Organizational Commitment

Organizational commitment persists as a primary variable of interest in studies of employment, organizations, and allied fields. The dissertation First database reveals 202 dissertation and abstract titles referencing “organizational commitment” in scholarly sources published between 2001 and 2004, and organizational commitment remains a perennial topic for management scholars. Commitment has been studied by many because it is believed to affect organizational performance. For example, a primary aspect of organizational commitment is extra role behaviour. Organizations generally value the initiative and conscientiousness dials such contributions represent. Although organizations appreciate individual performance that goes beyond job requirements, few would argue that job descriptions can adequately specify all valued contributions. (Bills 2003 202-21)

Numerous studies have shown that organizational commitment predicts important variables, including absenteeism, organizational citizenship, performance, and turnover. Colbert and Kwon (2000) noted that organizational commitment has been related inversely to both intent to search for job alternatives and intent to leave one’s job. Also, it reduces absence frequency. In addition, organizational commitment has been related to more positive organizational outcomes, including job satisfaction and attendance motivation. These studies underscore organizational commitment’s importance and thus the need to understand better its antecedents.

Many firms have moved rapidly from Tayloristic work systems, in which employees exercise limited discretion within narrow job descriptions, toward High Commitment Work Systems (HCWSs) that require considerable discretion, initiative, and judgment under reduced supervision. Lincoln and Kalleberg (1985) described a similar earlier trend inspired by the apparent success of Japanese-style management. These trends have spurred increased interest in organizational commitment, and will likely enhance its importance in coming years. Still, many issues concerning organizational commitment remain poorly understood. For example, scholars contend that many organizations adopt Human Resources (HR) practices intended to maximize employee commitment, yet, with few exceptions, little systematic research examines the influence of HR practices; including practices intended to promote commitment. Further, although prior work suggests that organizational structure influences commitment (Berger and Cummings, 2000), its effects have received only limited attention. (Berger 2000 287-326)

We examine effects of HR practices and organizational characteristics on commitment. Nearly all past studies rely on samples drawn from one (usually) or very few worksites. This severely restricts inferences on factors that tend to be constant within organizations, but vary across organizations, notably HR practices and organizational structures. The National Organizations Survey (NOS) used a hyper-sampling strategy to develop a nationally representative sample of employees and workplaces. It provides matched employee-employer surveys, including employer responses on HR practices and organizational characteristics. In addition to providing meaningful variance on HR practices, this helps overcome common method variance and causal inference problems that plague single source studies. Our study provides two major contributions. First, we test hypothesized relationships that have received little attention in past studies. Specifically, we examine the influence of HR practices and organizational structure on organizational commitment. Second, our study uses a diverse national probability sample of U.S. workers and their employers, providing greater generality than prior studies. (Kallenberg et. all 1991)

In the following section, we discuss theoretical foundations of organizational commitment, and present hypotheses for its relationships with various HR practices and organizational characteristics. Next, data, measures, and methods are discussed. Then, results are presented. Finally, we conclude with a discussion section addressing limitations, contributions of our study, and future research. Contested ground if employment relations are a definition that can be said to encapsulate both HRM and industrial relations, then it is first useful to disaggregate and define its two components. Thus: ‘HRM’ as a theoretical model involves the acquisition, development, remuneration, motivation and maintenance of an organisation’s workforce. Its functional activities are integrated, proactive and strategically orientated to the achievement of business objectives, and they include the organisational practices of human resource planning, job analysis and job design, recruitment and selection, training and career development, performance appraisal and management, compensation and benefits, health and safety and evaluation. Its orientations and activities are predicated on individualist and unitarist assumptions, and these assumptions deny the possibility of inherent conflict in workplace relations. (Holvino 2004 245)

