Bruce E. Kaufman

Emotional arousal as a source of bounded rationality

Abstract This paper proposes an alternative psychological explanation for bounded rationality. According to Herbert Simon, bounded rationality arises from human cognitive limitations. Following the suggestion of institutional economist John R. Commons, I argue that extremes in emotional arousal also contribute to bounded rationality. This idea is formalized and developed using the Yerkes–Dodson law from psychology. Examples from the popular press and the academic literatures of law, management and economics are presented to illustrate the impact of this type of bounded rationality on human behavior.

Expanding the Behavioral Foundations of Labor Economics

The author examines, critiques, and suggests modifications to the psychological assumptions of the rational choice model of the human agent that underlies much of the theoretical work in modern, neoclassical labor economics. He analyzes the rational choice model in terms of three psychological constructs-motivation, cognition, and emotion-in the context of a five-step model of the human behavioral process. Examples from the empirical and theoretical labor economics literature illustrate both problems with the current theory and new or improved insights and predictions that can be gained by incorporating additional psychological theories and concepts in economic analysis. The author concludes that although the rational choice model is a powerful and productive conceptual device, in many cases it cannot adequately explain behavior in the world of work, and labor economic theory would be improved by a more interdisciplinary approach that integrates conceptual and empirical research from the behavioral sciences. (Abstract courtesy JSTOR.)

The Global Evolution of Industrial Relations: Events, Ideas, and the IIRA.

Foreword Preface Abbreviations Introduction: The road ahead 1. The roots of industrial relations 2. The birth and early development of industrial relations: North America 3. Early industrial relations in Europe: The United Kingdom, the ILO and the IRI 4. American industrial relations in the golden age 5. The institutionalization of industrial relations in Australasia, Canada and the United Kingdom 6. The IIRA: Taking the industrial relations field global 7. Industrial relations in the United States: Challenges and declining fortunes 8. Modern industrial relations in Australasia, Canada and the United Kingdom 9. Industrial relations in continental Europe 10. Industrial relations in Africa, Asia and Latin America 11. The IIRA and contemporary industrial relations: Promoting global dialogue 12. Industrial relations: Retrospect and prospect References Index.

The Determinants of Strikes in the United States, 1900–1977

This study aims to assess the recent debate that has emerged in the literature over the “economic” and “organizational-political” models of strikes and to propose and test a synthesis of those models as an explanation for the pattern of strike activity in the United States since 1900. The paper begins with a review of strike activity in the post-1900 period and then develops a conceptual framework incorporating six factors—the size of union membership, economic conditions, political events, institutional arrangements, psychological variables, and the extent of rival unionism—to explain this historical pattern. The second part of the paper contains a regression analysis of strike activity over the 1900–1977 period. The regression results show that both the economic factors of unemployment and inflation and various noneconomic factors, such as changes in union membership, the outbreak of World War II, and enactment of New Deal legislation, are significant in explaining variations in strike activity during the period studied. The results also show that economic and noneconomic factors have worked together to cause a marked reduction in the variation in strike activity in the post-1948 period.

The theory and practice of strategic HRM and participative management: Antecedents in early industrial relations

Abstract Two central concepts in contemporary management research are strategic human resource management (SHRM) and participative management (PM). Most writers on these subjects portray them as relatively recent (post-1970s) developments in the industry and, in turn, trace their origin in the academic literature to the post-World War II writings of scholars, such as Kurt Lewin, Douglas McGregor, Chris Argyris, H. Igor Ansoff, and Michael Porter. This chronology is largely correct if attention is restricted to the academic field of management, but it misses important antecedent contributions in both theory and practice made several decades earlier by industrial relations academics and management practitioners. This paper describes these early antecedents and demonstrates that both the concept and practice of SHRM and PM were explicitly articulated and implemented in the 1920s, albeit in a different idiom and context than today.

Minimum Wage Channels of Adjustment

The economic impact of the 2007-2009 increases in the federal minimum wage (MW) is analyzed using a sample of quick-service restaurants in Georgia and Alabama. Store-level biweekly payroll records for individual employees are used, allowing us to precisely measure the MW compliance cost for each restaurant. We examine a broad range of adjustment channels in addition to employment, including hours, prices, turnover, training, performance standards, and non-labor costs. Exploiting variation in the cost impact of the MW across restaurants, we find no significant effect of the MW increases on employment or hours over the three years. Cost increases were instead absorbed through other channels of adjustment, including higher prices, lower profit margins, wage compression, reduced turnover, and higher performance standards. These findings are compared with MW predictions from competitive, monopsony, and institutional/behavioral models; the latter appears to fit best in the short run.

SHRM Theory in the Post‐Huselid Era: Why It Is Fundamentally Misspecified

This article critiques the theoretical model that dominates mainstream research in strategic human resource management. Contributions include: the critique is developed from an explicit model of the employment relationship; new concepts of “weak contingency” and “strong contingency” are introduced; the standard hypothesis of a positive sign on the human resource management variable in firm performance studies is shown to be incorrect for a competitive economy (it should be zero); and the analysis is based on “first principles” of institutional economics and industrial relations.

The Theoretical Foundation of Industrial Relations and its Implications for Labor Economics and Human Resource Management

The author identifies the core principle that forms the theoretical and policy foundation for the field of industrial relations—labor is embodied in human beings and is not a commodity—and argues that the fields two central dependent variables are labor problems and the employment relationship. Next, he uses this core principle, along with complementary ideas from institutional economics, to develop a theoretical framework that not only explains the nature of the employment relationship and labor problems but also reveals shortcomings in related theories from labor economics and human resource management. Finally, this framework is used to derive the “fundamental theorem” of industrial relations, demonstrate that optimal economic performance occurs in a mixed economy of imperfect labor markets and organizations, and show that a certain amount of labor protectionism promotes economic efficiency and human welfare.

Bargaining Theory, Inflation, and Cyclical Strike Activity in Manufacturing

This paper presents a theoretical and empirical analysis of cyclical movements in strike activity. The first part of the paper develops a bargaining model that demonstrates the crucial role of limited information as a cause of strikes. This model is believed to be an improvement over others because it allows for maximizing behavior on the part of both the union and the firm and it explicitly incorporates the interdependency that exists between the concessions of one side and the demands of the other. The second part of the paper uses this model to show how inflation may cause a systematic cyclical movement in strike activity. This analysis is developed for both the case of rational price expectations and that of adaptive price expectations. In the final section of the paper a series of fourteen hypotheses, developed either from the authors model or from previous studies, is tested through a regression analysis of strike data for American manufacturing over the 1954–75 period. The results show, among other things, that inflation has been responsible for much of the increase in strike rates experienced in manufacturing in the 1970s.

Human resources and industrial relations: Commonalities and differences

Abstract A diversity of opinion exists about the definition, intellectual boundaries, and major premises of the fields of human resources management (HRM) and industrial relations (IR). To help provide a common frame of reference for discussion and debate on the symposium topic, I endeavor in this paper to flesh out a consensus position on these matters. The method used is largely historical. Based on a review of the origins and evolution of the two fields from the early 20th century to the present day, I show that human resources (HR) up to the early 1960s was typically considered to be a subfield of IR. In more recent years, however, HR has largely severed its links with IR and now is widely regarded as a separate, sometimes competing and sometimes complementary field of study. In the last part of the paper I use this historical analysis, together with a review of the literatures in the two fields and the findings and conclusions of the other papers in this symposium, to identity both the commonalities and differences that distinguish the two fields in terms of their approach to science building (research) and problem solving (policy/practice).