Jonathan Michie

Human Resource Management and Corporate Performance in the UK

The relationship between HRM and performance was explored in 366 UK companies using objective and subjective performance measures and cross‐sectional and longitudinal data. Using objective measures of performance, greater use of HRM is associated with lower labour turnover and higher profit per employee but not higher productivity. After controlling for previous years’ performance, the association ceases to be significant. Using subjective performance estimates, there is a strong association between HRM and both productivity and financial performance. The study therefore confirms the association between HRM and performance but fails to show that HRM causes higher performance.

Innovation Policy in a Global Economy

Innovation Policy in a Global Economy concludes the successful sequence of books on Globalisation and Technology edited by Daniele Archibugi and Jonathan Michie, following Technology, Globalisation and Economic Performance (Cambridge University Press, 1997) and Trade, Growth and Technical Change (Cambridge University Press, 1998). This final volume argues that the opportunities offered by globalisation will only be fully realised by organisations which have developed institutions that allow for the transfer, absorption, and use of knowledge. Innovation Policy in a Global Economy is relevant for graduate and undergraduate courses in management and business, economics, geography, international political economy, and innovation and technology studies. Presenting original theoretical and empirical research by leading international experts in an accessible style, Innovation Policy will be vital reading for researchers and students and of use to public policy professionals.

Business strategy, human resources, labour market flexibility and competitive advantage

This paper contributes to the strategic human resource management literature by testing the three main approaches – the universalistic (‘best practice’), contingency and configurational – against an original database. Specifically, we examine: (1) the relationship between HR and firm performance, (2) the links between strategy, HR and the use of flexible employment contracts and (3) the moderating effects of strategy on the links between HR, flexible labour and firm performance. 2  While there appears to be empirical support for these ‘core’ HR strategies having a positive effect on performance, each of these policies ‘may be embodied in a variety of concrete and detailed people management practices’ (Richardson and Thompson, 1999 :2). Using original data collected from manufacturing and service-sector companies, we find positive relationships between HR policies and practices and performance; that the relationship between HR and performance is dependent upon business strategy; and that companies pursuing an integrated approach to HR coupled with an innovator/quality-enhancer focus within their business strategy perform best. The use of external flexible labour reduces the effectiveness of HR, especially for those pursuing an innovator/quality-enhancer approach.

Britain's Industrial Performance since 1960: Underinvestment and Relative Decline

This article argues first, that Britains industrial performance since I960 has been relatively poor; secondly, that despite the views of Crafts and others, the deindustrialisation which has resulted from this relatively poor industrial performance is a serious problem for the whole economy - not just for the industrial sector itself; thirdly, that neither the specific problem of deindustrialisation nor the consequent general problem of continued relative economic decline were solved in the 1980s; and fourthly, that the key reason why British industry has been doing relatively poorly has been underinvestment in manufacturing. This underinvestment has been allowed to persist by the lack of any strong modernising forces within British society, with the trade union movement having been either too weak or too defensive, and with government policy at best being rather ineffectual and at worst positively harmful. The reasons for this policy failure lie in Britains economic history and in the resulting distorted nature of both the economy and society. This fundamental problem, of a lack of any strong modernising force, has if anything been exacerbated since 1979.

Technical Change, Growth and Trade: New Departures in Institutional Economics

This article analyses the main theoretical and policy issues emerging from the literature on the evolutionary-institutional economics of technical change, the four distinguishing characteristics of which are that technology is often proprietary in nature; only a part of knowledge is codifiable in handbooks, blueprints, patents, and so on; there are fundamental variations in the above two points across different technological fields; and the evolution of knowledge is highly path-dependent. Copyright 1998 by Blackwell Publishers Ltd

Technology, Growth and Employment

The relationship between technology, productivity and employment is a complex one. Increased productivity can lead not just to increased market share, but through falling relative prices can help expand markets, and through product innovation can develop new markets. On the other hand, if demand and hence output does not expand in line with productivity, then an inverse relation between productivity and employment will result. The European Union seeks to improve living standards in Europe by boosting productivity, competitiveness and employment together. How, though, is this to be achieved? This paper looks at the effects on productivity of different forms of investment--in physical capital, in Research & Development, and in human capital. The paper also distinguishes between the high-tech and low-tech sectors. There does appear to be scope for boosting both productivity and employment, particularly in the high tech sectors. But to do so will require increased investment across all three categories--in machinery, in innovation and in people.