‘Industrial relations’ as a theoretical model involves the rules governing workplace relations and the institutions established to govern and enforce these rules. These ‘rules’ are represented in the terms and conditions of work set out collectively and individually agreed labour contracts and common law contracts, as well as grievance procedures, dispute settlement processes, statutory regulations, codes of conduct, industrial law, and similar. Their formulation is reached through practices such as negotiation, conciliation, arbitration, collective bargaining, individual bargaining, and their governance and enforcement are mediated through ‘institutions’ such as trade unions, employer associations, industrial tribunals, state-sponsored regulatory bodies and the civil courts. Its various orientations and activities are predicated on collectivist and pluralist assumptions, and these assumptions accept the possibility of inherent conflict in workplace relations. (McMalian 1998 193-214)

Although briefly described, the various practices, rules and institutions that fall under these definitions cover the ground we hold as constituting the ’employment relationship’. There are clear differences between their various emphases of workplace interest, such that it would not be hard to reach the conclusion that there are likely to be significant problems in trying melding them together. Indeed, on face value, the distinctions identified may even seem irreconcilable. One could conceivably choose one or the other as a guide to, or mode of, labour management practice, but not both. Much of the HRM literature reflects this problem, typically devoting one or two chapters to industrial relations institutions and rules without saying much about how these fit into its overall vision.

The industrial relations literature is similarly inclined, saying little about HRM programmes or how they might be expected to operate within the institutional machinery that regulate the rules of workplace relations. What comment has been passed has typically regarded HRM as a threat to industrial relations, the assumption being that its individualist and unitarist orientations are inimitable to the collectivist rule-making processes and the pluralist institutions set up to govern such processes. In other words, you can apply one (i.e. HRM) to replace the other (i.e., industrial relations), but you cannot have both. (Williams 2006 219-31)

From a theoretical point of view such an argument seems coherent. Industrial relations are based on the assumption that there is an ever-present potential for conflict between competing workplace groups, and therefore rules and institutions for its regulation are necessary. HRM, on the other hand, is based on the assumption that conflict is not an inherent part of workplace relations and therefore such rules and institutions are not needed. Indeed, from an HRM standpoint, they are often conceived to be the actual cause of conflict, such that their removal is fundamentally necessary for the proper operation of HRM practices. The first is that the less pervasive are the rules and institutions of industrial relation, the more HRM practices will prosper to the benefit of all. Hence the action to be taken is to seek the reduction or elimination of such rules and institutions.

The second is that the more properly HRM practices perform to the benefit of all, the less need there will be for the rules and institutions of industrial relations – the action in this instance being to persist with HRM practices until this end is achieved. Firms in the industrial west have generally followed one or the other of these advocacies, some lobbying government for measures to limit the powers and prerogatives of such things as trade unions and industrial tribunals, others introducing HRM practices as a means of weaning employees away from such things as collective agreements and union affiliation. (McCuiston, 2004 73-92)

There are grounds for challenging the rationale underpinning both these claims. It is wrong, for example, to assume all workplace relations are marked by endemic conflict between competing workplace interests. Most day-to-day experiences and relations between managers and employees, in fact, contain a goodly amount of general reciprocal interest in securing the survival of the organisations they work for. But it would be equally wrong to deny the ever-present potential for conflict between these groups over the specifics of work. How a job should be allocated, how intensely it should be performed and at what rate it should be remunerated are all areas that raise and sustain the potential for workplace conflict. This is because managers typically have more power than employees to determine such matters, and it is a power that will inevitably be contested from time to time, if not by the employees themselves than by trade unions, pressure groups or governments acting on their behalf. It is furthermore wrong to conceptualise HRM and industrial relations as being mutually exclusive.

Many HRM problems (e.g., absenteeism), for example, are in fact manifestations of industrial conflict (e.g. a ‘covert’ form of industrial conflict), whilst many industrial relations problems (e.g. discrimination) are manifestations of failing HRM practices. The point to be made here is that the assumptions dividing HRM and industrial relations are not as clear-cut as theory would suggest, such that the rationale underpinning the claim that the two forms of labour management are inimitable is questionable. This raises the possibility for their coexistence, an issue to which we now turn in the hope of relaying some understanding of how it might be conceptualised and applied. To this end we draw on a study by, which provides two useful analytical frameworks for this very purpose. The first delineates four approaches an organisation might take in its management-union relations. Looking at these approaches is a necessary first step, since the possible coexistence of HRM and industrial relations practices is very much predicated upon how an organisation chooses to relate with trade unions. (McMalian 1998 193-214)

So stated, the first approach involves managing trade union relations externally by referring industrial relations issues to employer associations or labour lawyers, thus providing the organisation with representation in negotiations conducted with trade unions and on matters brought before industrial tribunals. The advantage of this approach is that management can draw on outside industrial relations expertise, which can be cost effective, particularly for small organisations. It also allows organisations to resist trade union demands by making reference to industry standards and tribunal decisions.

