Towards a 'European' model of human resource management
Journal of International Business Studies; London; First Quarter 1995; Brewster, Chris

Copyright Journal of International Business Studies First Quarter 1995

Abstract:
The concept of human resource management (HRM) has been much debated in the literature. The concept developed initially from work in the US in the 1960s and 1970s and since then has been adopted increasingly around the world. It is argued that in Europe there is only limited acceptance of the organizational autonomy upon which the concept is based, and that, therefore, different approaches to the notion of human resource management are required. External constraints are analyzed and a new model of the concept that would encompass EuroHRM is proposed.

This paper examines the concept of HRM from a European perspective. Although much of the seminal work on the concept in the U.S.A. looked to challenging practices in Japan and the Pacific and in Europe, the theory that developed was rooted in a U.S. "ideal" which has at its core the notion of organisational autonomy. The way that the concept developed in the U.S. -- its reliance on specific aspects of Japanese practice; on the examples of a small number of private sector firms; its adherence to an independent "frontiers" mentality; and its failure to link theory to general practice -- have been much criticised in Europe [Guest 1990; Poole 1990; Pieper 1990; Bournois 1991; Beaumont 1991]. This paper attempts to go beyond these general critiques to address the core of the concept and to suggest a more internationally applicable model. Evidence for some aspects of what is a conceptual challenge are drawn from data collected in Europe and, therefore, although it is postulated in the final section of the paper that the model may be more widely applicable, the analysis here is restricted to that continent.

Before developing this approach two caveats, in particular, are necessary, arising from the fact that the data and the analysis are drawn from Europe.(1) First, this does not imply a general criticism of the U.S. authorities in the field. The concept has been widely adopted, first in the English-speaking world and more latterly in some of the European countries and, it could be argued, is now an international orthodoxy, at least amongst commentators. Furthermore, many of the recent writings on human resource management in the United States share the concerns about the core notions of the earlier models of HRM, even if they have had less generally available data to draw upon. (It has been argued that, in terms of knowledge about general practice, the U.S. is "data-poor" [Kochan 1991]).

A second caveat concerns the degree of generalisation. This is perhaps inevitable in any internationally comparative review, and does, to a degree, depend upon focus. This paper conflates differences within the U.S. and, more contentiously, within Europe. This is not to deny organisational size, sector, region or country differences. These exist and are important. However, the analysis is taken from an international perspective and shares the view of another commentator on "the conditions and circumstances with Western Europe" that although there are differences in HRM in each country, taken as a whole, Western Europe "stand(s) out as being distinct from other economic areas like the USA, USSR or Japan" [Remer 1986].

THE HRM CONCEPT IN THE LITERATURE

The meaning of HRM is far from clearly established in the literature: different authorities imply or state different definitions and draw on different evidence. This fluidity in the concept is both instructive, in terms of indicating its potential power as an explanatory theory; and frustrating, in that it becomes impossible to test a theory that can subsume such a range of, often contradictory, propositions. Many have attempted to classify the various areas that HRM covers. One of the classic texts sees a four-fold typology; employee influence, human resource flow (into, through, and out of the organisation), reward systems and work systems [Beer et al. 1985]. DeCenzo and Robbins [1988] identify four rather different areas: the acquisition, maintenance, motivation, and development of human resources, and Fombrun et al. [1984], a five-step HRM cycle: selection, performance, appraisal, rewards, and development.

Different analyses of the concept have tended to emphasise different elements, giving extra weight to "hard" approaches (as depicted initially by Fombrun et al. [1984]) that emphasise the need to consider employees as a resource; or to "soft" approaches [Beer et al. 1985].The difference between the two approaches has been explored elsewhere [Legge 1989; Beaumont 1991; Hendry and Pettigrew 1990]. Here it is only necessary to point out that whichever school of thought is examined in either the academic texts (e.g., in addition to those mentioned above, Mahoney and Deckop [1986]; Schuler and Jackson [1987]; Schuler [1992]; Storey [1992]) or the more popular prescriptive texts, one can identify common key components.

Central to the notion of HRM as currently propounded is the notion of organisational independence and autonomy [Brewster and Bournois 1991]. Defining and prescribing HRM strategies for organisations implies that the organisations concerned are free to develop their own strategies. Guest [1990] has argued that this view of freedom and autonomy in HRM is peculiarly American related to Americans' view of their country as the land of opportunity in which any individual, through hard work or self-improvement, can be a success, with the ideal model of the "rugged individualist" or self-reliant small business entrepreneur, and a vision of the "frontier mentality". These ideals are reflected in the comparatively low levels of support, subsidy and control provided, or at least commonly understood to be acceptable, from the State. They are visible in the "private enterprise" culture of the United States, and in the concept of "the right to manage" and the antagonism of management towards trade unions.

These factors are atypical of, to take our example, most European countries.(2) Certainly they have some limited acceptability in Great Britain, Put each point remains the focus of considerable controversy even there. In countries such as Germany and Sweden, by contrast, these beliefs would be held by only a small minority of the population. In the European system, organisations are less autonomous.

The paper explores the proposition that:

European organisations operate with restricted autonomy: constrained at the international (European Union) level and at the national level by culture and legislation, at the organisational level by patterns of ownership, and at the HRM level by trade union involvement and consultative arrangements. There is a need, therefore, for a model of HRM that goes beyond seeing these features as external constraints, and integrates them into the concept of HRM.

CULTURE AND LEGISLATION

At the most general level, the empirical data on national cultural differences is limited. International, data-based studies of national culture are still rare (see, for example, Hofstede [1980, 1991]; Laurent [1983]; Tayeb [1988]; Adler [1991]; Trompenaars [1993]). They tend to confirm, at the micro level, differences between even geographically close countries and, at the macro level, differences between broad groupings [East/West; Europe/U.S.A., etc.). They tend to point to the unusual nature of the United States. The U.S. has been characterised by one researcher in this field as "quite untypical of the world as a whole" [Trompenaars 1985]. The U.S. culture is more individualistic and more achievement-orientated than that of most other countries [Hofstede 1980].

