accounts (Jacoby 1984 ; Rubery 1978 ; Wilkinson 1981 ) of the processes by which
labor markets have come to be structured or ‘balkanised’ (Kerr 1954 ). Two main
critiques have been made:Wrst, they overemphasized the importance ofWrm-
speciWc skills as the main explanatory factor and failed suYciently to consider
the development and utilization of worker bargaining power; second, they pre-
sented a general theoretical approach, but in practice this reXected the institutional
characteristics of the US labor market. However, as we discuss below, Doeringer
and Piore are not alone in the HRWeld in failing to consider diVerent societal
approaches to the management of human resources.
4.4 The Lessons of Comparative
Analysis: Understanding How National
Institutions Shape Firm Behavior
.........................................................................................................................................................................................
In thisWnal section, we argue there are lessons to learn for HRM from comparative
studies by scholars who have adapted economists’ analytical techniques to under-
stand how country diVerences in institutions impact upon HRM practices. We
focus on two approaches, Marsden’s ( 1999 ) micro-founded theory of employment
systems and the ‘varieties of capitalism’Weld of studies associated with Hall and
Soskice ( 2001 ).
These two approaches share several principles of theory and method. Both use a
deductive approach to establish possible varieties of employment practices and
thus argue for the testing of an exhaustive typology of diverse systems. Both
explore the mutual interplay betweenWrm-level practices and strategic decision-
making, but extend this to include the interplay betweenWrm strategies and
practices and national-level institutions as operationalized through social actors.
And both explore the eVects of multiple, mutually reinforcing institutions, with the
argument that it is the particular societal bundle of institutions that matters rather
than an easily quantiWable institutional measure to be examined in abstract.
Finally, both are based upon what economists refer to as micro-foundations—a
rational choice incentive theory of behavior that is responsive to institutionalized
rules of the game (both approaches deploy game-theoretic terminology), which
reduce uncertainty and facilitate coordination of productive activity. For many,
this theoretical foundation is a strength as it demonstrates the importance of
institutions without reliance on ‘non-economic’ reasoning. For others, however,
the insights of the theories are limited by the adoption of a narrow conception of
the motivations for human behavior.
80 damian grimshaw and jill rubery