The major disadvantage is that any settlements reached will be less tailored to the particular circumstances of the organisation, and they may also not get to the root cause of the issue in dispute. This approach broadly reflects management-union relations under the centrally negotiated collective bargaining system. It is antithetical to the possibility of HRM practices as the wages and conditions of work are externally determined and imposed on the organisation from Outside’. In short, the On-the-job’ co-existence of HRM and industrial relations practices is difficult to contemplate under this type of approach. (Friday 2003 363-80)

The second approach involves managing trade unions relations internally through a specialist department (e.g. HRM). In this case the organisation, through its specialist department, negotiates directly with trade unions and the bargaining agendas are more clearly defined in terms of the circumstances and needs of the organisation. The main advantages of this approach are that it raises the quality of management-union relations and ensures negotiated outcomes are fair and consistent with accepted practices across the organisation. It also allows organisations to approach the management of trade union relations in a proactive rather than reactive manner. The main disadvantage is that it can encourage the growth and influence of trade unions within the decisional processes of an organisation, such that securing industrial peace becomes a more important goal than achieving business objectives. This approach is broadly consistent with management-union relations that operate under union negotiated collective agreements concluded at the level of the enterprise. Because it is organisationally-centred, the practice of HRM within the limitations and expectations imposed by trade unions is therefore possible.

The third approach involves managing trade union relations internally through line managers. In this instance, line managers are given the responsibility for dealing with industrial relations issues, negotiating directly with trade unions and providing representation in the proceedings of industrial tribunals. They may call on advice from an internal specialist department or externally from an employer association or labour lawyer, but the ultimate responsibility for any outcomes resulting from such negotiations and representations rests with them. Because of the closeness of line managers to the source of industrial relations problems, one advantage of this approach is that it encourages the early resolution of industrial relations issues. It also encourages higher levels of communication and cooperation between management and workers, thus reducing the number of issues likely to lead to disputes.

The main disadvantage is that it is prone to marginalize trade unions from the workplace, which can provoke them into actions against an organisation to promote or sustain their relevance. It also relies heavily on the competence of line managers to deal effectively with industrial relations issues, trade unions and industrial tribunals. As in the previous approach, this one is similarly consistent with management-union relations that involve union negotiated collective agreements negotiated at the enterprise level, and so the coexistence of HRM and industrial relations practices is similarly possible within the limitations and expectations imposed by the negotiating trade unions. (McCuiston, 2004 73-92)

The final approach involves managing trade union relations, either externally through employer associations and labour lawyers and/or internally through line managers or specialist departments, but in this instance the aim is not to accommodate trade unions and industrial relations issues but to seek their elimination altogether from the workplace. To this end, it seeks to encourage employees away from trade union affiliation and thereby dispense with industrial relations issues by having line managers deal directly with employees on an individual and exclusive basis. It furthermore involves resisting or limiting workplace access to trade unions and strongly opposing their claims and demands in industrial tribunals.

The main advantages and disadvantages of this approach extend upon those listed in the previous approach, the only difference being that the importance placed on the competency of line managers to deal with industrial relations issues, trade unions and industrial tribunals is dependent upon the success or otherwise of the approach. This approach is as organisationally centred as in the previous two approaches, but in this case it actively seeks to limit the role for trade unions in the settlement of workplace rules. It is therefore not possible to conceive of the coexistence of HRM and industrial relations under this approach. (McCuiston, 2004 73-92)

Summing the key elements of these four approaches it could be argued that centrally bargained collective agreements are more consistent with the operation of industrial relations alone, that individually bargained agreements and common law contracts are more consistent with the operation of HRM alone, and that neither of these forms of labour contract is capable of supporting the genuine coexistence of HRM and industrial relations practices. The operation of collectively bargained agreements at the level of the enterprise, on the other hand, is consistent. These later agreements, the provisions of which are typically settled with reference to the operational circumstances of individual organisations, bring HRM interests and trade union bargaining agendas into closer alignment.

