The private enterprise culture
The private enterprise culture is reflected in the way HRM has been studied. In
the USA, it is generally assumed that the purpose of the study of HRM, and in
particular strategic human resource management (SHRM) is to improve the
way that human resources are managed within organisations (Fombrun et al.,
1984; Tichy et al., 1982; Ulrich, 1997; Wright and McMahan, 1992). The ulti-
mate aim of HRM research is to improve organisational performance, as judged
by its impact on the organisation’s corporate strategy (Huselid, 1995), the
customer (Ulrich, 1989) or shareholders (Becker and Gerhart, 1996; Becker et al.,
1997; Huselid, 1995). Further, it is implicit that the objective of improving
organisational performance will apply in all cases. Thus, the widely cited defi-
nition by Wright and McMahan states that SHRM is ‘the pattern of planned
human resource deployments and activities intended to enable a firm to
achieve its goals’ (Wright and McMahan, 1992: 298). By contrast, in Europe
there is considerable debate about the meaning and purpose of HRM and no
automatic assumption that employers’ interests should be paramount (Brewster,
1999; Brewster and Larsen, 2000; Legge, 1995; Guest, 1990; Keenoy, 1990).
Furthermore, HRM is often seen as something that can apply at either regional,
national level, or at European Union level.
Many authors have recognised that US views of HRM may be culture-
bound, particularly in the emphasis on organisational autonomy. In the UK
Guest (1990) has argued that the view of freedom and autonomy in HRM is
peculiar to the USA and epitomises the ‘private enterprise’ culture. These
factors are uncharacteristic of most European countries, with the possible
exception of the UK (which would in any case take a more moderate position
to that of the US). In the European tradition, private enterprises are more
constrained, not just by national culture (see Chapter 6) but also by legislation.
The low level of state involvement
The low level of state involvement, typical of the USA, is absent in Europe. The
autonomy of organisations in Europe to manage their HRM, as they wish, is
constrained by legislation (including supranational, EU level legislation), and
by other aspects of the state’s activities.
On the subject of legislation, German researcher Pieper (1990) unambigu-
ously pointed out that: ‘the major difference between HRM in the US and in
Western Europe is the degree to which [HRM] is influenced and determined by
state regulations. Companies have a narrower scope of choice in regard to per-
sonnel management than in the US’ (1990: 8). Pieper points, in particular, to
the greater regulation of recruitment and dismissal, the formalisation of edu-
cational certification, and the quasi-legal characteristics of the industrial rela-
tions framework (in comparison to the USA). One could add to Pieper’s list
legislative requirements on pay, forms of employment contract, health and
safety, the working environment and hours of work. Supplementary to these
requirements are rights to trade union representation, as well as requirements
HRM in Europe 175