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The International Journal of Human Resource Management 6:4 December 1995

Assessing the adoption of HRM by small


and medium-sized manufacturing
organizations

Joanne P. Duberley and Paul Walley


Abstract This paper reports on exploratory research which uses a comparative
case-study approach with sixteen organizations to study the extent to which
HRM has been adopted in traditional brownfield-site, small and medium-sized
UK manufacturing organizations. The paper begins with a comparison of HRM
practices across the sixteen organizations. It is argued that the most common
HRM practices in these firms appeared to relate more to a traditional small firm
approach than to any proactive attempt to adopt HRM. The analysis shows that
very few of the organizations adopted a strategic approach towards HRM with
an integrated set of policies related to corporate strategy being put forward.
Instead, the dominant approach seemed to be one of reactive, opportunistic pragmatism, showing little development from the standard modern approach identified
as most common in the early 1980s. On the other hand, three organizations are
shown to approximate quite closely to the model of strategic HRM and contextual analysis is undertaken to attempt to differentiate these from the other organizations. A comparison is also made between the findings of this research and a
telephone survey that was conducted to assess the use of HRM in Leicestershire.
The results of this show that a certain degree of caution should be exercised when
accepting reports of organizational practices which do not involve researchers
actually entering the organizations. Finally, the paper concludes that in order to
get a better understanding of the situation facing these and other organizations
we need to broaden our scope and consider the impact of changing economic,
social and political conditions on management worker relations.
Keywords HRM, manufacturing, strategic, SME.
Introduction

A recent editorial comment in The International Journal of Human Resource


Management (Purcell, 1993) identified the need for greater research into the
application of HRM in small and medium-sized organizations. It has also been
suggested that current research into HRM does not convey a true picture of the
state of the field in the majority of British organizations (Beaumont, 1992). One
of the main reasons for this is that much of the research that has been conducted into HRM seems have been focused on larger organizations (Storey,
1992; Brewster and Smith, 1990; Hendry and Pettigrew, 1987; Sparrow and
Pettigrew, 1988) and there has been a tendency for research to be more narrowly
focused on industrial relations issues (Millward et al, 1992; Scott et ai, 1989;
Marginson et ai, 1988) or employee development (Hendry et ai, 1991). There
has also been a tendency to utilize individual case studies in the discussions of
HRM practices (Hendry and Pettigrew, 1987; Sparrow and Pettigrew, 1988;
0985-5192

Routledge 1995

892 Joanne Duberley and Paul Walley


Garrahan and Stewart, 1991; Gennard and Kelly, 1991; Noon, 1989), although
more recently a survey approach has been adopted by some researchers
(Brewster and Smith, 1990; Poole and Jenkins, 1990; Yuen, 1990; Pang and
Oliver, 1988; Storey et al, 1994).
This paper uses a comparative case study approach with sixteen organizations
to explore the extent to which HRM practices have been adopted in traditional,
brownfield-site small and medium-sized UK manufacturing companies. The
organizations under study here are of particular importance as it appears that
they are often neglected in HRM research and that most support for strategic
HRM has come from larger greenfield-site manufacturing organizations
(Garrahan and Stewart, 1991, Guest and Hoque, 1994) or service organizations
(Henry and Pettigrew, 1987; Sparrow and Pettigrew, 1988; Storey et al, 1994).
We also believe that a comparative case study approach has the benefit of allowing greater depth than survey approaches and, by looking at many aspects of
HRM, it is hoped that breadth will not be sacrificed. The paper will begin by
briefiy considering the meaning of the term HRM, we will then move on to discuss the results of the case studies before comparing these with a survey that
was carried out shortly afterwards in a similar area. The conclusions that we
draw suggest that a great deal more longitudinal research is required if we are to
get a clear picture of how applicable HRM is to smaller organizations and how
the employment relationship evolves over time.
Defining HRM
In order to identify the extent to which HRM is being used in these organizations it is first necessary to get a clear picture of what we understand the term to
mean. This, however, is easier said than done. The difficulties involved in
defining HRM and the inconsistencies and inherent contradictions of the concept have been discussed elsewhere (Legge, 1989) and it is not our intention to
repeat that here. However, these difficulties do cause problems for researchers
trying to identify the use of HRM. While some writers stress that HRM is different from personnel management 'by virtue of its integration with business
and other strategies' (Thomason, 1991: 3), others suggest that HRM is synonymous with the adoption of certain practices (see, for example. Guest, 1987).
These two approaches could obviously be contradictory. If HRM is a strategic
activity which aligns the personnel policies of the organization with corporate
strategy then surely it cannot also be a prescriptive set of practices. This can be
highlighted by a comment from Noon (1989) who notes that HRM is often
assumed to involve a move away from collective relations, yet from a strategic
fit perspective this may be the best way for managers to deal with their workforce in certain situations.
Thus, the lack of any clear definition of HRM makes research in this area
potentially problematic. One of the major issues that had to be confronted in
this particular piece of research was whether we should attempt to identify certain practices in order to substantiate the existence of HRM or whether we
needed to identify that the process of human resource strategy development was
taking place. Obviously, the former is easier to achieve than the latter. A simple
checklist of practices could be used (although, as we will show later, this may
not be as straightforward as imagined, particularly if a survey approach is used).

