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Developing a new type of the social and labor relations system in a time of social and economic change


The current difficulties of the Russian economy indicate that the application of policies for the attainment of economic stabilization without regard to the historical conditions of a particular country may produce little positive effect. Consideration needs to be given not only to economic factors, such as the level of industrial development of the country, the scientific and technical potential, and the amount of economic monopolization, but also cultural factors, such as the sense of justice, historical traditions, general mentality, and the system of values. Recognizing these cultural factors, this paper proposes a theoretical base to develop a strategy for reform in social and labor relations that would be adequate to Russia's current conditions. This paper investigates the processes of transformation of social and labor relations on the basis of logic modeling and an extended systems approach.

Methodology of the research

The system of social and labor relations is goal-oriented, and therefore is “tuned” to the implementation of certain objectives. Objectives serve as a vision for the future of advanced systems. Governance of the system of social and labor relations goes through continuous adjustment process. The system exists in actual form and in normative form. The interconnection between them can be depicted in the following scheme:


Actual social and labor relations on an objective level are a system of objectively necessary relationships which are free from value judgments; on an subjective level–a system of relations between actors, which is not free from the influence of the internal values.

Normative social and labor relations are also based on some underlying values. Ethical rules somehow fixed in laws and legislative norms ultimately reflect ethical norms. The laws often contain provisions which had a pronounced ethical orientation. Normative social and labor relations are carriers of a particular development of the system of labor relations, at least ethically. They might be considered as a goal of development for the social and labor relations system.

Ideally, both forms of social and labor relations - actual and normative - reflect the same model and have the same system of values as a foundation. Otherwise, a contradiction between the normative (what are the ideal social and labor relations for the country) and the actual (what are the social and labor relations actually practiced) forms arises.

The system of social relations should be based on the set of values accepted by the participants in these relations and manifested either in the system of individual preferences or in a group morality. Formal rules can be replaced quickly, informal constraints - no. Conflict of values is manifested, for example, in a discrepancy between the customary forms of social and labor behavior, giving specific meanings for the phenomena of economic life and the changing requirements of social and labor situation. This can be expressed in a nontraditional (for market-oriented social and labor relations) using of emerging opportunities for application of labor and capital, voluntary withdrawal from the labor market, a lack of understanding of how best to use social and employment potential, fear of responsibility for business etc. If the normative or declared model of social relations turns out to be in conflict with the latent set of values existing in the society, an imbalance may occur, which is manifested either in the degradation of social relations or the development of society as a whole.

To understand and guide the systemic changes which are typical for the time of transformation, it is necessary to perform periodically a comprehensive diagnosis of the system and simulate innovative changes. Social and labor relations are studied from the standpoint of law, economics, sociology, psychology and organizational theory. But in practice it is impossible to separate those and others. In practice, they are both economic and legal, psychological and ethical, and organizational. As a rule, the existing theories of social and labor relations, describe them with only one hand (Medvedeva, 2013).

From my point of view, the use of an extended system approach to social and labor relations allows us to capture the many facets of this phenomenon, describe social and labor relations in a complex, goal-oriented way, to include sociocultural components in their study and thus integrate the study of the external world of participations, the world of their relationships, interdependencies and their inner world, the world of meaning and values. This approach assumes the unity and interdependence of social and labor processes aimed at implementing the sense of social and labor relations, expressed through the goal. Thus a target is of paramount importance. All other components of the system are organized for its implementation (Medvedeva, 2013).

On the level of society the government creates conditions for change in social and labor system (Fig. 2); on the level of organizations we realize this change (Fig. 3).


Creating conditions for development of social and labor relations at the macro level by government means macro economic and social policy, the policy in the field of social and labor relations (protectionism or liberalism); labor standards and employment standards, labor legislation; direct participation of employees through a policy of income or through the dispute settlement mechanism; regulation of the rights of the employee and / or the participation of employees.

Other participants of social and labor relations work in the frameworks created by the government. Employers develop human resources policy (role of unions, investments in human capital, location of enterprises, production technologies, form of employment); determine personnel policy and rules of negotiations; choose style of work with employees.

Unions determine their political roles, objectives of their public policy; collective bargaining policies and strategy of negotiations; policies on employee participation, introducing new technologies etc. (Kochan, McKersie, Cappelli, 1983). The change of the social and labor relations system might be described as in Fig. 3.


