4

Strategic

management and

human resources:

the pursuit of

productivity,

flexibility, and

legitimacy

Peter Boxall and John Purcell

Introduction

This chapter is concerned with the role that human resources play in strategic
management and the ethical issues involved in this relationship. It begins
by defining what we mean by strategy and then sets up our model of the
strategic goals of HRM. Our contention is that three broad goal domains are
important in the strategic management of people in firms: labour productiv-
ity, organizational flexibility, and social legitimacy (Boxall and Purcell 2003).
While many business analysts would readily accept that the first two of these
are fundamental to organizational effectiveness, we argue that the pursuit of
legitimacy is also vital because firms are always ‘embedded in structures of
social relations’ (Granovetter 1985: 481).
Like Gospel (1992), we use the notion of HRM to refer to all those activities
associated with the management of work systems and employment regimes in
the firm (Boxall and Purcell 2003). HRM is always part of the management
of the firm—irrespective of the existence of HR specialists—and includes a
variety of managerial styles. While it is quite appropriate to define HRM as one
particular management style, as Guest (1987) and Storey (1995) have done,
we find that a broad, inclusive definition of HRM is more appropriate for the
purposes of analysing the links between strategic management and HRM. The
strategy literature requires this kind of openness because it recognizes variety