The Link between Business Strategy and Industrial Relations Systems in American Steel Minimills

Abstract

This study tests the “strategic choice” proposition that variation in workplace industrial relations policies and practices is related to differences in business strategy. A cluster analysis of data from a 1988–89 questionnaire examining workplace industrial relations and business strategies in U.S. steel minimills suggests that the industrial relations systems of these mills can be broadly categorized as emphasizing either cost reduction or employee commitment; similarly, the business strategies of the mills appear to stress either the manufacture of a few products in large quantities at the lowest possible cost, or more flexible manufacturing, with products marketed on some basis other than cost. Further investigation shows a significant association between the type of workplace industrial relations system and the business strategy choices in these mills.