An extended systems approach to social and labor relations is based on the assumption that actors are both participants in social and labor processes and its observers. The sociocultural values of actors–the meanings that they invest in their perception of the social and labor reality–largely determine their economic choices, and act as a basis for decision-making, which reflects the formation of the relevant rules, norms and values of social and labor life. In this sense, the system of social and labor relations–is a reflexive system, which means that participants do not just adapt to environmental changes, but are also able to reconceptualize.

Identifying the basic, actual and normative models of social-labor relations

I believe that identifying the model of social-labor relations actually used reveals the social-cultural characteristics of Russian actors and enables us to understand in which direction labor relations should change and which model of labor relations is preferable for Russia (see Fig. 4).

The basic model of social and labor relations–the starting point of its transformation and the ultimate goal of the transformation–is a model arising from the review of the value component of Russian labor law, the normative model.

Comparing the social and cultural characteristics of the participants involved in social and labor relations provides a basis for visualizing the future development of these values. It is enough to enumerate the Russian social and cultural values to see that collectivism, ethnic tolerance, primitive forms of mutual aid, mutual rescue, conscientiousness, aversion to a consuming culture, a way of thinking "both this and that," and a striving for world integration have a non-economic nature, indicating that the Russian mentality consists of values which occur in a post-industrial society. These values may be potentially useful for the development of Russia in accordance with current world trends. Hence, the positive characteristics of the Russian mentality should not be eliminated in the course of the transition period, which is in the interest of the future development of the Russian economy and is essential for the preservation of the human personality as a bio-social structure in a world of ever growing complexity.

On the other hand, it is clear that another group of characteristics, such as disrespect for the law and property, long suffering, utopian thinking, dislike for business organization of labor, etc., indicate a lack of economic rationality in individual attitudes.

Analysis of sociocultural characteristics of Russian actors allows us to conclude that the model, based on the inherent native Russian traditional values, is basically collectivistic with a paternalistic type of social and labor relations, with quantified objectives, with a predominance of collective over individualistic interests (Medvedeva, 2012). Such traditional characteristics of the Russian participants in social and labor relations as respect for state authority, deference to charismatically strong leader, sometimes unwillingness to take responsibility, disrespect for formal laws, dislike of discipline in the operation of labor and business etc., determine an active policy of the state to the labor market aimed at promoting cooperation in the labor processes through paternalism.

In the traditional model of Russian social and labor relations a vertical type of relationship dominates. The so called collective relationship between workers often has an informal character (trust, mutual comradely support, etc.)

The actual (present) model of social and labor relations in Russia is based on values formed in the period 1990-2000, a period of market reforms. Such values as individualism, freedom, self-confidence and responsibility for their own careers and families are more and more important for Russians. However, the dominant values, also in the 1990s, remain high wages in contrast to the old (pre-reform) domination of the content of labor, namely self-realization in work. Thus, young people often do not consider a career as a goal with the possibility of realizing themselves through work, but only as a way to obtain the necessary funds for living. Such a change could be interpreted as establishing a system of market values, but in combination with other values, such as honesty, high qualifications, skills, high performance in work, school, etc. However, young people are increasingly coming to the conclusion that engaging in market relations, while observing the requirements enunciated society, is almost impossible. Probably more correctly this system of values might be called the values of survival.

Another feature of the current Russian system of values in the field of social and labor relations is noted by professor Toshchenko. Based on survey data, he concludes that since the 2000s, Russian society might be characterized by an antinomy, i.e., a stable duality: two leading aspects, two positions having the same right to exist. (Toshchenko, 2009: 4-5) Russians preferring collectivism, paternalism, equality, society with a planned economy, and those who prefer individualism, inequality, liberty, a market economy based on private property, almost equally (Medvedeva, 2012: 137) It seems that it is now possible with reasonable certainty say that in Russia two actual models of labor relations coexist, with two different senses (see Table 1).