Adoption of HRM by small and medium-sized manufacturing organizations 893


Attempts to identify the relationship between HR practices and corporate strategy may be limited by an emphasis on the rationalist approach towards strategy
development which has been criticized both in mainstream strategy literature
(Mintzberg, 1990; Mintzberg and Waters, 1985) and in the HR literature
(Arthur and Hendry, 1990; Boxall, 1992; Butler, 1989). Yet a thorough analysis
of the emergent nature of strategy and the links between this and HR policies
would require an in-depth longitudinal analysis of the organizations.
This research has attempted to consider both approaches. In the first half of
the results section HR practices are compared across the firms, using a framework developed by Storey (1992). A possible limitation of using this framework
is that the emphasis tends to be upon HRM as a set of practices (e.g. team
working, harmonization, etc.) rather than as a process of incorporating human
resource decisions at a strategic level. However Storey does consider the extent
to which HRM is central to the corporate plan (factor 10) and the foci of attention for interventions (factor 27). Special attention has been paid to these variables in order to try to get a feel for the extent to which HRM represents a
strategic process in the organizations under study. Using this method it was possible to identify three organizations where it was perceived that human resource
policies were considered central to the development and implementation of corporate strategy and where a coherent set of HRM policies was adopted. In the
second half of the results section attempts will be made to identify contextual
factors which differentiated those organizations utilizing a strategic approach
from those that did not, using a framework developed by Buller (1988).
The framework developed by Storey (1992) identifies twenty-seven components of HRM split into four broad categories of beliefs and assumptions,
strategic aspects, line management and key levers. While the authors accept that
this model may have some limitations, outlined by Storey himself (1992: 36),
and that its description of HRM could be seen as an idealized future state, this
does seem to be the best available framework for identifying key HRM assumptions and practices which can be easily used for data analysis. Table 1 outlines
the twenty-seven factors and compares the HRM approach to a more traditional
personnel and IR approach.
Research methodology

One hundred and fifty firms were contacted and asked to take part in this study.
They were selected from the Kompass Directory on the basis of their size (fewer
than five hundred employees), turnover (less than 25 million), product range
(manufacturing engineering) and location (East Midlands, West Midlands and
South Yorkshire). It is recognized that almost any method of recruitment of
study sites would introduce some form of sampling bias. In this case it was
noted that the probability of company acceptance of the research did increase
with proximity to the university, perhaps due to some 'loyalty' factor. The
response rate of 12 per cent highlights the difficulties in gaining access to organizations for research purposes which has been discussed many times before
(Form, 1969; Bowles, 1976). Walley et al. (1994), for example, have noted that
only a small proportion of small/medium-sized UK manufacturing companies
regularly co-operate with academic research and that few companies appear prepared to commit managerial time to help with this type of study. Unfortunately

894

Joanne Duberley and Paul Walley

Table 1 Comparing HRM with personnel and IR


Dimension
1. Contract
2. Rules
3. Guide to management
action
4. Behaviour referent
5. Managerial task
vis-d-vis labour
6. Nature of relations
7. Conflict
8. Key relations
9. Initiatives
10. Corporate plan
11. Speed of decision
12. Management role
13. Key managers
14. Communication
15. Standardization

Personnel and IR

HRM

Careful delineation of
written contracts
Importance of devising clear
rules/mutuality
Procedures

Aim to go beyond contract

Norms/custom and practice


Monitoring

Values/mission
Nurturing

Pluralist
Institutionalized
Labour management
Piecemeal
Marginal to
Slow
Transactional
Personnel/IR specialists
Indirect
High (e.g. parity an issue)

Unitarist
De-emphasized
Customer
Integrated
Central to
Fast
Transformational
General/business line managers
Direct
Low (e.g. parity not seen as
relevant)
Facilitation

'Can-do' outlook
Business need

16. Prized management


skills
17. Selection
18. Pay
19. Conditions
20. Labour - management
21. Thrust of relations
with stewards

Negotiation
Separate, marginal task
Job evaluation
Separately negotiated
Collective
Regularized through facilities
and training

Integrated key task


Performance related
Harmonization
Towards individual contracts
Marginalized (with exception
of some bargaining for
change models)

