Varieties Inside The Shell Of Likeness: Explaining The Bureaucratization Of The Hr Function In British Smes

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Neo-institutional theory's concern with understanding the forces that promote structural isomorphism has led to a neglect of the heterogeneity of structures among organizations operating within the same institutional framework. To better understand such variation, we extend institutional theory by focusing on the link between institutional expectations and the interests and strategic choices of influential actors in an organization. Using a nationally representative sample of bureaucratic small and medium size British enterprises (SMEs), we find evidence that while SMEs' formal structures reflect the influence of the institutional environment, this influence is significantly moderated by the interests and concentration of owners' power. In particular, we argue that ownership structure affects owners' interpretations of the institutional environment conducive to either opportunities or constraints. Our results show that public firms with concentrated ownerships (OCOs) respond most strongly to institutional pressure to bureaucratize the HR function because complying with such pressure is in the owners' interests; therefore, they use their power to conform to the institutional expectations. In contrast, in private OCOs, owners use their power to resist institutional pressure; hence the HR function is less bureaucratized in such firms. We find that firms with dispersed ownership structure (ODOs) conform also to the institutional pressure but only up to a standard level. We discuss the implications of the findings for institutional theory, corporate governance, and SME research.

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bureaucratization; institutional theory; strategic choice perspective; ownership structure; HRM


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Union Local


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Tolbert, Pamela S

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Diciccio, Thomas J
Sine, Wesley

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Industrial and Labor Relations

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M.S., Industrial and Labor Relations

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Master of Science

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Government Document




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dissertation or thesis

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