International Brotherhood of Electrical Workers (IBEW)

Abstract 

The International Brotherhood of Electrical Workers was founded in the year 1891 just before George Westinghouse was elected into office as the United States president. Among the main achievements realized at the time was the move to light up Chicago leading to the electrification of businesses as well as homes across America. The idea behind its formation was the need to embrace a collective bargaining agenda. Currently, the organization continues to champion such programs while seeking to transform society. It also represents over 750,000 workers across the nation America. Among its primary obligations is monitoring the rights of its members in regards to issues touching on their general wellbeing as well as healthcare to name a few on behalf of its members. Its role is, however, not limited to this rather still entails other issues such as deregulation, earmarked goals as well as funding. The research evaluates the effects of divestiture through the prism of IBEW. 

Introduction 

The United States of Justice on November 20, 1974, lodged an antitrust case against the American Telephone and Telegraph Company (AT&T). At the core of the suit was the contestation that AT&T exploited its dominance in the telecommunications market to stifle competition to strengthen its market position (Salop, 2017). Thus the government petitioned the court to split AT&T from Bell operating companies, a consortium of firms serving in the US and Canada, and the dissolution of Western Electric, the manufacturing wing of AT&T. In a ruling rendered by Judge Harold Greene in the United States v. AT&T, the court endorsed an earlier agreement reached by the parties outlawing AT&T for operating within unregulated markets. The divestiture of AT&T presented a considerable setback to IBEW. The union drew a lot of members from the telecommunication sector and AT&T’s manufacturing premises. Divestiture of AT&T triggered the company management to refocus its business strategy. The ruling forced the company to divest its assets and business units which the management deemed no longer fitting within the company’s business model. As a result, the company designed a new strategic player to help it steer it through the subsequent years. Divesting the additional assets helped the company to reduce pressure on internal assets (Ajagbe et al., 2016). AT&T could now use the remaining assets to grow and sustain its operations in other market segments. Furthermore, divestiture of the telephony giant led to transparency within the organization bearing in mind the stature and market size of the company. For companies that rely on a huge pool of lenders and investors, transparency is a crucial element in spurring confidence as the external players are not usually aware of other aspects of the company. 

Divestiture brings the overall benefit of increased value in the company and increases the credibility of the remaining section of the firm, though it has the potential of causing an adverse effect on a firm’s overall cost structure (Ehrenberg & Smith, 2016). Large organizations usually experience fixed costs spread throughout within the organization; the remaining company is likely to find itself in an uncomfortable position of inheriting the huge costs. The divesting company may fail to accommodate the remaining staff who worked in more than one section of the former firm. Ehrenberg & Smith (2016) were of the view that a divested company was likely to encounter challenges while negotiating the terms of the contract thus forced to call for the consideration of the position of the divested segments of the firm. AT&T found itself in a tough situation where it had to modify contracts to fit the interests of potential partners. 

Studies conducted in the United States following the divestiture of AT&T revealed that the restructuring of companies has adverse effects on unionized employees. In the above case study, IBEW experienced a massive reduction of members. The union drew a significant number of members from people who worked within the former AT&T framework. Though by the time of the divestiture, IBEW had witnessed rapid growth in stature, the reduction in the number of members weakened and subsequently led to operational challenges that the large organization encountered in the years that followed. The case of AT&T about IBEW led to a debate on whether to unionize members of a given firm. Moreover, it raised questions on the place of unionized members in case a company opted for a divestiture. 

AT&T’s decision to split was expected to result in massive redundancies besides leaving IBEW in a reactive position. Accordingly, experts contended that the company ought to have carried extensive consultations with representatives of the union to determine the place of employees in the larger scheme of things. The essence of having talks with the union was to prepare workers of the consequences of the decisions that the company was contemplating giving them adequate time to prepare for the separation (Nissen, 2016). In other instances, companies intending to pursue the divestiture failed to furnish unions with sufficient information. It implied that unions receive the news with shock. Studies also reveal that some unions tend to receive data at the initial stages of talks, but given little time to make their voices heard in defense of their staff. Further, through the restructuring, a section of the staff was laid off without getting their due benefits. It serves as the point at which unions step in to push for their members’ rights. 

According to Nissen (2016), employers and unions tend to exhibit varied opinions with regards to unions. Since workers and their employers hold contrasting perspectives on employment, unions are established to serve a link between the two entities. IBEW thus served as a symbolism of organizations across the world tasked with the duty of negotiating for better terms of working on behalf of their members. Additionally, the case is reflective of the dilemma most of the labor movements globally face in events where decisions taken by corporates lie beyond control but do affect unionized workers. Labor experts opine that in such cases, it is essential for the labor unions to renegotiate new arrangements for their members in line to the restructuring that has taken place. It means that members under the umbrella of the unions cushioned from the effects of divestitures. 

In conclusion, IBEW and other unions constitute as essential players in the economy. They serve as useful forces in the determination of the economic and political future of the world. Lessons learned from the IBEW case scenario after the disintegration of AT&T should serve as a useful lesson to other unions around the world. Such experiences can help cope with unexpected events in the market because changes have the potential to affect other players in the economy. Although the union managed to come out of the turbulence situation and regained stability, there was a noticeable drop in the number of members who remained under its fold. It is, therefore, underscored that unionized workers are in a better position to get help in cases where their labor rights appear to be violated. 

References 

Ajagbe, M. A., Bih, J., Olujobi, J. O., &Udo, E. E. U. (2016). Which Precedes the other? Organizational Strategy or Organizational Structure. Which Precedes the other? Organizational Strategy or Organizational Structure, 2(6), 50-66. 

Ehrenberg, R. G., & Smith, R. S. (2016). Modern labor economics: Theory and public policy. Routledge. 

Nissen, B. (2016). Unions in a Globalized Environment: Changing Borders, Organizational Boundaries and Social Roles: Changing Borders, Organizational Boundaries and Social Roles. Routledge. 

Salop, S. C. (2017). Invigorating vertical merger enforcement. Yale LJ, 127, 1962.