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at the LMEs are able to keep their GDP rates high at the cost of inflation and also due to low public spending.

Factor 2: Conflict management- The second factor used to test the effectiveness of IR system in the CMEs and LMEs is the ability to resolve inevitable conflict of employment relations protecting the individual rights of the employers and employees because the critical function of the IR system is to establish procedures and process for addressing the problems that arise between employees and employers. When ability to solve issues is one side of the conflict management system to test effectiveness of IR, on the other side the volume of industrial disputes taken place are also systematically related to the performance of an industrial relations system. High degree of conflict between the management and labour is associated to low efficiency and poor quality thus results in poor performance of organisation and IR system. Low degree of conflict between the management and labour is associated to higher efficiency of the IR system. The data from previous studies indicates that CMEs have higher union density and collective bargaining coverage than that of the LMEs, which is an essential feature to settle industrial disputes. Therefore CMEs are expected to have better conflict management policies and procedures than that of the LMEs. For example in 2000 the union density in CMEs like Germany, Sweden and Austria were 30%, 79%, and 40% respectively where as in LMEs like UK and US had only 20% and 14%. The CMEs have effective collective bargaining system than the LMEs because the coverage of collective bargaining system is high in CMEs. Most of the CMEs have more than 80% collective bargaining coverage except Germany with 60% and above whereas LMEs like US the coverage of collective bargaining remained several times lower than this ranging between 12-15%. Another measure used to test the efficiency of IR system is the number of industrial disputes that has arisen. The number of strikes and lockouts has been more in LMEs than the CMEs with the only exception being France. For instance the number of strikes and lockouts in Germany has continuously been low and in Sweden it has ranged between 20 to 2 strikes per year during the last decade. Whereas in US it ranged between 39-14 strikes and in UK it ranged between 226-138 strikes per year during the last decade. Thus the evidence suggest that IR systems in CMEs have performed better in settling disputes and also has constantly kept the number of disputes minimal or less than that of the LMEs.

Therefore in the argument whether CMEs have more or less effective IR systems than LMEs it is essential to compare the concepts and values essential for effective IR system as stated early in the paper to that of the values of IR system in CMEs and LMEs. CMEs tend to have most of those central features. For instance there is equity and fairness in terms of wage determination and dispute settlements. There is individualism and collectivism in the CMEs because employees participation in decision making is encouraged and the unions play an important role in the negotiation process. In CMEs there is long term commitment to the workforce, since they are retained even during economic downturns which in turn build up employee integrity and trust, thus the employees start trusting the management and are likely to accept when changes are implemented and thus minimises conflicts. Th