In its most basic terms, the Dunlop Systems Theory in Industrial Relations is about the structure and development of relationships among the three integral members of labor relations (labor, management, government) and about resolving labor-management problems based upon agreement on a common set of facts that affect or are affected by labor, management and government.
In his industrial relations system (IRS), Dunlop defined industrial relationships as an analytically sub-strata of industrial nations. He defined the sub-strata as operating under the same logic as the discipline of economics; since Dunlop was primarily an economist, this is a significant element of his definition because he is positing that labor relations problems can be resolved through a system of logic, not chance, and that the development of labor relationships over time can be guided through logical steps and by logical means, with nothing left to disruptive chance.
Dunlop's definition and system centralized the rules and norms--the agreements--of industrial relations at the heart of analysis. This diverged from the previous system, which made labor-management conflict and resultant collective bargaining the heart of industrial relations, which left a good deal to chance and to the illogical emotions of conflict.
Dunlop's definition and system identified what he called a "web of rules" that are the elementary components that govern industrial labor relationships. He identified the institutions and norms that constitute the framework within which industrial relations are carried out and which govern the outcomes of these relationships.
- substantive norms: wages and wage rates, working hours, OSH regulations, etc
- procedural institutions: governmental regulating agencies, conciliation and arbitration boards, etc
As Walter Mullen-Jentsch says in "Theoretical Approaches to Industrial Relations":
[T]he IRS was conceptualized in terms of both process and product: as a rule-guided process generating as its product other rules governing the actors and administered by the systems of industrial relations at the national, industry, or plant level.
Dunlop identified the "actors" he referred to in his system as:
- workers and their labor union representatives,
- government institutions that oversee labor-industrial relations.
According to Dunlop, these actors are active in what he identified as the three "contexts" of industry: (1) technologies, (2) industry markets and (3) power distribution (e.g., labor unions and corporate organization). Finally, Dunlop posits an "ideology" that "binds" an industrial relations system together, binding them with a common set of beliefs about society, human worth, and government oversight.
While Dunlop's IRS does not account for the means or mode by which rules come to be made, it might be assumed that the rules devolve from the ideological commonality between actors. Because of Dunlop's IRS foundation in economics and logic, he developed a formulation representing all these components: rules (R), actors (A), contexts (T, M, P) and ideology (I): R = f(A, T, M, P, I).
What Dunlop is saying relating to actors and ideologies is, as briefly stated above, that all actors (managers, workers, governing bodies) share a common society, thus share a common ideology.
Ideology is defined as the set of beliefs common among members of a society in relation to philosophy, religion, politics, culture, art, etc.
While our societies are more complex, especially Western societies, Dunlop's post-World War II society was far more homogenous with less divergent roots in religion, politics, culture, art and philosophy than ours today. Still, it might rightly be said that there is a common ideology that governs the premise of how management, labor and government is expected to, ought to, should and/or must relate among one another.