Manajemen | Fakultas Ekonomi Universitas Maritim Raja Ali Haji 2003 1 (17)
BOOK REVIEWS
INTERNATIONAL HRM: A CROSS-CULTURAL APPROACH
By Terence Jackson. Sage, London, 2002, xii + 252 pp., $69 (paperback)
I
n this book, Jackson presents an innovative discussion of the cultural assumptions that affect human resource management (HRM) in global organisations.
He focuses on some of the key differences in HRM orientation across national
cultures (including Dutch, Japanese, Chinese and British) and geo-political divides
(including post-Soviet, European Union, post-Colonial), and comments on how
these differences may impact on indigenous and foreign companies in these
regions.
Each chapter in the book focuses on a particular cultural ‘model’ of organisations. Within each chapter, Jackson provides an overview of some of the cultural
and management research relevant to each region, as well as case studies ‘to
discuss issues as far as possible within the context of real companies and real
cultures’ (page x). Each chapter also considers the implications for managerial
action from the case(s) and developing further research in each area.
The author concentrates on a particular feature of HRM in each of his
‘models’. For example, in the Japanese model (chapter 5) he examines how a
holistic approach to commitment has played a role in motivating the Japanese
workforce, and how such a perspective may be exported to other parts of the
world through Japanese multinationals. Another example is the Dutch model
(chapter 4), in which Jackson focuses on the role of expatriates, and provides an
understanding of the way in which Dutch companies may have developed specific
roles for expatriates based on Dutch culture and history.
While each chapter focuses on a particular set of issues (for example, expatriation, training and development, and performance management), the purpose is
not to suggest that one particular model is the most appropriate to deal with a
particular human resource issue. Rather, Jackson takes aspects of HRM in
each chapter and submits them to somewhat of a cultural litmus test—using
the identification and practice of a particular concept (say, work flexibility) in a
particular cultural context (say, the European Union) as an impetus to discuss
the appropriate use of the same concept in other cultures and in global business
management. He further makes the point that concepts such as commitment,
job satisfaction, performance management, and development are most often seen
from a Western point of view, developed within Western cultural assumptions
and often imposed on other cultural contexts. Here perhaps, one assumption
Jackson himself makes is that the reader is approaching the area from the
perspective of a ‘Westerner’. He voices his concern that the opportunity to
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transfer management lessons from non-Western countries to the West is often
overlooked.
The concept of locus of human value is developed in this book to illustrate
different ways of understanding the value of people, and their relationship to
work and organisations. Jackson contrasts an instrumental perspective—human
beings as a resource used in the pursuit of shareholder value, to a humanistic
perspective—people regarded as having a value in their own right and being an
end in themselves. His suggestion is that a hybrid form of HRM may provide an
opportunity to apply the best of both extremes. The effective international
manager should recognise the benefits of a range of cultural perspectives in order
to successfully undertake management activities. However, Jackson’s locus of
human value would appear to relate most closely to the role of organisations and
business in society, and so fits particularly well within a discussion of management systems and processes.
Each chapter in the book provides case studies of an indigenous (or at least
initially indigenous) organisation. These demonstrate the particular human
resource feature and cultural assumptions drawn from Jackson’s overview of the
cross-cultural research on the area. Some of the cases contribute more fully to
this aim than others: IKEA’s initial ‘Swedish’ egalitarianism in Spain, or Crédit
Lyonnais’ struggles to globalise with its ‘French’ career management structures,
highlight the effect of indigenous HRM assumptions on company expansion into
foreign markets. However, it becomes more difficult to integrate cases with
research in geo-political divisions such as the post-Soviet or post-Colonial
models, where research into East German, Russian, Czech, and African cultures
is more limited.
Jackson states in the preface that the use of case analyses in the book does not
aim to be comprehensive in their coverage of industries. Rather, they are intended
to illustrate the activities and approaches of international organisations. However,
there is some variation in the detail of the case studies provided, which may reflect
the degree of detail available to the author (some cases are taken from already
published sources). This variation serves to draw a sketchy picture of the
activities of one or two of the organisations discussed in the text. For example,
a fairly extensive four-page discussion in chapter 1 of IKEA’s HRM approach
in Spain stands in marked contrast to a half-page discussion in chapter 10 of
Colgate-Palmolive in South Africa.
A number of interesting points are raised in this text. One is the dominance
of a US-based competency perspective and its strong impact on HRM approaches
in developing countries. Jackson suggests the economic power of the US lies
behind this; the argument is basically that it would seem to make sense to copy
the approach of a country that is successful, although the degree of transfer from
other successful countries is questionable.
A second point is the dynamic nature of culture—Jackson has captured the
impact of shifting boundaries well, focusing on the European Union, post-Soviet
and post-Colonial regions. He also emphasises the importance of the organisational context (in which HRM is conducted) and grounds the regional or national
focus with an understanding of the strategy of the individual firm. This inter-
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dependence between HRM and other organisational considerations, such as
strategic goals, product life cycles, and industry dynamics, is often glossed over
in discussions of culture and management that can overemphasise the ‘people
side’ of business in isolation from other organisational concerns.
In terms of the overall format of the book itself, some of the chapters appear
a little isolated. Perhaps a linking table would help readers exposed to some of
the information for the first time. ‘Briefings’ about each country or region would
also benefit from a standard table in each chapter. To be fair, Jackson does
this in the initial chapter, however, a reminder, in a similar format in each
chapter, would be useful. In addition, it is annoying to find a number of spelling
mistakes and tables that are formatted incorrectly (with a blank page in between
columns, for example), particularly where mistakes alter the meaning of the text.
Such errors are certainly not usual for a Sage publication and this detracts slightly
from the readability of the book.
I would certainly recommend that this book be read in conjunction with
earlier research on culture—an understanding of the work of Geert Hofstede
(Culture’s Consequences: International Differences in Work-Related Values, Sage:
Beverly Hills, 1980) and Alfons Trompenaars (Riding the Waves of Culture:
Understanding Cultural Diversity in Business, Nicholas Brealey: London, 1993)
would be advantageous in understanding some of the information presented in
the book.
The end effect of International HRM is to provide an important, ambitious,
and considered explanation of the way that managers may ground their own
realities in cultural assumptions. The book highlights particular areas of
business and human resource concerns across diverse cultures, demonstrating
that different cultures approach these topics from a different set of assumptions
about the person and the organisation.
CURTIN UNIVERSITY OF TECHNOLOGY
PAYING
FOR
ELLIOT WOOD
PERFORMANCE: AN INTERNATIONAL COMPARISON
Edited by Michelle Brown and John S. Heywood. M.E. Sharpe, Armonk, New York,
2002, xiv + 298 pp., US$25.95 (paperback)
A key strength of this collection derives from its comparative evaluation of
performance pay in a diverse range of international settings, chosen by the
editors to reflect a reasonable cross-section of countries where institutions,
influence on performance pay are undergoing substantial change. A further asset
could be its multi-disciplinarity. However, this is potentially more problematic.
For instance, the authors make some attempt to reconcile the differences
between pay terminology used by, for example, economists versus organisational
behaviourists, suggesting that ‘the fundamental behavior and institutions
being studied carry across disciplines’ (p. 11). The difficulty with this broad allencompassing approach is that, as with many edited collections, it is sometimes
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difficult to discern a shared understanding or central argument that unites the
chapters and brings this particular group of authors together. This is more than
a comment about structure as it affects the development of an argument within
the book. Hence, despite the claim that ‘common themes across the countries’
are drawn out, it is sometimes difficult to discern these—a problem exacerbated
by the indexing system, which deals with subjects such as ‘share ownership plans’
according to the country in which they are based. This further highlights
the specificity of the research and makes cross-referencing or comparison
difficult.
In the introductory chapter, Brown and Heywood make reference to the ‘new
pay’ model, citing authors closely associated with this strategic-fit approach.
However, the extent to which they endorse or refute this perspective is not clear.
Despite these problems in providing a theoretical framework for the book, the
empirical chapters that follow make valuable contributions to a research subject
that continues to receive limited attention, as the following selected contribution
summaries hopefully indicate. Chapter 2, by economist Daniel Parent, uses the
Lazear model to evaluate the effects of performance pay in the US, where nearly
half of all American workers claim to be paid some form of individual merit pay
or profit sharing. Chapter 5 commences with an historical explanation of what
the authors, Marsden and French, claim is the most important change in pay
systems in Britain during the last 15 years, the spread of performance-related
pay from the private to the public sector. Focusing on the introduction of
performance pay at the Inland Revenue, these authors discuss the potential
disadvantages and perceived benefits of performance-related pay based on
analysis of questionnaire data collected during 1992 and 1996–7. They do so in
a way that reveals the complexity of the issues involved. Chapter 8, by Hélio
Zylberstajn, an economist from the University of São Paolo, outlines the legal
situation that has historically prevented Brazilian firms from adopting flexible
compensation and explores the extent to which they use performance pay to
reduce compensation costs and enhance labour productivity. Other chapters
provide in-depth analyses of performance pay in Germany, France, Japan, Canada
and Australia. In the concluding chapter, the editors attempt to bring these diverse
contributions together, claiming the ‘most remarkable finding to emerge from
the studies in this volume is the accelerating nature of experimentation and change
in payment methods’ (p. 265).