22. Job categories and


grades
23. Communication
24. Job design
25. Conflict handling
26. Training and
development
27. Foci of attention
for interventions

Many

Few

Restricted flow
Division of labour
Reach temporary truces
Controlled access to courses

Increased flow
Teamwork
Manage climate and culture
Leaming companies

Personnel procedures

Wide-ranging cultural.
structural and personnel
strategies

Source: Storey 1992

the size of two of the companies was too large for this sample and so they have
had to be excluded from the analysis, leaving us with a sample of sixteen. A
brief description of each of the companies can be seen in Table 2.
Following Arthur and Hendry, we have focused on small and medium-sized
business units (SMBUs) and have defined those as 'business units with up to 500
employees that are either independent enterprises or substantially autonomous
divisions of larger corporations' (Arthur and Hendry, 1990: 233). Therefore,
although some of the firms were part of larger groups, each was viewed as a
strategic business unit and therefore was responsible for the majority of, if not

Adoption of HRM by small and medium-sized manufacturing organizations 895


Table 2 The organizations studied ranked by size (no. of employees)
Company

Turnover
(m)

No. of
employees

Market - industry

1
11
9
5
4
7
6
10
13
8
15
12
16
14
3
2

10-20
5-10
5-10

120
140
175
175
180
180
200
200
220
230
300
350
350
375
400
425

General engineering (hydraulics)


Metal castings
Wire products
Moulded components
Light electrical
Industrial filters
Measuring equipment
Special materials
Industrial valves
Industrial valves
Automotive components
Moulded components and light assembly
Mechanical engineering
Automotive components
Electrical engineering
Electro-mechanical

2-5

5-10
10-20
10-20
5-10
5-10
10-20
5-10
10-20
20-30
10-20
20-30
20-30

all, personnel decisions. The major control exerted over these companies by their
owners was usually in terms of financial measurements such as profit, cost and
return on investment targets.
A question of sampling bias arose as the majority of firms that opted to take
part in the research had been going through some type of change programme
and it was felt that they may have agreed to take part in the study in order to
get some feedback on this. Whether this is symptomatic of increased levels of
change in other UK manufacturing companies or is specific to this sample is
impossible to say. Nevertheless, by most parameters, such as size, markets
served and ownership type or profitability, the sample appears to be representative of this sector of UK manufacturing industry.
Although the small sample may preclude generalizations, it is hoped that the
use of in-depth case studies should prove illustrative; it has been recommended
by a number of writers in the small business field (see, for example, Curran,
1986). It is also suggested that by using smaller, less well-known organizations it
should be possible to overcome the problem identified by Guest (1987) and
Beaumont (1992) that the literature focuses on what is happening in one or two
atypical organizations and does not consider the majority of firms. The use of
in-depth case studies should also overcome another problem identified by Guest
(1990), namely that what companies tell the world they are doing can hide other
practices that they may be less keen to publicize. Thus it is our intention that
this study should be seen as an in-depth exploratory study and any findings
should not necessarily be viewed as generalizable to all small and medium-sized
manufacturing organizations.
The results of the research are shown in Table 3. Storey and Sisson (1993), in
outlining the use of this model, explain that the way the data were collected is

896 Joanne Duberley and Paul Walley


Table 3 Results

Aim to go beyond
contract
Impatience with
rules
Business need =
prime guide to
action
Values/mission
Nurturing org'n
Unitarist
Conflict
de-emphasized
Customer
orientation
Integrated
initiatives
Corporate plan
central
Speedy decision
making
Transformational
leadership
General business
mgt to fore
Direct
communication
Standardization
not emphasized
Facilitative mgt
Selection
integrated
PRP
Harmonization
Towards
individual
contracts
Marginalization
of stewards
Fewer job
categories
Increased flow of
communication
Teamworking
Conflict decreased
through culture
change
Learning co.
Wide-ranging
strategies
HRM present

10

II

12

13

14

15

16

No. of
firms'

10

X
X

X
X
X
%

X X X

X
%
X X X
X % X

Al

%
%

X X X

%
%

X
%

X
X

%
%

X
X
X

X
X

X
X

X
%

%
%

X
X

X
X

X
X

X
%

X
X

Notes
Present
% Present in some areas of the organization
t The number of firms in which each practice was seen

