American Journal of Industrial and Business Management, 2013, 3, 444-452 Published Online August 2013 (
How a Proactive Interventionist Can Make Strikes More
Effective: Evidence from the Korean Banking Sector
ChungIL Choi
Division of Business and Management, United International College, Zhuhai, China.
Received May 28th, 2013; revised June 28th, 2013; accepted July 18th, 2013
Copyright © 2013 ChungIL Choi. This is an open access article distributed under the Creative Commons Attribution License, which
permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
This paper argues, through a case study of two industry-wide strikes in the Korean banking sector, that a proactive in-
terventionist strike is more effective than a reactive pragmatist one in a union’s response to restructuring. Evidence
from the two strikes shows that unions were able to achieve more successful outcomes from the strike in which they
engaged proactively by an interventionist mode. In this case the unions identified opportunities, took the initiative and
devised effective strategies that pre-empted the other parties before they had fully prepared their restructuring planning.
Such a strategic capacity was gained from active organizational learning in unions derived from their previous strike
Keywords: Proactive Interventionist; Reactive Pragmatist; Organizational Learning; Strike; Union Effectiveness
1. Introduction
This paper presents, through an investigation of two in-
dustry-wide strikes in the Korean banking sector, evi-
dence explaining why and how a proactive intervention-
ist strike is more effective than a reactive one when a
union responds to restructuring. Through this case study
we develop an argument that for a union responding to
restructuring the proactive interventionist mode through
the employment of appropriate industrial actions is more
likely to be the best choice because successes are most
likely to be achieved when organizations make concerted
efforts to achieve their objectives by identifying oppor-
tunities, devising effective strategies and engaging in the
issues at an early stage, thus generating favourable cir-
cumstances which can change the views or positions of
other parties. Such a strategic capacity can be gained
from active organizational learning (OL).
In the neo-liberal environment which requires endless
restructuring for survival, unions have faced continual
changes and challenges. In response, unions’ main op-
tions have been to take industrial action or engage in
partnerships with employers. In all cases, the focus of
union leaders’ efforts has been to devise strategies most
likely to lead to success for their members. There is a
considerable body of literature regarding the conceptu-
alization of the union response to restructuring. Many
industrial relations (IR) scholars have tended to rely on a
conceptualization that defines it as unidimensional, either
militant or moderate, and have as a consequence devel-
oped mobilization and partnership theories [1,2]. Mobi-
lization proponents argue that unions are more likely to
gain their demands when they take militant actions, or
succeed in mobilizing resources and opportunities [3,4].
Moderate unionism supporters, however, argue that un-
ion survival and recovery depend on the willingness of
unions and their members to behave non-confrontation-
ally and to offer concessions to the employer; this, they
argue, is the wisest course for the future of the trade un-
ion movement in an era of intensified world competition
To further explain the form of union actions (militant
or moderate), we need to revisit Allen’s comments that
although “union militancy obviously refers to strikes, it is
also used to describe other forms of action, depending
upon the speed and vigour with which they are under-
taken”. Thus, being militant means to “take the initiative,
for unions to exploit fully whatever power or influence
they possess, and to pursue a possibly successful policy
in a prompt, speedy manner” [7]. However, the weakness
of the mobilization theories lies in their under develop-
ment of the strategic capacity of mobilization effective-
ness; without an appropriate strategy, successful mobili-
zation may not lead to a successful outcome. On the
Copyright © 2013 SciRes. AJIBM
How a Proactive Interventionist Can Make Strikes More Effective: Evidence from the Korean Banking Sector 445
other hand, moderate unionism has been frequently
prompted by the demand to be responsible to ensure
company survival and/or to consider national interests.
Thus, union action is constrained by having to operate
within limited scopes or legal systems [7].
Another view of union effectiveness is expressed by
strategic choice theorists [8-11], who place emphasis not
on the characteristics of the union approach per se, but
rather on the mode of interaction between unions and
employers. Frost [10] demonstrates that a greater focus
should be placed on how unions engage with manage-
ment on issues (i.e. in the adoption of either a “proactive
interventionist” or “reactive pragmatic”) rather than on
the unions’ orientation (i.e. militant or moderate). Such a
strategic choice model argues that actors determine the
nature of the institutional arrangements of IR through the
interrelationship between actors’ strategic choices and
responses to the strategic choices of others. Streeck [12]
notes that “unions can either be proactive or reactive”,
according to their circumstances, but that a more proac-
tive strategy could make unions more effective in their
campaigns. However, the strategic choice theory has its
limitations as well, as Huzzard observes: The making of
choices does not guarantee the success of the strategy.
