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RecensionsBook Reviews

Strategy, Organization and the Changing Nature of Workedited by Jordi Gual and Joan E. Ricart, Cheltenham: Edward Elgar, 2001, 250 pp., ISBN 1-8406-4713-2.

  • Geoffrey Wood

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  • Geoffrey Wood
    Middlesex University, London

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In contrast to the sustained economic growth that took place from the 1950s to the early 1970s, the subsequent period has been marked by endemic instability, characterized by technological and cultural change, increased mobility of investor capital, and heightened global competition. Whilst this may have, in certain cases, encouraged the development of more innovative functionally-flexible forms of work organization, it has also led to an increased emphasis on numerical flexibility, above all on the ability of organizations to readily upsize or downsize their staffing. This edited volume represents the outcome of a conference on employment, organized by the University of Navarre’s IESE Business School, focusing on the changes taking place in modern business as a result of new technology and heightened competition. The opening chapter provides a brief introduction to the following eight contributions. However, it never really goes beyond summary; the reader is left uncertain as to the contribution of the volume as a whole, and the underlying coherence of the remaining set of eight chapters.

The second chapter, by Joan Ricart and Carlos Portales, looks at the role of new forms of strategic HRM in underwriting the competitiveness of firms. The authors highlight the mutuality of exchanges underlying the employment contract. They underscore the dangers posed by short-term contracting and high staff turnover rates; whilst the latter may make for an immediate competitive advantage, it is likely to reduce organizational commitment over the medium and long terms, and instill a culture of fear in the workplace. As a possible alternative, they suggest a movement towards an “organizational employability model,” whereby individual contracts allow for high levels of job rotation, involvement, and associated benefits. In effect, an internal labour market is used as a source of skills; individuals forgo security in return for the possibility of competing for more interesting tasks and greater decision-making power. Again, the engendering of non-workplace based forms of social support, such as professional associations, may make job security less important to individual employees. Whilst there is little doubt that this chapter does highlight certain basic truths, it is marred by a tendency towards rather simplistic and flashy solutions, and an over-reliance on some of the more vulgar popular managerial literature.

In the following chapter, Carlos Sanchez-Rudde provides an overview of existing work, and a possible future agenda for research on new employment relationships from a strategic HRM perspective. This most authoritative overview is of great value both in highlighting existing themes and schools of thought and in its strong emphasis on the need to develop more critical approaches transcending the mainstream, U.S.-centric research agenda. Key issues for future research include the embeddedness of HR practice in both institutional and cultural terms, and the specific mechanisms linking HR practice with performance.

Chapter four, by Sumantra Goshal, Peter Moran and Christopher Bartlett, looks at the relationship between job security, employability and competitive advantage. They note that whilst there is a growing trend for companies to abandon long-standing policies regarding job security, there have been few new alternatives to replace it (p. 79). In response, the authors suggest a new approach, founded on the recognition that, whilst employees will tend to have skills that are marketable outside the firm, much managerial knowledge is specialized to the enterprise. This represents a reversal of usual conceptions of management as generalists, understanding all aspects of organizational processes, and employees as only commanding limited, specialized skills. This reversal will necessitate firms reviewing their internal labour markets, and a reassessment of the manner in which external labour markets are structured.

The rather brief chapter 5, by Peter Capelli, argues that the consequences for firms of low job security and high staff turnovers remain uncertain. However, it may encourage firms to spread operations between radically different employment systems; a particular level of staff turnover may best facilitate specific activities. A rather weightier chapter 6, by Carlos Portales, looks at overall business strategy versus employment systems adopted by firms operating in Spain, based on a survey of 218 firms. The study revealed considerable variability in practice within a single national context; indeed, many of the employment models followed by Spanish firms were similar to those in use in radically different social contexts. This important chapter underscores the difficulties in categorizing nations in terms of national business systems; under close examination, key defining features may prove elusive.

Chapter 7, by Andrew Pettigrew and Silvia Massini, looks at the adoption of new organizational forms by European and Japanese firms in the 1990s; it draws on the findings of two major multinational surveys, conducted in 1992 and 1996. They conclude that the speed of organizational change is often overestimated; new forms of organizing often supplement, rather than change, existing structures and practices. Nonetheless, important reforms have already taken place in Europe; these include a trend towards decentralization, horizontal linkages and strategic alliances. This interesting contribution is followed by a jargon-filled chapter by Rafael Andreu and Sandra Sieber, which, apparently, looks at “impacts on employment of new forms of organizing.”

The final chapter, by Paul Sparrow, argues that generally declining security of tenure is likely to have far-reaching social consequences. Few firms seem willing to even recognize, let alone rise to, the challenges posed by the “aftershocks” of downsizing. The consequences are likely to be negative in terms of personal well being, and organizational citizenship behaviour; a likely trend is towards heightened levels of passive resistance. Sparrow concludes that firms and societies face the stark choice of rebuilding employment systems to deal with a rising “trust no one” generation, or try and reengage individuals and reconstruct trust.

The sum of the parts of this book seems greater than the whole. On the one hand, many of the contributions provide important insights into key questions surrounding the possible convergence of practices and the implications for this within and between firms. Two chapters in particular contain a wealth of empirical detail, which sheds new light on often overly theoretical debates on the changing nature of employment systems. On the other hand, this book is marred by the rather lightweight nature of certain other contributions, and seemingly limited editorial direction. The extensive use of strategic HRM theory is both a strength and weakness; it allows for a more applied approach than typically found in the mainstream socio-economic literature, but, again, makes for a certain shallowness and eclecticism. Nonetheless, this volume is likely to be of considerable interest not only to students of HRM, but all concerned with the consequences of a global trend towards diminished security of tenure.