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Table of Contents

Introduction. 2

Background: Theories. 3

Corporate Governance. 3

Agency Theory. 5

The Stakeholder theory. 5

Values and Work Environment 7

Identity and Behaviour 7

Collective Identity. 8

Conclusion. 9

Reference List 10













Strikes A symptom of Ailing Industry: Study is an article written on 20th September 2015 by Pav Suy in the Khmer Times. The article captures the emergence of union action or strikes as a key element of failed labour and industrial relations. In the article the author looks at strike within Cambodia. He uses the Cambodian strikes to highlight how strikes have shifted from being part of a vibrant labour or industrial environment to an indicator of “ineffective industrial relations and human resource processes” (Suy, 2015). The author paints a sad picture of the cost implications of union action in Cambodia. He posits that strikes cost “Cambodia about $200 million per year in lost exports” (Suy, 2015). Using the Cambodian case study, this study will seek to understand the implications and causes of union action through elaborate business theories.

Background: Theories

Union action has over the years been rife due to the enhanced democratic space and poor industrial relations. Most of the strikes can be linked to the latter which also acts as a theory that helps us understand union actions insightfully. Corporate governance is one theory that tries to offer insight into the union actions. The corporate governance theories point out to relations, mechanisms and processes by which organizations are managed run. Much of the union actions are thus anchored in the inefficiencies within the management and control processes in an organization. Another theory that presents itself in the analysis of union action is values and identity. Values and identity try to extrapolate how organizational perspectives play a role in determining the prevalence of union actions within an organization. Identity on the other land tries to posit a correlation between identity at individual and collective level in influencing the frequency of union actions.


Corporate Governance

Corporations or organizations have become dominant and pivotal institutions. This is shown with the dynamics that characterize corporations in industries in terms of capabilities, sizes and influences.  The governance of these corporates has had a profound impact on various aspects of the social landscape as well as economies. Many organizations continue to wield disproportionate power and influence that have an impact on the lives of various parties-management, employees and other external stakeholders. In light of the Cambodian textile and footwear industry worker strikes, corporates can be said to have failed to establish structured resolution mechanisms to restore order and meet the adequate welfare of workers while at the same time adding value to stockholders.

It is also prudent to understand that corporate governance manifests itself in the running of labour unions globally. Many unions have systems just like business organizations have governance structures, relations and processes by which corporations are directed and controlled. Unions have mechanisms that act on practices, policies, and decisions touching on their stakeholders (workers). In most unions, corporate governance ensures that the interests of the union are aligned to the interests of the workers.

Just like the corporates in the Cambodian textile and footwear industry, unions have been said to have failures and inefficiencies in their governance. Many of the unions’ top brass management are focussed on vested interests which are not aligned to their members’ demands. Through the inefficiencies witnessed through corporate governance, union heads have become strong political heads that can easily wreak havoc and paralyze industrial functions when they want to.  With many of the unions operating on uncontrolled and unregulated environment, much of the organizations within industries such as the Cambodian textile industry will continue to suffer and yield much. All these dynamics are captured by the various corporate governance approaches.

Agency Theory

Under agency theory, the relationship between the principals (shareholders) and agents (management and company executive) is looked into. Under this theory the stakeholders who are notably the owners of the company hire the agents to perform the work for them.  The shareholders or principals entrust the running of the organizations with the agents. The agents are legally mandated to work for the principals through creation of policy, strategies and structures of organizational running. In many scenarios a problem arises where the agent looks into his own self-interest or rather develops opportunistic behaviour which falls short of the principals aspirations.  Through this opportunistic behaviour, the agents may create inefficiencies such as failing to improve the welfare of employees and other pertinent players. This precipitates union actions which ultimately affects the principals’ reputation and also stock value.

In the Cambodian case, the management of the textile and footwear industries failed to capture the concerns of the employees through structured talks with their representatives. Due to this, workers initiated union action which saw the industrial paralysis that affected the running of the aforementioned industry.  Agency theory can be said to also affect the running of unions. The union management as agents fail to act in due diligence by committing to pursue strikes in order to garner new members without consideration of the industrial dynamics. Many shareholders or union members are sometimes forced into actions brought by the desire of the union management to pursue personal interests.