In so doing they provide the opportunity for HRM practices to influence and orientate workplace relations in ways that contribute to the strategic direction of an organisation, rather than leaving them to be structured solely by the rules and institutions of centrally determined industrial relations. They furthermore provide the opportunity for industrial relations practices to be tailored to suit the particular circumstances confronting workers employed in different organisational settings and different occupational categories, at the same time securing their workplace well being and protecting them from the vagaries of managerial discretion.

Having set out four possible approaches an organisation can take in its relations with trade unions, it goes on to set out a second framework for conceptualising the role of trade unions in organisational labour management processes. Now a couple of modifications to the subject matter of the study need to be made at this point for a true understanding of what is intended to be purveyed can gained. First, the framework we are about to refer to is concerned with the process of change within organisations that have a trade union presence. For present purposes the meaning of the word ‘change’ can be taken as being synonymous with the introduction and/or application of HRM practices designed to achieve some strategic goal (recall the definition outlined at the beginning of the first section).

Second, the framework is also concerned with the ‘role’ trade unions play in the change process. In the following we hold this role to encapsulate everything trade unions do in terms of the earlier mentioned rules and institutions of industrial relations (recall again the definition outlined at the beginning of the first section). Neither of these modifications corrupts the meanings and understandings of the following framework, and is simply employed to demonstrate in a more accessible way how the coexistence of HRM and industrial relations might be conceptualised and applied. So stated, framework for workplace change involving trade unions is divided into three categorical models: management-driven’, trade union as ‘gatekeeper”, and managementunion ‘alliance ‘. It is to each of these that we now turn. (Brockner 2002 9-28)

In the first of these models the trade union plays no formal role in the change process. In the management dimension, the desire to introduce change is determined by management and its feasibility is considered in relation to the expected responses of employees. Having determined what is feasible it then develops a plan to affect the change. In the employee dimension it settles on a broad strategy (i.e., either to force or foster change), and establishes processes and structures of consultation and persuasion as a means of overcoming employee resistance to the proposed change. The substantive outcomes expected of the change process refer the way work is performed and remunerated, whilst the relational outcomes refer to the altered relationship between managers and employees.

Although the trade union is not included in this process it can nevertheless act upon it in a number of ways. It can strengthen employee resolve to resist the change by making them aware of what happened when a similar change was introduced elsewhere. It can also utilise its expertise to identify operational, financial and longer-term deficiencies associated with the change that employees are unaware of. In so doing, the incentives and levels of consultation and persuasion needed to elicit employee acceptance of the change will become greater, costing more, taking longer, and achieving less. What is left of the change process after these ‘outside’ influences is a change in relational outcomes and no guarantee of a change in substantive outcomes. 

An alternative model is where the trade union is not external to the change process, but is instead formally recognised by management as having a legitimate role to play in representing the interests of employees. It can still be expected to strengthen employee resolve to resist the change and to utilise its expertise in identifying problems with the change. But being integrated into the change process draws it into the role of a ‘gatekeeper’. By this it is meant that the trade union acts in a way that filters employee concerns to management about a proposed change, articulating what is possible and what is not in relation to those concerns. It also acts as a filter in the opposite direction, articulating to employees its own perspective of management’s intentions in relation to the change.

