The International Journal of Human Resource

Management

ISSN: 0958-5192 (Print) 1466-4399 (Online) Journal homepage: http://www.tandfonline.com/loi/rijh20

Human resource management, strategic

involvement and e-HRM technology

Janet H. Marler & Emma Parry

To cite this article: Janet H. Marler & Emma Parry (2015): Human resource management,
strategic involvement and e-HRM technology, The International Journal of Human Resource
Management

To link to this article: http://dx.doi.org/10.1080/09585192.2015.1091980

Published online: 10 Dec 2015.

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 The International Journal of Human Resource Management, 2015
http://dx.doi.org/10.1080/09585192.2015.1091980

Human resource management, strategic involvement and e-HRM

technology
Janet H. Marlera* and Emma Parryb
a
School of Business, University at Albany-State University of New York, Albany, NY, USA;
b
School of Management, Cranfield University, Bedfordshire, UK
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Associated with the emergence of internet-based human resource management

technology is rhetoric predicting that such technological advances (electronic human
resource management technology or e-HRM) will make HRM in organizations more
strategic. Yet such a prediction is contested in the literature on the role of technol-
ogy in organizations. Using a large survey data-set consisting of 5665 companies
that are located in 32 different countries, we use non-recursive simultaneous
equation models with instrumental variables to empirically evaluate competing
theoretical perspectives in this literature. We find and show that strategic HR
involvement and greater e-HRM capability are both directly and reciprocally related
supporting both theoretical perspectives but also showing each is not mutually
exclusive. We discuss the implication of these results for human resource
management theory, practice and future research.
Keywords: e-HRM; HR innovation; human resource information systems; socio-
materiality; strategic HRM; technological determinism

Introduction
The past decade has witnessed a surge in the use of innovative information technolo-
gies (IT) in human resource management (HRM). Fueling this growth is the spread of
increasingly sophisticated enterprise resource planning (ERP) software combined with
internet-based technologies that standardize and automate the administrative compo-
nents of HRM activities and tasks. The spread of these internet-based HRM IT innova-
tions, generally labeled e-HRM (see Ruel, Bondarouk & Looise, 2004; Strohmeier,
2007), may be attributed to the promise of significant economic efficiencies in process-
ing administrative transactions and communicating information. Some researchers also
argue that internet-based IT is a disruptive technology that will inevitably transform the
way in which organizations are structured (Bower & Christensen, 1995; Brynjolfsson
& Hitt, 2000). Consistent with this perspective, many researchers’ and practitioners’
claim that e-HRM will transform or disrupt how HRM is practiced in organizations,
shifting it from being primarily administrative to being more strategically relevant
(Lepak & Snell, 1998; Shrivastava & Shaw, 2003).
The promise of this technologically induced shift in the organizational role of HRM
is based on the notion that use of information technology affects how organizations are
structured (Hitt & Brynjolfsson, 1997; Pfeffer & Leblebici, 1977). With greater
automation of administrative tasks and increasingly distributed access to data,

*Corresponding author. Email: [email protected]

© 2015 Taylor & Francis

 2 J.H. Marler and E. Parry

decision-making is decentralized so that those performing HRM tasks now can more
effectively focus on complex, judgment-oriented and professionally demanding tasks
and responsibilities. In this sense, jobs in HRM are upskilled as an adaptation to the
effects of new technological advances (Brynjolfsson & Hitt, 2000; Marler & Liang,
2012). This perspective, however, competes with an alternate view. In this alternative
perspective, managerial strategic choice plays the primary role and choices are made
concerning how technology best serves the organization in achieving strategic objec-
tives (Barley, 1986). From this perspective, when e-HRM is adopted and how it is
deployed is the result of strategic decision-making and managerial intent (Broderick &
Boudreau, 1992; Marler, 2009; Martin & Reddington, 2010; Ruel, Bondarouk, &
Looise, 2004). In this sense therefore, the emergence of e-HRM in organizations is a
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planned outcome of strategic decisions concerning how to provide HRM services. In

many cases, the planned outcome might simply be to make the delivery of HRM ser-
vices more efficient rather than transform HRM jobs into strategically important roles
(Marler, 2009).
In this study, we examine the implications for strategic HRM underlying these two
perspectives to gain a better insight into the intersection of information technology and
strategic organizational processes. Is technological transformation a precursor of strate-
gic HRM as some suggest or is information technology simply a tool to execute strate-
gic decisions in which case HR strategy precedes the deployment of e-HRM (c.f.
Marler, 2009)? We take advantage of a large data-set consisting of HRM practices in
companies located in North America, Europe, Australia and New Zealand to provide
an empirically based examination of these competing perspectives and strategic
implications.
Our paper proceeds as follows. We begin with a definition of key theoretical
constructs and then in the next section, describe the competing theoretical frameworks
and associated hypotheses. The third section describes the sample, the survey data and
empirical methodology in more detail. We then present the results, discussion and
conclusions.