To conclude, this is a valuable text for anyone with an interest in this subject.
It provides valuable comparative insight into current performance pay practice
in a number of countries and demonstrates the widespread nature of this
phenomenon. However, it is less successful in providing an overarching set of
themes to unify the book and it may therefore be more appropriate to read
the chapters selectively rather than sequentially.
UNIVERSITY OF WARWICK
EMMA BELL
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LEARNING FROM SATURN: POSSIBILITIES FOR CORPORATE
GOVERNANCE AND EMPLOYEE RELATIONS
By Saul A. Rubenstein and Thomas A. Kochan. Cornell University Press, Ithaca and
London, 2001, x + 156 pp., US$25 (hardback)
The mid-1980s proved to be a significant time in US labour relations, both in
terms of academic scholarship and in relation to experiments in the auto industry. Two of the most publicised initiatives in the US auto industry during the
1980s were the New United Motor Manufacturing Inc. (NUMMI) and Saturn
plants. NUMMI was the joint venture between Toyota and General Motors (GM)
at the latter’s old Fremont site in California. Saturn was originally the code name
for the new GM project at Spring Hill, Tennessee, and subsequently became
the name of the model of the car produced at the site. It was the Saturn
workplace model that captured the imagination of people interested in fostering
a different, post-New Deal labour relationship in the US. In this slim and
engaging book, Saul Rubenstein and Tom Kochan have teamed up to write
the labour relations and corporate governance story of Saturn.
The book draws on the premises as set out earlier in The Transformation of
American Industrial Relations (by Tom Kochan et al., Basic Books, New York, 1986)
that the New Deal labour relations model was under challenge and in decline.
The philosophy underpinning Learning from Saturn is also consistent with
Kochan’s broader philosophy of promoting a better social contract for American
employees within a framework that legitimises a role for unions and seeks
responsible action from corporations. Set against the backdrop of the demise
of New Deal labour relations and competitive challenges facing the US auto
industry, the book explores two issues: corporate governance and labour relations. The authors argue that Saturn is about a ‘different model of organizational
governance and a very different concept of labour-management relations . . .
[Saturn shows that] the two debates are inseparable and should be treated as one’
(p. 2). These issues are both as important today, perhaps more so, as they were
20 years ago when Saturn was first conceived!
Despite the rise of the ‘new economy’, the knowledge worker, and diversified
employment arrangements, the auto industry retains a fascination for many
people. There is a long tradition of auto plant studies in labour relations research.
This is possibly because the auto industry has encompassed the full range of
interest areas: large scale manufacturing using both traditional and exceptional
production systems, often accompanied by high levels of employment, unionisation and industrial conflict. Learning from Saturn adds to the genre and demonstrates that it is feasible to adopt a different path even within an established sector
and that a new and different relationship between labour and management can
be forged. With clear and honest attention to detail, Rubenstein and Kochan show
us, however, that this is not achieved without difficulty.
The Saturn Corporation was established out of an agreement between
GM and the United Auto Workers (UAW) to build a greenfield car plant in
Spring Hill, Tennessee. Rather than continuing to rely on imports, this plant
would supply the US market with small cars built by American workers using
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self-directed work teams and integrating union representatives into the full range
of management’s strategic and operational decision making processes.
Interestingly, the current Saturn website provides a chronology of the plant. It
explains that in January 1985, the Saturn Corporation was ‘founded from scratch,
taking a clean-slate approach to everything’. According to the Saturn site, in
July 1985, a ‘unique pact’ was formed with Saturn and the UAW to ‘create a
revolutionary agreement’ that was so simple it could ‘fit in a shirt pocket instead
of a three-inch-thick binder’ (www.saturn.com). In a similar vein, Rubenstein and
Kochan claim Saturn was ‘the boldest and most far-reaching experiment in
organizational form and labor-management relationship’ in the US. Saturn, its
labour contract and management partnership arrangements were unique.
Indeed, there is no match for it in Australia—certainly not in the auto industry.
Saturn is also renowned for its special relations with suppliers, retailers and
customers and has successfully introduced a ‘service-supply-chain strategy’
innovation.
Saturn appears to have exemplified the partnership and network model of
manufacturing, combining some of the elements of lean production with a
corporate governance model of shared responsibility and risk—with workers,
union, retailers, customers and suppliers. This has difficulties for management
as well as unions. The book sets out clearly and objectively these issues and discusses a range of tensions that emerged at Saturn. These included intra-union
rivalries between the local and national UAW leaders; and intra-organisational
rivalries between Saturn management and GM management overall.
Like most greenfield sites that are genuine attempts to practice new management philosophies, foster new labour relations or introduce new production
processes, Saturn required constant vigilance, renewal, attention and effort. As
well as often being high performance and high commitment sites, such exemplars
are high maintenance sites. So, just as with other greenfield experiments, the big
question remains. How can such islands of innovation be positively transferred
to the rest of the organisation, in this case GM, as well as mainstream labour
relations? A first step is to fully understand what is involved in running such sites,
and this is what Rubinstein and Kochan provide in this book. They meticulously
investigate the struggle the local union had in defining its role at Saturn and
similarly how GM handled Saturn within its own corporate world. The authors
draw a number of lessons about teams, union renewal, learning organisations
and labour-management partnerships.
Yet, despite the knowledge gained from Saturn and its success, the limits to
learning were evident, even within the company that fostered Saturn. Within GM,
there has been resistance to extending the Saturn way in other plants. Rubenstein
and Kochan recount the internal union and company debates over further
investment in the Saturn plant at Spring Hill versus re-investing at GM’s
brownfield plant in Wilmington, Delaware. In the end, Wilmington got the
go-ahead to produce a second generation Saturn car. Significantly, the labour
contract for Wilmington did not contain the full set of Saturn policies and
principles, thus further restricting the ‘Saturnisation’ of GM manufacturing
plants in the US.
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The lessons from Saturn have broader application than just for GM and the
auto industry. Unfortunately perhaps, the reality is that in most car plants the
managers and people who work in them have never had the opportunity to
experience the Saturn model. Rubenstein and Kochan have given us a good
insight into the exceptional workplace, and they clearly challenge the view that
the sole purpose of organisations is to maximise shareholder wealth. They are
also honest about the dilemmas unions face in combining independent workplace
representation at the same time as sharing in managerial decision making. I am
not at all sure that it can ever be fully replicated, but there are ideas in this book
that are worth considering seriously.
UNIVERSITY OF SYDNEY
HEADHUNTERS: MATCHMAKING
MARIAN BAIRD
IN THE
LABOR MARKET
By William Finlay and James E. Coverdill. Cornell University Press, Ithaca and
London, 2002, 203 pp., US$29.95 (hardback)
This book reports on case study research into the contingent recruitment
industry in the US. The authors are interested in three related questions:
How do headhunters persuade employers and job candidates to sell themselves
to each other? What do employers gain by using headhunters? and What
criteria do headhunters use in choosing job candidates.
The book is structured as follows. In the first chapter the authors argue that
there are broad changes in the US economy that have created an increased role
for recruitment consultants. In the second chapter, they introduce the highly
plausible notion that recruitment consultants are involved in a ‘double sale’—
selling the job to the candidate at the same time as selling the candidate to the
client. Chapter 3 argues that managers use headhunters because the practice
provides them with not only economic advantages, but also political advantages
over using internal resources. Chapter 4 turns to the uncertainty facing
recruiters and examines some of the techniques they can use to avoid uncertainty
in what can be a very fickle relationship. The fifth chapter examines ways that
recruiters identify and present candidates for positions. In chapters six and
seven, the authors attempt to identify the role that recruiters play in shaping
who does (and who does not) get shortlisted for a position and what recruiters
can do to influence clients’ perception of the field of applicants. The final
chapter deals with the process of negotiation that takes place after a job offer
is made.
Headhunters is a well-written and fairly accessible account of a number of aspects
of the recruitment process and the role of recruitment consultants in that process.
It is one of very few academic studies of the role played by recruitment consultants
in the job market. Given the size of the industry, this lack of research is surprising.
It is hard to get estimates of the size of the industry in Australia but you can get
a good sense of the number of recruitment companies working at the ‘top end’
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of the market by flicking through the front section of the Sydney Morning Herald
or the Age on a Saturday morning. Bear in mind too, that each of these ads costs
clients between $3000–$5000. Nevertheless, much of what recruiters do involves
a lot of confidential information about companies and candidates, and this would
make research difficult. The approach taken by the authors—of conducting a
limited number of case studies across a range of different types of organisations—
overcomes this problem, but by the same token may exaggerate the prevalence
of some practices and attitudes in the industry as a whole.
