Submitted by:

Saima
Abhilasha
Sunakshi
Arushi

To understand the emergence of industrial relations,

it is necessary to study the process of evolution of
industry
The evolution of industry has been quite gradual.
There was a time in the history when there used to be
no industrial activity.
During hunting stage, man lived all by himself
After this man entered into pastoral stage under
which he started domesticating animal to have an
assured supply of milk, meat &skin.
Gradually, man discovered a new use to which land
could be put and entered in agricultural stage.
He began to cultivate and grow food, whereas some
people who didnt have any work were offered to
work in the field of others.

We can classify the stages in the evolution of

industry as follows:
Primitive stage
Agrarian economy stage
Handicrafts stage
Guild system
Putting out(or Domestic) system
Industrial revolution

The first three stages represents Pre- machine age.

Machine was started after industrial revolution in
England which took place between 1760 A.D and
1820 A.D.
Industrial relations has its roots in the industrial
revolution which created the modern employment
relationship by spawning free labour markets and
large-scale industrial organizations with thousands
of wage workers. As society wrestled with these
massive economic and social changes, labour
problems arose. Low wages, long working hours,
monotonous and dangerous work, and abusive
supervisory practices led to high employee turnover,
violent strikes, and the threat of social instability.

At this stage families were self-sufficient as their

need were limited. Hence there was no problem of
exchange of goods.
Division of the labour was restricted only to the
family level.
Men devoted their time to activities like hunting,
fishing and making of weapons, and women engaged
themselves in cooking, bringing up the children,
agriculture and domestication of animals.
In short, all the activities of the family were carried on
to produce or procure products for family
consumptions.
As every family was able to satisfy its needs, there
was no question of exchange of goods

In the course of time,

some families started
keeping the animals
rather than killing
them which led to
domestication of
animals.
Animals were treated
as a form of wealth
which could be
exchanged for other
products required by
the family.
This gave birth to the
BARTER ECONOMY.

Barter economy may be defined as the direct

exchange of one economy commodity for
another commodity.
It was developed because of the increase in the
number of human wants and inability of a family
to produce all the things required by it.
The exchange was direct and without any
common medium.
Every person used to exchange the surplus goods
with the other person for the required goods.
The main difficulty of this system was the lack of
double coincidence of wants and a common
measure of value. Therefore, the exchange was
restricted only to the goods in which some
families were surplus and other families were
deficient.

Agriculture became the primary source of

maintenance during this stage and tribes
settled down permanently at some places and
began to sow seeds and rear cattle on the
land which they shared in common
The division of labour confined to the
division of work between men and women of
the tribe.

With the rise of private ownership of the property

inland and cattle, the tribe split up in the families
and lead to variation in human wants.
Families were not self sufficient.
Moreover they concentrated on occupation
bother than agriculture
This led to exchange of goods for goods to
satisfy the needs of various families and the
establishment of village economy.
Being now a self sufficient economy they also
started using hired labour.

Later on traders came into existence who

purchased the surplus products of different
families and sold them to those requiring
these products.
The difference in purchase and sale price was
their profit.
Emergence of traders led to specialisation in
different fields by different families.
It was no longer necessary to produce
everything a family needed for selfconsumption.

Under this stage, artisan living in village

produced the products for the local population
and got in exchange various things from
customers.
There was hardly any machinery so craftsman
used simple hand tools and manual skills for
producing the goods.
There was no division of labour thus the
organization of industry was quite simple
The craftsman was responsible for assembling
various raw materials and selling the goods
produced.

Two types of guilds initiated, namely

MERCHANT GUILD and CRAFT GUILD.
A merchant guild was association of
merchants engaged in trade in a particular
locality whose purpose was to enforce
equality of opportunity for the members of
the guild, to protect their interest, to avoid
competition among the members and also to
regulate the conduct of its members by
prohibiting unfair practices.

A craft guild, on the other hand was an

association of the skilled artisans engaged in
the same occupation. Thus there were several
guilds in a town.
They regulated entry to the craft, prescribed
standards of workmanship and regulated the
conduct of the members.
The guild system began to decline by the end
of 15th century due to narrow attitude of the
guilds and the increasing rivalry among their
members.

At this stage, the intermediary between the

products and consumers of goods came to play
an important role.
The entrepreneur gave out work to the artisans
who worked in their homes, still they owned the
means of production.
The entrepreneurs came at regular intervals,
collected the goods and paid for them to the
artisans.
Artisans faced difficulty when the scale of
production increased and there were need for
new tools of production.

Entrepreneurs started providing raw materials

and tools to the artisan who produced good
and received wages on piece wage basis. That
is why this stage is called PUTTING OUT
SYSTEM.
During 18th century entrepreneurs followed
the practice of employing artisans, providing
them the raw materials and equipments,
inspection of quality of the product and
finding a market for his product.

Industrial revolution during the later part of the

18th century and earlier part of the 19th century had
a vital influence on the development of industry
and commerce.
It changed radically the techniques of production
and had an important impact on the life of
mankind.
Industrial revolution was the result of the invention
of many English scientists during 1760 to 1820.
The need for invention arose because of the
increase in the demand of the product due to
widening of markets followed by the geographical
discoveries of the late 15th and 16th centuries.

It was beyond the capacity of the industry using

labour intensive techniques to meet the increasing
demand.
The inventors in England had set for themselves the
task of finding ways and means to remove the
hindrances in production.
James Hargreaves made SPINNING GENNY in 1764
and Richard Arkwright introduced WATER FRAME in
1799
Thereafter many mechanical inventions came in quick
succession such as Mule Spinner by Crompton, and
Power-Loom by Cartwright.
The invention of steam engine enabled man to drive
the machines by power.