As to the change processes itself, in the management dimension the desire for change is once again the sole prerogative of management, but in this instance it determines the feasibility of the change by making reference to the expected response of the trade union. It then develops a plan, a structure and strategy (i.e. forced or fostered change) to affect the change. In the employee dimension consultation with employees no longer figures in the change process, and is instead replaced by processes of persuasion conducted in a management-union negotiating committee. (McCuiston, 2004 73-92)

Here the trade union negotiates in ‘partnership’ with management, with both sides offering incentives and resistances, demands and counter-demands, claims and counter-claims to affect the best possible result for their constituent needs in relation to the change. Once a settlement is reached, both sides are then expected to deliver on any commitments given and agreed upon. In so doing, the incentives and levels of persuasion needed to elicit employee acceptance of the change will be less than in the previous model, costing less, taking less time, and is more likely to be achieved. The end result is a more effective process of change, with the workplace outcomes being realised on substantive and relational levels in accordance with the trade-offs agreed in negotiations within the management-union committee. (McCuiston, 2004 73-92)

The third model again sees the trade union formally integrated into the change process, but in this instance is involved much earlier. In the management dimension it is still the case that management is the key driver in determining the desirability of change, but its feasibility and planning are undertaken in consultation with the trade union. For its part the trade union can still be expected to articulate members’ resistance to the plan, but its expertise and perspectives on the change can be used to shape the elements and expectations of the plan. Hence, rather then being regarded as an obstacle or filter through which the plan must pass, the trade union is viewed as offering a positive contribution to the plan. Employee consultation and persuasion reappear in the employee dimension, such that the change process now operates on two levels: one involving management and the trade union, the other involving management and the employees.

The issue of trust is important here. The trade union will need to trust the intentions of management consultations with employees are not trying to undermine its role in the workplace, and management will need to trust the intentions of the trade union in fairly representing the views of employees. If this is sustained, a mutually beneficial ‘alliance’ between management and the trade union and between management and the employees, over the elements of the plan and the processes by which it will be applied is possible. The end result is that change will be affected as expected by all parties on both relational and substantive levels.

In looking at these models, by definition the ‘management driven’ approach is inconsistent with the coexistence of HRM and industrial relations practices. Leaving a trade union outside the change process, or to put it in terms closer to the themes of the present discussion, leaving it outside the decisional processes involved in introducing and applying HRM practices, will leave the trade union with little option but to resist the introduction and application of the change. Thus, applying HRM practices will be contingent upon the ability to overcome this resistance, the outcome of which will largely depend on the balance of power each side can wield in the process. In this instance, it truly is a case of one set of practices prevailing over the other (i.e. HRM versus industrial relations) in the manner described in the early paragraphs of the last section, where the rules and institutions or industrial relations represent an obstacle to the implementation and operation of HRM practices. Although the model is inconsistent with the possibility of coexistence, it nonetheless provides a useful reference point for contrasting the other two approaches. (Kochan 2003 3-21)

Here we find that the ‘gatekeeper’ and ‘alliance’ models are, in fact, consistent with the possibility of coexistent HRM and industrial relations practices, but, not surprisingly, they are consistent in different ways. The gatekeeper approach, for example, allows HRM practices to be undertaken via & filtering process involving negotiated trade-offs with trade unions. In short, the coexistence occurs via HRM operating within the limitations imposed by the rules and institutions of industrial relations. The alliance approach, however, uses trade union expertise and employee consultation proactively in the planning stages of HRM, thereby closing the gap between what is desirable and what is feasible, at the same time co-opting trade union and employee commitment to the success of the plan. In short, the coexistence occurs via HRM practices conscripting the rules and institutions of industrial relations to service the achievement of organisational objectives.

As a cautionary note, you should read its contents with a mind that it is a broad conceptual devise aimed delimiting in the simplest possible way the disconnected facts that make up the practical problems and prospects of integrating the two practices. In other words there will always be exceptions, indeed some sizable, to the inferred ‘rules-of thumb’ listed under the various categories. Omitted, for example, is any reference to statutory minimum requirements and common law obligations (as well as their overseeing bodies), both of which could also be considered as part of the rules and regulations of industrial relations that form a backdrop to those that more directly involve trade unions and industrial tribunals. (Guzzo 2003 323-38)

In this closing section we propose to draw on the preceding discussion to outline things that need to be considered when applying HRM practices within an industrial relations setting. In so doing we offer a general appraisal that is capable of embracing all three models, and assume (as a reference point against which other possibilities might be conceived or applied) that HRM practices are operating or intended. Thus, consistent with the processes of a model HRM programme (see above) the initial stage of implementation will rely on senior managers coming together to settle on the strategic objectives and goals of the organisation. In so doing they will need to assess and analyse the available information to determine a corporate plan on how these objectives and goals might be achieved in the most effective and efficient manner. The settlement of these issues will typically have ramifications for the management of the organisation’s employees.