It is perhaps worth noting that this book is not really about headhunting as
most people would understand it. ‘True’ headhunting is retained search; that is,
the consultant is retained (not paid on results) who then looks for particular
candidates. This book is about contingent search whereby consultants are only
paid when they fill a position and, as such, are in competition with other recruiters.
While contingent search is dominant in the US, it is not very common in
Australia. In Australia, search is reserved for very senior positions and it is almost
always retained.
Most recruitment in Australia is based on selection of a short list of applicants
from a job ad. Selection is almost unheard of in the US, in part not only because
is there no reputable national newspaper that carries classified advertising, but
also because there is an assumption that nobody who is any good would apply
to a job ad. The main distinction in the Australian market is between retained
selection (where only a percentage of the fee is contingent on the placement),
which is common for management and senior positions, and contingent selection
(where the recruiter is paid only on filling the job) which is generally associated
with non managerial recruitment.
There are a number of aspects of this book that reflect that fact that it is about
the US, and readers seeking to apply it to Australia would need to take these
differences into account. An Australian study would have to examine the
relationship between recruiters and ad placement agencies and also look at
how recruiters deal with positions that they have not filled, but yet have been
paid a retainer.
The central argument of the book is that the hiring decision is a social process
as well as an economic one and the authors use the metaphor of romance to try
to capture its major elements. While there is a kernel of truth in this, I think
there is a danger in pushing the romance metaphor too far. In my experience,
while the social aspects of the hiring decision can be important (because the
hiring decision can have major economic consequences for the organisation),
economic factors play a greater role than the authors seem to suggest. What is
more, I believe that I am an excellent recruiter but not a very good matchmaker.
Perhaps more important is the observation that every applicant is a potential client
and therefore needs to be handled respectfully.
At one point in the book, the authors argue that the recruitment process
may prevent workforce diversity because recruiters tend to present clients with
people they will merely like. There is some merit to this claim. While we make
it our job to try to force clients to ‘think outside the square’ in their hiring
decisions, the majority of large organisations in Australia are run by grey-haired
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men. They seem to find it easier dealing with and employing other men, not
because there are no women capable of doing the job.
One major area that the book does not cover, but I believe warrants a closer
examination, is the economics of recruitment firms themselves. There are a
number of remuneration models operating in the recruitment industry and
these impact on the recruitment process. There are two major distinctions: if
pay systems are individualised or group-based, and whether you are rewarded
for getting the job (business development) or filling the position (execution). In
traditional firms, the bulk of the fee goes to a senior consultant that develops
business and execution is left to assistants who do not get any extra rewards. This
can have some undesirable outcomes. Other companies have experimented with
group-based payments, which also attempt to take execution into account. The
recruitment industry has also witnessed a number of other changes, including
mergers and the growth of large multinational firms like TMP, attempts by
companies like my own to use the Internet to redefine the industry space, and
the growth of longer term managed service agreements between recruiters and
clients. All of these developments have the potential to fundamentally alter the
economics of the recruitment industry.
Headhunters is an excellent introduction for anyone interested in the world of
recruiting. It would be a valuable addition to the reading list of both general and
specialist HRM courses and academics interested in the labour market would find
it appealing. It would also make useful reading for managers who are considering
engaging a recruitment company, those applying for jobs and may even provide
a few pointers for the recruiter themselves. I would also like to see more research
in this area, particularly research that focuses on the Australian scene.
KORN/FERRY INTERNATIONAL
SEXUAL POLITICS
AND
SHARON COLLINS
GREEDY INSTITUTIONS
By Suzanne Franzway. Pluto Press, Sydney, 2001, x + 186 pp., $34.95 (paperback)
For anyone who is suffering under the delusion that gender is not an issue in the
union movement, time should be set aside to read this book. For anyone else
who is interested in how change is made (or not made), it is also an interesting
read. Franzway bases her empirical work on interviews conducted with a series
of women trade union officials. She covers their issues thematically to protect
identities—underlining what a small world women occupy in the union
movement—and by doing so, also makes it easy to navigate her central ideas.
The author has attempted to mix the ‘scholarly’ with the ‘practical’. It is often
hard for the non-academic reader to peel away the jargon to reveal the major
point in many academic works. Feminists, more than most, have grappled actively
with this dilemma and the sentiment is nicely encapsulated by the Meaghan
Morris quote at the beginning of chapter two: ‘there is really no easy split between
a practical everyday feminism and the relentless, but specialised struggles of
feminist theories’.
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If one is unfamiliar with feminist theory, it is worth attempting to grasp the
concepts on offer here and Franzway explains some of the key dichotomies
that besiege understandings of sexual politics in a relatively accessible fashion. If
readers feel unequal to the conceptual challenge, it is still possible to skip or skim
the ‘hard’ theory section in chapter two and yet follow the threads of the book’s
main argument.
Franzway investigates how and why gender issues remain marginal in the trade
union movement. She makes the key observation that women who work in unions
are subject to the needs of two greedy institutions: the union movement and the
household/family. Both institutions make powerful demands on the time, energy
and emotion of women. Despite decades of struggle to re-align gender responsibility on the home front, overwhelmingly the burden of care and continuity of
family resides with mothers, sisters and daughters. Franzway comprehensively
illustrates that women active in unions also have to contend with the tacit rule
in the ‘movement’ that the labour struggle is primary. This ‘conflict’, where
women are torn between the household/family (in which they are invisible) and
the bottomless requirements of being an activist (where women suffer a special
kind of scrutiny) is, in many cases, unsustainable.
Given the overwhelming pressure these two fronts place on women officials
and activists, it is less surprising that the strategic aims of the union movement
do not encompass the major concerns of women in paid work, and even less
surprising that progressive union aims fail dismally to address the issues of
women’s unpaid work. In many ways, the trade union movement has been
better equipped to save koalas than achieve equity for women! Recently, I sat in
a room of ‘progressive’ organisers (all men) who were seriously troubled by the
use of part time work that their union continues to actively fight against. When
I worked in a public sector union we were unable to influence the membership
of a particular workplace to support the establishment of a child-care centre rather
than a gymnasium. Franzway makes clear that the women in positions in unions
apparently able to direct and develop progressive strategies for their female
constituents are significantly outnumbered and still confront discrimination
on the basis of their sex and sexuality. Moreover, they confront daily the
sapping time and energy demands of the public as well as the private spheres
they labour in.
Women are actually very good at mounting successful and creative campaigns
to ensure gains for women at work. A good and well-known example is the Fair
Wear campaign where the interests of outworkers have been pursued at the retail
point of the manufacturing supply chain. Women have worked collectively to
win senior positions in the movement and earned the election of Jennie George
to the presidency of the ACTU and her succession by Sharon Burrow. They have
achieved incredible gains with energy and commitment despite the challenges
and barriers outlined in this book. What Franzway makes clear in a compelling
way, is the failure to replicate that headway in the private sphere. Women union
officials do not work together to solve gender inequities in the household/
family arena. Despite having such challenges in common, they deal with them
on their own.
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Why is this the case? Franzway argues that it is because we have not spent
enough time explaining the links between the public and the private spheres; that
they currently occupy different conceptual spaces despite the fact that in reality
they intermingle and impact one upon the other in a complex (but currently
unstudied) fashion. According to Franzway, women in the union movement face
a triple bind: women continue to confront male hostility to their involvement in
the movement; issues that are central to women’s lives continue to be peripheral
to the movement; and building and maintaining the private sphere (household/family) continues overwhelmingly to be the responsibility of women. This
cocktail of barriers limits the political and practical reach of most women in
comparison to men who more often than not have their private concerns
attended to by others.
Trade unions in Australia are currently beset by a profound series of challenges:
the rapidly changing nature of work and the growing alignment of political and
economic interests that seriously confound a traditional trade union movement.
Franzway believes that the best response to these fundamental shifts will be to
‘(integrate) the effects of patriarchal gender relations and sexual politics’. She sees
real power in the intersection of feminist and trade union politics that transcend
the current invisible boundary between the private and the public spheres.
ACIRRT, SYDNEY
ORGANIZATIONAL CULTURE: MAPPING
JUSTINE EVESSON
THE
TERRAIN
By Joanne Martin. Sage, Thousand Oaks, California, 2002, xii + 402 pp.,
$64 (paperback)
In recent years, a number of criticisms have been levelled at organisational
culture leading to claims that cultural research was ‘dead’, that it was just another
managerial fad and simply something upon which consultants and practitioners
could make a lucrative living. There has also been considerable scepticism as to
whether or not culture was something that could be manipulated to enhance
organisational performance. One of the challenges facing cultural researchers is
that it encompasses a number of different intellectual traditions and there is
little agreement within and between the traditions. This book is the culmination
of many years of research by the author into the murky field of organisational
culture. Martin confronts the criticisms and makes a passionate, but balanced,
defence of cultural research into organisations.