These national cultural differences are reflected in legislation. Legislation has been seen as a significant reflector of national values [Hofstede 1980] and it is no surprise therefore to find that the U.S.A. has comparatively less legislative control over (or interference from, or support for) the employment relationship than is found in most of Europe. One German authority points out that "the major difference between HRM in the US and in Western Europe is the degree to which [HRM] is influenced and determined by state regulations. Companies have a narrower scope of choice in regard to personnel management than in the US" [Pieper 1990, p.8].(3) Expanding on this, Pieper includes the greater regulation of recruitment and dismissal, the formalisation of educational certification, and the quasilegal characteristics of the industrial relations framework in comparison to the United States. This catalogue shows its origins in the German system. Including other European countries, it is possible to add legislative requirements on pay, on health and safety, on the working environment and hours of work; and to supplement those with legislation on forms of employment contract, rights to trade union representation, requirements to establish and operate consultation or codetermination arrangements -- and a plethora of other legal requirements.

Furthermore, Europe is unique in the world in having, since January 1995, fifteen of its countries committed to a supranational level of legislation on a considerable range of aspects of the employer-employee relationship. The European Union (EU), particularly through the European Social Charter (Figure 1) and its associated Social Action Programme is having an increasing legislative influence on KRM [Brewster and Teague 1989]. Fourteen of the countries (the exception is the U.K.) are committed to a wider and deeper role for the EU in this area [Teague 1993].

State involvement in HRM in Europe is not restricted to legislation. For example, most European countries have a substantial share of the 18-24 age group in higher education (Table 1), and also provide substantial support to employers through vocational training programmes (Table 2).(Tables 1 & 2 omitted)

Taking the most widely discussed example -- Germany -- the picture is clear: "the system of vocational training supplies companies with well-trained labour, especially the so-called Facharbeiter. Since this system is run in co-operation with state agencies, companies enjoy the advantage of not being solely responsible for financing such training" [Pieper 1990, p.10].

Nor is training the only example of national support for the external labour market. Table 3 outlines the percentage of GDP devoted to public expenditure on labour market programmes.(Table 3 omitted) The figures include training, retraining and job transition support, job creation schemes and programmes to help younger people and the long-term unemployed get into the labour market.

In practice, then, governments in Europe and the overall European Union tend to have more of a controlling (through legislation) and supporting (through finance) role in HRM than is the case in the United States. The corollary is that employers are less autonomous vis a vis the State.

State involvement in HRM is not limited to the legislative role. Compared to the U.S.A., in broad terms, the State in Europe has a higher involvement in underlying social security provision, a more direct interventionist role in the economy, provides far more personnel and industrial relations services and is a more substantial employer in its own right by virtue of a more extensive government-owned sector.

PATTERNS OF OWNERSHIP

Patterns of ownership in the private sector also vary from one side of the Atlantic to the other. Although public ownership has decreased to some extent in many European countries in recent years, it is still far more widespread than in the United States. Not should it be assumed that ownership in the private sector implies the same thing. In many of the southern European countries particularly, ownership of even major companies remains in the hands of single families. In Germany, as a different example, most major companies are owned largely by a tight network of a small number of substantial banks. Their interlocking shareholdings and close involvement in the management of these corporations mean less pressure to produce short-term profits and a positive disincentive to drive competitors out of the market-place [Randlesome 1993].

TRADE UNION REPRESENTATION

These outside constraints on organisational autonomy are supported by a variety of internal constraints, particularly in the form of employee representation. Beaumont [1991] has pointed out that studies of HRM in the United States have tended to take place in the non-union sector. A constant thread in research programmes in the U.S. has been the link between HRM practices and non-unionism (see, e.g., Kochan et al. [1984]; Kochan et al. [1986l). "In the U.S. a number of...academics have argued that HRM (the concept and the practice) is anti-union and anti-collective bargaining" [Beaumont 1991a, p.300].

The definition, meaning and reliability of union membership figures vary across countries [Walsh 1985; Blanchflower and Freeman 1990]. However, it is quite clear that, in general, the European countries are more heavily unionised than the United States (Table 4).(Table 4 omitted) Trade union membership and influence varies considerably by country, of course, but is always significant. Sweden has union membership of 85% of the working population, the U.K. around 40% and even in the least unionised countries such as Switzerland, 23%, and France, 12%, union membership is above that in the U.S.A.

A more important question is trade union recognition. The number of employees who are union members in a workplace is of less relevance than whether the employer deals with a trade union in a collective bargaining relationship which sets terms and conditions for all or most of the employees. In many European countries, union recognition for collective bargaining is required by law. Some states, such as Germany, France and the Benelux countries, have legislation requiring employers over a certain size to recognise unions for consultative purposes. In France, Greece and Portugal, an employer has to negotiate with any union with members in the workplace. Union recognition occurs in nine out of ten organisations with more than 200 employees in Sweden, Norway, Denmark, Italy, and Germany and in more than seven out of every ten such organisations in Spain, Ireland and the U.K. [Gunnigle et al. 1993].

In many European countries, union recognition for collective bargaining purposes is required by law wherever there are trade unions. Even in the U.K., where there is no legal mechanism for enforcing recognition, 72% of organisations with more than 200 employees still recognise trade unions [Gunnigle et al. 1993].

Trade unionism remains widespread and important in Europe, an importance that current EU-level approaches may well enhance. Furthermore, in most European countries, many of the union functions in such areas as pay bargaining, for example, are exercised at industrial or national levels outside the direct involvement of managers within individual organisations -- as well as at establishment levels [Hegewisch 1991; Gunnigle et al. 1993].

EMPLOYEE INVOLVEMENT

Beyond the immediate issue of trade union membership lies the European practice of employee involvement. In countries such as France and Germany, the establishment of workers' councils is required by law.

