The Road Taken: Origins and Evolution of Employment Systems in Emerging Companies

Abstract

Uses information regarding the process oforganization-building to identify several distinct models for organizingemployment and work, in order to gain insight into how organizational designersapproach the issue of consistency and complementarities in human resourcesmanagement. Two goals of this research are to understand: (a) how earlydecisions regarding human resources affect future outcomes of the, firm and (b)how human resource systems are established. A random sample of 100 hightechnology firms in Silicon Valley was drawn from Rich's Everyday SalesProspecting Guide and CorpTech in 1994. The employment practices adopted byorganizations in their formative years and how those who created theorganizations conceived of the employment relationship were examined. Four distinct employment blueprints were garnered from the interviews withfounders--i.e., star, engineering, commitment, and factory models. From theseblueprints, three recurring dimensions regarding how work and employment shouldbe organized and three distinct categories within these dimensions werereflected. These include: the primary basis of organizational attachment--e.g.,love, work, and money; the primary means for controlling and coordinatingwork--e.g., peer or cultural control, professional, control, and formalprocedures and systems; and the primary criterion to be emphasized in selectingemployees--e.g., skills and experience needed to accomplish some immediatetasks, long-term potential, and values and cultural fit. The stronginterrelationships among the three dimensions and the clarity of the foundermodels are consistent with the idea that strong complementarities characterizehuman resources systems. Additional evidence of consistency andcomplementarities among human resource practices was also found. (SFL)

Keywords: Employee relations, Computer industry, Software industry, High technology industry, Human resources management, Employee management, Founders, Silicon Valley, Transaction costs, Employment policies, Work roles, Organizational structures, Organizational practices, High technology firms, Telecommunications industry