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Strategy and Human Resource Management Third
Edition Management Work and Organisations Boxall
Digital Instant Download
Author(s): Boxall, Peter, Purcell, John
ISBN(s): 9780230579354, 0230579353
Edition: 3
File Details: PDF, 16.19 MB
Year: 2011
Language: english
MANAGEMENT, WORK & ORGANISATIONS

Strategy and
Human Resource
Management
Peter BoxalL &
John Purcell

‘An indispensable companion for any

www.palgrave.com student of HRM.'
Companion Website - Ian Kirkpatrick, Professor of Work
and Organization, Leeds University, UK
 <36%
<2ol(

Strategy and Human Resource

Management

3rd edition
MANAGEMENT, WORK AND ORGANISATIONS
Series editors: Gibson Burrell, The Management Centre, University of Leicester
Mick Marchington, Manchester Business School
Paul Thompson, Department of Human Resource Management,
University of Strathclyde

This series of new textbooks covers the areas of human resource management, employee relations,
organisational behaviour and related business and management fields. Each text has been specially
commissioned to be written by leading experts in a clear and accessible way. The books contain serious and
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These texts have become essential reading at business and management schools worldwide.

Published
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READING MANAGEMENT AND ORGANIZATION IN FILM
Paul Blyton and Peter Turnbull
THE DYNAMICS OF EMPLOYEE RELATIONS (3rd edn)
Paul Blyton and Peter Turnbull (eds)
REASSESSING THE EMPLOYMENT RELATIONSHIP
Sharon C. Bolton
EMOTION MANAGEMENT IN THE WORKPLACE
Sharon C. Bolton and Maeve Houlihan (eds)
SEARCHING FOR THE HUMAN IN HUMAN RESOURCE MANAGEMENT
Peter Boxall and John Purcell
STRATEGY AND HUMAN RESOURCE MANAGEMENT (3rd edn)
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CRITICAL CASES IN ORGANISATIONAL BEHAVIOUR
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RETHINKING REWARD
Ian Greener
PUBLIC MANAGEMENT
Keith Grint
LEADERSHIP
Irena Grugulis
SKILLS, TRAINING AND HUMAN RESOURCE DEVELOPMENT
Geraldine Healy, Gill Kirton and Mike Noon (eds)
EQUALITY, INEQUALITIES AND DIVERSITY
Damian Hodgson and Svetlana Cicmil (eds)
MAKING PROJECTS CRITICAL
Marek Korczynski
HUMAN RESOURCE MANAGE MENT i^SPR'V'IcK'W#*''-
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HUMAN RESOURCE MANACEW^NT:
Patricia Lewis and Ruth Sirrfpson (eds)
GENDERING EMOTIONS IN 'ORGANIZATIONS
Patricia Lewis and Ruth Simpson (eds)
VOICE, VISIBILITY AND THE GENDERING OF ORGANIZATIONS
Alison Pullen, Nic Beech and David Sims (eds)
EXPLORING IDENTITY
Jill Rubery and Damian Grimshaw
THE ORGANISATION OF EMPLOYMENT
Hugh Scullion and Margaret Linehan (eds)
INTERNATIONAL HUMAN RESOURCE MANAGEMENT
Colin C. Williams
RETHINKING THE FUTURE OF WORK
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ETHICAL ISSUES IN CONTEMPORARY HUMAN RESOURCE MANAGEMENT

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Houndmills, Basingstoke, Hampshire RG21 6XS, England, UK
 Strategy and
Human Resource
Management

3rd edition

Peter Boxall
Professor of Human Resource Management, University of Auckland,
New Zealand

and

John Purcell
Associate Fellow of the Industrial Relations Research Unit at Warwick
University Business School, UK and a Deputy Chairman of the Central
Arbitration Commitee, ACAS, UK

palgrave
macmiltan
© Peter Boxall and John Purcell 2003, 2008, 2011
All rights reserved. No reproduction, copy or transmission of this
publication may be made without written permission.
No portion of this publication may be reproduced, copied or transmitted
save with written permission or in accordance with the provisions of the
Copyright, Designs and Patents Act 1988, or under the terms of any licence
permitting limited copying issued by the Copyright Licensing Agency,
Saffron House, 6-10 Kirby Street, London EC IN 8TS.
Any person who does any unauthorised act in relation to this publication
may be liable to criminal prosecution and civil claims for damages.
The authors have asserted their rights to be identified
as the authors of this work in accordance with the Copyright,
Designs and Patents Act 1988.
First edition 2003
Second edition 2008
Third edition 2011
Published by
PALGRAVE MACMILLAN
Palgrave Macmillan in the UK is an imprint of Macmillan Publishers Limited,
registered in England, company number 785998, of Houndmills, Basingstoke,
Hampshire RG21 6XS.
Palgrave Macmillan in the US is a division of St Martin's Press LLC,
175 Fifth Avenue, New York, NY 10010.
Palgrave Macmillan is the global academic imprint of the above companies
and has companies and representatives throughout the world.
Palgrave® and Macmillan® are registered trademarks in the United States,
the United Kingdom, Europe and other countries.
ISBN 978-0-230-57935-4
This book is printed on paper suitable for recycling and made from fully
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A catalogue record for this book is available from the British Library.
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10 987654321
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Printed in China
 Contents

List of boxes, figures and tables viii

Introduction xi

Acknowledgements xv

1 The goals of human resource management 1

Defining human resource management 1
What are the goals of HRM? 11
Strategic tensions and problems in HRM 24
Summary and structure of the book 34

Part 1 Connecting strategy and human resource

management

2 Strategy and the process of strategic management 39

Strategic problems and the strategies of firms 39
The process of strategic management 50
The role of HRM in improving strategic management processes 56
Conclusions 61

3 Strategic HRM: ‘best fit’ or ‘best practice’? 63

Defining strategic HRM and HR strategy 64
Strategic HRM: the best-fit school 69
Strategic HRM: the best-practice school 85
Conclusions 94

4 Strategic HRM and sustained competitive advantage 97

The resource-based view of the firm: origins and assumptions 97
Resources and barriers to imitation 100

v
 Competencies, ‘table stakes’ and dynamic learning 106
HR strategy, competitive parity and sustained advantage 112
Conclusions 120

Part 2 Managing work and people: searching for general

principles

5 Work systems and the changing economics of production 125

Work systems in manufacturing 127
Globalisation, market reform and production offshoring 141
Work systems in services and the public sector 146
Conclusions 156

6 Managing employee voice 159

The contested nature and changing contours of employee voice 160
What are the impacts of employee voice systems? 178
Management style in employee relations 182
Conclusions 185

7 Managing individual employment relationships 188

The performance equation 189
Managing employee ability 193
Managing employee motivation 202
Conclusions 225

8 Linking HR systems to organisational performance 228

HR systems and organisational patterns in HR strategy 228
The ‘black box’ problem: links between HRM and performance 243
Conclusions 253

Part 3 Managing people in dynamic and complex

business contexts

9 Human resource strategy and the dynamics

of industry-based competition 257
Industry dynamics: cycles of stability and change 258
HR strategy and industry dynamics 263
Conclusions 278

10 Human resource strategy in multidivisional and

multinational firms 280
Structure, control and HRM in multidivisional firms 282
Strategy and HRM in multinational firms 290
The HR implications of mergers and acquisitions 299
Conclusions 304

vi Contents
11 Conclusions and implications 307
The main themes of this book 307
Can strategic planning be a valuable resource in the firm? 316
The design of HR planning processes 318
Seeking integration: HR planning and the new management
accounting 324
Conclusions 336

References 338

Author index 371

Subject index 380

Contents vii
 List of boxes, figures
and tables

Boxes

2.1 Human cognitive issues affecting strategic management 52

3.1 Three sets of questions for a review of HR strategy in a firm 66
3.2 Key characteristics of human resource strategy 68
4.1 Qualities of desirable resources 102
4.2 Hamel and Prahalad’s notion of ‘core competence’ 106
4.3 The four dimensions of a‘core capability’ 107
5.1 Recommended strategies to create a more ‘motivational
model’ of work design 132
7.1 Supporting conditions for performance-related pay 211
11.1 An example of scenario-based HR planning 322

Figures

1.1 The AMO model of individual performance 5

1.2 HRM and workforce performance 6
1.3 The goals of HRM 24
2.1 Four critical elements in a viable business model 43
3.1 An organisation’s HR strategy as a cluster of
HR systems 67
3.2 The Harvard ‘map of the HRM territory’ 69
3.3 Porter’s typology of competitive strategies 81
3.4 Linking HR practices to competitive strategy 81
3.5 The ‘best fit’ versus ‘best practice’ debate: two levels of
analysis 95
4.1 Internal and external dimensions of the strategic problem 100
4.2 Strategic importance of capabilities to the firm 110

viii
 4.3 Lepak and Snell’s ‘HR architectural perspective’ 115
5.1 Conceptual model of high-involvement work processes 136
5.2 Competitive differentiation through HR strategy in a luxury
hotel 152
6.1 Scale of participation allowed to employees and their
representatives 164
6.2 Marchington and Wilkinson’s escalator of participation 164
6.3 What unions do 176
6.4 Voice systems and management style 184
7.1 The individual human resource cycle 189
7.2 Determinants of job performance 191
7.3 A typology of recruitment strategies 196
7.4 Balanced and imbalanced employment relationships 204
7.5 An illustration of the formation of a psychological contract 221
7.6 The expectancy theory of motivation and performance 223
7.7 Promises, trust and commitment in the psychological
contract 225
8.1 HR systems and the links to organisational performance 251
9.1 The S-curve 260
9.2 Phases of industry evolution 262
9.3 HRM and the viability of the firm: key elements 270
9.4 A definition of organisational agility 275
9.5 Dyer and Shafer’s model of HR strategy in agile
organisations 277
10.1 Three levels of strategic decision making in Anglo-American
multidivisional firms 284
10.2 The J-curve of productivity loss in the management of
change 303
11.1 The four perspectives in the balanced scorecard 326
11.2 Example of a strategy map and some balanced scorecard
measures 327
11.3 The employee-customer-profit chain at Sears 331
11.4 Multiple goals in HR strategy and organisational
effectiveness 334

Tables

2.1 Styles of strategy making 58

2.2 A typology of team roles 60
3.1 Pfeffer’s seven practices 88

List of boxes, figures and tables IX

3.2 Some key differences in employment relations in three
national contexts 91
4.1 Types of knowledge 114
5.1 Hourly compensation costs in US dollars for production
workers in manufacturing, 2007: selected countries 142
5.2 Herzenberg et al'.s (1998) typology of work systems 148
5.3 Types of work design in private sector service 149
6.1 Types of employee voice mechanisms 168
6.2 Conditions that affect choices to force and foster: Walton
et al. ’s propositions 177
7.1 A typology of performance types 192
7.2 Types of skill-matching and satisfaction levels 200
7.3 Job facet priorities of British workers 205
7.4 The continuum from transactional to relational contracting 220
8.1 A typology of HR systems 233
8.2 A typology of organisational types and their HR systems 239
9.1 Three types of industry 263

x List of boxes, figures and tables

 Introduction

The last thirty years witnessed a major growth of interest in strategy and
human resource management. Reacting to the dramatic growth of new tech¬
nology, of competitive change, and of regulatory reform, business leaders,
and their counterparts in the public sector, looked for ways to design and
implement more successful strategies. Consultancy practices responded to this
explosion of interest. So too did the academic field of strategic management. It
moved on from its base in prescriptive texts on ‘business policy’. Academically,
strategic management is now characterised by a range of theoretical schools,
by extensive research, and by large academic conferences. Business schools
have invested enormous resources in the teaching of strategy, both in MBA
programmes and in the ‘capstone courses’ of major undergraduate degrees.
The situation is much the same in HRM. The term first gained prominence
in the United States, where the most influential textbooks were initially pub¬
lished and where leading journals such as Human Resource Management and
Human Resource Management Review are based. Outside the United States,
the significance of HRM has been recognised in the launch and growth of
the Human Resource Management Journal, the International Journal of Human
Resource Management and the Asia Pacific Journal of Human Resources, among
others. Within business schools, and across more traditional academic depart¬
ments, there has been an explosion of courses and publications concerned
with the management of work and people. It may have been fashionable to
treat personnel management as a ‘Cinderella’ subject in the 1970s but few
universities today treat HRM with quite the same disdain.
The growth of interest in strategic management and HRM has not, however,
been accompanied by sufficient concern for integrating these two important
fields of theory and practice. This was our argument for writing the first edi¬
tion of this book and remains our overriding goal in this third edition. Too
much of the literature in strategic management continues to downplay or dis¬
regard the human issues which affect the viability and relative performance of

xi
firms. Similarly, too much of the literature in HRM carries on the preoccupa¬
tion of the personnel management literature with individual techniques - such
as particular types of selection tests or performance appraisal formats - and
fails to pay sufficient regard to the way that the value of particular techniques
varies across contexts. Both bodies of literature have their characteristic weak¬
nesses. On the strategy side, it is the failure genuinely to appreciate the ways in
which the management of work and people is strategic to organisational suc¬
cess. On the HRM side, it is the failure to look up from the nooks and crannies
of currently fashionable techniques to study the bigger picture, to perceive the
ways in which patterns of HRM relate to broader business problems and need
to vary with the organisations particular environment.
Strategy and Human Resource Management is not organised around the clas¬
sical sub-functions of HR practice - selection, appraisal, pay, training, and so
on - with the word ‘strategic’ slipped in front. The sub-functional domains
of micro-HRM do not dominate the design of chapters as if they were self-
contained ‘solutions’. Instead, the book is designed around the need for a
critical analysis of how HRM affects organisational performance. We are con¬
cerned with understanding the role that HRM plays in strategic management,
with examining how HR strategy impacts on an organisation’s chances of sur¬
vival and its relative success, and with how HR strategy varies across important
organisational, industry and societal contexts. In tackling these questions, we
are committed to what we call an ‘analytical approach’ to HRM. This means
we try to understand what managers do and why they do it before we offer any
sort of prescription for what they should do or how they could do things bet¬
ter. In other words, empirical description and theoretical explanation should
come before policy prescription. This is an approach which is uncompromis¬
ingly about research but, wherever possible, we try to bring the story to life
with the more interesting illustrations - cases and vignettes - with which we
are familiar and, wherever possible, we insert references to valuable internet
sites. In the book’s companion website, we provide case studies and lecture
notes for every chapter.
In this edition, all chapters in the book have been rigorously reviewed and
updated. As before, we argue that HRM is an essential organisational pro¬
cess which serves multiple goals, and that these goals are subject to strategic
tensions. The framework presented in Chapter 1 contends that not only are
firms typically concerned with securing cost-effective labour and with some
degree of organisational flexibility but that social legitimacy and managerial
power also play important roles in their HR activities. This framework acts
as a touchstone throughout the book. It is reinforced in Chapter 2, where
we argue for the centrality of human resource strategy within any credible

Xli Introduction
understanding of business strategy - and not as some kind of dubious
appendage to it. Our view is that an effective HR strategy is a necessary, though
not a sufficient, condition of business viability. In addition, for those firms that
survive, HR strategy may help to support some form of sustained competitive
advantage. Differences in the quality of HRM help to explain differences in
relative performance.
In Chapter 3, we continue to analyse the debate within strategic HRM over
the role of context (‘best fit’) and universalism (‘best practice’). Our review
of the evidence now includes greater material on national cultures and social
institutions. We have reorganised our discussion of fit so that the evidence is
presented on three levels: societal, industry and organisational. We think this
is a better structure for analysis of specific situations. We retain the conclu¬
sion that firms either adapt to their specific context or they fail. There is a
basis, however, for a concept of best practice when it is founded on underpin¬
ning principles that help managers to achieve better outcomes. As might be
expected, we continue to work studiously with the resource-based view of the
firm (Chapter 4), with the notion that intangible assets can build distinctive
and enviable positions of competitive strength. This remains a very important
body of work which quite obviously links the strategy and HRM fields. We try
in this area to make some of the obtuse ideas more accessible and to ensure we
have an argument that goes beyond the self-evident truths.
The central section of the book (Chapters 5 to 8) aims to identify and
expound major principles that underpin key choices in HR strategy. This
means we are less interested in talking about specific HR practices than we
are in pinpointing critical theoretical principles that run across HRM. In this
edition, Chapter 6 has been reorganised and Chapter 7 has been renamed
and enhanced to underline the importance of mutuality or reciprocity in
employment relationships. As in the second edition, in order to make sense
of the enormous clutter in HRM, we emphasise the value of understanding
organisational HR strategies as clusters of HR systems (Chapter 8). While
organisational politics often ensure that there are some overlapping features,
each HR system in a firm is aimed at a different workforce group. Understand¬
ing HR strategy in this way helps to us to see patterns in it, within and across
organisations, and over time.
Areas much less often visited by writers on strategic HRM include the evo¬
lution of HR strategy across cycles of industry change and the shape of HR
strategy within multidivisional and multinational firms. These have been con¬
cerns of ours - we see them as important in the dynamic picture and in the
larger world of capitalist competition - and they continue to play a key role in
the final section of the book (Chapters 9 and 10). The book’s final chapter

Introduction X1U
includes a summary of the main themes in the book and relates HRM to
important developments in strategic planning and management accounting.
Overall, we think that Strategy and Human Resource Management is a novel
synthesis of the HRM-strategy nexus: you be the judge.

