3.3 Goal Theories and Research in HRM
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In terms of theoretical development, there are, however, problems with the broad
frameworks just described. It is hard to form testable propositions when it is
argued that HRM goals depend somehow on so many variables (Guest 1997 ; Purcell
1999 ). The objective ofWtting HRM to key features of the organization’s external
and internal environment rapidly became a key theme in the HRM literature but
theoretical models of what this meant became more parsimonious.
In one of the earliest sources, Baird and Meshoulam ( 1988 ) argued that
HR activities, like structure and systems, shouldWt the organization’s stage of
development, implying informal, more Xexible styles of HRM among start-up
Wrms and more formal, professionalized styles asWrms become more mature.
Theoretically, however, most models of ‘bestWt’ in HRM did not follow Baird
and Meshoulam’s ( 1988 ) emphasis on adapting to organizational size and stage of
development but argued that the key goal was to achieveWt with theWrm’s
competitive strategy. While there are other models of what is variously called
‘external’ or ‘vertical’Wt in HRM, Schuler and Jackson ( 1987 ) used Porter’s typ-
ology of generic competitive strategies (cost leadership versus diVerentiation,
either on a broad or niche basis) to create what became the most inXuential
model. Their model is normative: it argues that HR practices ought to be designed
to mutually reinforce theWrm’s choice of competitive strategy and, if so, business
performance will improve. If, for example, management chooses a competitive
strategy of diVerentiation through product innovation, this would call for high
levels of creative, risk-oriented, and cooperative behavior. On the other hand, if
management wants to pursue cost leadership, the model suggests designing jobs
which are fairly repetitive, training workers as little as is practical, cutting staV
numbers to the minimum, and rewarding high output and predictable behavior.
Although competitive posture can be complex, there are now several studies
which can be cited as oVering some support for the argument thatWrms try to
relate a variety of HR practices to their competitive strategies (e.g. Delery and
Doty 1996 ; Guthrie et al. 2002 ; Jackson et al. 1989 ; Sanz-Valle et al. 1999 ; Youndt
et al. 1996 ). In a study of 200 SpanishWrms, for example, Sanz-Valle et al. ( 1999 )
Wnd that those with an innovation or a quality strategy do indeed provide more
training and greater opportunities for employee participation than those pursu-
ing cost leadership, as Schuler and Jackson’s ( 1987 ) model predicts. They alsoWnd
that innovators pay better wages than those focusing on cost, again as the model
predicts. However, theWt between HR strategy and competitive strategy is not
overwhelming. These mixed results are typical for this kind of study. They suggest
that current competitive strategy is indeed playing some role in shaping goals
in HRM but that HRM goals are complex and various factors exert inXuence
over time.
the goals of hrm 53