapest way. "Scientific managem ent
includes finding the most efficient methods ofproduction, scientific selection
and training of workers, proper allotment of duties and work and achieving
cooperation between workers and management.
In short, scientific management involves :
(i) scientific study and analysis of work;
(ii) scientific selection and training of employees ; and
(iii) standardisation of raw materials, working conditions and
equipment.

Aims of Scientific Management

The aims of scientific management may be summarised as under :
(a) Increased Production. Increase in the rate of production by use
of standardized tools, equipment and metho_ds.
(b) Quality Control. Improvement in the quality of the output of
research, quality control and inspection devices.
SOCIAL RELATIONS IN INDUSTRY .,.--
(c) Cost Reduction. Reduction in the cost of a production by rational
planning and regulation, and cost control techniques.
(d) Elimination of Wastes. Elimination of wastes in the use of resources
and methods of production.
(e) Right Men for Right Work. Placement of right person on the right
job through scientific selection and training.
(fJ Incentive Wages. Payment of wages to workers according to their
efficiency.
 SOCIAL RELATIONS IN INDUSTRY --
.,~.
many advantages of standardisation. Firstly, operators can be trained easily.
Secondly, it i"s economical to have st an~ardi sed materials, tools and
equipment etc. Thirdly, standardisation h elps in achieving various
economics of large scale production. Lastly, standardisation will
improve the quality of production and r edu ce t he cost of repairs and
maintenance.

6. Scientific Selection and Training of Workers

The selection procedure must be designed carefully because errors
committed at the time of selection may prove to be very costly later on. If
the selection process is faulty, there will not be right workers on the right
jobs. Thus, the efficiency of the organisation will be r educed. Taylor
advocated the need for proper sele ction and training of workers. Only a
worker who meets the requirements of his job can do it well and at the
minimum cost . Training of workers is th e other task of management after
the appropriate placement of workers is the other tasl of management
after the appropriate placement of workers. Training he.lps in changing the
behaviour of the workers. It can be of great help in teaching them the best
method of doing their job. Since the workers are trained, they will produce
goods of high quality and incur less wastages.

7. Specialisation of Function Foremanship

Taylor advocated that specialisation must be introduced in a factory.
He advocated functiona l foremanship for this purpose. In his sch eme
planning was separa~ed from executing. He recommended eight foremen
in all to control the variou,s aspects of production. He advocated four
foremen in the planning department, Namely, route clerk, instruction card
clerk, time and cost clerk and shop disciplinarian. The four foremen
recommended for getting the required performance from the workers
include gang boss, speed boss, repair boss and inspector.

Principles of Scientific Management

Taylor's scientific management is based on five principles which are
discussed below :
1. Replacement of Old Rule of Thumb Method. Scientific investigation
should be used for taking managerial decisions instead of basing decisions
on opinion, intu.i tion or rule of thumb. The principle of use of science for
rule of thumb is the starting point that distinguishes scientific management
from traditional management. Under scientific management decisions are
made on the basis of acts as devel oped by the application of sc!e::.l:.:.
method to the problem concerned. This is in contrast with !:...
.,.--- INDUSTRIAL SOCIOLOGY

followed under traditional management according to which decisions are

based on opinions, prejudices, or rule of thumb . Thus, substitution of rule
of thumb or opinion by scientific approach is one of the primary
contributions of Taylor to the field of management.
2. Scientific Selection and Training of Workers. The procedure for
selection of workers should be designed scientifically. The errors
committed, at the time of selection may prove to be very costly later on.
If we do not have right workers on the right, the efficiency of the
organisation will be reduced. Therefore, every organisation should follow
a scientific system of selection. The selected workers are to be trained to
avoid wrong methods of work. Management is responsible for the scientific
education and training. The management has to prove opportunities for
development of workers having better capabilities.
3. Cooperation between Labour and Managemenf. There should be
cooperation between the management and the workers. This requires
change of mental attitudes of the workers and the management towards
each other. Taylor called it mental revolution. When this mental revolution
takes place, workers and management turn their attention towards
increasing profits. They do not quarrel about the distribution of profits.
4. Equal Division of Responsibility. There must be equal division of
responsibility between the managers and the workers. The management
should assume responsibility for the work for which it is better suited. For
instance, management should decide the method of work, working
conditions, time for completion of work, etc. instead of leaving these to
the discretion of workers. The management should be responsible for
planning and organising the work, whereas the- workers should be
responsible for the execution of work as per instructions of managemenL
5. Maximum Output. The management and the workers should try to
achieve maximum output in place of restricted output. This will be
beneficial to both the parties. Maximum output will also be in the interest
of the society.

Principles of Scientific Management

1. Scientific W1vestigation in place of Rule of Thumb Decisions and
Methods.
2. Scientific Selection and Training of Workers.
3. Cm:>peration lpetween Management and Labour.
4. Equal Division of Responsibility between Management and
Labour.
5. Maximum Output ln place of Restricted Output.
Benefits of Scientific Management
To Employers. Taylor's scientific management was associated with
many benefits to the industry. According to Gilbreths, the main benefit of
scientific management was, "conservation and savings, making and
adequate use of every ounce of energy of any type that is expended."
Scientific management leads to the following benefits to the employers:
1. Replacement of tranditional rule of thumb method by scientific
investigation.
2. Proper selection and training of the workers leading to better
workforce.
3. Establishment of harmonious relationships between the workers
and the management.
4. Achievement of equal division of responsibilities between the
workers and the man~gement.
5. Standardisation of tools, equipment, materials and work methods
for increasing efficiency.
6. Better utilisation of various resources and elimination of wastes.
7. Scientific determination of fair work a worker can do during the
day. This leads to establishment of good relations between the
employers and the workers.
To Workers. The advantages of scientific management to the workers
are listed below :
1. Detailed instructions and constant guidance for the workers.
2. Opportunity for training and development to increase skills.
3. Incentive wages to the workers for higher production.
4 . Better working conditions and tools of work for good health of
the workers.
5. Less fatigue in work because of application of scientific methods.
To Society. Scientific management was expected to bring the following
benefits to the society in general :
1. Better quality products at lower costs to the people.
2. Higher standard of living of people through better products.
3. Increased productivity in the country.
4. Industrial peace in the country.
5. Technological development due to scientific investigation.
SOCIAL RELATIONS IN INDUSTRY

Criticism of Scientific Management

.,.-
.--....

Scientific management was criticized on the basis of the following

arguments:
(i) Speeding up of Workers. Workers feel that scientific management
attempts to ~orce them to work their maximum. It does not bother about
the adverse effect of such speeding up on the physical and mental well-
being of the workers. But it should be noted that scientific management
improves methods of work, tools and equipment and working conditions
in order to achieve higher productivity. The scientific managemen·t also
undertakes fatigue study to provide suitable rest pauses to the wmkers in
the course of work.
(ii) Boredom. Scientific management introduces specialisation in the
enterprise. The workers are supposed to do the routine work just like
automatic machines. This creates the problem of monotony among the
workers who start looking for better jobs in other organisations.
(iii) No Scope for Initiative. Since there is a divorce between the
functions of planning and doing, the workers get no opportunit y to take
initiative. They are supposed to do whatever they are told to do. They
cannot take initiative and exercise their skills to find new methods of
work.
·(iv) Unemployment. Workers feel that scientific management increases
the efficiency through standard methods, working conditions, tools and
equipment. Since the output per worker is increased there will be reduction
in the employment opportunities.
{v) Exploitation of Workers. Workers feel that scientific management
is a clever device for the exploitation of the workers. They argue that their
wages do not rise in the same proportion in which tlieir pro ductivity
increases. A major portion of the gains from increased productivity is taken
away by the employers. But it should be note that owners have also to
invest a lot of money on introducing scientific management. However,
the share of gains given to the workers should be just and fair.
(vi) Weakening of Trade Unions. Scientific management advocates
harmony in the organisation. It discourages disputes over the distribution
of gains from increased productivity. This in a way weakens the trade
union movement.

~.5 HUMAN RELATIONS APPROACH

The classical theory con centrated on formal organisation and ignored
the 'human factor' . The nee-classical or human relations approach was
proposed as a reaction to the classical approach which ignored human
relations. The neo-classicists focussed on the human aspect of industry.
They modified the classical theory by emphasizing the fact that organisation
is a social system and the human factor is the most important element
 --
p1.1 INDUSTRIAL SOCIOLOGY

within it. They conducted some experiments (known as Hawthorne

Experiments) and investigated informal groups, informal relationships,
patterns of communication, patterns of informal leadership, etc. This led
to the development of human relations approach. Elton Mayo is generally
recognized as the father of the Human Relations School. Other prominent
contributors to this school include Roethlisberger, Dickson, Dewey, Lewin,
etc.
Features and Contributions of Human Relations Approach
The salient features of human relations approach are as under :
(i) Social System. Organisation in general is a social system composed
of numerous interacting parts. The social system defines individual roles
and establishes norms that may differ from those of the formal organisation.
The workers follow a social norm determined by their co-workers, which
defines the proper amount of work, rather than trying to achieve the targets
management thinks they can achieve, even though this would have helped
them to earn as much as they physically can.
(ii) Social ~nvironment. The social environment on the job affects
the workers and is also affected by them. Management is not the only
variable.
(iii) Informal Organisation. The informal organisation does also exist
within the framework of formal organisation and it affects and is affected
by the formal organisation.
(iv) Group Dynamics. At the workplace, the workers often do not act
or react as individuals but as members of groups. A person who resists
pressure to change his behaviour as an individual often .changes it quite
readily if the group of which he is a member changes its behaviour. The
group plays an important role in determining the attitudes and performance
of individual workers.
(v) Leadership. There is an emergence of informal leadership as against
formal leadership and that sets and enforces group norms. He helps the
workers to function as a social group and the formal leader is rendered
ineffective unless h e conforms to the norms of the group of which he is
supposed to be incharge. -
(vi) Communication. Both way communication is necessary because
it carries necessary information downward for the proper functioning of
the organisation and tran smits upward the feelings and sentiments of people
who work in the organisation.
(vii) Role of Money. Money is only one of the motivators, but not the
sole motivator of human behaviour. Man is diversely motivated and socio-
psychological factors act as important motivators.
(viii) Conflict. There is always a conflict between organisational and
 SOCIAL RELATIONS IN INDUSTRY .,,.
---
individual goals. For the smooth functioning of the organisation, it is
necessary to achieve the integration between the goals of the organisation
and those of the individuals.
Criticism of Human Relations Approach
The human relations approach is not free from shortcomings. Scott
observed that "like classical theory, neo-classical theory suffers from
incompetency, a short-sighted perspective, and lack of integration among
many facets of humari behaviour studied by it." The criticisms range from
'human relations as a tool for cynical puppeteering of people', to 'human
relations is no more than a trifling body of empirical and descriptive
information.' Trade unionists ridiculed it as a form of 'cow psychology'.
Human relationists are also nick named as 'happiness boys' who ignored
the economic realities.
The human relations approach has been criticised on the following
grounds:
(i) Invalid Assumptions. Certain assumptions on which the neo-
classical theory is based do not seem to be true. For example, the
assumption that there is a solution to every problem which satisfies
everyone in the organisation is not true. Often there are conflicts of
interests among various groups in the organisation that are structural and
not merely psychological. ·
(ii) Lack of Scientific Validity. The human relationists drew
conclusions from Hawthorne studies. These conclusions are based on
clinical insight than on scientific evidence. The groups chosen for study
were not representative in character. The findings based upon temporary
groups do not apply to groups that have continuing relationship with one
another. Moreover, the experiments focused on operative employees only.
(iii) Limited Application. The various structures of organisation given
by neo-classicists are not universal. Their application is limited. There is
no particular structure which may serve the purpose of all the organisations.
The relationists also overlooked some of the environmental constraints
which mai;iagers cannot ignore and this lapse makes the practicability of
the theory limited.
(iv) Limited Focus on Work. It lacks adequate focus on work. Human
relations approach puts all the emphasis on interpersonal relations and on
the informal group. It tends to overemphasise the psychological aspects
at the cost of the structural and technical aspects.
(v) Over-concern with Happiness. Neo-classicists have been criticised
for single minded attention to the concept of 'happiness' of employees.
The Hawthorne studies suggested that happy employees will be productive
employees. This equation between happiness and job satisfaction is
-*'''
- INDUSTRIAL SOCIOLOGY

un fortunate as it represents a naive and simplistic view of the nature of

man. Studies have failed to show a consistent relationship between
happiness or morale and productivity. It is quite possible to have a lot of
happy but unproductive workers.
(vi) Fragmented Approach. The theory lacks the unified approach. In
fact, it is not a theory at all. All that was done in neo-classical theory is
simply a modification of classical theory rather than organisational
transformation. So this theory has almost the same limitations as the
classical theory has.
(vii) Other Shortcomings. The neo-classical theory also suffers from
incompetency, a short-sighted perspective and lack of integration among
many facets of human behaviour studied by it. Some other modern thinkers
also opine that this theory is bankrupt and unable to suggest any thing
new.
· UNIT-II RISE AND DEVELOPMENT
OF INDUSTRY

O.Jfe1 Ii E<Jr~~ ..trialiim and TyP.<n Qf PrGductive

~na
Systtmt
Qaptw 4: tndu,ffi<illi~ati~n ; Cau~ and CQrrs~qv~n~es
 CHAPTFR COVERAGE

3. I Early Industrialism
3.2 Types of Productive Systems
3.3 The Manorial or Feudal System
3.4 The Guild System
3.5 The Domestic or Putting Out System
3.6 The Industrial Revolution
3.7 The Factory System
3.8 Obstades to and Limitations of Industrialisation

The evolution of industry has been quite gradual. There was a time in the
history of human civilisation when there used to be no industrial activity.
During hunting stage, man lived all by himself. He used to go out for hunting
and eat whatever he could find, even flesh, fish, fruits and roots of trees. He
used tree bark, leaves and animal skins to cover his body. But he had no fixed
residence. After this, man entered into past<?ral stage under which he started
domesticating animals to have an assured supply of milk, meat and skin. He
lived near the banks of lakes and rivers because of the availability of grass and
water for the animals. Gradually, man discovered a new use to which land
could be put. He entered the agricultural stage. He began cultivating the land
to grow foodgrains. Some people, who did not have any work, offered to
work in the fields of others. Such workers were paid in kind. The exchange of
services for goods made the background for the evolution of industry.

...--
.,.--
a.1 EARlY INDUSTRIAU5"1
INDUSTRIAL SOCIOLOGY

Minor industrial activities started during the primitive period during .

which all operations were performed by human beings. The main concern
of man during this s age was merely for fi)o'Qanapbysical protection. Tile
means which were adopted by him to mehl these ends were symbolic of his
industrial effort. For food, the primitive man used to hunt animals and g~
wild vegetables and fruits:-F'or unting, he employed bow and fil'.I.O:W.Jlll..d
certain tools made by sharpening s~one§.....All primitive weapons were made
eithe r of wood or stone. These weapons were symbols of industrial development
of that period. And making fire by friction of stone or bamboos was an
industrial miracle of that time.
At this stage, the families.were self-sufficient as their needs were limited.
Hence, there was no problem of exchange. of goods. Division of labour was
restricted only to the family le_yel. Men devoted t4eir tlIDe to activities like
hunting, fishing and making of weapons, and women engaged themselves in
cooking, bringing up the children, agriculture and domestication of animals.
In short, all the activities of the family were carried on to produce or procure
products for family consumption. As every family was able to satisfy its
needs, there was no question of exchange of goods.
There was collective use of natural resources and the idea of private
ownership did not arise. However, in the course of time, some families started
keeping animals rather than killing them. This led to domestication of animals.
Animals were treated as a form of wealth which could be exchanged for other
products required by the family. This gave birth to the barter economy. The
barter economy may be defined as the direct exchange of one commodity
for another commodity.
With the passage of time, many tribes settled down permanently at some
place and began to cultivate land and rear cattle on the land which they
shared in common. These tribes were self-sufficient as they produced everything
they required. The division of labour confined to the division of work
between men and women of the tribe.
The invention of plough marked the beginning of agrarian societies more
than 6000 years back. According to Collins Dictionary of Sociology, agrarian
society refers to the traditional society primarily based on agricultural and
craft production rather than industrial production. The cultivation of land
was done through the plough as this invention enabled the people to make
a great leap forward in food production. It increased the productivity of land
through the use of animals and bringing to the surface the nutrients of the
soil. Combining irrigation techniques with the use of the plough increased
the productivity and the crop yield.
 EARLY INDUSTRIALl$M --
••
During the medieval period, signs of industry became quite visible in
the efforts of man. A number of manually operated machines were developed.
The signs of industrialisation, i.e., production of goods in excess of personal
consumption and stocking of goods for sale can also be noticed during this
stage. Further, development of small tools paved the way for handicrafts
stage.
Under the handicraft stage, artisans living in villages produced products
for the local population and got in exchange various things from customers.
There was hardly any machinery. The craftsman used simple hand tools and
manual skills for producing the goods. There was no division of labour at
this s_tage. Thus, organisation of industry was quite simple. The craftsman
was responsible for assembling various raw materials, and selling the goods
produced by him.

3.2 TYPES OF PRODUCTIVE SYSTEMS

The medieval industrial stage is characterized by three industrial systems
which are:
1. The manorial or feudal system.
2. The guild system.
3. The domestic or putting-out system.
The above three stags represent pre-machine age. Machine age started
after the use of the machines invented during the industrial revolution that
took place in England between 1700 A.D.' and 1820 A.D. This led to the
evolution of modern factory system.

3.3 THE MANORIAL OR FEUDAL SYSTEM

In this stage, it was believed that the land belonged to the King who
got it from God. He~e that to the nobles (also calloo feffilal lord) arid
could al;:;take that backa t any tim;-lt was tlleO.UfYOfthe reudanordl'.o
rerna:in lo~l to the King. The feudal lord distributed land to cultivators for
cultivation in ?clurn -for servicesoy lre--cultivators known as -sertS. The
cultivators served their feudal fords in sev-erfilways. This system came to
be known as manorial or feudal system. Class distinction became well
established. The priests worshipped the King, and nobles fought wars and
serfs rendered manual services to other classes. The traders engaged themselves
in trade and commerce. Slavery and serfdom were well established and
socially recognized institutions.
Gradually, feudal system gave birth to capitalism which gave fil'ea,t er
importance to machme f!ian man. Later with the onset £_f industrial r~olution,
industrial societies began to emerge. ---........
..-- Terms used .Under Manorial System
INDUSTRIAL SOCIOLOGY

(1) Feudal Lord: Landlord who also acted as employer.

(ii) Manor: A vast cultivable land owned by the lor<i.
(iii) Serf or vassal: Employee; p~sant er labourer.
(iv) Fief: Agreement to keep land for cultivation,

The centre of the feudal system in medieval Europe was the king. Three
primary elements characterized feudalism; lords, vassals and fiefs. A lord was
a noble who owned land, a vassal was a person who was granted possession
of the land by the lord, and the land was known as a fief In exchange for
the fief, the vassal would provide military service to the lord. Thus, the
relations between lord, vassal and fief formed the basis of feudalism.
The main characteristics of the feudal system were as follows:
(i) Feudalism or Manorialism was the social and economic system
which characterized most European societies in the Middle Ages.
(ii) Feudalism was the expression of a society in which every man was
bound to another by mutual ties of loyalty and service.
(iii) Feudal society was characterized by military landholders and working
peasants.
(iv) The basic essence of the system was the granting of land in return
for military service.
(v) Hierarchy of rank in the society was well defined.
(vi) The employer-employee relationship was that of master-slave type.
Only death of the serf terminated this relationship.
Since the lord had not given the land away, only loaned it, it was still
the lord's responsibility to maintain the land, while the vassal had the right
to collect revenues generated from it. Another obligation that the lord had
to fulfill was to protect the land and the vassal from harm. The vassal's
principal obligation to the lord was to provide "aid", or military service. This
security of military help was the primary reason the lord entered into the
feudal relationship.
·Until the rise of powerful monarchies with central bureaucracies, it was
the lord of the manor who was the real ruler of society. The peasant worked
the land for him and owed him a number of feudal dues, justice was dispensed
in the manorial courts. Customs varied, but it was common for a peasant
to have a small plot, or to share a communal plot, on which to grow food
for himself and his family and to be entitled to gather firewood from forest
land for the hearth fire. More common than single plots, however, was the
system of dividing the land into strips, with each household's strips scattered
about the manor.
 EARLY INDUSTRIALISM --
••
Manorial System
Manorlalism means the political, economic, and social system by which
the peasants of medieval Europe were tied to their land and their lord
through serfdom. The basic unit was the manor, a self-sufficient landed
estate, or fief, under the control of the lord. The peasants or tenants paid rent
or provided military service in exchange for the use of the land. They cultivated
small plots of land and owed rent to t~eir lord, and most were not free to leave
the e$tate Oant.O. The manori~I system was flourishirr:~ ifl we.stern Europe by
the 8th century and had begun to decline by the 13th century; while in EaStern
Europe, it achieved its greatest strength after the 15th century.

