Human Resource Management in a Business Context
3rd edition

by Alan Price

Human Resource Management in a Business Context provides an international focus on the theory and practice of people management. A thorough and comprehensive overview of all the key aspects of HRM, including case studies, articles from HRM Guide and other sources, key concepts, review questions and problems for discussion and analysis.
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HRM Guide Sections

HRM Guide Australia

HRM Guide Canada

HRM Guide NZ

HRM Guide UK

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Introduction Overview of HRM Guide

HRM Guide Updates Latest updates on the HRM Guide websites

Jobs and Careers Advice, job postings and leads

HRM Topics Hundreds of pages of information, updates and links to articles

HR Directory Links to HR service providers

HR News Releases Announcements, news, reports

Like fashions in hairstyles and clothing, management ideas come and go. Today’s bestselling management concept will not survive long before being overtaken by the next ‘big idea’. Significantly, however, a consistent theme has prevailed for more than two decades: the most successful organizations make the most effective use of their people - their human resources.

The emergence of HRM was part of a major shift in the nature and meaning of management towards the end of the 20th century. This happened for a number of reasons. Perhaps most significantly, as we will see in Part 2 of this book, major developments in the structure and intensity of international competition forced companies to make radical changes in their working practices (Goss, 1994, p.1).

From the 1970s onwards, managers in the industrialized countries felt themselves to be on a roller coaster of change, expected to deliver improved business performance by whatever means they could muster. Their own careers and rewards were increasingly tied to those improvements and many were despatched to the ranks of the unemployed for not acting quickly and imaginatively enough. Caught between the need to manage decisively and fear of failure, managers sought credible new ideas as a potential route for survival.

The development of dynamic new economies in the Asia-Pacific region emphasized the weakness in traditional Western - specifically American - management methods. To meet competition from east Asia, industries and organizations in older developed countries were forced to restructure. The Japanese, in particular, provided both a threat and a role model that Eastern and Western companies tried to copy. Frequently, reorganized businesses in Australasia, Europe, North America and South Africa adopted Japanese techniques in an attempt to regain competitiveness. The term ‘Japanization’ came into vogue in the mid- 1980s to describe attempts in other countries to make practical use of ‘Japanese’ ideas and practices, reinforced by the impact of Japanese subsidiaries overseas. Initially, the main interest lay in forms of technical innovation and manufacturing methods such as ‘continuous improvement’ and ‘just-in-time’. And their ways of managing people also attracted attention.

KEY CONCEPT 1.2 Stakeholders Employees have rights and interests beyond pay. They are stakeholders along with members of other recognizably separate groups or institutions with a special interest in an organization. These include shareholders, managers, customers, suppliers, lenders and government. Each group has its own priorities and demands and fits into the power structure controlling the organization. Employees have limited importance in free market countries such as the USA and the UK in comparison with most European and many Asian-Pacific countries. Notionally, shareholders are paramount in English-speaking countries. In reality, top managers normally have effective control and pursue their own interests, often at the expense of their staff. (This topic is dealt with at some length in Chapter 2.)

HRM-type themes, including ‘human capital theory’ (discussed in Part 2) and ‘human asset accounting’ can be found in literature dating as far back as the 1970s. But the modern view of HRM first gained prominence in 1981 with its introduction on the prestigious MBA course at Harvard Business School. The Harvard MBA provided a blueprint for many other courses throughout North America and the rest of the world, making its interpretation of HRM particularly influential (Beer et al., 1984; Guest, 1987; Poole, 1990). Simultaneously, other interpretations were being developed in Michigan and New York.

These ideas spread to other countries in the 1980s and 1990s, particularly Australia, New Zealand, parts of northern Europe - especially the UK, Ireland and Scandinavia - and also South and South-East Asia and South Africa. Today, the HRM approach is influential in many parts of the world.

Excerpt from chapter 1 of the second edition of Human Resource Management in a Business Context, published by Thomson Learning. Copyright A. J. Price - this excerpt may be copied for personal use only and must be credited to the author if quoted in any text. 

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