One of the striking features of this book is the cover illustration. Highlighted
on an old map of the world are three areas depicted in bold type. On one side is
‘Terra Incognita’, on the other side, a warning that ‘Dragons Lurk Here’, and in
between the two is ‘Buried Treasure’. This is a deliberate strategy and Martin
makes effective use of the map and exploration metaphor (see p. 14) as she charts
a course across the organisational culture terrain. For the intrepid explorer and
treasure-hunter of culture, Martin guides the reader through a voyage of
discovery past the lurking dragons to buried gold and new lands. This book is
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not a ‘how to do it’ for practitioners. Rather, it is a considered, critical and
elegant review of the organisational culture literature that challenges the reader
to think about the subject matter in different and deeper ways. To this end,
Martin achieves her goal.
The book is divided into three parts. Each of the chapters is organised around
a series of related questions or what Martin calls ‘dilemmas’ that confront the
cultural researcher. The first part is the largest section of the book and deals with
mapping the cultural terrain. Here, Martin introduces us to the culture wars of
the 1980s and 1990s which outline the key debates and major controversies
surrounding the topic. One of the real treasures is Martin’s analysis of what
culture is and what it is not. In an exhaustive review of the culture literature,
Martin introduces and explains in detail the central constructs of organisational
culture and how they might be operationalised. For new researchers, part one
provides an invaluable introduction to the core concepts and debates. Most of
part one is taken up with a detailed examination of theoretical perspectives on
culture, including the ‘three-theory perspective’ developed elsewhere by Martin
and Debra Meyerson, and considerable space is devoted to the defence of this
perspective. The salient, but often taken-for-granted question of whose interest
is served by the research and in whose interest is the researcher working, is raised.
The second part explores the practice of conducting cultural research. In this
part of the book, Martin reviews the methodological debates, primarily the
quantitative verses qualitative debate, and argues for a multi-method approach
to culture studies. Perhaps the most useful part of the book is the integration
and review of sample studies and writings about cultures, whereby Martin
presents an overview of a selection of well-known culture studies along with the
comments of two reviewers contrasted with her opinion. This section of the book
concludes with an examination of scholarly writing about culture. Martin explores
how studies of culture have been presented to their intended audience, examines
a range of written styles including the use of reflexivity, criticality and postmodernism, and calls for the use of innovative writing styles, as she puts it ‘to
convey and acknowledge the ambiguities of meaning and the uncertainties of
contemporary life’ (p. 307). Academics writing for scholarly journals in the social
sciences will find this part of the book useful in addressing some of the criticisms
directed towards cultural studies and the selection of research methods.
Part three is titled Exploring the Edges of Cultural Theory. For me, this is
the most insightful and interesting part of the book as Martin challenges us to
move forward ‘from research that has been done to research that might be done’
(p. 315). This is also the most controversial section of the book and Martin takes
issue with the idea of cultural boundaries and argues that we need to re-think
the idea of culture and examine it in different ways. The final chapter returns to
the metaphor that has shaped the book and is appropriately titled Terra Incognita.
Martin hands the helm to the reader to take up the voyage of discovery and
confront and by-pass the lurking dragons to find new and innovative ideas for
future research. Rather than heading off aimlessly, Martin offers the reader a
number of ideas or territories to be explored including the need for more longitudinal studies of organisational culture, cultural challenges facing multinational
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corporations, international cultural issues, new organisational forms, the
work–family boundary, as well as inviting us to consider new media for studying
cultures. Unfortunately, part three is the shortest section and is the book’s main
weakness. Martin’s analysis of the margins of cultural theory differentiates this
book from others on the topic and this part deserves wider discussion.
What also sets this book apart from others on organisational culture is the
breadth and detail of Martin’s analysis and its written style. One of the highlights
of the book is the accessibility of the written material. The argument is presented
in a manner that is both engaging and interspersed with a reflexive voice and
personal style that I found refreshing. This book has much to recommend it and
I am sure that it will become a standard text to a wide audience, or simply a good
starting point for those setting out on their own voyage of discovery into the
world of organisational culture.
UNIVERSITY OF SYDNEY
THE REAL WORLD
SHAUN RYAN
OF
EMPLOYEE OWNERSHIP
By John Logue and Jacquelyn Yates. Cornell University Press, Ithaca and London,
2001, xvi + 247 pp., £11.50 (paperback)
This book, as the title suggests, is about employee ownership in Ohio, US. It is
based on the authors’ long-term involvement with employee-owned firms in the
Ohio Employee Ownership Centre, as well as their scholarly activities in the area.
Much of the material presented in the book is derived from a survey of employeeowned firms in the early 1990s, supplemented by the authors’ intimate knowledge of many of the firms in the survey and, at times, by the findings of an earlier
survey. The authors’ primary concern is to address the proposition that ‘it is the
combination of employee ownership with employee participation systems, open
communication about the business, and the training to use those systems, and to
understand the information communicated which has a positive impact on
company performance’ (p. 6). Thus, there are chapters on communication and
training (by Karen Thomas and Jennifer Maxwell), employee participation, unions
and employee ownership, the impact on performance, and the encouragement
that can be given to employee ownership by public policy.
The primary function of the book is not to test theories in economics, management, and related disciplines about employee ownership, but to outline the
characteristics of employee-owned firms and determine whether these
characteristics bear any systematic relationship to performance outcomes. The
book is ‘loosely coupled’ to theory: the authors are aware of key debates in the
literature about the impact of employee ownership, and these shape their presentation of empirical material, but they do not put these theories to the test
as such. As they put it, ‘if you want equations, please look elsewhere . . . the book
is a doggedly inductive account of what employee ownership is in practice:
successes and failures, the good, the bad, and the indifferent’ (p. 19).
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The authors attempted to survey the entire population of firms with employee
share ownership plans (ESOPs) or similar mechanisms, and secured a response
rate of over 60 per cent. The survey findings indicate that the most important
reason for establishing an ESOP was to buy stock from a retiring owner. A
philosophical commitment to employee ownership, aided and abetted by
generous tax incentives, was the main reason that retiring owners took the
employee ownership route. Just under 15 per cent of ESOP firms took the
employee ownership route to avoid a shutdown or job-loss. Most employee
ownership firms were minority employee-owned and 30 per cent were majorityowned. They find that most ESOPs take some steps to broaden employee
participation in management, but that in most cases these changes are quite
modest. A quarter of firms make no changes at all. These findings are broadly
similar to those observed elsewhere.
The over-riding picture arising from the book is that of the diversity of motives,
practices, and impacts between firms with employee ownership. Logue and Yates
point out that the patterns of participation are quite bewildering. They note 18
distinct patterns of participation. Interpretation of these findings could have been
assisted by greater use of statistical methods to cluster the data. For the most
part, the authors rely on frequency distributions and simple tests of association
(there is, however, a causal path multivariate model towards the end of the book).
Some may argue that this limits the findings on performance because other
relevant influences are not controlled for. This is unfortunate since advocates
for employee ownership would welcome a stronger foundation to the claim that
‘expanding participation is one of the surest methods of enhancing financial
success for ESOP firms’ (p. 101). The two most potent forms of participation
were involvement at the shop floor and representation on the board of directors,
and combining these two is good for the bottom line. By contrast, employee
representation on the administrative structures for operating the ESOP did
nothing for the bottom line. A further important finding, though one subject to
the limitations mentioned above, is that some of the firms that did not introduce
any forms of employee participation in decisions post-ownership-conversion
suffered falls in their profits relative to the sector norm.
The chapter on unions and employee ownership should be of interest to those
concerned that employee ownership can undermine union membership and
representation. To my mind, however, the authors compress a little too
much information into this chapter. They focus on the impact on union representation, the relationship between unions and participation, and the relationship with performance. It all gets a little too complicated, and it is difficult at
times to see the wood for the trees. It might have been beneficial to draw on
their case study experience in this chapter as the dynamic relationships between
unions and employee ownership is arguably not readily captured by a single-shot
survey.
The book concludes with several recommendations to advance the cause of
employee ownership. Though there is some reference to employee ownership
elsewhere (such as Mondragon in Spain), interest in this chapter will probably
be mainly limited to a North American audience.
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All in all, this book makes a valuable contribution to the employee ownership
literature. It provides evidence that confirms important propositions in the
employee ownership literature, even though it does not aim to test theory. If
Logue and Yates were to do a second edition, they could simplify the presentation of findings by using a greater battery of statistical tests. They could also
draw more explicitly and extensively on some of the other work being done on
employee ownership in the US at the moment.