Employers have to deal with workplace (and often wider) works councils wherever the employees request it in Germany, Italy and Portugal. In Greece, the unions can only insist on the establishment of a works council where the organisation is larger than twenty employees; there have to be thirty-five or more employees in the Netherlands, fifty or more in Spain and France, and one hundred in Belgium. These various forms of works council have differing degrees of power, but most would shock U.S. managers brought up on theories of "management's right to manage". In Germany and the Netherlands, for example, employee representatives can resort to the courts to prevent, or to delay, managerial decisions in areas (recruitment, termination, changing working practices) that in the United States would be areas for considerable managerial prerogative.

Beyond the workplace, legislation in countries such as the Netherlands, Denmark and, most famously, Germany, requires organisations to have two-tier management boards, with employees having the right to be represented on the more senior Supervisory Board. Employee representation can, depending on country, size and sector, range up to 50% of the Board. Table 5, which does not include the enterprise level representational rights conferred by law on, for example, Italian trade unions, which enable the establishment of bodies like works councils, outlines the position.(Table 5 omitted)

These arrangements give considerable (legally backed) power to the employee representatives and, unlike consultation in the U.S. for example, they tend to supplement rather than supplant the union position. In relatively highly unionised countries, it is unsurprising that many of the representatives of the workforce are, in practice, trade union officials. In Germany, as one instance, four-fifths of them are union representatives.

It is clear that many employers in Europe have taken steps to expand the degree of information given to the workforce irrespective of legal requirements [Brewster et al. 1994]. This reflects a central theme of standard concepts of HRM -- the requirement to generate significant workforce commitment. However it is noticeable that this provision of information to the workforce still includes a substantial number of organisations that are expanding their use of the formalised employee representation or trade union channels (Table 6 and 7).(Tables 6 & 7 omitted)

The point is made equally clearly when upward communication is examined. Across Europe, the two most common means, by a considerable margin, are through immediate line management, and through the trade union or works council channel [Brewster et al. 1994].(4)

At the supranational, EU, level it is clear that the European Union is committed to maintaining the role of employers and trade unions. These are referred to, in instructive EU terminology, as the "social partners". In particular, the latest proposals from the European Commission on the subject of employee involvement offer a series of options for the member states. These are, in effect, an attempt to draw on the best practice available in all the European countries rather than to impose the system that exists in one state on the others.

Summing up this evidence, then, it is clear that organisations in Europe are constrained in important ways in how they deal with people. The constraints on management operate both internally and externally. The proposition at the beginning of the paper is soundly based.

It is not sufficient to point out weaknesses in theory. There is a need to move beyond that to proposing, at least tentatively, improvements to the models. This is more important in the light of two very different developments: the increasing interest in the linkage between HRM and economic success, and the drive towards Europeanisation.

THE HRM-ECONOMIC SUCCESS EQUATION

It is frequently argued that there is a direct correlation between strategic HRM and economic success. Porter [1985, 1991] believes that HRM can help a firm obtain competitive advantage. Schuler and Macmillan [1984, p.242] make a similar point, that "effectively managing human resources" gives benefits that "include greater profitability". Other authors make the point explicitly that "firms that engage in a strategy formulation process that systematically and reciprocally considers human resources and competitive strategy will perform better...over the long term" [Lengnick-Hall and Lengnick-Hall 1988, p.468]; Pieper [1990, p.4] built on this to follow Porter in arguing that "since HRM is seen as a strategic factor strongly influencing the economic success of a single company one can argue that it is also a strategic factor for the success of an entire nation".

The problem with this argument is that there is a marked dearth of evidence to support it. Indeed at the most visible level, the national level, there is some evidence that on the most generalised assumptions taken here, the evidence points in the opposite direction: countries where employment policies and practices are furthest from the traditional concept of HRM, those nations that allow least autonomy to their managements (with most legal regulation and trade union influence), tend to have been most successful in recent years. National differences in human resource management and in practices linked frequently with views of "good" HRM practice appear to have no correlation with national differences in economic performance.

Part of the answer to this problem is undoubtedly methodological, based upon the impossibility of finding nations (or organisations) that are equal in all substantial areas except HRM strategies. It seems unlikely however that better methodology would resolve the issue. This raises two possibilities: the first is that, despite the apparent logic, there is no correlation between HRM strategies and economic success. The second, more promisingly, is that current conceptions of HRM are inadequate. This would go some way towards explaining the lack of correlation of a narrowly conceived view of organisational HRM strategies with economic success. By failing to include the external constraints, the 'autonomous' HRM models ignore important factors.

THE EUROPEANISATION OF THEORY

The need to build in external constraints to models of HRM is widely accepted in the U.S. and elsewhere. In the European context, however, it can be seen as part of a general trend in theorising towards arguing that an over-ready acceptance of models originating in the U.S.A. has gone beyond its provable value: and that the time is now ripe for distinguishing specifically European approaches. It is surely no coincidence that this coincides with the revitalisation of the European Union and Europe's economic success compared to the U.S.A.

Thurley and Wirdenius [1991], for example, were concerned with the development of a functional model of management, particularly in the context of international business activities, rather than with HRM in particular, or the comparative analysis of different national models of HRM. But they are relevant here because they tried to distil what is particular to "Europe" rather than the U.S. or Japan. They focussed on the cultural context of management, and, in the face of the predominance of U.S. (and more recently Japanese) conceptions of management, the need "now to distinguish 'European Management' as a possible alternative approach" (p.128). They saw this as necessary to reflect the different cultural values and legal-institutional practices that are dominant in Europe. Such a European approach, according to Thurley and Wirdenius [1991, p.128], has the following characteristics:

European Management

* is emerging, and cannot be said to exist except in limited circumstances;

* is broadly linked to the idea of European integration, which is continuously expanding further into different countries (i.e., the 12);

* reflects key values such as pluralism, tolerance, etc., but is not consciously developed from these values; and

* is associated with a balanced stakeholder philosophy and the concept of Social Partners.

There has been criticism of the importation of U.S. theory elsewhere, too [Cox and Cooper 1985]. In the context of HRM specifically, Europeans are increasingly critical of the current HRM model. Looking at the U.K., Guest sees "signs that...the American model is losing its appeal as attention focuses to a greater extent on developments in Europe" [Guest 1990, p.377] and the same author is elsewhere sceptical of the feasibility of transferring the model to Britain.