3.4 THE GUILD SYS~

A guild is an association of craftsmen in a particular trade like
textile workers, masons, carpenters, carvers, lassworkers, or an"'""i'Otn-en-
lt is formed to protect the interests of the members. The earliest gui s
were formed as fraternities of sell-employed skilled craftsmen with ownership
aiid control over the materials and tools they needed to produce their goods.
A guild had the exc usive nglit to produce certain goods or provide ~;rtain
services. Guilds often depended on grant of letters patent by an authority
or monarch in order to enforce the flow of trade to their self-employed
members, and to retain ownership of tools and the supply of materials.
( The guilds were formed by ex~ie~ed _a: tisans in their g eld ~f
handicrafts. fiIBYWere called master craftsmen. Usually the guilds were
founded by free independent master craftsmen. B~fore a newe mployee could
rise to the level of master, he had to go through a training period during which
he was first called an apprentice. They were bound to work for the master
craftsman for a specified time during which they could learn the craft. They
got no wages except lodging and boarding facilities from the master craftsman.
After this period, he could rise to tlie level of journeyman, i. e., day labourer,
entitled to wages on daily basis.
Guildhalls that were constructed and used as meeting places are an
example of a legacy of traditional guilds. Some guild traditions still remain
in a few handicrafts in Europe, especially among shoemakers and barbers.
Characteristics of Guild System
The guild system had the following features :
(i) Artisan or Craft guilds were formed by artisans engaged in the same
line of industrial activity.
(ii) The guilds were located generally in a town or a village. The
membership of a guild was compulsory to operate in the concerned
town or village.
 --
M:W INDUSTRIAL SOCIOLOGY

(iii) The main aims of these guilds were:

(a) To protect the interests of the members.
(b) To ensure implementation of various rules and regulations
formed by town authorities.
(iv) The guilds used to elect 'wardens' in order to regulate their working.
The wardens used to ensure the implementation of various rules
and regulations.
(v) The members of the guilds were expected to produce quality goods
only. Any deviation from standard business practices could attract
punishment from the guild.
(vi) The guilds were responsible for the welfare of their members. The
sick and disabled members were looked after and financially weak
members were helped by the guilds.
Functions of Guilds
The guilds played multiple roles as discussed below :
(i) Social organisation : Each guild was a social organisation which
acted like a mutual benefit society. During this era, people were identified
with their families, guilds, and villages. Their structure was stable, secure,
integrated and predictable. This was undoubtedly the most harmonious and
endurable social order which the West has ever produced.
(ii) Economic organisation : The guilds represented an extended families
of artisans engaged in handicraft production in the shop of the master. They
regulated the wages paid to workers. They also controlled the technology
of production, quantity of production, pricing and distribution of products,
etc. Together they regulated the entire local economy.
(iii) Professional organisation : The guilds were a kind of professional
organisation. They regulated the work relationships of the artisans through
a graded system of apprentices, journeymen and masters. These occupational
levels had different functions and different responsibilities towards each
other and towards the larger community.
(iv) Political and religious organisation : The guilds also discharged
social, political and religious functions. They elected the town representatives
before the king, had their patron saints and had Masses celebrated for their
deceased members.
The guilds were able to help the growth of industrial development on '
a sound footing. The interest of various sections of society were protected.
The consumers were supplied quality goods at reasonable prices. Reasonable
profitability was ensured to the craftsmen. Thus, guilds ma.de a positive
contribution in the field of industry.
Types of Guilds
Two types of guilds were initiated, namely, Merchant Guild, and Craft
Guild. A merchant guild was an association of merchants engaged in trade
 EARLY INDUSTRIALISM

in a particular locality. The purpose of a merchant guild was to enforce

.,.--
equality of opportunity for the members of the guild, to protect their interest,
to avoid competition among the members and also to regulate the conduct
of its members by prohibiting unfair practic~s. A craft guild, on the other
hand, was an association of the skilled artisans engaged in the same occupation.
Thus, there were several guilds in a town. The craft guild regulated entry to
the craft, prescribed standards of workmanship and regulated the conduct
of the members. The guild system began to decline by the end of 15th century
due to the narrow attitude of the guilds and the increasing rivalry among their
members.
Reasons for Decline of Guild System
The guild system suffered from many drawbacks and it gradually declined
during the 16th century. The reasons for disintegration of guilds were : ·
(i) Rigid outlook of craftsmen. TI_iey did not like to introduce changes.
(ii) Restriction on the entry of new members to the guilds.
(iii) Lack of commitment among the guild members.
(iv) Development of new towns without guilds.
(v) Opposition from journeymen who developed grievances against
m~J;;:Crafts_merr:-
(vi) Gradual rise of middlemen who could gain control over trade_.
- -
3.5 THE DOMESTIC OR PUTI'ING OUT SYSTEM
The intermediary between the producers and consumers of goods came
:o play an important role. The entrepreneur gave out work to the artisans
··.-ho worked in their homes. They put out the raw materials, paid a certain
sum per finished product and sold the same in the market. The artisans still
o~med the tools of production. The entrepreneur came at regular intervals,
collected the goods and paid for them to the artisans. The artisans faced
Cifficulty when the scale of production increased and there was a need for
:.:nproved tools of production. The entrepreneur started providing both raw-
=aterials and tools to the artisans who produced goods and received wages
::i piece wage basis. That is why, this stage was called the putting out system.
~u.ring the beginning of 18th century, the entrepreneur followed the practice
-~employing the artisans who worked at their own premises or workshops.
:be entrepreneur procured raw-materials and equipment, assigned work to
!:!.e artisans, inspected the quality of products, and found a market for the
-:oducts. In other words, he was the owner and manager of the production
.ystem.
The domestic or putting out system evolved as a means of sub-
contracting work. Under this system, the work was contracted by a central
ent to subcontractors who completed the work in their own facility (usually
......eir own home) . It was used in the English textile industry, in small farms,
..:!d lock making units.
 --
Wini INDUSTRIAL SOCIOLOGY

Features of Domestic or Putting·Out System

The salient features of the domestic system were as follows :
(i) Workers worked from home, and manufactured individual articles
from raw materials (the merchant received the finished product,
as the raw materials were provided by him, hence the synonymous
term putting-out system).
(ii) The articles were assembled and sold in the market located at a
central place.
(iii) The domestic system was popular in cloth production in the Europe.
It was also used in various other industries like, the manufacture
of wrought ironware such as pins, pots, and pans for the ironmongers.
(iv) Many entrepreneurs took advantage of the domestic system to
bypass the guild system, which was thought to be cumbersome and
inflexible.
The advantages of the domestic or putting out system were as follows:
(i) The workers could work at their own speed while at home.
(ii) Since the woman of a family could work at home, shoe was there
to look after her children.
(iii) Children working in the system were better treated than they would
· have been in the factory system.
(iv) The workers earned higher incomes.

Decline of Putting Out System

The rise of factoi;-ies after the success of industrial revolution made the
domestic system obsolete. As the entrepreneures invested huge amounts of
money into industry for maximum mechanisation, the domestic system
became economically non-viable. Moreover, with rapidly increasing population,
the demand for goods was pushed up which was beyond the capability of
the domestic system and could only be met through machines in big factories.
Industrial revolution in England during the 19th century provided
machinery for manufacturing on a large scale. This paved the way for the
start of the modern factory system under which production system is organised
more efficiently than under the domestic system. Many large manufacturing
enterprises or factories were launched. Under these, workforce worked during
fixed working hours and their activities could be monitored. All production
processes were carried out under one roof or shed.
Early factories were solid structures built to accommodate the necessary
machines and sources of power. Easy availability of raw materials and workers
in the area were essential pre-requisites for establishing a factory at a particular
location.
From the employers' point of view, the factory system had such manifest
advantages that it was widely adopted, especially in the textile industries.
 EARLY INDUSTRIALISM

The factory system became the dominant form of industrial organisation

.,.-
~

throughout the 19th century and remained important in the 20th century.
The dispersal of industry became possible only because of the introduction
of electricity and road haulage; and the modern electronics revolution enabled
an increasing number of people to work at home.

Industrial revolution during the later part of the 18th century and earlier
part of the 19th century had a vital influence on the development of industry
and commerce. It changed radically the techniques ofproduction and had
an important impact on the life of mankind.
Industrial revolution was the result of the inventions of many English
scientists during 1700 to 1820. 'J;'he need for inventions arQ§§ becauss: of th~
increase in the demand of products due to wid~I.!ing of markets followed by
the geographical- discoverie..2, of the lat~ 5th and 16th centurie~,. It was
b~ond the capacity of gie industry using labour intensive techniques to m~et
the increasing demand. The inventors in England had set for themselves the
task offiruiing ways a;;'.d means to remove the hindrances in productiollia-ced
--
bJLlhe_pm.ducers and manufacture.rs. James Hargreaves made 'spinning genny'
--- --
i:q,J 7t;l4, @ d Richard ArkwEight introduced 'water-frame' in 1.?7...§!.:.J hereafter,
many mechanical inventions came in quick succession such as 'mule spinner'
by Crompton, and 'power-loom' by Cartwrighl, The inventk>n of 'steam
engine' enabled man t o...driv,e_the machines bx power. ,- - - -
Features of Industrial Revolution
The characteristic features of industrial revolution may be summed up
as follows :
(i) There were a series of mechanical inventions by the English

--scientists.
(ii) :rr_gd·~.s!!~,n in factories started with the ~~1.P of machinQ§,!un by
mechanical power such as steam, oil and electricity. Thus, setting
up a factory required huge amount of capital. Tllisgave birth to two
classes in industry, namely, capitalist and labour.
..__ -
(iii) Introduction of machinery led to mass scale production of
- stanaaro~
~ ,
-
(iv ) The factory SJIB_te.m.pJ:OJlideJi.ho..th.d.ixe.c;;.t,and indirect employment
to a large number of people. Direct employment was generated by
tne 'factories and traain g-in rawmaterials and factors products gave
indirect employment to traders and mercantile agents.
(v) Large scale employment in factories gave birth to labour problems
which necessitated some steps by employers to create good human
relations in factories.
 -
~or
INDUSTRIAL SOCIOLOGY

Causes of Industrial Revolution, # '

/ The significant changes brought about l::iy industrial revolution are listed
below:
p a ~(a)
Development of engineering.@ii.,Pin~ers ere req1:ired to d~sign
\J
\
. ·"'.,i machinery for textiles, coal mining, etc. for making and repairing
'\4 ,. \';/. •..»: {' steam engines, and making tools and locomotiyey
,f~~ 111- (b) Revolution in iron making. The engineers, who took charge of
important task connected with tlie industrial change, coUid SJJ.Cceed
in their work onlyjf iron was cast in large quantities and was of
fairly g2od quality..

-
(c) Use ofpower driven machines. Power driven machines were used
in industry. Jt began with cotton spinning- and weaving and, later
~n, s~ad to wool, silk, e.!£.. _
-
-
(d) Rise ofchemical. industry. The application of power driven rn.a~s
in textile mills made it I!§_cessary to develop bleaching, dyeing,
finishing and print~g processes to keep pace with the output of
textile mills. < y .-l'<~V. { ~ f .. - -

(e) Development of coal. mining. Coal was needed to refiruw;ljgjr_gn

and cast
,_
it into the form in whichlt was needed by the engineers. It
~...:..:_:...:::::;:_;_..:...,,;...:..::~.:..:.....~:----;;--:-~---
was also needed for generation of steam power.
(f) Development of I¥1eans of transport. Forr egular supply of raw
m~terials. 11tc,,lu.irldustcy.andfor the distribution of.goods prod1!fed
by the factories...effactiv_eJ:rausport was a must. The development
OfTiie means of transport like railways and steamships constitutes
the most imporlruit impact of the industrial revolution-:-·
Economic Consequences of Industrial Revolution
Industrial revolution brought about the following economic changes :
(i) Large Scal.e Production. The industrial revolution made mass
production of goods possible by the us~ of powe! driven machinery
in place of hand tools.
(ii) Change of Form of Ownership. Large scale production l,ncreased
t~ size of industrial enterprises sole proprietorship concerns
expanded into partnership firms and further developed into joint-
stock companies. The ~volution of joint stock.companies was an
imJ2..ortant outco~ of the ·ns1u.sti:ial revolution.
(iii) Specialisation. Industrialisation led to a craze for specialisation in
every field because of developmep.t in the means of transport and
communication. Different parts of the country (and even different
parts of the world) specialised in producing or manufacturing
different commodities or parts. Specialisation helped in reducing
the cost of production.
 y

.
EARLY INDUSTRIALISM
~~'">::.~ r-
(iv) Rise of Capitalism. Cottage system of production was greatly
•

replaced by the factorysysfem. Un derthe factory system, capital is

the crucial factor. Large scale production further increased the need
and significance of capital. This gave birth to capitalistic economy
under which there are two classes of people, namely, capitalists and
workers. The workers are purely wage earners dependent for their
living on the capitalist employers. The capitalist system also
increased the importance of money as a medium of exchange,
measure of value and store of value.
(v) Trade Cycles. Large scale production accompanied by capitalism
gave birth to trade cycles having successive·periods of inflation and
depression. During the period of prosperity, there is high level of
employment and sustained rise is prices. But during depression, there
is large scale unemployment, decrease in demand and so on. Many
weak firms are eliminated during the depression period.
(vi) Standard of Living. Industrial revolution had a positive impact on
the st<!ndard of living of the people. Factories produced goods of
better quality and at cheaper rates for the consumption of the people.
This improved their standard of living.
Social and Political Consequences of Industrial Revolution
Industrial revolution had certain social and political implications
which created the need for organisation of workers and later paved the way
'for trade unionism. Social and political effects of industrial revolution are as
under:
(i) Urbanisation. Industrial revolution led to the concentration of
"' population in towns because factories ar{°d other establishments were
Iocared illthe towns. This gave birth to the housing problem. Even
,:IloW, lakhs of worker~ continue to live in slum areas in the industrial
towns.
(ii) Rise of Individualism. People from the villages came to the towns
to find employment. Their close ties with the village, land and family
were broken. The industrial revolution created conditions under
which workers aimed at material progress by working in the factories.
This led to the disintegration of joint family life .
(iii) Awareness of Rights. The industrial revolution gave birth to two
classes, namely capitalists and workers. There was economic
inequality between the rich and the poor. Slowly and slowly, class
consciou sness came in the minds of workers and they organised
themselves in the form of unions to fight for their economic, social
and political rights.
-••
- INDUSTRIAL. soc1qtoGY

(iv) Poor Working Conditions. The workers were paid lower wages and
they had to work under poor working conditions. There was no one
to convince the factory owners about the need of good. working
conditions so long as trade unions did not protest. This was an
obstruction in increasing the productivity of the workers.
(v) Political Awareness. Industrial revolution increased the income
and standard of living of the people. The earning people started
spending more and more on the education of their children. Press
also progressed a lot to air the grievances of the working class. These
factors created political consciousness among the people. The
workers demanded the right to form unions and to participate in
the management of the industrial undertakings.

f;>RE-MACHINE AGE
Pre-machine age refers to the stages in the evolution of industry prior to
industrial revolution. The era of industrial revolution (/. e., 1760 to 1820) may be
referred to as an era of transition from pre-machine age to machine age Which
is characterised by factory system, automation, control by electronic compwt,ers,
use of atomic energy, use of satellites, etc. It may be noted that industrialisation
first started in England and then it spread to other western countries.
The features of the commercial system during the pre-machine age were
as follows:
1. Production was by manual labour on relatively small scale.
2. Production was restricted for the local market only.
3. Distribution of goods was controlled by merchant guild or association
of merchants.
4. There was virtually no competition in the market.
5. Sale and purchase by physical inspection of gOOds was the practice
during pre-machine age.
6. Old customs and traditions had a great jnfluence on trade and commerce.
7. The town and its surrounding villages acted as a unit of self-sufficiency.
8. Agriculture was the major economic occupation Qf the masses. About
80% of the population lived in rural areas and depend on agricultur-e.
9. The fartf:I technology was quite simple and the village life was more or
less s.tatiG.
10. Trade was local in character because of lack of efficient means of
transport. Foreign trade was insignificant.
11. Metallic currency preva1ted. No elabG>tate monetary and credit syst~m
existed.
EARLY INDUSTRIALISM --
•••
3.7 THE FACTORY SYSTEM
The industrial revolution took place in England and later on spread to
other countries of the world. Since the industrial revolution, many changes
have taken place in the industrial·system. The present age is an era of large
scale production. Many big factories have come into existence and they employ
a large number of workers. They cater to the needs of the people not only in
one country but also in many countries of the world. Thus, machine age has
facilitated world trade and growth of multinational corporations.
During the last seven decades, tremendous ~d rapid development of
science and technology has taken place. That is why, the present era is known
as 'atomic age', 'space age' and 'electronic age'. Some people also call this
era as the second phase of industrial revolution. In the present age, different
countries of the world .are closely inter-related by very fast means of transport
and communication.
Characteristics of the Factory System
The main features of the modern factory system are as follo~s:
(i) Large Scale Production. Modern factories carry on large scale
production to meet the demands o f large number of people.
Production is carried on in anticipation of demand.
(ii) Mechanisation. The developments in the fields of science and
technology have increased the degree-of mechanisation in the
moclern'"facFory system. The efficiency of the factories has increased
many times because of new innovations.
(iii) Automation. In many advanced countries like the USA and the
UK, autom,i:ion has been introduced in the production system. By
automation we mean installation of one set of machiµes to run
..
another set of machines. For instance, there is automation in oil
refineries, cliemical industrial units and food processing units. A
small number of operators sitting in the control room control the
entire op~rations in the factory.
(iv) Management Information System. Introduction of management
information system with the help of electronic computers is another
highlight of modern machine age. The computers have va~t
memories. They can store huge amount of information and make
available the required information within seconds. They help in
taking managerial decisions at the proper time.
(v) Specialisation. There is greater specialisation and division of labour
in the modern factories. Many industrial units specialise in the
-••
- INDUSTRIAL SOCIOLOGY
EARLY IN.DUSTRIA
manufacture of a small number of components or parts of different
and institutions. E:l
products. Division of labour has facilitated the workers to concentrate
of profit. Th e m CL •
on limited operations.
services and laboc::
(vi) Standardisation. Standardisation brings about uniformity of quality calculation.
and size, and facilitates large scale production. Now a days, many
organisq.tions, whether production or services based, are trying to Creation of Soci;:
get themselves standardised as per International Standards called England was I
ISO certifications. Thus, overall quality consciousness has increased •'•as completely c!.t
in the indus~y. agriculture and te:ci
(vii) Growth oflndustrialAreas. Concentration of industries in certain :..ived in villag~
regions of the country has given rise to the growth of industrial the blacksmiths ru:
areas which offer special advantages to the industrial units in regard and the. brewers. ~
to raw materials, power, access to market, financing, transporting, Class positions of
etc. 50c1ehes it was aI5:i
(viii) Expansion oflnternational Trade. Mass production, standardisation each of these fea..
of products, and improved means of transport and communication society.
have increased the volume of international trade among different
Degradation of Li
countries.
One of the :::i
(ix) Research and Development. Big industrial enterprises have
degradation of lab
·established separate departments for research and development and
of guild, village. a:!
they spend a considerable portion of their earnings for innovating
appalled at the ded
new products and ideas. Research and development activities have
the skilled craftsm.1
the effect of decreasing cost, increasing quality and consum,er
satisfaction and raising the standard of living of the people. Problems due to I
(x ) Competition. There is cut-throat competition among the producers
Urban centres
of goods in all capitalist economies. Economic relations between earlier. But their c±3
different persons are based on contract rather than on customs and cities gave birth to 1
traditions.
Thus, it can be concluded that industrial revolution gave plants and
machinery which gave birth to the factory system. Entrepreneurs established
--
the congested fac:J
class, bad sanitat!OI
social interactions..
factories and employed a large number of workers to work in their factories. The factory a!!
This gave rise to two classes, namely, capitalist and workers and the term deliberate attemp: I
'industrial relations' was coined to create and maintain cordial relations between :ocal communih-. :'
these two classes for the growth of industry. regimentation hi·
sociologists like ~ '
3.8 OBSTACLES TO AND LIMITATIONS OF INDUSTRIALISATION Here workers lea..~
The industrial revolution was based upon a new, dynamic form of for better conditio:;.
economic activity-capitalism. The system of capitalism became the driving Another inc!!
force behind the growth of industrial activity. Capitalism involved new attitudes significance of cloc.;.
 EARLY INDUSTRIALISM --
••
and institutions. Entrepreneurs now engaged in the sustained, systematic pursuit
of profit. The markets acted a$ the key instrument ofproductive life. And goods,
services and labour became commodities whose use was determined by rational
calculation.

