African Journal of Business and Economics

The field of HRM has attracted substantial attention both as a practice and as a field of academic research. This paper examines the conceptual relationship between the soft and hard orientations of HRM and the organization’s business strategic response on the one hand and the environmental forces on the other. The argument is based on the premise that changes in the external environment trigger business strategic responses that in turn trigger human resource management strategic responses, but the nature of these responses is moderated by the HRM orientation practiced by an organization. From the literature evidence and the conceptual argument advanced, several propositions are drawn. Firstly, the business strategic response of an organization to external stimuli influences the HRM orientation adopted. Secondly, organizations tend to adopt workforce flexibility during change but the degree and type of that flexibility will depend on the organization’s HRM orientation. Thirdly, organizations practicing soft HRM policies are less likely to encounter confrontations with trade unions compared to those practicing hard HRM policies. Lastly, most organizations are more likely to adopt hard HRM practices during change though their HRM rhetoric is soft. 1.0 INTRODUCTION The concept of human resource management (HRM) has attracted considerable attention over the last two decades from scholars and practitioners alike. While part of the debate has centered on its application and theoretical underpinnings (Pinnington and Edwards, 2000; Armstrong, 1999; Beardwell and Holden, 1997 and Storey, 1992), the other has been on its prescriptive value for the survival of organizations in a turbulent and volatile business environment (Anthony and colleagues, 1996: Brewster and colleagues, 2000). More recently, the issue of whether to situate the HRM debate in the organizational or the international context has arisen (Sparrow & Marchington eds, 1998). According to Pinnington and Edwards (2000), change in the external environment triggers organizational responses which may take the form of restructuring, mergers, acquisitions, splits and cost cutting, which in turn trigger human resource management responses reflected in adoption of new employment patterns and new employer-employee relationships (Hendry, 1995; Sparrow & Marchington, 1998). HRM has assumed varied meanings and connotations. While it has been used as a synonym for personnel management by some, (Storey, 1992; Storey & Sisson, 1993), there is a general agreement that the adoption of HRM signals a more business oriented and business integrated approach to the management of people (Beer and colleagues, 1984; Fombrun and colleagues, 1985; Storey, 1987). However, more skepticism has been expressed about its theoretical underpinnings and intellectual credentials (Storey, 1995; Legge, 1995a). While some writers African Journal of Business and Economics 2009 pp 43-58 *The author is a Senior Lecturer in the School of Continuing and Distance Education at the University of Nairobi harrietkidombo@yahoo.co.uk have questioned if HRM is a map, a model or a theory (Legge, 1995a) others have proposed typologies (Storey, 1987; Hendry, 1995) and some have proceeded to make empirical observations to confirm the presence of these typologies in organizations (Truss, 1997, 1999; Heery, 1997; Gooderham and colleagues 1999; Kane & Crawford, 1999 and Morris, 2002). Among the typologies proposed, the soft and hard HRM orientations are the most acceptable and the subject of conceptual constructions and empirical enquiries. The soft version of HRM is linked to the human relations school while the hard HRM version is seen as emerging from strategic and business policy thoughts (Guest, 1989; Storey & Sisson, 1993). The general view, therefore, is that HRM is a qualitatively different function with philosophical underpinnings, but the exact nature of this view is not clear and is the subject of much debate. Further controversy has been fueled by the discrepancy between the rhetoric and reality of HRM. As a result, Legge (1995a); Storey & Sisson (1993) and Sparrow and Marchington (1998) have raised much concern about the applicability of HRM ideas in organizations especially in the light of a turbulent and constantly shifting environment. Some empirical observations have shown that, while organization’s rhetoric, reflected in management’s language and vocabulary is soft, the reality, reflected in management action and behaviour can be hard depending upon the prevailing changes in the environment in which the organization operates (Gooderham and colleagues, 1999 and Truss, 1997, 1999). In this paper, the objective is to develop a conceptual understanding of how organizations respond in the way they manage people when changes occur in their external environments. To achieve this objective the theoretical underpinnings of HRM are outlined and consequently the relationship between environmental change and business strategic responses is discussed within two broad generic human resource management practices – employment patterns and employee relations. This article rests on the premise that changes in the external environment trigger business strategic responses that in turn trigger human resource management strategic responses, but the nature of these responses is moderated by the HRM orientation practiced by an organization. 