Criteria for identifying the model of social and labor relationsModels of social and labor relations
State policy on the labor marketActive - ProtectionismActive - State liberalization strategy; inefficient and unaccountable bureaucracyActive - State liberalization strategy
Labor and management standards of the social and labor relations systemDomination-subordination system; Inequality of social and labor relations actors; Dominance of the societal interestsDomination-subordination system; Inequality of social and labor relations actors; Dominance of the societal interestsSystem of Partnership on the basis of shared values; Equality of social and labor relations actors; Interests of individualsSocial partnership; Equality of social and labor relations actors; Balance of social groups’ interests
Regulation of worker’s rights and/ or employees participationBureaucraticBureaucraticContractual or Individual employee participationWork groups emphasis

Modern Russian labor law in large part has been developed using foreign experience. The analysis of the social-cultural component of the system of social and labor relations on the normative level shows that modern labor law in Russia sets up the landmarks for a system of social and labor relations based on social partnership with equal actors in social and labor relations and on balancing their interests by social partnership (see Table 2). On the other hand, Russian labor law provides no mechanisms for implementing this social and labor relations model.

The mismatched values in the variables of the actual and normative models shows that the "bottleneck" in the transformation of the Russian system of social and labor relations is the Russian worker with his values. There is an acute issue of forming a new type of worker. At one time this issue arose in the U.S. and the USSR and was successfully resolved. Gramsci wrote that in America rationalization led to the need for a new type of workers and a new type of labor the production process (Gramsci, 1959). The Russian system of social and labor relations has its own extensive experience in the formation of the necessary qualities of workers. Suffice it to mention the economic schools of universal education. Individual, individual-brigade production-technical training, brigade and course learning, schools of advanced production experience, training for special purposes, production-technical schools–all these forms were sent to a consistent, gradual retraining of workers. Trade Unions almost took the lead in organizing schools of universal economic education, where millions of workers acquired new knowledge for a particular economy and raised their technological and production skills.

The mismatch in values in the variables of actual and normative models also says that currently there is a mismatch between Russia factual and normative social and labor relations, which manifests itself in two ways. On the one hand, there is degradation or destruction of the social and labor relations inherent in a planned economy, and on the other hand, social and labor relations are advancing in comparison with the development of society as a whole (as a rule, this trend can be seen in new markets). It is informative that the most mature market in Russia now is the market for information technologies, which in Soviet times simply did not exist. This market has no problems with the so-called "Soviet" legacy of authoritarian management style and, accordingly, sleepy workers. Other markets continue to struggle with traditional stereotypes.

The authors of "Tectonic shifts in the world economy" E.G. Yasin, M.V. Snegovaya believe that such basic institutional and cultural obstacles as the tradition of authoritarianism and bureaucracy, since it is the main support of an authoritarian leader, corruption, legal nihilism, disrespect for law, most notably by the authorities, and clientelism (most Russians believe that the best way to achieve something in life) - a personal touch prevent Russia's transition to an innovative development stage (Yasin, Snegovaya, 2009).

The fact can also be stated that the reforms have undergone the ravages of the non-economic values of Russian actors in social and labor relations which, in our view, could become the basis for the development of a post-industrial society in Russia, in addition to the development of a rational culture. The question of values - is the question of what kind of society we want to live in? What will we consider to be fair? What principles will the social and labor relations system be built? Integration and change of values, one way or another, will determine our destiny. If this become rotated in the wrong direction, we will lose the future, and find ourselves unable to survive.

I believe that the difference between the actual and normative models leads to a conflict of values between the latent and the declared values. A possible solution to this problem might be similar to the transformation of the system of social-labor relations.

Transformation of the social and labor relations system: A general model

I proceed from an assumption that any system of social and labor relations is based on a particular set of values. In a period of social transformations, values as an ethical component of social development become important and serve as a basis for decision-making in the new situations which arise.

In the ideal case, the system of social and labor relations should be based on the set of values accepted by the participants in these relations and manifested either in the system of individual preferences or in a group morality. If these relations are manifested inconsistently or irrationally, it is reasonable to presume that the individual (or the group) has different values and/or a different type of rationality.

Russia currently aspires to a new system of social and labor relations, which will be based on a set of values. The two sets of values, latent and declared (that is, the current system of social and labor relations and the one to be introduced) come into interaction, interfere and interpenetrate. Therefore, the development of social and labor relations in many respects is subject to the interaction between the latent and declared sets of values. If the normative or declared model of social and labor relations turns out to be in conflict with the latent set of values existing in the society, an imbalance may occur, which is manifested either in the degradation of social and labor relations or in their advanced development with respect to the development of society as a whole.