Creation of Social Problems

England was the centre of the industrial revolution. The new economy
was completely different from what it replaced. Before industrialisat~on,
agriculture and textiles were the chief occupations of the British. Most people
lived in villages..-bi..ke~ndian villages, there were peasants and landlords,
thehlacksrniths and leather~ers~the weavers and the potters~e shepnerds
a,;;d the- 6rewers. Society was small. It was- hier~chical, i.e. the s tatus aiid
Classpositions ofdifferent pe~pl; were ciearly defined. Like all traditional
societies If was also characterised by close fu~;;;ct"ion. With industrialisation
each of these features changed. } his creatyP _m~:q.y, s~cial problems in the
_society. S\-cr'>· , ' · • r (" : ,, (.,)

Degradation of Labour
One of the most fundamental aspects of the new order was the
degradation of labour, the wrenching of work from the protective contexts
of guild, village, and family. Both the radical and conservative thinkers were
appalled at the decline of the status of the common lp.bourer, not to mention
7t'mlie.. were..
t h es killed eraftsman. / ~~l'J·t l,,Q~\(vs _ 1I
/w pcu tJ
---. V>. e-\ !'V\e«
• f,.. ;J}(" -1 ~ l.A.tH-f~ f ~ 4
L !? C\.t.d\ - l o..i
Problems due to GroWtfl of Urban Society J
Urban centres expanded and grew. It was not that there were no cities
earlier. But their character prior to industrialisation was different. The industrial
cities gave birth to a completely new kind of urban world. It was marked by
the CQ!!_gested .factories,,...Qx overQip;w<i,ed slums of the new fudustrial working
cla~ad sanitation and ge.J.)1fral sgual...QI.. It was~l!larked by ~k!nds of _
social interactions. 1 • / .l . ., )• • ,
- ::>~,. ·,;.J,f;- (' c•fp. , v-o, ('"""; ~').< •

The factory and its-mechanical division of labour were often seen as a

deliberate attempt to d~stroy the peasant, the artisan, as ~ell as family and
local community. The factory was perceived as an archetype of an economic
regimentation hitherto known only in barracks and prisons. For some
sociologists like Marx the factory was oppressive. Yet potentially liberating.
Here workers learnt both collective functioning as well as concerted efforts
for better conditions.
Another indicator of the emergence of modern societies was the
significance of clock-time as a basis of social organisation. A crucial aspect of
 --
Ml:I INDUSTRIAL SOCIOLOGY

this was the way in which, in the 18th and 19th centuries, the te~po of
agricultural and.manufacturing labour increasingly came t~·be set by the clock
and calendar in a . way very different from pre-modern forms of work.
Prior to the development of industrial capitalism, work-rhythms were set by
factors such as the per~od of daylight, the break between tasks and the
constraints of dealines or other social duties. Factory production implied the
synchronisation of labour-it began p1:1nctually, had a steady pace and took
place for set hours and on particular days of the week. In addition, the clock
injected a new urgency to work. For both employer and employee, 'time is
now money'.
Major Obstacles to Industrialisation
Industrialisation spread to U.K, U.S.A. and some European countries. Its
progress was slow in other·countries because of the following obstacles :
(i) Poor means of Communication. People in the developing countries
were not aware of the availability of new machines and equipment.
(ii) Shortage of Capital. Those who wanted to install modem machinery,
lacked capital. Funds for purchasge of new technology were not
available.
(iii) Shortage of Entrepreneurs. Developing countries face the shortage
of enterepreneurs who are creative and cai:i undertake risks of
starting new ventures.
(iv ) Traditional Attitudes. The societies which presecve traditional
attitudes and culture resist industrialisation.
(v) Excessive Dependence on Agriculture and Traditional Occupations.
In developing economies, people engaged in agriculture and
traditional occupations often don't like to leave rural areas to fake
up industrial occupations.
Major Limitations of Industrialisation
The problems created by industrialisation are as follows :
(i) Rise of Individualism: Due to industrialisation, large metropolitan
centres are corning up. In large communities there is decline in fellow
feeling. In such societies therefore the community ~ling or th~
fe~ling of mutual belongingne.ss is tather missing. The life becomes
r~d and mechanical ang~e_2ple have little OJ?.QOr.1.uniti to look
after the welfare of others. The life in industrial societies becomes
seif-centred. As a ~ltof this there is growth and development of
individualism everywhere.
(ii) Disintegration of Family : As a result of industrialisation, the
tendency of intense individualism has grown. Everyone wants to
EARLY INDUSTRIALISM -••
-
have his own way; no one likes to be subject to anybody. Nobody
these days apreciates the need for adjustment and give and take.
Thus, we find modern families cracking up under stress and strain.
There is continuous tension and cnflict in the minds of family
members. As a consequence the families are breaking up fast in the
urban society.
(iii) Materialist Outlook : On account of industrialisation thel_mportance
and value of physical R!Q~ development has enhanced. An

--
average citizen of to-day does not aPJ2ear to be satisfied and
-
contented. '!'Ile maximum material acquisition seems_to have
become tlie aim of modern life. It is for this reason that a common
man of today is averse to religion and spirituality. There is a strong
competition for acquiring as much wealth as possible.
(iv) Loosening of Social Control : In industrial towns, l::ibourers and
arti ans from gla.c_es..far and wide come huefilcg of jobs. Having
fou,nd jobs, they settle in these towns. As mos! of these wor! ers ~~­

- --
outsiders they are not subject to usual social controls. Moreover
caste and clan considerations are almost non-existent in big
metropolises. On account of all these factors the social control
becomes loose and lax.
(v) Increase in Rates of Crime : Researchers have pointed out that the
rate of crime is very.high.in.industrial tow~most of the industrial
towns, prostitution an..dJiqye-r consump.tion are rampcm . Besides_
theft andd acoity also ar;.e commonplace in industrial towns. The
- incidence of violence and murder is also n~indu;trial towns.
 C11APTER COVERAGE

4.1 Concept of Industrialisation

4 .2 Causes of Industrialisation
4.3 Growth of Trade Unionism
4.4 Consequences of Industrialisation

4.1 CONCFr OF INDUSTllAUSA110N

Industrialisation connotes a shift from an agrarian economy leading to
the rise of manufacturing industries. It was industrial revolution in
England and some other European countries which laid down the
foundations of industrialisation.
Industrialisation is the process of social and econo'!1ic change
whereby a society is transformed from a pre-industrial society into
an industrial one. It is the process of transformation to a socio-economic
order in which industry is dominant. It is an economic and social system
based on the development of large-scale industries and marked by the
production of large quantities of inexpensive manufactured goods and
the· concentration of employment in urban factories. Industrialisation
is built on large industries rather than on agriculture or craftsmanship.

-
•••
-
--•
•• INDUSTRIAL SOCIOLOGY

Industrialisation is a part of a wider economic growth process, where

social change and economic development are closely related with technological
innovation, particularly with the development of electric power, steam engine,
textile machinery and iron and steel makin.9.

Characteristics of Industrialisation
The salient features of industrialisation are as follows:
(i) Industrialisation involves large scale mechanisation and automation.
(ii) It lays the foundation of factory system under which an entrepreneur
employs hired labour in the production process.
(iii) It involves the application of scientific methods in industry for the
purpose of improving productivity and quality.
(iv) It leads to division of labour and specialisation.
(v) It attracts labour from agriculture and al Iied occupations to industry.
(vi) It increases the geographic and social mobility of labour.
(vii) It involves better utilisation of idle natural resources for speedy
economic development.

Early Industrialism
The process of transformation from an agrarian economy to one dominated
by industry and machine manufacture began in England in the 18th century.
Technological changes included the use of iron and steel, new energy sources,
the invention of new machines that increased production (the steam engine
and the spinning jenny), the development of the factory system, and tmpertant
developments in transportation and communication (railroad and telegraph).
The Industrial Revolution remained largely confined to Britain from 1760 to
1830 and later spread to Belgium, France, Germany, the U.S., and Japan. The
Industrial Revolution spread to China and India around the mid-2oth century.
The freeing of labourers from feudal and customary obligations created a free
market in labotJr, with a pivotal role for the entrepreneur. Cities attracted large
number of people, amassing work~rs in new industrial towns. Free and flexible
labour, positive. work ethics combined with skills in quickly utilizing new
technologies and scientific discoveries probably boosted both production and
income levels. As the income levels rose, markets for consumer goods and
services of all kinds tended to expand and provide a further stimulus to
industrialisation and economic growth.

When industrialisation was shap ing up, thinkers like Karl Marx, Max
Weber and Emile Durkheim identified a number of soc ial features:
(i) urbanisation;
' lltDUSTRIALISATION : CAUSES AND CONSEQUENCES --
••
(ii) the loss of face-to-face relationships that were found in rural areas
e.g., between landlord and labour; and
(iii) emergence of professional class called 'managers' w ho served as a
link between the employers and the employees.
Industrialisation involves a detailed division of labour. People often do
rot see the end result of their work because they are produc ing only one
s.11all part of a product. The work is often repetitive and exhausting. Yet,
e'!en this is better than having no work at all, i.e., being unemployed. Marx
cal led this situation alienation, when people do not enjoy work, and see it
as something they have to do only in order to survive, and even that survival
depends on whether the technology has room for any human labour.
Over the years, tremendous and rapid development of science and
·echnology has taken place. That is why, the present era is known as 'atomic
age', 'space age' and 'electronic age'. Some people also call this era as the
phase of second industrial revolution. In the present machine age, different
countries of the world are closely inter-related by very fast means of transport
and communication.

4.2 CAUSES OF INDUSIRAIJSA110N

The main factors which gave stimulus to industrialisation are as follows :
(i) Large Scale Production. Modern factories carry on large scale
production to meet the demands of large number of people.
Production is carried on in anticipation of demand.
(ii) Mechanisation. The developments in the fields of science and
technology have increased the degree of mechanisation in the
modern factory system. The efficiency of the factories has increased
many ti mes because of new innovations.
(iii) Automation. In many advanced countries like the U.S.A. and the
U.K .. automation has been introduced in the production system.
By automation we mean installation of one set of machines to run
another set of machines. For instance, ther:e is automation in oil
refineries, chemical industrial units and food processing units.
A smal I number of operators sitting in the control room oversee the
entire operation.
(iv) Specialisation. There is greater specialisation and division of labour.
Many industrial units specialise in the manufacture of a small number
of components or parts of different products. Division of labour has
faci I itated the workers to concentrate on I im ited operations.
(v) Standardisation. Standardisation brings about uniformity of quality
and size, and facilitates large scale' production. Now a days, many
organisations, whether production or services based, are trying to
get themselves standardised as per International Standards called
.,.-- INDUSTRIAL SOCIOLOGY

ISO certifications. Thus, overal I qua I ity consciousness has increased

in industry. ·
(vi) Management Information System. Introduction of management
information system with the help of electronic computers is another
highlight of modern machine age. The computers have vast
memories. They can store huge amount of information and make
available the required information within seconds. They help in
taking managerial decisions at the proper time.
(vii) Growth of Industrial Areas. Concentration of industries in certai n
regions of the country has given rise to the growth of industrial
areas which offer special advantages in regard to raw materials,
power, access to market, financin'g, transporting, etc.
(viii) Expansion of International Trade. Mass production, standardisation
of products, and improved means of transport and communication
have increased the volume of international trade among different
countriews.
(ix) Research and Development. Big industrial enterprises . have
established separate departments for research and development and
they spend a considerable portion of their earnings for innovating
new products and ideas. Research and development activities have
the effect of decreasing cost, increasing quality and consumer
satisfaction and raising the standard of living of the people.
(x) Competition. There is cut-throat competition among the producers
of goods in all capitalist economies. Economic relations between
different persons are based on contract rather than on custom and
tradition.
Thus, it can be concluded that industrial revolution gave plants and
machinery which brought about factory system. Entrepreneurs established
factories and employed a large number of workers to work in their factories.
This gave rise to two crasses, namely, capitalists and workers and the term
'industrial relations' was coined to create and maintain cordial relations between
these two classes for the growth of industry.

4.S GROW1H OF 1RADE UNIONISM

During the early period of industria 1isati on, workers faced severa I problems
in the factories. They got lower wages and worked under poor working
conditions. So they organised themselves into trade unions to secure better
wages and better conditions of work. The basic philosophy underlying trade
unionism was that through strength and collective support, the employers
could be forced to listen to the workers and redress their grievances. The
weapons used included strikes, slowdowns, walkouts, picketing, boycotts and
sabotage. Sometimes, even physical force was used. Trade unionism influenced
 WDUSTRIALISATION : CAUSES AND CONSEQUENCES --
•••
-e personnel management in such fields of activity as the adoption of
~ p loyee grievance hand I ing systems, the acceptance of arbitration as a means
~resolving conflict of rights, disciplinary practices, the expansion of employee
:enefit programmes, the liberalisation of holiday and vacation time, clear
:efinition of job duties, job rights through seniority and the installation of
-21ional and defensible wage structures.
Because of influence of trade unions, several employers in the U.S.A.
- flpoi nted Welfare Secretaries and also launched schemes for workers'
:larticipation. They adopted paternalistic attitude towards the workers and
-1ested on welfare activities for the betterment of workers. In several
:nmpanies, personnel departments were set up around 1910 to look after
"...n ctions like recruitment, training, motion study, record-keeping, welfare,
etc.
Trade unionism in India developed quiteslowlyascomparedtothewestern
"1ations. The main reason for the delayed start of the labour movement is the
:: fference in her economic set up from those of the United Kingdom and the
..:.s.A. Though ,the foreign trading companies helped in the spread of trade
::.."'Id commerce in the country during the eighteenth and the first half of the
- :ieteenth centuries, they were also instrumental in destroying indigenous
'1Clustries. They were more interested in selling goods obtained from their
:r. n country and not in setting up production centres. It was only during the
·9th century, and especially during its second ha If, that a number of factories
;.ere set up in Calcutta and Bombay-jute mills in Calcutta and cotton textile
""'li ll s in Bombay.
Enactment of the Trade Unions Act in 1926 and formation of the
1ternational Labour Organisation (I.LO.) gave a fillip to the trade union
1ovement in India. The immediate result of the formation of International
-..abour Organisation was the birth of the All-India Trade Union Congress
AITUC) in 1920. With the formation of I.LO., immediate necessity was felt
:or a forum for election of the workers' representatives to that organisation or,
a: least, of an agency that could tender suitable advice to Government regarding
sel ection of the workers' representatives. This necessity led to the formation
$ the All -India Trade Union Congress.
The Trade Unions Act gave legal status to registered trade unions and
conferred on them and their members a measure of immunity from civil suits
c'ld criminal prosecution. Thus, it enhanced their position in the minds of
:mployers and the general public. This Act was an important landmark in
:ne history of trade union movement in India. The failure of the Bombay
- extile Strike of 1929 and the economic depression of that period brought
a lu ll in trade· union activity. But industries faced the problem of effective
l"\andlihg of labour-management relations. The managements declared lock-
outs to resist pressure by workers while workers resorted to strikes to
:x-essurise managements for higher wage and better faci Iities. The Government
-
••
- INDUSTRIAL SOCIOLOGY

also intervened in many cases to resolve the disputes between the management
and wor!<ers. This is how the industrial relations system consisting of three
actors, i.e., management, workers and government, evolved.

4.4 QONSIQUB\ICES OF INDUSIRIAUSA110N

Industrialisation has affected the society in every respect. The customs
and traditions, the fashion and mar:ners, the ways and modes of living all
have been deeply influenced by indu strialisation. T he processes of
industrialisation are intimately related with scientific processes. Therefore,
the attitude of the members of industrial society has become scientific. In
an industrial society, the superstitions and blind faiths have no place. Peop le
expect and demand rational explanation of every phenomenon. The reason
and not faith is the touchstone of every action and belief in the industrial
society. The freedom of thought and individualism are the cornerstones of
the industrial society. Because of industrialisation, the methods and means
of social control have changed. The ancient institutions of marriage and
family have also changed. The old values and rules pertaining to religion and
morals are undergoing radical changes. The new patterns of social stratification
are being established. The caste system is being replaced by the class system.
Even the means of recreation and entertainment have undergone change in
the industrial urban society. Thus, it is obvious that industrialisation has
influenced almost every aspect of society.

