There are many cultural factors which contribute to a sound industrial relation system. The relationship between employees and management is harmonious and cooperative which encourage economic efficiency, productivity and development of the employee and generates employee loyalty and mutual trust. In other words, industrial relation is concerned with the rules, processes and mechanisms through which the relationship between the employers and employees is regulated. Industrial relations seek to balance the economic efficiency of organizations with the development of the individual and also aim to minimize and resolve disputes and conflicts.
Industrial relations work at different levels, such as at the national level, at the level of the industry and at the enterprise level. At the national level, industrial relations aim to formulate labour relations policy. At the market level, there is a tripartite process involving government, employers and workers and their representative organizations. At the industry level industrial relations involve bargaining between employers' organizations and unions. At the enterprise level the relationship between employers and workers is more direct. Some of the objectives of a sound industrial policy are:
Employment and job security and increased employment opportunities.
Raising living standards through improved terms and conditions of employment.
Productivity improvement which enables employers to be more competitive and to increase their financial capacity to raise the living standards of the employees.
Minimizing conflict, achieving harmonious relations, resolving conflicts through peaceful means and establishing stable social relationships.