Furthermore, choices are often a great deal more com-
plex in reality [11].
OL theories have reduced the limitations in mobiliza-
tion and strategic choice theories regarding the extension
of strategic capacity (i.e. with respect to “generation of
motivation”, “access to salient information” and “use of
heuristic processes” [13]) as it relates to outcomes. Ac-
cording to these theories, organizations can extend their
capacity to effectively mobilize and make appropriate
strategic choices when they conduct higher-level learning.
High-level OL occurs when, in addition to the detection
and correction of errors, the organization questions and
amends its norms, procedures, policies, and objectives; it
aims, therefore, at the adjustment of overall rules and
norms to adapt in changing environments and to improve
effectiveness. Organizational members (including lead-
ers/managers) reflect on, and inquire into, previous epi-
sodes of OL, or failures to learn, discovering what they
did that facilitated or inhibited learning [14-16]. This
paper applies the three theories—mobilization, strategic
choice, OL—to explain the effectiveness of a proactive
interventionist strike.
2. Theoretical Framework and Research
For our theoretical framework, we make the following
three assumptions. First, unions may achieve better re-
sults if they adopt a proactive militant interventionist
mode in response to restructuring. In this mode unions
make concerted efforts to achieve their objectives by
devising effective strategies (i.e. targeting resources,
timing initiatives, and using opportunities and developing
tactics and engaging in the issues at an early stage
through the employment of appropriate industrial actions,
thus generating favourable circumstances which can
change the views or positions of other parties. Successful
examples of this approach have included the EU unions’
mobilization to protest against plans by ABB Alstom
Power in 1999 [17] and the San Jose City public women
workers’ comparable worth campaigns in 1979-1981
[18]1. This mode implies a kind of strategic unionism in
which unions utilize resources and opportunities most
effectively to maximize outcomes through early strategy-
Secondly, unions may achieve limited outcomes if
they adopt a reactive militant pragmatist mode, in which
they allow management to make proposals first before
commencing negotiations and attempting to change the
proposals through subsequent industrial actions. In this
mode, unions would not have the initiative; circum-
stances (or conditions) would be determined by other
parties who would also be able to prepare their counter-
actions against the unions in advance. This mode would
only be useful when unions have enough power to
change the positions of other parties. This approach has
been used by unions responding to the restructuring of
firms as a result of M&As or economic difficulties (e.g.
the strike at International Paper Company in 1985 [19]
and the strike at Ontario’s food retail sector in 1993-1994
Lastly, if unions can acquire and apply high-level OL
from previous experiences (e.g. by identifying why ear-
lier actions were not as successful as they had wished)
they will be able to increase their strategic capacity, and
therefore develop more effective strategies and results in
future actions. It can be argued that the differences in
outcomes of actions organized by the same union are
1In the former case, when the company announced huge job cuts, the
EU-level unions organized a demonstration in Brussels of 2000 union-
ists. Lobbying by unions and politicians, coupled with demonstrations,
eventually forced EU merger regulators to reverse their decision and
ermit union representatives to take part in future merger deliberations.
In the latter case, the public women workers won comparable worth
reforms through a delicate process of issue articulation, coali-
tion-building with other workers and social activists, and mobilizing
various collective actions (such as a one day sick-in, a one day wildcat
strike, a nine-day strike, and participation in the job evaluation proc-
2The strikers at 63 Miracle Food Mart stores in Ontario (in an action
lasting over three months) were determined to resist concessions, bu
the outcome reinforced segmentation between full-time and part-time
workers, depressed wage rates, undermined conditions of works and
greatly eroded the power of union, although the union leaders did
succeed in reducing some of the employers’ concession demands by
striking. Furthermore, the potentially disastrous consequences include
the permanent replacement of strikers and the closure or relocation o
factories by managements, which happened, for instance, as a result o
the strike at International Paper Company in 1985.
Copyright © 2013 SciRes. AJIBM
How a Proactive Interventionist Can Make Strikes More Effective: Evidence from the Korean Banking Sector
most likely to derive from the existence of positive
learning (or OL) processes within the organization. Even
so, an organization which has accumulated a lot of
learning could still fail to achieve its aims if its strategic
capacity is damaged by internal friction, unpredictable
environmental changes, and the ability of opponents to
be able to utilize more effective counteractions, possibly
as a result of their own OL. As Johnston observes: “Both
unionists’ and employers’ assumptions and strategies
collide when faced with new conditions”. “Each adapts
to new conditions and learns” [18].
