particular changes in economic and social context. These consist of either the
general argument of a paradigm break from some species of Fordist capitalism or a
more diVuse idea that market expansion, volatility, and speed of technical change
have decisively altered the rules of the game.
Whilst mainstream perspectives have never exactly been realistic about the
nature of capitalism, it seems to us that, if anything, recent years have seen global
political economy shift away from, rather than towards, the conWguration pre-
dicted by HRM theorists. There is a growing body of evidence that inWnancialized
economies capital markets rather than product or labor markets are the dominant
drivers ofWrm behavior (Thompson 2003 ). In circumstances where downsizing
and perpetual restructuring are the norm in many sectors, progressive objectives in
work and employment spheres are diYcult to sustain and increasingly discon-
nected from wider trends in corporate governance. Crucially, thoseWrms that have
achieved gains in productivity and market share through the appropriate HPWS
measures are not immune from destructive eVects of enhanced demands for
shareholder value.
HR managers may want to pursue higher performance and high-commitment
policies, at least in some sectors, but the levers they are pulling are often out-
weighed or countermanded by corporate decision makers in thrall toWnancial
markets. As Kunda and Ailon-Souday ( 2005 ) demonstrate, the dominant form of
market rationalism has little time for culture and is more interested in reducing
than transforming the workforce. One crucial conclusion to be drawn from these
observations is that the 1990 s are a more signiWcant decade for transformative
change than the 1980 s that shaped the assumptions of HRM. In this context, whilst
many of the prescriptions of HRM are laudable, they are increasingly out of step
with reality.
HRM not only needs to reconsider some of its core concepts, it needs to address
some methodological limitations. To date, research has been characterized by a
narrow focus on the individualWrm, largely separate from analysis of any bigger
picture (Thompson 2003 : 372 ). At the same time as ignoring the ‘big picture,’ HRM
can also be criticized for overlooking the experiences of employees within work-
places. Whilst LPT has been guilty of too many qualitative case studies, it is
theoretically predisposed to locate work relations within the broader political
economy. We are not for a moment suggesting that if such an approach were
adopted HRM and LPT would converge—clearly the theoretical diVerences remain
signiWcant—but there would be much greater scope for fruitful engagement
between the two approaches.
TheWnal question which our chapter raises is why, in the face of compelling
counter-evidence, core propositions of HRM continue to hold sway in signiWcant
sections of the academic community, as well as among practitioners. As Harley and
Hardy ( 2004 : 393 ) argue, mainstream HRM scholarship is characterized by an
increasing convergence of meaning among researchers as to what HRM is and
hrm: labor process perspectives 161