STAGE 1970s: THE RISE OF GOVERNMENT (Industrial Relation)

STAGE 1970s: THE RISE OF GOVERNMENT

          In 1970s, the roles of government became powerful in influencing industrial relation procedure. In general, this is according the roles of government to enacting a policies and laws to influence the industrial relations.

          Announces in 1970 after the post-election race riots of May 1969, the New Economic Policy (NEP) sought to create the socio-economic conditions for national unity through massive economic redistribution programs to achieve its twin prongs of poverty eradication which is the  reduction of the proportion of households earning less than the poverty line income, and the restructuring of society  to achieve greater inter-ethnic economic parity, especially between the predominantly Malay Bumiputera and the mainly ethnic Chinese non-Bumiputera. The NEP Outline Perspective Plan for 1971-1990 (OPP) envisaged declining poverty over the next two decades, while restructuring society  basically referred to efforts to achieve greater inter-ethnic parity in occupations and corporate wealth ownership, and thus eliminate the identification of race with economic function. The OPP also expected to raise the Bumiputera share of corporate equity from 2.5% in 1970 to 30.0% in 1990.

          Policies in the 1970s, after the declaration of the NEP show the partial abandonment of laissez faire policies in favor of greater state intervention in public resource allocation as well as public sector ownership and control of business enterprises. The 1970s saw the rapid growth of the public sector and increasing state intervention in the name of the NEP. Especially in the 1970s, the state established a large number of public or state-owned enterprises in all sectors, sometimes in collaboration with private capital. The number of public enterprises rose from 10 in 1957 to over 1000 enterprises by the mid-1980s.

          By then, however, there was also growing dissatisfaction with the government due to its policy responses to fiscal and debt problems as well as more general economic and political crises. By this point, large Malay-controlled business groups had already emerged in the corporate scene, and were calling for a less regulated economy. Indeed, some of them saw excessive intervention as slowing growth, and hence, counter-productive to their interests. The turning point for government policy, in terms of economic liberalization and policy reversals, occurred around 1986. Greater liberalization in the late 1980s has been a boon to the corporate sector, with most businesses benefiting, and hence supportive of further selective liberalization. By this time, politically influential corporate groups had developed various new ways and means to advance their interests while appreciating the greater flexibility offered by reduced regulatory constraints required by public accountability.

          In late of 1970s, Japan was a most powerful country in international production of goods. Thus, many countries really impressed with Japan management techniques. The main important aspect in Japan management is the focus to human resource as a main key of organizational success. Most countries, impressed with Japan management and most of the organization has reviewed and considered to practice this management skills in their own countries. Due this Japan management focus in human resource as a main asset in organization, it will give a positive side to the relationship between employer and employee. The evolution in Japan management was influence the development on industrial relation as a scholarly discipline.