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Human resource management strategies for small territories : an alternative proposition

01 May 2001-International Journal of Educational Development (Pergamon)-Vol. 21, Iss: 3, pp 205-215

Abstract: This paper tackles the issue of educational development from a somewhat different, and still under-explored, perspective: that of human resource management (HRM). This paper argues that small territories have, often blindly, accepted an ‘industrial relations’ (IR) framework that is much more at home in the formalistic, mass production and mass employment based, manufacturing economies of the industrialised world. While the future of ‘IR’ in these settings is also being called into question today, small territories have been hard put all along to apply their labour relations practice to the strictures of this theory. An inductive analysis of the human resource condition in small territories reveals rather a contextual disposition for empowerment and entrepreneurship — a critical component for successful HRM practice — which is often unacknowledged, let alone addressed in public policy. The paper identifies aspects of current industrial relations as well as educational practice that could be addressed in order to better tap the benefits of this different understanding of human resourcefulness.
Topics: Human resource management (57%), Industrial relations (57%), Labor relations (56%), Human resources (53%), Entrepreneurship (52%)

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International Journal of Educational Development 21 (2001) 205–215
Human resource management strategies for small territories:
an alternative proposition
Godfrey Baldacchino
Workers’ Participation Development Centre & Islands and Small States Institute, University of Malta, Malta
This paper tackles the issue of educational development from a somewhat different, and still under-explored, perspec-
tive: that of human resource management (HRM). This paper argues that small territories have, often blindly, accepted
an ‘industrial relations’ (IR) framework that is much more at home in the formalistic, mass production and mass
employment based, manufacturing economies of the industrialised world. While the future of ‘IR’ in these settings is
also being called into question today, small territories have been hard put all along to apply their labour relations
practice to the strictures of this theory. An inductive analysis of the human resource condition in small territories
reveals rather a contextual disposition for empowerment and entrepreneurship a critical component for successful
HRM practice which is often unacknowledged, let alone addressed in public policy. The paper identifies aspects of
current industrial relations as well as educational practice that could be addressed in order to better tap the benefits of
this different understanding of human resourcefulness. 2001 Elsevier Science Ltd. All rights reserved.
Keywords: Educational policy; Small territories; Industrial relations; Human resource management
1. Preamble
It is only in the last few decades that a serious
attempt has been made to explore the idiosyn-
crasies of small territories. This area of research
was by definition non-existent until such a category
of independent, sovereign units started taking their
place on the world’s geo-political map, albeit late
in the epoch of decolonisation. The fascination of
the small, often island, site and its fair share of
associated glamour and myth have no doubt con-
tributed to such locations becoming academic
curios, loaded with stereotypes uncritically
accepted by one and all. Useful comparative work,
E-mail address: (G. Baldacchino).
0738-0593/01/$ - see front matter 2001 Elsevier Science Ltd. All rights reserved.
PII: S0738-0593(00)00029-8
inductively based on case material, has been dis-
pelling these constructions and building in their
stead a more solid, experientially grounded, under-
standing of the small world predicament. Such
advances are more noticeable in areas such as pub-
lic administration (Baker, 1992; Public Adminis-
tration and Development, 1998), economic growth
and development (Dommen and Hein, 1985;
McKee and Tisdell, 1990; World Development,
1980, 1993) and tourism (Briguglio et al., 1996a,b;
Lockhart and Drakakis-Smith, 1996).
But it is the area of educational planning and
management in small states that is probably the
most developed and best sustained of all these
research fields. Under the aegis of such inter-
national institutions as the Commonwealth Sec-
retariat and UNESCO’s International Institute for

