STRATEGIC HUMAN RESOURCE MANAGEMENT

Figure 2. 8 Environment as a mediating variable for human resource

management strategies

Human Resource Strategy

Environmental influences Business Strategy

Source: Bamberger and Phillips (1991) Organizational Environment and
Business Strategy, Human Resource Management, Vol.30 (2)

In the late 1980’s, Purcell made a significant contribution to research on
business-HRM strategy. Drawing on the literature on 'strategic choice' in
industrial relations (for example Kochan et al., 1986; Thurkey & Wood,
1983)^30 and using the notion of a hierarchy of strategy, Purcell (1989)^31
identified what he called, 'upstream' and 'downstream' types of strategic
decision. The upstream or 'first-order' strategic decisions are concerned with
the long-term direction of the corporation. If a first order decision is made to
take over another enterprise, for example a French company acquiring a
water company in southern England, a second set of considerations applies
concerning the extent to which the new operation is to be integrated with or
separate from existing operations. These are classified as downstream or
'second order', strategic decisions. Different HR strategies are called 'third-
order' strategic decisions because they establish the basic parameters for
managing people in the workplace. Purcell (1989, p. 71) wrote, '[in theory]
strategy in human resources management is determined in the context of first-
order, long-run decisions on the direction and scope of the firm's activities and
purpose ... and second-order decisions on the structure of the firm'.