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IntroductionDeveloping-Approaches
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Secondly, there is an economics tradition within HRM studies which is very much drawn from labor economics and concerns itself with matters concerning the relation between HRM processes and out comes, as well as the subject of changing flexible labor markets and their relation with the HRM strategies of firms.

Thirdly, there is a sociological trajectory which concerns itself with employment matters and management-employee-trade union relations within the workplace, and the broader composition of the workforce.

Human resource management is therefore a multidisciplinary area of analysis in terms of its academic context. There has also been an increasing demand from a practitioner perspective for information and guidance. This demand has come from organizations seeking greater flexibility in their workplaces, greater employee commitment, and developments in the capabilities of employees e. These demands have been driven by a range of changes in product markets, competitive strategies, the structure of the firm, the competitive challenge through the globalization of economies, social changes and employee demands, and the changing context of regulation.

The topic is based on a growing belief that competitive success increasingly depends on securing more from employees in terms of commitment and resources rather than passive compliance to managerial instruction. The topics that have emerged were best described by Walton , who argued that future competitive success required the eliciting of commitment rather than the imposing of control. The first approach is more drawn to questions of control and direction e.

These approaches have been nourished by the development of total quality management, with its emphasis on performance management on the one hand and employee involvement in matters related to service quality on the other.

There are two schools of thought and practice. One sees HRM as a series of techniques and practices which are transferable across time: Both these models were seen as being transferable to other contexts in their attempts to develop competitive economies through labor management policies.

Similar to economic models, the contingency approach emphasizes efficiency, but like sociology models, it contends that the structure of the organization depends on various environmental and strategy contingencies Donaldson Environmental contingencies include firm size and the complexity, predictability, and interdependence of technological and market changes.

Strategy and environmental factors are the contingencies affecting organizational structure, and efficiency is found in the fit or alignment of the environment and strategies with organizational structures. Strategies are considered part of the normative culture of the organization, with a presumption of an efficiency-seeking orientation among managers.

The notion of fit between the organization and its environment resides somewhere in management perception, interpretation, and action. Having perceived such contingencies, they would, for example, create new programs or specialized departments or adjust administrative rules or structures to adapt to these contingencies.

The contingency approach moved the sociology of organizations away from notions of a tight relation between the organization and the environment and that there was one best way to organize toward the notion that the better way to organize depended on the particular environmental contingencies confronting the organization. However, critics question the tautological character of organization-environmental fit and the capacity of managers to perceive and change organizational structure Pfeffer and Salancik Also unspecified are the internal dynamics that affect managerial strategies and the notion that the perception of environment contingencies may be social and political constructions rather than objective facts Pfeffer The resource dependence approach emerged in the late s, in part as a reaction to the structural contingency approach.

These resource requirements entangle the organization in patterns of power-dependence relationships. Similar to the contingency approach, the emphasis on economic or technological resources implicitly orients the framework toward private firms. Managers are responsible for gaining favorable exchanges and avoiding debilitating dependencies.

They seek discretion to maintain their own power and to permit subsequent adaptations to new environmental dependencies. The distribution of power within the organization is seen as an outcome of environmental dependencies. Thus, decision making is a function of the internal power structure, which interprets and defines the most critical dependencies and the choices of strategies to address them.

Management mediates the relationship between the environment and the organization by adapting the organizational structure, negotiating favorable terms of exchange, and using a range of strategies from stockpiling supplies to joint ventures and mergers. The sheer capacity to enact an environment implies that the resource dependency model is most appropriate for large, powerful, and dominating organizations. The resource dependency model focuses greater attention on internal organizational decision making and the efforts of managers to strategically adapt to the environment.

However, the larger pattern of asymmetrical relations in which the focal organization is enmeshed is left largely unexplored.

The neo-institutional approach began with the work of Meyer and Rowan Building on the earlier institutional school of Selznick, this approach represents a reaction to economic contingency and resource dependency models that postulate that organizational structure is the result of technical and economic contingencies in the environment. Instead, this approach presumes that many sectors and even parts of organizations are free of these technical and economic constraints and that organizational structure is more the result of efforts to fulfill normative expectations in the environment.

The emphasis is on how organizational decision making is shaped, mediated, and channeled by normative institutional arrangements DiMaggio , where these arrangements take the form of routines, operating procedures, and standard ways of perceiving the environment and agreed-on value priorities. Broadly shared patterns of beliefs and habitual practices mitigate problems of uncertainty, leading to emphasis on the role of ideas and belief systems in supporting and structuring organizations.

Thus, organizations involve established procedures and rule-bound and standardized behaviors, and researchers attend to the process of infusing such procedures and behaviors into the organization as regularized and stable features Jepperson Organizational structures become similar as organizations interact and formal or informal rules emerge to govern these interactions. Once institutionalized, or taken for granted, these rules exert powerful normative effects on subsequent organizational interactions, and changes in organizational structure result more from issues of legitimacy than from rational adaptation or efficiency.

DiMaggio and Powell contend that the primary institutionalizing mechanism is imitation, which also works through coercive and regulatory mechanisms of the state and professions that disseminate and elaborate sets of beliefs and rules about appropriate organizational structure and practices. Their point is that modern organizations cannot be adequately understood in terms of efficiency and adaptations to technical and economic contingencies because of the often contradictory demands of maintaining organizational effectiveness and legitimacy.

They adopt formal structures that are legitimate, while informal everyday activities pursue effective operations, independent of the formal structure. The institutional approach is more applicable to public sector organizations because of its greater sensitivity to issues of normative expectations and legitimacy.