206 G. Baldacchino / International Journal of Educational Development 21 (2001) 205–215
Educational Planning, and thanks to such reputable
international journals as Compare and Prospects,
a fairly long tradition of scholarly publications has
been produced. Notable amongst these are
Atchoarena (1993), Bray and Packer (1993) and
Bray and Steward (1998). The pioneer in this field
is probably Norwell E. Harrigan who argued for a
customised approach to educational development
in small, often island, territories (Harrigan, 1972).
1.1. This paper
This paper hopes to build on this rich pedigree.
It adopts a fairly common definition of what con-
stitute ‘small territories’ within this literature
namely, countries that are either politically sover-
eign states or else have a fair degree of jurisdic-
tional autonomy; while smallness of size is taken
on the basis of a resident population cut-off point
of around 1.5 million.
The novelty of this paper lies mainly in its
attempt to tackle the issue of educational develop-
ment from a somewhat different, and still under-
explored, perspective: that of human resource man-
agement (HRM). Discussions about educational
planning and management in small territories have
been promoted primarily by experts and prac-
titioners who come from a solidly education back-
ground mainly university professors of edu-
cation as well as educational planners and officers
in Ministries or Departments of Education. In the
case of this particular article, the point of departure
is the economy, the labour market setting and the
centrality of a suitable human resource manage-
ment policy that is sensitive to any specifics
obtaining in small territories.
These specifics are likely to exist. This paper
will argue that small territories have, often blindly,
accepted an ‘industrial relations’ (IR) framework
that is much more at home in the formalistic, mass
production and mass employment based, manufac-
turing economies of the industrialised world. While
the future of ‘IR’ in these settings is also being
called into question today, small territories have
been hard put all along to apply their labour
relations practice to the strictures of this theory.
An inductive analysis of the human resource con-
dition in small territories reveals rather a contex-
tual disposition for empowerment and
entrepreneurship a critical component for suc-
cessful HRM practice which is often unac-
knowledged, let alone addressed in public policy.
The paper identifies aspects of current industrial
relations as well as educational practice that could
be addressed in order to better tap the benefits of
this different understanding of human resourceful-
2. The critical resource
That the major resource of any particular organ-
isation is, or lies in, its human endowment is a glib
statement we may have heard all too often. In a
world increasingly open and inevitably disposed
towards global competition, organisations and
firms are finding themselves sharing markets with
adversaries who match, or exceed, their ‘best prac-
tice’ in terms of delivery times, quality levels and
technological sophistication. All eyes therefore
turn to the human resource department as that
which may yet provide that crucial, critical edge
and boost competitiveness to higher, dizzier levels.
Such quantum leaps are theoretically within
reach with the deployment of effective human
resource management practice in firms. HRM is
both a philosophy and a technique. As a philo-
sophy, it squarely confronts the labour force as a
potential partner in the work process. It obliges
owners and managers to look at employees as indi-
viduals who can be brought to bear as committed
players in achieving organisational goals. This is
best done by taking on board employees’ own
interests when charting overall, corporate objec-
tives, making sure that the profits landed by firms
are also accompanied by significant rewards to
those who labour to make them happen. Critical
among such rewards are programmes that flexibly
address the education, training and development
needs of personnel generally, at all levels of the
organisational hierarchy. This is the technique of
HRM, premised on the understanding that a cus-
tomised approach to the needs and aspirations of
each employee constitutes a tangible form of com-
mitment to that person’s well-being and job satis-
faction, which in turn should readily translate into

207G. Baldacchino / International Journal of Educational Development 21 (2001) 205–215
a winning, synergetic partnership with managers
and investors. Human and intellectual capital are
recognised as being just as vital to a firm as are
financial and entrepreneurial capital. Such an
enthusiastic commitment should, given other sup-
ports, also liberate the, often latent, creative forces
of employees, placing still further, priceless human
talent at the organisation’s service. According to
Krulis-Randa (1990, p. 136), HRM embodies the
following five characteristics:
A focus on horizontal authority and reduced
hierarchy; a blurring of the rigid distinction
between management and non-management;
Wherever possible, responsibility for people
management is devolved to line managers; the
role of personnel professionals is to support and
facilitate line management in this task, not to
control it;
Human resource planning is proactive and fused
with corporate-level planning; human resource
issues are treated strategically in an integrated
Employees are viewed as subjects with the
potential for growth and development; such
potential is to be identified and developed in line
with the adaptive needs of the organisation;
All employees, managers and managed, have a
common interest in the success of the organis-
ation and should become aware of, and commit-
ted to, common goals.
3. Enter human resources
The above philosophy and associated techniques
would have been anathema a few years ago. Con-
ceiving of workers as ‘human resources’ (HR) is
a very recent trend. As Springer and Springer
(1990, p. 41) suggest, the history of HRM may be
said to have started when NCR Corporation estab-
lished a separate personnel office in the 1890s. The
term itself HR has been coined as recently
as the Second World War; while ‘human capital
theory’ came onto the scene in the 1960s (Hendry
and Pettigrew, 1990). This should not come as a
surprise because, until very recently, a firm’s com-
parative advantage was generally deemed to
depend substantially on technology (as in more
efficient production processes) rather than on any
human resources strategy (Whipp, 1996). Further-
more, in a scenario where mass markets operated
under fairly stable conditions, it was a ‘Fordist’,
‘just-in-case’ type of production regime that was
hailed as superior, based on a routinisation of tasks
and de-skilling of employees (Wood, 1982; Wom-
ack et al., 1990).
In this setting, traditional industrial relations
emphasised a tripartite, consensual social partner-
ship between state, labour and capital. This
model promulgated by such eminent proponents
as Parsons (1952), Dunlop (1958) and Fox (1966),
as well as such influential international bodies like
the International Labour Organisation (Cox,
1977) achieved world-wide legitimacy. This
model may have been a ponderous and slow-mov-
ing machinery for building a labour–management
rapport; it may have been a structure more at home
in a condition of comfortable and secure market
dominance; it may have been more at home in a
context where management and workers were
resigned to the understanding that industrial
relations was a battlefield; where harmonious
industrial relations were really only a fragile truce,
a lull in an eternal and bitter conflict between
‘them and us’.
Times have changed dramatically. Worker com-
mitment and company loyalty have suddenly been
‘discovered’ as critical resources for superior com-
petition (Peters and Waterman, 1982). The superi-
ority of more flexible, ‘just-in-time’ production
systems, with a high responsiveness to market sig-
nals, is now widely recognised (Monden, 1983).
The pressure is now on for ‘employee affairs’ to
graduate from a marginal department maintaining
sickness, seniority, leave and disciplinary records
to become strategically integrated with the overall
business objectives of a firm (Robbins, 1983;
Amaya, 1990). The warlike, ‘us and them’ IR
metaphor is being replaced by that of the ‘final
frontier’ and an invitation to take up the challenge
of the adventure together (Dunn, 1990, my
emphasis). Human Resource Management prac-
tices have been conscripted in order to transform
traditional enemies into allies, and to transform