To attest the effectiveness of the proactive militant in-
terventionist, we compare a proactive interventionist
strike with a reactive pragmatist strike. We explore case
studies from the Korean banking sector, where the first
ever industry-wide strikes were organized against the
structural adjustment proposed by the government as part
of the process of recovering from a national financial
crisis in 1998, an event largely the result of the Asian
financial crisis in 1997.
This paper is a qualitative study of two strikes, and
draws on primary and secondary sources. The primary
sources include interviews with union officials, the min-
utes of union meetings, annual reports of union activities,
union newspapers, reports about strikes strategies, and
union rule-books. Secondary sources include daily news-
papers’ accounts of the strikes, and academic analyses of
restructuring in the banking sector and the national fi-
nancial crisis.
3. The National Financial Crisis and
Restructuring in the Korean Banking
Following the 1998 financial crisis, the Korean Govern-
ment applied to the IMF for a bailout fund. The IMF
provided a comprehensive financial package of about
US$65 billion. In return, the Korean Government was
asked to contain inflationary pressure through tight
monetary and fiscal policies, and to fundamentally re-
structure the banking and financial sector. The main fea-
tures of the restructuring were the closure of bankrupt
banks, the creation of larger banks through mergers, the
reform of bank governance, the reform of credit practices,
and the pursuit of performance. As a result, the number
of banks decreased from 26 in 1997 to 14 in 2003. In
addition, 40% of the sector’s regular employees were
fired, and the employment relationship was changed sig-
nificantly, from one of lifetime employment and based
on the seniority principle to one of endless redundancy
and based on the performance principle. The previously
moderate industrial relationship was transformed into a
militant one, with major disputes breaking out as unions
sought to protect employees. Between 1997 and 2003,
the unions went on strike on several occasions in order to
protect employment security. In 2000, unions changed
their form from enterprise unions (based on an enterprise
consciousness or focus and employer paternalism), uni-
fied under a federation of individual bank unions (the
Korean Federation of Financial Unions (KFFU)), to an
industrial union (the Korean Financial Industrial Union
(KFIU)) in order to respond more effectively to restruc-
turing. In the process of restructuring, the Government
established the Korean Tripartite Commission (KTC),
utilizing it to deal more smoothly with the troublesome
restructuring issues [21,22].
4. Cases: Two Industry-Wide Strikes in the
Korean Banking Sector
4.1. Industry-Wide Strike in September 1998
On 29 June 1998 the Government closed five insolvent
banks. In fact, the trade unions had already begun their
response to the restructuring by holding protest rallies
prior to these closures. A week later, on 6 July, the lead-
ers of the KFFU shaved their heads as a demonstration of
their determination to fight against the restructuring at a
rally in front of Myung Dong Cathedral (a kind of Holy
Land, as well as sanctuary, of the democracy and labour
movements in Korea). In addition, the unions asked their
members to ballot on the subject of a strike on 9 July and
established a strike fund.
The second step in the restructuring process was the
demand, by the Financial Supervision Commission (FSC)
on 18 August, of nine poorly performing banks that they
reduce the size of their workforce as a precondition for
the investment of public funds needed to keep them
afloat. The precise details of this step were, first, seven
poor performing banks (Cho Hung, Han Il, Sang Yup,
Foreign Exchange, Pyung Hya, Kang Won, and Chung
Puk) were required to reduce staff numbers by 30% (in-
cluding those who had already retired in 1998) before the
end of 1998 (a further 10% reduction was required by the
end of 1999; all in all, therefore, a total staff reduction of
40%), the staff being paid a retirement bonus equivalent
to five months salary, and, secondly, the two most worst
performing banks (Seoul, Jae Il), for whom foreign buy-
ers were to be sought, were required to reduce staff
numbers by 50% (including those who had already re-
tired in 1998) by the end of 1998, again with a retirement
bonus equivalent to five months salary.
