Financialization, Globalization and the Management of Skilled Employees: Towards a Market‐Based HRM Model in Large Corporations in France
| DOI | http://doi.org/10.1111/j.1467-8543.2010.00785.x |
| Author | Florence Palpacuer,Corinne Vercher,Amélie Seignour |
| Published date | 01 September 2011 |
| Date | 01 September 2011 |
Financialization, Globalization and the
Management of Skilled Employees:
Towards a Market-Based HRM Model in
Large Corporations in Francebjir_785560..582
Florence Palpacuer, Amélie Seignour and
Corinne Vercher
Abstract
The article analyses the transformation of HRM policies for skilled employees
in large corporations in France over the last decade in relation to changes
occurring in governance patterns and competitive strategies. First, we highlight
a shift towards globalization and financialization in the strategic management
of large corporations in France, entailed by the diffusion of a shareholder form
of capitalism in that country. Second, we characterize the market-based HRM
model applied to skilled employees under these new strategic orientations and
the diversity of ways in which these transformations are perceived depending on
employees’ age and level of responsibility within the firm.
1. Introduction
While the late 1980s and early 1990s witnessed the rise of a literature seeing
investments in human resources on the basis of broad employee training,
employment stability and participative management as key sources of com-
petitive advantage (Appelbaum and Batt 1994; Kochan and Osterman 1994),
the late 1990s brought growing scepticism regarding the potential diffusion of
such participative management models in the new ‘high-performance’ work-
place. In the United States, the continuous restructuring of large corpora-
tions threw doubt on the capacity of the economy to continue to provide the
type of employment security historically developed in large corporations
Florence Palpacuer is at the Institute for Enterprise Management Sciences (ISEM), University of
Montpellier. Amélie Seignour is at the Academic Institute of Technology, University of Mont-
pellier II. Corinne Vercher is at the Department of Economic and Social Administration,
University of Montpellier III.
British Journal of Industrial Relations doi: 10.1111/j.1467-8543.2010.00785.x
49:3 September 2011 0007–1080 pp. 560–582
© Blackwell Publishing Ltd/London School of Economics 2010. Published by Blackwell Publishing Ltd,
9600 Garsington Road, Oxford OX4 2DQ, UK and 350 Main Street, Malden, MA 02148, USA.
(Capelli et al. 1997; Doeringer et al. 1991). Leading American thinkers on
employment and the labour market highlighted the rising pressures exerted
by the investment community on large corporations in the direction of
cutting costs and improving profits, and expressed concern over the resulting
adoption by large firms of HRM policies geared not only at downsizing, on
the basis of dismissals and subcontracting, but also at ‘treating labour much
like their “just-in-time” procurement of other factors’ (Capelli et al. 1997: 7)
through continuous hire and fire on the labour market. Announcing the
demise of American internal labour markets, Capelli strongly argued that
‘career jobs [were] dead’ (Capelli 1999a) and companies were ‘managing
without commitment’ (Capelli 2000) a ‘market-based employment relation-
ship’ (Capelli 1995, 1999b).
On the basis of interviews conducted in 2004–2005 with HR managers and
skilled employees — including both managers and professionals1— primarily
belonging, or having recently belonged, to six prominent multinationals in
France (see Appendix), we argue that such a market-based HRM model has
gained growing influence in large corporations in France (II), and identify a
rationale for promoting market-based management in the combined shift
towards ‘financialization’ and ‘globalization’ observable in corporate strate-
gies in our sample (I). We conclude by highlighting the consequences of these
strategic shifts in terms of greater insecurity and inequality of treatment
among employees, signalling a reduced capacity of French capitalism to offer
employment protection and stability to core workers in large corporations.
2. The rise of global financialized corporations in French capitalism
During the 1980s and 1990s, developed countries have undergone a major
shift towards a new form of ‘patrimonial’ (Aglietta and Rébérioux 2004)
or ‘shareholder’ (Williams 2000) capitalism. Characterized by the growing
importance of financial markets in the economy and the rise of institutional
investors as prominent shareholders of large corporations, the transforma-
tion initiated in the United States during the 1980s, when institutional inves-
tors had accumulated amounts of collective savings large enough to exercise
significant buying power on financial markets (Lazonick and O’Sullivan
2000). Spreading to European countries, such as France, over the following
decades, these changes in the governance patterns of large corporations were
closely intertwined to a shift towards global patterns of competition, as
observed in the six multinationals of our sample.
Diffusion of a Shareholder Value Ideology
Within the context of corporate ‘financialization’ where objectives to increase
shareholder returns have become dominant in the strategic management
of large corporations (Williams 2000), greater investor pressures have
been passed onto top management through a variety of devices implicitly
Market-Based HRM Model in Large Corporations 561
© Blackwell Publishing Ltd/London School of Economics 2010.
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