Thus, it is necessary to develop the mechanisms of value conflict resolution. A balance between the declared and latent sets of values may be realized through changes (Fig. 5) in either the outer or the inner context (Fig. 6) of social-labor relations. Management of the outer context of social-labor relations might involve a) Changes of norms, values, world standards, labor standards, etc. formulated on the meta level (Club of Rome, International Labor Organization, etc.); b) Changes of the behavioral models of organizations on the micro level; or c) Social learning as a realization mechanism (on the micro level) of norms and values in the light of world standards.


The state of social and labor relations is mainly due to how the members of a given community perform their functions or play their roles. Social and labor relations are also dependent on the cohesion, social and psychological, among the individuals in the group. Thus, it would be reasonable to use a multi-disciplinary approach to model collective behavior in the presence of several mechanisms of social relations, namely constraint, compromise and co-operation. By a multi-disciplinary approach I mean the participation of specialists engaged in research in the fields of economics, psychology, sociology and demography. For each of the possible combinations of mechanisms there should be a different behavioral model and, thus, different managerial models given the same economic goal. If a change in the goals is given, then it follows that the behavioral and managerial models are also to be changed, because behavioral models as a rule are developed for specific company goals, which, in turn, are determined by exterior (macroeconomic) factors: fiscal, credit, political and social conditions, etc. Company goals are formulated subjectively, though under the pressure of objective factors. Thus, the behavioral model allows the organization to adapt to macroeconomic conditions, to work out a behavioral model at the microeconomic level, which is conducive to the company's adaptation to the social-economic environment and ensures its stable development.

A moral mechanism for the realization of the model in question, in line with global social trends, could be the mechanism of social learning (Fig.7). This mechanism can be realized in different ways. Of primary importance is the fact that social learning serves as a method of interfacing all the requirements, thereby ensuring the best models of industrial and commercial behavior aimed at the attainment of a particular goal or set of goals. Social learning has three basic forms: adaptive learning; learning based on changes; and deutero learning or the learning process itself.


Actors: 1) the hierarchy of managers and their representatives; 2) a hierarchy of personnel and their representatives; 3) specialized bodies of a third party.

Environmental context - technological characteristics of the workplace and community workers; the market; distribution of power in society, economic globalization, etc.

Ideology - is "a set of common ideas that define the role and place of everyone who works in this system, as well as the ideas of the place and other functions in the system that has each participant." (5, p. 16f)

(Medvedeva, 2012: 115). Actors: 1) the hierarchy of managers and their representatives; 2) a hierarchy of personnel and their representatives; 3) specialized bodies of a third party. Environmental context - technological characteristics of the workplace and community workers; the market; distribution of power in society, economic globalization, etc. Ideology - is "a set of common ideas that define the role and place of everyone who works in this system, as well as the ideas of the place and other functions in the system that has each participant." (5, p. 16f)

The realization of role functions, and their distribution within the organization, is to be based on the existing potentialities with due regard to psychological, demographic, social and other factors.

An example of organizing the process of social learning

Since September 2003 the Center for Business and Management of the Siberian State University of Transport (Novosibirsk, Russia) has been providing training for prospective managers of the West-Siberian Railroads. This experience shows that one of the most effective forms of training modern managers is to organize centers, which synthesize the best practices of Russian education and the Western conception of corporate universities. In the Russian case that would mean centers which create a developing environment of education (Medvedeva, 2008).


From the very beginning the Center’s specialists worked on the premise that it is necessary to develop rather than to educate young managers, using the principles of developing education, well-known and widely-used in Russia, and the concept of corporate universities. Development and education–are not the same. Education is (in the best case) storing up a certain volume of knowledge or (in the worst case) storing up only information. Development means creating competencies and increasing the number of them.

Currently the Center for Business and Management focuses its activities on assistance for developing modern management of organizations and on social innovations. The Center provides:

  • A modern business culture as a mean of creating a developing education environment;

  • Continuous process improvement of the Center’s activities on the basis of feedback;

  • Technologies of corporate education;

  • Metaprograms of education;

  • Innovative methods of education;

  • Teachers, familiar with innovative education technologies;

  • A mechanism of adjusting to the external environment.