2.0 THEORETICAL UNDERPINNINGS OF HRM Although HRM may not have attained the status of a theory, the two frequently cited typologies of ‘soft’ and ‘hard’ HRM have gained some credence with writers and researchers who have made attempts to bridge theory and practice (Towers, 1996). Although typologies have been criticized as being classification systems rather than theories, Doty and Glick (1994), to the contrary, support typologies. They argue that when typologies are properly developed and fully specified, they are complex theories that can be subjected to rigorous empirical testing using quantitative models. The writers point out that, typologies have generated a large volume of African Journal of Business and Economics 2009 pp 43-58 *The author is a Senior Lecturer in the School of Continuing and Distance Education at the University of Nairobi harrietkidombo@yahoo.co.uk empirical research because of their ability to provide a parsimonious framework for describing complex organizational structures. They refer to popular typologies such as Miles and Snow’s (1978), Mintzberg’s (1979, 1983) and Porter’s (1980) that have stimulated a large amount of empirical research. Based on the above arguments, it would appear that the soft and hard approaches to HRM would serve as an appropriate theoretical basis from which to discuss the HRM concept. According to Truss (1997), the underlying ideas and assumptions of HRM are based on two opposing views of human nature. These are the human relations movements of the early twentieth century and the more recent strategic management and business policy line of thought that gave rise to what Guest (1989) referred to as the ‘soft’ and ‘hard’ models of HRM respectively. 2.1 Hard HRM The hard HRM, proposed by Fombrun, Tichy and Devanna (1984) is also referred to as the Michigan School Model. The idea of this HRM model was inspired by Alfred Chandler’s concept of structure following strategy. The emphasis of the hard HRM model is on treating employees as a means to achieving the organization’s strategy. Guest (1989), Storey (1992), Hendry (1995) and Beardwell & Holden (1997), explain that the hard version of HRM is rooted in the corporate strategy and business policy line of thought which emphasizes environmental scanning and integration of the business plan with human resources. This orientation fosters the quantitative, strategic and calculative approach to HRM aimed at efficient production. The emphasis in this approach is on the term resource, which implies that people are viewed as any other factor of production to be used rationally and deployed in a calculative and instrumental way for economic gain. This model is associated with efficiency seeking devices such as assessment of human resources, rewards, individual performance appraisals, and performance pay, reflecting the application of Taylorist ideas (Sisson, 1994). Organizations that practice this model, monitor investment in employee training and development, to ensure it fits in with the firm’s business strategy. Collective entities are discouraged with collective bargaining and trade unions taking backstage (Morris, 2002). Hard HRM assumes that the needs of the firm are paramount and that increasing productivity is the management’s principal reason for improving the effectiveness of HRM. In their model, Fombrun et al (1984) propose a framework for strategic HRM that assumes that organizational needs come first. Their view is that organizations exist to accomplish a mission or achieve objectives. Hence, the model hinges on three issues: mission and strategy of the organization; fit among organizational structures and human resource requirements, tasks and systems. The model assumes that HRM will respond to the external and internal environment appropriately. African Journal of Business and Economics 2009 pp 43-58 *The author is a Senior Lecturer in the School of Continuing and Distance Education at the University of Nairobi harrietkidombo@yahoo.co.uk Some writers have dismissed this model as inhuman while others proclaim it as common sense and the only route to business success (Hendry, 1995; Morris,2000). Others have argued that hard HRM has been used to strengthen management prerogative and legitimize the worst employee-relations excesses of the enterprise culture (Legge, 1995a) 2.2 Soft HRM The soft HRM approach to managing people also referred to as the Harvard Model, was advanced by Beer et al (1984) and Walton (1985) and extended by Guest (1989). The model proposes that people can be dealt