The Stakeholder theory

The theory focuses on any team or individual who can impact or is impacted on by the attainment of the organizational objectives.  The management of the corporates have a network of relationships that they serve this includes employees, suppliers and business partners.  The relationship, in this case, with employees affects the running of the organizations and its profitability within an industry. The employees are thus important elements within the corporate structure. The Cambodian crisis posits the failed relationships pre-empted by adamant unions and high-headed managements. This results to union action which if unchecked brings about industrial paralysis which ends up affecting other stakeholders such as the government agencies, suppliers and business partners. Unions seem to understand the impact of industrial paralysis and thus use it to push for demands however surreal they might be.

Values and Identity

Values are essential in any organization as they establish guidelines surrounding business conduct. Values are static and are not subject to organizational changes. Values are essential in establishing the relations within an industry between various players. This is factual as values provide a framework of how various parties ought to treat one another. For instance, the management ought to treat the workers or the subordinates well. Issues such as remuneration, worker welfare, appraisals, and promotions are some of the issues that constitute conduct (Barrett, 2014, P.41). . The values are also established to precursors of a conducive working environment which often than not is one of the reasons cited whenever union actions are undertaken. Pav Suy denotes this in his article that late payments continue to be one of the negative conditions that make it hard for labourers within the textile and footwear industry to work effectively hence the strikes.

Identity, on the other hand, is defined as the basic cognitive system that humans create distinctions from others individually and collectively. Many organizations and individuals display unique traits, communication, symbolism and behaviour to establish how they want to be perceived. Communication is depicted through direct speech, introducing and divulging of culture, vision, and strategies (Letza, et al., 2008). Symbolism, on the other hand, focuses on the visual representation such as flags, logos, emblems or even colours (Jones & Volpe, 2010, P. 432). Lastly, behaviour is depicted through the conduct of an organization or individual towards the surrounding elements or environment.

Values and Work Environment

Strikes a symptom of Ailing Industry: Study shows a critical correlation between upholding of values and worker satisfaction. The Cambodian textile and footwear industry has endured many strikes due to the breakdown of values within the organizations within the industry (Baker & Anderson, 2010). Many of the managers within the aforementioned industries have ignored organizational values in the pursuit of profits and instituting control within their respective organizations.

The breakdown of values is further manifested in the labour unions that are cited by Pav Suy (2015) to be not overly focussed on the values. Many are not keen to support the workers agenda devoid of vested interests. A number of unions have been highlighted for trying to compete against one another in their quest for more membership. The budding unions are said to be “opportunistic and chase the demands of workers through strikes” (Suy 2015).

Identity and Behaviour

Many of the Cambodian worker unions are founded on the mutual need to push the worker agenda. The unions are created with the worker in mind and are strengthened by the unity cemented by mutual concerns and comradeship expressed by workers. With unions as their platforms of expression, much of their conduct and beliefs gravitate upon what unions hold as values and objectives. Workers express similar behaviours due to the shared concerns and agenda in their engagement with other agents or players in the industrial relations (Bainbridge, 2008).

Collective Identity

In any organization, workers are encouraged to identify with the organizational goals and values. Being main cogs of a firm or organization makes labourers chief cogs within the organizational context. Hatch and Schultz (2004, P. 91), however, notes that workers identify more with their union representatives as compared to the management. The union representatives pay a pivotal role in shaping a worker’s identity through availing welfare and pertinent information which ensures feel protected and have their interests well taken care of.  Many unions enhance the collective identity through constant communication and visibility among their members (Thomsen, 2005). Publishing of periodicals, use of social media et cetera is one of the avenues that unions are currently using to connect and interact with their members. It is through this interaction and discourses that worker identity is enhanced. It is the collective identity that enables Cambodian workers to stand in solidarity, as captured by Suy (2015), whenever their representatives are dismissed unfairly from work.  It is one of the common forces behind strikes in the Cambodian textile and footwear industry. Virtually all triggers of the strikes are precipitated by the collective identity which makes work express their dissatisfaction with “discrimination or dismissal of union representatives by employers” (Suy, 2015).

