This article critiques the theoretical model that dominates mainstream research in strategic human resource management. Contributions include: the critique is developed from an explicit model of the employment relationship; new concepts of “weak contingency” and “strong contingency” are introduced; the standard hypothesis of a positive sign on the human resource management variable in firm performance studies is shown to be incorrect for a competitive economy (it should bezero); and the analysis is based on “first principles” of institutional economics and industrial relations.
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