Peter Boxall
John Purcell

XIV Introduction
 Acknowledgements

I am very grateful for the support of Professor Greg Whittred, Dean, Professor
Jilnaught Wong, Senior Associate Dean, and Professor Hugh Whittaker, Head
of the Department of Management and International Business, at the Univer¬
sity of Auckland Business School. Collectively, they have made it possible for
me to remain research-active while serving as the School’s Associate Dean of
Research. I am also indebted to a range of colleagues who have taught me a lot
in our strategic HRM research over recent few years, including Keith Macky,
Peter Haynes, Giles Burch, Tim Bartram and Siah Ang. Similarly, I am very
grateful to my students in the postgraduate diploma of HRM, all of whom are
practitioners, bringing the touchstone of the Teal world’ into the classroom.
I am, as ever, deeply indebted to my friend and partner in this work, John
Purcell. John’s support of my sabbaticals at the University of Bath enabled this
book to become a reality and to reach its third edition in eight years. Work¬
ing with John is always an enriching experience. I have benefited greatly from
his challenging critique and his insight into the critical processes of HRM,
honed through a distinguished research career and extensive engagement
with practitioners. We both thank Palgrave Macmillan for commissioning this
third edition. At Palgrave Macmillan, we especially thank Ursula Gavin, Ceri
Griffiths and Keith Povey. As ever, my heartfelt thanks go to Marijanne for her
unfailing interest in my work and to our sons, Chris, Andy and David, whose
careers help me to see the world of work from a fresh perspective.

2010 Peter Boxall

My thanks go to Professor Paul Marginson at the Industrial Relations Research

Unit at Warwick Business School for appointing me as a Research Professor in
the period 2007-10 and providing all kinds of support. In particular, I wish to
thank Mark Hall for his friendship and sharing with me his deep understand¬
ing of consultation, or what we call in this book ‘employee voice’. While I was

xv
at the IRRU I was also working at the Advisory, Conciliation and Arbitration
Service (ACAS). It is a rare privilege for an academic to have the opportunity to
try to turn theory into practice. My colleagues in the Strategy Unit - Kimberley
Bingham, George Boyce, Rachel Suff, Sarah Podro, Lydia Bradley and Nicole
Ranieri - helped me hugely in debating the practical implications of ‘good
practice’ and the limits of regulation. One outcome was the design of the ACAS
Model Workplace, an interactive tool for managers, and employee representa¬
tives, to use to evaluate their employment relations. I hope that some of this
practical application is reflected in this third edition. Both Peter Boxall and
I share a bond in always wanting theory to inform practice and for practition¬
ers to be able to appreciate the origins and outcomes of their decisions. This
is why we embarked on the book a decade ago. I am most grateful to Peter for
his friendship and support, and critical debates over many years over analysis,
expression and big ideas, and for the depth of his scholarship. Kate Purcell has,
for over forty years, kept me focused on what is important in work, life and
play. My debt to her is beyond compare.

2010 John Purcell

The authors and publishers would like to thank the following for permission
to reproduce copyright material: Professor M. Beer and Professor B. Spector
for Figure 3.2 from Beer, M., Spector, B., Lawrence, P, Quinn Millis, D.,
and Walton, R. (1984) Managing Human Assets, copyright previously held
by New York: Free Press; California Management Review for Figure 9.3
from Williams, J. (1992) ‘How sustainable is your competitive advantage?’,
California Management Review, 34(3): 29-51; Cornell University Press for
Table 5.2 from Herzenberg, S., Alic, J. and Wial, H. (1998) New Rules for a New
Economy: Employment and Opportunity in Postindustrial America, Ithaca, NY:
ILR Press; Emerald Group Publishing Ltd for Figure 5.2 from Haynes, P. and
Fryer, G. (2000) ‘Human resources, service quality and performance: a case
study’, International Journal of Contemporary Hospitality Management, 12(4):
240-8, and Figure 9.4 from Dyer, L. and Shafer, R. (1999) ‘Creating organi¬
zational agility: implications for strategic human resource management’, in
Wright, P, Dyer, L., Bourdreau, J., and Milkovich, G. (eds) Research in Per¬
sonnel and Human Resource Management (Supplement 4: Strategic Human
Resource Management in the Twenty First Century), Stanford, CT, and London:
JA1 Press; Harvard Business School Publishing for Box 4.3 and Figure 4.2
from Leonard, D. (1998) Wellsprings of Knowledge: Building and Sustain¬
ing the Sources of Innovation, Boston, MA: Harvard Business School Press,
Figure 11.1 from Kaplan, R. and Norton, D. (1996) The Balanced Scorecard:

XVI Acknowledgements
Translating Strategy into Action, Boston, MA: Harvard Business School Press,
and Figures 11.2-11.3 from Kaplan, R. and Norton, D. (2001) The Strategy-
Focused Organization, Boston, MA: Harvard Business School Press; John
Wiley & Sons Ltd for Figure 7.2 from Campbell, J. P., McCloy, R., Oppler, S.
and Sager, C. (1993) A theory of performance’, in Schmitt, N. and Borman, W.
(eds) Personnel Selection in Organizations, San Francisco: Jossey-Bass; Oxford
University Press for Table 7.2 from Rose, M. (1994) ‘Job satisfaction, job skills,
and personal skills’, in Penn, R., Rose, M. and Rubery, J. (eds) Skill and Occu¬
pational Change, Oxford: Oxford University Press; Figure 4.3 from Lepak, D.
and Snell, S., (2007) ‘Employment sub-systems and the “HR architecture’”,
in Boxall, P., Purcell, J. and Wright, P. (eds) The Oxford Handbook of Human
Resource Management, Oxford: Oxford University Press, and Figure 7.7 from
Guest, D., (2007) ‘Human resource management and the worker: towards a
new psychological contract?’, in Boxall, P., Purcell, J. and Wright, P. (eds) The
Oxford Handbook of Human Resource Management, Oxford: Oxford University
Press; The Free Press for Figure 3.3 from Porter, M. (1985) Competitive Advan¬
tage: Creating and Sustaining Superior Performance, New York: Free Press; Sage
Publications for Box 5.1 from Parker, S. and Wall, T. (1998) Job and Work
Design: Organizing Work to Promote Well-being and Effectiveness, Thousand
Oaks, CA: Sage; Figure 5.1 from Vandenberg, R. J., Richardson, H. A. and
Eastman, L. J. (1999) ‘The impact of high involvement work processes on
organizational effectiveness: a second-order latent variable approach’, Group
and Organization Management, 24(3): 300-39; Figure 7.3 from Windolf, P.
(1986) ‘Recruitment, selection, and internal labour markets in Britain and
Germany’, Organization Studies, 7(3), and Figures 7.5-7.10 from Rousseau, D.
(1995) Psychological Contracts in Organizations, Thousand Oaks, CA: Sage.
Every effort has been made to contact all copyright-holders, but if any have
been inadvertently omitted the publishers will be please to make the necessary
arrangement at the earliest opportunity.

Acknowledgements XVU
„T
 The goals of human resource
management

Our mission in this book is to examine the ways in which human resource
management (HRM) is critical to organisational success. We are interested
in how HRM affects the fundamental viability and relative performance of
organisations. The logical place to begin is with the analysis of management’s
goals in HRM. What is management trying to achieve in organising work and
employing people? What sort of motives underpin human resource manage¬
ment? This is the question we pose and seek to answer in this first chapter. The
chapter begins by defining the key characteristics of HRM. We then identify
and examine the principal goals or motives that can be discerned in manage¬
ment’s HRM activities. This leads into a discussion of the strategic tensions
and problems that management faces in pursuing these goals. We conclude
with a summary and an outline of what lies ahead in the book.

Defining human resource management

HRM refers to all those activities associated with the management of work and
people in organisations. In this book, related terms such as ‘employee rela¬
tions’, ‘labour management’ and ‘people management’ are used as synonyms
for HRM. While there have been debates over the meaning of HRM since the
term came into vogue in the 1980s, it has become the most widely recognised
term in the English-speaking world referring to the activities of management
in organising work and employing people. The term is not restricted to orga¬
nizations in the Anglo-American sphere: it is also popular in the Francophone
and Hispanic worlds, among others.

1
 We do not wish to use the term loosely, however. Definitions are important.
They should not be rushed or glossed over because they indicate the intellec¬
tual terrain that is being addressed. They suggest the relevant ‘problematics’
of the field - that is, they suggest what needs to be discussed and explained.
Before proceeding, our definition will be clarified and elaborated.

HRM: an inevitable process in organisations

Let’s suppose you are a self-employed individual running your own small busi¬
ness. The business, however, is starting to take off. You have more orders from
clients than you can cope with. You have some capital and your bank manager,
who likes your financial performance so far and thinks you are a good risk, is
prepared to lend you some more. The minute you decide you want to hire
your first employee, you are engaged in the initial stages of human resource
management. You are moving from a situation in which self-employment and
self-management has been everything to one in which the employment and
management of others will also be critical. Your ideas may not be well shaped
at this stage but as you start to think more seriously about what kind of help
you need and take some steps to make it happen (for example, by networking
among talented friends or advertising the job on the internet), you are entering
the world of HRM. Once someone has actually joined you as an employee, you
have really begun the process of HRM in earnest. You have started to expand
your business in the anticipation of improving its potential and, if you wish to
survive, with the intention of making money through employing the talents of
other people. You have embarked on a process that brings opportunity at the
same time as it creates a whole new world of problems for you. (For example:
How are you going to involve this person in decision making? What will you
do if they are not much good at the job and coping with them turns out to be
very time-consuming? If they are good at it, how will you keep up with their
income and career aspirations?)
This simple illustration underlines the fact that it is virtually impossible to
grow businesses (and, for that matter, any kind of formal organization) with¬
out employing people. HRM is a process that accompanies the expansion of
organisations: it is a correlate of entrepreneurial success and organisational
growth. One of the key metrics commonly used to measure the size of
organisations is the number of people employed. The world’s largest com¬
pany by revenue in 2009 - Royal Dutch Shell - employs 102,000 people.1 2

1 http://inoney.cnn.com/magazines/fortune/global500/2009/snapshots/6388.html, accessed
20/5/10.

2 Strategy and HRM

The third largest company by revenue in 2009, Wal-Mart Stores, employs
around 2.1 million people.2 These differences in employee numbers say some¬
thing about the difference between oil production and retail organisations in
terms of technological intensity (the oil industry requires huge capital invest¬
ments while supermarkets remain relatively labour intensive) but both of these
organisations need large numbers of people to do what they do. In the public
sector, workforces can also be very large. The British national health service,
for example, employs 1.4 million people.3
The idea that we might need to justify the process of HRM in organisations
is, thus, rather absurd. We may well wish to analyse the effectiveness of a
firm’s approach to HRM and make some changes but we inevitably come
back to some kind of‘human resourcing’ process (Watson 2005). You simply
cannot grow and maintain organisations without at least some employment
of other people. Longstanding firms may go through periods in which they
need to lay off people - possibly very large numbers of people - to improve
their cost structure but hardly any business will survive unless it is employ¬
ing at least some people on a regular basis. If everyone is laid off and their
final entitlements paid to them, the process of HRM will cease - but so will
the firm.4

HRM: managing work and people

Our conception of HRM covers the policies and practices used to organise
work and to employ people. In other words, HRM encompasses the man¬
agement of work and the management of people to do the work. Work
policies and practices are to do with the way the work itself is organ¬
ised. This includes its fundamental structure, which can range from low-
discretion jobs where supervisors exercise a high level of control through to
highly autonomous jobs where individuals largely supervise themselves. It
also includes any associated opportunities to engage in problem-solving and
change management regarding work processes (for example, through quality
circles or team meetings). Employment policies and practices, on the other
hand, are concerned with how firms try to hire and manage people. They
include management activities in recruiting, selecting, deploying, motivating,

2 http://money.cnn.eom/magazines/fortune/global500/2009/snapshots/2255.html, accessed
20/5/10.
3 http://www.ic.nhs.uk/statistics-and-data-collections/workforce/nhs-staff-numbers/nhs-
staff-1999—2009-overview, accessed 20/5/10.
4 Except in the case of ‘shell companies’ which are defunct but may be revived when
someone acquires the rights to the name and decides to use them.

The goals of HRM 3

appraising, training, developing and retaining individual employees. In addi¬
tion, they include processes for informing, consulting and negotiating with
individuals and groups and activities associated with disciplining employ¬
ees, terminating their contracts and downsizing entire workforces. As this
makes apparent, the management of work and people includes both individ¬
ual and collective dimensions. People are managed through employing and
relating to them as individuals and also through relating to them in larger
groups.

HRM: involving line and specialist managers

Given this wide remit, it should be obvious that HRM can never be the
exclusive property of HR specialists. As an essential organisational process,
HRM is as an aspect of all management jobs. All firms have ‘workforce
strategies’ (Huselid, Becker and Beatty 2005), whether or not they have spe¬
cialist HR people on their staff. Line managers - those who directly supervise
employees engaged in the operations of the firm - are intimately involved,
usually hiring people in their team and almost always held directly account¬
able for the performance of that team. In larger organisations, there may
be permanent in-house HR specialists contributing specialist skills in such
technical aspects of HRM as the design of selection processes, the forma¬
tion of Equal Employment Opportunity (EEO) policies, the conduct of
collective employment negotiations, and training needs’ analysis. There may
also be specialist HR consultants contracted to provide such important ser¬
vices as executive search, and assistance with major reformulations of salary
structure and performance incentives. In the UK, the Personnel Manager’s
Yearbook lists 90,000 HR specialists working in 13,000 organisations/ In
the USA, there are more than 250,000 members of the Society for Human
Resource Management, making this organisation the world’s largest volun¬
tary association of HR specialists.5 6 These figures underline the importance
of this kind of work in advanced economies. All specialists, however, are
engaged in ‘selling’ their services to other managers (senior, middle and
first-line), in working together with other members of the management
team to achieve the desired results. In this book, the acronym ‘HRM’ is
therefore used to refer to the totality of the firm’s management of work
and people and not simply to those aspects where HR specialists are
involved.

5 http://www.wlrstore.com/apinfo/personnel-managers-yearbook.aspx, accessed 20/5/10.

6 http://www.shrm.org/about/pages/default.aspx, accessed 20/5/10.