MANCHESTER METROPOLITAN UNIVERSITY
ANDREW PENDLETON
INTERNATIONAL HRM: A CROSS-CULTURAL APPROACH
By Terence Jackson. Sage, London, 2002, xii + 252 pp., $69 (paperback)
I
n this book, Jackson presents an innovative discussion of the cultural assumptions that affect human resource management (HRM) in global organisations.
He focuses on some of the key differences in HRM orientation across national
cultures (including Dutch, Japanese, Chinese and British) and geo-political divides
(including post-Soviet, European Union, post-Colonial), and comments on how
these differences may impact on indigenous and foreign companies in these
regions.
Each chapter in the book focuses on a particular cultural ‘model’ of organisations. Within each chapter, Jackson provides an overview of some of the cultural
and management research relevant to each region, as well as case studies ‘to
discuss issues as far as possible within the context of real companies and real
cultures’ (page x). Each chapter also considers the implications for managerial
action from the case(s) and developing further research in each area.
The author concentrates on a particular feature of HRM in each of his
‘models’. For example, in the Japanese model (chapter 5) he examines how a
holistic approach to commitment has played a role in motivating the Japanese
workforce, and how such a perspective may be exported to other parts of the
world through Japanese multinationals. Another example is the Dutch model
(chapter 4), in which Jackson focuses on the role of expatriates, and provides an
understanding of the way in which Dutch companies may have developed specific
roles for expatriates based on Dutch culture and history.
While each chapter focuses on a particular set of issues (for example, expatriation, training and development, and performance management), the purpose is
not to suggest that one particular model is the most appropriate to deal with a
particular human resource issue. Rather, Jackson takes aspects of HRM in
each chapter and submits them to somewhat of a cultural litmus test—using
the identification and practice of a particular concept (say, work flexibility) in a
particular cultural context (say, the European Union) as an impetus to discuss
the appropriate use of the same concept in other cultures and in global business
management. He further makes the point that concepts such as commitment,
job satisfaction, performance management, and development are most often seen
from a Western point of view, developed within Western cultural assumptions
and often imposed on other cultural contexts. Here perhaps, one assumption
Jackson himself makes is that the reader is approaching the area from the
perspective of a ‘Westerner’. He voices his concern that the opportunity to
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transfer management lessons from non-Western countries to the West is often
overlooked.
The concept of locus of human value is developed in this book to illustrate
different ways of understanding the value of people, and their relationship to
work and organisations. Jackson contrasts an instrumental perspective—human
beings as a resource used in the pursuit of shareholder value, to a humanistic
perspective—people regarded as having a value in their own right and being an
end in themselves. His suggestion is that a hybrid form of HRM may provide an
opportunity to apply the best of both extremes. The effective international
manager should recognise the benefits of a range of cultural perspectives in order
to successfully undertake management activities. However, Jackson’s locus of
human value would appear to relate most closely to the role of organisations and
business in society, and so fits particularly well within a discussion of management systems and processes.
Each chapter in the book provides case studies of an indigenous (or at least
initially indigenous) organisation. These demonstrate the particular human
resource feature and cultural assumptions drawn from Jackson’s overview of the
cross-cultural research on the area. Some of the cases contribute more fully to
this aim than others: IKEA’s initial ‘Swedish’ egalitarianism in Spain, or Crédit
Lyonnais’ struggles to globalise with its ‘French’ career management structures,
highlight the effect of indigenous HRM assumptions on company expansion into
foreign markets. However, it becomes more difficult to integrate cases with
research in geo-political divisions such as the post-Soviet or post-Colonial
models, where research into East German, Russian, Czech, and African cultures
is more limited.
Jackson states in the preface that the use of case analyses in the book does not
aim to be comprehensive in their coverage of industries. Rather, they are intended
to illustrate the activities and approaches of international organisations. However,
there is some variation in the detail of the case studies provided, which may reflect
the degree of detail available to the author (some cases are taken from already
published sources). This variation serves to draw a sketchy picture of the
activities of one or two of the organisations discussed in the text. For example,
a fairly extensive four-page discussion in chapter 1 of IKEA’s HRM approach
in Spain stands in marked contrast to a half-page discussion in chapter 10 of
Colgate-Palmolive in South Africa.
A number of interesting points are raised in this text. One is the dominance
of a US-based competency perspective and its strong impact on HRM approaches
in developing countries. Jackson suggests the economic power of the US lies
behind this; the argument is basically that it would seem to make sense to copy
the approach of a country that is successful, although the degree of transfer from
other successful countries is questionable.
A second point is the dynamic nature of culture—Jackson has captured the
impact of shifting boundaries well, focusing on the European Union, post-Soviet
and post-Colonial regions. He also emphasises the importance of the organisational context (in which HRM is conducted) and grounds the regional or national
focus with an understanding of the strategy of the individual firm. This inter-
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dependence between HRM and other organisational considerations, such as
strategic goals, product life cycles, and industry dynamics, is often glossed over
in discussions of culture and management that can overemphasise the ‘people
side’ of business in isolation from other organisational concerns.
In terms of the overall format of the book itself, some of the chapters appear
a little isolated. Perhaps a linking table would help readers exposed to some of
the information for the first time. ‘Briefings’ about each country or region would
also benefit from a standard table in each chapter. To be fair, Jackson does
this in the initial chapter, however, a reminder, in a similar format in each
chapter, would be useful. In addition, it is annoying to find a number of spelling
mistakes and tables that are formatted incorrectly (with a blank page in between
columns, for example), particularly where mistakes alter the meaning of the text.
Such errors are certainly not usual for a Sage publication and this detracts slightly
from the readability of the book.
I would certainly recommend that this book be read in conjunction with
earlier research on culture—an understanding of the work of Geert Hofstede
(Culture’s Consequences: International Differences in Work-Related Values, Sage:
Beverly Hills, 1980) and Alfons Trompenaars (Riding the Waves of Culture:
Understanding Cultural Diversity in Business, Nicholas Brealey: London, 1993)
would be advantageous in understanding some of the information presented in
the book.
The end effect of International HRM is to provide an important, ambitious,
and considered explanation of the way that managers may ground their own
realities in cultural assumptions. The book highlights particular areas of
business and human resource concerns across diverse cultures, demonstrating
that different cultures approach these topics from a different set of assumptions
about the person and the organisation.
CURTIN UNIVERSITY OF TECHNOLOGY
PAYING
FOR
ELLIOT WOOD
PERFORMANCE: AN INTERNATIONAL COMPARISON
Edited by Michelle Brown and John S. Heywood. M.E. Sharpe, Armonk, New York,
2002, xiv + 298 pp., US$25.95 (paperback)
A key strength of this collection derives from its comparative evaluation of
performance pay in a diverse range of international settings, chosen by the
editors to reflect a reasonable cross-section of countries where institutions,
influence on performance pay are undergoing substantial change. A further asset
could be its multi-disciplinarity. However, this is potentially more problematic.
For instance, the authors make some attempt to reconcile the differences
between pay terminology used by, for example, economists versus organisational
behaviourists, suggesting that ‘the fundamental behavior and institutions
being studied carry across disciplines’ (p. 11). The difficulty with this broad allencompassing approach is that, as with many edited collections, it is sometimes
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difficult to discern a shared understanding or central argument that unites the
chapters and brings this particular group of authors together. This is more than
a comment about structure as it affects the development of an argument within
the book. Hence, despite the claim that ‘common themes across the countries’
are drawn out, it is sometimes difficult to discern these—a problem exacerbated
by the indexing system, which deals with subjects such as ‘share ownership plans’
according to the country in which they are based. This further highlights
the specificity of the research and makes cross-referencing or comparison
difficult.
In the introductory chapter, Brown and Heywood make reference to the ‘new
pay’ model, citing authors closely associated with this strategic-fit approach.
However, the extent to which they endorse or refute this perspective is not clear.
Despite these problems in providing a theoretical framework for the book, the
empirical chapters that follow make valuable contributions to a research subject
that continues to receive limited attention, as the following selected contribution
summaries hopefully indicate. Chapter 2, by economist Daniel Parent, uses the
Lazear model to evaluate the effects of performance pay in the US, where nearly
half of all American workers claim to be paid some form of individual merit pay
or profit sharing. Chapter 5 commences with an historical explanation of what
the authors, Marsden and French, claim is the most important change in pay
systems in Britain during the last 15 years, the spread of performance-related
pay from the private to the public sector. Focusing on the introduction of
performance pay at the Inland Revenue, these authors discuss the potential
disadvantages and perceived benefits of performance-related pay based on
analysis of questionnaire data collected during 1992 and 1996–7. They do so in
a way that reveals the complexity of the issues involved. Chapter 8, by Hélio
Zylberstajn, an economist from the University of São Paolo, outlines the legal
situation that has historically prevented Brazilian firms from adopting flexible
compensation and explores the extent to which they use performance pay to
reduce compensation costs and enhance labour productivity. Other chapters
provide in-depth analyses of performance pay in Germany, France, Japan, Canada
and Australia. In the concluding chapter, the editors attempt to bring these diverse
contributions together, claiming the ‘most remarkable finding to emerge from
the studies in this volume is the accelerating nature of experimentation and change
in payment methods’ (p. 265).