E-HRM and HRM

Conceptually, it turns out that defining and measuring e-HRM technology and informa-
tion technology, more generally, is challenging because technology has both a physical
and a procedural dimension (Orlikowski & Scott, 2008). Thus, information technology
is a physical entity (e.g. hardware, software and communication network infrastructure)
that is separate from individuals but at the same time the physical technology is noth-
ing without individuals using it in organizational tasks. With this challenge in mind, we
draw our definition from Marler and Fisher (2013), in which the information technol-
ogy is a physical entity (e.g. hardware, software and communication network infrastruc-
ture) that is separate from individuals in an organization but at the same time also
incorporates organizational processes such as HR activities. Thus, in this study e-HRM
consists of configurations of computer hardware, software and electronic networking
resources that enable intended or actual HRM activities (e.g. policies, practices and
services) through coordinating and controlling individual and group-level data capture
and information creation and communication within and across organizational bound-
aries. E-HRM in organizations varies from the degree of physical presence and the
degree to which it is used to enable increasingly coordinated individual and group-level
transactions that capture HR data, creates HR information and provides HR data access
 The International Journal of Human Resource Management 3

and information regardless of geographical constraints and organizational horizontal

and vertical differentiation. Variation in e-HRM, therefore, represents variation in
organizational capability to support increasingly coordinated and automated individual
and group transactions involving HRM data capture, creation and communication using
internet-based information technology resources.

HRM as strategic
An early and widely accepted definition of strategic HRM is ‘the pattern of planned
human resource deployments and activities intended to enable an organization to
achieve its goals’ (Wright & McMahan, 1992, p. 298). The definition subsumes the
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notion of human resource bundles or configurations, as patterns of activities that

develop over time that support successful adaptation and organizational performance.
Most research has focused on this aspect of strategic HRM (see recent literature
reviews such as Lengnick-Hall et al., 2009; Lepak & Shaw, 2008; Mackey & Boxall,
2007). Less attention is paid to another strand of the strategic HRM research, which
describes and analyzes the involvement of the HR function in the strategic management
process. In this conception of strategic HRM, the term ‘making HR more strategic’
draws on Ulrich’s early model of strategic HRM which posits that the way for the HR
function to become more involved in the strategic process is for the HR function to
change from being primarily an administrative expert to being a strategic business part-
ner and supporting the strategic process (Lawler & Mohrman, 2003; Ulrich, 1997).
In the strategic management process, managers dynamically search for business
strategies that respond to problems and challenges posed in the external environment,
arriving at strategic responses through a strategy formulation process, and implementing
strategy and changes incrementally (Gavetti & Rivkin, 2007). Marler (2009) suggests
strategic HRM emerges from this larger process in which strategy formulation involves
top managers making decisions that affect HR-related goals, practices and policies. In
firms where the dominant HR functional capability is that of administrative expert
(Ulrich, 1997), these goals are likely to be limited to building an efficient administra-
tive infrastructure such as tracking job requisitions, managing employee payroll, bene-
fits programs and EEO compliance rather than HR professionals engaging in
transformational HR activities like HR strategy development that better align with pro-
duct or service strategies as a strategic business partner (Marler, 2009). Therefore, in
this paper, we define HR strategic involvement as HR professionals’ involvement in
HRM strategy or policy development.

Theory and hypotheses

Technological primacy
Several theories speak of the relationship between information technology and
organizational structure and are therefore relevant to understanding the nature of the
relationship between e-HRM and HR strategic decision-making involvement. Organiza-
tional contingency theory emerging from Joan Woodward’s studies of technology in
organizations states that organizational structures depend on the production technology
used in the organization (Woodward, 1965). Subsequent research applying this theory
to information technology in particular, suggests that greater use of information
technology results in more decentralized decision-making (Pfeffer & Leblebici, 1977), a
 4 J.H. Marler and E. Parry