4 Strategy and HRM

HRM: building individual and workforce performance

HRM can usefully be understood as a set of activities aimed at building indi¬

vidual and workforce performance. On the level of individual performance,
HRM consists of managerial attempts to influence individual ability (A), moti¬
vation (M), and the opportunity to perform (O). If managers want to enhance
individual performance, they need to influence these three variables positively
(Blumberg and Pringle 1982, Campbell, McCloy, Oppler and Sager 1993). This
is true in any model of HRM, whether we are talking of one in which employ¬
ees have relatively basic skills (such as fast-food services) or very advanced
qualifications (such as brain surgery). Using mathematical notation:

P = f(A,M,0)

In other words, individuals perform when they have:

• the ability (A) to perform (they can do the job because they possess the
necessary knowledge, skills and aptitudes);
• the motivation (M) to perform (they will do the job because they feel
adequately interested and incentivised); and
• the opportunity (O) to perform (their work structure and its environment
provides the necessary support and avenues for expression).

The AMO framework is depicted in Figure 1.1. We should note here that it
is not only HRM that affects the AMO variables. Employees are motivated and
enabled not only through incentives (such as pay and promotion) and work
processes (such as supervisory help and co-worker support) but also through
the wider organisational environment, including such things as the quality of
information systems and the level of funding available. It is easier to perform

Figure 1.1 The AMO model of individual performance

The goals of HRM 5

when a firm is financially successful and management decides to plough its
wealth back into new technologies and better staffing budgets.
The mathematical shorthand we use here, P = f(A,M,0), is not meant to
be mystifying or off-putting. It is simply a useful way of indicating that no
one knows the precise relationships among ability, motivation and opportu¬
nity. There is no exact formula here but we do know that all three factors are
involved in creating employee performance. Good ability alone will not bring
performance: the worker must want to apply it. Similarly, motivated workers
with good abilities cannot achieve much if critical resources or organisational
support are lacking. The AMO framework is something that we will refer to
regularly, and develop in a more sophisticated way, in this book.
The managerial effort in human resource management, however, is not
solely concerned with managing individuals as if they were independent of
others. It does include this but, as we have indicated, it also includes efforts
to organise groups of employees and manage whole workforces. Figure 1.2
sketches the role of HRM on this collective level. Again, we do not know
the precise relationships here but we do know that HRM plays an impor¬
tant role in building workforce organisation and collective capabilities and
the general climate of employee attitudes. It typically includes attempts to
build work systems that coordinate individuals in some kind of way, such as
permanent teams, finite project groups and ‘virtual teams’ which coordinate
through intranets and the internet. It may include attempts to build collabora¬
tion across departmental or hierarchical boundaries and networks operating
across work sites, countries and time zones. These sorts of work organisation
activities, along with various kinds of recruitment and development activi¬
ties (including, at times, company takeovers), are attempts to build workforce
capabilities. Managers try to build ‘critical mass’: the stock of knowledge and

Figure 1.2 HRM and workforce performance

6 Strategy and HRM

skills they need to fulfil the firm’s mission. Finally on the collective level, HRM
includes management actions that affect the attitudinal climate of the work¬
place. Management’s stance towards employee voice is a key influence here and
a variety of collective variables - such as trust levels, commitment levels and
the quality of cooperation - are in play.
HRM, then, needs to be understood as a management process that oper¬
ates on more than one level. It includes attempts to manage individuals and
attempts to build a functioning workforce. HRM is about building both
human capital (what individuals can and will do that is valuable to the
organisation) and social capital (relationships and networks among individ¬
uals and groups that create value for the organisation) (Ghoshal and Nahapiet
1998, Leana and van Buren 1999, Snell 1999). These levels are obviously con¬
nected. While there is often much that individuals can achieve through their
own skills and drive, they are always acting within a larger social context. They
are inevitably affected by the quality of workforce organisation and capabilities
and the attitudinal climate in which they are embedded. The need to under¬
stand HRM as concerned with both individual and collective performance will
be an important theme in this book.

HRM: incorporating a variety of management styles

and ideologies

As our discussion so far should indicate, management often adopts a variety

of approaches to managing employees: variety of management practice is a
fact of life in HRM. In the larger organisations, it is quite common for one
approach to be taken to managing managers, another approach to permanent
non-managerial employees, and yet another to temporary and ‘contract’ staff
(Pinfield and Berner 1994, Harley 2001, Kalleberg et al. 2006). In unionised
organisations, such as public sector hospitals, there can be different employ¬
ment regimes for each occupational group with each of these negotiated in
separate contractual negotiations and then enforced or ‘policed’ with a high
degree of seriousness. In this light, Osterman (1987) refers to a range of
‘employment subsystems’ in firms. Lepak and Snell (1999, 2002, 2007) talk of
a ‘human resource architecture’ in which management chooses different HR
systems for different groups based on their strategic value and the uniqueness
of the skills that each group possesses.
Not only are there key differences in style within firms but differences in
styles across firms are also widely observed. In terms of the way firms approach
employee voice, we see a broad range of styles from paternalistic ones through
to workplace ‘partnerships’ in which there is much greater recognition of

The goals of HRM 7

employee rights and interests (Purcell, 1987, Purcell and Ahlstrand 1994, Budd
2004). At one extreme, managers seek to ‘command and control’ and allow
very limited avenues, if any, for employees to express disagreement with man¬
agement policies. This is not necessarily going to stop employee discontent
because employees can still resign, or can sabotage operations in ways that
are not easy to detect, but attempts to exercise managerial power in a unilat¬
eral way are a common style. At the other end, there are companies that are
committed participants in collective bargaining with employee unions, which
produces a structured and legally enforceable way of recognising employee
voice. In European societies, many companies complement union negoti¬
ations with such vehicles as consultative committees or works councils or
develop such structures when unions are absent (for example, Marchington
2007, Purcell and Georgiades 2007). In between, there is a range of ways in
which managers can open up channels for employee voice, including open-
door policies, regular team meetings, and employee forums or ‘town hall’
meetings (Freeman, Boxall and Haynes 2007).
Our definition of HRM, then, allows for a wide variety of management ide¬
ologies and styles. The notion of HRM is largely used in this sense in the
United States where the term covers all management approaches to manag¬
ing people in the workplace. Some approaches involve unions while others do
not (see, for example, Noe, Hollenbeck, Gerhart and Wright 2005). It must be
admitted, however, that most styles of labour management in the US private
sector do not involve dealing with unions.' This fact can mean that students
of HRM there have much less exposure to theory on union-management rela¬
tions than is typical in Europe and in the old Commonwealth countries of
Canada, South Africa, Australia and New Zealand.
In Britain, the rise of practitioner and academic interest in HRM sparked
a debate about the term’s meaning, its ideological presuppositions, and its
consequences for the teaching and practice of Industrial Relations. Storey
(1995: 5) defined HRM as a ‘distinctive approach to employment manage¬
ment’, one which ‘seeks to achieve competitive advantage through the strategic
deployment of a highly committed and capable workforce, using an integrated
array of cultural, structural and personnel techniques.’ Similarly, Guest (1987)
developed a model of HRM as a strongly integrated management approach
in which high levels of commitment and flexibility are sought from a high
quality staff. Some commentators went further and saw HRM as a workplace

7 In 2009, US private sector union density (based on membership) stood at 7.2%

of employed wage and salary earners: http://www.bls.gov/news.release/union2.t03.htm,
accessed 20/5/10.

8 Strategy and HRM

manifestation of Thatcherite ‘enterprise culture’, as an ideology that would
make management prerogative the natural order of things (see, for example,
Keenoy and Anthony 1992).
For research purposes, defining HRM as a particular style is obviously a
legitimate way to proceed. It opens up useful questions such as: What prac¬
tices constitute a high-commitment model of labour management? In what
contexts is such a model likely to occur? Are the outcomes of such a model
actually superior?
We are interested in all styles of labour management, and the ideologies
associated with them, and pursue the sorts of questions about particular
models just noted. However, for the purposes of exploring the links between
strategic management and HRM, we find that a broad, inclusive definition of
HRM is more appropriate. The terrain of HRM includes a variety of styles.
We are interested in which ones managers take in a particular context and
why, and we are interested in how different styles work. The strategy literature
requires this kind of openness because it recognises variety in business strat¬
egy across varying contexts (see, for example, Miles and Snow 1984, Porter
1980, 1985). It implies that there is no ‘one best way’ to compete in markets
and organise the internal operations of the firm. If we are to truly explore the
HRM-strategy nexus, we need relatively open definitions on both sides of the
equation.

HRM: embeddled in industries and societies

HRM, then, is a process carried out in formal organisations - some small,

some large, some very large, including multinational firms and the huge gov¬
ernment departments of large countries. While recognition of this fact is
essential, the academic study of HRM has been criticised by scholars in the
companion discipline of Industrial or Employment Relations for focusing too
much on the firm and ignoring the wider context of the markets, networks and
societies in which the firm operates (see, for example, Rubery and Grimshaw
2003, Blyton and Turnbull 2004, Rubery, Earnshaw and Marchington 2005).
We think this is a fair criticism. The different HR strategies of firms are better
understood if they are examined in the wider context that helps to shape them,
something we shall certainly be arguing throughout this book. Work and
employment practices are not entirely developed within a firm or controlled
by that firm’s management. In Granovetter’s (1985: 481) famous phrase, firms
are ‘embedded in structures of social relations’.
We will shortly be arguing that HRM is profoundly affected by the char¬
acteristics of the industries in which the firm chooses to compete. This is a

The goals of HRM 9

fundamental premise in strategic management theory in which industries are
seen to vary in structure and profitability (Porter 1980) but was also demon¬
strated long ago in Blauner’s (1964) sociological analysis of the nature of
work across different manufacturing environments. He categorised industries
according to four types of technology: craft (in which products are made in
small, distinctive, customised batches), machine-tending (in which produc¬
tion is highly mechanised, as in textile production), assembly-line (in which
workers are located along a conveyer belt which propels the partially com¬
pleted product towards them, as in car assembly), and continuous-process
technology (highly automated, ‘24IT, production, as in oil refining). The
nature of work varies enormously across these four types. According to
Blauner (1964), workers deploy a greater range of skills, have greater control
and generally experience a greater sense of meaning in craft and continuous-
process industries, as compared with machine-tending and assembly-line
industries. The problems of how best to motivate workers naturally vary across
these working conditions.
One can also observe enormous variations across service industries
(Herzenberg, Alic and Wial, 1998). Simply contrast the experience of working
in a major commercial law firm, with its extensive basis in professional educa¬
tion, its elite clients with complex problems, its comfortable, well-appointed
offices and its high level of pay, with that of working in most of the retail
sector, where jobs require much less education, where the public can be rude
and demanding, where employees may be monitored by mystery shoppers,
and have much lower pay levels! In addition to the variation that exists
across manufacturing and service industries, it is also useful to consider the
public sector as a set of ‘industries’, embracing government departments,
the armed services, public health providers, state schools, and many oth¬
ers. Organisations in these areas, just like firms in private sector industries,
face distinctive challenges and demonstrate characteristic ways of handling
HRM that mark them out from other industries (see, for example, Sherer and
Leblebici 2001, Kalleberg et al. 2006, Bach and Kessler 2007).
We will also be arguing that along with industry differences, HRM is deeply
affected by differences between societies. Although globalisation is a pow¬
erful set of forces, the different characteristics of nation states still exercise
a major impact on the HR strategies of firms. Nations provide a range of
resources that affect workplaces and workforces: they provide some level of
physical infrastructure (roading, ports, power, and so on), provide some form
of political and justice system (ranging from autocracy to democracy), some
kind of economic system (usually a variation of capitalism or a blend of capi¬
talism and communism), some degree of general education, and some level

10 Strategy and HRM

of social order. These resources are of various kinds and of variable qual¬
ity across nations but they are always significant in the way they affect what
firms can achieve (Porter 1990). Some differences are more immediately vis¬
ible than others. A less visible, but deep-seated, element of the way societies
vary concerns cultural differences, the ‘beliefs, values, and attitudes shared
by people ... that guide their thoughts, reasoning, actions, and interactions’
(De Cieri 2007: 510). As we shall explore in Chapter 3 of this book, cultural
differences in attitudes to work affect how management can operate in differ¬
ent countries and are not easily set aside by companies wanting to impose a
particular management style from elsewhere.
The role of industry and societal factors in influencing the HR strategies of
firms is an important theme in this book. The implicit model of HR practice
as something entirely within the control of management in the individual firm
is something we work hard to avoid.

What are the goals of HRM?

Human resource management, we have argued, covers a broad range of activ¬

ities associated with managing work and people and shows a huge range
of variations across hierarchical levels, occupations, firms, industries and
societies. This confusing detail and profound diversity naturally begs a fun¬
damental question: what are employers seeking through engaging in HRM
and how do their goals for HRM relate to their broader organisational goals?
What are the underpinning objectives of employers? In terms of the ‘level
of analysis’ involved, our question concerns the goals that characterise whole
employing units: that is, firms or, where these are diversified and devolved in
labour management, business units or establishments within them.
The task is a difficult one. It has never been easy to define the goals of labour
management in the firm. In a classic analysis, Karen Legge (1978: 3) noted that
most textbooks on (what was then) personnel management sidestepped the
issue by briefly referring to some statement such as, ‘the optimum utilization
of human resources in order to achieve the goals and objectives of the organi¬
zation’. She pointed out that this kind of vague, ill-defined statement begged a
number of important questions, including the question of whose interests were
being served and what was meant by optimisation. Ignoring such trouble¬
some questions, the textbooks moved quickly into the traditional exposition
of personnel practices, depicted as ends in themselves (rather than as means
or methods which might be relevant in some contexts and counter-productive
in others).

The goals of HRM 11

 One can, to some extent, sympathise. In asking about a firm’s goals for
HRM, we face the problem that these goals are often implicit (Purcell and
Ahlstrand 1994, Gratton et al. 1999b). Only the larger firms have formal or
explicit goal statements for their HR strategies (Kersley et al. 2006). Even
when they do, we need to be careful in taking them at face value. In HRM,
aspirational rhetoric or ideology may mask a more opportunistic and prag¬
matic reality (Marchington and Grugulis 2000, Legge 2005). Broad policies
are always open to the interpretations of managers, both general and special¬
ist, and sometimes their active subversion. Furthermore, particular patterns
of HRM are laid down or ‘sedimented’ at certain critical moments in an
organisation’s history (Poole 1986) and managers find themselves working
within these traditions without necessarily being able to explain how all the
pieces got there. Goals may not be seriously analysed unless some kind of crisis
emerges in the firm’s growth or performance that forces reconsideration and
restructuring (Snape, Redman and Wilkinson 1993, Colling 1995). Our task,
then, is better understood as trying to infer the general intentions or motives
underpinning labour management, recognising that we are studying a com¬
plex, collective process, built up historically in firms and inevitably subject to
a degree of interpretation, politicking and inconsistent practice. It helps if we
analyse the goals of HRM in terms of two broad categories: economic and
socio-political goals (Boxall 2007).

The economic goals of HRM

Cost-effective labour

We argue in this book that the primary problem facing firms is to secure their
economic viability in the industries in which they have chosen to compete.
Economic viability means that a firm generates a return on investment that its
shareholders consider ‘acceptable’ or which meets the obligations it has to its
bankers and other lenders (Cyert and March 1956, Kaysen 1960, Williamson
1964). It is not essential for a firm to ‘maximise’ profits but it is essential to pro¬
vide investors and lenders with the kind of financial returns that sustain their
commitment to the organisation. Shareholders and other finance-providers
form part of the political coalition of stakeholders that sustains a firm (March
1962, Cyert and March 1963: 42-3). Management needs to ensure it meets
their demands for a worthwhile return from the risk they are taking. The con¬
sequences of failing to generate an acceptable profit are that managers may be
sacked, firms may be sold off, or they may be broken up and reabsorbed into
other parts of a larger organisation.