In response, the unions of the nine banks mandated
their right of negotiation to the KFFU, who undertook to
organize opposition to the restructuring. Negotiations
between the KFFU and employers regarding staff reduc-
tion were conducted at three meetings held between 7
and 15 September. However, the parties could not reach
an agreement, and employers declared the negotiations at
a close. The KFFU demanded that the negotiations con-
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How a Proactive Interventionist Can Make Strikes More Effective: Evidence from the Korean Banking Sector 447
tinue, and prevented the employers from departing. The
Government sent riot police into the negotiation venue,
and the union delegates were arrested. The union cause
appeared ruined. However, the unions held two big ral-
lies, on 16 and 19 September, which attracted more than
10,000 members. There, the unions accused the Gov-
ernment of oppression and began preparing for a general
strike against the restructuring.
The KFFU’s three demands at the negotiations had
been: 1) Cancellation of the Government’s forced de-
mand for staff reduction; 2) Guarantee of autonomous
negotiation between unions and employers; 3) Guarantee
of 12 months retirement bonus for departures. These
were not issues that the management of the poor per-
forming banks could deal with. Thus, the KFFU submit-
ted an application requesting mediation of the dispute
between the union and the FSC to the Labour Relations
Committee (LRC), whose role is to reconcile and arbi-
trate labour disputes according to labour law and, there-
fore, like the banks, did not have the authority to deal
with the KFFU’s demands. However, the LRC returned
the application to the KFFU, explaining that the FSC was
not an employer according to Korean labour law. The
unions felt that they had no option but to take strike ac-
tion in order to resolve these issues. The strike was an-
nounced for 29 September.
On the eve of the strike, about 20,000 union members
(out of a total number of 36,569 staff employed at the
nine banks) gathered in front of Myung Dong Cathedral
and staged an all-night sit-in demonstration. During the
night, the head of the FSC visited the site to meet the
head of the KFFU to recommence negotiations; however,
they were unable to reach an agreement. At 6 am on the
following day, the head of the KFFU formally announced
that the union would proceed with the strike. Employers
then changed their approach and switched from negotia-
tions at the industry level to discussions with the indi-
vidual bank unions in order to prevent the strike. They
succeeded in settling individual agreements at Jae IL
Bank and Seoul Bank in the morning with a mixture of
conciliation and intimidation. The members of those two
bank unions returned to work, meaning however that the
heads of those unions, in betraying the KFFU and the
other bank unions, had broken the law as they had al-
ready mandated their negotiation rights to the KFFU.
This crack in union solidarity weakened the position of
the union delegates at the negotiations. Nevertheless,
7000 members remained at the demonstration site, and
the strike continued until 1 pm, when an agreement be-
tween the KFFU and employers was finally reached. The
strike had lasted for four hours, from 9 am to 1 pm. It
was the first industry-wide strike in Korean banking his-
tory. Due to the strike, many bank branches could not
operate properly during the day. However, the Govern-
ment, in order to save face (i.e. by proving that it was
able to resolve such situations) and to avoid complicated
legal problems for the unions, did not agree that it had
been a real strike. Thus, although the event had been de-
clared, legally, to be a strike, the prosecution authority
announced that it rescinded the decision to punish 95
union officials for organizing, and engaging in, an illegal
strike. The details of the agreement were as follows: 1)
There would be a staff reduction of 32% within 1998,
and; 2) Departing staff would be paid the equivalent of 9
- 12 months salary as a retirement bonus. It meant that, as
a result of the strike action, the unions had reduced the
percentage of staff to be laid off from between 40 and
50% to 32%, and had persuaded the banks to increase the
retirement bonus from the equivalent of 5 months salary
to 9 - 12 months salary.
The leaders of the KFFU believed that the strike had
been a great victory. One of them argues:
The strike success contributed greatly to the recovery
of bankers’ spirit of self-respect. It is a vivid demonstra-
tion of how much power bankers generate once they are
unified. The fact that we could go on an industry-wide
strike is significant (the first in the history of the banking
sector). It was proven to be not only justified but also a
success in terms of achievement (Interview with author,
19 January 2003).
Some journalists also observed that the strike con-
firmed that staff reduction was impossible without union
agreement and that such outcomes had been achieved
because of the unions’ successful mobilization and the
collection of a substantial strike fund (approximately
£2,500,000) [23,24].
However, according to the KFFU evaluation report of
the strike written after discussions between the rank-
and-file and union officials, union members evaluated
the strike as a failure, and felt defeated. They felt that
union unity and leadership were very weak, too weak to
confront and overcome the Government’s continuous
restructuring plans. More M&As between banks and re-
structuring in banks were predicted in 1999 and 2000,
and these would lead to further redundancies. Moreover,
the outcomes of the strike had been predicted (or re-
vealed) during the negotiation process before the strike,
meaning that the strike itself had not led to bet-
ter-than-anticipated gains. As noted above, even after the
compromise agreement, 32% of the staff of the nine
banks (approximately 16,000 employees) departed in
1998 [25].
