Theoretical perspectives for strategic human resource management

Journal of Management, June, 1992 by Patrick M. Wright, Gary C. McMahan

Thus, we examine six theoretical models that have attempted to describe the determinants of HR practices. We have included the various theories to be discussed here in Figure 1 and have overlaid them on the model in accord with the relationships on which each tends to focus. The resource-based view of the firm focuses primarily on the relationships among strategy, HR practices, and the HR capital pool; thus, it is positioned to the left of the model. The behavioral approach is primarily concerned with how strategy, HR practices and HR behaviors are interrelated; thus, it is placed to the right side of the model. Cybernetic and agency/transaction cost models attempt to examine the relationships among strategy, HR practices, and both the HR capital pool and HR behaviors; thus, their location is near the center of the model. Finally, resource dependence and institutional theories examine the effects of political and institutional factors on HR practices, and we have placed these theories to the upper right comer of the model. The next section will expand upon the basic theoretical frameworks in order to more completely describe each approach and its implications for SHRM research and practice.

Theoretical Models of HRM

Given the proposed definition of SHRM, it is possible to examine some theoretical models that are relevant to the field. As previously discussed, HRM writers have complained about the lack of any theoretical foundation for describing the HRM function in organizations (Butler et al, 1991; Ferris & Judge, 1991). However, though this criticism may have been valid a few years ago, recent SHRM scholars have relied on various theories from the organizations literature as a basis for developing a more fully articulated theory of human resource management. We contend that these various theories of organization may provide the necessary theoretical foundation that has been lacking in SHRM research.

In this section we will review some of the attempts to apply macro-level organization theories to the HRM field. We present six theoretical models from the fields of organization theory, finance, and economics. As depicted in Figure 1, the first four theories are applicable to strategic HRM decision making. These attempt to view HRM activities as being determined by proactive, strategically-intended decisions. The latter two theories focus on the institutional and political determinants of various HRM practices. These theories tend to explain the non-strategic and possibly even dysfunctional determinants of HRM practices. We propose that both types of theories are necessary for understanding the role of HRM practices in strategic management.

Strategic Theories of HRM

Resource-based view of the firm. The most recent entry into the theoretical discussions of strategic human resource management comes from the organizational economics and strategic management literature and has been coined the resource-based view of the firm (Barney 1991; Conner, 1991; Penrose, 1959; Wernerfelt, 1984). Since the birth of strategy as a recognized area in the field of management, industrial organization strategists have relied primarily on a single framework (strengths, weaknesses, opportunities and threats) to structure their research (Barney, 1991). Major contributions to the strategy literature have centered around the extenally focused portions of this competitive advantage model (e.g. Porter, 1980; 1985).