Disadvantages of Unions on Company Culture

When considering unionization, it makes sense to look at the question from all sides. But for a company, what are the disadvantages of unions when building an intentional company culture? The entire dynamics of the company culture may change, and the harsh reality is that it is often not for the better if you don't have a clear strategy to protect and maintain a positive culture and positive employee relationships.

Company culture is frequently thought of as an intangible asset. But take a deeper dive into what makes up a company's culture and it's not a vague concept but a tangible asset. It's not a vague concept. The type of organizational culture is a tangible component of the organization that encompasses values, ethics, attitudes, working styles, stakeholder interactions, and innovation. It also includes employee engagement level, morale, and performance. The tangible aspect of culture makes it something effective leadership doesn't leave to develop on its own. Effective leaders deliberately design and develop a culture and then leverage it to improve employee engagement and organizational performance.

Let's Talk About Organizational Culture First

Attention to company culture is essential for many reasons. One is that it differentiates your company from other companies, contributing to making you an employer of choice. It can be difficult to quantify or articulate because it's anchored in mindsets, unspoken behaviors, social patterns, and the employee experience. 

In a Harvard Business Review Spotlight Series, researchers discuss organizational culture, making the point that "culture and leadership are inextricably linked," and influential leaders can "shape the culture, through conscious and unconscious actions." The authors define culture as: 

"The tacit social order of an organization: It shapes attitudes and behaviors in wide-ranging and durable ways. Cultural norms define what is encouraged, discouraged, accepted, or rejected within a group. When properly aligned with personal values, drives, and needs, culture can unleash tremendous amounts of energy toward a shared purpose and foster an organization's capacity to thrive. Culture can also evolve flexibly and autonomously in response to changing opportunities and demands. Whereas the C-suite typically determines strategy, culture can fluidly blend the intentions of top leaders with the knowledge and experiences of frontline employees." 

The fact that conscious actions can shape culture is just more proof that culture is tangible.

Organizational Culture Impacts Everyone

Organizational culture impacts everyone in the organization, from the CEO to the frontline workers. Some brands have developed such a strong culture that just saying the brand name evokes a sense of its culture. When leaders put employees first, employees put customers first. Yet, things can change fast unless leadership understands what employees are thinking and experiencing; when employees have unresolved grievances and turn to the union for assistance, the culture changes. The internet is now full of stories about employees accusing employers of low wages, poor working conditions, understaffing, and discrimination against certain groups of people, safety concerns, and more. Most stories involve unions in some way because unions thrive on negativity.

What does this have to do with organizational culture? Unions are organizing by convincing employees that joining a union is the only hope for getting fair treatment, and leadership is often not even aware the organizing is going on. Long before a union vote is taken, the company's positive culture is being eroded by disgruntled employees, many turning to social media to discuss working conditions.

It's Not One or the Other: Culture and Strategy Must Work Together

Peter Drucker said that "culture eats strategy for breakfast." You can develop a great strategy, but the culture determines if the strategy will work. Culture and strategy must work together. You can't maintain a direct connection with employees without a great culture. The positive employee relations strategy should be a good fit in the culture, and the culture should support that strategy. A positive culture makes it more likely that employees will turn to their leaders to present ideas and solve internal challenges. 

If culture is tangible and can be impacted by leaders, then culture can be affected by a union. When unions get involved, the company culture will inevitably change and seldom for the better. Following are some of the disadvantages a union can have on company culture. 

Labor Unions Often Discourage Individuality and Encourage "Groupthink"

Like any membership organization, unions want people to think and act in a certain way. This is one of the disadvantages of union involvement, since groupthink is essential to union success. Conversely, a strong company culture, where individuality encourages new thoughts, ideas, and collaborative efforts and collaborative efforts can move the organization forward. Groupthink is defined as a phenomenon that occurs when people feel the need to conform or that dissent is impossible. It also discourages individuality. It can also lead to situations in which employees ignore moral or ethical consequences to avoid disagreeing with the consensus. A third consequence of groupthink is not speaking up for individual belief.s Employees that don't want to join a union can become afraid to say so and instead just go along with the crowd. It is not a good dynamic in a business environment, where creativity and diverse perspectives are important to business success.

Unions May Discourage a Collaborative Culture and Influence Work Norms

A truly collaborative culture is one in which employees are encouraged to work with people across functions and departments and to work with management to solve problems and innovate. Unions often discourage "working out of grade" or performing duties that aren't specifically in their job description. There are often "jurisdictional restrictions" in union contracts. If an employee works out of their area, it opens up a whole set of issues that include union contract compliance.

Union contracts can event create a productivity disadvantage. One reason for this is that unions usually impose restrictive work rules when negotiating union contracts. Management is restricted from organizing work activities. Employees are prohibited from being more productive (production limitations), working across jurisdictions (cross-department, function, location, etc.), and taking on responsibilities not explicitly included in their job descriptions. A second productivity disadvantage is that union members are expected to be supportive of other union members. You may have personnel work issues in one department that have nothing to do with other departments, but union members will join forces across the organization.