The strike strategy had been to mobilize union mem-
bers only in order to reduce the percentage of employees
(a figure set by the Government) who would lose their
jobs. It was thus a typical pragmatist response. The case
also reveals some of the limitations of the pragmatist
response. Even though union leaders had done their best
Copyright © 2013 SciRes. AJIBM
How a Proactive Interventionist Can Make Strikes More Effective: Evidence from the Korean Banking Sector
under the circumstances their achievements were not
considered satisfactory by the rank-and-file as the
strike’s outcomes were limited by conditions defined by
the other parties in the dispute.
4.2. Industry-Wide Strike in July 2000
A KFFU presidential candidate argued at the National
Congress in November 1998:
The great wave and battle cry of 20,000 colleagues
was our proud appearance that confronted the Govern-
ment’s impromptu restructuring. However, at the conclu-
sion of the unsuccessful strike all that remained to us
were just anguish and auto-destruction in spite of heart-
breaking fighting… The KFFU had no leadership to lead
members and individual unions… The movement ide-
ology of the KFFU had proceeded with a moderate nego-
tiation that was dependent on the Government and em-
ployers’ paternalism. However, the real power of the
labour movement is based on its strong solidarity and
fighting… We have to extend the range of union move-
ment activity… The KFFU has been negligent of exter-
nal activities, and has thus been accused of being a self-
ish organization. Now, the federation has to emerge and
become a big movement through solidarity with civic
groups as well as other unions… We have to establish an
industrial union in order to overcome enterprise unionism
and to bring about a greater unity [25].
His address struck a chord with the rank-and-file. The
majority of representatives voted for him and he became
the new President of the union. The new leaders of the
KFFU undertook six major actions. First, they formed a
special committee whose aim was to establish an Indus-
trial union. The committee held several workshops, pre-
pared new rulebooks, and issued a declaration announc-
ing that an industrial union would be established.
Secondly, the bank unions agreed to bargain jointly
when negotiating a FY (Financial Year) 1999 collective
bargaining agreement (CBA) in order to promote
stronger unity. The KFFU subsequently negotiated (be-
tween May and July 1999) an agreement to joint bar-
gaining involving almost all of the retail banks (15 out of
Thirdly, in order to remove the pressure the IMF was
exerting on the Korean Government to implement a sec-
ond restructuring, the union sought to expose the prob-
lems, such as mass bankruptcy and redundancy, stem-
ming from the IMF policies and restraints, such as high
interest and extreme retrenchment policies. The union,
with the assistance of civic groups, organized a petition
to encourage people to support a suit against the IMF. In
the suit, the unions claimed for compensation of damages
which had resulted from the IMF’s policies. Through the
petition-signing campaign, the union was able to promote
both members’ unity and solidarity with civic groups as
preparation for the union’s next fight [26].
Fourthly, in February 2000, the KFFU’s Central Com-
mittee (CC) made a decision to strike against the Gov-
ernment’s second restructuring plan.
In the fifth major action, at the National Congress in
March 2000, the representatives decided to dismiss their
enterprise unions and establish an industrial union, the
Korean Financial Industrial Union (KFIU). The KFIU
acquired authority over bargaining in the banking sector.
Lastly, at the CC (now a KFIU committee) on 9 June
2000, union officials decided to go on an industry-wide
strike on 11 July.
4.3. Strike Strategy Making
To prepare the strike strategy, the KFFU National Office
(NO) distributed a report to the CC in February 2000.
The report included both general material, such as the
political situation in Korea in 2000, and specific details
about the Government’s second restructuring of the
banking sector and the union’s strategy to oppose it. The
report observes:
The Government will propel the merger between
banks again through the privatization of banks… This is
required because the foundation of the second restruc-
turing is a bank large-sizing policy, necessary for the
banks’ global competitiveness. As a result, employment
security will become the biggest issue once again. Thus,
the target of the fight against the second restructuring
will not be the employers, but the Government’s policy.
In order to change Government policy, the union has to
stage a powerful industry-wide strike and to mobilize all
kinds of resources and political opportunities. Rallies and
general collective activities are not enough… With re-
spect to detailed fighting methods, … the union needs to
formulate a logical oppositional argument, … to actively
exploit the period of the General Election, … and to
strengthen solidarity with civic groups, other unions, and
political parties before commencing the industry-wide
strike… The strike demands have to contain alternatives
for the sound nurture and development of the financial
industry [27].
