Abstract
This paper draws upon data from an investigation of U.S. and Japanese employment and pay systems. Most studies of high-performance workplace organizations have been concerned with 'internal fit', focusing on organizational practices within the firm. In this contribution, the emphasis is upon the 'external fit' between high-performance organizations and their wider environments. The conclusion is that the effectiveness of an organizational system critically depends upon the macroeconomic and institutional contexts within which it is located.
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