12 Strategy and HRM

 It helps to tease out more fully what this implies for the organisation,
including its HRM. In order to build a viable business model, management
must, in fact, meet four fundamental conditions. First, managers must develop
products or services that an economically worthwhile group of customers
wants to buy. Marketing theory has long emphasised the fundamental prin¬
ciple that management needs to identify a group of customers whose needs
the firm can potentially serve at a profit (Kotler and Keller 2006). However,
a second condition applies. The firm will not be profitable simply through an
astute targeting of customer needs. It will fail unless it actually implements
its marketing promises. This means that it must stabilise a production system
that delivers its promised products or services to customers in a reliable way
(Rubery 1994, Rubery and Grimshaw 2003). This depends on having the nec¬
essary technology or know-how and operational processes for producing the
product or service, and leads to a third, closely related condition. The firm
must hire and manage the kind of labour it needs in a way that is affordable.
In other words, management needs to establish a cost-effective system for man¬
aging the work and people the business requires (Geare 1977, Osterman 1987,
Godard 2001). All of this implies one final condition: the firm needs the finan¬
cial backing that will make its marketing, production and human resource
management possible (Reynolds 1987, Besley and Brigham 2009). Sometimes
this funding comes solely from the owner-manager or from family members
but, in larger organisations, it typically comes from securing investment from
shareholders and loans from bondholders or bankers.
Cost-effectiveness is a dual concept. It incorporates the idea that firms need
people who are effective, who are skilled at what the firm needs them to
do, while also motivating them to perform at a cost (wages, benefits, train¬
ing, and so on) that the firm can afford to pay. A viable model of HRM
is one that delivers on the grounds of both effectiveness and cost. Because
the characteristics of industries vary (Blauner 1964, Porter 1980), we can
therefore expect that viable models of HRM will vary across industries. For
example, in the discount retail sector, where standard, low-priced goods are
sold in bulk, consumers often shop around for the lowest prices, competition
among firms is often intense, and even minor cost differences can threaten
a firm’s viability (Jany-Catrice, Gadrey and Pernod 2005). In such circum¬
stances, stores have some long-term managers and experienced employees
to provide a reliable ‘backbone’ to operations but otherwise do enough in
HRM to attract less experienced workers, such as part-time student work¬
ers and new migrants, who are paid the kind of wage that is adequate in the
retail sector (Siebert and Zubanov 2009). This is typically at, or not much
above, the legal minimum wage (Osterman 2001). Managers do not expect

The goals of HRM 13

most of these workers to stay for the long term but provide a basic setting in
which they can gain some working experience and move on. Their business
model typically turns on providing sufficient, rather than superior, service
standards because customers are more price than quality sensitive. As a result,
expensive models of HRM, which incorporate more rigorous employee selec¬
tion, higher pay, and extensive internal employee development, are unusual
in this industry (Boxall 2003). The simple fact is that they would not be cost
effective.
On the other hand, as Godard and Delaney (2000: 488) explain, high-skill,
high-commitment HR strategies are more often found in industries where the
production system is capital intensive or where high technology is involved.
They cite the example of nuclear power plants:

in a nuclear power plant employing many workers, the costs of poor morale,
[labour] turnover, and strikes can be high, so the benefits of HRM innovations
will tend to be high. Firm size may also introduce important economies of scale,
reducing the costs of HRM innovations per worker. Thus, in this plant, the benefits
of new practices can be expected to exceed the costs. In a small, low-technology
garment factory employing unskilled labour, the opposite may be true.

In capital-intensive conditions, the actual level of labour cost will be quite

low (10 per cent or less of total cost) but workers will have a major effect on
how well the technology is utilised (Blauner 1964). It thus pays to remunerate
and train them very well, making better use of their skills and ensuring their
motivation is kept high. As they find ways of making the equipment meet or
even exceed its specifications, the unit costs of labour fall and productivity
rises. Thus, in this kind of industry context, the firm can easily sustain high
wage levels. It is more important not to alienate this kind of labour, because
of the productivity impacts of disruptions to production, than it is to worry
about wage levels (Blauner 1964: 136, 180).
These examples help to illustrate the point that it is wrong to confuse
wage levels with unit labour costs or to confuse cost minimisation with cost-
effectiveness (Osterman 1987). In certain cases, where product markets are
very competitive and where technology is limited and the work is labour inten¬
sive, labour costs are decisive in the assessment of cost-effectiveness (Boxall
2003). In these situations, cost-effectiveness does broadly equate with labour
cost minimisation because labour cost levels have such a huge impact on the
survival of firms. This is why so much clothing, footwear and toy manufacture
has moved to low-wage countries such as China and Cambodia. On the other
hand, more complex and capital-intensive research and design functions can
often be kept in high-wage countries where a small team of well-paid designers

14 Strategy and HRM

uses advanced computing equipment and keeps in close contact with their
marketing colleagues and with retail buyers external to the firm.
Clearly, then, the problem of securing cost-effective labour, of making
labour productive at reasonable cost, invites some careful thinking about costs
and benefits in the industry concerned. There are indeed situations where
labour costs can make or break the firm. When this occurs in manufacturing,
firms worry about where to site production facilities to take advantage of lower
labour costs. When it occurs in services, firms typically use employment prac¬
tices that keep their service costs competitive: wages paid are relative to ‘the
going rate’ in the local labour market (but rarely superior to it), the training
investment is only sufficient to ensure basic quality, and employee turnover
levels can be high. Or, if the service can be offered over the internet, man¬
agers may think about outsourcing or offshoring it to lower-cost countries.
Quality may be no better than average but this may be quite acceptable with
customers if the price is right. On the other hand, there are situations where
labour costs are not in competition but the interaction between labour and
technology needs to be carefully managed to achieve high productivity. Here,
high levels of HR investment pay high dividends and help to protect against
disruption or downtime. Similarly, there are areas in the service sector, such as
professional services, which are knowledge-intensive. Here, managers see the
value of investing in higher salaries, extensive career development, and time-
consuming performance appraisal because these practices foster the kind of
expert interactions with customers that make it possible for the firm to secure
and retain high value-added business.
In summary, the fundamental economic motive that can be observed in
HRM is concerned with making labour productive at an affordable cost
in the industry concerned. In effect, managers ask: what HR systems are
cost-effective or ‘profit-rational’ in our specific market context? In capital¬
ist societies, the pursuit of cost-effectiveness runs across the management
of labour in all business organisations and also makes its impact in pub¬
lic sector organisations through their budget constraints and contracting
requirements.

Organisational flexibility

Cost-effectiveness is not, however, the only economic goal we can discern

in HRM. Cost-effective labour is essential to economic viability in a given
context. In other words, given a particular market or budget and a certain
type of technology (among other things), it is about management’s drive to
make labour productive at competitive cost. However, change is inevitable

The goals of HRM 15

and so an element of flexibility is also essential if the firm’s model of HRM
is to remain viable over time. In recent years, many firms have, of neces¬
sity, adopted some HR practices designed to enhance capacity to change or
build ‘organisational flexibility’ (Osterman 1987). The word ‘organisational’
is used here because employers typically seek forms of flexibility which extend
beyond, but encompass, their labour management (Streeck 1987). Concern to
achieve an appropriate degree of flexibility has grown since the 1980s.
In thinking about the HRM goals that firms pursue in the area of
organisational flexibility, it is useful to distinguish between short-run respon¬
siveness and long-run agility. Short-run responsiveness includes attempts to
bring about greater numerical (or ‘headcount’) flexibility (measures which
make it easier to hire and shed labour) and greater financial flexibility
(attempts to bring greater flexibility into the price of labour) (Atkinson 1984).
Thus, firms engaged in very cyclical activities often seek to relate their per¬
manent staff numbers to their calculation of the troughs in business demand
rather than the relatively unpredictable peaks, seeking to offer overtime and
bring in temporary or ‘seasonal’ staff if, and when, the workload surges. This
is common in the retail sector, for example (Siebert and Zubanov 2009). In
other cases, managers seek to pay workers a mix of wages and profit-related
bonuses, with the latter fluctuating in line with company financial fortunes. In
both these cases, the emphasis is on adjusting labour costs to fit with changes
in business revenues. Short-run responsiveness also includes attempts to hire
workers who are cross-trained or ‘multi-skilled’, combining roles that have his¬
torically been kept in separate job descriptions. Such ‘functional flexibility’
(Atkinson 1984) helps the firm to maintain a lower headcount but cope better
with marginal improvements in product design or production processes.
Long-run agility, on the other hand, is a much more powerful, but rather
ambiguous, concept (Dyer and Shafer 1999). It is concerned with the ques¬
tion of whether a firm can build the ability to survive in an environment that
can change radically. Does the firm have the capacity to create, or at least cope
with, long-run changes in products, costs and technologies? Can it adapt to
change as fast or faster than its major rivals? What elements of its HR strat¬
egy might need to be flexible to achieve this? While some firms aspire to
long-run agility, organisational ecologists such as Carroll and Hannan (1995),
who study patterns of organisational birth, growth and decline in industries,
observe that it is very hard to achieve because core features of organizations
are hard to change once laid down in the early stages of establishment and
growth.
A key challenge to the agility of manufacturing firms in recent times has
come from the major cost differences between companies with operations

16 Strategy and HRM

in the developed world and those with operations in newly industrialising
nations. When manufacturers in lower-cost countries find ways of making the
same products at the same quality and delivery benchmarks but do so at much
lower prices, established firms operating in high-wage countries either adjust
their HR strategies or go out of business. A case in point is one of Britain’s most
innovative manufacturing firms, Dyson. The firm, an international leader in
vacuum cleaner technology, shifted its production facilities to Malaysia in the
year 2000. Relocation to Malaysia delivered lower unit costs than was possible
in the UK and also ensured proximity to key parts’ suppliers, thus improving
the firm’s location in its supply chain. Some 550 British workers were laid off in
the process and HR strategy now revolves around managing a dual workforce:
one in the UK where research and development (R&D) staff are employed and
one in Malaysia where the products are assembled.8 This shift in production
facilities and labour forces has made Dyson a more agile firm, enabling it to
invest more heavily in R&D and to expand production. The company sees its
long-run ability to survive as relying on innovation in its core products or
technologies. Making a difficult change to its production and HR strategy has
enabled it to focus more effectively on this goal. Agility, then, may mean that
the firm needs the capacity to make quite radical changes in HRM.

Human resource advantage

The achievement of economic viability is clearly the fundamental priority for

management. It is the most pressing problem that management faces: without
securing their financial viability, firms fail (Reynolds 1987). However, firms
that survive are engaged in an ongoing process of trying to build and defend
competitive advantages (Porter 1980, 1985). Advantages may be temporary or
more sustained. The sort of production switching we have just talked about in
the Dyson case is more likely to enhance viability than it is to bring about a
sustained advantage. The firms that do it first enjoy some temporary advan¬
tages in performance but their offshoring moves are highly visible and are
based on well-known information about cost differences in different coun¬
tries. As other manufacturers follow suit, profits typically return to normal
(Hayes and Pisano 1996). High-tech manufacturing firms, like Dyson, gener¬
ally seek a more enduring form of advantage through some distinctive feature
that is not so easily copied. Dyson has clearly built up a leadership position that
depends on the innovativeness of its products, which stems from the quality
of the highly skilled executives and designers who drive this. This is a form of

8 For a summary of the company’s history, see http://en.wikipedia.org/wiki/James_Dyson,

accessed 25/5/10.

The goals of HRM 17

differentiation in the quality of human resources, a form of'human resource
advantage’.
A firm has some kind of human resource advantage when it builds a
superior, hard-to-imitate capability through the special quality of its human
resources. Human resource advantage can be broken down into two dimen¬
sions (Boxall 1996, 1998). The first of these is ‘human capital advantage’,
which a firm enjoys when it employs more talented individuals than its rivals.
A human capital advantage rests on the outstanding intellectual, emotional
and physical performances of individuals employed in the firm. Depending on
the firm’s business philosophies and financial strategies, this advantage may
simply relate to an elite group of highly talented individuals, typically exec¬
utives and other employees whose skills generate special value, or it may be
more deeply embedded throughout the entire workforce. The second dimen¬
sion of HRA is 'organizational process’ or ‘social capital advantage’, which
occurs in those firms that have developed superior ways of combining the
talents of individuals in collaborative activities. It is possible to hire bril¬
liant individuals, and this can bring important breakthroughs for a company,
but fail to make best use of their potential as a result of poor organisational
processes in such areas as teamwork, cross-functional communication and
problem solving. Thus, more powerful forms of human resource advan¬
tage occur when both the human capital and organisational processes of an
organisation are superior to those of its rivals.
In the long run, just about all firms need to think, in some way, about
human resource advantage but the extent of their investment in HRM varies
from ‘elite’ to more ‘egalitarian’ models. Studies in the service sector imply that
firms rarely build an elite model of HRM for the majority of their workers
when they are locked into the cost-based competition that occurs in low-
skill services (Boxall 2003). In low-skill services, technology is often used to
substitute for workers and customers will typically take part in self-service if
the price is right. The firm may have some elite elements in its staffing (for
example, in its management of marketing and supply-chain experts) but it
is unlikely to invest more than its executives consider necessary in its general
workforce. The goal of building human resource advantage in a more extensive
or egalitarian way throughout a workforce is more of a possibility in differ¬
entiated service markets where a group of affluent customers is prepared to
pay a premium for a higher quality of service (Boxall 2003). This is observed,
for example, in professional services and in such expensive services as luxury
hotels and top-tier retirement villages. As a result, firms will often invest in
more selective recruitment, greater development and better reward of their
front-line staff in order to meet these more discerning customer needs.

18 Strategy and HRM

 Thus, the extent to which human resource advantage is based on elite
or egalitarian models is variable. We will analyse and explore the possi¬
bility of human resource advantage further in this book, particularly in
Chapters 4, 5 and 9. What we wish to emphasise at this stage is that the need
to support the firm’s viability is the fundamental economic driver in HRM.
This rests on achieving a cost-effective approach to managing people and some
degree of flexibility over time. As the competitive struggle unfolds, however,
firms need to consider how HRM can support or develop competitive advan¬
tage, either through management of an elite core of employees or, in certain
conditions, more generally across the workforce.

