The first is the logic of direct, process-based control, in which the focus is on
efficiency and cost containment (managers needing within this domain to
monitor and control workers' performance carefully), whereas the second is
the logic of indirect outcomes-based control, in which the focus is on actual
results (within this domain, managers needing to engage workers' intellectual
capital, commitment and cooperation). Thus, when managing people at work,
control and cooperation coexist, and the extent to which there is any ebb and
flow in intensity and direction between types of control will depend upon the
'multiple constituents' of the management process.
Implicit in this approach to managerial control is that the logic underlying an
HR strategy will tend to be consistent with an organization's competitive
strategy. We are thus unlikely to find organizations adopting a Porterian cost-
leadership strategy with an HR strategy grounded in an outcome-based logic.
Managers will tend to adopt process-based controls when means-ends
relations are certain (as is typically the case among firms adopting a cost -
leadership strategy), and outcomes-based controls when means-ends are
uncertain (for example differentiation strategy). These management logics
result in different organizational designs and variations in HR strategy, which
provide the source of inevitable structural tensions between management and
employees. It is posited, therefore, that HR strategies contain inherent
contradictions (Hyman, 1987; Storey, 1995; Thompson &: McHugh, 2002)^41.
The resource-based mode
This second approach to developing typologies of HR strategy is grounded in
the nature of the reward-effort exchange and, more specifically, the degree to
which managers view their human resources as an asset as opposed to a
variable cost. Superior performance through workers is underscored when
advanced technology and other inanimate resources are readily available to
competing firms. The sum of people's knowledge and expertise, and social
relationships, has the potential to provide non-substitutable capabilities that
serve as a source of competitive advantage (Cappelli & Singh, 1992). The
various perspectives on resource-based HRM models raise questions about