The inapplicability of autonomy-based models of HRM in Europe has also been noted in Germany. "An international comparison of HR practices clearly indicates that the basic functions of HR management are given different weights in different countries and that they are carried out differently" [Gaugler 1988, p.26]. Another German surveying European personnel management similarly concluded that "a single universal model of HRM does not exist" [Pieper 1990, p.11]. Critiques of any simplistic attempts to "universalise" the U.S. models have also come from France (see, e.g., Bournois [1991]). European authors have argued that "we are in culturally different contexts" and, "Rather than copy solutions which result from other cultural traditions, we should consider the state of mind that presided in the search for responses adapted to the culture" [Albert 1989, p.75, translation in Brewster and Bournois 1991].

A "EUROPEAN MODEL"?

It has been recognised from the earliest discussions of personnel administration and management that practice has to be related to directly impinging environmental factors, such as labour markets and State legislation. Literature, perhaps, lagged rather behind practice. A paper at the end of the 1960s on the then dominant "human relations" approach argued that the human relations literature of the immediate post-war years and the succeeding organisation development and change literature ignored all external, economic variables [Strauss 1968]. The same critique could well be applied to much of the more prescriptive HRM literature.

From the early 1980s this debate has been widened. Several authors in that period (see, for example, Nkomo [1980]; Tichy et al. [1982]; Fombrun [1982]) argued that human resource management needed to follow the corporate strategy literature in acknowledging, and positioning itself in line with, environmental influences. Indeed, it has recently been argued that, whatever the other failings of the latest writing on HRM, it "no longer ignores external, economic variables" [Beaumont 1991]. This was, far example, included in the "perspective" proposed by Lengnick-Hall and Lengnick-Hall, where "competitive strategy" and "HR strategy" are still in separate boxes (but boxes that are connected or, in their terms, "mesh") and that are both impacted by external issues. For HR, these issues are the labour market, skills and values, culture, and economic conditions. Only the last overlaps with issues for competitive strategy [Lengnick-Hall and Lengnick-Hall 1988, p.467].

Nor are these the only criticisms of the American concept of HRM. These, as we have seen, have been attacked for ignoring (or being anti) trade union and being based on a unitary view of organisations. It was partly to counter such attacks that Beer et al. included (potentially conflicting) "stakeholder interests" in their classic "map of the HRM territory" [Beer et al. 1985, p.16]. Interestingly, however, much of their succeeding discussion reflects a unitarist concept of the organisation, and in fact moves into a clearly normative and prescriptive path.

These models have also been subject to significant criticism in Europe. Poole [1990] supplements the Beer et al. map with power, strategic choice, and 'globalisation' (the practice of multinational corporations involving, centrally, the transfer of executives between countries) [Brewster 1991; Black et al. 1992; Schuler et al. 1993]. Hendry and Pettigrew [1990] extend the Beer et al. model to categorise the factors influencing strategic decisionmaking in HRM, under the headings of "economic"; "technical"; and "socio-political". Under "economic" they include ownership and control, organisational size and structure, the growth pattern of an organisation, industry structure and markets; under "technical" they refer to skill, work organisation and labour force requirements of technologies; and "socio-political" encompasses the institutional framework, particularly the national education and training system. The environmental factors have been central to discussions of this issue in other European countries too (see, for example Bournois [1991] in France; Remer [1986] and Pieper [1990] in Germany).

Whether these lists of environmental issues are external or are an intrinsic aspect of the HRM concept may be more than a matter of semantics. It is noteworthy that it is in general authors from the United States who have seen these issues as external and the European authors who have wanted to include these areas within the concept. Going down the route of seeing these issues as external has led to the often very detailed, case-study-based, and sophisticated attempts to create a "contingency" approach to HRM. Thus Schuler [1989], a leading figure in this movement, has attempted to link HRM strategies to life-cycle models (as did Kerr [1982]; Fombrun and Tichy [1983]; Kochan and Capelli [1984]; Kochan and Barocci [1985]) and to Porter's models for achieving competitive advantage in different industry conditions Schuler and Jackson 1987; Schuler 1989]. Other authors have argued that HRM should be contingent upon markets [Baird, Meshoulam and Degive 1983; Dertouzos, Lester and Solow 1989] and upon groupings within organisational levels [Lorange and Murphy 1984]. The examples could be multiplied (see also Macmillan and Schuler [1985], where the reciprocity of HR and strategy is clearly stated; Lengnick-Hall and Lengnick Hall [1988]; Schuler and Macmillan [1989]; Schuler [1992]).

This contingent determinism has been adopted by some authors in Europe [Staffelbach 1986; Ackermann 1986; Besseyre des Horts 1987, 1988; Hendry and Pettigrew 1992]. However contingency theory has come under attack in the corporate strategy literature.(5) A major critique is that it allows little role for managerial action other than that of identifying the current position and matching strategy to it. Many of the "contingency" school of HRM writers risk falling into a form of strategic determinism in which management's task is essentially no more than to establish the "fit" of HRM to a given -- usually corporate strategy driven -- scenario. Such attempts have been sharply criticised by Conrad and Pieper [1990]; by Staehle [1988], who attacks the U.S. literature accessible in Germany for its derivative approach to personnel management seen as dependent upon corporate strategy, rather than contributory to it; and by Poole: "strategic choices imply discretion over decision-making (i.e., no situational or environmental determinism)" [Poole 1990, p.5].

What is needed is a model of HRM that reemphasises the influence of such factors as culture, ownership structures, the role of the State and trade union organisation. Clearly the European evidence suggests that managements can see unions as social partners with a positive role to play in human resource management. The manifest success of many European firms that adopt that approach shows that the explicit or implicit anti-unionism of many approaches to HRM does not fit the European culture.