The socio-political objectives of HRM

Social legitimacy

While the pursuit of economic objectives is fundamental to HRM, it does not

fully account for the strategic behaviour of employers. Firms are economic
actors but they operate in societies, in which there are laws that attempt to
control how managers employ people and in which there are customs, or
widely shared expectations, for how people should be treated in the work¬
place. This means that some degree of social legitimacy must also be seen as a
motive in HRM.
The reasons for this are not hard to discern. Employment laws vary signif¬
icantly across nations, accounting for significant differences in HRM across
different national boundaries (Gooderham, Nordhaug and Ringdal 1999).
There are fundamental differences, for example, between Anglo-American
employment systems, in which management typically contracts with individ¬
ual employees rather than unions, and those that prevail in the ‘Rhineland
countries’ of Germany, France and the Netherlands where ‘social partnership’
models accord a strong role to trade unions and to works councils in which
elected employees have a say over HR policy (Paauwe and Boselie 2003, 2007).
The idea that firms need to adapt to the rules and customs of different soci¬
eties is widely acknowledged in the social sciences. Economists talk of‘varieties
of capitalism’ (Hall and Soskice 2001), recognising the ways that economic
institutions vary across nations. In the Anglophone world, the ‘liberal market’
model is dominant. In this variety of capitalism, shares are widely traded in
stockmarkets, corporate takeovers are commonplace, and both labour-market
regulation and customary attitudes to employment are more individualist and
less collectivist (Gospel and Pendleton 2003). Unionisation is relatively low,
and declining in the private sector, and there are few sanctions against lay-offs
when times are tough (Freeman, Boxall and Haynes 2007). Firms that step

The goals of HRM 19

out of this environment and hire a workforce in major continental European
countries such as France or Germany enter a much more highly coordinated
and regulated variety of capitalism. They typically find that it is important to
work with trade unions and works councils and find it much more difficult to
make unilateral decisions about the workforce. This was graphically illustrated
in the global financial crisis of 2008-9 when some American and British man¬
agers were kidnapped - or ‘bossnapped’ - in French companies and forced
to renegotiate deals involving major redundancies.9 French workers sought
to send the message that Anglo-American cultural assumptions about hiring
and firing labour would not be treated so charitably in France. These events
were viewed with incomprehension in the USA where labour contracts are
more easily terminated, often requiring no advanced notice or compensation.
In many European countries, collective dismissals or redundancies must be
justified to the works council or the union. In some countries, like Sweden
and Germany, the state has an ‘active labour market strategy’ to provide job
and training subsidies to keep workers in employment. National context is
important, especially at times of economic difficulty.
The need for firms to adapt to their social environment is, of course,
strongly underlined by sociologists, such as DiMaggio and Powell (1983,
1991), who bring an ‘institutional perspective’ to the analysis of firms, exam¬
ining the ways in which organisations are influenced by a range of expectations
in wider society. In a major review of this perspective, Scott (2008: 50-9)
defines ‘three pillars of institutions’: the ‘regulative’, the ‘normative’ and the
‘cultural-cognitive’. Regulative pressures are the most obvious. They include
the different codes of employment law that we have just highlighted in our
discussion of varieties of capitalism. Organisations can be coerced to com¬
ply with legal rules, if the state deems this necessary and has the power to do
so. Normative or moral pressures are also fairly apparent, evidenced in the
way that firms come under pressure to conform to prevailing social values
and norms around how to treat people in the workplace. For example, in the
Anglophone world, the last 50 years have seen a growing movement to foster
equal employment opportunity, to eliminate discrimination on such grounds
as gender, race, sexual orientation, and physical disability, and the largest com¬
panies increasingly invest in practices that foster diversity and social inclusion
(Kossek and Pichler 2007). Few companies that are large enough to be ‘house¬
hold names’ are untouched by this important social trend. To be sure, a lot
of this expectation is now embedded in regulation but much of it is conveyed

9 See, for example: http://business.timesonline.co.uk/tol/business/industry_sectors/

industrials/article5974895.ece, accessed 20/5/10.

20 Strategy and HRM

through norms of behaviour that were much less prevalent in earlier times.
Finally, there are cultural-cognitive pressures, which include the ways in which
people customarily think and behave in a society. Hofstede’s (1980, 1983) pio¬
neering work on national culture has emphasised the ways in which people in
some societies are more individualistic than they are in others, more comfort¬
able with status and power differences, more prone to avoid uncertainty, and
so on. These are more subtle, deep-seated pressures and managers may not
discern their true significance if they are simply passing through a country on
a short business trip. Those who stay to live and build a business typically find
that they affect how HRM can be conducted, as we will discuss in Chapter 3.
The key implication we wish to emphasise at this stage is that prevailing
notions of legitimate or appropriate behaviour in how people are employed
affect the standing of organisations (Suchman 1995, Scott 2008). This is cer¬
tainly true in societies where labour laws are not simply enacted but also
effectively enforced through government agencies and/or trade union action.
As Lees (1997) argues, it is therefore important that social legitimacy is recog¬
nised as an employer goal in HRM alongside the more market-oriented ones.
Not only are there legitimacy issues for firms operating in one society but
there are extremely complex legitimacy issues when firms operate in multi¬
ple societies (Kostova and Zaheer 1999). In general, therefore , employers are
concerned with ensuring their social legitimacy while simultaneously pursu¬
ing cost-effective HRM (Boxall 2007). More broadly, of course, the quality of
the firm’s reputation as an employer is only one aspect of its social legitimacy,
which also includes such things as its impacts on the natural environment.
There is a range of contemporary movements designed to encourage greater
social responsibility in business and broader corporate reporting, including
the notion of the ‘triple bottom line’ (financial, environmental and social)
(Elkington 1997).
In practice, we see significant variation in the extent to which employ¬
ers take legitimacy goals into account in their labour management. At one
extreme, there is a group of employers in any society who try to avoid their
legal responsibilities. In the UK, for example, there is an ongoing problem
with the employment of new migrants in unsafe conditions. This was tragically
illustrated in the drowning of 23 Chinese workers while harvesting shell-fish
at Morecombe Bay in 2004.10 There are sectors of the British economy, such
as catering, where research has revealed that a significant number of employ¬
ers do not pay the minimum wage (Edwards and Ram 2006). Most employers

10 See, for example, ‘Another Morecombe Bay is waiting to happen’, The Guardian, Tuesday
28 March 2006, p. 28.

The goals of HRM 21

in Britain, however, comply with their responsibilities under employment law
and under government regulations for occupational safety and health. Their
legitimacy goal is legal compliance. Compliance is the baseline legitimacy goal
for employers who wish to avoid prosecution and bad publicity, a risk in any
society in which labour laws are efficiently enforced. It is apparent, however,
that some firms, at least, operate beyond this baseline. For example, some
firms are now actively competing for Equal Employment Opportunity (EEO)
awards or for favourable rankings in lists of the best companies to work for or
the most family-friendly workplaces.11 These tend to be larger, better-known
firms, but some are also innovative small firms, with a strong interest in build¬
ing their standing as an ‘employer of choice’. Some see the achievement of
the Investors in People (IiP) standard,12 based on a commitment to training
and development linked to business needs, as a dimension of legitimacy while
for others being recognised for corporate social responsibility, including in
employment, is a desirable goal.

Managerial power

As with economic motives, where we see both attempts to stabilise cost-

effectiveness in the short run and the need to build flexibility and competitive
advantage if firms are to survive into the longer term, it is useful to think
about management’s socio-political motives in a dynamic way. All firms can
be seen as political systems in which management holds legitimate authority
but one in which management decisions are nonetheless subject to legal and
moral challenge (Donaldson and Preston 1995). What is management trying
to achieve in the politics or governance of the workplace as time goes by? The
evidence suggests that management exhibits a fundamental desire to enhance
its power as a stakeholder, a tendency that can have both positive and perverse
consequences for the organisation.
In a classic study of management ideology and power, Reinhard Bendix
(1956: xxiii) argued that ‘ideologies of management are attempts by leaders
of enterprises to justify the privilege of voluntary action and association for
themselves, while imposing upon all subordinates the duty of obedience and
of service to the best of their ability’. Similarly, Gospel (1973) refers to man¬
agement as having a less openly acknowledged ‘security objective’ alongside
the profit (cost-effectiveness) motive, a goal to maximise managerial control

11 http://money.cnn.com/magazines/fortune/bestcompanies/2009/, accessed 20/5/10;

http://www.greatplacetowork.co.uk/, accessed 20/5/10; http://www.workingmother.com/
BestCompanies/, accessed 20/5/10.
12 http://www.investorsinpeople.co.uk/Pages/Home.aspx, accessed 20/5/10.

22 Strategy and HRM

over an uncertain environment including threats to its power base from work
groups and trade unions. We can see this in the way the managers of multi¬
national firms tend to favour investment in countries with less demanding
labour market regulations (Cooke 2001, 2007b). We can also see it at industry
and societal levels, in the tendency of employer federations to lobby, over time,
for greater freedom to manage and to resist new employment regulations seen
to be diminishing managerial prerogative. And we see it in the actions of those
firms in which managers wish to minimise the pressures exerted by external
shareholders and watchdogs. De-listing from stockmarkets is growing among
firms in which a dominant (often, family-based) interest has sufficient capital
to buy out other shareholders.13
Power, of course, has negative connotations but we should be careful not
to rush to such a judgement. An appropriate level of management power is
positive. It is needed so that management can coordinate the interests of the
diverse stakeholders on whom the organisation depends, an assumption of
good governance which has long been recognised (Blau 1964, chapter eight).
Most people would recognise that there is a natural tendency in positions of
authority, or in conditions of risk, to try to ensure one can act effectively: it
is unhelpful to firms if managers are hopelessly checked at every point when
they need to make important decisions for the sake of the organisation. Like
other organisational actors, managers need the power to act, they need some
degrees of freedom or the job is impossible (Clegg and Haugaard 2009, Gohler
2009).
However, there is always the potential for power-seeking behaviour to
become perverse, bringing about consequences that are counterproductive
for an organisation’s well-being. Economists studying managerial behaviour
inside the firm have long emphasised the fact that the interests of sharehold¬
ers and managers do not perfectly coincide. Williamson (1964), for example,
argues that while managers need to generate an acceptable level of profit, their
motives also include enlarging their salaries, enhancing their security, and
increasing their status, power and prestige. In the branch of organisational
economics known as ‘agency theory’, managers are seen as agents whose inter¬
ests overlap with, but also diverge from, those of the firm’s principals or
owners (Jensen and Meckling 1976, Lazear 1999, Tomer 2001). Managers, like
other stakeholders in organisations, can use their power to pursue their own
interests, including their personal rewards. Evidence for this perspective is not
hard to find. The global financial crisis of 2008-9, for example, has given rise

13 See, for example, The Economist, 25 November-1 December, 2006, p. 96.

The goals ofHRM 23

to widespread criticism of the way in which banking executives have profited
enormously from annual bonus payouts based on short-term performance
targets while the long-term health of their organisations has been undermined,
or fatally compromised, by ill-informed and excessive risk-taking (Stiglitz
2010).14 Although the worst excesses are in banking, the executive bonus
culture has actually been more widespread. It has been encouraged by the
growth of private equity firms and hedge funds, which have promoted highly
leveraged company acquisitions and speculative investments based on predic¬
tions of share price movements rather than on more conservative valuations
of a company’s assets and liabilities. This trend to ‘financialization’ (Sisson
and Purcell 2010: 91-4) has brought an increasing emphasis on managing
managers through pay-for-performance schemes.
Thus, while management is generally concerned about social legitimacy,
at least to the extent of legal compliance in societies where there is a risk of
legal enforcement, and sometimes well beyond this, we also observe manage¬
ment, as a stakeholder, playing a longer-run political game. The tendency of
management is to act, over time, to enhance its power base, something which
can have both positive and negative consequences for the organization.

Strategic tensions and problems in HRM

We have identified some fundamental or underpinning motives in HRM

(Figure 1.3). We have split these into economic and socio-political goals
because the firm is not simply an unconstrained economic actor: it is an eco¬
nomic entity located in a social context. Firms need a cost-effective approach

Economic Socio-political
Static Cost- Social legitimacy
effective labour

Dynamic
l * * I
Organisational Managerial power
flexibility:
Human resource
advantage

Figure 1.3 The goals of HRM

14 For the OECD’s review of the problem, see http://www.oecdobserver.org/news/fullstory.

php/aid/2931/Corporate_governance:_Lessons_from_the_financial_crisis.html, accessed
19/5/10.

24 Strategy and HRM

to HRM in the industries in which they compete while also needing legitimacy
in the societies in which they are located. If they fail on these two criteria, they
will generally not survive. Over time, firms need to develop some degree of
flexibility in their HRM and their managers need to secure enough power to
be effective. Firms that survive are concerned with how to build and defend
competitive advantages. This implies some thinking about ‘human resource
advantage’, not necessarily for the entire workforce but at least for elite ele¬
ments in it. Such a discussion naturally arouses suspicion that the pursuit of
these goals is far from straightforward. This is indeed the case. The strategic
management of work and people in the firm inevitably involves management
wrestling with ‘strategic tensions’ and problems, including trade-offs between
employer and employee interests. We turn now to a discussion of the key
tensions and problems that management faces.

The problem of labour scarcity

One of the main problems facing management stems from the fact that
firms need to compete not only in product markets but also in labour mar¬
kets (Windolf 1986, Rubery 1994, Coff 1997). In all countries where forced
labour has been eliminated, workers are free to resign and seek alternative
employment. Firms must compete with others to secure appropriately skilled
staff. The general severity of labour supply problems waxes and wanes with
the level of economic growth. Organisations are often inundated with job
applicants and have less difficulty recruiting in major recessions when unem¬
ployment levels are high. However, the challenge of recruiting the quality of
labour they need tends to remain an issue. Well-resourced and well-recognised
organisations, those that have the ability to pay high salaries and offer career
development opportunities, tend to dominate the labour market. As a result,
many small firms remain fragile, tenuous organisations with ongoing recruit¬
ment problems (Storey 1985, Hendry, Arthur and Jones 1995, Hornsby and
Kuratko 2003). The goals of building a stable production system, including a
cost-effective supply of motivated employees, and building some capacity for
development of the business, are seriously compromised if the firm cannot
make competitive job offers and keep the labour it has. It then struggles to
build the capabilities it needs to meet its business objectives or respond to its
clients’ demands. In the extreme, the tension associated with labour scarcity
can become a full-blown ‘capability crisis’, threatening the firm’s reputation
and viability.
Labour scarcity is a problem that can afflict entire industries and not sim¬
ply undercapitalised firms or new firms struggling for recognition. In the