To pursue the corporate plan, for example, the organisation may need to recruit additional employees or lay-off existing employees. It may alternatively require the importation of new skills, the upgrading of existing skills, the introduction of new forms of performance appraisal, the application of new or innovative methods of remuneration, or some other alteration that changes the existing pattern of work and employment. Whatever the case, it will (or should ideally) be the responsibility of HRM (or those in charge of this function) to develop the employee and management dimensions of the corporate plan in a manner consistent with meeting the strategic goals and objectives of the organisation. (Soutar 2004 26-33)

Developing such ‘dimensions’ where trade unions are active and working arrangements are subject to collective agreements will necessitate the settlement of some form of industrial relations policy. Such a policy will need to reflect the organisation’s approach to industrial relations (i.e., management driven, gatekeeper or alliance) and provide a reference point for decision-making. It should be consistent with the achievement of the organisation’s strategic goals and objectives and provide employees with a measure of managerial accountability, particularly where consultations with employees and/or negotiations with trade unions are provided for. The policy should ideally cover a range of HRM issues likely to lend substance to these ends, but at the very least it should deal with the following issues:

• Attitude toward trade unions’ whether the organisation will recognise the legitimate right of trade unions to represent workers (alliance), or whether such a right will be merely tolerated (gatekeeper) or resisted (management directed).
• Structure of trade union representation: whether the organisation will encourage multi-union or single union representation of its employees (alliance and gatekeeper), or whether it will discourage all forms of representation (management directed).
• Negotiation: whether the organisation will negotiate with trade union, on what issues, and at what stage in the planning process (pre-emptively in the case of an alliance strategy, post-operatively in the case of a gatekeeper strategy, or not at all in the case of a management directed strategy).
• Consultation: whether the organisation will consult with employees in addition to negotiating with trade unions (alliance), or conducted with employees alone (management directed), or not at all (gatekeeper).
• Dispute settlement: how the organisation expects industrial disputes will be resolved, either through a combination of negotiations with trade unions and consultation with employees (alliance), or through negotiation with trade unions and/or shop stewards alone (gatekeeper), or through consultation with employees alone (management directed).
• Grievance Procedures: how the organisation expects grievance procedures to be followed, and whether this will involve trade unions and employees (alliance), or trade unions alone (gatekeeper), or employees alone (management-directed).
• Responsibility: who in the organisation will be responsible for industrial relations issues, whether external agencies in the form of employer associations and labour lawyers (management directed), or internally in the form of specialist departments and/or line managers (management directed, gate keeper and alliance). (Gardenswartz 1998 3)

Having settled the company’s approach to industrial relations, the managers of the HRM function will be in a position to consider the implications of applying practices or changing working arrangements to achieve the organisation’s strategic goals and objectives. Thus, if the company is seeking to multi-skill its workforce as part of a programme designed to achieve this aim, it will certainly need to discuss the proposal with its employees. Depending on the industrial relations approach adopted, it may or may not be decided to discuss the proposals with trade union representatives, as well as to take account of any provisions contained in collectively bargained agreements (e.g., job classifications, remuneration, skill development, and so on). The company will furthermore need to evaluate the legal requirements pertaining to such things as occupational health and safety and equal employment opportunity in determining training needs and its allocation among the workforce.