In accordance with the decision to strike, the strat-
egy-making committee devised logically rigorous argu-
ments against the restructuring. The details of their ar-
gument were as follows:
First, the fundamental reasons for the current problems
stemmed from the Government’s unreasonable involve-
ment practices in the sector. Examples were the immod-
erate support of conglomerates and the policy of stock
market nurture through banks. Secondly, the IMF had
misinterpreted the reasons for the Korean financial crisis,
identifying it as a total credit crisis, when in fact it was
just a temporary crisis of dollar liquidity. The IMF de-
manded retrenchments by way of a high interest policy.
Copyright © 2013 SciRes. AJIBM
How a Proactive Interventionist Can Make Strikes More Effective: Evidence from the Korean Banking Sector 449
This resulted in unnecessary mass bankruptcies of enter-
prises and worsened the financial condition of the bank-
ing sector. Thirdly, the bank large-sizing policy by
mergers will create mass redundancies once again, and
the sovereignty of the financial market will transfer to
foreign investors. Lastly, as an alternative, the Govern-
ment should transfer the direction of the restructuring of
the sector from a stock market-centred system to a
bank-centred system. The former induces endless re-
structuring in order to pursue short-term profit for share-
holders instead of the long-term sound development of
enterprises [28].
The NO also utilized the weeks leading up to the Gen-
eral Election in April 2000 and the period (April to June)
of collective bargaining to inform the public of the un-
ion’s opposition to the restructuring and to prepare for a
strike through distributing pamphlets to people on the
street and at canvassing venues.
4.4. Mobilization
The KFIU’s mobilization strategy involved a number of
actions. First, the leaders of the KFIU and union
branches held a rally on 16 June, declaring their deter-
mination to go to jail if necessary; they also shaved their
hair as a symbol of their determination to fight against
the restructuring.
Secondly, the union held a big rally, attended by ap-
proximately 10,000 members, at a public park on 1 July.
There, the formal declaration of a strike, to be held on 11
July, was made.
Thirdly, on 4 July, the KFIU announced its five formal
demands to the Government. These were: 1) Dismiss the
Minister of Finance and Economy who is responsible for
the failure and confusion of the financial market, and
hold a hearing into the financial restructuring. 2) The
Government has to take responsibility for the insolvent
credits resulting from the Government’s involvement in
financial institutions. 3) Enact special laws in order to
eradicate the Government’s involvement in financial
institutions. 4) Cancel the policy of forced mergers of
financial institutions. 5) Repeal the hurried legislation
regarding the formation of the Financial Holding Com-
pany (FHC).
Fourthly, the union submitted a mediation of labour
dispute application to the Labour Relations Commission
on 26 June. In compliance with Korean labour law it also
asked approximately 65,000 members to vote on a strike
on 3 July. Ninety percent of the members voted for the
strike; union members also agreed to begin wearing cas-
ual clothing to work from 4 July.
Fifthly, the union sought the support of outside re-
sources. On 5 July, the union and civic groups estab-
lished a committee whose aims were the cessation of the
Government’s involvement in financial firms and the
development of the financial industry.
Sixthly, the KFIU collected £5,000,000 in strike funds
from members. The union let members submit a leave of
absence for five days to their banks in order to be able to
participate in the strike legally.
Seventhly, the union exerted political pressure, re-
questing the support of opposition MPs in delaying the
passing of the FHC legislation in the National Assembly.
This was a success, in that the legislation was delayed
until 10 July. This placed the FSC under enormous pres-
sure, forcing it to be much more positive during the ne-
Lastly, the union requested that its members gather at
a stadium at Yun Se University (in the centre of Seoul)
on 10 July, the evening before the strike. Approximately
30,000 union members (out of a total membership of
65,000 in all bank unions) participated in the rally which
continued until the formal commencement of the strike at
8 am on the following day. Approximately 20,000 mem-
bers actually participated in the strike, their commitment
unaffected by the rain that fell intermittently throughout
the day.
Following a recommendation from the KTC, the rep-
resentatives of the union and the FSC engaged in nego-
tiation and reached an agreement at 7.20 pm, with the
head of the KFIU announcing the formal end of the strike
to members at 8 pm. The strikers had been together for
exactly 24 hours, with the strike itself lasting officially
for 12 hours (8 am to 8 pm on 11 July).
