ABSTRACT
The new theory of industrial relations is a critical theory of the governance of work under capitalism. The economic system is made up of product, labour and financial markets and is external to the organization. Since the economic and organizational systems are nothing more than complexes of action, worker action in response to system requirements is part of the process that ultimately gives rise to system requirements. Significant change in frames of reference will also lead to change in the functional characteristics of the economic and organizational systems. The objective and subjective aspects of the industrial relations system are in a dynamic relationship of mutual influence, while the institutional structures of industrial relations attempt to stabilise that relationship from the perspective of a particular frame of reference. Democratic unitarism is the frame of reference that arises when both the market and organizational systems are given a positive normative evaluation.
