HRM and the legitimacy market

Abstract

This article develops and proposes the concept of the legitimacy market as a counterpoint to the product market in strategic FIRM analysis and practice. It is driven by three major concerns. First, in much of the contemporary literature, internal efficiency pursuits and product market equirements appear to be the dominant reference points in HRM analysis and practice. Criteria of environmental legitimacy are scarcely recognized. Second, despite the many claims that HRM is novel and distinctive, there appears to have been little social science development in the field of HRM. Third, the dominance of the strategic management paradigm in HRM has obscured the distinctiveness of HRM in organizations, especially its role in reflecting the external social and cultural environment. These concerns are addressed through the concept of the legitimacy market. The concept, it is argued, should help to conceptualize and analyse more effectively the environmental determinants of HRM, in particular culture and ideology, as well as suggesting alternatives for practitioners to follow. The core proposition upon which the article is predicated is that legitimacy and efficiency are the two central concerns of management.