The rise of labor movements and the evolution of the Indonesian system of industrial relations: A case study

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Abstract

This study analyzes a case of labor conflict at a garment company in West Java with particular reference to the rules and strategies among the parties involved. Using game theory, the study analyzes the formation of the critical point of labor conflict and examines the negotiations that led to the formation of stable industrial relations. At that point, the Nash equilibrium was at the company strategy of collaboration and at the workers' strategy of hostility, the company having assumed that the workers would mount a strong resistance to the company's hostile strategy. Under circumstances of weak law enforcement, the effective strategy for the workers was not only to obtain knowledge concerning the law but also to gain the support of the community, as well as solidarity among union members, and to pursue creative strategies. This study also shows that an important rule for stabilizing industrial relations is continual communication among the company, labor unions, and the members of the workers' organizations.

Original languageEnglish
Pages (from-to)190-211
Number of pages22
JournalDeveloping Economies
Volume43
Issue number1
DOIs
Publication statusPublished - Mar 2005

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