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The Strategic Choice model created by Kochan, Katz and Mckersie originated from economics and organisational behaviour is closely associated with human resource management, while the Labour Process approach evolved from Marx’s theoretical works has traits that is closely associated with personnel / industrial relations. From two diverse perspectives, the two models both have indications that they support an adoption for human resource management, provided that personnel / industrial relations is seen as apart of and giving rise to human resource management.
Kochan, Katz and McKersie developed their theory of the Strategic Choice model from previous works of Dunlop’s System Theory.
The two models had strong emphasis on employment relations being strongly influenced by environmental forces which include: economic forces; technology advancement; political forces; legal and social forces; management’s values, beliefs and philosophies; the outcomes of previous organisational decisions; the distribution of power and structure within the organisation i.e. central or decentralised hierarchy; and the unions’ and government agencies’ values and strategies in creating policies and legislations.
Level Employers Unions Governments
Long-Term Business Strategies Political Strategies Macroeconomic
Strategy and Investment Strategies Representation strategies and social policies
Policy Making Organising strategies
Collective Personnel policies Collective Bargaining Labour law and
Bargaining Negotiation Strategies Strategies administration
and Personnel policy
Workplace and Worker Participation Contract administration Labour standards
Individual/ Job design and Work Worker Participation Worker participation
organization Organization Job design and worker Individual rights
(Kochan, Katz and McKersie, 1986, p 17.)
The majority of environmental forces influencing employment relations can be explained by three groups: employers, unions and the government which in essence is the three actors from Dunlop’s System Model.
In relation to KKM’s Strategic Choice, the three tier model explains why and how the three actors interact and hence explaining the environmental forces. There are three levels of decision making: macro, industrial relations system and the workplace. In the perspective of employers, the top level is where the creation of business strategies and goals for it to be competitive are developed to maximise the value of the organisation.
This is usually achieved by satisfying the demands of the environmental forces or eliminating any problems reducing their chances of achieving their goals. The middle level is a representation of the industrial relations where policies and negotiations between all three actors occur. As for the bottom, the policies created in the middle level are implemented upon employees and other parties included in the policies. Thus through this model, it demonstrates that decisions made at the top level will inevitably affect those at the bottom level i.e. policies made at the top level will have some sort of representation in lower level policies.
The notion of strategic choice is based on the assumption that the three actors have alternatives and options in the decisions chosen that will inevitably impact on the employment relations and the direction that these will take. Not only does the organisation can make decisions that would affect itself, but also the choices and decisions made on the part of labour, management, and government affect the course and structure of industrial relations systems. Legislations made by the government can restrict or either enhances an organisation’s ability to be competitive, and an example of this is tariffs imposed in countries to protect the internal markets from overseas markets.
The Labour Process approach was first theorised by Karl Marx. The theory was not a static, universal theory but a historical theory that was revised in the light of historical change. Such scholars as: Harry Braverman, Stephen Marglin, Stanley Aronowitz, Andre Gorz and Katherine Stone have all created their own theories encompassing Marx’s theory during their times, and hence the many different interpretations of the Labour Process (Gartman 1978, p. 1). In general the core notion of Labour Process is concerned in converting potential into actual labour. An example of this is how to organise and structure employees such that the organisation can make full use of their skills. Though this sounds simple in theory, there is an organisational dilemma in how to reconcile the potential inconsistency between individual needs and interests of different organisational stakeholders on the one hand, and the collective purpose of the organisation on the other.
Increase control by the employer over the employees seems to be one solution to the inconsistency of interests and needs. The workplace thus becomes a competition between employees individually and collectively seeking to protect and expand their own interests and needs, but also at the same time trying to resist management’s attempts to control. These activities are closely aligned with actions of industrial relations: conflict of interests that would result in tension and conflict between parties. This approach of increase control was supported by Taylorist approach. Braverman added his thoughts that another form of reconciling the differences was to: de-skill the employees to minimise time lost on context switching; simplify the structure of labour divisions; lower labour cost since the occupation becomes less sophisticated hence maximising output. (Gartman 1978, p. 5)
In essence the labour process sees conflict as a fundamental and central dynamic in organisational life that can be used to explain the actual i.e. observed instances of workplace conflict, control, and profit distribution. This can be seen by large organisations performing “restructuring” of itself in terms of labour management to reduce cost of production (banking sector and motoring industry). Prevention of conflict is not considered in a labour process approach, hence ruling out the requirement of employers to nurture the moral and ethics of employees. Guidelines and procedures are strictly followed, which these features are clear characteristics of industrial relations approach.