It is our contention that HRM theory needs to adopt the wider perspective of the model proposed by Kochan et al. [1986], which argued inter alia that governmental, market and labour-management relations are interwoven. If HRM is to become a concept that stands the test of international application, a more comprehensive view of the actors in the system is required.

This paper proposes a model of HRM (outlined in Figure 2) which shows the HR strategies interacting with the business strategy.(Figure 2 omitted) The model also shows, in a simplistic form, that the business strategy, HR strategy and HR practice of the organisation interact within and with an external environment of national culture, power systems, legislation, education, employee representation and all the other issues discussed above. The dotted lines show that the organisation and its human resource strategies and practices in turn interact with and are part of that environment. The model places HR strategies in close interaction with the relevant organisational strategy and external environment in a way that is foreshadowed in much of the literature but is indicated simply and clearly here.

This different presentation of the HRM concept extends the model to show factors external to the organisation as part of the HRM model rather than as external influences upon it. It places organisational approaches firmly within the national context, thus allowing fuller understanding of situations that differ from those in the United States. The importance of this aspect of the model is emphasised by recent research findings that confirm that there are significant differences between nations in their HRM practices; and that even multinational corporations tend to adapt their HRM to local practice [Brewster and Bournois 1991; Rosenzweig and Nohria 1994]. The advantages of this approach include a better fit of the model to the European scene and experience. This changes the debate in Europe from two angles.

From the normative side, where commentators and consultants have criticised employing organisations for not adopting 'United States' style HRM, this approach provides different options. Rather than searching for, and not finding, autonomy-based HRM and then criticising employing organisations and their personnel specialists for not adopting these 'modern' approaches, the model enables the consultants to be more modest and employers to be less defensive. An HRM style that accepts and builds on a clear social underpinning and required employee involvement enables, even forces, organisations to look beyond short-term 'hire and fire' approaches to reducing labour costs towards a focus on training, development and the cost-effective use of labour. Arguably, this is a more positive approach. It becomes a matter for empirical testing as to whether this is a more successful approach.

The debate is also changed from the analytical side, where academics have found little evidence of HRM in practice and significant shortcomings in the concept as it has come across to Europe from the U.S.A. The model enables analysts to move beyond discussions of whether HRM should be 'accepted' or 'rejected' to a more positive debate about the forms and styles of HRM.

Furthermore, by including in the HRM concept not just organisational HR strategies and practices and corporate strategy but also the national location and the national HRM context, the model allows for a reappraisal of the corporate strategy/strategic HRM link. There was, at least, a widespread assumption in the U.S. literature that HRM is the dependent variable in this relationship (see, e.g., Galbraith and Nathanson 1978; Tichy et al. 1982). The assumption is that human resource management is in some sense "strategic" when it follows closely the corporate strategy of the organisation. This conception is open to three kinds of criticism.

First, it shows considerable misunderstanding of the strategic process. The concept of strategy needs to be treated with some caution [Crow 1989; Morgan 1989]. It has been pointed out that a search for clear examples of coherent overarching strategies that lead directly to implementation would be extremely limiting; in practice the line from formulation to implementation is subject to much variability and a perspective that takes account of this, and of the effect of actors, processes and contextual conditions is required [Child 1985]. Mintzberg [1978, p. 935] indeed argued that "formulation" of strategy does not take place -- it is much less explicit, conscious or planned. He suggests using the term "formation" instead. The development of strategy is in fact a complex, iterative and incremental process, so that is is difficult to define a point at which the corporate strategy can be "finalised" sufficiently to allow the "HRM strategy" to be created. (For a brief, clear view of this issue see Hendry and Pettigrew [1990], p. 34.)

Second, there is considerable evidence from the United States [Springer and Springer 1990; Devanna et al. 1984; Quinn Mills and Balkaby 1985; Burack 1986; Butler 1988; CCH 1989; Kochan and Dyer 1992] that the integration of HRM with business strategy is in practice rare, even amongst large corporations. British authors have gone so far as to suggest that American texts on HRM, as on other topics of management, "need to be read, therefore, as indictments of what American industry largely was not" Hendry and Pettigrew 1990, p. 191.

Third, the process described in the United States is built on different assumptions from those that operate in much of Europe. The rational/logical view that is widespread in America leads to a view that HRM strategies should be determined by management experts in human resources who closely follow the business strategy. One German author as a contrasting example argues that the closer involvement of "modern personnel management" with the organisation's strategy "could perhaps mean that staff participation in the organisational process...might be more feasible now than was the case in the past" [Remer 1986, p. 361]. American texts on strategy formulation tend to assume that employees will not be involved in the process.

By allowing for the inclusion in the concept of HRM of the environment in which the organisation is located, this model has a further potential advantage. It enables analysts to link HRM more clearly with some of the advantages in international competition which leading strategic theorists claim will accrue where organisations take greater account of personnel requirements, become more tolerant of ambiguity and challenge, are in a position to take greater risks and are more accepting of variability [Bartlett and Ghoshal 1989; Hedlund and Rolander 1990]. Perhaps based partly on this reasoning, the model provides a closer fit between HRM and national success. Personnel aspects are brought into human resource management strategy by culture, legislation, or union involvement through a direct influence channel as well as affecting the organisation via corporate strategy. This goes a considerable way towards explaining why some countries, even including those with limited natural resources, that do not adopt the policies and practices that the majority of U.S.-based theorists of HRM would see as good practice are nonetheless amongst the most successful in the world. The link between positive HRM and economic success is restored.

Limitations of the Model

This paper has focussed upon outlining the challenge that the European perspective provides to many of the autonomy-based notions of HRM which, it has been argued, developed originally in the U.S.A. Developing the concept to take account of the more limited autonomy (or greater support) of organisational managers in Europe, and including the external factors within a different model of the concept of HRM, has a value beyond the presentation of simple diagrams. Clearly it needs refinement, but it does present a way forward. Without some adaptation to take account of the European (and perhaps other?) extra-U.S.A situations, the HRM concept will continue to attract fundamental critiques, even in its most sophisticated form, for its failure to accept different degrees of managerial independence, different approaches to working with employee representatives and governmental involvement, and, most damagingly, its inability to link HRM to economic performance. This paper, by attempting to clarify some of these fundamental bases of the concept, suggests one way forward.