208 G. Baldacchino / International Journal of Educational Development 21 (2001) 205–215
low-trust employment contracts into high-trust,
commitment-rich, partnership agreements (Fox,
1974; Fukuyama, 1995; Cohen-Rosenthal and Bur-
ton, 1993).
Territories are obliged to face challenges similar
to those of discrete firms and organisations, albeit
from a different perspective. In spite of the ‘privat-
isation’ of development, political and administrat-
ive structures continue to carry a major responsi-
bility in maximising the competitiveness of their
economies generally and of individual firms parti-
cularly. They do so primarily by means of
deploying a number of jurisdictional instruments,
while directing the necessary (mainly public) fund-
ing towards the fruition of their objectives. These
include providing attractive conditions for foreign
direct investment; ensuring efficient and user-fri-
endly administrative structures; enacting appropri-
ate labour legislation; and implementing suitable
education and training strategies.
Recent decades have witnessed the attempts of
a number of polities to come to grips with the need
to move from an ‘industrial relations’ to a ‘human
resource management’ configuration. Neo-liberal
economic doctrines, accompanied by wide-ranging
privatisation programmes and changes in labour
legislation, have led to a decline in trade union
membership and lobbying power; a fall-back in
public sector employment; and marked increases
in the flexibilisation of the job contract (e.g.,
Ferner and Hyman, 1997). Public policy has thus
contributed to the emergence of a ‘new mana-
gerialism’ at work, whereby professional senior
executives have a larger discretion to manage the
operations of firms and agencies, in both private
and public sectors. The ‘right to manage’ (Goss,
1994, p. 5) finds ideological support in the growth
of strategic human resource management, parti-
cularly in the United States (see Beer et al., 1984;
Fombrun et al., 1984). Here, it is the professional
manager alone who is deemed to enjoy the auth-
ority to handle organisational practices, has the
background expertise to master its intricacies, and
is willing and able to bear full accountability for
all outcomes.
This situation may lead to an interesting para-
dox. While specific human resource management
initiatives are addressed towards enhancing worker
empowerment, it appears that other attempts seek
to do the exact opposite such as disarming
workers from any legitimate role in decision-mak-
ing they may have enjoyed, particularly through
their collective representation (see Storey, 1985, p.
201). Such conflicting policies are bound to be
noted by employees who would thus become disil-
lusioned, and also more suspicious, of the pious
intentions of human resource development (HRD):
is it just another more sophisticated form of control
after all (Sewell and Wilkinson, 1996)? Is plural-
ism, for all its weightiness, still preferable in the
face of a sham unitarism (Legge, 1995)? Does
‘good old’ industrial relations read as more trust-
worthy than glitzy human resource management?
Small territories are not exempt from these same
forces, tensions and searching questions. The local
absence of economies of scale typically obliges
these territories to orient their economies towards
external markets (Fischer and Encontre, 1998); this
structural feature fostered a sense of competi-
tiveness which saved many of these economies
from contemplating protectionism (see Milne,
1999). Their policy leaders too often declare that
their major asset is the human resource, often in
sharp contrast to the lack of any exploitable natural
resources. To what extent, however, is this bland
observation supported by actual policy? And in
what way does the small-scale environment present
a different challenge to the deployment of human
resource strategy?
4. Five domains
A wide and critical reading of the experiences
of various small territories suggests that at least
five key domains highlight the distinctive nature of
such a deployment. These collectively intimate that
the value of the discrete and enterprising person
in a small territory is more pronounced than else-
Firstly, ‘person power’ is enhanced thanks to the
ease of achieving expertise and monopoly status.
With the obligation to provide the same roles and
services forthcoming from larger social units, indi-
viduals in small territories are more likely to oper-
ate as sole service providers. “…[I]n a small coun-