The goals of HRM 25

Exploring the Variety of Random
Documents with Different Content
students and intellectuals, were mostly shot or hanged. She
recognized some of them as they hung from lamp-posts in the
streets, and gave us a vivid imitation of how they looked, with their
necks cricked and their tongues hanging out. She became used to
that sort of thing.... After wandering adventures, abominable
hardships, in dirt and rags, she got through at last to
Constantinople, and lived for a time on a Greek gunboat, as one of
the crew, wearing one of their caps and a sailor’s jersey. They saved
her from starving to death, until she was able to get in touch with
her family. Now she was going to Alexandria, as a typist in an
English office.
She was tremendously amused with all this experience. She wouldn’t
have missed it for the world. It was the adventure of life, and the
great game. There was nothing in life but that—and what did death
matter after this adventure whenever it came! We spoke of war, and
the chance of world peace, and she scoffed at the chance. War was
inevitable—the greatest adventure of all. Cruelty?—Yes, that was
part of the adventure. Men were heartless, but amusing, even in
their cruelties. It was no good looking at life seriously, breaking one’s
heart over impossible ideals. It was best to laugh and take things as
they came, and shrug one’s shoulders, whatever happened. It was
Life!... So we talked under the stars.
There was another girl on board who talked to us. She belonged to a
different type and race—a tragic type, and Armenian. She had some
frightful photographs in a satchel which she wore always round her
waist. They were photographs of Turkish atrocities in Asia Minor.
There was one of a Turkish officer sitting on a pile of skulls and
smoking a cigarette. Those skulls had once held the living brains of
this girl’s family and townsfolk at Samsun. She told me of the death
march of the Armenians when the Turks drove them from the coast
into the interior. The women and children had been separated from
their men folk, who were then massacred. Her father and brother
had been killed like that. They passed their bodies on the roadsides.
The women and children had been driven forward until many
dropped and died, until all were barefoot and exhausted to the point
of death. Kurdish brigands had robbed them of the little money they
had, and their rings. Some of the younger girls were carried off.
Their screams were heard for a long way. There were not many who
reached the journey’s end.... A terrible tale, told with a white
passion of hate against the Turk, but without tears, and coldly, so
that it made me shiver.
In that ship, sailing under the stars in the Ægean Sea, I learnt more
than I had known about the infernal history of mankind during war
and revolution. I had seen it in the West. These were stories of the
East, unknown and unrecorded, as primitive in their horror as when
Assyrians fought Egyptians, or the Israelites were put to the sword
in the time of Judas Maccabæus.
Our ship put in at Mitylene, and with the Greek girl we explored the
port and walked up the hillside to an old fort built by the Venetians
in the great days when Venice was the strongest sea power in that
part of the world. On the way, the Greek girl chatted to shopkeepers
and peasants in their own tongue, and hers, and then climbed to the
top of the fort, sitting fearlessly on the edge of the wall and looking
back to the sea over which we had traveled, and down to our ship,
so small as we saw it from this height.
In the valley, Greek peasants of better type and stock than those at
Athens, and true descendants of the people whose tools and gods
and jewels they turn up sometimes with their spades, were leading
their sheep and goats. Some of them were singing and the sound
rose clear up the hillside with a tinkling of goat bells and the baaing
of the sheep. Wild flowers were growing in the old walls of the fort,
and the hillside was silvered with daisies. We seemed very close to
the blue canopy of the sky above us, as we sat on the edge of the
wall, and in the warm sunshine, and above that calm, crystal-clear
sea, mirroring our ship, we seemed to be touched by the immortality
of the gods, and to be invested with the beauty of the springtime of
the world.
“It would be good to stay here,” said the Greek girl. “We could keep
goats and sing old Greek songs.”
However, presently she was hungry, and scrambled off the wall and
said, “The ship—and supper!”
So we went down to the little port again and rowed away from
Mitylene to the ship which was sounding its siren for our return.
We reached Smyrna next morning, and I, for one, was astonished by
the modern aspect of its sea frontage, upon which the sun poured
down. Beyond the broad quays it swept round the gulf in a wide
curve of white houses, faced with marble and very handsome along
the side inhabited, I was told, by rich Armenian merchants.
“The Turks will never rest till they get Smyrna back,” said the English
major by my side, and his words came as a sharp reminder of the
lines away beyond the hills, where a Greek army lay entrenched
against the Turkish nationalists and Mustapha Kemal. But no shadow
of doom crept through the sunlight that lay glittering upon those
white-fronted houses, nor did I guess that one day, not far ahead,
Englishmen, like myself, looking over the side of this ship, would see
the beauty of that city devoured by an infernal fury of flame, and
listen to the screams of panic-stricken crowds on those broad
quaysides, hidden behind rolling clouds of smoke....
When we landed, in the harbor-master’s pinnace, we found that we
had come on a day of festival among the Greek army of occupation
and the Greek inhabitants of Smyrna. All the ships in the harbor—
among them the very gunboat in which our Greek lady had lived as
one of the crew—were dressed in bunting, and flags were flying
from many buildings. Greek officers, very dandified, in much
decorated uniforms, with highly polished boots, drove along the
esplanade in open carriages, carrying great bouquets, on their way
to a review by the Commander-in-Chief outside the city. Smyrniote
girls, Greek and Armenian, were in fancy frocks and high-heeled
shoes tripping gayly along with young Greek soldiers. Bands were
playing as they marched, and all the air thrilled with the music of
trumpets and military pomp. Few Turks were visible among those
Christian inhabitants. They were mostly dockside laborers and
porters, wearing the red fez of Islam.
It was the English major who told me of the horror that had
happened here when the Greeks first landed. They had rowed off
from their transports in boats, and a crowd of these Turkish porters
had helped to draw the boats up to the quayside. All the Christian
population was on the front, waving handkerchiefs from windows
and balconies. Ladies of the American Red Cross were looking at the
scene from the balcony of the Grand Hotel Splendid Palace—what a
name! There was no sign of hostility from the Turks, but suddenly
the Greek soldiers seemed to go mad, and started bayoneting the
Turks who had helped them to land. In view of all the women and
children who had assembled to greet them with delirious joy, they
murdered those defenseless men and flung their bodies into the sea.
It was a crime for which many poor innocents were to pay when the
Turkish irregulars came into Smyrna with the madness of victory
after the destruction of the Greek army by Mustapha Kemal and his
Nationalist troops. Well, that grim secret of fate lay hidden in the
future when Tony and I booked rooms at the Grand Hotel Splendid
Palace and entertained our little Greek lady to breakfast, and then at
midday waved towels out of the bedroom window in answer to her
signals from the ship which took her on her way to Alexandria and
another adventure of life. The English major brought a bucket to the
upper deck, as we could see distinctly and wrung a towel over it as a
sign of tears. We made the countersign....
The sea front of Smyrna, with its modern marble-fronted houses,
masked an older and more romantic city, as we found in many walks
in all its quarters. It masked the Turkish squalor of little streets of
wooden shops and booths where crowds of Turkish women, more
closely veiled than those in Constantinople, bargained for silks and
slippers and household goods. In the old markets at the end of
Frank Street, now a heap of cindered ruins, we sauntered through
the narrow passages with vaulted roofs where old Turks sat cross-
legged in their alcoves, selling carpets from Ouchak and Angora,
dried raisins and vegetables, strips of colored silk for Turkish
dresses, Sofrali linen, Manissa cotton, German-made hardware, and
all manner of rubbish from the East and West, drenched in the
aroma of spices, moist sugar, oil, and camels.
I was anxious, as a journalist, to get the latest information about the
military situation away to the back of Smyrna, and for that purpose
called upon the British Military Mission, represented by a General
Hamilton and his staff. A charming and courteous man, he was
obviously embarrassed by my visit, not knowing how much to tell me
of a situation which was extremely delicate in a political as well as a
military way. He decided to tell me nothing, and I did not press him,
seeing his trouble.
I obtained all the information I wanted, and even more than I
bargained for, from the Greek authorities. The fact that I
represented The Daily Chronicle, known for its pro-Greek sympathies
and for its official connection with Lloyd George’s Government, gave
me an almost embarrassing importance. No sooner had I revealed
my journalistic mission than I received a visit from a Greek staff
officer—Lieutenant Casimatis—who put the entire city of Smyrna at
my feet, as it were, and as one small token of my right to fulfill the
slightest wish, sent round a powerful military car with two tall
soldiers, under orders to obey my commands. Tony was pleased with
this attention and other courtesies that were showered upon us. It
was he, rather than myself, who interviewed the Commander-in-
Chief of the Greek army, and received the salutes of its soldiers as
we drove up magnificently to General Headquarters.
A military band was playing outside—selections from “Patience,” by
some strange chance—and in the antechamber of the General’s
room Greek staff officers, waisted, highly polished, scented,
swaggered in and out. The Commander-in-Chief was a very fat old
gentleman, uncomfortable in his tight belt, and perspiring freely on
that hot day. The windows of his room were open, and the merry
music floated in, and the scent of flowers, and of the warm sea. “He
received us most politely,” as poor Fragson used to sing in one of my
brother’s plays, and with his fat fingers moving about a big map,
explained the military situation. It was excellent, he said. The Greek
army was splendid, in training and morale, and longing to advance
against the Turk, who was utterly demoralized. Those poor Turkish
peasants, forcibly enlisted by Mustapha Kemal, wanted nothing but
leave to go home. The Greek advance would be a parade—the
Commander-in-Chief, speaking in French, repeated his words with
relish and pride—“a parade, sir!” Unfortunately, he said, Greece was
hampered by differences among the Allies. The French were
certainly intriguing with the Turkish Nationalists of Angora—
supplying them with arms and ammunition! The Italians were no
better, and very jealous of Greek claims in Asia Minor. Greece had
trust, however, in the noble friendship of England, in the sympathy
and aid of that great statesman, Mr. Lloyd George.... The Greek
army would astonish the world.
So the old gentleman talked, and I listened politely, and asked
questions, and kept my doubts to myself. There was not a British
officer I had met anywhere, except General Hamilton in Smyrna,
who had a good word to say for the fighting qualities of Greek
soldiers. There was not one I had met who believed that they could
hold Smyrna for more than a year or two, until the Turks
reorganized.
It was Lieutenant Casimatis who introduced us to the Commander-
in-Chief, and he devoted himself to the task of presenting us to all
the people of importance in Smyrna, and taking us to schools,
hospitals, museums, and other institutions which would prove to us
the benevolence and high culture of Greek rulers in Asia Minor. He
was a cheery, stout little man, speaking English, which he had learnt
in India, and almost bursting with good nature and the desire to
pump us with Greek propaganda.
He took us to the Greek Metropolitan at Smyrna, a black-bearded,
broad-shouldered, loud-laughing, excitable Bishop of the Orthodox
Church, wearing the high black hat and long black robe of his
priestly office, but reminding us of one of those Princes of the
Church in the Middle Ages who led their armies to battle and
sometimes wielded a battleax in the name of the Lord. “An old
ruffian,” I heard him called by an English merchant of Bournabat,
whose sympathies, however, were decidedly pro-Turk. A picture
representing the martyrdom of St. Polycarp at Smyrna, in the early
days of the Christian era, adorned the wall opposite his desk, and he
waved his hand toward it and spoke of the martyrdom of the
Christian people, not so long ago as that, but only a year or two ago,
when they were driven from the coast, as that Armenian girl had
told me. “The spirit of St. Polycarp,” he said, in barbarous French,
“animates the Greek Christians to-day, and nothing would give me
greater joy than to die for the faith as he did.” I have never heard
whether this pious wish was fulfilled. It seems to me probable.
For a long time he talked of the sufferings of the Greeks and
Armenians, calling upon various men in the room—his secretaries
and priests—to bear witness to the truth of his tales. Presently, with
some ceremony, servants came round with silver trays laden with
glasses of iced water and some little plates containing a white
glutinous substance. As the guest of ceremony, it was my privilege
to be served first, which did not give me the chance of watching
what others might do. I took a spoonful of the white substance, and
swallowed it, hoping for the best. But it was the worst that I had
done. I discovered afterward that it was a resinous stuff called
mastica, something in the nature of chewing gum. The mouthful I
had swallowed had a most disturbing effect upon my system, and
even the Metropolitan was alarmed. My son Tony, served second,
was in the same trouble.
In the Greek schools of Smyrna all the scholars were kept in during
the luncheon hour, while we went from class to class inspecting their
work and making polite bows and speeches to the teachers. The
scholars, ranging from all ages of childhood, did not seem to bear us
any grudge for their long wait for lunch, and we were much
impressed by their discipline, their pretty manners, their beautiful
eyes. Tony felt like the Prince of Wales, and was conscious of the
“glad eyes” of the older girls.... When Smyrna was reported to be a
city of fire and massacre, I thought with dreadful pity of those little
ones.
We touched with our very hands the spirit of this ancient race in the
time of its glory, when we went into the museum and handled the
pottery, the gods, the household ornaments, the memorials—found
by peasants with their picks not far below the soil—of that time
when Homer was born (it is claimed) in this city of the Ægean, when
the Ionians held it, when Lysimachus made it great and beautiful,
until it was one of the most prosperous ports in the world, crowded
with Greek and Roman and Syrian ships trading between the West
and East.
Lieutenant Casimatis took us to his little home away on a lonely road
beyond the Turkish quarter, and we spent an evening with his family,
a handsome wife and three beautiful children who sang little songs
to us in French and Greek. The poor lady was nervous. Some
shadow of fear was upon her because of that Turkish army beyond
the Greek trenches. I hope with all my heart she escaped from
Smyrna with her babes before the horror happened.... I drank to the
welfare of Greece in the sweet resinous wine which Lieutenant
Casimatis poured out for us. It was a sincere wish, but at the back of
my mind was some foreboding.
We drove out one day to Boudja and Bournabat, past the slopes of
Mount Pagus and away in the hills. Turkish peasants riding on
donkeys or in ox wagons jogged along the dusty tracks. We passed
Turkish cemeteries with tombstones leaning at every angle below
tall, black cypress trees, and looking back, saw the brown roofs of
Smyrna below, as in a panorama under the hot sun which made the
gulf like molten metal.
In the country we lost touch with the Western world. It was Asia,
with the smell and color and silence of the East. A camel caravan
moved slowly in the valley, like a picture in “The Arabian Nights.” But
at Boudja, and later at Bournabat, we were astonished to see
English-looking girls in English summer frocks, carrying tennis
racquets, and appearing as though they had just left Surbiton. These
two villages were inhabited by British merchants who had been long
settled there as traders in Oriental carpets, spices, raisins, dates,
and the merchandise of the East. We called on one of them at
Bournabat, and I rubbed my eyes when, with Asia Minor at the gate,
we drove up to a house that might have been transplanted from
Clapham Park in the early Victorian period, when Cubitt was building
for a rich middle class.
The house was furnished like that, except for some bearskins and
hunting trophies, and the two old ladies and one old gentleman who
gave us tea might have been transported on a magic carpet from a
tea party in the time of the Newcomes. We had toasted muffins, and
the stouter of the two old ladies (who wore a little lace cap and sat
stiffly against an antimacassar, in a chintz-covered chair) asked
whether we would take one or two lumps of sugar with our tea.
Tony, who was beginning to feel an exile from civilization, beamed
with happiness at this English life again.
The old gentleman had been the greatest trader in Asia Minor, and in
his younger days had hunted with Turkish peasants in the
mountains. He loved the Turk still, though he deplored the cruelties
they had done to the Christian populations in the war. For the Greeks
he had pity, and dreadful forebodings. He knew something of what
was happening behind the Turkish lines, with Mustapha Kemal.
There would be no peace until they had Smyrna back again. The
Greeks had claimed too much. Venizelos had lost his head. Lloyd
George—The old man sighed, and fell into a gloomy silence. “I’m
afraid of the future,” he said, presently. “Nobody will listen to my
advice. The Greeks think I am pro-Turk. What I want is a just peace,
and above all peace. This is only an armed truce.” He told me many
things about the situation which filled me with uneasiness. I
promised to see him again, but after a few days we left Smyrna for
Athens.
We traveled in a little steam yacht which had once been Vanderbilt’s
and now was a Greek passenger ship, called Polikos. It was crowded
with Greek officers, in elegant uniforms, and very martial-looking
until a certain hour of the evening. The passage began in a
wonderful calm, and after darkness there were groups of singing folk
of different nationalities, as on that other ship, but presently a
terrific storm broke upon us, and the singing ceased, and the Polikos
was a ship of sick and sorry people.
Tony and I crept to our bunks in a big crowded cabin, and the Greek
officers in the other bunks were frightfully and outrageously ill. Early
next morning their martial appearance had gone and they were the
disheveled wrecks of men. Tony, with extreme heroism, staggered to
the saloon and ordered ham and eggs, but thought better of it
before they came, and took to his bunk again, below mine which I,
less brave, had never left. We were glad to reach Athens without
shipwreck.
We had a week of joy there, in dazzling sunshine, and wandered
about the ruins of the Acropolis and touched old stones with
reverence, and sipped rose-tinted ices in the King’s Gardens, and