To conclude, this is a valuable text for anyone with an interest in this subject.
It provides valuable comparative insight into current performance pay practice
in a number of countries and demonstrates the widespread nature of this
phenomenon. However, it is less successful in providing an overarching set of
themes to unify the book and it may therefore be more appropriate to read
the chapters selectively rather than sequentially.
UNIVERSITY OF WARWICK
EMMA BELL
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LEARNING FROM SATURN: POSSIBILITIES FOR CORPORATE
GOVERNANCE AND EMPLOYEE RELATIONS
By Saul A. Rubenstein and Thomas A. Kochan. Cornell University Press, Ithaca and
London, 2001, x + 156 pp., US$25 (hardback)
The mid-1980s proved to be a significant time in US labour relations, both in
terms of academic scholarship and in relation to experiments in the auto industry. Two of the most publicised initiatives in the US auto industry during the
1980s were the New United Motor Manufacturing Inc. (NUMMI) and Saturn
plants. NUMMI was the joint venture between Toyota and General Motors (GM)
at the latter’s old Fremont site in California. Saturn was originally the code name
for the new GM project at Spring Hill, Tennessee, and subsequently became
the name of the model of the car produced at the site. It was the Saturn
workplace model that captured the imagination of people interested in fostering
a different, post-New Deal labour relationship in the US. In this slim and
engaging book, Saul Rubenstein and Tom Kochan have teamed up to write
the labour relations and corporate governance story of Saturn.
The book draws on the premises as set out earlier in The Transformation of
American Industrial Relations (by Tom Kochan et al., Basic Books, New York, 1986)
that the New Deal labour relations model was under challenge and in decline.
The philosophy underpinning Learning from Saturn is also consistent with
Kochan’s broader philosophy of promoting a better social contract for American
employees within a framework that legitimises a role for unions and seeks
responsible action from corporations. Set against the backdrop of the demise
of New Deal labour relations and competitive challenges facing the US auto
industry, the book explores two issues: corporate governance and labour relations. The authors argue that Saturn is about a ‘different model of organizational
governance and a very different concept of labour-management relations . . .
[Saturn shows that] the two debates are inseparable and should be treated as one’
(p. 2). These issues are both as important today, perhaps more so, as they were
20 years ago when Saturn was first conceived!
Despite the rise of the ‘new economy’, the knowledge worker, and diversified
employment arrangements, the auto industry retains a fascination for many
people. There is a long tradition of auto plant studies in labour relations research.
This is possibly because the auto industry has encompassed the full range of
interest areas: large scale manufacturing using both traditional and exceptional
production systems, often accompanied by high levels of employment, unionisation and industrial conflict. Learning from Saturn adds to the genre and demonstrates that it is feasible to adopt a different path even within an established sector
and that a new and different relationship between labour and management can
be forged. With clear and honest attention to detail, Rubenstein and Kochan show
us, however, that this is not achieved without difficulty.
The Saturn Corporation was established out of an agreement between
GM and the United Auto Workers (UAW) to build a greenfield car plant in
Spring Hill, Tennessee. Rather than continuing to rely on imports, this plant
would supply the US market with small cars built by American workers using
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self-directed work teams and integrating union representatives into the full range
of management’s strategic and operational decision making processes.
Interestingly, the current Saturn website provides a chronology of the plant. It
explains that in January 1985, the Saturn Corporation was ‘founded from scratch,
taking a clean-slate approach to everything’. According to the Saturn site, in
July 1985, a ‘unique pact’ was formed with Saturn and the UAW to ‘create a
revolutionary agreement’ that was so simple it could ‘fit in a shirt pocket instead
of a three-inch-thick binder’ (www.saturn.com). In a similar vein, Rubenstein and
Kochan claim Saturn was ‘the boldest and most far-reaching experiment in
organizational form and labor-management relationship’ in the US. Saturn, its
labour contract and management partnership arrangements were unique.
Indeed, there is no match for it in Australia—certainly not in the auto industry.
Saturn is also renowned for its special relations with suppliers, retailers and
customers and has successfully introduced a ‘service-supply-chain strategy’
innovation.
Saturn appears to have exemplified the partnership and network model of
manufacturing, combining some of the elements of lean production with a
corporate governance model of shared responsibility and risk—with workers,
union, retailers, customers and suppliers. This has difficulties for management
as well as unions. The book sets out clearly and objectively these issues and discusses a range of tensions that emerged at Saturn. These included intra-union
rivalries between the local and national UAW leaders; and intra-organisational
rivalries between Saturn management and GM management overall.
Like most greenfield sites that are genuine attempts to practice new management philosophies, foster new labour relations or introduce new production
processes, Saturn required constant vigilance, renewal, attention and effort. As
well as often being high performance and high commitment sites, such exemplars
are high maintenance sites. So, just as with other greenfield experiments, the big
question remains. How can such islands of innovation be positively transferred
to the rest of the organisation, in this case GM, as well as mainstream labour
relations? A first step is to fully understand what is involved in running such sites,
and this is what Rubinstein and Kochan provide in this book. They meticulously
investigate the struggle the local union had in defining its role at Saturn and
similarly how GM handled Saturn within its own corporate world. The authors
draw a number of lessons about teams, union renewal, learning organisations
and labour-management partnerships.
Yet, despite the knowledge gained from Saturn and its success, the limits to
learning were evident, even within the company that fostered Saturn. Within GM,
there has been resistance to extending the Saturn way in other plants. Rubenstein
and Kochan recount the internal union and company debates over further
investment in the Saturn plant at Spring Hill versus re-investing at GM’s
brownfield plant in Wilmington, Delaware. In the end, Wilmington got the
go-ahead to produce a second generation Saturn car. Significantly, the labour
contract for Wilmington did not contain the full set of Saturn policies and
principles, thus further restricting the ‘Saturnisation’ of GM manufacturing
plants in the US.
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The lessons from Saturn have broader application than just for GM and the
auto industry. Unfortunately perhaps, the reality is that in most car plants the
managers and people who work in them have never had the opportunity to
experience the Saturn model. Rubenstein and Kochan have given us a good
insight into the exceptional workplace, and they clearly challenge the view that
the sole purpose of organisations is to maximise shareholder wealth. They are
also honest about the dilemmas unions face in combining independent workplace
representation at the same time as sharing in managerial decision making. I am
not at all sure that it can ever be fully replicated, but there are ideas in this book
that are worth considering seriously.
UNIVERSITY OF SYDNEY
HEADHUNTERS: MATCHMAKING
MARIAN BAIRD
IN THE
LABOR MARKET
By William Finlay and James E. Coverdill. Cornell University Press, Ithaca and
London, 2002, 203 pp., US$29.95 (hardback)
This book reports on case study research into the contingent recruitment
industry in the US. The authors are interested in three related questions:
How do headhunters persuade employers and job candidates to sell themselves
to each other? What do employers gain by using headhunters? and What
criteria do headhunters use in choosing job candidates.
The book is structured as follows. In the first chapter the authors argue that
there are broad changes in the US economy that have created an increased role
for recruitment consultants. In the second chapter, they introduce the highly
plausible notion that recruitment consultants are involved in a ‘double sale’—
selling the job to the candidate at the same time as selling the candidate to the
client. Chapter 3 argues that managers use headhunters because the practice
provides them with not only economic advantages, but also political advantages
over using internal resources. Chapter 4 turns to the uncertainty facing
recruiters and examines some of the techniques they can use to avoid uncertainty
in what can be a very fickle relationship. The fifth chapter examines ways that
recruiters identify and present candidates for positions. In chapters six and
seven, the authors attempt to identify the role that recruiters play in shaping
who does (and who does not) get shortlisted for a position and what recruiters
can do to influence clients’ perception of the field of applicants. The final
chapter deals with the process of negotiation that takes place after a job offer
is made.
Headhunters is a well-written and fairly accessible account of a number of aspects
of the recruitment process and the role of recruitment consultants in that process.
It is one of very few academic studies of the role played by recruitment consultants
in the job market. Given the size of the industry, this lack of research is surprising.
It is hard to get estimates of the size of the industry in Australia but you can get
a good sense of the number of recruitment companies working at the ‘top end’
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of the market by flicking through the front section of the Sydney Morning Herald
or the Age on a Saturday morning. Bear in mind too, that each of these ads costs
clients between $3000–$5000. Nevertheless, much of what recruiters do involves
a lot of confidential information about companies and candidates, and this would
make research difficult. The approach taken by the authors—of conducting a
limited number of case studies across a range of different types of organisations—
overcomes this problem, but by the same token may exaggerate the prevalence
of some practices and attitudes in the industry as a whole.
