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Human Resource Bundles and Manufacturing Performance: Organizational Logic and Flexible Production Systems in the World Auto Industry Author(s): John Paul Macduffie Source: Industrial and Labor Relations Review, Vol. 48, No. 2 (Jan., 1995), pp. 197-221 Published by: Cornell University, School of Industrial & Labor Relations Stable URL: http://www.jstor.org/stable/2524483 . Accessed: 24/01/201114:04
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HUMAN RESOURCE BUNDLES AND MANUFACTURING PERFORMANCE: ORGANIZATIONAL LOGIC AND FLEXIBLE PRODUCTION SYSTEMS IN THE WORLD AUTO INDUSTRY
JOHN PAUL MACDUFFIE*

Using a unique international data set from a 1989-90 survey of 62 automotive assembly plants, the author tests twohypotheses: that innovative HR practices affect performance not individually but as interrelated elements in an internallyconsistent HR "bundle" or system; and that these HR bundles contribute most to assembly plant productivity and quality when they are integrated with manufacturing policies under the "organizational logic" of a flexible production system. Analysis of the survey data, which teststhree indices representing distinct bundles of human resource and manufacturing practices, supports both hypotheses. Flexible production plants with team-based work systems, "high-commitment" HR practices (such as contingent compensation and extensive training), and low inventory and repair buffers consistentlyoutperformed mass production plants. Variables capturing twointeractions among the bundlesof practices are even way and three-way better predictors of performance, supporting the integration hypothesis.

espite claims that innovative human resource (HR) practices can boost firm-level performanceand national competitiveness, fewstudies have been able to confirmthis relationship empirically,and stillfewerhave systematically described the conditionsunder whichitwillbe strongest. DAlthough some of the problems in this research stream have been empirical (for example, unreliable measures and inadequate controls), the more fundamental barriershave been conceptual. Innovative HR practicesare oftenstudiedin a vacuum, with more attention paid to isolating the effect individualpracticesthan to underof

*The author, who is AssistantProfessor of Manof agement at the WhartonSchool, University Pennsylvania,thanks Peter Cappelli, Harry Katz, Thomas Kochan, Bruce Kogut,Paul Osterman,FritsPil, Daniel Nikolai Rogovsky, Raff, LibbyScott,and Peter Sherer for theircomments on an earlier draftof thispaper, and theInternationalMotorVehicleProgramat M.I.T. forgenerous support.

Additional details on the data and methodologies fromthe InternationalAssembly Plant Studyare available...