The conceptual limitations of this paper will be apparent. One in particular is the conflating of Europe into a single entity. There is some rationale for this. The European Union provides a unifying political theme even for countries that at present only aspire to join it; and in many areas the similarities between countries in Europe in distinction to those in other continents are more obvious than differences within Europe. Nevertheless differences within Europe are important and are touched on in this paper, and addressed in more detail in Brewster and Bournois [1991], Filella [1991] and Brewster and Holt Larsen [1992].

One particular challenge here is the position of the U.K. and, to a lesser extent, Ireland. They stand, more than geographically, between Europe and the U.S.A. Culturally they share more with the U.S.A. than do other European countries [Hofstede 1980]. Governmental support and legislative constraints in this subject are notably less in the U.K. than elsewhere in Europe. The UK government is attempting to "sidestep" European Union social policy. In terms of trade union involvement and employee participation, the U.K. and Ireland share the higher levels of union membership and involvement common to the rest of Europe, but without the attitudes of social partnership: they share the more antagonistic management-union attitudes common to the U.S.A., but with the unions still deeply entrenched in employing organisations. The U.K. and, to a lesser extent, Ireland remain in an uncomfortable middle ground with, arguably, the worst of both worlds.

A second oversimplification in the model, and one where it needs development, is in its relation to MNCs. Clearly it shows the need for international organisations, and particularly international managers, to be aware of, and to adapt to, local environments -- as in practice they do [Brewster 1993]. However, more complicated, perhaps three-dimensional, models would be required to provide a full picture of the world environment within which many international organisations operate. Some valuable work on conceptualising international HRM is now underway [Schuler et al. 1993].

The challenge that international comparisons bring to our basic assumptions of a variety of concepts within management can only create greater understanding. The data and model presented here are an attempt to instigate that challenge and start the process of increasing our understanding of the concept of human resource management.

NOTES

1. There is a further and more general caveat that has to be entered on behalf of papers such as this. Not only are the data and analysis presented here "European"; so is the style of research upon which the paper is based and the manner, therefore, in which it is written. The difference between U.S. and other styles of academic endeavour is more apparent to researchers outside the U.S., since many of the library systems in the United States provide only sparse reference to external work in, for example, literature searches. From the outside, the U.S. research and literary tradition at its best seems detailed, careful, replicable, and cautious. It does, at below its best, risk becoming narrow and over-reliant on small-sample statistics, concentrating on the measurable at the expense of the important. Other traditions can be more risk-taking and challenging without severely reducing chances of publication. They will often involve large-scale surveys and at their best are clearly focussed on what has to be explained, rather than on what can be measured. At their worst, studies in these traditions can be poorly grounded in existing knowledge, inadequately tested or simply sloppy. The potential frustrations, and opportunities for development, that working across these two traditions can bring was originally brought home to the author by a fascinating discussion led by Professor Henry Lane at a session of the Academy of International Business at which an early draft of this paper was presented. This was, surely, a most appropriate venue for such a discussion; and one that may be replicated as the AIB itself becomes more international. The author wishes to thank Professor Lane and all those who took part in that session.

2. For more detail on European HRM practices, see Brewster, Hegewisch, Holden and Lockhart [1991]. In the paper, unreferenced statements about individual country practices are taken from that source.

3. The closest German equivalent to the linguistic distinction between personnel management and human resource management is between "Personalwesen" or "Personalverwaltung" (administration) and "Personalmanagement"; this differentiation is much weaker and concentrates more on the shift from administration to management, rather than emphasising a different valuation of employees.

4. The next most commonly used means, "regular workforce meetings," is used by 88% of Finnish organisations; 74% in Denmark; 63% in Germany; 52% in the U.K. and France; and by considerably less than 50% in all other countries. No other method was used by more than half the organisations in any country [Brewster et al. 1994].

5. The attack on contingency theory was originated by Child [1976] and followed through by authorities such as Porter [1980, 1985]. There is a useful summary of the debate in the issue of Academy of Management Review, 1990, devoted to "organisational economics".

REFERENCES

Ackermann, Karl-Friedrich. 1986. A contingency model of HRM strategy -- Empirical research findings reconsidered. Management Forum, 6:65-93.

Adler, Nancy. 1991 (second edition). International dimensions of organizational behaviour. Boston: PWS-Kent.

Albert, F.J. 1989. Les ressources humaines, atout strategique. Editions L'harmattan, 75.

Baird, Lloyd, Ilan Meshoulam & Ghislaine DeGive. 1983. Meshing human resources planning with strategic business planning, A model approach. Personnel, 60(5):14-25.

Bartlett, Christopher A. & Sumantra Ghoshal. 1989. Managing across borders: The transnational solution. Cambridge, Mass.: Harvard Business School Press.

Beaumont, Philip B. 1991. The US human resource management literature: A review. In Graeme Salaman, editor, Human resource strategies. Milton Keynes, U.K.: The Open University.

--. 1991a. Trade unions and HRM. Industrial Relations Journal, 22(4):300-308.

Beer, Michael, Peter R. Lawrence, D. Quinn Mills & Richard E. Walton. 1985. Human resource management. New York: The Free Press.

Besseyre des Horts, Charles. 1987., Typologies des pratiques de gestion des ressources humaines. Revue francaise de Gestion, 149-55.

--. 1988. Vers une gestion strategique des ressources humaines. Editions d'Organisation, 69-84.

Black, Stewart, Hal Gregersen & Mark Mendenhall. 1992. Global asignments. San Francisco: Jossey-Bass.

Blanchflower, David & Richard Freeman. 1990. Going different ways: Unionism in the US and other advanced OECD countries. Centre for Economic Performance Discussion Paper 5. London: London School of Economics.

Bournois, Frank. 1991. Gestion des RH en Europe: donnees comparees. Revue Francaise de Gestion, mars-avril-mai: 68-83.