Promoting corporate diversity in the financial services sector

This article sets out a detailed and realistic strategy for achieving the diversity in financial services to which the UK Governments Coalition Agreement is committed. Diversity of ownership types and business models creates a corresponding diversity in forms of corporate governance; risk appetite and management; incentive structures; policies and practices; and behaviours and outcomes. It also offers wider choice for consumers through enhanced competition that derives in part from the juxtaposition of different business models. However, the UK financial services sector is dominated disproportionately by a single business model, namely the large, shareholder-owned plc. This domination of the shareholder ownership model – whose purpose is to maximise financial returns to the shareholders – proved a lethal combination with the financial deregulation, the creation of new financial instruments and the concomitant rising levels of debt over the past 20 years. In a situation of uncertainty and unpredictability, we cannot know which model will prove to be superior in all possible future circumstances, so we ought to be rather cautious before destroying any successful model. The global economy is a complex system, and an important point about complexity is that many complex systems are intrinsically unpredictable, even if we know everything else about them. Thus, the problem is not just that the economic future is uncertain, but that it is fundamentally unpredictable.

The corporate governance of professional football clubs

Professional football clubs in England face serious financial and operational difficulties and challenges. Our survey reveals that less than a quarter of football clubs responding had an internal audit committee. Even where clubs had an audit committee, almost one third of those clubs report there being no regular board review of risk assessment reports. The need to undertake risk assessment is now accepted as part of good corporate governance. The collapse of the ITV Digital agreement, which led to Football League clubs losing significant revenue, forcing some into administration, simply illustrates the reasoning behind the practice (following the Turnbull Report). Football clubs (and the companies that own them) need improved corporate governance practice, financial planning and risk assessment procedures; 76 percent of clubs responded that they would benefit from a guide to good corporate governance and 80 percent that they would find advice on Company Law useful.

Converting Failed Financial Institutions into Mutual Organisations

Abstract There are three reasons for promoting mutual building societies: they are less prone than banks to pursue risky speculative activity; a mixed system produces a more stable financial sector; and a stronger mutual sector enhances competition within the financial system. The banking crisis highlighted the importance of retaining diverse models of financial service providers, and while mutuals were affected by the recession, they were not themselves responsible for causing the recession, as were private banks. The UK Government needs to secure a financial return for the failed financial institutions it nationalised and a low level of overall economic risk for the taxpayer. Given a trade-off, the long-run benefits of financial sustainability and reduced risk, plus enhanced competition, need to be given proper weighting compared with any short run gain through a trade sale and the repayment of the governments support. This paper focuses on the case of Northern Rock as the most suitable candidate for remutualisation, and whose disposal is under current consideration, but the analysis applies more widely.

HRM COMPLEMENTARITIES AND INNOVATIVE PERFORMANCE IN FRENCH AND BRITISH INDUSTRY

A dominant theme in the high performance HRM literature concerns complementarities among individual practices and the positive performance benefits associated with adopting simultaneously a bundle of HRM practices. While there is little consensus over what practices should be included under the “high performance” label, most authors see employee representation and consultation as representing a traditional management approach. Moreover enterprise performance is commonly measured as financial performance and relatively little attention has been given to innovative performance. In contrast to the mainstream view, we argue that employee representation can be highly complementary to the training and incentive devices focused on in the high performance HRM literature. This proposition is empirically tested for the innovative performance of comparable populations of U.K. and French private sector establishments. The chapter constitutes one of the first major comparative empirical investigations of the HRM/innovative performance link.