The activities of the Center for Business and Management are based on:

  • Experience of scientific schools of the Siberian State University of Transport, which appeared as a result of interaction between the University and the West-Siberian Railroads;

  • Corporate spirit of a shareholder-owned company «Russian Railroads»: Corporate values, corporate culture, corporate history and traditions.

Accordingly, the model of the Center might be presented as shown in Figure 7.

Modern business culture

Modern business culture is a means of creating a developing education environment. Physical spaces and social processes work as a model of an innovative organization. Students are immersed in this culture during the time of training. This environment influences them every minute they are in the Center. A modern business culture recognizes that the way we implement our tasks and achieve our goals is as important as the content of the work. Key beliefs and values are:

  1. Respect for personalities and understanding that success of an enterprise, its reputation and viability depend primarily on its people;

  2. Understanding that the result of any work is the result of the joint efforts of the company’s employees and that employees should be able to work as a team;

  3. Understanding that profit is a measure of efficiency of work and a source of development and that the service provided should be competitive;

  4. Social responsibility as an indicator of the quality of interaction of individual and collective, individual and organization, individual and organization and society.

Continuous improvement of the Center’s activity on the basis of feedback

The methods of total quality management or continuous process improvement are means not only for improving the quality of goods and services but also for increasing worker skills and worker autonomy. These methods require that workers be more aware of the whole process in which they are involved, that they measure the performance of the process, and that they continually modify or redesign the process in order to improve performance. These methods are used in many cities, states, and countries. They are intended to reduce costs, reduce paperwork, and improve the services delivered to citizens.

In the Center continuous process improvement is realized by involving trainees of the Center and representatives of West-Siberian Railroads top management in creating and modifying or redesigning the Center’s activities and programs of education and development of trainees. Estimation of program quality, quality of teaching, quality of additional services (sport and culture events, quality of work notebooks, information assistance in searching for necessary literature, etc.) are made during the time that trainees are in the Center, using questionnaires. Results of the surveys, proposals for improving the educational process and quality of service are analyzed and discussed at the final conference. The programs of the Center are corrected in accordance with the proposals. The Center supports its graduates by information, analyses of their career development and supports their promotion.

Technologies of corporate education

Based on the concept of a corporate university, the Center’s development and programs of training are worked out in close collaboration with the personnel management service of the West-Siberian Railroads and other services interested in training. There are four levels of the hierarchy of the management reserve be determined and that each level be trained accordingly: first level - prospective management reserve from the most successful students (purpose-students); second level - young specialists with work experience up to 5 years; third level - deputy heads of enterprises, candidates for higher positions, and heads of enterprises with a record of service up to 2 years; fourth level–top management.

Metaprograms of education

For each level there is a program of training and development. Programs are built in such a way that a trainee, going from one level to another one, accumulates knowledge of the discipline and develops the necessary competencies for this level of management. As a system, each program is organized in such a way that it contains:

  • A part directed on development of already existing professional competencies;

  • A part directed on increasing competencies;

  • A part directed on forming a new motivation-intellectual basis.

As the Center deals with young managers, the reserve, in other words with the future of the company, we aim at a proactive training philosophy so that the trainee will be able not only to respond to the current problems of the enterprise but also to envision strategic goals and objectives of the company and the ways to achieve them, and, in turn, enables them to manage task-oriented changes in the organization and motivate this employees for the necessary changes. Accordingly, each program of studies in the Center sets as its goals, first, the formation in young leaders of the ability of systemic, strategic and conceptual thinking and, second, the provision of essential knowledge, including the basics of innovative management. An innovative view of competition, cooperation, and interaction of all interested parties will ideally form their new motivation-intellectual basis and later make them prepared to undertake the implementation of corporate objectives on a higher management level. Hence, the programs emphasize the issues of strategy, leadership, crisis management, Total Quality Management, management competencies, etc. This curriculum will in our view lay the foundation for a modern corporate culture, a culture that, while preserving the best of the existing culture, will trigger the processes of goal-oriented changes, since they are the demands of the times.

Each program is an organic part of the four-levels of managers’ reserve training. Each program focuses on corporate issues, develops a corporate culture, and provides the possibility for individual consultations on questions of economy, management and the psychological aspects of management.

