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Establishing the Laws of Interaction
Laws of interaction explain the relationship that exists between various units of a theory and not the conceptual dimensions of a unit of a theory (Lynham, 2002). As outlined by Dubin (1978), there are three types of laws of interaction: categorical, sequential, and determinant. Categorical laws suggest that the values of a unit are associated with another unit, direction or order of association is not important here, which is determined by the sequential law of interaction. Expressions such as preceded by or succeeded by typify this type of law of interaction. Dubin (1978) suggests laws of interaction do not necessarily indicate causality, as the laws of interaction, per se, are not measured; only the units in a relationship are. Considering the scope of this chapter, a summary of specific interactions between various units of the theory is presented.
Competition and industry sub-sector. Industry sub-sector is likely to influence the unit of nature of competition. Nature of competition varies on the basis of price and quality for all the three sectors of the Indian IT industry. ITSS is more likely to compete on the basis of quality than on price. High levels of skill sets are a characteristic of the ITSS sector. Competition based on quality of products and services is likely to increase investment in training, whereas competition based on price increases the likelihood of decreased training effort (Ergas & Wright, 1995).
Market orientation, total quality management systems, and workplace change: Market orientation is interrelated with the units of workplace change, especially learning orientation and technological innovation. Organisations with high learning orientation are likely to question the existing knowledge they hold and maintain open-mindedness towards new ideas or any knowledge produced by market orientation through adaptive and generative learning processes. They may even challenge the market-orientated behaviours that firms have in any situation. It is possible that a strong market orientation could result in adaptive learning (Slater & Narver, 1995) but not in generative learning except in case of a strong learning orientation (Senge, 1990; Sinkula et al., 1997). In other words, high learning orientation is likely to enhance the market- orientated behaviours as a strong learning orientation constantly challenges its assumptions. In terms of adaptability for a new product or service, it is likely that strong market orientation will result in faster product development irrespective of its learning orientation, but strong learning orientation may not necessarily result in new product development as it relies on a range of additional information sources, including market intelligence processing to make informed decisions. To this end, firms with low learning orientation and high market orientation are likely to focus on product, service, and process enhancements than new prod?ucts and innovations (Malik, 2013a). More recently, Malik et al. (2012) and Malik and Blumenfeld (2012) noted that in the context of Indian IT and BPO firms, their quality management systems have a positive impact on its market and learning orientations as well as skill formation and training practices.
Unionisation and SHRM practices: Unionisation has an influence on the units of human resource practices. Studies in Australia have shown that the presence of unions in organisations has a positive influence on enterprise training and adopting a pluralistic approach to HRM (Smith et al., 2002; Teicher & Grauze, 1996). Recent developments suggest that unionisation is likely to influence SHRM practices of high-technology sectors such as the IT sector (Verma, 2004; UNI-APRO, 2004).
Employee mobility and SHRM practices: Mobility of workforce has an influence on the unit of strategic HRM practices. Higher employee mobility is likely to result in low investments in training (Malik, 2009; Pereira & Malik, 2015). However, high levels of employee mobility in the Indian IT organisations influence high levels of investment in generic and firm-specific skills training, recruitment, remuneration and career development, and a strategic approach to HR practices.
Employee skill levels and SHRM practices: Employee skill levels influence the units of strategic HR practices. It may sound a bit paradoxical, but higher levels of employee skills are likely to have a positive influence on its HR practices such as training, remuneration and career development, especially if employee mobility is high. Further, considering the resource-based view, specific skills sets of firm can be the source of an organisation’s sustained competitive advantage and engagement with innovation at the workplace (Malik, 2013; Mark & Akhtar, 2003). To ensure the organisation can sustain its competitive advantage, it invests in a range of strategic HR activities, including skills that can’t be imitated by its rivals (Pereira & Malik, 2015; Wright & McMahan, 1992).
Employee permanency and SHRM practice: Employee permanency is interrelated with the units of SHRM practices. Workforce flexibility is often noted as an organisation’s strategic HR response to manage competition and improve productivity. High levels of workforce permanency in an organisation are likely to influence levels of SHRM practices. Low levels of workforce permanency, or high rate of casualisation in an organ?isation is likely to result in lower levels of SHRM practices (Malik, 2009; Malik & Nilakant, 2011).
Employee mobility and industry sub-sector: Industry sub-sector influences the unit of employee mobility. The IT sector of India is broadly classified into three sub-sectors: ITSS, ITeS/BPO, and ITHM. Employees in ITeS/ BPO sector are more likely to have higher employee mobility than those in the ITSS and ITHM sectors, in the same order.
Workplace change and SHRM practices: Organisational change can influence the units of SHRM practices. Organisation changes such as high levels of technological innovation and organisational change influences higher levels of SHRM practices (Pereira & Malik, 2015).
Industry sector and workplace change: Industry sub-sector influences the nature and extent of workplace change, as different types of workplace changes and technological innovations may be occurring at any given stage of an industry’s life cycle. For example, only few business processes have high levels of maturity in the ITeS/BPO sector, and a lot of other new business processes are being continuously added as the industry grows. To summarise, the following laws of interaction are evident:
Law 1: Units of industry sub-sector, competition, market orientation, total quality management, workplace change, unionisation, skills levels, workforce mobility, cycle time, enterprise size, SHRM practices, workforce permanency, and composition are required for the outputs of the nature and extent of enterprise training and innovation outcomes.
Law 2: Units of market orientation are interrelated with the units of workplace change, innovation, and temporal and geographical dimension of training.
Law 3: Units of quality management and market orientation influence learning orientation units; and high levels of learning orientation and market orientation units influence temporal and geographical dimension units.
Law 4: Units of workplace change, unionisation, employee mobility, skill levels, and workforce permanency influence units of SHRM practices.
Law 5: Unit of industry sub-sector influences units of competition, workplace change, and employee mobility.
Law 6: Unit of SHRM practice influences units of workforce permanency, skills formation, and innovation outcomes.