The approach is criticized as tautological in the sense that outcome is the evidence for the cause and there is a lack of specification of what practices, procedures, and behaviors are institutionalized and which ones are freer to vary Hall and Tolbert Also, the emphasis on normative features deflects attention from issues of interests, power, and conflict Perrow and the technical and economic challenges to the organization.

The population ecology or natural selection approach began with the works of Hannan and Freeman and Aldrich and Pfeffer and presumes a tight relationship between the organizational form and the environment by stressing the impact of the environment on organizational survival. In contrast with approaches that explain organizational change through adaptation of individual organizations, population ecology scholars emphasize selection processes such as competition embedded in the environmental or ecological conditions of a population of organizations.

This approach operates at the level of groups or populations of organizations that carry out similar activities, compete with each other, and are dependent on similar resources within the same ecological niche. They examine the birth or death rates of types or forms of organizations to identify the survival rates of a particular form.

Organizational form changes not as a result of adaptation of existing organizations but through the replacement of one form of organization with another Hannan and Carroll The research objective is to explain the variation in form, the longevity of that form, and its birth rates and death rates Hannan and Carroll Three evolutionary processes are viewed as the mechanisms linking the environment with the survival of the organizational form or activity.

Researchers explain this selection based on characteristics of the niche representing a distinct combination of resources and density of organizations as a kind of organizational ecology. Narrow niches have been shown to support specialized forms of organizations, while broader niches support a more generalized form of organizations. Finally, the selected forms or activities are retained through some type of reproduction process, and reproduced forms generate variations that begin a new cycle of selection and retention.

The emphasis on ecological niche adds to the present knowledge of specific industries, and their longer time frame of analysis provides a historical perspective absent in other approaches Hall and Tolbert However, the source of the initial variation or mutation is not specified. The logic of this approach suggests that large, powerful public and private organizations and government sponsorship of certain environments neutralize the selection process by enacting their environments, thus limiting the applicability of the approach.

Finally, focusing on the selection effects of competing organizations directs attention away from more symbiotic and cooperative interorganizational arrangements Scott The transaction cost approach is the economic approach best known to sociologists and has become an important foil for their arguments. Oliver Williamson , has promoted an approach focused on the creation and changes in governance structure to explain organizational efficiencies.

Organizational governance structures are arrangements for establishing and safeguarding economic exchanges of the firm. The approach postulates two broad governance structures of economic exchanges: Markets represent immediate exchanges, but when exchanges involve future transactions, the market becomes less useful for securing satisfactory exchanges. Organizations appear as an alternative to markets as a governance structure for exchanges, and the structure of the organization varies by the types of exchanges to be governed.

This approach attends to the efficiency of autonomous firms and the cost of exchanges of goods and services within the organization and between the organization and the market. It assumes that actors are boundedly rational, based on the limits of information, and opportunistic in that they will lie, cheat, and steal.

The issue is that not all eventualities can be anticipated in contracts and that actors may deceive. One solution is to bring transactions inside the organization to control opportunism through authority relations. Then, firms respond to issues of bounded rationality by subdividing operational problems, making simpler decision guidelines, channeling information, and creating standard operating procedures. Bounded rationality and opportunism present transaction cost problems for the firm when contracting outside the organization, where tasks are difficult to specify and monitor.

Transaction costs include searching for information on quantity, quality, and price; negotiating and monitoring agreements; and providing incentives for cooperation and resolving disputes.

Organizations may respond by writing contingent contracts and creating auditing and controlling systems to safeguard the efficiency of exchanges. Opportunism is aggravated when firms have few exchange partners representing transaction disadvantages such as monopoly prices.

The emphasis on transaction costs shifts analysis toward the governance structures as the organizational form created and adjusted to search, create, and monitor exchanges. Thus, the form of the organization is a function of the transaction costs to which it needs to adapt. Also, since the theory can be applied to both interfirm and intrafirm exchanges, it provides a fertile link between the nature of markets and intra-organizational relations Swedberg However, the fact that an organizational form governance structure reduces transaction costs does not explain its creation.

All organizations that exist are not, by this fact, efficient. In addition, the arguments about efficiency ignore power and goal ambiguity, and therefore the analysis of decision making is simplistic. Finally, the approach neglects the extent to which search, creation, and monitoring of economic behaviors are embedded in social relations Granovetter Since the s, organizational sociologists have recognized the theoretical importance and practical effectiveness of groups of organizations, leading to the development of new approaches.

Recognition was sparked by the worldwide competitive successes of East Asian firms that rely on network forms of organization Hamilton and Biggart and the limits of economic theory in restructuring the economies of the former Soviet republics Stark Also, changes in technology, labor markets, and laws governing rules of competition and cooperation in the United States contributed to a rethinking of organizational processes DiMaggio The global movement and management of money also led to conceptual questions about coordinated activities among groups of organizations Davis and McAdam Furthermore, sociologists began to use economic theories as a foil for their arguments because of the overwhelming dominance of economists in discussions of corporate and industrial policy and their theoretical vulnerability from simplistic assumptions about organizations Biggart Sociologists used the concept of a network of organizations as a way of analyzing the cooperative interconnections among groups of firms.

This shift in attention to interactions among organizations in level of analysis from the single firm to a collection or network of firms represents a substantial theoretical shift. Please create a new list with a new name; move some items to a new or existing list; or delete some items.

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