13

%
X
%

X
X

X X X

X X
X X

X
X

12
3
6
15
16
6

4
9
3
15
13
6
5
4

X
X

X
X

X
%

X
X

X
X

%
X

9
5
5

14

%
%

%
%

%
%

X
%

X
X

X
X

3
6

X Not present
Not applicable, no trade tinion representation

Adoption of HRM by small and medium-sized manufacturing organizations 897


crucial in that the ticks, crosses and percentage marks are not simply the usual
record of respondents' replies to surveys, they are the researchers' own judgements based on multiple sources of information. The same approach has been
used in the analysis of these firms. During the research visits a minimum of
seven people, ranging from senior management to shop-floor operatives, were
interviewed in depth in order to give different perspectives on any changes taking place. In addition, written policies and procedures were reviewed and
lengthy observation was carried out wherever practical.
Not surprisingly, we have encountered the same problems as those found by
Storey and Sisson. For example, in many cases there had been particular periods
of time when one or more of the twenty-seven features, which may be deemed
less important now, was given paramount attention. In concurrence with Storey
and Sisson (1993), a tick is given when the criterion in question was being given
a clear emphasis at some time during the research, although attempts were made
to differentiate between programmes where there was genuine commitment and
those to which lip service was being paid. The second difficulty and in some
respects the most problematic during this research was the fact that initiatives
were often directed at certain sections of the work-force and not others, hence
the need for the score 'in part'.
Results
Identification of common HRM practices
Perhaps the most striking result is the large amount of variety that exists with
regard to HRM practices across these firms, although it has been noted elsewhere that small and medium-sized enterprises are very diverse in this regard
(Pettigrew et al., 1990). Table 4 below shows the most and least common HRM
practices which were seen in this research.
Most common HRM practices Before looking at the trends it is important to
note that some of the features highlighted may have more to do with the size
and lack of formality in some of these firms than with any strategic approach to
HRM. Indeed, it could be argued that the practices which were most common
actually represent a traditional small-firm approach rather than any strategic
move towards HRM. In most of the organizations the prime guide to action
was business need; however, in some of the smaller owner-managed companies
the wishes of the owner managers themselves, whether this was perceived to be
in the best interests of the business or not, could be seen as the prime guide to
action. An example of this was the introduction of MRPII in one company
where the owner's rationale for this relatively large investment was that his son
was interested in computers and it might be useful. Although some of the larger
organizations relied more upon formal procedures, most of the companies were
not heavily bureaucratized and there was often a strong sense of the finn's mission. The speed of decision making is also unsurprising in the owner-managed
firms where power often rests in the hands of one or two individuals. However,
the speed of decision making in those firms owned by a group varied considerably depending upon the amount of money which was involved. Certain internal
decisions which had few obvious financial implications could be made very

898 Joanne Duberley and Paul Walley


Table 4 Most and least common HRM practices
Most common HRM practices^

Least common HRM


practices^

Prime guide to action is business need


Conflict de-emphasized
Values/mission
Customer orientation
Speedy decision making
General business management to fore
Increased direct communication

Nurturing organization
Corporate plan central
Transformational leadership
Learning companies
Wide-ranging strategies

Notes
1 Practices seen in more than two-thirds of the companies
2 Practices which were not used by more than two-thirds of the companies

quickly. Those involving capital investment, on the other hand, could take a
very long time.
In all of the companies general managers were the key decision makers with
regard to the employment issues. This is not necessarily a move towards HRM
however, as in some of the companies it could be explained by the very low status of personnel professionals, often viewed as performing nothing more than an
employee record-keeping function. In addition, almost 40 per cent of these companies employed no personnel specialist.
Confiict was de-emphasized in most of these firms and there are a number of
possible reasons for this. In the owner-managed organizations a unitarist outlook on the part of managers prevailed and so conflict was not really recognized
by them (although this outlook was not always shared by the work-force). In
the larger companies the fact that some of them were fighting for their survival,
a perceived weakening of the union and desperation on the part of many workers to keep their jobs may all have been contributory factors. Finally, both the
type and level of communication appeared to be changing. An increased use of
direct communication such as team briefing was prevalent. Interestingly, though,
communication was not always as widespread in owner-managed firms. In these
companies there was often a tendency to keep financial infonnation in particular
out of the hands of employees (including managers).
Least common HRM practices These can be split into three main areas. The
first is with regard to levels of training and development. This was very low in
most of the organizations. There was a tendency to buy in skills when they were
needed rather than train existing staff It was generally felt that the current
recession had some part to play in this and that few of the firms could afford to
train. In addition, many of the firms were situated in areas near to larger
employers who provided a pool of skilled workers. In one case where the organization was the main employer in a small market town they did appear to pay
more attention to long-term training and development needs. The second area
relates to the managerial role vis-d-vis staff. Although a paternalistic approach
was common, few of the organizations could be called nurturing as the emphasis

