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ature of relationship held by the workers, unions and management. In modern industrialised society lays much importance for individualism where rules are not just made considering people as simply a unit of factors of production. Rather there should be considerable importance given to the individual aspirations, attitudes seeing them as humans who make significant contribution to the success of the organisation. On one hand when individualism is related to management/individual relationship on the other hand collectivism is related to management/union relationship. The central concept of collectivism is collective bargaining. Collective bargaining is the method by which the terms of the employment are fixed and the grievances arising are also settled through negotiations. Thus the effectiveness of the IR system relies on the effectiveness of collective bargaining and the coverage it has.

Rights and responsibilities: An effective IR system should have well defined rights and responsibilities of the actors. The IR system sets out certain rights and obligations for the employees and employers in relation to their employment including minimum entitlements. The term rights in IR system are the degree of freedom the individual have and the exclusive rights or privileges held by the workers or management. Responsibilities are the duty and their obligations.

Integrity, trust and transparency: Effective IR system promotes transparency through sharing of information, openness in communication etc. it has to create an atmosphere where there is co operation between the labour and management where they consult and share ideas to bridge the gap between policy making and implementation. The IR system should focus on creating high trust employment relationship where management and employees have an informal give and take policy avoiding greater formalisation of control which will create a low trust atmosphere.

The IR system is expected to differ between countries based on the political, social and economic conditions of the country because each country has its own system which will suit their economy. In making comparison between the IR systems of various countries it is sometimes claimed that the system of one country is better than the other. Historically if we see there has been many countries that were considered as a model to the other country for instance during the late 19th century it was Britain, during 1970s and pre first world war it was Germany, in 1960s Sweden, US between 1945 & 1960 and Japan during 1980s. The main reason for considering a country as a model to others was highly based on the economic growth and conflict minimised conflict (due to effective conflict management system) that the countries had during the considered period. Therefore in talking about the effectiveness of an IR system it is these two factors that are to be considered to determine the effectiveness. Therefore in determining whether coordinated market economies (CMEs) have more or less effective IR systems than liberal market economies (LMEs), this paper consider the economic growth and conflict management systems as two important factors to test the efficiency of IR systems in various liberal market countries and coordinated market countries.

Industrial relations system in LMEs and CMEs: Though the features of IR system vary between nations but there are a number of characteristic features that can