Impact of Industrialisation on Family

Besides affecting the institution of marriage, industrialisation produces
effects upon the institution of family. Some of the important effects of
industrialisation upon family areas under:
(i) Role of Family: As a result of industrialisation, the role of fam ily
has changed considerably. Now a number of functions which used
to be performed by families in the past have been taken over by
other institutions. Traditional·ly, an Indian family used to be a centre
of birth, rearing and education of children. The children used to get
training in the ancestral profession. The function of socialisation of
children, too, used to be performed by the family. But in the
industrialised society of today the family is not required to fulfil
these roles. Today children are born in hospitals. In big towns, we
find today a number of Infant-Care Centres and Playway Schools.
The education of children today is done in schools and not in homes.
The professional training also is no longer the obligation of the family.
What is even more, even feeding is no longer the exclusive obi igation
of the family many people in metropolises eat out of homes. In
almost all big cities people rarely take lunch at home except on
Sundays and holidays.
MXISTRIALISATION : CAUSES AND CONSEQU.ENCES -••
-
(ii) Breaking-Up of Joint Family : Traditionally, most of the Indian
families werejoint families. As a result of industrial isation, most of
thesejoint families are breaking up and are being replaced by nuclear
families. In industrial towns there is acute shortage of residential
accommodation. Most of the people have to content themselves
with a single or two room accommodation. In these circumstances
it is physically exceedingly difficult if not impossible to retain the
joint family system.
(iii) Nucleus Familie5: Asa result of industrialisation, the cost of living
has gone up. At the same time standard of living has also gone up
considerably. Everybody wants good c lothes, house and other
comforts of I ife. Obviously, it is not possible to maintain the standard
with a big family. Therefore, people these days want to keep sma ll
families.
(iv) Status of Women: The status enjoyed by women in the trad itional
Indian soc iety was rather low. Women were confined in the four-
wa I ls of the home. They enjoyed no independence. Without husband
the condition of a woman was miserable. As a result of
industria lisation there has been much improvement in the status of
women. Alongwith men, women today work in all walks of life.
They are therefore becoming independent econom ica Ily. Their status
and respect in society has therefore improved considerably. Now-
a-days, women consider themselves equal , even superior, to men.
(v) Disintegration of Family : As a result of industrialisation, the
tendency of intense individual ism h·as grown. Everyone wants to
have his own way; no one likes to be subject to any.body. Nobody
these days appreciates the need for adjustment and give and take.
Thus we find in modern society families cracking up under stress
and strain. There is continuous tension and conflict in the minds of
family members. As a consequence of this situation, the families
are breaking up fast in urban society.
(v1) Change in Family Goals: The goals and ideals which nourished
the traditional Indian family were spiritual and religious. The
housewife used to regard her husband asa divine being. The women
willingly subjected themselves to each and every whim of their
husbands. Even children used to give unqualified respect to their
parents. The father was regarded to be the head of the family and
hi s command was rarely defied. In the industri al society, there is no
room for such ·ideals. For a modern wife the husba nd can be at best
an honourable friend and, under no circumstances, a god. The
powerful status of father in family is being lowered as a result of
industriali sation.
 --
Ml:W. INDUSTRIAL SOCIOLOGY

Impact of Industrialisation on Caste System

In the Indian society, the caste system has had a unique role. The social
status of a person was determined by his caste. But industrialisation has
diminished the role of caste system. The impact of industrialisation upon Indian
caste system are as under :
(1) Disintegration of Caste System: The industrialisation in India has
led to breakdown of caste-system. Traditiona lly, the socia l status of
a person iri Indian society was determined by the caste into which
he was born. As a resu It of industrialisation the caste-based criterion
of social classification has changed. In the industrial society it is
the class and not the caste which fixes the socialstatus of a person.
Now the society is split into classes. Man gets social status according
to his class.
(ii) Reduction in Influence of Brahmins : In the traditional soci al
structure the Brahmins enjoyed the highest status in the society.
But as a result of industrialisation the influence of Brahmins is
gradually losing its traditional hold on Indi an society.
(iii) Abolition of System of Caste-based Functions: In the traditional
caste-based society each caste was associated with some activities
or functions. The Brahm in had the role of teacher, the Kshatriya
that of warrior. Now all this has changed. It is no longer obligatory
upon a shudra to do menial jobs for upper castes. Due to these
changes, the traditional functions of the castes stand aboli shed.
(iv) Division of Labour based on Specialisation : Under the caste
system, the division of labour was based upon caste and upon the
consideration of efficiency. A Brahm in was to perform the functions
of learned even if he was poor in learning. Under the influence of
industriali sation, the criterion of division of labour has changed .
The industrialisation has encouraged specia li sation. Now-a-days a
person is not given a task unless he is specially trained for it. In
every sphere of society, a specialized training is needed for the
successful performance of ajob.
(v) Dilution of Control of Castes: In traditional society each caste had
its own code of conduct which was strictly adhered to, any violation
thereof attracted strong social reprobation . The violation of caste-
based code of conduct used to result in excommunication. In modern
industrial society, the control of caste has become loose and lax.
The industrial society is highly intricate and complex. Now-a-days
persons of al l castes work together and it is, therefore, impossible
to observe the separate caste-based codes of conduct. In modern
industrial societies, the instruments of effective social controls are
prov ided by law and law enforcing agencies.
 ~ DUSTRIALISATION : CAUSES AND CONSEQUENCES

(vi) Loosening Hold of Untouchability : Under the caste system the

.,.--
persons belonging to different castes did not get together and share
a common bond. As far as dalit was concerned he could not even
sit. stand or walk near the persons of upper castes. As a result of
industrialisation, the spectre of untouchabi I ity has relaxed its grip
upon the thought and imagination of people. Today members of al I
castes work together in mills and factories and eat food stuff from
the same canteens. Many a waiters in restaurants are da Iits. Everybody
including Brahminswillinglyeat food prepared and served by these
people. Besides in parks and pub I ic places, there are no restrictions
on the entry of dalits. Thus, industrialisation can be said to have
come as a boori for the lower-castes.
(vii) Solemenisation of Inter-caste Marriages: Under the caste system,
the inter-caste marriages were a strict taboo. Hardly anyone dared
to defy this taboo and marry with a spouse of any other caste except
one's own. The punishment for such marriages was nothing less
than complete excommunication. In modern societies, people do
marry into other castes without much disapproval. In mills and
factories, persons belonging to different castes come together, develop
common interests and friendship. Some of these contacts bloom
and flower into mutual love and attraction. The mutual attraction
breaks the caste barriers and such persons marry. There is another
reason for prevalence of inter-caste marriages. Due to frequent
encounters with members of other communities one comes to realize
the fundamental oneness of all human beings. One
begins to appreciate that stereo-typed thinking with regard to other
castes is not val id. Thus, the factors Ii ke caste pride and hatred for
other castes which help accentuate caste barriers become inoperative.
Thus, there emerges a rational outlook among the people.

Impact of Industrialisation on Social Stratification

In the industrial society, there is a unique kind of social stratification.
The different strata of society are known as social classes. The basis of
stratification in an industrial society is different from that of other societies.
Generally, social stratification in an industrial society occurs on the following
four-fold bases :
(i) Occupation
(; i) Education
(iii) Income
(iv) Birth
 INDUSTRIAL SOCIOLOGY

Occupation : In the industrial society, the main basis of soci al

stratification is occupation. The status and prestige of an individual is
determined by the position and rank he occupies in industry, the nature of h is
profession and hi s rank and status in that profession. The rank and status are
of crucial importance in an industrial society as they are indicative of one's
ability. The rank and status and occupation are not heredity in industrial society
and one has to strive and struggle for acquiring status.
Education : Education has become an important determinant of the status
of a person. The better educated are regarded more highly than the less
educated. Of course in every society the poets, writers and learned have got
top rank and status. However, in industrial soc iety there is some difference in
this regard from other societies. The industry has closer relation to science
and technology than formal learning. Th is is why a person who is highly learned
is not regarded so wetI as a person who is proficient in science and technology.
In an industrial society it is not I iterary learning but the scientific learning that
commands respect. As a consequence of indus~rial isation the importance and
value of subjects like philosophy and literature has gone down. The forma l
learning has been replaced by utilitarian subjects.
Income: Another measuring rod of one's social status is one's income;
the higher one's income the higher one's socia l status. The ri ch are respected
and poor are hated. According to the materialistic outlook, the possession of
material comforts and luxuries is the paramount aim of life and the more are
one's material possessions nearer is one to the summum bonum of I ife. Money
income is needed for acquisition of material comforts.
Caste: In the caste-based societies, the son of a Brahm in was accorded
the status of Brahm in without the slightest consideration of his actual merit.
In feudal societies, the family had great importance in determining one's socia l
status. In industrial society, too, the family has uniqu e importance in
determining the social status of a person. However, the reasons for the
importance of family in social strat ification in industrial society are not the
same as in caste-based or feudal society. In an industria l society it is recognised
that in order to develop or flower one's talents the fami ly plays an important
role. A successful manager and technocrat need especial opportunities of
training etc., only those families which ca n provide such facilities produce
successful persons in industrial soc ieties. A man born in a high class family
naturally gets more opportunities of development than a person who is less
fortunate in this respect. In soc ialisation also, the family plays an important
role.

Impact of Industrialisation on Religion

It has been sa id that religion prospers most in soc ieties where ignorance
is rampant. On the contra ry, as the areas of science and technology spread, the
INDUSTRIALISATION : CAUSES AND CONSEQUENCES --
•11•
hold of religion weakens. Generally, science and religion are considered to
be mutually opposed. In the absence of scientific explanation, small an~
insignificantthings and events become pillars of religious faith and dogma. In
pre-scientific days the phenomenon of rain, storm etc., was linked with the
religious phenomenon and it was imagined that there are gods of rain, thunder
etc. Industrialisation is intimately related to science and technology and with
the growth of industrialisation there is spread of science and technology. The
widespread use of science and technology creates a scientific outlook. In the
Indian society, religion and morals are intimately linked. The moral principl es
are grounded in religious faith and belief. Morality is based upon religion. This
is the reason why with the decline in religion there is change in moral principles
as well.
lndstrial isation has influenced the religious and moral thinking of the
people in the fol lowing ways:
{i) Decline of Superstitions: Under the garb of religion orthodoxy and
superstitions flourish. Superstitions are due to ignorance. For material
and industrial progress, it is very essential that people should be
free from the clutches of superstitions. They must have rational
and scientific outlook. The process of industrialisation helps the
spread and dissemination of science and practical knowledge. As a
result of industrialisation people learn the truth of physical reality.
They begin to appreciate and value the practical results and are
prepared to give up irrational beliefs.
pi) Development of Religious Tolerance: Generally, orthodox religious
people are of narrow and parochial outlook. On account of their
parochial outlook they regard their own religion as supreme and
i nfal Iible. Their attitude towards other religions is that of contempt.
As a consequence of industria I ization, the persons of different faiths
come together and get an opportunity of knowing and understanding
the truth about each other. This results in dispelling of wrong notions
about other faiths and an appreciation of basic unity of all fa iths.
(iii) Secular States: Previously the states used to be theocratic; each
state subscribed to some or other faith. The citizens professing faiths
different from that of the state did not enjoy ful I rights and privileges;
they were treated as second-rate citizens. But as a result of
industrialization, the concept of theocratic state has become
obsolete. Due to industrialisation every state now has a sizeable
number of minorities whose claims ca nnot be ignored. The states
today subscribe to the ideology of religion but accords equal status
to all religions. This is called seculari sm.
.,,-- .
Impact of Industrialisation on Morals
INDUSTRIAL SOCIOLOGY

The impact of industrialisation on morals is discussed below :

(i) Rational Outlook : The Indian society considered the moral
principles as universal truths beyond the sphere of doubt and reason.
As a result of industrialisation, the outlook of common man has
changed. Now people demand rational justification as to why a
particular action is considered right or wrong. In industrial societies
it is believed that the moral principles are man-made and that
morality is for the sake of human I ife and society and not vice versa.
The tendency to examine and evaluate every moral principle before
acquiescing to it is gaining ground in modern society.
(ii) Materialist Outlook: On account of industrialisation the importance
and value of physical progress and development has enhanced. An
average citizen of to-day does not appear to be satisfied and
contented. The maximum material acqui sition seems .to have
become the aim of modern life. It is for this reason that a common
man of today is averse to religion and spirituality. There is a strong
competition for acquiring as much wealth as possible.
(iii) Individualism: Due to industrialisation, large metropolitan centres
are coming up. In large communities there is decline in fellow feeling.
In such societies therefore the community feeling or the feeling of
mutual belongingness is rather missing. The life becomes rapid and
mechanical and people have little opportunity to look after the
welfare of others. The I ife in industrial societies becomes self-
centred . As a result of this there is growth and development of
inpividual ism everywhere.
(iv) Permissiveness in Sex Morals : As a result of industrialisation,
the sexual mores have become lax. There are numerous reasons for
this laxity. Firstly, the opportunities for the m ixing-up of people of
opposite sex have increased. Now-a-days boys and girls can meet
without much difficulty and social opposition. In mills, factories
and offices, men and women work together. As a result of th is
frequent encounter of sexes there is laxity in sexual morals. Moreover
industrialisation has given rise to materialistic thinking and
according to the materialist outlook of I ife the traditional taboos on
sex are not valid . This is why that today premarital sex is not
considered to be criminal or immoral. Indeed sex without marriage
is coming to be considered quite normal, healthy and moral. In
·Western society, all taboos on sex have broken down.
(v) Increase in Rates of Crime: Researchers have pointed out t hat t he
rate of crime is very high in industrial towns. In large metropol itan
cities, family life is subject to many pressures. It is very difficu lt to
 INDUSTRIALISATION: CAUSES AND CONSEQUENCES •.--,.
have normal family life in such towns. On account of disintegration
of family, life the control of family over individuals is becoming
lax. Due to absence of this control there is encouragement of crime.
In mostofthe industrial towns, prostitution and liquor consumption
are rampant. Besides theft and dacoity also are commonplace in
industrial towns. The incidence of violence and murder is also high
in industrial towns.
(v11 Loosening of Social Control : In industrial towns labourers and
artisans from places far and wide come in search of jobs. Having
found jobs, they settle in these towns. As most of these workers are
outsiders they are not subject to usual social controls. Moreover
caste and clan considerations are almost non-existent in big
metropolises. On account of all these factors the social control
becomes loose and lax. So the control is exercised by law and law
enforcing agencies like police, courts etc.

Impact of Industrialisation on Entertainment

The means of relaxation and entertainment keep changing with time.
There is a big difference between the means of entertainment in pre-industrial
and post-industrial societies. In India, there have been significant changes in
the means of entertainment as a resu It of i ndustria Iisation.
Traditionally, all entertainment was focussed upon family. Generally, all
families used to bejoint and therefore were very large. On account of large
families it was possible to find all kinds of entertainment within the fami ly
itself. The adult male members used to entertain themselves by playing cards
or chess and females used to gossip, swing or sing. As there were very many
children in every family, theentertainmentof children was easy. In the modern
industria I societies the situation is just the opposite. The size of families has
shrunken. A family today consists of husband and wife and their two or three
children. Besides, in niany families, both husband and wife are employed.
Under these circumstances there is no scope of entertainment within the family.
Today almost everyone goes out for entertainment to places like theatres,
cinema halls, etc.
 ~

UNIT-Ill INDUSTRIALISATION AND

POLICY FRAMEWORK
=---------~--....,, -- --- - ---

Chapter 5: Industrialisation in India

Chapter 6: Industrial Policy and Science, Technology
and Industrial Policy
 CHAPrnR CovERAGE

5. I Industrial Activity in the Medieval Period

5.2 Industry during the Mughal Period

5.3 Impact of Industrial Revolution

5.4 Industrialisation since Independence
5.5 Industrial Development during the Plans
5.6 Problems/Issues Created by Industrialisation
5 .7 Dealing with Evil Consequences of Industrialisation
5 .8 Industrial Policy, 1991 and Recent Developments

In the ancient period there was virtually no industry in India. The main
concern of humans during the primitive period was merely to provide for food
and physical m:-otection. The means which were adopted by him to meet these
ends were symbolic of his industrial effort. For food the primitive man used to
hunt animals and gather wild vegetables and fruitt For hunting he employed
blow and arrow and certain instruments made by sharpening stone. All primitive
weapons were made either of wood or stone. These weapons were symbols of
industrial development of that period. Besides, making fire by friction of stone
or bamboos was industrial miracle of that time .

~.1 INDUS~AL ACTIVITY IN THE MS)IEVAL PERIOD

During this period, a number of manually operated machines were
fabricated. Man also began using animal power to meet his ends. The signs of
industrialisation, production of goods in excess of consumption and stocking

-
·--
.--.,. INDUSTRIAL SOCIOLOGY

of these came in evidence at that time. The exchange of goods and division of
labour also began. As a consequence, different industries started operating
separately. For example, blacksmith, carpenter and weaver set up independent
units. Thus began the specialisation of jobs.
The medieval industrial age could be divided into the following three
distinct industrial systems.
(1) Feudal system
(2) Guild system
(3) Domestic system
Feudal System
Under this system, the primary industry was agriculture. A few persons
controlled vast tracts oflands each and they engaged and employed hundreds
of workers to do the farming. This system was in vogue in Europe between
9th and 12th centuries. Under this system, the owner of the land was called
feudal lord and persons engaged by him were called serfs. The serfs were
virtual slaves of the feudal lord. Besides agriculture, other important
occupations were : carpentry, blacksmithy, pottery and weaving.
Under the feudal sy~tem, the serfs were required to give all kinds of
services of their respective lords. In case required, they had to fight war against
the enemies of their lord. From 11th century onward, urban towns started
coming up in Europe. With urbanization, feudal system got a set-back. The
labour serfs. They could migrate to towns for their livelihood. This gave rise
to the guild system.

Guild System
Urbanization in Europe emancipated the serfs from their traditional
slavery under feudal lords. The workers started learning new trades and skills.
As .a result of specialisation and proficiency in trades acquired by workers,
centres of trade came up. Gradually, this process gave rise to Guild system
under which, trade associations representing various trades came into being.
These trade associations worked for the promotion and development of their
respective trades. These associations supervised the quality and quantity of
goods being produced by the members of their association. They also fixed
and regulated the prices of goods. Various Kinds of relations obtained among
the members of a guild. ·
There were two kinds of guilds: (1) the Merchant Guilds, and (2) the
Craft Guilds. The main task of the Merchant Guilds was to look after the
interests of traders. They worked for justice from government in a manner in
which Chambers of Commerce of today function. The Craft Guilds were
associations formed by craftsmen carrying on a particular craft. The craft guilds
worked for the pi:omotion of the crafts and protection of the interests of
 M>USTRIALISATION IN !NOIA

::aftsrnen. The craft guilds used to arrange weekly markets where craftsmen
.--.,..
::llid sell their products. In craft guilds, master craftsmen played a crucial
_e.
The master craftsmen used to belong to families of master craftsmen.
-e craftsmanship was supposed to be hereditary. During this age, the craft
::ilds of black-smiths, carpenters and weavers were particularly prominent.
=. short, the guild system occupies a place of pride in the history of Industrial
.-elopment. This system played an important role in maintaining social
-~any and unity.
The guild system lasted for a pretty long-time, but gradually it declined.
• m 16th century there was a gradual decline and deterioration in this system.
~ere were two main causes for the decline of this system as discussed below.
(i) The first cause of the decline of the guild system was that its functions
and the rights of its officials were not well-defined. This gave rise to
myriad conflicts. For example, the guild of goldsmiths was always
warring with the guild of silver-smiths. Moreover, there was gradual
fragmentation of the guilds. Originally, there was only one guild of
cloth merchant, but later many sub-guilds like association of weavers,
tailors, embroiderers etc. were formed.
(ii) The second cause of the decline of the guild system was external.
Under this system, there was one group of traders who were
manufacturers and the other was that of middlemen. This group of
middlemen later began exploitation of the manufacturers. The
middlemen took over the control of all levers of production and
arbitrarily used them for their own selfish ends. Generally they took
over the control of supply of raw materials. The arbitrary acts of
these middemen gave severe set back to the guild system.
.
Domestic System/ f Jh~ t\ CM; l ~~ \~
As far as the method<arproduction was concerned, the domestic system
was not much different from that of the guild system. However, under the
domestic system there was no place for various guilds and trade associations.
Under the domestic system a head of family who normally was a master
craftsman controlled the entire production and everything was under his
personal control. The head of the family used to provide for the raw materials
and tools for the manufacture of goods. All processes or stages of production
were under his individual control and supervision. Under this system, the
craftsmen had not much freedom. The system is to be seen today in the form
of cottage industries.
The role played by middlemen and the money-lenders which ruined the
domestic system. The head of a trade in the domestic system required from
time to time extra funds for the purchase of the raw material. This extra amount
came from the money-lender and he usually exploited the opportunity to the
 --
•• INDUSTRIAL SOCIOLOGY

fullest. Besides, mechanisation of industry rendered this system absolut::

and economically non-viable. The capitalist by investing huge amounts
into industry and mechanising it to the hilt completely ruined the dome st:~
system.