It is perhaps worth noting that this book is not really about headhunting as
most people would understand it. ‘True’ headhunting is retained search; that is,
the consultant is retained (not paid on results) who then looks for particular
candidates. This book is about contingent search whereby consultants are only
paid when they fill a position and, as such, are in competition with other recruiters.
While contingent search is dominant in the US, it is not very common in
Australia. In Australia, search is reserved for very senior positions and it is almost
always retained.
Most recruitment in Australia is based on selection of a short list of applicants
from a job ad. Selection is almost unheard of in the US, in part not only because
is there no reputable national newspaper that carries classified advertising, but
also because there is an assumption that nobody who is any good would apply
to a job ad. The main distinction in the Australian market is between retained
selection (where only a percentage of the fee is contingent on the placement),
which is common for management and senior positions, and contingent selection
(where the recruiter is paid only on filling the job) which is generally associated
with non managerial recruitment.
There are a number of aspects of this book that reflect that fact that it is about
the US, and readers seeking to apply it to Australia would need to take these
differences into account. An Australian study would have to examine the
relationship between recruiters and ad placement agencies and also look at
how recruiters deal with positions that they have not filled, but yet have been
paid a retainer.
The central argument of the book is that the hiring decision is a social process
as well as an economic one and the authors use the metaphor of romance to try
to capture its major elements. While there is a kernel of truth in this, I think
there is a danger in pushing the romance metaphor too far. In my experience,
while the social aspects of the hiring decision can be important (because the
hiring decision can have major economic consequences for the organisation),
economic factors play a greater role than the authors seem to suggest. What is
more, I believe that I am an excellent recruiter but not a very good matchmaker.
Perhaps more important is the observation that every applicant is a potential client
and therefore needs to be handled respectfully.
At one point in the book, the authors argue that the recruitment process
may prevent workforce diversity because recruiters tend to present clients with
people they will merely like. There is some merit to this claim. While we make
it our job to try to force clients to ‘think outside the square’ in their hiring
decisions, the majority of large organisations in Australia are run by grey-haired
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men. They seem to find it easier dealing with and employing other men, not
because there are no women capable of doing the job.
One major area that the book does not cover, but I believe warrants a closer
examination, is the economics of recruitment firms themselves. There are a
number of remuneration models operating in the recruitment industry and
these impact on the recruitment process. There are two major distinctions: if
pay systems are individualised or group-based, and whether you are rewarded
for getting the job (business development) or filling the position (execution). In
traditional firms, the bulk of the fee goes to a senior consultant that develops
business and execution is left to assistants who do not get any extra rewards. This
can have some undesirable outcomes. Other companies have experimented with
group-based payments, which also attempt to take execution into account. The
recruitment industry has also witnessed a number of other changes, including
mergers and the growth of large multinational firms like TMP, attempts by
companies like my own to use the Internet to redefine the industry space, and
the growth of longer term managed service agreements between recruiters and
clients. All of these developments have the potential to fundamentally alter the
economics of the recruitment industry.
Headhunters is an excellent introduction for anyone interested in the world of
recruiting. It would be a valuable addition to the reading list of both general and
specialist HRM courses and academics interested in the labour market would find
it appealing. It would also make useful reading for managers who are considering
engaging a recruitment company, those applying for jobs and may even provide
a few pointers for the recruiter themselves. I would also like to see more research
in this area, particularly research that focuses on the Australian scene.
KORN/FERRY INTERNATIONAL
SEXUAL POLITICS
AND
SHARON COLLINS
GREEDY INSTITUTIONS
By Suzanne Franzway. Pluto Press, Sydney, 2001, x + 186 pp., $34.95 (paperback)
For anyone who is suffering under the delusion that gender is not an issue in the
union movement, time should be set aside to read this book. For anyone else
who is interested in how change is made (or not made), it is also an interesting
read. Franzway bases her empirical work on interviews conducted with a series
of women trade union officials. She covers their issues thematically to protect
identities—underlining what a small world women occupy in the union
movement—and by doing so, also makes it easy to navigate her central ideas.
The author has attempted to mix the ‘scholarly’ with the ‘practical’. It is often
hard for the non-academic reader to peel away the jargon to reveal the major
point in many academic works. Feminists, more than most, have grappled actively
with this dilemma and the sentiment is nicely encapsulated by the Meaghan
Morris quote at the beginning of chapter two: ‘there is really no easy split between
a practical everyday feminism and the relentless, but specialised struggles of
feminist theories’.
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If one is unfamiliar with feminist theory, it is worth attempting to grasp the
concepts on offer here and Franzway explains some of the key dichotomies
that besiege understandings of sexual politics in a relatively accessible fashion. If
readers feel unequal to the conceptual challenge, it is still possible to skip or skim
the ‘hard’ theory section in chapter two and yet follow the threads of the book’s
main argument.
Franzway investigates how and why gender issues remain marginal in the trade
union movement. She makes the key observation that women who work in unions
are subject to the needs of two greedy institutions: the union movement and the
household/family. Both institutions make powerful demands on the time, energy
and emotion of women. Despite decades of struggle to re-align gender responsibility on the home front, overwhelmingly the burden of care and continuity of
family resides with mothers, sisters and daughters. Franzway comprehensively
illustrates that women active in unions also have to contend with the tacit rule
in the ‘movement’ that the labour struggle is primary. This ‘conflict’, where
women are torn between the household/family (in which they are invisible) and
the bottomless requirements of being an activist (where women suffer a special
kind of scrutiny) is, in many cases, unsustainable.
Given the overwhelming pressure these two fronts place on women officials
and activists, it is less surprising that the strategic aims of the union movement
do not encompass the major concerns of women in paid work, and even less
surprising that progressive union aims fail dismally to address the issues of
women’s unpaid work. In many ways, the trade union movement has been
better equipped to save koalas than achieve equity for women! Recently, I sat in
a room of ‘progressive’ organisers (all men) who were seriously troubled by the
use of part time work that their union continues to actively fight against. When
I worked in a public sector union we were unable to influence the membership
of a particular workplace to support the establishment of a child-care centre rather
than a gymnasium. Franzway makes clear that the women in positions in unions
apparently able to direct and develop progressive strategies for their female
constituents are significantly outnumbered and still confront discrimination
on the basis of their sex and sexuality. Moreover, they confront daily the
sapping time and energy demands of the public as well as the private spheres
they labour in.
Women are actually very good at mounting successful and creative campaigns
to ensure gains for women at work. A good and well-known example is the Fair
Wear campaign where the interests of outworkers have been pursued at the retail
point of the manufacturing supply chain. Women have worked collectively to
win senior positions in the movement and earned the election of Jennie George
to the presidency of the ACTU and her succession by Sharon Burrow. They have
achieved incredible gains with energy and commitment despite the challenges
and barriers outlined in this book. What Franzway makes clear in a compelling
way, is the failure to replicate that headway in the private sphere. Women union
officials do not work together to solve gender inequities in the household/
family arena. Despite having such challenges in common, they deal with them
on their own.
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Why is this the case? Franzway argues that it is because we have not spent
enough time explaining the links between the public and the private spheres; that
they currently occupy different conceptual spaces despite the fact that in reality
they intermingle and impact one upon the other in a complex (but currently
unstudied) fashion. According to Franzway, women in the union movement face
a triple bind: women continue to confront male hostility to their involvement in
the movement; issues that are central to women’s lives continue to be peripheral
to the movement; and building and maintaining the private sphere (household/family) continues overwhelmingly to be the responsibility of women. This
cocktail of barriers limits the political and practical reach of most women in
comparison to men who more often than not have their private concerns
attended to by others.
Trade unions in Australia are currently beset by a profound series of challenges:
the rapidly changing nature of work and the growing alignment of political and
economic interests that seriously confound a traditional trade union movement.
Franzway believes that the best response to these fundamental shifts will be to
‘(integrate) the effects of patriarchal gender relations and sexual politics’. She sees
real power in the intersection of feminist and trade union politics that transcend
the current invisible boundary between the private and the public spheres.
ACIRRT, SYDNEY
ORGANIZATIONAL CULTURE: MAPPING
JUSTINE EVESSON
THE
TERRAIN
By Joanne Martin. Sage, Thousand Oaks, California, 2002, xii + 402 pp.,
$64 (paperback)
In recent years, a number of criticisms have been levelled at organisational
culture leading to claims that cultural research was ‘dead’, that it was just another
managerial fad and simply something upon which consultants and practitioners
could make a lucrative living. There has also been considerable scepticism as to
whether or not culture was something that could be manipulated to enhance
organisational performance. One of the challenges facing cultural researchers is
that it encompasses a number of different intellectual traditions and there is
little agreement within and between the traditions. This book is the culmination
of many years of research by the author into the murky field of organisational
culture. Martin confronts the criticisms and makes a passionate, but balanced,
defence of cultural research into organisations.