Bearing these considerations in mind the HRM team will need to show a considerable degree of lateral thinking and tact if it is to push through its agenda whilst retaining the trust and confidence of the workforce (i.e., employees only under the union directed model) and/or those with whom it is negotiating (i.e., trade unions only under the gatekeeper model and employees and trade unions under the alliance model). If endemic workplace conflict and collective bargaining between workers and management have long histories in the organisation, and if the trade unions covering the workforce are well organised and militant, then this will be no easy task. Indeed trying to apply a full HRM programme unilaterally (i.e., management directed) may even prove counter-productive. The alternative to such circumstances only serves to highlight the importance of negotiation and consultation, whether in the application stages of a HRM programme (i.e., gate keeper) and/or in the planning stages of the programme (i.e., alliance). Appropriate structures and processes therefore need to be put place to facilitate these activities, and are necessary preconditions if HRM outcomes within an industrial relations setting are to achieve any likely success.

Managers need to be skilled in the art of negotiation and consultation, and thereby recognise that the likely implementation of a theoretically pristine HRM programme in is unlikely to be achieved. They must also have appropriate levels of authority to make decisions and deliver on commitments given in negotiations with trade unions and consultations with employees. And they must also have access to relevant sources of information, whether this is from internal specialist departments or external agencies of expertise (e.g., employer associations or labour lawyers). Once an HRM programme has been implemented, in whatever form (i.e., management directed, gatekeeper or alliance), the question remains as to whether its operation under the chosen industrial relations strategy has been successful. In this respect the accountability of management requires the establishment of industrial relations indicators, which can take the form of information on absenteeism rates, labour turnover rates, monthly calculations of the number of strikes, stop work meetings and grievance meetings, and the resultant lost time associated with each. (Cook 2003 296-322)

A company’s approach to human resource to human resource management in the global environment is guided by its general company approach to human resource management. Most businesses in human resource management: ethnocentric, polycentric, regiocentric, or geocentric. The decision depends on several factors- such as governmental regulations and the company’s size, structure, strategy, attitudes, and staffing. (Ragins 2004 48)

The ethnocentric approach uses natives of the parent country of a business to fill key positions at home and abroad. This approach can by useful when new technology is being introduced into another country. It is also useful when prior experience is important. Sometimes less- developed countries ask that companies transfer expertise and technology by using employees form the parent country to train and develop employees in the host country. The goal is to prepare the host country employees to manage the business.

The ethnocentric approach has drawbacks. For example, it deprives local workers of the opportunity to fill key managerial positions. This may lower the morale and lessen the productivity of local work3ers. Also, natives of the parent county might not be culturally sensitive enough to manage local workers well. These managers could make decisions that hurt the ability of the company to operate abroad. (Adler 2006 61-89)

The polycentric approach uses natives of the host country of a business to manage operations within that country and natives of the parent country to manage at headquarters. In this situation, host country managers rarely advance to corporate headquarters since natives of the parent country are preferred by the company as managers at that level. This approach is advantageous since locals manage in the countries for which they are best prepared. It is also cheaper since locals, who require few, if any, incentives are readily available and generally less expensive to hire than others. The polycentric approach is helpful in politically sensitive situations because the managers are culturally sensitive locals, not foreigners. Further, the polycentric approach allows for continuity of management. The polycentric approach has several disadvantages.

One disadvantage is the cultural gap between the subsidiary managers and headquarters managers. If the gap is not bridged, then the subsidiaries any function too independently. Another disadvantage is limited opportunities for advancement. Natives of the host countries of the host countries can only advance within their subsidiaries, and parent country natives can only advance within company headquarters. The result is that company decision makers at headquarters have little or no international experience. Nevertheless, their decisions have major effects on the subsidiaries.

The regiocentric approach uses manager’s form various countries within the geographic regions of a business. Although the mangers operate relatively independently in the region, they are not normally moved to the company headquarters. The regiocentric approach is adaptable to fit the company and product strategies. When regional expertise is needed, natives of the region are hired. IF product knowledge is crucial, then parent- country nationals who heave ready access to corporate sources of information can be hired. One shortcoming of the regiocentric approach is that managers form the region may not understand the headquarters view. Also, corporate headquarters may not employ enough managers with international experience. This could result in poor decisions. (McCuiston 2004 73-92)

The geocentric approach uses the best available a mangers for a business without regard for their country of origin. The geocentric company should have a worldwide strategy of business integration. The geocentric approach allows the development of international managers and reduces national biases. On the other hand, the geocentric approach has to deal with the fact that most governments want businesses to hire employees from the host countries. Getting approval for non-natives to work in some countries is difficult or impossible. Implementing the geocentric approach is expensive. It requires substantial training and employee development and more r5elocation costs. It also requires more centralization of human resource management and longer lead times before employees can be transferred because of the complexities of worldwide operation.