.2 INDUSTRY DURING THE MUGHAL PERIOD

In the reign of Akbar and Jahangir, industry was given greater importance
During the reign of these rulers, India was famous world over for its industria_
f\~vJ products. At this time spices, cloth and indigo used to be exported to Europe
\.to,__ from India. The Muslin of Dacca was world-renowned. A number of industri<L
J7h1A centres had sprung up at this time from which goods used to be exported t::
several countries.
Under the Mughals, industry in India was quite widespread. There we:e
industrial centres in rural as well as urban areas. The aim of the in~try i::
ru~ areas was mostly to cater to needs of local people. The goods of dail.
need were availa61e m villages. Tile iffilustry in urban area-s-was high:.~
developed and was carried on a vast scale. The primary aim of industry i::
towns was to produce fine quality goods for the purposes of export. The
industry at this period was not privately owned but was under the control o:
guilds. At certain places middle-men used to play a role. They middle-me:.
used to pay in advance for the goods needed by them.
After the Mughals there began a gradual decline and deterioration of the
traditional Indian industry. The chief reason for this decline was the industria:.
revolution in the West. As a result of the industrial revolution, the pattern ar.C.
nature of industrial production in England underwent such a change that the
demand there for the Indian goods completely dried up. There were a numbe:-
of reasons for this radical change. Firstly industry in England was becomin'"
highly mechanised. The mechanisation led to an increase in the productio:r:.
and also improvement in the quality of goods. Thus there was competitio::
between machine-made foreign goods and hand-made Indian goods. The
machine made goods were cheap, standard and available in bulk. For prett:;
obvious reasons Indian goods failed to compete with their Wester::
counterparts. The result was that there was steep decline in the demand fo:-
Indian products which, in turn, led to closure of many manufacturing units.
Many of the skilled Indian craftsmen took to job under foreign controlled
comp~ies.

~.3 IMPACT OF INDUSTRtAl REVOLUTION

After the industrial revolution in the west, the Indian.industry lost its
ground substantially. Industrial activity on modern lines pricked up after the
 nDUSTRIALISATION IN INDIA
..--
B:itish took over the reigns in India. Between 1850-60, jute mills were set up.
:n the beginning, rail track between mining centres in Bihar and Calcutta were
.aid. Along with the development of means of communication there was rapid
.:?dustrial growth in India. About this time foreign merchants established
:extile mills in Bombay and Ahmedabad. In Kanpur woolen and leather
::actories were established. These factories were under British ownership though
;,he raw material was supplied by Indians and the labour working in these
=actories was also Indian. The profit was made by the British at the expense of
:Udians.
The British Government used to export the raw materials from India and
:mport into India the finished goods at exhorbitant prices. The Britishers had
:ittle sympathy for the development of local industry. In 1911, Jamshed ji
Tata ushered in an era of Indian industrial revolution by setting up a steel mill
in Jamshedpur. However, its production was not adequate to meet the local of
communication and the production of coal and iron ore. On the whole,
however, Indian industry was backward.
In the First World War, the British had to suffer and face grave difficulties
on account of the undeveloped state of Indian industry. The situation arose
where the sea-routes were blocked and it became impossible to export raw
materials from India and to import finished goods into India. On account of
this the army based in India was put to great hardships. Therefore, after the
war, the British encouraged setting up industries in India.

Industrial Revolution and India

In India, industrialisation started in the second half of the 19th century.
But on account of political dependence, it proved to be haphazard and lop-
sided. Even upto 1914, we did not have any basic or key industries and the
so-called producer's goods industries. We had, of course, many consumer goods
industries such as contton textile industry. Unfortunately, we were require to
import all kinds of manufactured goods and machinery and machine fools
from abroad till our independence.
It was after independence that the Central government laid the foundation
of industrialisation by setting up core and producers' goods industries in the
public sector and starting development financial institutions for the
encouragement of industries in the private sector. As a result, there has been
tremendous growth in iron and steel, oil refineries, heavy electrical, fertilizers,
chemical and ship building industries. Recently, we have seen the exemplary
growth of the information technology (IT) sector in India.
 INDUSTRIAL SOCIOLOGY

The Factories Act, 1948

The Factories Act was passed in 1948. It contains provisions relating to
health, safety, welfare, working hours and leave of workers and employment of
women and young persons in Factories. The preamble of the Act states the
object of the Act is to consolidate and amend the law regulating labour in
factories. However, it has the following other objects:
(i) To protect the labour employed in factories from unduly long hours
of manual labour or bodily strain.
(ii) To provide for healthy and sanitary conditions.
(iii) To take precautions for the safety of workers.
(iv) To maintain effective supervision by the State Government by
appointment of inspecting staff for factories.
According to Sec. 2 (m), Factory means any premises including the
precincts thereof-
(i) Whereon ten or more-workers are working or were working on any
day of the preceding twelve months and in any part of which a
manufacturing process is being carried on with the aid of power, or
is ordinarily so carried on, or
(ii) Whereon twenty or more workers are working, or were working on
any day of the preceding twelve months, and in any part of which a
manufacturing process is being carried on without the aid of power,
or is ordinarily so carried on.
For computing the number of workers for the purposes of this clause, all
the workers in different relays in a day shall be taken into account.
It may also be noted that where power is employed, it is enough for 10
workers working in a place to make it a factory. But if 20 workers or more are
employed and any manufacturing process is carried on even without the use
of power, it bec;;omes a factory.

After independence, industrialisation got a big boost particularly after

the announcement of Industrial Policy Resolution, 1956. The Central
government took over the 'commanding heights of the economy.' This involved
defence, transport and communication, power, mining and other projects w.hich
only government had the power to launch, and which. were necessary for
private industry also to flourish. In India's mixed economy policy, some sectors
were reserved for government, while others were open to the private sector.
But within that, the government tried to ensure, through its licensing policy,
that industries were spread over different regions. Befort; ii1dependence,
INDUSTRIALISATION IN INDIA -••
-
industries were located mainly in the port cities like Madras, Bombay, Calcutta.
But since then, we see that places like Baroda, Coimbatore, Bangalore, Pune,
Faridabad and Rajkot have become important industrial centres. The
government also tried to encourage the small-scale sector through special
incentives and assistance. Many items like paper and wood products,
stationery, glass and ceramics were reserved for the small-scale sector.

Roie of Industrialisation
Industrialisation plays a very significant role in country's economic development.
In most of the contemporary advanced countries, the development of industry
has led to higher incomes and economic growth. The role of industrialisation
in ecDnomic development can be stated in the followrng few points:
(1) Industrialisation is the basis ~f raising income levels of the people.
(it) It is a means of promoting rapid economic development.
(iii) ft helps in absorbing rural surplus labour.
(i0 It is necessary for building up strong export secwr.
M It helps agricultural growth in the country.
(w), It strengthens infr9structure,
(vii) It leads to modernisation of the economy.
(viii} It otters wide choices to the consumers,.
(ix) It is necessary to ensure nat4onal seoutlty.
(x) It ensures security against foreign dominance ar'ld dependence.

S.S INDUSTRIAL 'DEVELOPMENT DURING TNE PLANS

In India the programme of rapid industrial development starts with the
Second Five-Year Plan, because the First Plan was preoccupied with agriculture
and rectifying problems created by the partition of the country. The Second
Plan {1956-61) was designed to provide a strong base for industry and provided
for a public sector outlay of Rs. 960 crores which was nearly 21 per cent of
the total public sector outlay. And from this plan onwards the public sector
outlay on industry was continuously stepped up from less than two thousand
crores in Third Plan to over sixty five thousand crores of rupees in the Ninth
Plan. The relative share of outlay on industry has, however, declined since the
sixth plan due to greater emphasis on energy and infrastructural development
to provide for smooth growth of industry.
The overall growth of industry over the plans has been slow and erratic.
The actual growth rates achieved under the various five-year plans invariably
fell short of the targets, except for the First Plan where the target was marginally
exceeded and the Seventh Plan where the actual achievement was very close
 --
Wjnl INDUSTRIAL SOCIOLOGY

to the target fixed for it. The following Table 1 shows the targets and
achievements of industrial growth rate during the plans.
The most striking feature of industrial development in India has been the
larger extent of diversification it has achieved over the relatively small period
of half a century. Industrial self-reliance has been built in the economy through
development of heavy, basic and capital goods industries. The Mahalanobis
strategy of building up machinery and capital goods industries, which formed
the foundation of our early industrial development p,rogramme, had indeed
put the nation on a very firm industrial base. Far from being a major importer
of capital goods, machinery and transport equipment, the country now exports
a wide variety of these goods to other developing countries and even to some
of the developed nations.

Table 5.1: Growth Rates of Industrial Production

(Per cent per anmun)

Plan/Period Target Actual

First Plan 1951-52 to 1955-56 7.0 7.3

Second Plan 1956-57 to 1960-61 10.5 6.6
T hird Plan 1961-62 to 1965-66 11.0 9.0
Annual Plan 1966-67 to 1968-69 - 2.0
Fourth Plan 1974-75 to 1978-79 12.0 4.7
Fifth Plan 1974- 75to 1978-79 8.0 5.9
Annual Plan 1979--80 - 1.4
Sixth Plan 1980-S1 to 1984-85 8.0 5.9
Seventh Plan 1985-86 to 1989-90 8.7 8.5
Annual Plan 1990-91to1991-92 - 4.4
Eighth Plan 1992-93 to 1996-97 7.5 7.0
Ninth Plan 1997-98 to 2001-2002 8.0 5.0
Tenth Plan 2002-03to2006-07 10.0 -

2002-03 - 5.7
2003-04 - 7.0
2004-05 - 8.4
Source: Krishna, K.L.: Industrial growth and Diversification, Ninth Plan Document, RBI Report on
Currency and Finance, 2002-03 and Economic Survey 2004-05.
S.(> PROBLEMS/ISSUES CREATED BY INDUSTRIAUSATIO~
Economic Consequences of Industrialisation
The economic consequences of industrialisation are discussed below:
(i) Large Scale Production: As a result of industrialisation, there is
production on large scale. In India steel, cement, sugar, jute,
fertilizers, electrical equipment, etc., are beingproduced on maSsiV'e
scale. India with its vast population is near self-sufficient in these
commodities.
(ii) Growth of Trade: On account of ~t_prod_u.£!!.?n , there is
unparalleled 1Q'OWth in trade and commerce. The development of
fast means of communication has contribUted a lot towards this
end. The foreig~ade h-;s also shown tremendous rise.
--- .
(iii) Division of Labour and Specialization: Another economic impact
of industrialisation is the division of labour and specialisation.
Gradually, the number of technocrats and highly skilled personnel
is growing.
Rise in the Standard of Living; As a result of industrialisation there
is a certain rise in the living standard. Today electric gadgets, T.V. ,
bike,gaS,'etc., are common household goods.
(v) Unemployment: The mechanization of production system has
t_gr_o~illions of Q_eople out of wo!!i. Due to fudustrialisation,
 INDUSTRIALISATION IN INDIA .,--...
there is glut of many comrµodities. This leads to grave economic
crisis.
(vi) Industrial Disputes: The i~dustrial disputes are inevitable
accompaniments of industrialisation. Wherever there is in dustry,
there are thousands of workers. It is a natural tenden~_x of worke~s
to exgect more and more for their work; on. th.e Qthar..b.a.ruL.tlte
industrialists want m~Te production fC:r l~ss wa~. Under these
circumstances there are bound to be clash.es of interests resulting in
industrial disputes. . -
(vii) Concentration of Wealth: As a result of industrialisation, there is
tremendous concentration of wealth in a few hands. Due to
industrialisahon one man can control a business of crores of rupees
and go on amassing wealth unabated. Thus, like other couiitrles;
industrialization m1na ia has also given tremendous fillip to the
growth of capitalism.
(viii) Spread of Individualism: Industrialisation has promoted
,,,,y; ~ndividualism. As a result of it capitalism grew and with it spread
"7-..1j )() q the ideas of individualism and laissez faire. On the other hand, the

\
1
"o~ ideology of socialism also spread as a result of industialisation.
:''f{)' (ix) Class-Conflict: Like other countries, industrialisation in India has
given rise to class-conflicts. There is continuous tension among the
capitalist and the labour and the poor and the rich.
(x) Decline of Cottage Industry: As a result of industrialisation, the
goods of daily use are produced on mass scale. The quality of
machine-made goods is standard and they are cheap. This has
resulted in large inflow of goods into villages which has ruined the
cottage industries of the villages.

Social Consequences of Industrialisation

The social impact of industrialisation in India is discussed below:
(i) Urbanisation: Industrialisation has speeded up the process of
urbanisation. Many cities and towns have come on the industrial
map because of setting up of industrial units in large number and
migration of people from rural areas. It is on account of
industrialisation that there is progressive rise in the population of
cities in India. Whatever social impact is due to urbanisation is
indirectly due to industrialisation.
(ii) Decline in Family Control: Since the population of cities has grown,
the cities have expanded. This has resulted in there being great
distances between the places of work and places of residence;
between educational institutions and homes. This has meant that
people stay away from home environment for the best part of the
CHAPTER COVERAGE

6. 1 Role of Govemme~t's Industrial Policy

6.2 Industrial Policy Resolution, 1956
6.3 New Industrial Policy, 199 I
6.4 Public Sector under NIP, 1991
6.5 Role of Government to Promote Small Scale Industries
6.6 Changes in Industrial Environment In India
6.7 Technology Policy Statement, I 983
6.8 Science, Technology and Innovation Policy, 20 I 3

On the eve of independence, India had an extreme~_Q.evelopecl

cfu;torted.aud UJJ.balfl!!ced industrial structure. Industri~ontributed less
tQ.an ~ne_six.th....o.Lthe national incoID..El,Jhe country did have some
industries like cotton textiles, jute and sugar, but there were virtually no
basic, heavy and capital goods industries ·o n which programmes of future
industrialisation could be based. Whate'[l;}r major industries were there,
they were largely concentrated ina few areas such as Bomba , Surat,
!\. me a a , amshedl?ur, a cutta, etc., whi ~e the rest of the country
~ma~d iJ!.du.s..t~ neglected. After independen~e, the Government of
India undertook effective measures to: (1) in.crease the tem2 2,..o f
industrialisation, (2) correct regional imbalances in industrial
aevelo~ (3) rectify the distorted industrial str_ujj.m:.e tbroJ!Eh
rapid development of cauital gQodSllidiiSttles.

-•••
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 .,.--
6.1 ROLE Of GOVERNMENT'S INDUSTRIAL POLICY
. . . . . ' . . .
INDUSTRIAL SOCIOLOGY

What is Industrial Policy?

The industrial policy is a statement which defiIJes the role of the govem_l!lent
in industrial development, the_roLes of the p ublic and private sectors in
industrialisatio!J..Qf_ the country, the relative role of large and smCil.1 maustfies,
the rgje olfl?!§ign capital, etc., It is also a statement of the objectives1:obe
achieved in the area of inaustrial development and the measures to be adoptea
towards achieving these ooieclives.
- - - -
The industrial policy formally indicates the spheres of activity of the
public and the private sectors. It lays ilown norms, rules and procedures thaf
would govern the growth and pattern of il!dustrial activity. The industrlar
p OTicy is not iiiflexible. It is amended, modified and redrafted according to Th"'e-
~angea s1tua!ions, reg_uirements an~ectives of developrnenL ~
The ~e!:!!!Pen..t.:§..in.dus.trial eolicy has been initially protecting the
Indian industries and then promotin and develo ing industries to speed
up the process of in ustrialisation in the coun . In the initia .years after
inoependence, the government's fO'CliSWas on protection of small industries
from competition by large industries. It also protected large industries from
competition by the foreign companies. The imports of goods into the country
were restricted
... and the foreign companies were not allowed to enter India.
Tiie government's industrial policy also initiated measures to promote
and develop industries. For example, it provided for :
(i) Cheaper long-term finance ;
(ii) Creation of industrial estates to provide industrial plots and sheds
for starting new units ;
(iii) Concessions in excise duty and other taxes.
(iv) Training and development of entrepreneurs. ·
(v) Promotionof small enterprises.

Objectives of the Industrial Policy

The major objectives of the government's industrial policy are as follows:
(i) Rapid Industrial Development. The industrial policy _of the
Government of India is aimed at increasing the tempo of industrial
development. It seeks to create a favourable investment climate for investment
in industry.
(n1 Prevention of Concentration of Economic Power. The industrial policy
' seeks to provide a framework of rules, regulations and reservation of spheres
of activity for the public and the private sectors. This is aimed at reducing the
monopolistic tendencies and preventing concentration of economic power in
the hands of a few big industrial houses.
 INDUSTRIAL POLICY AND STI POLICY --
••
(iii) Balanced Industrial Structure. The industrial policy is designed to
co!'rect the prevailing lopsided industrial structure. Before independence, India
had some fairly developed consumer goods industries. But the capital goods
sector was not developed at all and basic and heavy industries were by and
large absent. By laying emphasis on heavy industries and development of
capital goods sector, the industrial policy seeks to bring a balance in industrial
structure.
(iv) Balanced Regional Growth. Industrial policy also aims at correcting
regional imbalances in industrial development. It is quite well-known that
some regions in t4e country are industrially advanced (e.g., Maharashtra,
Gujarat) while others are industrially backward, (like Bihar, Orissa). It is the
purpose of industrial policy to work out programmes and policies which lead
to industrial development of backward areas and thus correct regional
distortions in the pattern of industrial growth.
(v) Protection and Promotion of Small Industries. It has been the
government policy to protect and promote small industries. From 1956 to
1991, the government encouraged the small industries by reserving 836 items
for the exclusive protection by the small units. The government also arranged
for cheaper finance, i:qstitutional support and µiarketing assistance to the
small scale industries.
The Industrial Policy of 1948, which was the first indust:i;ial policy
statement of the Government of India, was changed in 1956- t& usher in a
public sector dominated industrial development policy that remained in force
till 1991 with some minor modifications and amendments in 1977 and 1980.
In 1991, far reaching changes were made in the 1956 industrial policy. The
new Industrial Policy of July 1991 heralded the era of liberalisation in the
industrial scenario.