One of the striking features of this book is the cover illustration. Highlighted
on an old map of the world are three areas depicted in bold type. On one side is
‘Terra Incognita’, on the other side, a warning that ‘Dragons Lurk Here’, and in
between the two is ‘Buried Treasure’. This is a deliberate strategy and Martin
makes effective use of the map and exploration metaphor (see p. 14) as she charts
a course across the organisational culture terrain. For the intrepid explorer and
treasure-hunter of culture, Martin guides the reader through a voyage of
discovery past the lurking dragons to buried gold and new lands. This book is
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not a ‘how to do it’ for practitioners. Rather, it is a considered, critical and
elegant review of the organisational culture literature that challenges the reader
to think about the subject matter in different and deeper ways. To this end,
Martin achieves her goal.
The book is divided into three parts. Each of the chapters is organised around
a series of related questions or what Martin calls ‘dilemmas’ that confront the
cultural researcher. The first part is the largest section of the book and deals with
mapping the cultural terrain. Here, Martin introduces us to the culture wars of
the 1980s and 1990s which outline the key debates and major controversies
surrounding the topic. One of the real treasures is Martin’s analysis of what
culture is and what it is not. In an exhaustive review of the culture literature,
Martin introduces and explains in detail the central constructs of organisational
culture and how they might be operationalised. For new researchers, part one
provides an invaluable introduction to the core concepts and debates. Most of
part one is taken up with a detailed examination of theoretical perspectives on
culture, including the ‘three-theory perspective’ developed elsewhere by Martin
and Debra Meyerson, and considerable space is devoted to the defence of this
perspective. The salient, but often taken-for-granted question of whose interest
is served by the research and in whose interest is the researcher working, is raised.
The second part explores the practice of conducting cultural research. In this
part of the book, Martin reviews the methodological debates, primarily the
quantitative verses qualitative debate, and argues for a multi-method approach
to culture studies. Perhaps the most useful part of the book is the integration
and review of sample studies and writings about cultures, whereby Martin
presents an overview of a selection of well-known culture studies along with the
comments of two reviewers contrasted with her opinion. This section of the book
concludes with an examination of scholarly writing about culture. Martin explores
how studies of culture have been presented to their intended audience, examines
a range of written styles including the use of reflexivity, criticality and postmodernism, and calls for the use of innovative writing styles, as she puts it ‘to
convey and acknowledge the ambiguities of meaning and the uncertainties of
contemporary life’ (p. 307). Academics writing for scholarly journals in the social
sciences will find this part of the book useful in addressing some of the criticisms
directed towards cultural studies and the selection of research methods.
Part three is titled Exploring the Edges of Cultural Theory. For me, this is
the most insightful and interesting part of the book as Martin challenges us to
move forward ‘from research that has been done to research that might be done’
(p. 315). This is also the most controversial section of the book and Martin takes
issue with the idea of cultural boundaries and argues that we need to re-think
the idea of culture and examine it in different ways. The final chapter returns to
the metaphor that has shaped the book and is appropriately titled Terra Incognita.
Martin hands the helm to the reader to take up the voyage of discovery and
confront and by-pass the lurking dragons to find new and innovative ideas for
future research. Rather than heading off aimlessly, Martin offers the reader a
number of ideas or territories to be explored including the need for more longitudinal studies of organisational culture, cultural challenges facing multinational
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corporations, international cultural issues, new organisational forms, the
work–family boundary, as well as inviting us to consider new media for studying
cultures. Unfortunately, part three is the shortest section and is the book’s main
weakness. Martin’s analysis of the margins of cultural theory differentiates this
book from others on the topic and this part deserves wider discussion.
What also sets this book apart from others on organisational culture is the
breadth and detail of Martin’s analysis and its written style. One of the highlights
of the book is the accessibility of the written material. The argument is presented
in a manner that is both engaging and interspersed with a reflexive voice and
personal style that I found refreshing. This book has much to recommend it and
I am sure that it will become a standard text to a wide audience, or simply a good
starting point for those setting out on their own voyage of discovery into the
world of organisational culture.
UNIVERSITY OF SYDNEY
THE REAL WORLD
SHAUN RYAN
OF
EMPLOYEE OWNERSHIP
By John Logue and Jacquelyn Yates. Cornell University Press, Ithaca and London,
2001, xvi + 247 pp., £11.50 (paperback)
This book, as the title suggests, is about employee ownership in Ohio, US. It is
based on the authors’ long-term involvement with employee-owned firms in the
Ohio Employee Ownership Centre, as well as their scholarly activities in the area.
Much of the material presented in the book is derived from a survey of employeeowned firms in the early 1990s, supplemented by the authors’ intimate knowledge of many of the firms in the survey and, at times, by the findings of an earlier
survey. The authors’ primary concern is to address the proposition that ‘it is the
combination of employee ownership with employee participation systems, open
communication about the business, and the training to use those systems, and to
understand the information communicated which has a positive impact on
company performance’ (p. 6). Thus, there are chapters on communication and
training (by Karen Thomas and Jennifer Maxwell), employee participation, unions
and employee ownership, the impact on performance, and the encouragement
that can be given to employee ownership by public policy.
The primary function of the book is not to test theories in economics, management, and related disciplines about employee ownership, but to outline the
characteristics of employee-owned firms and determine whether these
characteristics bear any systematic relationship to performance outcomes. The
book is ‘loosely coupled’ to theory: the authors are aware of key debates in the
literature about the impact of employee ownership, and these shape their presentation of empirical material, but they do not put these theories to the test
as such. As they put it, ‘if you want equations, please look elsewhere . . . the book
is a doggedly inductive account of what employee ownership is in practice:
successes and failures, the good, the bad, and the indifferent’ (p. 19).
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The authors attempted to survey the entire population of firms with employee
share ownership plans (ESOPs) or similar mechanisms, and secured a response
rate of over 60 per cent. The survey findings indicate that the most important
reason for establishing an ESOP was to buy stock from a retiring owner. A
philosophical commitment to employee ownership, aided and abetted by
generous tax incentives, was the main reason that retiring owners took the
employee ownership route. Just under 15 per cent of ESOP firms took the
employee ownership route to avoid a shutdown or job-loss. Most employee
ownership firms were minority employee-owned and 30 per cent were majorityowned. They find that most ESOPs take some steps to broaden employee
participation in management, but that in most cases these changes are quite
modest. A quarter of firms make no changes at all. These findings are broadly
similar to those observed elsewhere.
The over-riding picture arising from the book is that of the diversity of motives,
practices, and impacts between firms with employee ownership. Logue and Yates
point out that the patterns of participation are quite bewildering. They note 18
distinct patterns of participation. Interpretation of these findings could have been
assisted by greater use of statistical methods to cluster the data. For the most
part, the authors rely on frequency distributions and simple tests of association
(there is, however, a causal path multivariate model towards the end of the book).
Some may argue that this limits the findings on performance because other
relevant influences are not controlled for. This is unfortunate since advocates
for employee ownership would welcome a stronger foundation to the claim that
‘expanding participation is one of the surest methods of enhancing financial
success for ESOP firms’ (p. 101). The two most potent forms of participation
were involvement at the shop floor and representation on the board of directors,
and combining these two is good for the bottom line. By contrast, employee
representation on the administrative structures for operating the ESOP did
nothing for the bottom line. A further important finding, though one subject to
the limitations mentioned above, is that some of the firms that did not introduce
any forms of employee participation in decisions post-ownership-conversion
suffered falls in their profits relative to the sector norm.
The chapter on unions and employee ownership should be of interest to those
concerned that employee ownership can undermine union membership and
representation. To my mind, however, the authors compress a little too
much information into this chapter. They focus on the impact on union representation, the relationship between unions and participation, and the relationship with performance. It all gets a little too complicated, and it is difficult at
times to see the wood for the trees. It might have been beneficial to draw on
their case study experience in this chapter as the dynamic relationships between
unions and employee ownership is arguably not readily captured by a single-shot
survey.
The book concludes with several recommendations to advance the cause of
employee ownership. Though there is some reference to employee ownership
elsewhere (such as Mondragon in Spain), interest in this chapter will probably
be mainly limited to a North American audience.
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All in all, this book makes a valuable contribution to the employee ownership
literature. It provides evidence that confirms important propositions in the
employee ownership literature, even though it does not aim to test theory. If
Logue and Yates were to do a second edition, they could simplify the presentation of findings by using a greater battery of statistical tests. They could also
draw more explicitly and extensively on some of the other work being done on
employee ownership in the US at the moment.
MANCHESTER METROPOLITAN UNIVERSITY
ANDREW PENDLETON