Brewster, Chris. 1991. The management of expatriates. London: Kogan Page.

--. 1993. The paradox of adjustment: UK and Swedish expatriates in Sweden and the UK. Human Resource Management Journal, 4(1):49-62.

--& Frank Bournois. 1991. A European perspective on human resource management. Personnel Review, 20(6):4-13.

Brewster Chris & Ariane Hegewisch. 1994 Policy and practice in European human resource management. The evidence and analysis from the Price Waterhouse Cranfield survey. London: Routledge.

--, --, Lesley Mayne & Olga Tregaskis. 1994. Employee communication and participation. In Chris Brewster & Ariane Hegewisch, editors, Policy and practice in European human resource management: The evidence and analysis from the Price Waterhouse Cranfield survey. London: Routledge.

Brewster, Chris & Henrik Holt Larsen. 1992. Human resource management in Europe: Evidence from ten countries. International Journal of Human Resource Management, 3(3):409-434.

Brewster, Chris & Paul Teague. 1989. European Community social policy: The impact on the UK. London: Institute of Personnel Management.

Brewster, Chris, Ariane Hegewisch, Len Holden & Terry Lockhart, editors. 1992. The European human resource management guide. London: Academic Press.

Burack, Elmer H. 1986. Corporate business and human resource planning practices, strategic issues and concerns. Organisational Dynamics, 15:73-87.

Butler, John E. 1988. Human resource management as a driving force in business strategy. Journal of General Management, 13(4):88-102.

Child, John. 1976. Organisational structure, environment and performance: The role of strategic choice. Sociology, 6:1-22.

--. 1985. Managerial strategies, new technology and the labour practice. In D. Knights, editor, Job redesign: critical perspectives on the labour process. Aldershot, U.K.: Gower Press.

Commerce Clearing House (CCH). 1989. The 1989 ASPA/CCH survey: Corporate restructuring. Chicago: CCH, Inc.

Conrad, Peter & Rudiger Pieper. 1990. HRM in the Federal Republic of Germany. In Rudiger Pieper, editor, Human resource management: An international comparison. Berlin: Walter de Gruyter.

Cox, Charles & Cary Cooper. 1985. The irrelevance of American organisational sciences to the UK and Europe. Journal of General Management, 11(2):27-34.

Crow, Graham. 1989. The use of the concept of 'strategy' in recent sociological literature. Sociology, 23(1):1-24.

DeCenzo, David A. & Stephen Robbins. 1988 (third edition). Personnel/human resource management. Englewood Cliffs, N. J.: Prentice Hall.

Dertouzos, Michael L., Richard Lester, & Robert Solow. 1989. Made in America: Regaining the productive edge. Cambridge, Mass.: MIT Press.

Devanna, Mary Ann, Charles J. Fombrun, & Noel Tichy. 1984. A framework for strategic human resource management. In Charles Fombrun, Noel Tichy & Mary Ann Devanna, editors, Strategic human resource management, 33-51. New York: John Wiley.

Dowling, Peter, Randall Schuler & Denice Welch. 1994 (second edition). International dimensions of human resource management. Belmont, Calif.: Wadsworth Inc.

Filella, Jaume. 1991. Is there a Latin model in the management of human resources? Personnel Review, 20(6):15-24.

Fombrun, Charles. 1982. Environmental trends create new pressures on human resources. Journal of Business Strategy, 3(1):61-69.

--& Noel M. Tichy. 1993. Strategic planning and human resources management: At Rainbow's End. In R. Lamb, editor, Recent advances in strategic planning. New York: McGraw-Hill.

--, -- & Mary Ann Devanna, editors. 1984. Strategic human resource management. New York: John Wiley.

Galbraith, Jay R. & Daniel Nathanson. 1978. Strategy implementation: The role of structure and process. St Paul, Minn.: West Publishing.

Gaugler, Edouard. 1988. HR management: An international comparison. Personnel, 65(8):24-30.

Guest, David. 1990. Human resource management and the American dream. Journal of Management Studies, 27(4):377-97.

Gunnigle, Patrick, Chris Brewster & Michael Morley. 1993. Evaluating change in industrial relations: Evidence from the Price Waterhouse Cranfield Project. P+: Journal of the European Foundation for the Improvement of Working and Living Conditions, Issue 7.

Hedlund, Gunnar & Dag Rolander. 1990. Action in heterarchies -- New approaches to managing the MNC. In Christopher A. Bartlett, Yves Doz & Gunnar Hedlund, editors, Managing the global firm, 15-46. London: Routledge.

Hegewisch, Ariane. 1991. The decentralisation of pay bargaining: European comparisons. Personnel Review, 20(6):28-35.

Hendry, Chris & Andrew Pettigrew. 1990. HRM: An agenda for the 1990s. International Journal of Human Resource Management, 1(1):17-25.

--. 1992. Patterns of strategic change in the development of human resource management. British Journal of Management, 3:137-56.

Hofstede, Geert. 1980. Cultures consequences: International differences in work-related values. Beverley Hills, Calif.: Sage.

--. 1991. Cultures and organisations: Software of the mind. Maidenhead, U.K.: McGraw-Hill.

Kerr, Jeffrey. 1982. Assigning managers on the basis of the life cycle. Journal of Business Strategy, 2(4):58-65.

Kochan, Thomas A. 1991. Industrial relations research and HRM. Paper to OECD Workshop. Paris.

--& Thomas A. Barocci. 1985. Human resource management and industrial relations. Boston: Little Brown.

Kochan, Thomas A. & Peter Capelli. 1984. The transformation of the industrial relations and personnel function. In Paul Osterman. editor, Internal labour markers. Boston, Mass.: MIT Press.

Kochan, Thomas A. & Lee Dyer. 1992. Managing transformational change: The role of human resource professionals. Sloan Working Paper 3420-92-BPS. Boston, Mass.: MIT.

Kochan, Thomas A., Harry C. Katz & Robert McKersie. 1986. The transformation of american industrial relations. New York: Basic Books.