At the organizational level, to stem out worker agitation and possible union actions, there is need to forge organizational identity. The management in organizations ought to ensure workers understand and appreciate the various facets that make their organizations unique and enviable. The employees ought to understand who they are in relation to an organization. The identification theory cites that for organizational identity has three components (1) “feelings of solidarity with the organization” (2) shared traits (3) behavioural and attitudinal support of the organization (Witting, 2006, P.1). To enhance the identity, there is a need for the employees to have insightful knowledge of the company from its ethics to its financial standing. With the right knowledge and constant communication with the management, relations can be built and inefficiencies reduced between the two parties (Ahrens & Khalifa, 2013). If many Cambodian industries were to enhance organizational identity, union actions can be constrained or reduced.


Strikes A symptom of Ailing Industry: Study by Pav Suy in the Khmer Times captures the industrial relation inefficiencies within the Cambodian textile and footwear industries. These inefficiencies as highlighted are prompted by various elements which in the paper are dissected using theory of corporate governance and principles of values and identity. Values and identity are also explored to dissect the issue of rampant strikes. The values are observed and instituted in the work environment. Identity, on the other hand, is founded on behaviour and collective identity. Many unions in Cambodia are successful in their union actions due to the solidarity shared by workers. Cambodian organizations as aforementioned can counter this through enhancement of organizational identity. Organizational identity if effected well can reduce inefficiencies ensuring that disputes are handled internally devoid of drastic actions.

Corporate governance, on the other hand, through its varied approaches looks into the processes, mechanisms and structures that are integral in the organizational running. Many organizations continue to wield disproportionate power and influence that have an impact on the lives of various parties-management, employees and other external stakeholders. In light of the Cambodian textile and footwear industry worker strikes, corporates can be said to have failed to establish structured resolution mechanisms to restore order and meet the adequate welfare of workers while at the same time adding value to stockholders. All these dynamics are captured by the various corporate governance approaches- agency and stakeholder theories. Under agency theory, the relationship between the principals (shareholders) and agents (management and company executive) is looked into. Stakeholder theory, on the other hand, focuses on any team or individual who can impact or is impacted on by the attainment of the organizational objectives.













Ahrens, T. & Khalifa, R., 2013. Researching the lived experience of corporate governance. Qualitative Research in Accounting & Management, 10(1), pp. 4-30.

Barrett, R. 2014. The values-driven organization: Unleashing human potential for performance and profit.

Bainbridge, S., 2008. The New Corporate Governance in Theory and Practice. Oxford: Oxford University Press.

Baker, H. K. & Anderson, R., 2010. Corporate Governance: A Synthesis of Theory, Research, and Practice. New York: John Wiley & Sons.


Harcourt, M., & Wood, G. E. 2004. Trade unions and democracy: Strategies and perspectives. Manchester: Manchester University Press.

Hatch, M. J., & Schultz, M. 2004. Organizational identity: A reader. Oxford: Oxford University Press.

Jones, C., & Volpe, E. H. 2010. Organizational identification: Extending our understanding of social identities through social networks. Journal of Organizational Behavior32(3), 413-434. doi:10.1002/job.694

Letza, S., Kirkbride, J., Sun, X. & Smallman, C., 2008. Corporate Governance Theorising: Limits, Critics and Alternatives. International Journal of Law and Management, 50(1), pp. 17–32.


Suy, P. 2015, September 20. Strikes a Symptom of Ailing Industry: Study. Khmer Times. Retrieved from–study/

Thomsen, S., 2005. Corporate Governance as a determinant of Corporate Values. The International Journal of Business in Society, 5(4), pp. 10-27.

Wiitting, M. 2006. Relations between organizational identity, identification and organizational objectives: An empirical study in municipalities. Afstudeerartikel voor de opleiding Toegepaste Communicatiewetenschap, 1-20.

































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