Organizational commitment is an individual attitude that reflects one’s identification with and involvement in a particular organization. It can be characterized by three related factors:

1. strong belief in the organization’s goals and values,
2. willingness to exert extra effort on its behalf,
3. 3) strong desire to maintain membership.

The extant literature has included important debates, or alternative perspectives, on several important issues, including the focus and conceptualization of organizational commitment. Various foci of employee commitment are possible. These include commitments to one’s employer, profession, immediate supervisor, and union. Our concern is with commitment to the employer. This aligns with our emphasis on organizational-level variables (i.e., HR practices, organizational characteristics) rather than supervisor or co-worker attributes. Also, we emphasize a “global” or unidimensional conception of organizational commitment rather than a faceted approach. Commitment facets are sufficiently correlated such that one may speak meaningfully of overall (unidimensional) commitment, and thus focus on it as a useful concept, even though it may be useful for some purposes to examine its facets in greater detail.

Critics have argued that research on organizational commitment lacks strong theoretical grounding. At least three compatible theoretical streams apply. First, common to all social exchange theories is the notion that individuals seek favourable outcomes relative to their inputs. Consistent with social exchange theory, perceived organizational support (POS) addresses the organization’s commitment to its employees. Specifically, POS refers to the extent employees perceive that employers value employee contributions and care about their wellbeing. Finally, psychological contract theory refers to the implicit, reciprocal rights and obligations that individuals perceive within exchange relations, and can also be used to understand commitment. Each perspective suggests that commitment is contingent on perceived exchanges. More favourable exchanges should strengthen employee attraction to the employment relationship and increase commitment.

In addition, all three theories allow for exchange of either instrumental or affective outcomes. Finally, implicit or explicit within each theory is the notion that employees hold expectations of what employers should provide (e.g., comparison level (CL) standards or expectations, expectations of support, psychological contract expectations). Meta-analyses and more qualitative reviews show that prior study of antecedents varies greatly. Mathieu and Zajac (1990) were able to incorporate 41 prior estimates relating commitment and employee age, but only three on “organizational characteristics” (size and centralization). None of the antecedents examined could be termed a “human resource practice.” This is both interesting and problematic, given that such practices are a principal means organizations use to influence commitment. (McMalian 1998 193-214)

Variables such as age, gender, and tenure are often studied because they vary within a single site, are readily available, and are easy to measure. Prior studies typically focus on a single site where HR practice variation is limited or non-existent; thus, HR practices are not examined. Although a few studies have examined effects of specific HR practices, HR measures tend to be unique and not comparable across studies. This makes the accumulation of findings difficult at best. Hence, little is known about the influence of HR practices and most organizational characteristics. Despite this, prior research provides a basis for predictions on effects of HR practices and organizational characteristics. Testing such predictions is needed to establish the empirical relationship between HR practices and commitment. (Stone, 2005 214-39)

Prior work (suggests distinct HR concepts that should influence commitment. Using that research as a foundation, the present study posits that internal labour markets, hiring selectivity, training, grievance resolution mechanisms, benefits, employee involvement, incentive pay, union pressure, compensation cuts, and downsizing all affect organizational commitment Internal Labour Markets. An internal labour market (ILM) exists when external hiring is limited to entry-level positions, job “ladders” exist to advance internally, and promotion from within is favoured. Bills suggested that a primary motivation to establish and maintain ILMs is to secure employee commitment. Since ILMs favour current employees over external rivals, employees should perceive ILMs positively and reciprocate this support with commitment. Also, individuals may see ILMs fulfilling an employer’s duty to provide security and opportunity for development and advancement. We expect employees appreciate their favoured status in an ILM and, consequently, feel higher commitment. (Marchant 2004 36-42)