6.2 tt.fDUSTRIAl. POUCY RESOlU'flON, 1f56

Within a few years of the operation of the 1948 Industrial Policy, some
significant changes took place in the economic and political spheres that called
for changes in the industrial policy as well. The country had launched a
programme of planned economic development with the First Five-Year Plan.
The Second Plan gave high priority to industrial development aimed at setting
up a number of heavy industries, steel plants, capital goods industries, etc.,
for which direct government participation was needed. Further in December
1954, the Parliament adopted the 'Socialistic Pattern of Society' as the goal
of economic policy which called for the State or the public sector to increase
its sphere of activity in the industrial sector and thus prevent concentration of
economic power in private hands. In view of all these developments, a new
industrial policy was announced in April 1956.
 ••-
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INDUSTRIAL SOCIOLOGY

Classification of Industries
The Industrial Policy of 1956 announced the classification of industries
into three categories, viz., (i} Schedule A industries, (ii) Schedule B industries
and, (iii) Schedule C industries according to the degree of state, ownership
and participation in their development.
, VI • (i) Schedule A Industries. This category included 17 industries. The future
<JO 1jievelopment of these industries was to be the exclusive responsibility of the
f.\;.J~ Government. The list included arms and ammunition, aircraft building, air
· transport, ship building, iron and steel, coal and lignite, mineral oils, heavy
electricals, etc. These industries, thus formed the exclusive domain of Public
Sector.
(ii) Schedule B Industries. There were 12 industries placed in Schedule B
which were to be progressively state owned. In regard to the development of
these industries, the state was generally to take initiative in setting up new
undertakings. However, the private sector was also expected to supplement
the efforts of the state in this category of industries. Some industries in this
schedule were machine tools, aluminium and other non-ferrous metals,
fertilisers, antibiotics and other essential drugs, road and sea transport, etc.
The schedule B industries thus depended for their development on the public
as well as the private sectors.
(iii) Schedule C Industries. All the remaining industries fell in the Schedule
'( C, the future development of which was left to the initiative of the private
~·/;!sector. The state, however, was to provide necessary. assistance to the private
f sector for development of industries.
The other features of the Industrial Policy, 1956 were as follows:
(i) No Water-tight Compartments. The allocation of industries into
distinct categories does not imply that they are placed in water-
tight compartments. The Government was given the freedom to
undertake any type of industrial activity. The private enterprise may
also be allowed produce some of the items included in Schedule A
which contains industries coming in the domain of the State. Even
the State may get some of the components manufactured by private
enterprise. The private enterprise may also depend upon the public
sector for some of its requirements.
(ii) Role of Small Scale Sector. The significance of small scale and cottage
industries was reiterated in clear terms. The Policy Resolution laid
down the aim of the State in the following words: "to ensure that
the decentralised sector acquires sufficient vitality to be self-
supporting and its development is integrated with that of large scale ·
industries. The State will therefore, concentrate on measures
designed to improve the competitive strength of small scale
producers." In order to achieve this aim, the Rescl'.!tion laid down a
I
INDUSTRIAL POLICY AND STI POLICY --
•••
list of 128 items reserved for exclusive production in the small scale
sector and this list could be expanded by the Government.
(iii) Balanced Regional Development. The Resolution recognised the need
for balanced regional development. It emphasized the provision of
industrial facilities like power and transport specially to those areas
which lagged behind in the matter of employment and industrial
development. It was decided to give encouragement for setting up
of new industrial units in backward areas.
(iv) Management of Public Enterprises. The Policy Resolution stressed
the need for management of State-enterprises strictly along business
lines. It suggested measures like decentralisation of authority, speedy
decision making by competent and qualified managers and provision
of ample initiative and freedom of action to the executives for toning
up the efficiency of State industrial units. The managers of public
enterprises must also show efficiency and flexibility, the two
attributes of the sound business management. The bureaucratic
management and red tapism, the defects of management by civil
servants, should be avoided in the administration of public
enterprises.
[v) Development of Personnel. The Industrial Policy Resolution, 1956
provided for the development of managerial and technological
personnel for the rapid industrialisation of the country. Facilities for
their training were provided at various levels ..
(vi) Industrial Peace. The significance of industrial peace was recognised
by the Policy Resolution. The Policy recommended provision of
good working conditions to workers, joint consultation and
association of labour with management as steps to achieve industrial
harmony. The public sector undertakings were called upon to act as
model employers.
 INDUSTRIAL POLICY AND STI POLICY -••
-
6.8 SCIENCE, TECHNOLOGY AND INNOVATION POLICY, 2013
Shaping the Future of an Aspiring India. Science, Technology and
Innovation (STI) have emerged as the major drivers of national development
globally. As India aspires for faster, sustainable and inclusive growth, the Indian
STI system, with the advantages of a large demographic dividend and the
huge talent pool, will need to play a defining role in achieving these national
goals. The national STI enterprise must become central to national
development.
Changing Phases of National Policies in S & T. India's Scientific Policy
Resolution (SPR)_of 195F8_resolved to "foster, promote and sustain" the
"cultivation of science and scientific reseru'.ch in all its aspects". Technology
was then expected to flow from the country's estabfi'Slied science' infrastructure.
The Technology Policy Statement ('!:PS) of 1983 emphasized the need to attain
technolo ·cal competence and self-reliance. The Science and Technology Policy
(STP) of 2003 brought science an tee no ogy (S&T)"together and emphasized
the need for investment in R&D. It called for integrating programmes of socio-
economic sectors with the natiO'iial R&D syst~m to address national problems
as well as creating a national innovation system.
India has declared 2010-20 as the "Decade of Innovation::.. The
Government hass tressed'the need to enunciate a policy·to synergize science,
technology and innovation and has also established the National Innovation
Council (NlnC). The STI Policy 2013 is in furtherance of these pronouncements.
It aims to bring fresh perspectives to bear on innovation in the Indian context.
STI Policy: A Ne)V Paradigam. Science, technology and innovation can
exist separately orJ. ~~ bwn in disconnected spaces. But, it is their integration
that leads to new value creation. India's global competitiveness will be
determined by the extent to which the STI enterprise contributes social good
and/or economic wealth. There is, therefore, the need to create the necessary
framework for enabling this integration in identified priority areas by exploiting
endogenous resources, strengths and capacities. New structural mechanisms
and models are needed to address the pressing challenges of energy and
environment, food and nutrition, water and sanitation, habitat, affordable
health care and skill building and unemployment. "Science technology and
innovation for the people" is the new paradigm of the Indian STI enterprise.
The national STI system must, therefore, recognize the Indian society as its
major stakeholder.
Innovation for inclusive growth implies ensuring access, availability and
affordability of solutions to as large a population as possible. Innovation,
therefore, must be inclusive. The instruments of the STI policy will enable
this to be realized. The policy will drive both investment in science and
investment of science-led technology and innovation in select areas of socio-
economic importance. Emphasis will be to bridge the gaps between the STI
 --
p !:I .
INDUSTRIAL SOCIOLOGY
'

system and the socio-economic sectors by developing a symbiotic relationshit=

with economic and other policies.

STJ Policy Vision

I The guKJ,~ng ¥i~Qn l\lf a$ptring lntli:an .$TI enterpr•~ i$ llil· aceeter:ate the
· pa~ Qf dis:o~v~y and detfo~ry m S<1ii$n~e~.1e.<;J soluttons fc.H' faster,
swstaln~fi1~ an(;! in~l:usJve gr0wth, A $ffgng .ans viabte S,~Uwce,
Resetil.IJ:h and lnn1vation $¥stem lar Hip Ter:J1,n(fJJsgy.,Jel.I patb tor
ttttlia (SRIS'HTI) is me g()f!J f/ll the new stt pa11r:y.
Salient Features of STI Policy
The key elements·of the STI policy are :
• Promoting the spread of scientific temper amongst all sections of
society.
• Enhancing skill for applications of science among the young from
all social strata. ·
• Making careers in science, research and innovation attractive enough
for talented and bright minds.
• Establishing world class infrastructure for R&D for gaining global
leadership in some select frontier areas of science.
• Positioning India among the top five global scientific powers by
2020.
• Linking contributions of science, research and innovation system
with the inclusive economic growth agenda and combining priorities
of excellence and relevance.
• Creating an environment for enhanced private sector Participation
inR&D.
• Enabling conversion of R&D outputs into societal and commercial
applications by replicating hitherto successful models as well as
establishing of new PPP structures.
• Seeding S&T-based high-risk i~novations through new mechanisms.
• Fostering resource-optimized, cost-effective innovations across size
and technology domains.
• Triggering changes in the mindset and value systems to recognize,
respect and reward performances which create wealth from S&T
derived knowledge.
• Creating a robust national innovation system.
Invesbnent in Research and Development
Global investments in science, technology and innovation are estimated
at $1.2 trillion as of 2009. India's R&D investment is less than 2.5% of this and
is currently under 1 % of the GDP. Increasing Gross Expenditure in Research
 INDUSTRIAL POLICY AND STI POLICY --
••
-
and Development (GERD) to 2% of the GDP has been a national goal for some
~e. Achieving this in the next five years is realizable if the private sector
:aises its R&D investment to at least match the public secto R&D investment
from the current ratio of around 1:3. This seems attainable as the industrial
R.&D investment grew by 250% and the sales by 200% between 2005 and
2010. Increased private investment is necessary for translating R&D ou tputs
into commercial outcomes. While maintaining current rates of growth in public
R&D investments, a conducive environment will be created for enhancing
private sector investment in R&D.
Promoting Excellence and Relevance in R&D
Nourishing the Roots. Ensuring sustainable pipeline of talented youth
for science is a challenge. India has mounted some significant initiatives for
attracting talent to science and careers with research. Empowering stakeholders
for local actions is a key element of these initiatives. The policy framework
will further enable school science education reforms by improving teaching
methods, science curricula, motivating science teachers and schemes for early
attraction of talent to science. Also special incentive mechanisms will be
devised to stimulate research in the universities and develop young leaders in
science and engineering.
Excellence and Relevance. Investment in basic research will be enhanced
for fostering excellence against global benchmarks and focusing on relevance
for addressing national challenges.
Gender Parity. Participation of women in STI activities is important.
New and flexible schemes to address the mobility challenges of employed
women scientists and technologists will be put in place. A broad scope for re-
entry of women into R&D and facilitation mechanisms for special career paths
in diverse areas will be sought.
Inter-University Centres. The few inter-university centres that have been
set up have proved the concept to be a successful and viable one. Such centres
need to be multiplied in different fields to enable a w.i der cross section of
university researchers access advanced research facilities and equipment which
are otherwise not available in university environments. These will be discipline-
specific as well as multi-disciplinary, including humanities, to address the grand
challenges in S&T and its applications.
Participation in Global R&D Infrastructure and Science. Modern science
is increasingly becoming resource intensive. It has become necessary to create
high-cost global infrastructures in some fields through international consortia
models. Indian participation in such international projects will be encouraged
and facilitated to gain access to facilities for advanced research in cutting
edge areas of science. This will also enable the Indian industry to gain global
experience and competitiveness in some high-technology areas with spin-off
benefits.
 --
U1•1 INDU_STRIAL SOCIOLOGY

· Performance-Linked Rewards and Invesbnents. Transparent centrally

implementable Performance Related Incentive Scheme (PRIS), based on past
and proven track record in research, will be put in place to enable grant-based
investments in such performers. For R&D leading to technology development
and knowledge services, the criteria would, however, be institution specific.
Centrally instituted incentives to public-funded R&D centres for outcomes
leading to public and strategic goods could be introduced.
Attracting Private Sector Invesbnents in R&D
Public funds for partnerships vyith the private sector for social and public
good objectives will be earmarked as a new policy initiative. A National Science,
Technology and Innovation Foundation will be established as a Public-Private
Partnership (PPP) initiative for investing critical levels of resources in innovative
and ambitious projects.
The focus.of the policy will be:
• Facilitating private sector investments in R&D centres in India and
overseas.
• P.romoting establishment of large R&D facilities in PPP mode with
provisions for benefits sharing.
• Permitting multi7stakeholders participation in the Indian R&D system.
• Treating R&D in the private sector at par with public institutions for
availing public funds.
• Benchmarking of R&D funding mechanisms and patterns globally.
• Modifying IPR policy to provide for marching rights for social good
when supported by public funds and for co-sharing IPRs generated
under PPP.
• Launching newer mechanisms for nurturing Technology Business
Incubators (TBis) and science-led entrepreneurship.
• Providing incentives for commercialisation of innovations with focus
on green manufacturing.
Delivery Systems for STI Outputs to Stakeholders and Society. Diffusion
of scientific outputs and technology interventions into social systems is a
multi-layered process. Except for the mission-oriented strategic sectors, the
delivery mechanism involves a large number of intermediaries both from the
public and private sectors. This requires strengthening of linkeages between
the scientific and socio-economic sectors. The STI policy will leverage the
R&D allocations of socio-economic ministries through a shared vision, mission-
oriented approach and adoption of new delivery models with provisions for
accountability. The state governments constitute important stakeholders.
Measures will be taken to ensure that state-specific S&T vision and plans are
informed and guided by the new STI Policy towards which State S&T Councils/
Boards will be strengthened. NGOs will be accorded a pivotal role in the delivery
of STI outputs, especially rural technologies, to the grassroots level.
 INDUSTRIAL POLICY AND STI POLICY

Ecosystem Changes for Science, Technology and Innovation. Special

.,,.
--
and innovative mechanisms for fostering academia-research-industry
partnerships will be devised. Mobility of experts from academia to industry
and vice-versa will be facilitated. Success stories in S&T-based innovations
from Indian experience would be replicated and scaled up. Regulatory and
~egal framework for sharing of IPRs between inventors and investors will be
put in place. Measures to close gaps in the translation of new R&D findings
and grassroot innovations into the commercial space will be taken.
Specifically, the policy will focus on:
• Prioritizing critical R&D areas like agriculture, telecommunications,
energy, water management, health and drug discovery, materials,
environment and climate variability and change.
• Promoting inter-disciplinary research, including traditional
knowledge.
• Fostering the delivery and use in the society of innovations in the
strategic sectors with civilian application potential.
• Promoting mechanisms such as "small idea-small money" and "Risky
Idea Fund" to support innovation incubators.
• Establishing of a Fund for Innovations for Social Inclusion.
• Leveraging traditional knowledge through modern science for
finding solutions to national challenges.
• Supporting STI driven ·entrepreneurship with viable and highly
scalable business models.
• Investing in young innovators and entrepreneurs through education,
training and mentoring.
Gaining Global Competitiveness through Collaboration
Open source approaches for public and social goods form interesting
innovation systems. Knowledge commons is an emerging theme for managing
IPRs created through multi-stake holder participation. The STI Policy will seek
to establish a new regulatory framework for data access and sharing as also
for creation and sharing of IPRs. The new policy framework will enable strategic
partnerships and ajliances with other nations through both bilateral and
multilateral cooperation in science, technology and innovation. Science ·
diplomacy, technology synergy and technology acquisition models will be
judiciously deployed based on strategic relationships.
Public Awareness and Public Accountability of Indian STI Sector
Public understanding of science is an important dimensions for introducing
and reaching the benefits of modern science and technology to the people.
The civilizational aspect of science, or scientific temper, needs to be promoted
across all sections of the society systematically. Effective science
communication methods, by using tools such as the National Knowledge
Network, will be initiated.
 -------~---- -

UNIT-IV CONTEMPORARY ISSUES

IN INDUSTRIAL SOCIOLOGY

Chapter 7: Grievance Handling Procedure

Chapter 8: Industrial Disputes

Chapter 9: Industrial Relations Machinery
Chapter 10: Workers Participation in Management
1

and Collective Bargaining

Chapter 11: Code of Discipline and Standing Orders
Chapter 12: trade Unionism
 CHAPTER CovERAGI~

7.1 Nature and Forms of Grievance

7.2 Causes of Grievances
7 .3 Establishing a Grievance Procedure
7.4 Model Grievance Procedure
7.5 Essentials of a Grievance Procedure

7.1 NATURE AND FORMS OF GRIEVANCE

Definition of Grievance
According to Michael Jucius, ''.A grievance can be any discontent or
dissatisfaction, whether expressed or not, whether valid or not, and
arising out of anything connected with the company that an employee
thinks, believes, or even feels as unfair, unjust, or inequitable."
A grievance means any discontentment or dissatisfaction in an
employee arising out of anything related to the enterprise where he
is working. It may not be expressed and even may not be valid. It
arises when an employee feels that something has happened or is going
to happen which is unfair, unjust or inequitable. Thus, a grievance
represents a situation in which an employee feels that something
unfavourable to him has happened or is going to happen. In an industrial
enterprise, an em lo ee may have grievance because of long hours Of
wot , non- ulfilrne.nLQf terms of service by the managepient, un ar

-
treatment in promotion, 1212or working_facilities, etc.

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-
--
•• INDUSTRIAL SOCIOLOGY

Nature of Grievance
Grievances are symptoms of conflicts in the enterprise. So they should
be handled very promptly and efficiently. Coping with grievances forms an
important part of any manager's job. The manner in which he deals with
grievances determines his efficiency of dealing with subordinates. A manager
is successful if he is able to build a team of satisfied workers by removing
their grievances. While dealing with grievances of subordinates, it is necessary
to keep in mind the following points :
(i) A grievance may or may not be real.
(ii) Grievances may arise out of not one cause but multifarious causes.
(iii) Every individual does not give expression to his grievances.
Complaints of employees relating to interpretation and implementation
of agreements, labour legislations, various personnel policies, rules and
regulations, past practices, code of conduct are grievances. The grievances
may relate to either one employee (individual grievances) or group of
employees (group grievances). Individual and group grievances are to be
redressed through grievance procedure. Individual employee or group of
employees concerned and manager concerned play vital role in grievance
procedure. Trade unions play only a minor role in grievance settlement.
Differences between employees and employer relating to various
personnel policies, wage levels and variety of benefits, awards, rules and
regulations are conflicts. Conflicts are to be settled through collective
bargaining. Trade unions and management participate in collective bargaining
for settling disputes. Thus, conflicts have wider policy implications as
compared to grievances.

Forms of Grievances
A grievance may take any of the following forms: (a) Factual, (b)
Imaginary, (c) Disguised. These are discussed below :
(a) Factual. When an employee is dissatisfied with his job, for genuine
or factual reasons like a breach of terms of employment or any
other reasons that are clearly attributed to the management, he is
said to have a factual grievance. Thus, factual grievances arise when
the legitimate needs are unfulfilled.
(b) Imaginary. When an employee's grievance or dissatisfaction is not
because of any factual or valid reason but because of wrong
perception, wrong attitude or wrong information he has. Such a
grievance is called an imaginary grievance. Thought it is not the
fault of management, the responsibility for their redressal still rests
with the management.
(c) Disguised. An employee may have dissatisfaction for reasons that
are unknown to himself. This may be because of pressures and
GRIEVANCE HANDLING PROCEDURE --
••
frustrations that an employee is feeling fron other directions The
managers have to detect such disguised grievances and attend to
them by counselling the concerned employees.

Identification of Grievances
Good management redresses grievances as they arise, excellent
management anticipates them and prevents them from arising. A manager
can know about the sirnmerings even before they turn into actual grievances
through several' means such as (a) exit interviews, (b) gripe boxes, (c)
opinion surveys and (d) open door policy.
(a) Exit interview. Employees usually quit organisations due to
dissatisfaction or better prospects elsewhere. Exit interviews, if conducted
carefully, can provide important information about employees' grievances.
(b) Gripe Boxes. These are boxes in which the employees canJ!LQ.p
their anonymous complaints. They are difEirent from the suggestion boxes
in which employees drop therrsuggestions with an intention to receive
rewards. /
(c) Opinion Surve~oup meetings, peri9dical interviews with
employees, collective bargaining sessions are some other means through
which one can get information about employees' dissatisfaction before it
turns into a grievance'.) ·
(d) Open-dooJ:.-PDlicy.~ome organisations extend a general invitation
to their employees to informally drop in the manager's room any time and
talk over their grievanc~

7.2 CAUSES OF GRIEVANCES

In order to handle the grievances efficiently, it is necessary to find and
analyse the grievances of the subordinates. If a grievance is found to be
genuine or real, the corrective action should be taken immediately. But if
the grievance arises due to irnagination or disturbed frame of mind of the
worker, then it is necessary to explain and clear up the matter. Before
dealing with the grievances, their causes must be diagnosed. But when the
grievances are not given expression by the subordinates, it is manager's job
to detect the possible grievances and their causes. He may realise the
existence of grievances because of high labour turnover, high rate of
absenteeism and poor quality of work. These problems will go on multiplymg
if the causes of grievances are not cured. ·
The causes of grievances may be broadly classified into the following
categories :
(1) Griev~ces resulting from working conditions
(i) Improper matching of the worker with the job.
(ii) Changes ih schedules or procedures.
 --
••• INDUSTRIAL SOCIOLOGY

(iii} Non-availability of proper tools, machines and equipment for doing

- the job.
(iv) Tight production standards.
(v) Bad physical conditions of workplace.
(vi) Bad employer-employee relationship, e~c.
(2) Grievances resulting from management policy
(i) Wage payment and job rates.
(ii) Leave.
(iii) Overtime.
(iv) Seniority and Promotion.
(v) Transfer.
(vi) Disciplinary action.
(vii) Lack of employee development plan.
(viii) Lack of role clarity.
(3) Grievances resulting from personal maladjusbnent
. (i) Over-ambition.· ' • r.
(ii) Excessive self-esteem.
(iii) Impractical attitude to life.

