Marsden’s work straddles the HRM–economics divide as is evident in his
research on incentive-based payment systems (e.g. Marsden and French 1998 )
and on vocational training (e.g. Marsden and Ryan 1990 ). His 1986 book—The
End of Economic Man—further establishes his credentials as a non-mainstream
economist. As such, his application of microeconomic principles and concepts
such as transaction costs is unorthodox and owes more to the work of Herbert
Simon than to Coase or Williamson. Moreover, Marsden’s analytical framework
is enriched by a historical perspective gleaned from industrial relations
research. Nevertheless, the questions he poses follow the mainstream focus on
opportunism—e.g. Is it possible to specify a viable form of transaction that gives
suYcient protection to worker and employer against possible opportunism by the
other? Moreover, Marsden’s methodWts neatly within the economics discipline
since it is deductive, not inductive as is much of the HRM literature.
Marsden establishes a typology of four national varieties of work organization
based on employment rules derived from alternative options for satisfying two
contractual constraints: (a) to align job demands with worker competences (Wrms
can emphasize complementarities either among production tasks or among
worker skills); and (b) to design an easily enforceable and transparent system of
task assignment (Wrms can choose a task-centered approach or a function/
procedure approach) ( 1999 : ch. 2 ). The four identiWed types of transaction rules
for the employment relationship are said to be ‘constitutive,’ ‘in the sense that
without them there would be no lasting agreement between employers and
workers to cooperate in this way’ (ibid.: 61 ). Moreover, applying economic
reasoning from game theory models (which Wts neatly as an application of
methodological individualism reasoning), Marsden seeks to show how each rule
can emerge in a world of uncoordinated, decentralized decision-making with
repeated interactions between workers and employers and is then diVused
throughout the major sectors of an economy. Importantly, he does not rule out
the supportive role of labor market institutions in this process (especially through
the state, unions and employers—ibid.: 107 – 9 ), but warns against the use of labor
market institutions to impose a particular rule as this may conXict with norms at
a workplace level (ibid.: 83 – 4 ). Marsden also shows how transaction rules have a
mutually supporting relationship with institutional features of labor markets—a
production approach to task allocationWts with patterns of employment mobility
associated with internal labor markets, and a training approach similarlyWts with
occupational labor markets. The argument incorporates a relatively detailed,
historical account of labor market institutions, including, for example, the role
of the tripartite system of dual apprenticeship in Germany in propping up its
‘qualiWcation rule’ approach to employment organization, the problems of
declining coordination among British employers for preserving a ‘tools of the
trade’ approach, and the importance of inter-Wrm support for job classiWcation
systems in France.
economics and hrm 81