During the strike, the business of several banks was
partially paralyzed and customers were seriously incon-
venienced. Approximately 40% of the employees of Han
Bit Bank, Seoul Bank, and Cho Hung Bank (the main
targets of the proposed M&As) participated in the strike.
The FSC reported that deposits of about £800 million
were transferred from strike-affected banks to banks ei-
ther little or not affected by the action [29].
There was no precedent in Korean history for the
signing of a collective agreement related to a labour dis-
pute between a union and the Government. Thus, the
agreement was announced as a decision of the KTC on
12 September. The KFIU had obtained a number of
promises from the Government. These included the
guarantee of the autonomous management of banks
through the eradication of unnecessary and excessive
legal regulations, permission for a trial of management
normalization by banks themselves (although they re-
ceived public funds), the guarantee of personnel and or-
ganization reduction according to autonomous consulta-
tion between unions and employers, and the payment of
bank debts for which the Government had a responsibil-
ity (i.e. bank debts resulting from decisions made under
Government pressure). In return, the union conceded that
the Government could proceed with the FHC legislation,
Copyright © 2013 SciRes. AJIBM
How a Proactive Interventionist Can Make Strikes More Effective: Evidence from the Korean Banking Sector
subject to the union’s agreement. The most important
outcome of the agreement was that the Government and
the union would now decide on the direction of financial
policy together. In short, the union attained a position of
direct influence on government policy. The union mem-
bers and leaders, and the media concluded that the strike
had been a great victory for the union. These successful
outcomes thus illustrate the effectiveness of the interven-
tionist mode.
According to an evaluation report of the strike [30],
the action had been a political one that required a change
of restructuring policies in a financial sector oriented by
neo-liberal policies. The strike allowed the rank-and-file
to overcome the defeatism left over from the earlier Sep-
tember 1998 strike. As the strike demands extended be-
yond employment security to persuading the Government
to change its policies the strike raised members’ con-
sciousness of the significance of the fight. In addition, as
a result of increased publicity activity on the part of the
union the strike had gained support from the general
5. Discussions and Conclusions
This paper provides evidence that outcomes of restruc-
turing plans would be more beneficial to employees if
unions could maximally mobilize their members and
external resources, use political opportunities actively,
engage in the issues proactively, and take the initiative
by devising effective strategies that pre-empted other
parties before those groups were fully prepared; in short,
by adopting a proactive militant interventionist mode. In
comparing the two strikes, we can say that the 2000
strike was more successful in achieving desired outcomes
for employees than the 1998 one. One explanation for the
different results can be obtained by reviewing the extent
and impact of the mobilizations and the outcomes of each
strike. Social movement theorists [31,32] claim that the
effectiveness of mobilization can be evaluated by meas-
uring the resource mobilization, the use of political op-
portunities, and the quality of strategy and outcomes.
In the first, the September 1998 strike, the unions took
their action against restructuring after the Government
had completed its restructuring planning, meaning that
their demands were limited to adjustments of an al-
ready-established plan. The unions’ achievements can be
likened to damage control—they were able to slightly
reduce the number of redundancies and secure an in-
crease in the sizes of retirement bonuses. Their mode was
a reactive pragmatist one. With respect to mobilization,
the unions were able to mobilize just 19% of their mem-
bers (7000 out of a total of 36,569 in the relevant nine
banks), despite attracting 20,000 members to the rally
held on the eve of the strike. Furthermore, the unions
were unable to maintain unity until the following day due
to the pressure placed by the employers of two banks on
the unions at their organizations to break ranks and nego-
tiate individual settlements. They were unable to make
their case a political issue and mobilize external re-
sources because of the public perception of the national
financial crisis; the public generally supported, the gov-
ernment’s restructuring plan. Consequently, the out-
comes of the strike were poorer than union members had
expected. Experiencing a sense of defeatism, they con-
cluded that the strike had been a failure even though the
union had won concessions from the employers. A more
desirable outcome might have resulted if the unions
could have developed better strategies, taken the initia-
tive in the dispute, made more efforts to strengthen their
unity before going on strike, and learnt more thoroughly
from other unions’ strikes. Their weak organizational
unity could have been strengthened by promoting a sense
of a group sharing a common destiny, while justification
for a strike that could have won widespread public sup-
port could have been established by exploiting more op-
portunities and resources by coalition-building with civic
groups and political parties. They might thus have
avoided the secession of two unions during the strike and
also been able to achieve better results for their members.