Adoption of HRM by small and medium-sized manufacturing organizations 899


tended much more towards monitoring. Possible reasons for this include a lack
of promotion opportunities in these smaller firms and the effects of the recession. Similarly, few managers either perceived themselves or were perceived by
their work-force as transformational leaders, tending towards a more transactional approach.
Finally, the third factor concerns the strategic aspect of HRM. Policies and
decisions were rarely seen as central to the corporate plan (although it must be
remembered that some of these firms did not have an explicit long-term corporate plan). An example of this can be seen when one of the companies invested
heavily in advanced technology in order to broaden their product range, only to
discover once it was installed that none of their work-force had suitable skills to
be able to use it. Similarly, few of the organizations utilized wide-ranging cultural, structural and personnel strategies. As will be discussed later, the
approach tended to be far more reactive and piecemeal, with personnel practices
often viewed as a bolt-on activity.
Other interesting areas found in the results include the following: an increased
use of performance-related pay in many of these organizations. This was particularly common in units that were owned by other organizations as it was often
one of the controls in place upon senior management. Where the organizations
were unionized there was not generally perceived to be an increased marginalization of stewards, by either management or the stewards themselves, although
arguably they were being side-stepped by the introduction of more direct methods of communication.
Fewer job categories were found in some of the organizations, although the
extent to which this was viewed as a strategic move or a reactive cost-cutting
one could be debated. The reduction of categories was more common on the
shop-floor, particularly by those organizations that were in the process of implementing or had implemented certain new manufacturing approaches such as cellular technology.
Comparison with results from telephone survey
A telephone survey of human resource practices was organized by the Human
Resource and Change Management Research Unit of Loughborough University
(Storey et al., 1994). This study used a stratified sample of 560 organizations in
Leicestershire, representing all industrial sectors, to discover which HRM initiatives had been adopted in the last five years and whether the initiatives had been
sustained. Although not directly comparable with the research reported here, in
that it was not restricted to manufacturing and sampled a wider variety of different-sized units, it is interesting to note some of the obvious similarities and
differences found.
There was some agreement in the results found here and those found in the
Leicestershire survey, notably the popularity of teamworking (although in the
case studies this was predominantly within functions) and team briefing, an
increased use of non-standard employment and the adoption of performancerelated pay. However, the survey finding that changes were sustained in a vigorous manner was rarely substantiated in the case studies where we found
evidence that many programmes such as team briefing and quality circles fell
into disuse. Another major difference was the extent to which organizations had

900 Joanne Duberley and Paul Walley


a formal HR strategy. The Leicestershire survey found that between 48 per cent
and 70 per cent of firms of a comparable size had a formal strategy (this is
difficult to compare as the firms in the case studies fall into two of the size
bands for the Loughborough study). This contrasts with under 40 per cent of
the case study sample. This could to some extent be explained by the survey's
finding that formal HR strategies were more common in the service sector and
the public sector. Another explanation could be the discrepancy found by marginson et al. (1988) between the claim to have an integrated approach and the
reality of the situation, although every effort was made in the telephone interviews to substantiate any claims of a formal strategy. Other differences include
that the case studies found few examples of harmonization in terms of conditions whereas these were more common in the telephone study. This may be
because the types of non-standard employment which had increased in popularity in the case studies were predominantly part-time working and subcontracting
which could be seen as a shift away from rather than towards harmonization
(Blyton and Morris, 1992).
In many ways we were impressed by the similarities in the findings of the two
studies, although the differences do send out signals for caution with regard to
how we can find out the true picture of HRM activity in organizations. It may
be that organizations like to promote themselves as being forward-looking
employers when a lack of strategic integration means that certain practices may
be picked up and then quickly dropped when no immediate financial return is
seen (Duberley and Burns, 1993). As Poole and Mansfield (1992: 213) found,
'notwithstanding considerable variations in the implementation of HRM practices there are undoubtedly indications that management attitudes are consistent
with many of the core elements of HRM'. Therefore we would suggest that the
telephone survey discussed here and self-reporting questionnaires like that
recently undertaken by Guest and Hoque (1994) should be treated with some
caution.
From our case studies, it would appear that many of the companies studied
had seen a definite change in their employment practices over the last few years.
The extent to which these were proactive, strategic initiatives on their part, however, was questionable. Some of these changes do fall into the realms of human
resource management, for example the increase in direct communication, the
increased use of a peripheral labour force and a certain amount of tinkering
with payment systems under the guise of performance-related pay. However, this
cannot really be considered strategic as there very rarely existed a coherent
approach (note the scores on item 27); and even if there was a coherent set of
personnel policies these were rarely linked to the corporate strategy of the business. Changes were often piecemeal, reacting to specific problems and often concentrated in only one area of the company, predominantly the shop-fioor.
Rather than adopting a strategic stance, the managers of many of the companies
appeared to conform to Fox's (1974) standard modern classification, operating
with an opportunistic reactive perspective, which seems to indicate little real
change from the situation found by Purcell and Sisson (1983). It appears that,
instead of wide-ranging strategic changes, what we often saw were piecemeal
'quick fixes' to perceived problems.

