ILPC 2027

This paper addresses in a direct way the conference theme of reconnecting work and political economy. In particular, it seeks to make connections between three things: financialisation, flexibility and strategic HRM. We start with the idea of financialisation, and the degree to which, at least in a UK context, it should be understood as an intensification of existing pressures on organizations rather than as a completely new phenomenon. We then examine the impact of financialisation on the structural flexibility of large UK organizations. Picking up on themes of flexibility first developed in Ackroyd and Procter (1998; see also Ackroyd, 2011) we make use of a unique data-set on the size and market location of these organizations. The data reveals a degree of polarisation in their size and scope: only very few companies are growing in value, while most are shrinking. In the case of large British engineering firms, these transitions have been taken further, with the firms becoming smaller and more specialised. There are also some distinct clusters among these firms, and we can identify these in the specialist engineering, defence and retail-related sectors. These developments are placed in the context of the ‘new flexible firm’ model developed in Ackroyd and Procter (1998), with the global financial crisis shown to be intensifying trends already present. Consideration of the relationship between financialisation and strategic HRM brings us to Thompson’s (2003, 2013) disconnected capitalism thesis (DCT). The idea is examined that financial and economic conditions make it impossible for firms to introduce anything like a fully fledged regime of strategic HRM. At the same time, we argue that there are other ways of explaining HRM’s failure to deliver on its promises. We look in particular at the work of Kaufman (2010), whose argument that HRM theory is ‘fundamentally misspecified’ can be seen as approaching the issue from the point of view of economics: firms are acting purely rationally in taking up HRM practices only up to the point at which the benefits no longer exceed the costs. The third side of our triangle links flexibility with strategic HRM. Here we draw initially on the framework developed by Wright and Snell (1998). Their basic concern is whether flexibility and ‘fit’ in strategic HRM should be seen as complements or as substitutes for each other. We place this in the context of an intensification of financialisation, and the effects we have already identified, in an attempt to provide a framework in which we can locate current developments in their wider and more historical context (Procter and Rowlinson, 2012). References Ackroyd, S. (2011) ‘Post-bureaucratic Manufacturing? The Post-war Organization of Large British Firms’, in S. Clegg, M. Harris and H. Hopfl (eds) Managing Modernity: Beyond Bureaucracy?, Oxford UP, pp, 176-201. Ackroyd, S. and S. Procter (1998) `British Manufacturing Organization and Workplace Industrial Relations: some Attributes of the New Flexible Firm', British Journal of Industrial Relations, 36(2): 163 83. Kaufman, B. (2010) ‘SHRM Theory in the Post-Huselid era: Why it is Fundamentally Misspecified’, Industrial Relations, 49(2): 286–313. Procter, S. and M. Rowlinson (2012) ‘From the British Worker Question to the Impact of HRM: Understanding the Relationship between Employment Relations and Economic Performance’, Industrial Relations Journal, 43(1): 5-21. Thompson, P. (2003) ‘Disconnected Capitalism: or Why Employers Can’t Keep their Side of the Bargain’, Work, Employment and Society, 17(2): 359-378. Thompson, P. (2013) ‘Financialization and the Workplace: Extending and Applying the Disconnected Capitalism Thesis’, Work, Employment and Society, 27(3): 472-488. Wright, P. and S. Snell (1998) ‘Towards a Unifying Framework for Exploring Fit and Flexibility in Strategic Human Resource Management’, Academy of Management Review, 23(4): 756-772.