On the other hand, in the 2000 strike, the union began
preparations at an earlier stage, before the Government
had completed the second of its restructuring plans. The
unions changed their leadership (with more militant ap-
pointees) and organizational form (the industrial union
being more unified than the separate enterprise unions
had been) in order to improve strategic capacity and pre-
vail in this new battle over restructuring of the banking
sector. Consequently, they were able to devise alternative
plans, take the initiative, and maximize the use of re-
source and opportunities; in short, the union was able to
direct the course of events and lead the Government to-
wards an acceptance of their demands. The union also
succeeded in generating more support from its members
than had been the case in 1998, mobilizing almost 31%
of them (20,000 out of a total of 65,000). In addition, the
unions succeeded in developing a strike justification—
that the level of the Government’s involvement in bank
business was immoderate—with which all parties (union
members, employers, and even the Government officials
and the media) were in sympathy. Furthermore, they ac-
tively sought solidarity with civic groups as well as ob-
taining the support of opposition political parties. In
other words, the unions made intelligent and active use
of political opportunities and external resources. The
case illustrates neatly the effectiveness of a proactive
interventionist mode strike.
The foregoing comparison of the 1998 and 2000
strikes seems to indicate clearly the differences of out-
comes between a reactive mode and a proactive one in
Copyright © 2013 SciRes. AJIBM
How a Proactive Interventionist Can Make Strikes More Effective: Evidence from the Korean Banking Sector 451
responding to restructuring plans. However, although the
results show that the effectiveness of each strike was
affected by the mode adopted by the unions, it could be
argued that the extent to which the effectiveness was
attributable to the interaction mode has not been conclu-
sively established. Other factors, such as political oppor-
tunities or unpredictable environmental changes, differ-
ent contexts (e.g. the 1998 and 2000 strikes were re-
sponses to different restructuring stages3), the ability of
opponents to be able to utilize more effective counterac-
tions, and other obstacles, such as internal union friction,
may have also played a part. The existence of favourable
political opportunities (or a successful mobilization of
resources) does not necessarily guarantee that a strike’s
success nor, conversely, does the existence of unfavour-
able opportunities (or an unsuccessful mobilization) nec-
essarily lead to strike failure. Strike outcomes are most
likely to depend on unions’ efforts and determination to
make appropriate choices regarding the use of opportuni-
ties and resources, and to respond at an early stage, than
on other factors.
This paper also suggests that learning from a past fail-
ure can assist in a later dispute. The learning effect,
however, will only be positive when organizations make
concerted efforts to incorporate knowledge from the past,
demonstrating a willingness to change their previous
norms or organizational structures to improve their stra-
tegic capacity. In the 2000 strike, we can see a case of
positive learning; unions improved their strategic capac-
ity by changing their leadership and organizational form.
What unions should not ignore, however, is the trap of
complacency or over-confidence resulting from the mere
fact of an accumulation of experience. Each strike always
requires careful planning and the development of an ap-
propriate strategy.
The effectiveness of the proactive militant interven-
tionist mode requires a high level of OL to be able to
increase unions’ strategic capacity prior to future chal-
lenges. Unions thus need to learn actively from their and
others’ experiences as well as strategic management and
organization studies on effective benchmarking, organ-
izational change, and strategic planning, all of which can
contribute to improve the effectiveness of proactive in-
terventionism. Such high-level OL in unions can be ob-
tained when leaders and members, through effective dia-
logue, develop a common sense of mission towards
achieving their goals [16]; meaningful goals are most
likely to motivate people to their maximum capability to
achieve them. However, unions should not forget one
lesson of EU trade unions’ history: that long-term effec-
tiveness is most likely to depend on their ability to forge
political and social connections based on social justice
[33], while short-term effectiveness is more dependent
on their current strategic capacity.
The union effectiveness in influencing the restructur-
ing of the Korean banking sector depended not only on
actors’ strategic choices, but also on invariant features of
the sector and the unique historical conditions of IR in
Korea. Because of these multiple and, to some extent,
country-specific, conditions, the combination of explana-
tions offered in this article may not fully apply in cases
outside of Korea. Furthermore, this research relied ex-
clusively on qualitative research methods that can present
challenges in terms of generalizability, validity and reli-
ability. Nevertheless, in many (if not all) cases, it can be
argued that the strategic capacity of IR actors to make the
right choices has been a decisive factor in prevailing in
industrial disputes.
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