Are new organisations at the cutting edge of employment relations innovation?
| Date | 16 October 2017 |
| Published date | 16 October 2017 |
| Pages | 1397-1413 |
| DOI | https://doi.org/10.1108/PR-09-2016-0249 |
| Author | David Peetz,Olav Muurlink,Keith Townsend,Adrian Wilkinson,Madeleine Brabant |
| Subject Matter | HR & organizational behaviour,Global HRM |
Are new organisations at the
cutting edge of employment
relations innovation?
David Peetz
Department of Employment Relations and Human Resources,
Griffith Business School, Griffith University, Nathan, Australia
Olav Muurlink
School of Business and Law, Central Queensland University, Brisbane, Australia
Keith Townsend
Department of Employment Relations and Human Resources,
Griffith University, Brisbane, Australia
Adrian Wilkinson
Centre for Work, Organisation and Wellbeing, Griffith University, and
Madeleine Brabant
Griffith University, Brisbane, Australia
Abstract
Purpose –The purpose of this paper is to explore differences in the degree of innovation in employment
relations (ER) between emerging and established firms,
Design/methodology/approach –A large national telephone survey (N¼1,416) of both emerging
(o5 years) and established firms was conducted.
Findings –Emerging firms were more casualised, less unionised, and experiencing higher levels of market
expansion and unpredictability. Despite these differences, younger firms showed otherwise remarkable similarity
to olderfirms across a range of ER practices,and both categoriesshowed a relianceon business networks,rather
formal training, for ER knowledge. While introducing ER changes more rapidly than older (and larger) firms,
they were converging towards a suite of ER practices similar to that adopted by older firms. The results suggest
that, if anything, established firms may have been engaged in greater innovation in more unusual ER practices.
Research limitations/implications –Only managers were surveyed. The data are cross-sectional
rather than longitudinal. As the study was undertaken in only one country, replication in other settings would
be desirable.
Originality/value –The resultsraise major doubts aboutthe notion that new firms representthe cutting edge
of innovation, and highlights the degree to which newer firmsmatch or mimic older firms’ER architecture.
Keywords Innovation, Convergence, Quantitative, Divergence, New firms, Emerging firms,
Employment relations practices
Paper type Research paper
The youth or age of firms is often viewed as being linked to their innovativeness. Mature
firms are thought to have opportunities to pursue innovation through resource advantages
that outweigh the reduced agility associated with age (Noke and Hughes, 2010). In contrast,
young organisations are forced by circumstances to be at the cutting edge of change, and
Personnel Review
Vol. 46 No. 7, 2017
pp. 1397-1413
Emerald Publishing Limited
0048-3486
DOI 10.1108/PR-09-2016-0249
Received 26 September 2016
Revised 18 April 2017
Accepted 27 April 2017
The current issue and full text archive of this journal is available on Emerald Insight at:
www.emeraldinsight.com/0048-3486.htm
© David Peetz, Olav Muurlink, Keith Townsend, Adrian Wilkinson and Madeleine Brabant. Published
by Emerald Publishing Limited. This article is published under the Creative Commons
Attribution (CC BY 4.0) licence. Anyone may reproduce, distribute, translate and create derivative
works of this article ( for both commercial and non-commercial purposes), subject to full attribution to
the original publication and authors. The full terms of this licence may be seen at http://creative
commons.org/licences/by/4.0/legalcode
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relations
innovation
they lack the stultifying institutional and cultural legacies of mature organisations. By that
observation, it seems reasonable to expect them to be at the forefront of new methods of
work and employment innovation. But are they? Within the broader innovation field there
are persuasive arguments both ways (Katila and Shane, 2005). Within the employment
relations (ER) literature there are some indications that younger (and smaller) firms do use
innovative practices; and it is clear younger or smaller firms feature flatter hierarchies and
more organic communication, thus creating a platform for innovative ER initiatives
(Wilkinson et al., 2007b). The Australian Workplace Industrial Relations Survey (AWIRS)
provides some empirical confirmation –at least of difference –suggesting that new
worksites have fewer occupational levels, fewer unions, and a lower incidence of industrial
disputes (Morehead et al., 1997). Does this reduced union density associated with immature
firms lead to the proliferation of alternative methods of organising and controlling labour
and/or give rise to other forms of voice?
Alternatively, in the pursuit of competitive advantage, or reflecting exposure to similar
ideas, it is possible that all companies end up converging on basically the same suite of ER
measures (e.g Sparrow et al., 1994). While the convergence/divergence debate usually asks
questions like “are organizations and managerial practices worldwide becoming
more similar or maintaining their nationally based dissimilarity?”(Mcgaughey and
De Cieri, 1999, p. 235), one could equally ask “do organisations converge towards similar
managerial practices, regardless of age?”This paper describes the results of a national
telephone survey of Australian business managers (N¼1,416), and explores how the
prevalence of particular ER features covaries with firm characteristics, in particular
the youth of firms. This study controls for the issue of size both statistically, and by
including only those new firms that have reached a quorum of 20 employees.
This study extends current research of ER in younger firms and compares responses
from managers of firms of different ages, sizes and industry sectors. We will focus on new
organisations rather than new workplaces per se. Our primary research question is:
RQ1. Do new organisations show evidence of innovation and different practices when it
comes to how firms manage their staff?
That is, are they at the “leading-edge”or alternatively, at the trailing edge –simply
mimicking the behaviours of larger firms, to the extent that their more limited resources
allow? Bacon et al. (1996) argue that owner-mangers are not merely picking-up new
management practices as “flavours of the month”. They suggest that “the new management
agenda has penetrated deep into the UK economy and that innovative and progressive
employee relations practices are no longer restricted to large mainstream companies”
(Bacon et al., 1996, p. 87).
Innovation in ER
“Innovation”is a widely used but loosely defined term. It is often seen in an ER
context to equate to practices that depart from traditional work and industrial relations
norms. Much of the extant literature equates innovative practices with notions of flexibility
and employee participation in an effort to create high performing workplaces (Ichniowski
et al., 1996). An alternative, oft-cited definition by West and Farr (1990), suggests a product,
process or idea only has to jump a low hurdle to qualify as an innovation: it only needs
to be new to the “unit of adoption”(Becker and Matthews, 2008; Brav et al., 2009, p. 355).
By this definition, new organisations might seem arithmetically certain to possess
more innovation than old organisations in their ER practices, but such a conclusion
would be banal and lead commentators to argue that rhetoric about innovation cannot
“obscure fundamental continuities with the recent […] history of employment relations”
(Giles et al., 1999, p. 15). Setting a higher bar, that innovations are not purely contextually
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