~.3 ESTABUSHlr.aG AGRIEvANCE PROCEDURE

Need of Grievance Procedure
Dynamic organisations maintain a grievances procedure to attain the
following advantages :
(a) The management can know the emph:>yees' feelings and opinions
about the company's policies and practices. It can feel the 'pulse' of
the employees.
(b) With the existence of a grievance handling procedure, the employee
gets a chance to ventilate his feelings. He can blow off his 'steam'
through an official channel. Certain problems of workers cannot be
solved by first line supervisors; for these supervisors lack the
expertise that the top management has, by virtue of their professional
knowledge and experience.
(c) It keeps a check on the supervisions towards their subordinates.
They are compelled to listen to subordinates patiently and
sympathetically.
(d) The morale of the employees will be high with the existence of
proper grievance handling procedure. Employees can get their
grievances redressed in a just manner and within the stipulated
period.
 GRIEVANCE HANDLING PROCEDURE

Considerations in Designing a Grievance Procedure

..--
It is advisable to set up an effective grievance procedure in the
organisation. The procedure should be flexible enough to meet the
requirements of the organisation. It should be simple so that an average
employee is able to understand it. Though such a procedure will vary in
different organisations, yet the following principles should be observed while
laying down a procedure,
1. A grievance should be dealt with in the first instance at the lowest
level; that is to say, an employee s_!l.ould raise his grievance with his
immediate superior. It may be simple to settle it on the spot and
that will be the end of it. Even if it cannot be settled at that level,
the man's superior will know what is happening. This is necessary ·
not only to maintain his authority, but also to prevent him from
being aggrieved, as he will certainly be, if he is by-passed and later
hears of the complaint from his own superior. ·
2 . It must be made clear to the employee what line of appeal is
available. If he cannot get satisfaction from his immediate superior,
he should know the next higher authority to whom he can go.
3. Since ~elay causes frustration and tempers may rise and rumours
spread around the work, it is essential tha,t grievances should be
• dealt with speedily.
4 . It !Ilust be clearly understood in establishing a grievance procedure
that if the grievance is against an instruction given by a superior, it
is in the interest of discipline that instruction must be carried out.
Only then can the employee register his protest and set in motion
the procedure.
5. The grievance procedure should be set up with the participation of
the employees and it should be applicable to all in the organisation.
It jhould be agreed that there will be no recourse to the official
~achinery of conciliation unless the procedure has been carried •
out and there is still dissatisfaction, and moreover, there must be no
direct action on either side which might prejudice the case or raise
tempers while the grievance is being investigated.

Open-Door Policy
Under this policy, any employee can take his grievance to the chief
boss and talk over the problem. It is said that this policy can remove the
cause of grievance quickly. Though this policy appears to be attractive, it
has the following implications :
(i) The ~en door policy is workable only in small organisatiorls~ In big
orgahisations, the top management does not have the time to attend
 INDUSTRIAL SOCIOLOGY

to innumerable routine grievances daily which is the work of lower-

level managers.
(ii) Under this policy, the front-line supervisor who should be the
first man to know about the grievances of his subordinates is by
passed. This provokes him in two ways. First, he thinks the man
who skipped him is disrespectful. Secondly, he fears that he will
incur his superior's displeasure because this will be interpreted by
the superior as his failure to handle his subordinates.

Ste~-l..<tc:i<i~( {>(<l(4~(i.\1.\:~
Under.the step~ladder procedure, the employee with a grievance has to .
proceed step by step unless he is able to redress his grievance. According to
the Model Grievance Procedure, an aggrieved employee shall first present
his grievance verbally in person to the officer designated by the management
f~r this purpose. An ap.swer shall be given within 48 hours. If he is dissatisfied
with the. answer, the worker will present his grievance to the head of the
department, who will give his answer within 3 days. If the worker is
dissatisfied with the answer, he may ask that his grievance should be referred
to the Grievance Committee, which shall make its recommendations within
7 days to the manager. Unanimous recommendations of this committee
must be implemented by the management. A dissatisfied worker can apply
to the management for a revision of its decision. f
 CHAPTER COVERAGE

8. I Industrial ConHict
8.2 Industrial Peace
8.3 Concept of Industrial Disputes
8 .4 Severity of Industrial Disputes
8.5 Strike and other Weapons of Labour
8.6 Lockout and other Weapons of Management.
8.7 Causes of Industrial Disputes
8.8 Impact of Industrial Disputes
8.9 Industrial Disputes in India
8.10 Trends in Industrial Disputes since Independence
8. I I Causes of Industrial Disputes
8. 12 Adverse Effects of Industrial Disputes
8. 13 Steps to Check Industrial Disputes and Promote Industrial Peace

8.1 INDUSTRIAl CONFLICT

Traditional View of Conflict
Traditionally, conflict in organisations has been viewed very negatively.
It has been considered dysfunctional .Primarily because of the adverse effects
it could have on organisational productivity. Conflict could cause losses in
productivity because groups wouldn't cooperate in getting jobs finished and
~ouldn't share important information. Too much conflict could also distract
Il!anagers from their work and reduce their concentration on the job.

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l:IM
8.5 STRIKE AND OTHER WEAPONS OF LABOUR
Whenever industrial disputes arise, workers generally resort to one or
more of the following weapons, namely, strike, boycott, picketing and gherao.
Strike
When workers collectively cease to work in an industry, it is known as
strike. "It means a cessation of work by a body of persons employed in an
industry acting in combination; or a concerted refusal of any number of
persons who are or have been so employed to continue to work or to accept
employment; or a refusal under a common understanding of any number of
such persons to continue to work or to accept employment".

Types of Strikes
For trade unions, strike is the most powerful weapon for forcing the
management to accept their demands. Various types of strikes are discussed
below:
 INDUSTRIAL DISPUTES

(i) Economic Strike. Most of the strikes of workers are for more
facilities and increase in wage levels. In economic strike, the labourers
demand increase in wages , travelling allowance, house rent
allowance, dearness allowance and other facilities such as increase
· in privilege leave and casual leave.
(ii) Sympathetic Strike. When workers of one unit or factory go on
strike in sympathy with workers of another unit or factory who are
already on strike, it is called a sympathetic strike. The workers of
sugar industry may go on strike in sympathy with their fellow workers
of the textile industry who may already be on strike.
(iii) General Strike. It means a strike by members of all or most of the
unions in a region or an industry. It may be a strike of all the workers
in a particular region of industry to force demands common to all
the workers. It may also be an extension of the.sympathetic strike
to express generalised protest by the workers.
(iv) Stay-in Strike. In this case, workers do not absent themselves from
their place of work when they are on strike. They keep control over
production facilities but do not work. Such a strike is also known as
'pen down' or 'tool down' strike.
(v) Slow Down Strike. Employees remain on their jobs under this type
of strike. They do not stop work, but restrict the rate of output in
an organised manner. The adopt go-slow tactics to put pressure on
the employers. ·

Boycott
The workers may decide to boycott the company by not using its
products. Such an appeal may also be made to the public in general. In the
former case, th e boycott is known as primary and in the latter secondary. It
is a coercive method whereby the management is forced to accept their
demands since the boycott affects the marketability of its products.

Picketing
When workers are dissuaded from work by stationing certain men at
the factory gates, su ch a step is known as picketing. If picketing does not
involve any violence, it is perfectly legal.
"Picketing" is an act ofposting pickets and implies marching or patrolling
of the workmen in front of the premises of the employer carrying and displaying
signs, banners, and placards (in connection with the dispute) for the purpose
of preventing others from entering the place.
Picketing is designed to give to the workers a method of drawing the
attention of the public by advertising through picketing, that there is a
dispute between the employer and the labour. Under picketing, some of the
union workers are posted at the factory gate for the purpose of pursuading
others not to enter the premises but to join strikes. Such type of 'picketing'
 INDUSTRIAL SOCIOLOGY

is said to be 'peaceful': Here the employees resort to verbal persuasion only

in order to desist the other workers from going to work.
When persuasion is done by physical force or show of force or physical
obstruction, threat, or violence, picketing no longer remains peaceful. Since
'picketing' is one of the tools in the hands of labour to help to bring about
the granting of when rightfully belongs to them, it must be free from
intimidation, coercion, duress, fraud, threat and violence and must not be
exercised in any way so as to affect to property rights of the employer.
Peaceful picketing is not unlawful.

Gherao
Gherao in Hindi means to surround. Workers may gherao the members
of management by blocking their exits and forcing them to stay inside their
cabins just like prisoners. The main object of gherao is to inflict physical
and mental torture to the person being gheraoed and hence this weapon
disturbs the industrial peace to a great extent.
Gheraos have been criticised on both legal and moral grounds. Legally
gheraos amount to imposing wrongful restraints on the freedom of some
persons to move. That is why, courts have held it as an illegal action.
Gheraos tend to inflict physical duress on the persons affected. They also
create law and order problem. Morally, to gherao a person to press him to
agree to certain demands is unjustified because it amounts to getting consent
under duress and pressure. A person who is gheraoed is subjected to
humiliation. Moreover, a person who has made a promise under gherao is
justified in going back over the word after the gherao has been lifted. In
short, as pointed out by the National Commission on Labour, gheraos cannot
be treated as form of industrial protest because they involve physical coercion
rather than economic pressure.

8.6 LOCKOUT ANQ OTHER WEAPONS OF MANAGEMENT

""
Employers' Association
The employers may form their associations collectively oppose the
working class and put pressure on the trade unions.

Lock-out
An employer may close down the place of employment temporarily.
Such a step is technically known as lock-out. It is reverse of a strike and is
a very powerful weapon in the hands of an employer to coerce or pressurises _
the .workers to return to the place of work. According to the Industrial
Disputes ActJ 1947, "lock-out means the closing of a place of employment
ot the suspension of work, or the refusal by an employer to continue to
employ any number •of persons employed by him."
g1.
INDUSTRIAL DISPUTES --
M:W
Termination of Service
The employers may terminate the services of those workers who are
on strike by blacklisting them. Their lists may be circulated to other
employers so as to restrict their chances of getting employment with those
employers.

8.7 CAUSES OF INDUSTRIAL DISPUTES

The disputes between the management and the workers may arise on
account of the following factors:
1. Economic Causes. These causes may be clas$ified as:
(a) Demand for increase in wages on account of increase in all-India
Consumer Price Index for Industrial Workers. The demand for
increase in wages may be raised for all categories of factory workers.
(b) Demand for higher gratuity and other retirement benefits.
(c) Demand for higher bonus.
\d\ \J~m.Ql\.~fot c.~t\.a\.u..al.\.civ-xan.c.~s s\lc.b. asb.tlu.s~ t~n.\. a\.\a'N'dl\t~ <m.~ili.ta\.
o.\\()'NC..l\rn, l\\i\\\. ~\\\.\\. o.\\()'NC..l\C.~, C.()l\V~~mc.e. a\\()wan.ce..
(e) Demand for paid holidays.
(j) Demand for reduction of working hours.
(g) Demand for better working conditions, etc.
2. Political Causes. Trade unions in India are controlled by various
political parties. In many cases, their leadership vests in the hands
of persons who are more interested in achieving their political
interests rather than the interests of labourers.
2. Persoll!'-el Causes. Sometimes, industrial disputes arise because
of personnel problems like dismissal, retrenchment, layoff, transfer,
promotion, etc.
4. Indiscipline. Industrial disputes also take place because of
indiscipline and violence on the part of the workforce. Lock-outs
are resorted to by the managements to curb indiscipline and
violence.

8.8 IMPACT OF INDUSTRtAl DISPVIU

Consequences of industrial disputes are often far-reaching as they dish.~.rb
the economic, social and political life of a country. Industrial disputes create
turmoil between the management and the labour and are, in fact, symptoms
of poor industrial relations. An organisation being in the grip of tense
industrial relations finds it impossible to introduce any innovation or effect
 --
M:ftni INDUSTRIAL SOCIOLOGY

any productivity improvement exclusively through the various industrial

engineering techniques. Poor industrial relations within an organisation are
not only harmful for it, but are also against the interests of the society as a
whole. The adverse effects of industrial conflicts may be enumerated as
follows:
(i) Disturbance ofIndustrial Peace. Tense industrial relations resulting
in disputes lead to a fall in the normal tempo of work in the factory.
Plant capacity untilisation falls below the optimum level; costs go
up; absenteeism and labour turnover increase; industrial disciplipe
breaks down; and productfon suffers both quantitatively as well as
qualitatively.
(ii) Resistance to Change. To be successful in business, innovations
are a must. Innovations involve changes which can be introduced
with the cooperation of employees only. In an environment of poor
industrial relations, employees lose faith in the management, and
therefore, they not only indulge in non-cooperation with the
management, but also resist all changes necessary for the survival
and growth of the enterprise.
(iii) Frustration among Employees. Employees work in a particular
organisation for the satisfaction of their physical, social, and egoistic
needs. In an environment with uncomfortable industrial relations,
·they find it difficult to satisfy their needs, particularly social and
psychological needs. This obviously leads to frustration and
alienation among them.
(iv) Intensification of Social Tension. Frustration among employees
leads to a reduction in their cordiality towards management and
this creates social tension in the industry which has far reaching
consequences not only for the affected organisation, but also for
the whole nation.
(v) Advere Effect on the Economy. Industry and economy are
interrelated and interdependent. Direct loss of output caused by an
enterprise suffering from poor industrial relations may not be
substantial, but the total loss caused due to its multiplier effect on
the total economy might be astonishing.
In general, industrial disputes are harmful, undesirable and even
dangerous. They create unrest in the industry and create tension among the
employers and the employees. Such dispute.s are particularly undesirable in
developing countries as shown in Exhibit 1. Industrial disputes must be
replaced by industrial harmony and industrial unrest by industrial peace.
INDUSTRIAL DISPUTES --
l :l!i
Effects of Industrial Disputes
(A) Effects on Workers
(~ When industrial dispute leads to strike, the wages may not be paid to
werkers for the strike period. Thus, workers and their families have to
face financial difficulties due to such disputes.
(i1) The rate of bonus also comes down due to disputes as disputes result
in reducing the rate of profitability.
(ii~ Due to continuous disputes, the employer may introduce lock-out and
the workers will have to suffer.
(iv) Some workers, particularly tempcirary workers, may be dismissed during
the period of dispute.
{v} Prolonged industrial €lisputes lead to industrial sickness and even
closure of the enterprise. As a result, workers lose their jobs.
( v1) Due to industrial disputes, the employers lose sympathy forthe workers.
As a result, certain welfare and other facilities may be denied to them.
(B) Effect$ QO Employers
(1) The prot;iuctivity and profit ability of the industrial uF1it go down due to
industrial disputes.
(it) Tlie quality of prcx;luction and thereby the market reputation is adVersely
affected due to limited interest or non-cooperation from workers during
the period of dispute.
{iii) Industrial disputes bring higher labour.turnover. Moreover, efficient and
sincere workers may not like to continue with the firm where such
disputes are common.
(iv} Spoiled work increases due to indifferent attitude of workers during the·
period of dispute.
(v) Industrial disputes affect labour-management relations and this disturbs
the smooth working of tlie industrial unit.
(C) Eff~cts on the Society
(1) Industrial production goes down. l'h addition, exports suffer and this
affects the entire national economy,
(it) Industrial disputes lead to shortages and artificial price rise.This affects
consumers and the society at large.
(iii) Industrial growth of the country is jeopardised due to large-scale
industrial disputes.The expansion programmes are disturbed and the
rate of investment in the corporate sector goes down.

8. 9 INDUSTRIAL DISPUTES IN INDIA

industrial Disputes prior to Independence
Industrial conflicts were not so common in India before the end of
First World War in 1918. The reasons were illiteracy, a passive outlook of
life and lack of organisation and leadership. After the end of the First World
 --
•t• INDUSTRIAL SOCIOLOGY

\\·ar, there were many strikes. In January 1919, about 1.25 lakh workers of
Bombay Cotton Textile Mills went on strike. There were more than 200
strikes in different units in 1920 all over the country.
The Industrial Disputes Enquiry Committee (1921), appointed by the
Government of Bombay, mentioned the following as the chief characteristics
of Bombay strikes and which even now continue to be the characteristics of
the main strikes in India:
(i) the frequency of strikes without notice;
(ii) the lack of clearly defined grievances before resorting to strikes;
(iii) the multiplicity of demands brought forward after the
commencement of strikes;
(iv) the lack of effective organisations to give shape to the demands of
the workers and to secure their compliance with any settlement
that may be arrived at;
(v) the growing cohesion among the employers and the workers; and
(vi) the ability of the latter to continue strikes for prolonged periods in
spite of any visible organisation. During 1921, there were 396 strikes
all over India involving about 6 lac workers and aggregate loss· of
nearly 7 million working days.
Industrial disputes showed a mixed trend during the period 1921-28.
There were comparatively less number of disputes during 1927, 1930, 1932
and 193'5. The reasons for this were as follows: (i) fall in the cost of living
index, (ii) failure of the general strike of 1928-29, (iii) economic depression
during 1929-33., ancl(.i14..E!:9secutiqg of the revolutionary trade union leaders .
....,,~ There was revival of prosperity in 1935 which led the workers to demand
a-~ - ' higher wages. There was a sudden increase in the industrial disputes in 1937
~ and onwards. Defence of India Rules were invoked during th e Second World
~ War to check the number of disputes. Nonetheless, there were a large
~~jnumber of strikes during this period because of increase in the cost of living
U at a rapid rate. The number of industrial disputes rose from 322 in 1940 to
')1' 820 in 1945. This trend could not be curbed even after the end of the
~ Second World War. There were 1626 industrial disputes during 1946 involving
~b 1929 thousand workers. The number of disputes during 1947 was 1811
~ involving 1841 thousand workers. The main causes of industrial disputes
were wages and bonus.

8.10 TREND$ lN INDUSTRIAi,. DISPUTES StNC£ INDEPENDENC~

There were 1259 industrial disputes with 78 lakh mandays lost in India
during 1948. As against a total loss of 38 lakh mandays in 1951, the loss
was of the order of about 49 lakh mandays in 1961. It jumped to 138 lakh
mandays in 1966 and further to 165 lakh mandays in 1971. The position
deteriorated further during 1974 on account of a rapid rise in prices and a
record of 402 lakh mandays were lost. With the declaration of emergency in
Cn1PTER Cm'ERAGE

9. I . Preventive Machinery

9.2 Industrial Dispute Settlement Machinery

9.3 Conciliation

9.4 Court of Inquiry

9.5 Voluntary Arbitration

9.6 Adjudication

9.7 Improvement in Industrial Relations Machinery

Lasting industrial peace requires that the causes of industrial disputes

should be 'eliminated. In other words, preventive steps should be taken
so that industrial disputes do not occur. But if preventive machinery
fails, then ·the- industrial dispute settlement machinery should be
activated by the Government because non-settlement of disputes will
prove to be very costly to the workers, management and the society as
a whole. The machinery for handling of industrial conflicts has been
shown in Fig. 9.1.

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••
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.,.-- Machinery for Handling Industrial Disputes
INDUSTRIAL SOCIOLOGY

Preventive Machinery Settlement Machinery

(Voluntary or Non-statutory) (Statutory)

Workers Collective Grievance Tripartite Code of Standing

Participation in Bargaining Procedure Bodies Discipline Orders
Management

Conciliation Court of Voluntary Adjudication

Enquiry Arbitration

Conciliation Conciliation Labour Industrial National

Officers Board Courts Tribunals Tribunals
Fig. 9.1. Machinery for Handling of Industrial Disputes.