saw Greek boys throwing the discus in the very arena where the
games were played in the Golden Age, and tried to remember odd
scraps of classical knowledge, to recall the beauty of the Gods and
the wisdom of the poets. All that need not be told, but it was as pro-
Greeks that we returned to England, and with memories which made
us understand more sharply the tragedy of that defeat when the
Cross went down before the Crescent, and the horror happened in
Smyrna, and all the world held its breath when Constantinople was
threatened with the same fate.
 XXIV
In October of 1921 I went to Russia for the purpose of making a
report on the Famine to the Imperial Relief Fund.
Much as I disliked the idea of seeing the grisly vision of Famine after
so many experiences of war and its effects, I felt that it was an
inescapable duty to accept the invitation made to me. I was also
drawn by a strong desire to see the conditions of Russia, outside as
well as inside the famine area, and to get first-hand knowledge of
the system of Bolshevism which was a terror to the majority in
Europe, with some secret attraction, holy or unholy, among men and
women of revolutionary or “advanced” views.
It was impossible to know the truth from newspaper reading. Stories
of Russian atrocities and horrors arrived from Riga, Helsingfors and
other cities on the border of the Soviet Republic, and were denied by
other correspondents. Knowing the way in which “atrocities” had
been manufactured in time of war, by every nation, I disbelieved all I
read about Russia circulated by the “White” propaganda department,
while doubting everything which came from “Red” sources. I think
that was a general attitude of mind among unprejudiced people.
Even with regard to the Famine it was impossible to get near the
truth by newspaper accounts. The Daily Mail said the tales of famine
were vastly exaggerated. The Daily Express said there was no
famine at all. The Morning Post suggested that it was a simple
scheme for deluding Western nations in order to feed the Red Army.
I wanted to know, and promised to find out and report impartially to
the Imperial Relief Fund. The Daily Chronicle agreed to publish a
number of articles written after my return from Russia (in order to
avoid censorship), and I arranged to send an account to The Review
of Reviews, of which I was the rather nominal editor.
A journalist friend of mine named Leonard Spray was also under
instructions from The Daily Chronicle to go to Russia, for another
line of inquiry, and much to my delight promised to wait for me in
Berlin so that we could travel together. It would make a great
difference having a companion on that adventure, for I confess that
I hate the lonely trail.
It was a question of waiting for passports from the Soviet Foreign
Office in Moscow. I had applied to the Russian Trade Mission in
London and was recommended by an assistant to Krassin, an
intelligent and well-educated young Russian who professed devoted
adherence to Communism while doing himself remarkably well, I
thought, with all the material pleasures of capitalistic luxury. After a
couple of weeks my credentials arrived, my passport was indorsed
with the stamp of the Soviet Republic, and I had in this way a
talisman which would open the gate of Red Russia and let me enter
the heart of its mystery. To some of my friends it seemed the free
admission to a tiger’s cage.
In Berlin I was advised to buy blankets, cooking utensils, as much
food as I could carry, and illimitable quantities of insect powder. I
took this advice, and with Leonard Spray and a very useful lady who
understood the German ways of shopping, we bought this outfit,
remarkably cheap, reckoning in German marks which were then not
quite 4,000 to the English pound.
Among other items we acquired an enormous Dutch cheese, round
and red, which we wrapped up in a towel. It became our most
precious possession, and, as I may tell later, came to an honorable
and joyous end. A quantity of solid alcohol in tins somewhat in the
style of the “Tommy’s Cooker” also bulged out our bags and were an
immense boon by enabling us to heat up food and drink on our
Russian journey.
Spray and I spent two solid days obtaining visas in Berlin for all the
countries through which we had to pass on our way to the Russian
frontier by way of Riga—those new Baltic States created at
Versailles.
Our journey to Riga was half a nightmare and half a farce, and Spray
called our train the “Get in and Get out Express.” We generally
arrived at a new frontier in the dead of night or in the early hours of
dawn, after fitful sleep. Then we were awakened by armed guards
demanding to see our visa for each side of the “Danzig corridor” for
Lithuania, Esthonia, and Latvia.
At Eydtkühnen, in East Prussia, we had a six-hours’ wait and were
able to see something of the Russian invasion and Germany’s
“devastated region” which had been the greatest cause of terror to
the German mind when the “Russian steam roller” first began to roll
forward before its subsequent retreat. Russian cavalry had done a
lot of damage—the Germans had plenty of atrocity stories to set
beside those of Alost and Louvain—and we saw even at that late
date, so long after those early days of war, the ruins of burnt-out
farms and shell-wrecked houses. But not many. German industry had
been quick at work, and Eydtkühnen was built up like a model town,
with red-tiled roofs not yet toned down by weather, and shop
windows just exhibiting their first stocks.
As we passed through the new Baltic States—Lithuania, Esthonia,
Latvia—I had an impression that the old British Armies of khaki men
had been transferred to those far countries. At every station there
was a crowd of soldiers, all of them clad in unmistakable khaki from
British stores, but made into misfits for bearded, or unshaven, portly
or slouchy men who looked—many of them—like the old
Contemptibles after years of foreign exile and moral degeneration.
Yet it would be unfair to say they were all like that, for these Baltic
peasants were sturdy fellows enough, and, I should say, hard
fighting men.
In Riga we put up for three or four days, waiting for a train into
Russia and permission from Soviet representatives in that city to
cross the Russian frontier. In spite of our visas from headquarters,
those Riga Bolsheviks were extremely insolent and put up a blank
wall of indifference to our requests for railway facilities. There
seemed to be no chance of a place in any train, and very little
chance of a train.
Spray and I kicked our heels about in the little old city, very German
in its character, which seemed in a state of stagnation and creeping
paralysis. In its once busy port we saw no ship but a vessel carrying
a cargo of apples which it unloaded on the quayside. The
restaurants were almost deserted, and we drank little glasses of
Schnapps in solitary cafés. After midnight there was the awakening
of a squalid night life and we watched the Riga manifestation of the
fox-trot mania, and an imitation of the Friedrichstrasse Wein Stube,
with a fair amount of amusement on my part because of the strange
types here in a city filled with Russian exiles, Letts, Poles, Germans,
Swedes, Lithuanians, and all variety of northern races. But it was not
Russia, which we had come to see.
I doubt whether we should ever have set foot in Russia if it had not
been for the American Relief Administration established in Riga and
just beginning to send food supplies into the famine area. The chief
of the Riga headquarters promised us two places on the next food
train going to Moscow, and broke through all formalities by
reckoning us as members of his staff.
“What about the Famine?” I asked, and he said, “There’s a Famine
all right, with a capital F.”
It was a queer journey from Riga to Moscow—unforgotten by me. I
have put the spirit of it, as indeed of all my experience in Russia,
into my novel “The Middle of the Road,” under a thin guise of fiction,
with some imaginary characters. The train started at night, and
Spray and I, with our baggage carried by Lettish porters, stumbled
along unlit rail tracks to a long train in absolute darkness, except in a
few carriages where candles, stuck in their own grease, burned
dimly on the window ledges. In the corridor was a seething mass of
Lettish and Russian porters, laden with the enormous baggage of
Russian, British, German, American, and other couriers, who shouted
at them in various languages. A party of young American clerks and
typists for the central headquarters in Moscow of the American Relief
Administration (always known as the A.R.A., or even, shorter, as
“Ara”) smoked cigarettes, cursed because of the darkness and filth
and stench and lack of space for their baggage, and between their
curses sang ragtime choruses.
Violent action and terrific language in the American accent, on the
part of a large-sized man, cleared the corridor somewhat, and I met,
for the first time, a cheery young giant whom I have put into my
novel as “Cherry of Lynchburg, U.S.A.,” but who is really H. J. Fink,
courier, at that time, to the A.R.A. He is known as “The Milk-fed Boy”
by his fellow-travelers, and but for his enormous good nature, his
mixture of ferocity and joviality with obstructive Bolsheviks, his
genial command of the whole “outfit” from the “provodniks” or
guards to the engine drivers, the journey would have been more
intolerable than we found it. I take off my hat, metaphorically, to the
“Milk-fed Boy.”
Our blankets were uncommonly valuable in the filthy carriage of bare
boards with wooden bunks which I shared with Spray. By rigging up
a “gadget” of straps strung across the carriage, we were able to use
our solid alcohol for heating up soups and beans, with only a fifty-
per-cent chance of setting the bunks on fire. We went easy on the
red Dutch cheese, remembering that we might have greater need of
it in times to come.
The insect powder was extraordinarily good, for the insects, which
came out of their lairs as soon as the train warmed up. They throve
on it. It sharpened their appetite for Leonard Spray, who suffered
exceedingly. Afterward, all through Russia, he was a victim of these
creatures who at the first sight of him leapt upon him joyously. By
some thinness of blood, or anti-insect tincture—I strongly suspect
the nicotine of innumerable “gaspers”—I was wonderfully immune,
and Russian lice had no use for me, though I encountered them
everywhere, for Russia is their stronghold as carriers of typhus, with
which the people were stricken in every city and village.
We saw Red soldiers for the first time at Sebesh, the Russian
frontier, anæmic-looking lads, wearing long gray overcoats and gray
hoods, rising to a point like Assyrian helmets, with the Red Star of
the Soviet Republic above the peak. Here at Sebesh also we saw the
first trainload of refugees from the famine area, whom we met in
hordes throughout our journey. They were Letts, and in a bad state,
after being three months on the way, in closed cattle trucks. Many
were typhus-stricken. All were weak and wan-looking, except some
of the children, who had a sturdy look in their ragged sheepskins. A
man spoke to me in English, with an American accent. He had come
from Ufa, three thousand miles away, and spoke tragic words about
the people there. They were starving, and near death.
Our train crawled forward through flat, desolate country. The people
we saw at wayside stations looked wretched and gloomy. A light
snow lay on the ground, and the woods were black against it, and
grim. Many times our engine panted and then stopped for lack of
fuel. We waited while fresh timber was piled on. The journey
seemed interminable but for the laughter of the “Milk-fed Boy,” and
tales of Russian tragedy by Mr. Wilton, the King’s messenger, who
had a queer red glint in his eyes, and a suppressed passion beneath
his quiet and charming grace of manner, when he spoke of all that
agony in the country he loved. So at last we reached Moscow, and in
a little while came to know its way of life.
The fantastic aspect of the city, and especially at its heart by the
palace of the Kremlin, seemed to me as wild as an Oriental
nightmare in a hasheesh dream, with golden pear-shaped domes,
and tall towers, and high walls with fan-shaped battlements, and
step flights of steps leading to walled walks, and old narrow
gateways guarded by Red soldiers. There was something sinister as
well as splendid in that vast fortress palace which is a city within a
city. It seemed to tell of ancient barbarities. There was a spirit of evil
about its very walls, I thought. Perhaps vague memories of Russian
history were sharpened by the knowledge that somewhere within
those walls was the brooding mind of Lenin, whose genius had
drowned Russia in blood and tears, if all one heard, or a thousandth
part of it, were true.
I entered the Kremlin one day on a visit to Radek—whose name
means “scoundrel”—and was arrested three times at the guard posts
before reaching the rooms where the chief propaganda agent of
Soviet Russia lived with his wife and child, in simple domesticity,
while he pulled wires in all parts of the world to stir up revolution, or
any kind of trouble. Smiling through his spectacles, this man who
looked a cross between an ancient mariner and a German poet, with
a fringe of reddish beard round his face, was disarmingly frank and
cynical on the subject of Anglo-Russian relations, and had a
profound and intimate knowledge of foreign politics which startled
me. He knew more than I did about the secret intrigues in England
and France.
Leonard Spray and I were billeted in a house immediately opposite
the Kremlin along an embankment of the river called the
Sophieskaya. It was, indeed, more than a house, being the palace of
a pre-war monopolist in sugar, and most handsomely furnished in
the French Empire style, with elegant salons on whose walls hung
some valuable pictures, among which I remember a Corot, and a
Greuze.
We arrived in the dark, after a visit to the Soviet Foreign Office and
an interview with a melancholy, soft-spoken, cross-eyed Jew, by
name Weinstein, who was in charge of foreign visitors and
correspondents. A pretty Lettish girl, shuffling along in bedroom
slippers, opened the door to us, and locked us in afterward. Then
the housekeeper, a tall Swede who spoke a little of all languages,
conducted us up a noble stairway, richly carved, to our bedroom,
which was an immense gilded salon without a bed. This lack of
sleeping accommodation was remedied by four Red soldiers who
came staggering in under bits of an enormous four-poster which
they fixed up in a corner of the room. Spray took possession of it,
and I slept on a broad divan.
It was bitterly cold, and we were almost frozen to death. I shall
never forget how Spray used to wrap himself up in the blankets to
the top of his head, like an Eskimo in his sleeping bag. That house
was full of strange people whom we used to pass in the corridors,
including a deputation of Chinese Mandarins from the Far Eastern
Republic, and a mission of Turks from Angora. One evening while we
were there, Tchicherin, the Foreign Minister, with whom I had a long
interview, gave a banquet on the third anniversary of the Soviet
Republic to all the missions represented in Moscow. It was a very
handsome affair. All the leading Bolsheviks were in evening dress,
the Chinese Mandarins wore cloth of gold, wine flowed copiously,
and watching from the doorway of my bedroom, I wondered what
had happened to Bolshevism and Communism, and what equality
there was between those well-fed, elegantly dressed gentlemen,
dining richly in their noble rooms, and those millions of starving
peasants who were waiting for death, and dying, in the Volga valley,
or even the population of Moscow itself, not starving altogether, but
pinched, and half hungry in their ragged sheepskins.
Spray and I explored the life of Moscow, freely, as I must admit, for
never once were we aware of any deliberate espionage about us,
though often there were watchful eyes.
We had arrived in time to witness a complete reversal of the
Communistic system by what Lenin called the “New Economic Laws.”
On October 17, 1921, while we were there, Lenin made an historic
speech in which he admitted, with amazing frankness, the complete
breakdown of the Communistic way of life which he had imposed
upon the people. He explained, with a kind of vigorous brutality of
speech, that owing to the hostility and ignorance of the peasants,
who resisted the requisition of their food stuffs, and the failure of
world revolution which prevented any international trade with
Russia, industry had disintegrated, factories were abandoned,
transport had broken down, and the system of rationing which had
been in force in the cities, could no longer be maintained.
The cardinal theory of Communism was that in return for service to
the State, every individual in the State received equal rations of
food, clothes, education, and amusements. That was the ideal, but it
could no longer be fulfilled, for the causes given.
“We have suffered a severe defeat on the economic front,” said
Lenin. “Our only safety lies in a rapid retreat upon prepared
positions.”
He then outlined the “New Economic Laws,” which abolished the
rationing system, re-established the use of money, permitted
“private trading” which had been the unpardonable crime, and even
invited the introduction of foreign capital.
We saw the immediate, though gradual and tentative effect of this
reversal of policy. It was visible in the market places of Moscow,
where peasants freely sold the produce of their farms under the
eyes of Red soldiers who previously would have seized and flung
them into prison for trading in that way.
Among these peasants stood long lines of men and women who as I
saw at a glance were people of the old régime—aristocrats and
intellectuals. Shabby as most of them were, haggard and wan,
unshaven and unwashed (how could they wash without soap?), their
faces, and above all their eyes, betrayed them. They stood, those
ladies and gentlemen of Imperial Russia, holding out little articles
which they had saved or hidden during the time of revolution. The
women carried their underclothing, or their fur coats, tippets, and
caps, embroidered linen, old shoes and boots, their engagement
rings, brooches, household ornaments. The men—mostly old fellows
—held out woollen vests, socks, pipes, rugs, books, many odds and
ends of their ancient life. Who bought these things I could never tell,
though I saw peasant women and old soldiers fingering them, and
asking the price, and generally shrugging their shoulders and
walking away.
I spoke to some of the ladies there in French or German, and at first
they were very much afraid and would not answer, or left the market
place immediately, lest this were some police trap which would
endanger their liberty or life. Almost all of them, as I found
afterward, had been imprisoned for doing secretly the very thing
which they now dared to do in the open market place, but with
trembling fear at first.
In the same way, timidly, with nervous foreboding, little groups of
families or friends opened a few shops in the Arbat, furnishing them
with relics of their old homes, and stocking them with a strange
assortment of goods.
Two restaurants opened, one called “The English Restaurant,” where
Spray and I used to dine, almost alone, except for a Red
Commissioner or two who came in for coffee and a secret
inspection, and now and then a few ladies, furtively, for a plate of
soup. The restaurant keepers were of good family and ancient rank.
The lady spoke English and French, and told me many tales of her
tragic life during the years of revolution. Behind the bar was a pretty,
smiling girl of sixteen or so, amazed and delighted to see two
English customers. Her father, dressed like a seafaring man, was
charming in his courtesy to us, but always afraid.
Even now I dare not write too freely about the people we met by
hazard, or by introduction, lest any words of mine should do them
harm. There was one family, of noble blood, who lived in two squalid