Innovative methods of education and teachers familiar with innovative technologies of education

The teaching methods used in the Center should be specifically recorded. Instructors are trying to reduce the number of classic lectures to the minimum and give preference to lectures-messages, interactive seminars, business and role-playing games and trainings. The Center’s instructors do not consider themselves to be the source of absolute knowledge. They do not claim to know proper answers to all questions. They try to present the material as advice when knowledge is jointly created by the instructor and trainees. It happens increasingly frequently that leading managers of the West-Siberian Railroads become instructors at the Center and participants in its graduate conferences.

The teaching methods used are related to the goal of each part of the metaprogram. Development of existing professional competencies is best achieved by training. Increasing the number of competencies is achieved by a process of interacting with colleagues in analyzing situations, brain storming, and modeling of the task formulation and methods of its solution. Forming a new motivation-intellectual basis of young managers is a process which includes classical lectures and seminars by highly-qualified teachers, round tables, development of a plan of innovations, conferences, as well as comprehension of whole program.

Probably the use of group facilitation methods is the Center’s most distinctive feature, its “business card”. In the Soviet Union workers learned to wait for bosses to make decisions. People in the Soviet Union had to accept an authoritarian, repressive style of management, which suppressed individuality and initiative. As a rule, presently an authoritarian style of management continues in Russian organizations. This means that, when receiving a task, at the same time a person receives a “warning” about punishment for bad execution of the task. As a result, a person thinks about possible ways to avoid punishment but not about the quality of fulfilling the task. People came to believe that nothing depends on them in their country. The Soviet Union developed high technology but conserved the old style of social relationships among people, including a repressive style of management. But a market economy requires a faster rate of change and more initiative by workers. Workers need to learn teamwork, problem identification and problem solving skills. (Umpleby, Medvedeva & Oyler, 2004) Group facilitation methods release the creativity of people. They can be used to involve all employees at all levels in the continuous improvement of services.

In the Center each group of managers has an interactive seminar or strategic planning activity based on the Technology of Participation (ToP). In this way young managers become aware of a new type of leadership and new methods of management. In addition, they have the possibility not only to discuss actual problems of management with their colleagues but to create a strategy for overcoming these problems. Frequently they see that another side of a problem is an opportunity to improve a process.

Based on the seminar results trainees create plans for innovations. A plan of innovation is an instrument of quality management. Trainees are assigned to find a solution (by management methods, which they learned while in the Center) of a problem which they face in real production. Then trainees defend their plans for innovations at the conference “Innovations in the workplace from the eyes of managers”. Participants in this conference are trainees, teachers, and representatives of top management of the West-Siberian Railroads.

Mechanism of adaptation to the external environment

Specialists and teachers at the Center constantly work on introducing new knowledge in programs of education, and in programs for the Center’s development. For this they use all possibilities: research on management problems (socio-economic, psychological aspects of management, management technologies, etc.) and training of the prospective management reserve. They also participate in Russian and international conferences that allow them not only to have new knowledge, which they will bring to education programs, but to learn about the external environment and to analyze the possible consequences of new ideas and methods for the Center’s activities.


  1. The development of Russia's labor relations may not be based on involuntary market regulation since economic factors, even though dominating, govern the system of social and labor relations in Russia in an indirect way. More clearly manifested is the effect of social factors. Therefore, the development of an effective model of social and labor relations becomes feasible if a complex solution is found to the problem of transformation and interaction of the social and economic components of such a model rather than if the social factor alone is to be exploited.

  2. The target of the development could simply be the model of social and labor relations declared by Russian labor law. Such target setting makes for an active role of the government in social and labor relations aimed at removing the current differences between the normative and actual models of social and labor relations.

  3. To eliminate these differences between the normative and actual models of social and labor relations it is necessary to develop the mechanisms for practical implementation of the normative model declared by current Russian law and to solve the problem of training workers in the new model.

  4. The latter can be achieved through social learning only, which makes it possible to preserve the post-industrial component of the Russian system of values and at the same time to cope with the lack of a culture of rational self-interest in the nation's labor mentality. Russian society has extensive experience with different forms of social learning, for example, the long experience of the trade union movement in Russia.

  5. The Russian model of social and labor relations is predominantly collective. The development of collective behavior models also could contribute to adaptation of workers to the new type of labor relations. On the one hand, the collective is a participant in market social and labor relations, and on the other hand, it develops according to its intrinsic non-market laws. In this respect of special importance is filling the gaps in the current labor law particularly the law referring to "labor collectives".



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