“In recent years the distinctions between industrial relations and human resource management have blurred, as the resolution of industrial conflicts has been decentralised and as national policy increased its interests in issues like training and labour productivity, once left to workplace management.”
(Gardner & Palmer 1997, p. 7)
Human resource management is a managerial perspective, with an aim to establish an integrated series of personnel policies consistent with organisation strategy, thus ensuring the quality of working life, high commitment and performance from employees, and organisational effectiveness and competitive advantage: the management of organisational goals and labour. Thus meaning that industrial relations is another component of human resource management, which allows the comparison and contrasting of Kochan, Katz and McKersie’s Strategic Choice approach, Marxist Labour Process approach to be made possible.
One major common approach that there is between the two models is that there is some form of upward movement in opinions and interests by the employees. In the case of strategic choice approach collective bargaining is utilised whereas unions is made use of for the labour process approach to express employees’ interests and needs. As for industrial relations, negotiation is its prized management skill between employer and employee.
Both human resource management and the strategic choice approach create their policies based on the interests of the organisation and employees with a slightly more emphasis upon the organisation goals. From the three tier model, policies are made at the top level in the interests of the organisation just as human resource management places the organisation’s ‘customer’ first (Fells 1989, p. 486). Labour process approach is primarily focused upon conflicts and has a less of an emphasis upon organisational strategies. As previously stated the labour process is closely associated with industrial relations, which can also be seen in the middle level in the three tier model in terms of strategic choice approach. For human resource management, industrial relations is melded into its strategies in the form of pre-emptive actions upon conflicts i.e. the managerial task is seen as a nurturing employees’ moral and ethics.
Labour process approach can also be viewed as hard human resource management as the employees are seen as any other resources of production by controlling and managing them, while cultivation of employees’ moral and needs is neglected. Soft human resource management is represented by the strategic choice approach as employees are seen as ‘human’ resources that are valuable to the organisation to make full use of. Policies made in the middle level of the three tier model are in consideration of both in the best interests of employees and the organisation itself.
Human resource management in recent times has become more strategic; it increasingly scraps developmental aspects and places more focus upon financial aspects. De-skilling of employees has been more emphasised upon more than the structure and organisation of labour, which is quite on the contrary upon the goals of labour process approach where de-skilling of an occupational positions. De-skilling has the effect of either removing or lowering the skill level required from those performing the job and in some cases it will also reduce the price of labour.
In conclusion, Kochan, Katz and McKersie’s Strategic Choice approach and the Labour Process approach provide explanations for the adoption of Human Resource Management, since it is more contingent management strategy than Personnel / Industrial relations. Evidence of this is clearly seen in today’s evolving workplace where large organisations include human resource management in its decision making and is no longer neglected as a lower priority department. In addition, both models: strategic choice approach and labour process, have had many radical perspectives added to the theory in the past until recently very little change has been made meaning the end to the two models and the rise of human resource management. As human resource develops, initiatives come and go whereas the focus of financial mechanisms increase and become more sophisticated.
Bratton J. and Gould J. 1988, Human Resource Management – Theory and Practice
Braverman, H. 1974, Labor and monopoly capital: the degradation of work in the twentieth century
Clark, I ‘The Budgetary and Financial Basis of HRM in the Large Corporation’, Internet Source: http://panoptic.csustan.edu/cpa99/html/clark.html
Fells, R. 1989, The employment relationship, control and strategic choice in the study of industrial relations
Gardner, M. & Palmer, G. 1997, Employment Relations: Industrial Relations and Human Resource Management in Australia
Gartman. D. 1978, Marx and the Labour Process: An Interpretation
Huczynski, A. & Buchanan, D. Organizational Behaviour: An Introductory Text
Kitay, J. 1997 The Labour Process: Still Stuck? Still a Perspective? Still Useful?
Kochan, T., Katz H. & McKersie J. 1986, The Transformation of American Industrial Relations
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