rooms divided by a curtain from a public corridor. The two daughters
had one pair of decent boots between them. They took turns to go
out “visiting” at the British Mission which gave Sunday afternoon
receptions to a little group of ladies, and taught them the fox trot
and two step and other dances which had become a mania in many
Western nations, but were utterly unknown in Russia, cut off from all
the world.
The old gentleman their father, and their charming mother, had dirty
hands. There was no soap in Russia, and in those rooms no chance
of hot water, except for tea. I marveled at their courage (though the
old man wept a little), and at the courage of all those people of the
old régime, who were living in direst poverty, in perpetual fear of
prison, or worse than that. They saw the ruin of Russia, but still had
hope that out of all that agony, and all their tears, some new hope
would dawn for the country they loved. So many people told me,
and among them one bedridden lady, near to death, I think, who
said that there would be a new and nobler Russia born out of all this
terror and tribulation.
Moscow was not starving to death, though many in it were always
hungry. When the American Relief Administration opened a soup
kitchen in the famous old restaurant, The Hermitage, thousands of
children came to be fed, but, on the whole, they were not famine-
stricken—only underfed and uncertain of the next day’s meal.
With its dilapidated houses, many of them wrecked by gunfire in the
first days of the revolution, Moscow had a melancholy look, and few
of its people, outside the Commissar and Soviet official class had any
margin beyond the barest needs of life. But the people in the mass
looked healthy, and they were not deprived of all light and beauty in
life. The opera, and two or three theaters were open, crowded every
night by the “proletariat” in working clothes. In the Imperial box of
the opera, with its eagles covered under the Red Flag, sat a group of
mechanics with their wives, and between the acts the foyer was
crowded with what looked like the “lower middle class,” as we
should see them in some music hall on the Surrey side of London.
The opera and the ballet were as beautiful as in the old days,
maintaining their historic traditions, though all else had gone in
Russia, and it was strange to see this stage splendor in a Republic of
ruin.... But not yet had I seen the famine.
I came closer to the effects of famine in Petrograd. That city, grim
but magnificent as I saw it under heavy snow, had a sinister and
tragic look. During the war its population had been 3,000,000 and
more. When Spray and I walked along the Nevski Prospekt, where
all the shops but six or seven were barricaded with wooden planks,
there were only 750,000 people in the whole of this great city.
Palaces, Government offices, great banks, city offices, huge blocks of
buildings, were uninhabited and unlighted. Many of those who had
been government officials, rich merchants, factory owners, were
shoveling snow upon the streets, or dragging loads of wood on
sledges over the slippery roads. They wore bowler hats, black coats
with ragged collars of astrachan, the clothes of a “genteel” world
that had gone down into the great gulfs of revolution.
At every street corner were men and women selling cigarettes. Some
of those women, and one I especially remember, were thinly clad,
shivering in the biting wind, and obviously starved. The very look of
them made me shiver in my soul.
In Petrograd I went to a home for refugees from the famine region.
All round the city were great camps of these people, who had come
in a tide of flight—hundreds of thousands—when the harvest of 1921
was burnt as black as that of 1920 in the awful drought. Four
thousand or so were in one of the old Imperial barracks, and they
had come three thousand miles to reach this refuge at the end of
their journey. Outside, in Petrograd, there was a hard, grim frost. In
these bare whitewashed rooms there was no heat, for lack of fuel,
and men, women and children lay about in heaps, huddled together
in their sheepskins for human warmth, tormented by vermin, fever-
stricken, weak. Too weak to stand, some of them, even to take their
place in line for the daily ration of potato soup. A doctor there took
us round. He pointed to those with typhus, and said, “There’s no
hope for them. They’ll be dead to-morrow or next day.”
When we crossed a courtyard, he stopped a moment to thrust back
a heavy door. “Our morgue,” he said. “Three-days’ dead.” Inside was
a pile of dead bodies, men, women and children, flung one on top of
the other like rubbish for the refuse heap. Hands and legs obtruded
from the mass of corruption. It was the end of their journey.
But the opera was very brilliant in Petrograd, some distance from
that heap of mud-colored corpses. I went to the Marinsky theater
and heard “Carmen.” It was marvelously staged, admirably sung,
and there was a packed audience of “trade unionists,” as I was told,
on free tickets, but as everybody in Russia had to belong to a trade
union or die, it did not specify the character of the people closely. I
think most of them were of the clerical class, with a few mechanics.
On the way back we followed a party of young men and women
walking in snow boots and wrapped to their ears in ragged furs or
woollen shawls. They were laughing gayly. Their voices rang out on
the still frosty air under the steely glint of stars.... So there were still
people who could laugh and make love in Russia!
How did they live, these people? I never could find out in actual
detail. Russian money meant nothing to me. When I changed ten
pounds in Moscow, I received four big bundles of notes, containing
three million roubles. My first experience with the purchasing power
of this money was when I wanted to buy a pair of boots in the
market place. They were good top boots, splendid looking for snow
and mud, but when I was asked one million roubles, I was abashed.
Yet, after all, it was not much in English money. But what did it
mean to those Russians?
I found out that the average wage for a mechanic, or Soviet official,
or University professor, was 150,000 roubles a month. That sounded
well until I came up against those boots, and later discovered that in
Petrograd a pound of bread cost 80,000 roubles, a pound of tea
120,000 roubles, ten cigarettes 60,000 roubles. How, then, could
any human soul live on 150,000 roubles a month? I asked many of
them, and some said, “We don’t live. We die,” but others said, “We
supplement our wages by speculation.” For some time I was puzzled
by that word speculation, until I found that it meant bartering.
Secretly, and at risk of imprisonment or death, until the “New
Economic Laws,” there was a general system of exchange in goods.
A man with a second pair of boots exchanged them for a sack of
potatoes, kept some and bartered the others for tea, or bread, or
meat, kept some of that, and bartered the rest for a woollen vest, a
fur waistcoat, or a tin of sardines, smuggled in from Riga. And so on,
in a highly complicated, difficult and dangerous system of
“underground trade.” But in spite of “speculation,” life was hard, and
almost impossible for elderly folk, and the sick, and frail women. For
years hundreds of thousands of them had lived on bread and tea
and small rations of soused herrings and millet seed. Now there
were no rations, but still bread and tea, for those who had the
money.
“What do you think of Bolshevism?” asked Spray one night in the
Sugar king’s palace. We lay in bed, with only our mouths and noses
out.
I asked him three questions in return. Was there liberty in Russia?
Was there equality? Was there a higher type of civilization and
human happiness here than in Western Europe, or any chance of it?
I asked the questions without prejudice, and we discussed them
between the low divan and the four-poster bed, in that great gilded
salon opposite the Kremlin, where, in some secret room, Lenin sat
that night scheming out some way of saving Russia from the fate
into which he had led it, to test his theory of the Communistic state.
We could find no liberty. The two chief papers published—Pravda,
and Izvestia—were propaganda sheets under Government control.
There was no freedom of speech or opinion. There was no equality,
even of misery—surely the first test of the Communistic state.
Between the Soviet Commissars, even the “trade-union” audience of
the Marinsky theater, and the peasants, the workers, the underfed
masses, there was a gulf as wide as between the profiteers and
unemployed of England, wide though lower down the scale of life on
both sides. Civilization, human happiness? Well, there was the
Marinsky theater, and those laughing boys and girls. Human nature
adapted itself marvelously to the hardest conditions of life. Perhaps
there were happy people in Russia, but for the most part, Spray and
I had met only those who told us tragic tales, of imprisonings,
executions, deaths, misery.
When we left Moscow and traveled across Russia to Kazan, and took
a boat down the Volga, and sledges across the snow fields to the
villages where Famine dwelt, we left human happiness behind us
and saw nothing but suffering and despair, hunger and pestilence.
It was again due to the American Relief Administration that we were
able to make that journey. Colonel Haskell, chief of the A.R.A., and a
man of indomitable energy, iron will power, and exquisite courtesy,
invited Spray and myself to join his own party which was going to
Kazan on a tour of inspection under his command, and after that he
would provide us with a ship for the Volga voyage. Without that
immense help of the A.R.A., all-powerful in Russia because it was
the one source of hope in the famine region, I should have seen
nothing outside Moscow. It was they who controlled the railways,
got the trains to move, and forced officials to work.
It was a four-days’ journey to Kazan. The carriages were verminous,
and Spray was tortured again—and we crawled slowly through the
dreary woods and plains. Colonel Haskell and his staff carried good
rations which they shared with us, and at night, when our darkness
was illumined by candlelight, we played poker for Russian roubles,
gambling wildly, as it seemed, in thousands of roubles, but losing or
winning no more than a few shillings.
One man on board impressed me beyond words. It was Governor
Goodrich of Indiana, who had come to report to Washington on the
agricultural conditions and prospects of Russia, and the truth about
the Famine. He was an elderly man with the fresh complexion of a
new-born babe, and a powerful clear-cut face, wonderfully softened
by the look of benevolence in his eyes and the whimsical smile about
his lips. “Governor Jem” he used to be called in Indiana, and he
must have been a gallant fellow in his youth, before he became lame
in one leg. Now he had come as a knight-errant to Russia, for the
rescue of a stricken people. I think no man of greater quality ever
went into Russia, or ever came out of it, and it was due not a little to
his report (which he allowed me to read) that the Government of the
United States, acting through the American Relief Association, fed
ten million Russians every day in the famine regions, and saved that
number from certain death by hunger or disease.
Kazan lay under a heavy mantle of snow. It was now the capital of
the “Tartar Republic,” a province of Soviet Russia, on the edge of the
richest grain-growing districts of the Volga valley, where now there
was no grain. It was a garden city, with many great houses where
the nobles of Imperial Russia had taken their pleasure in summer
months, now inhabited by misery, hunger, and disease.
There were forty homes here for abandoned children—abandoned
not by the cruelty of their parents but by their love, because they
could not bear to see their little ones wailing over empty platters. I
went into a number of them, and they were all alike in general
character. In one of them were fifteen hundred children, naked, or
merely clothed in little ragged shirts. Their clothes had been burnt
because of the lice in them, which spread typhus fever. There were
no other clothes to replace their ragged old sheepskins and woollen
garments. There was no heat in the rooms, for lack of fuel. There
was no furniture. On the bare boards they huddled together, these
little wizened things, with deep, sunken eyes, and tight-drawn skin,
like little bald-headed monkeys. There were many homes like that,
and worse than that, because many of the children were dying, and
the rooms reeked with their fever, and the very doorposts crawled
with lice.
I went into the hospitals, and they were dreadful. Because there was
no fuel for heat, these people, stricken with typhus, dysentery, all
manner of hunger diseases, were huddled together in unventilated
wards for human warmth. Many of the beds had been burnt for fuel
and most of them lay on mattresses or the bare boards. Those who
had beds lay four together, two one way and two the other. There
were no medicines, no anaesthetics, no soap, no dressings. The
nurses were starving, and dying of the diseases they could not cure.
They came clamoring round the doctor of the A.R.A. with whom I
went, begging for food in a wild animal way which made his heart
go sick.
But there was an opera, even in Kazan! It was true that the stench
of it was pretty bad, and that its audience tightened their belts from
time to time in lieu of supper, but Madam Butterfly delighted them,
they thrilled to the “Carmen” of a Persian prima donna.
One night the ladies and gentlemen of the opera invaded the
headquarters of the A.R.A. after midnight. They were hungry, and
made no secret about it. So the young Americans of the Kazan
headquarters brewed cocoa in a saucepan, with the help of one of
the ladies, and scraped up some bully beef and beans and a loaf or
two and some apples, and odds and ends. Not much for a banquet!
Spray and I whispered together! I fetched out the last hunk of our
round red cheese. It was received with a chorus of approval. It died
a sacrificial death in the cause of art and beauty. The Persian prima
donna had an insatiable appetite.... Out in the streets of Kazan were
starving wanderers, and in the station lay the latest of the
abandoned children.
The last boat to go down the Volga before the ice came was put
under command of the press representative of the A.R.A., my good
friend Murphy, a most kind and generous-hearted soul. Spray and I
were the only passengers. We three explored the ship before she left
the quayside. She had been a rescue ship for the fugitives from
famine, and was in a noisome state. We dared not linger in the
sleeping cabins. The very washbasins were crawling. That night
Murphy and I slept on the table in the dining saloon—the safest
place. Spray gave himself up for lost and curled up on the floor,
where he tossed all night. I was cook on that voyage, and did rather
well with boiled beans and a mess of pottage. We went down to
Tetiushi, and found ourselves among the people of famine....
After two droughts in successive years, there was no harvest of any
account. The Red soldiers had requisitioned the peasants’ reserves
of grain for rationing the cities. Without reserves they had no means
of life. The Soviet Government had supplied them with seed grain for
the next harvest, and they had sown it, not expecting to reap it.
They had also sent, lately, some barges of potatoes, but they lay
there rotting. To carry them to the villages, horses were needed for
the sledges, but there was no fodder, and the horses were dying, or
dead. So we discovered the State of Tetiushi.
By a message from the Prime Minister of the Tartar Republic, four
horses were found for us, and two sledges, after many hours of
waiting, and we set out across the snow to the villages. They were
very silent when we entered. They seemed abandoned. But we saw
in one or two of their timbered houses little wizened faces staring at
us from the windows. They were faces like those I had seen in the
homes for abandoned children, monkeylike. We went into the
cottages and found there peasant families waiting for a visitor who
tarried, which was Death.
They showed us the last food they had—if they had any left. It was
a brownish powder, made of leaves ground up and mixed with the
husks of grain. Others showed us bits of hard stuff like lead. It was a
bluish clay dug from a hillside called Bitarjisk. It had some nutritive
value, but it swelled when eaten, and was the cause of dreadful
agony to children. Peasant women, weeping very quietly, showed us
their naked children, with distended stomachs, the sign of starvation
in its last stage. From other cottages they came to where we stood,
crossing themselves at the doorways, in the Russian way, and then
lamenting.
Handsome Russian peasants, with blue eyes and straw-colored
beards, struck their breasts with a gesture of absolute despair, and
said—we had a Russian with us who spoke English—that death could
not be long delayed, for all of them. The last cows had been killed
for lack of fodder. There was no milk for the children, as for a long
time there had been no bread. Here and there a woman wailed
loudly, or grasped my wrist with her skinny hand and spoke fiercely,
as though I denied her food. I remember one cottage in which a
whole family lay dying, and nearly dead. It was the Famine....
I will not write more about the horrors here. In many articles, and in
my novel “The Middle of the Road” I have given the picture of it, and
the agony of it.
It is said that two million of these people died. That is Nansen’s
figures. That twenty million did not die is due to the magnificent
work of the A.R.A. and the Save the Children Fund who, against all
political prejudice and for humanity’s sake, achieved a great rescue
of these stricken folk. As I have said, the A.R.A. alone fed ten million
people a day in the famine area, and I pay a tribute here to the
courage and efficiency and devotion of those young Americans
whose work I saw, and of whose friendship I am proud. Our people
did less, having less means, but it was work well and nobly done in
the spirit of Christianity kept alight in a dark and cruel world, which
is this jungle of Europe.
 XXV
In the spring of 1919, while the Peace Conference was sitting in
Paris, I made my first visit to the United States, and lectured in
many American cities. I went there again in 1920 and 1921, and on
the third visit traveled from New York to San Francisco.
I regard these American visits as the greatest experience of my life,
apart from the War, and they added enormously to the knowledge of
world forces and the human problem which I had been studying
among the peoples of Europe. I was, and still remain, convinced that
the United States will shape, for good or ill—and I believe for good—
the future destiny of the world, for these people, in the mass, have a
dynamic energy, a clear-cut quality of character, and a power not
only of material wealth, but of practical idealism, from which an
enormous impetus may be given to human progress, in the direction
of the common well-being, international peace, liberty, decency, and
average prosperity of individual life.
During those three visits, when I talked with innumerable men and
women of great intelligence and honesty of thought, I was “made
wise,” as they call it, to many of the darker aspects of American life.
I was not unconscious of a strong strain of intolerance; a dangerous
gulf between the very rich and—not the very poor, there are few of
those—but well-paid, speeded-up, ugly-living, dissatisfied labor;
something rather hysterical in mass emotion when worked up by the
wire-pullers and the spellbinders; and the noisy, blatant, loud-
mouthed boasting vulgarity of the mob. I saw the unloveliness of
“Main Street,” I met “Babbitt” in his club, parlor car, and private
house. But though I did not shut my eyes to all that, and much more
than that—a good deal of it belongs to civilization as well as to the
United States—I saw also the qualities that outweigh these defects,
and, in my judgment, contain a great hope for the world. I met,