Making Or Buying Employees: The Relationship Between Human Resources Policy, Business Strategy And Corporate Restructuring

Abstract

This study used cross level data from two different levels of management to examine the relationship between human resources policy, business strategy and corporate restructuring activities. The results suggested that corporate restructuring activities, not business strategy, accounted for a significant proportion of variance in the career patterns of managers. Organizations that had experienced more restructuring in the form of cutbacks in operations, reductions in force, voluntary terminations, and reorganizations had a remaining work force that had an external labor market orientation. These results challenge the theory of Miles & Snow (1984) and Sonnenfeld and Peiperl (1988) that suggests an organizations business strategy should be reflected in human resource policy.