Labor Unions Can Make it Difficult to Identify Leadership Potential

Unions are diligent about ensuring regular staff doesn't assume any leadership roles, even willingly. Beyond just simple seniority clauses that encourage rewarding tenure over potential or hard work, unions are striving to get as many people as possible who are supervisors (and currently can't join a union) reclassified. so that they can pay union dues With 2019's proposed PRO Act , the thinking was that a surge of union efforts would occur, working to have many employees reclassified from non-union to union-eligible status. Many current non-union employees are frontline supervisors. The net effect of these efforts is discouraging employees from showing leadership potential. 

Other Potential Disadvantages of Unionization

Labor unions discourage personal initiative – Most union contracts require promotions based on next-in-line rather than competencies. This isn't very encouraging to people who excel in their jobs and deserve to advance. Watching someone less competent (in some cases) get the higher-level position only because of seniority harms the workplace culture.

A "us vs. them" attitude can develop in unionized companies – In order to encourage solidarity, unions often promote an us-vs.-them workplace attitude in which employees (us) assume management (them) will always try to take advantage of employees. This negative attitude leads to a culture of suspicion, which increases the number of conflicts and grievances.

Adversarial relationships can develop at any time – There are places where management and the union work well together. The problem is that the union can quickly change the culture of cooperation by promoting an adversarial attitude among employees over an issue – usually a charge of unfair labor practice. The power play is always a union option, even when currently kept in check. Adversarial relationships are tense, unproductive, and will inevitably impact employer-employee engagement. 

The management-union relationship always maintains some level of wariness, for this reason, making it difficult to develop positive employee relations. 

Labor Unions Often Resist Change

Companies must have a culture that embraces agility and flexibility, and that means having the ability to make changes and adapt as necessary to marketplace dynamics quickly. As we've seen when modernization and technology brings greater efficiencies, unions will usually resist change to protect union member interests - and dues income. This difference in perspective means success is only possible through successful management-union negotiations, which is very difficult if unions resist change and end goals are different. 

Change adaptability is a significant component of modern company culture. Legacy hierarchical organizational structures that unions are used to operating in are ineffective in today's fast-moving global economy. Instead of the hierarchy, command-and-control structure, organizations are moving to a structure and a culture that empowers employees. Today, only 14 percent of the executives believe the model of hierarchal job levels based on specific area expertise makes the organization effective. 

Many forward-thinking companies have already adapted their culture and approach to work. There is a need for a team-centric structure that encourages shared values and culture, the free flow of feedback and information, and employees rewarded for their skills and abilities and not their position. These are organizational culture features that are in direct opposition to the union culture. In social enterprise, individuals are empowered. Unions say they give each employee a voice, but in reality, it's a collective voice in which individuals are only empowered through union membership. 

Labor unions create a separate culture – Paul F. Clark, author of the book Building More Effective Unions and School Director and Professor, Labor and Employment Relations at Penn State, points out that unions create their own culture among employees. He writes, "Many of us are familiar with the slogans, songs, jackets, parades, banquets, and picnics of unions because they are all part of the labor movement. To some, they are simply window dressing, unconnected to the important things that build an effective union. But these things are part of a potentially powerful phenomenon called "organizational culture." He mentions how union members call each other "brother" and "sister" to create a bond. 

To succeed, the union culture must be integrated with the company's culture of beliefs, attitudes, values, and objectives to achieve a truly positive organizational culture. Employees must be fully engaged in their workplace culture in order for management to develop strong employee engagement. It can be very difficult to integrate two cultures because one must be willing to be a subculture, something neither entity wants to do. 

Compounding the Disadvantages of Union Membership

The impact of a union on company culture should also be viewed from the employee's perspective. Union employees lose their right to speak for themselves, pursue their career goals as they see fit, work with whomever they want to work with, collaboratively solve problems with management, and agree to changes they approve of without union intervention. For these privileges, employees must pay union dues, receiving less net pay while knowing the dues are spent in whatever manner the union leaders see fit. 

Culture and strategy must work together. In a survey of senior executives at 1,348 North American firms, 92 percent believed that improving culture would increase its value. Still, only 16 percent believed their culture is where it should be. Executives linked culture to ethical choices, including turnover, innovation, which includes creativity, and value creation, which includes productivity. 

Sharing Deep Knowledge of Labor Union Behaviors

Successfully negotiating a union contract has little to do with the union's influence on the organization's culture yet to come. Think of it like this: No union is responsible for your company's culture - there is nothing in the bargaining agreement that says: "Union representatives will work to maintain a positive culture."

Work to build a strong collaborative culture, in which belonging plays a strong role. Culture may eat strategy for breakfast, but culture plus a solid positive employee relations strategy is a full day's meal!