209G. Baldacchino / International Journal of Educational Development 21 (2001) 205–215
try, it is easy to hit the limelight” (Bray and Fergus,
1986, pp. 94–95). The diversification of knowledge
and specialisation of tasks that any small territory
needs to accommodate implies that one person (or
even parts thereof) equals the small-scale society’s
total sum requirement of expertise and skill in
some particular fields (Bennell and Oxenham,
1983, p. 31). As soon as individuals develop even
a modest edge in an area of knowledge, skill or
service provision, they may proclaim themselves,
or may find themselves proclaimed by others, as
having authoritative standing. Such results substan-
tially form the ‘natural monopoly’ which occurs in
the small-scale site. There is a social hierarchy like
anywhere else; but this has typically fewer inter-
mediate rungs. Various specialisms remain vacant
or undeclared, until recognised and colonised by
enterprising individuals (Murray, 1985, p. 194;
Boyce, 1991, p. 113; Peters and Sabaroche, 1991,
p. 133; Bray, 1992, p. 150). The latter may amass
a portfolio of such specialisms and may flexibly
deploy now a set of these, now another, in response
to changing demand (Carnegie, 1982, p. 13; Trouil-
lot, 1988, p. 32). The cultivation of one’s own
indispensability what Murray (1981, p. 254) has
aptly called ‘monument building’ is quite a
rational strategy in such a context; indeed, it may
even be spontaneous and unavoidable. Presump-
tuousness may also reap rewards because, frankly,
there may not be anyone around locally to chal-
lenge one’s bluff or fragile claim to authority
(Kersell, 1985, pp. 376–377).
Secondly, such person power leads invariably to
a personalisation of service provision. The loss of
one individual could constitute a very serious loss
because of non-substitutability (see Shand, 1980,
p. 16; Lowenthal, 1987, p. 36). And the association
of a service or skill with one, and just one, person
means that individuals requiring that skill or ser-
vice may easily bypass the legal–rational structure
to satisfy their demands by directly accosting the
provider (Reid, 1974, pp. 21–22; Kersell, 1992, p.
292). Thus, personalisation works against and
erodes institutionalisation (Danns, 1980, p. 17, 30;
Schahczenski, 1992, p. 38). This is a behaviour
pattern that may be fuelled by both sides since this
facilitates the build-up of a network of obligation;
while ensuring that the service remains solidly a
function of the person, not of the institution in
which that person operates.
Thirdly, even in the context of a tripartite or
bipartite industrial relations framework, the dis-
crete identity of individuals in the context of lab-
our–management bargaining cannot be dis-
counted. In other societies, bargaining and
negotiation may take place amongst labour, state
and management leaders who may hardly ever
meet and who would not know much about each
other except for information related explicitly to
their role in industrial relations. In small-scale set-
tings, the social partners would be well known to
each other; they are likely to meet over and over
again in a variety of social and civic events; their
dealings and relationships apart from those related
to industrial relations will also be widely known
or at least be easily available for public consump-
tion and mutual scrutiny. Information about their
families, friends, favourite haunts, political beliefs
would be available in such territories because of a
much lower threshold of privacy. As noted by Con-
nell (1988, p. 5):
Social ties in island micro-states are so powerful
and pervasive that anonymity, impersonal role
relationships and informality are difficult to
Hence, it may prove impossible to engage in any
labour–management debates, whether at a one-to-
one or at a national level, without a fair degree of
data spill-over from other role sets in which the
incumbents operate as social beings. The effect of
these structural tendencies is that aspects of the
personal and matters specific to the individual find
their way into and colour what may elsewhere be
fairly objective, focused and impersonal dealings.
As vividly noted by Benedict (1967, p. 49):
Impersonal standards of efficiency, performance
and integrity are modified by the myriad
relationships connecting the individuals con-
Fourthly, one must keep in mind that the econ-
omic structure of small territories is typically more
heavily dependent on small businesses, on service

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