9 .1 PREVENTIVE MACHINERY
The preventive machinery has been. set up with a view to creating
harmonious relations between labour and management so that disputes do
not arise. It comprises of the following measures:
ehemes of workers' participation ._ .v.-'Collective bargaining
· 3. Grievance procedure J · Tripartite bodies
y Code of discipline · ~ Standing orders.
1. Workers' Participation in Management
It is a method whereby the workers are allowed to be consulted and to
have a say in the management of the unit. The important schemes of
workers' participation are: Works committee, joint management council (JMC),
shop council and joint council. These have been discu ssed later in this
book.
2. Collective Bargaining
According to Dale Yoder, "Collective bargaining is the term used to
describe a situation in · which essential conditions of employment are
determined by a bargaining process undertaken by representatives of a
 INDUSTRIAL RELATIONS MACHINERY

group of workers on the one hand and of one or more employers on the
..--
other." 1 Collective bargaining not only includes negotiation, administration
and enforcement of the written contracts between the employees and the
employers, but also includes the process of resolving labour-management
conflicts.
The role of collective bargaining in solving the issues arising between
the management and the workers at the plant or industry level has been
widely recognised. Labour legislation and the machinery for its
implementation prepare a framework according to which industrial
establishments should operate. But w}J.atever labour laws may lay down, it
is the approach of employers and trade union leaders which matters. Unless
both are enlightened, industrial harmony is not possible. Therefore, the
solution to common problems can be found directly through negotiation
between both parties and in this context, the scope of collective bargaining
is very wide.
3. Grievance Procedure
Grievances are symptoms of conflicts in the enterprise. So they should
be handled very promptly and efficiently. Coping with grievances forms an
important part of a manager's job. The manner in which he deals with
grievances determines his efficiency in dealing with the subordinates. A
manager is successful if he is able to build a team of satisfied workers by
removing their grievances. This would help in the prevention of industrial
disputes in the organisation.
4. Tripartite Bodies
Industrial relations in India have been shaped largely by principles and
policies evolved through tripartite consultative machinery at industry and
national levels. The aim of the consultative machinery is "to bring the
parties together for mutual settlement of differences in a spirit of cooperation
and goodwill."
Indian Labour Conference (ILC) and Standing Labour Committee (SLC)
have been constituted to suggest ways and means to prevent disputes. The
representatives of the workers and employers are nominated to these bodies
by the Central Government in consultation with the All-India organisation
of workers and employers.
The agenda for ILC/SLC meetings is settled by the Labour Ministry
after taking into consideration the suggestions sent to it by member
organisations. These two bodies work with minimum procedural rules to
facilitate free and fuller discussions among the members. The ILC meets
once a year, whereas the SLC meets as and when necessary.
The functions of ILG are: (a) to promote uniformity in labour legislation;
(b) tO lay down procedure for the settlement of industrial disputes; and (c)
1. Yoder, Dale,Personnel Management: Principles and Policies, Pr entice-Hall,
New York, 1959, p. 97.
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•• INDUSTRIAL SOCIOLOGY

to discuss matters of all-India importance as between employers and

employees. The ILC advises the Government on any matter referred to it for
advice, taking into account suggestions made by the state governments and
representatives of the organisations of workers and employers. The Standing
Labour Committee's main function is to consider and determine such
questions as may be referred to it by the Plenary Conference or the Central
Government and to render advice, taking into account the suggestions made
by various state governments, and the organisations of workers and
employers.
5. Code of Discipline
Code of Discipline is a set of self-imposed mutually agreed voluntary
principles of discipline and go_od relations between the management and the
workers in industry. In India, Code of Discipline was approved by the 16th
Indian Labour Conference held in 1958. It contains three sets of codes
which have been discussed later in this book.
According to the National Commission on Labour, the Code in reality
has been of limited use. When ·it was started, very favourable hopes were
thought of it; but soon it started acquiring rust. Main reasons for the lapses
on the part of the employers and employees to secure harmonious relations
through the Code may be listed as below:
(i) There was absence of self-imposed voluntary restraint on the part
of the parties.
(ii) The worsening of economic situation led to the erosion of real wages
of the workers. ·
(iii) The rivalry among labour representatives.
(iv) Conflicts between the Code and the law.
(v) The state of indiscipline in the body politic, that is, the whole set
up is charged with indiscipline and the Code could not work.
(vi) The employers could not implement the Code in many respects for
reasons beyond their control.
6. Standing Orders
The terms and conditions of employment have been a bone of contention
between labour and management since the advent of factory system. To
prevent the emergence of industrial strife over the conditions of employment,
one important measure is the Standing Orders. Under the Industrial
Employment Standing Orders Act, 1946, it was made obligatory that Standing
Orders would govern the conditions of employment. The Standing Orders
regulate the conditions of employment from the stage of entry' to the
organisation to the stage of exit from the organisation. Thus, they constitute
the regulatory pattern for industrial relations. Since the Standing Orders
provide Do 's and Don 'ts, they also act as a code of conduct for the employees
during their working life within the organisation.
 INDUSTRIAL RELATIONS MACHINERY -••
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government has to make a reference to adjudication. However, if the
appropriate government considers that the notice of strike or lockout is
frivolously or vexatiously given or it is inexpedient to make a reference, no
such reference may be made. The opinion of the appropriate government is
very material here.

Labour Court /
A labour court consists of one member only, who is normally a sitting
or an ex-judge of a High Court. It may be constituted by the appropriate
Government for adjudication of disputes which are mentioned in the second
schedule of the Act. The issues referred to a labour court may include:
(a) The propriety or legality of an order passed by an employer under
the Standing Orders.
(b) The application and interpretation of Standing OrdeJ:'.S.
(c) Discharge and dismissal of workmen and grant of relief to them.
(d) Withdrawal of.any statutory concession or privilege.
(e) Illegality or otherwise of any strike or lockout.
(f) All matters not specified in the third schedule of Industrial Disputes
Act, 1947. (It deals with the jurisdication of Industrial Tribunals).

Industrial Tribunal
Like a labour court, an industrial tribunal is also a one-member body.
The matters which fall within the jurisdiction of industrial tribunals are as
mentioned in the second schedule or the third schedule of the Act. Obviously,
industrial tribunals have wider jurisdiction than the labour courts. Moreover
an industrial tribunal, in addition to the presiding officer, can have two
assessors to advise him in the proceedings; the appropriate Government is
empowered to appoint the assessors. The Industrial Tribunal may be referred
the following issues:
1. Wages including the period and mode of payment.
2. Compensatory and other allowances.
3. Hours of work and rest intervals.
4. Leave with wages and holidays.
5. Bonus, profit sharing, provident fund and gratuity.
6. Shift working otherwise than in accordance with the standing orders.
7. Rules of discipline.
8. Rationalisation.
9. Retrenchment.
10. Any other matter that may be prescribed.
 ii
I

CHAPTE'R COVERAGE

10.1 Tripartite Machinery · 1

10.2 Bipartite Machinery ,.

10.3 Works Committes
10.4 Joint Management Councils (JMCs)
10.5 Collective Bargaining
10.6 Collective Bargaining in India
10.7 Workers' Participation in Management
10.8 Modes of Workers' Participation
10.9 Reasons for Failure of Workers' Participation

10.1 TRIPARTITE MACHINERY

A large number of tripartite bodies have been set up by the government
to provide a forum of discussion and consultation on various labour-related
issues. Among these bodies, a few notatable ones are: (1) The Indian Labour
Conference (!LC); (2) The Standing Labour Committee (SLC); (3-) The Committe
on Conventions; (4) The Industrial Committee; and (5) Other bodies of tripartite
nature dealing with various aspects of labour problems.

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ll•ll
 WORKERS' PARTICIPATION IN MANAGEMENT AND COLLECTIVE BARGAINING --
MofW
(iii) The workers' organisations have criticised the procedures in reaching
consensus as an exercise in semantics, leaving the basi c
contradictions unresolved. The employers have similarly held the
view that the usefulness of tripartite bodies will be enhanced if
official conclusions are based not merely on the views summed up
by the chairman, but on the points emphasised by all the parties.
The suggestions, offered by the National Commission on Labour to make
the two bodies more effective, are as follows :
(i) To save time at the conference, the discussions should be well
supported by a good deal of spade work in the committees of the
conference, and the duration should be longer.
(ii) Only those central organisations should be given representation
which have a membership of at least 10 per cent of the unionised
labour force in the country.
(iii) There should be a review every three years to accord representation
to organisations on the above basis, but with the object of weeding
out weaker federations and to promote organisational solidarity.
The employers, representation at the tripartite forums should also
be modified accordingly to maintain parity.

Industrial Committees
The eight session of the ILC (1947) decided to set up Industrial Committees
"to discuss various specific problems special to the industries covered by them
and submit their report to the conference, which would co-ordinate their
activities." These committes are tripartite bodies in which the number of
workers' representatives is equal to the number of employers' representatives.
They do not meet regularly; meeti.Ilg are considered afresh each time a session
is called.
Industrial committees provide a forum for the discussion of proposals
for legislation and other matters connected with labour policy and
administration before they are finally brought up before the legislature, so
that the passage of the legislation may be facilitated.

~G.2 BIPARTITE MACHINERY

The bipartite consultative machinery comprises two important
constituents, viz., works committees and joint management councils. These
are purely consultative, and not negotiating bodies. The consultative joint
machinery-with equal representation of the employers and the workers-
has been set up exclusively for dealing with disputes affecting the plant or
industry.
The importance of bipartite consultative machinery was first recognised
as early as in 1920, when a few joint committees were set up in the presses
 WORKS CQM_MtTrES
A works committee consists of representatives of employer and workmen
ed in the establishment. The number of representatives of workmen
!lot be less than the numbe of representatives of the employer.
The composition of the committee is so fixed as to give representation
-e various categories, groups and classes of workmen, and to the sections,
or departments of the establishments. The total number of members
not exceed 20. The representatives of the employer shall be nominated
the technical, managerial or supervisory category, who should be in direct
with the working of the establishment. The representatives of workers
be elected from among themselves.
:-he Bombay Industrial Relations Act, 1946 made a statutory provision
"Sl:ablishment of joint committees at the plant level to maintain regular
els of communication between employers and employees. The Industrial
ates Ac;t, 1947 envisages the creation of works committee in each unit
IBting of representatives of workmen and ·employers with more or less
 INDUSTRIAL SOCIOLOGY

equal representation. The Act lays down that, "It shall be the duty of the
works committee to promote amity and good relations between the employers
and workmen and to that end to comment upon matters of their common
·interest and endeavour to compose any material difference of opinion in respect
of such matters".
The scope of works committee is very restricted. But in some cases, these
committees deal with production problems- a role assigned to joint
management councils in the draft model agreement. The difference is that
joint management council is a voluntary measure for the prevention of disputes.
But it is suggested that we should have either works committees or joint
management councils in the same establishment.
National Commission on Labour found that works committees have not
been effective. "In the evidence before us, State Governments have expressed
the views that the advisory nature of the recommendations, vagueness regarding
their exact scope and functions , inter-union rivalries, union opposition and
reluctance of employers to utilise such media have rendered works committees
ineffective. The employers' associations have attributed the failure of works
committees to factors like inter-union rivalries, union antipathy and the attitude
of members (workers' wing) in trying to raise in the committee discussion : on
extraneous issues. According to the unions, conflict between union jurisdiction
and the jurisdiction of the works committees and the unhelpful attitudes of
the employers have generally led to their failure".
The effectiveness of works committees will depend on the following
factors :
(a) a more responsive attitude on the part of management;
(b) adequate support from unions;
(c) proper appreciation of the scope and functions of works committees;
(d) whole-hearted implementation of the recommendations of the works
committees; and
(e) proper co-or dination of the functions of the multiple bipartite
institutions at the plant level now in vogue.
 --
l!tltj INDUSTRIAL SOCIOLOGY

UlS COUECTIVE BARGAINING

Concept of Collective Bargaining
Collective bargaining relates to group bargaining as opposed to individual
bargaining abo"!-lt wages and salaries and conditions of work in the broadest
sense. The groups include trade unions and their federations on the one side
and an employer or his representatives or an employers' association or
federation on the other side. The term 'collective bargaining' denotes a
procedure under which two parties, namely, workers and management, reach
an agreement about wage .rates and basic conditions of employment.
Collective bargaining is a process in which representatives of two groups
(employers and employees) meet and attempt to negotiate an agreement which
specifies the nature of future relationship (pertaining to employment) between
the two. According to Flippo, "Collective bargaining is a process in which
the representatives of a labour organisation and the representatives of
business meet and attempt to negotiate a contract or agreement, which
specifies the nature of employee-employer-union relationship."
Collective bargaining is a mode of fixing the terms of employment by
means of bargaining between organised body of employees and an employer
or association of employers acting usualfy through authorised agents. The
essence of collective bargaining is bargaining between interested parties and
not a decree from outside parties.
Features of Collective Bargaining
The essential features of collective bargaining are as under:
(i) It is a collective process. The representatives of both the management
and the employees participate in it.
(ii) It is a continuous process. It establishes regular and stable relationship
between the parties involved. It involves not only the negotiation of
the contract, but also the administration or application of the contract
also. It means that bargaining is a day-to-day process. In this context,
Summer Stitcher has rightly observe, "It would be a mistake to assume
that collective bargaining begins and ends with the writing of the
contract. Actually that is only the beginning of collective bargaining."
(iii) It is aflexi.ble and dynamic process. The parties have to adopt a flexible
attitude throughout the process of bargaining.
(iv) It is a method of partnership of workers in management. It is in fact a
way to establish industrial democracy.
(v) It is based on give and take approach and not in take or leave approach.
(vi) It is an attempt in achieving and maintaining discipline in industry.
(vii) It is an effective step in promoting industrial jurisprudence.
 CHAPTER CovERAGE

I I. I Meaning and Nature of Discipline

I 1.2 Causes of Indiscipline
I I .3 DisciplinarY Procedure
I I .4 Principles of Industrial Discipline
I I .5 Code of Discipline in India
I I .6 Code of Discipline in Industry
I 1.7 The Industrial Employment (Standing Orders) Act, 1946

-
11.1 MEANING AND NATURE OF DISC~PUNE. ·
What is Industrial Discipline?
According to Richard D. Calhoon, "Discipline is the force that prompts
individuals or groups to observe rules, regulations, standards and procedures
deemed necessary for an organisation." Discipline means securing consistent
behaviour in accordance with the accepted norms of behaviour. Discipline is
essential to the democratic way of life. It is equally essent~al in industrial
undertaldngs. Simply stated, discipline means orderliness. It implies the absence
of chaos, irregularity and confusion in the behaviour of workers. In other
words, disciplined workers cooperate and behave in a normal and orderly
way. To quote Ordway Tead, "Discipline is the orderly conduct of affairs by
the members of an organisation who adhere to its necessary regulations because
they desire to cooperate harmoniously in forwarding the end which the group

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1 111
 -
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- INDUSTRIAL SOCIOLOGY

has in view, and willingly recognise that, to do this, their wishes must be
brought into a reasonable unison with the requirements of the group in action.''
Maintenance of discipline is a prerequisite to the attainment of maximum
productivity, not only of the firm but also of the entire nation. It is only
because of this that the underlying philosophy of discipline is conceived in
the proper thinking of the whole field of industrial relations. Viewed against
this background, self-discipline is the highest form of discipline and
management efforts should be directed to encourage this. True discipline is
educational because it changes the very attitude of the workers towards their
work and work-place. It must, therefore, be realised that discipline must be
developed from within. It has to be reformative and not punitive.
According to Megginson, discipline involves the following three things:
(i) Self-discipline.
(ii) Orderly behaviour.
(iii) Punishment
Self-discipline implies that a person brings the discipline in himself with
a determination to achieve the goals that he has set for himself in life.
Orderly benaviour refers to discipline as a condition that must exist for
an orderly bahaviour in the organisation.
Punishment is used to prevent indiscipline. When a worker goes astray in
his conduct, he has to be punished for the same and the reeurrance of it must
be prevented.

Self-Discipline and Control

Behavioural scientists view discipline as a self-control to attain
organisational objectives. Megginson clarified the term thus : "Self-discipline
refers to one's efforts at self-control for the purpose of adjusting oneself to
certain needs and demands. This form of discipline is raised on two
psychological principles. First, punishment seldom produces the desired
results. Often, it produces undesirable results. Second, a self-respecting person
tends to be a better worker than one who is not".

Progressive Discipline
The concept of progressive discipline states that penalities must be
appropriate to the violation. If inappropriate behaviour is minor in nature
and has not previously occurred, an oral warning may be sufficient. If the
violation written warnings. it must be done according to a procedure. After
written warning-, if the conduct of the employee is still not along desired
lines, serious punitive steps could be initiated. In case of major violations
such as hitting a supervisor, even termination of an employee is justified. A
 INDUSTRIAL SOCIOLOGY

(vi) A judicious machinery preferably internal to the organisation should

be provided for appeals against, and review of, all disciplinary
actions.
(vii) The management should ensure that their own conduct and policies
do not encourage breach of discipline. This ·will promote self-
discipline among the workers.
(viii) The managers should try to remove the causes responsible for
indiscipline.
(ix) A disciplinary committee consisting of the representatives of the
workers and the management should be set up to look into the
cases of indiscipline and suggest remedial measures.

CODE QF DISCIPUNE
The 15th Tripartite Indian Labour Conference, held in July 1957, discussed
the question of discipline in indian industry and appointed a sub-committee
to draft a Code of Discipline. The committee evolved a Code of Conduct which
came into force ·on June 1, 1958. The broad principles of the Code are :-
(i) There should be no lock-outs or strikes without notice, nor should
there be intimidation, coercion, instigation, or violence.
(ii) There should be no recourse to go-slow tactics.
(ii11 No unilateral action should be taken by either party in connection
with any iil.dustrial matter.
(iv) The existing machinery for the settlement of disputes should be
used for settling all disputes.
( v) A common grievance procedure should be evolved for the settlement
of disputes. ·
(vi) The employers will not increase workload without prior agreement
with workers. Also, they will provide all facilities for the growth
of trade unions.
(vii) The workers will not indulge in any trade union activity during the
working hours.
(viii) Awards and agreements should be speedily implemented.
(ix) Any agreement which disturbs co~dial relations should be avoided.
The Code of Discipline was accepted by the four Central Labour
Organisations, namely, INTUC, AITUC, HMS and UTUC, on behalf of the
workers and by the Employers' Federation of India, the All India Organisation
of Industrial Employers, and the All-India Manufacturers' Organisation on
behalf of the employers. It applies to both the public and private sectors of
the economy. The Code is a comprehensive formulation providing for almost
all the functions of an industrial relations system. It consists of three parts
as shown in Exhibit 1. The first part applies to both management and union.
It makes it obligatory upon them to comply with existing machinery for the
settlement of disputes; to settle all disputes, differences and grievances by
 ,,,.
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CODE OF DISCIPLINE AND STANDING ORDERS

-
~ut_ua~ ne?otiation, conciliation and voluntary arbitration, to give up coercion,
v1~tim1sat10n, work stoppages, lock-outs, and litigations, and to establish
gnevance procedure.
The second part consists of obligations to be observed by management.
It lays down that management should not raise the workload unless agreed
otherwise. Management must also settle grievances promptly ; implement the
settlements and awards; allow grievance appeal in all cases. The management
is to recognise unions according to the criteria laid down in the Code. The
criteria laid down in the Code mentions that to qualify for recognition, a
union niust observe the Code and must have a membership of atleast 15%
of workers. Where there is more than one union, largest should be recognised
only if it has been functioning for more than one year. A union may claim
recognition as a representative of all the workers employed in an industry
in any local area if 25% of the workers are its members. But if any plant
union has 50% workers as its members, it may represent its members in
purely local matters such as grievances, working hours, etc.
The third and final set of principles consists of obligations of unions.
It lays down that unions should not engage in physical coercion or rowdyism
and unpeaceful. acts in demonstrations. There will be no union activity
during working hours unless permitted by law or agreement. Such practices
as negligence of duty, careless operation, damage to property, interference
with work will be discouraged. Settlements and awards will be implemented
promptly and office-bearers and members of the unions who violate the spirit
of the code will be disciplined.
The Code symbolises the policy of the Government to build up industrial
democracy on voluntary basis. It tries to preserve industrial peace with
the help of the employers and the employees. Suitable machinery has
been set up at the Centre and State levels (Central Implementation and
Evaluation Machinery) to implement the Code. The National Commission
on Labour (1969) found that the Code had only a limited success and a limited
use. The main reasons for such a state of affairs were the absence of genuine
desire for and limited support to the Code on the part of the employers'
and workers' organisations; the state of indiscipline in the body politic; conflict
of the Code with the law; worsening economic situation which eroded the
workers' real wages; and the inability of some employers to implement their
obligations.