Adoption of HRM by small and medium-sized manufacturing organizations 901


Identifying firms using strategic HRM
Although the majority of firms did not appear to be adopting a coherent strategic HRM approach, the findings here were similar to research on SMEs carried
out by Pettigrew et al. (1990) in that the sample was characterized by diversity
and there were three firms (firms 2, 5 and 12) that did appear to be adopting a
much more proactive stance. It is also interesting to note that these organizations appear to adopt not only the prescribed practices of HRM but also the
process of involving HR issues in corporate decision making, which perhaps
indicates that the distinction made at the beginning of the paper is less problematic than originally thought. The next section of the paper will try to identify
contextual factors which differentiated those organizations which adopted a
strategic HRM approach from those that did not.
Contextual factors Buller (1988) identified a number of factors which he
claimed had an effect upon the extent to which HR initiatives are integrated
with strategic planning. These included the environment, the extent to which the
organization had formulated a strategy, organizational characteristics, executive
values and skills, work-force skills and management systems. We have considered each of these areas to try to identify whether those organizations which
adopted HRM were significantly different from the others.
Environment Buller suggests that environmental forces which have a major
impact are the increased levels of competition (this was also found by Pettigrew
and Sparrow, 1988b), technological change and changing labour-market demographics. It is difficult to differentiate the HRM firms from the others on these
characteristics because managers in all of the companies perceived themselves to
be facing increased competition and a more dynamic environment. Perhaps the
answer lay more in what was considered to be the most appropriate way to
react to an increasingly competitive market. Firm 5, for example, clearly felt
that the way to compete was through getting the most out of its work-force (for
example by ensuring they were multi-skilled), while others, in particular firm 4,
felt that cost minimization was the key and concentrated on reducing the head
count and cutting costs. In general terms all of the companies felt that they were
facing increasingly competitive markets and many had reacted to this by reducing the work-force. None of the firms were operating at the leading edge in
terms of technology and, although the extent to which organizations had
invested in new technology varied quite dramatically, we could find no link
between this and strategic HRM.
The way in which companies adapted to environmental changes varied enormously. Many of them made use of part-time labour or subcontractors in an
effort to make themselves more fiexibie. This however often seemed to be a reactive, opportunistic approach rather than a planned strategy of moving towards a
fiexibie organization utilizing the dual labour market (Atkinson, 1986). Indeed,
some managers did not see this as a particularly new strategy and felt that it
was in many ways a refiection of the economic recession which had also been
used in previous periods of economic depression.
In conclusion, we would suggest that the relationship between environmental
influences and HRM practices cannot be seen in terms of a simplistic

902 Joanne Duberley and Paul Walley


cause-effect equation. However, a key factor influencing the adoption of HRM
practices appeared to be perceptions held by senior management about how best
to deal with the opportunities and threats posed by the environment. While
some firms concentrated on HRM practices, others focused on manufacturing
processes or financial controls.
Organizational characteristics We found that the following organizational characteristics may have had some infiuence upon the take-up of HRM.
Size As discussed earlier in the paper, the size of the organizations in this
sample does vary. The extent to which this influenced the take-up of strategic
HRM is unclear. The three users include both the largest and one of the smallest companies in the sample so it is not possible to identify a direct link. It
would appear though, when comparing these results with those found by the
telephone survey research (Storey et al., 1994), that larger companies are more
likely to adopt certain aspects of HRM.
History The three companies include one that is fairly young and two that
are over 100 years old. These results suggest that age does not necessarily preclude the adoption of HRM, although it would be expected that it would be
easier to adopt this approach when setting up a new company on a greenfield
site than in existing older companies. The history of the organization in terms of
relationships between management and the labour force may be a very important factor. However, due to the difficulty in collecting reliable information in
this area, it has not been possible to compare.
Structure Buller suggests that a linkage between strategy and HR is more
likely when personnel managers have equal status with functional heads (Buller,
1988). This was rarely the case in the sample of firms visited. Of the sixteen
companies, only two firms had personnel representatives at senior-management
level. Five firms had personnel managers at middle-management level; three had
a personnel function performed by clerical staff and viewed as no more than
employee record keeping and six of the companies had no personnel function as
such, with all personnel activities being carried out by line managers.
Of those companies considered to be farthest down the road to strategic
HRM, one of the firms falls into the first category, with representation at
senior-management level, one falls into the second category with representation at middle-mahagement level and the third falls into the final category with
no separate personnel function. Obviously, this spread of results makes it
difficult to draw any conclusions and perhaps suggests that the level of personnel representation may be less important than Buller (1988) found in his US
sample. Although research carried out by Purcell (1994: 29) in much larger
organizations also suggests that 'a very consistent picture emerges of a
rounded sophisticated personnel function being much more likely to exist
when there is a main board director wholly or mainly devoted to personnel
matters'. So perhaps, as organizations grow, there is a need for personnel representation at senior-management level to ensure that personnel matters are
considered strategically.
Ownership The style of ownership was found by Walley et al. (1993) to have
a great impact on the control systems operated in companies. The styles of ownership of these companies varies as shown in Table 5.
The three HRM users were split as follows:

Adoption of HRM by small and medium-sized manufacturing organizations 903


Table 5 Styles of ownership
Owner-managed (or family-owned)
UK group
European group
US group

6
7
1
2

Firm 2 - US group
Firm 5 - Family owned
Firm 12 - UK group
There may be some significance in the US group ownership as it is arguably
from the US that the term HRM originated and where it has achieved most
popularity. Storey (1992), in his study of larger organizations, also found
attempts to transplant US ideas into American-owned firms. The extent of
influence in these firms was not that clear, however, due to a small sample of
American-owned companies.
Level of unionization One might expect that the level of unionization would
have a considerable impact upon the extent to which HR policies are adopted.
The results of this study show that, of the three HRM users, one was nonunionized and the other two recognized trade unions for production workers.
Thus, it is difficult to argue that HRM can be seen only in situations where
there is no trade union. It might however be argued that in adopting HRM
firms are marginalizing their trade unions. In this sample it could be argued that
those companies adopting HRM were more likely to be marginalizing their
union by increasing the emphasis on individual rather than collective relations.
Many of the companies in this study seemed to be operating with the duality of
approach noted by Storey (1992) in that they recognized trade unions for collective bargaining purposes but were also implementing practices such as team
briefing which could be seen as a way of side-stepping the union.
Strategy The extent to which companies had an explicit corporate strategy varied considerably throughout the sample. Although the three most developed
HRM users did have a formal corporate strategy so did some of the non-HRM
companies. Hence it is difficult to claim that this is an important factor. One
thing that did differentiate the HRM users from some of the others, however,
was the extent to which they not only formulated a strategy but also communicated this to all of their work-force. The level of secrecy with regard to company
strategy was remarkably high in some of the organizations, particularly in one
firm whose major competitor was situated only a couple of streets away. In at
least two of the other firms which had a formal corporate strategy this was kept
secret from all but the most senior managers.
Incumbent executive's values and skills Again, this is very difficult to measure.
However, it is the feeling of the authors that this played a major role in determining whether employment issues were considered at a strategic level. This
was particularly so in the owner-managed firms where owners had the power
to implement the policies they desired without recourse to shareholders or (in

904 Joanne Duberley and Paul Walley


this sample) trade unions. This can be highlighted with reference to firm 5 in
which the chief executive's feelings on the value of people and how they
should be managed, based on deep religious convictions, had a major impact
on corporate decisions. Obviously the extent to which the values of senior
management influence corporate policies will depend to some extent upon the
constraints which they are facing. However, research done by Miller et al.
(1982, 1986) has highlighted how important this factor can be in strategic decision making.
Work-force skills Buller (1988) suggests that if employee skills are considered
to be lacking to the extent that they constrain or prevent implementation of the
strategic plan, then top management is more likely to enlist the help of the HR
function and potentially elevate the strategic importance of HR. Executives in
many of the companies visited complained that workers did not have the
required skills to move the company forward. However, in most cases they
appeared to do very little about this in terms of manpower planning or longterm training provision. It is difficult to say whether the three HRM users were
driven to this by a shortfall in their workers' skill levels. What can be said is
that due to the reactive nature of some of the other firms they were unaware
that the skills of their work-force were lacking until it was too late. For example, as mentioned earlier, one organization realized that they had no staff
trained to operate a very expensive piece of new equipment only after it had
been installed. Over six months later, at the time of our research, the machine
was still standing idle due to a lack of skilled operators.
Management systems Finally, Buller (1988) found that HR systems were likely
to be more integrated with strategic plans at firms whose senior management
had a substantial percentage of their compensation 'at risk', i.e. related to company performance. It is fair to say that all of the HRM firms did operate a performance element in their senior management remuneration. However, it is also
true that many of the non-HRM firms, particularly those which were part of a
larger group, did so. Once again, it is difBcult to draw a distinction here.