Kochan. Thomas A., Robert McKersie & Peter Capelli. 1984. Strategic choice and industrial relations theory. Industrial Relations, 23:16-39.

Laurent, Andre. 1983. The cultural diversity of western conceptions of management. International Studies of Management and Organisation, 13(1-2):75-96.

Legge, Karen. 1989. Human resource management: A critical analysis. In John Storey. editor, New perspectives on human resource management. London: Routledge.

Lengnick-Hall, Cynthia A. & Mark Lengnick-Hall. 1988. Strategic human resources management: A review of the literature and a proposed typology. Academy of Management Review, 13(3):454-70.

Lorange, Peter & Dennis Murphy. 1984. Bringing human resources into strategic planning: Systems design considerations. In Charles Fombrun. Noel Tichy & Mary Ann Devanna, editors, 1984. Strategic human resource management. New York: John Wiley.

Macmillan, Ian C. & Randall S. Schuler. 1985. Gaining a competitive edge through human resources. Personnel, 62(4):24-29.

Mahoney. Thomas A. & John Deckop. 1986. Evolution of concept and practice in personnel administration/human resource management. Journal of Management, 12(2):223-41.

Mintzberg, Howard. 1978. Patterns in strategy formation. Management Science, 24(9):934-48.

Morgan, David. 1989. Strategies and sociologists: A comment on Crow. Sociology, 23(1):25-29.

Nkomo, Stella M. 1980. Stage three in personnel administration. Strategic human resource management. Personnel, 57:189-202.

Pieper, Rudiger, editor. 1990. Human resource management: An international comparison. Berlin: Walter de Gruyter.

Poole, Michael 1990. Human resource management in an international perspective. International Journal of Human Resource Management, 1(1):1-15.

Porter, Michael. 1980. Competitive strategies. New York: The Free Press.

--. 1985. Competitive advantage, New York: The Free Press.

--. 1991. The competitive advantage of nations. New York: The Free Press.

Quinn Mills, D. & Mary Lou Balbaky. 1985. Planning for morale and culture. In Richard Walton & Paul Lawrence, editors, Human resource management -- Trends and challenges. Boston, Mass.: Harvard Business School Press.

Randlesome, Collin. 1993. Business cultures in Europe. Oxford, U.K.: Heinemann.

Remer, Andreas. 1986. Personnel management in western europe -- Development, situation and concepts. In Klaus Macharzina & Wolfgang H. Staehle., editors, European approaches to international management. Berlin: Walter de Gruyter.

Rosenzweig, Philip M & Nitin Nohria. 1994. Influences on human resource management practices in multinational corporations. Journal of International Business Studies, 25(2):229-51.

Schuler, Randall S. & Ian Macmillan. 1984. Gaining competitive advantage through human resource management practices. Human Resource Management, 23(3):241-55.

Schuler, Randall S., Peter J. Dowling & Helen De Cieri. 1993. An integrative framework of strategic international human resource management. Journal of Management, 19(2):419-59.

Schuler, Randall S. 1989. Human resources strategy: Focusing on issues and actions. Organisational Dynamics, 19(1):4-20.

--. 1992. Strategic human resource management: Linking the people with the strategic needs of the business. Organisational Dynamics, Summer: 18-31.

--& Susan E. Jackson. 1987. Linking competitive strategies with human resource management practices. Academy of Management Executive, 1 (3):209-213.

Springer, Beverley & Stephen Springer. 1990. Human resource management in the UK Celebration of its centenary. In Rudiger Pieper, editor, Human resource management: An international comparison. Berlin: Walter de Gruyter.

Staehle, Wolfgang H. 1988. Human resource management. Zeirschrift fur Betriebswirtschaft, 5/6:26-37.

Staffelbach, Bruno. 1986. Strategisches Personalmanagement. Bern & Stuttgart: Haupt.

Storey, John 1992. HRM in action: The truth is out at last. Personnel Management, April: 28-31.

Strauss, George 1968. Human relations -- 1968 style. Industrial Relations, 7:262-76

Tayeb, Monir 1988. Organisations and national culture. London: Sage.

Teague, Paul 1993. EC and organisational attitudes to the social charter. In Chris Brewster & Ariane Hegewisch, editors, Policy and practice in European human resource management: Evidence and analysis. London: Routledge.

Thurley, Keith & Hans Wirdenius. 1991. Will management become 'European'? Strategic choices for organisations. European Management Journal, 9(2):127-34

Tichy, Noel M., Charles J. Fombrun & Mary Ann Devanna. 1982. Strategic human resource management. Sloan Management Review, 24:47-61.

Trompenaars, Fons 1985. Organisation of meaning and the meaning of organisation: A comparative study on the conception of organisational structure in different cultures. Unpublished Ph.D. thesis, University of Pennsylvania (DA 8515460).

--. 1993. Riding the waves of culture. London: The Economist Books.

Walsh, Kieron 1985. Trade union membership, methods and measurement in the European community. Luxembourg: Eurostat.

FIGURE 1

European Union Social Charter

The European Union Charter of Fundamental Social Rights or the "Social Charter" lists the following twelve as major areas to be addressed.

* the freedom of movement;

* employment and remuneration;

* improvement of living and working conditions;

* social protection;

* freedom of association;

* vocational training;

* equal treatment for men and women;

* information, consultation and participation of workers;

* health protection;

* protection of children and adolescents;

* elderly persons; and

* disabled persons.

After lengthy negotiations that intensified from May to December 1989, the Charter was signed by all member states except the U.K. at the Strasbourg summit in December 1989. Further work at the E.U. level in the social field was similarly approved at the Maastricht summit in December 1991 (again, with the U.K. dissenting).

The European Commission is now busy with proposals to transfer these general objectives into E.U. policy. via the Social Action Programme.

* Chris Brewster is Professor of European Human Resource Management at the School of Management, Cranfield University, U.K. He is Director of the Centre for European HRM which conducts a major triennial survey of HRM policy and practice in fifteen European countries and is currently being undertaken in the Pacific region. Many of his publications report on this research.