The impact of strike to an organization

By on June 11, 2012

An organizational strike not only destroys the power of labor at its source while still professing theoretical support for the right to strike, but also causes many other losses. Labor on the other hand in demanding freedom to use the organizational strike is seeking an instrument fundamental to its rising power. The right to strike restricted in any way is the right shorn of some of its power (International Confederation for Free Trade Unions, 1989). The economic losses of the employer cause by a strike are incapable of precise calculation.

The loss of profits is only one item in the total losses that an employer may suffer. The employer’s business may be crippled because of the loss of the market connection beyond the period of strike; goodwill may be lost; and the idle machines may get spoilt. Additional expenditure may have to be incurred on protecting the plant and on strike breaking activities (Howell, 2005).

Publicity and propaganda are yet other items adding to its costs. Besides the loss of mental peace, respect and status in the community cannot be calculated in terms of money. The adverse affects of a strike on the workers are the loss of wages, and fringe benefits contracting of debts, personal hardships and loss of employment. It is difficult to assess the wage and production losses on account of a strike. Any calculation of wage losses from pay roll gives only a partial picture. In addition the strike may leave the union weakened and divided to the satisfaction of the employer

Thus, strikes involve both economic and non economic costs for the employer and if at the extreme of strike he has to concede the demands of the striker’s additional burdens are imposed. However certain other elements which mitigate the losses also form a part of the economic calculation of the cost of a strike.


  • Howell C (2005), Trade Unions and the State, Princeton University Press, New Jersey.
  • International Confederation for Free Trade Unions (1989), Employment and structural change in Indian industries, Cengage Learning, USA.