Conclusions
As the preceding discussion has shown, it is very difficult to pick out any single
factor that has influenced the adoption of HRM and it could be argued that any
attempt to do so would be overly simplistic and deny the complexities of organizations (Duberley, 1993). Instead, we suggest that the inability to identify causal
links reflects the diversity found in HRM practices in this sample and the need
to take an holistic approach, taking into account the many different influences
which impinge upon the management-labour relationship.
In attempting to assess implications of these results it is possible to take two
different standpoints, emphasizing either the thirteen that didn't appear to
adhere to the HRM model or the three that did. In our analysis we have tried
to provide a comparison between these two groups to highlight possible contextual factors influencing the adoption of HRM, although it appears that more in-

Adoption of HRM by small and medium-sized manufacturing organizations 905


depth longitudinal analysis would be required to get a clearer picture. To a large
extent the results here appear to back up Beaumont's (1992: 32) argument that
academic literature on HRM is running ahead of organizational practice and
that individual HRM changes in most organizations do not add up to a consistent integrated package deriving from a long-term coherent management strategy. In fact, many of the practices adopted in these organizations which fall into
Storey's framework of HRM could have been viewed as typical SME characteristics: for example, the unitarist outlook adopted in some firms, the de-emphasis
of conflict, customer orientation and speedy decision making. This leads us to
question whether these organizations were adopting strategic HRM or merely
operating as they always had done, which could explain the fact that some
aspects of the HRM framework (those that reflected traditional small-firm practices) seemed much more popular than others.
In some respects we have fallen into a trap here that Storey (1992) warned
against. This is the temptation to measure against the template and risk
reification of subtle and incomplete tendencies. He claims that both of these
divert attention away from extensive and far-reaching changes which may not in
themselves constitute HRM but which, none the less, are of profound
significance in changing the terrain of labour management. For this reason it is
worth remembering that, although only three of our companies have been
labelled HRM users, a great many initiatives in the field of labour management had been put into place in the other companies. Like Storey's sample,
these firms have adopted diverse approaches towards managing their employees. On the whole, it would appear that pragmatism remained the order of the
day in many companies, which may at first sight indicate that little has
changed since Purcell and Sisson suggested this was the most common
approach in 1983. However, this ignores the fact that employment issues do
appear to be given much more attention now than they once were and numerous initiatives aimed at changing the management-labour relationship have
been seen in these firms.
This research in many ways poses more questions than it can answer. A
model of HRM has been used in an attempt to identify the existence of these
practices in smaller and medium-sized manufacturing organizations. The
results are difficult to assess, the answer seems to be 'maybe'. There have been
examples which could perhaps be viewed as strategic HRM. However, the
majority of the changes witnessed do not fit easily into the formulated, strategic approach. Perhaps the time has come to reformulate our definition of
HRM. Recently there has been an acceptance by some writers (Arthur and
Hendry, 1990; Boxall, 1992; Butler, 1989) that the approach towards HRM
has often relied on a rationalist, formulated approach towards strategy and
that we now need to take more account of the emergent process of strategy
development identified by writers like Mintzberg (1990). As suggested earlier,
this necessitates more in-depth, longitudinal research to be conducted in this
field. This research can only be seen as exploratory and for that reason the
'findings' cannot be viewed as generalizable to the whole population of small
and medium-sized organizations. However, the research has raised some interesting questions about the nature of HRM in these types of organizations and
calls into question the extent to which HRM is applied in small and mediumsized manufacturing companies.

906 Joanne Duberley and Paul Walley


At present we may find that the theory of HRM, if indeed it should be called
a theory (Noon, 1992), discussed in some academic texts rarely occurs in practice. Perhaps it was put forward as a means of legitimizing management action,
trying to show a science of management when in fact the business world is more
reliant on muddling through. Or, perhaps, as Keenoy (1990: 374-5) puts it, 'the
purpose of the rhetoric of HRM might be to provide a legitimatory managerial
ideology to facilitate an intensification of work and an increase in the commodification of labour'. Alternatively, it may be that the current emphasis on
strategic HRM has more to do with the MBA market and the desire for
increased professional standing among personnel practitioners and academics
than with organizational realities.
Keenoy and Anthony (1992: 235) suggest that 'empirical refutations of the
claims of HRM are of marginal relevance to the cultural impact of HRM'.
They propose that the importance of HRM lies in its role as a source of inspiration and conviction. Thus, HRM can be seen as a tool for constructing an
image of work that legitimates certain forms of managerial action and control.
This is an approach that we would suggest merits further consideration, particularly as the lack of empirical support does not appear to have limited the
appeal of HRM. However, we would suggest that the cultural impact of HRM
cannot be divorced from the wider social, economic and political context
which has arguably had a far greater impact upon the labour-management
relationship.
We therefore echo the suggestion from Blyton and Turnbull (1992) that
research in this decade should consider the impact of changing economic, social
and political conditions on management-worker relations and that there should
be a return to the fundamental issues of labour management. We suggest that
this can only be achieved through in-depth longitudinal research over extended
periods of time.
Joanne Duberley
Sheffield Business School
Paul Walley
Loughborough University of Technology
UK

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