larger variety of people participating in making decisions (Huber, 1990) and

organizational adoption of more strategic HRM practices (Hitt & Brynjolfsson, 1997).
The logic underlying this theory is that technology manages the uncertainty and risk
surrounding the transactions necessary to convert inputs to outputs (Thompson, 1976)
and that information technology is primarily used to reduce uncertainties concerning
production and administrative processes (Dewett & Jones, 2001). Thus based on contin-
gency theory, organizations that best fit or adapt to the capabilities of information
technology to manage their administrative processes will be more successful.
Consistent with organizational contingency theory, neo-classical economic theory
also asserts that competitive forces compel technological diffusion because all firms
must operate efficiently or not survive. Therefore, to the extent that new technology
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enhances productivity, either as a complement or a substitute for labor, new technology

precedes or causes organizational change. E-HRM is expected to increase HR produc-
tivity through automating and replacing low-value administrative tasks with higher
value skilled tasks. For example, the use of e-HRM digitizes and automates HR’s
transactional or administrative tasks, allowing for the allocation of more time to more
value-added tasks such as designing better HR policies that improve organizational per-
formance and by participating as a full strategic partner in the business (Adler, 2003;
Bell, Lee, & Yeung, 2006; Groe, Pyle, & Jamrog, 1996; Hussain, Wallace, &
Cornelius, 2007; Lengnick-Hall & Mortiz, 2003; Marler, 2009; Parry, 2011; Parry &
Tyson, 2011; Panayotopoulou, Vakola, & Galanaki, 2007). Secondly, the use of e-HRM
should provide richer, more useful and detailed information quickly and easily, which
support HR managers making better analytical decisions (Dulebohn & Johnson, 2013;
Hussain et al., 2007; Kovach & Cathcart, 1999) and to drive strategic organizational
decisions. Third, adoption of e-HRM is facilitated by both mimetic pressures and nor-
mative coercion (DiMaggio & Powell, 1983; Marler, 2009; Paauwe & Boselie, 2005)
in which e-HRM software vendors suggest that ‘best practice’ HRM is built into their
software (e.g. CedarCrestone 2012–2013 HR Systems Survey, 2013) and therefore
facilitate or pressure others into mimetic practices. In competitive environments,
therefore, organizations may adopt e-HRM software systems that are viewed as ‘best
practice’, a form of mimetic isomorphism (Marler, 2009; Paauwe & Boselie, 2005).
The adoption of systems that are viewed as ‘best practice’ might also result in elevating
the strategic status of HR managers.
There is qualitative evidence in support of this theorized relationship. Parry and
Tyson (2011) and Ruel et al. (2004) found that the use of e-HRM commonly resulted
in the reduction of an administrative burden on the HR function, therefore allowing
them to improve their strategic orientation. Ruel, Bondarouk, and Van der Velde (2007)
found that e-HRM promoted the perception of HRM effectiveness, adding more weight
to this argument. Using quantitative survey data, Parry and Wilson (2009) also
supported the existence of mimetic isomorphism in the adoption of e-recruitment
technology by organizations.
In summary, from several theoretical perspectives, e-HRM is an administrative tech-
nology that enables changes in the internal structure of the organization. Standardiza-
tion and automation of administrative tasks and provision of more timely and relevant
information makes it more efficient and effective to increase the participation of those
with knowledge to better use the information to make better decisions. Based on a con-
tingency theory, in which information technology causes organizational change, we thus
derive our first hypothesis:
 The International Journal of Human Resource Management 5

Hypothesis 1. The use of more e-HRM capabilities within an organization results in greater
involvement of HR personnel in strategic decision-making.

Strategic primacy
In contrast, several scholars have depicted a reverse argument in which e-HRM deploy-
ment is an outcome of the HR strategic decision-making. When HRM plays a strategic
role in organizational decision-making, it is linking HRM practices with the strategic
management process of the organization (Wright & McMahan, 1992). Strategic HRM
represents the ‘linking’ mechanism between strategic formulation and implementation.
Boxall and Purcell (2003) explained that strategic HRM, as a field of study, is
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concerned with strategic choices associated with the use of labor in firms and with
‘explaining why some firms manage them more effectively than others’ (p. 49). From
this perspective, the deployment of e-HRM may be seen as a strategic choice as a way
of enabling an organization to achieve its goals and is, therefore, an outcome of HRM
having a strategic role in the organization (Marler, 2009).
Marler’s (2009) theoretical model, which is based on integrating several theories
from strategic management, explains how HR involvement in strategic decisions can
precede deployment of e-HRM within an organization. HRM managers tasked with
implementing business strategies use e-HRM technology to implement HR practices
and development of human capital to support organizational business strategies. In a
similar vein, Martin and Reddington (2010) proposed a model in which the goals of
e-HRM systems are driven by strategic HRM decisions such as reducing costs and HR
headcount and transformational goals such as becoming a strategic business partner.
Hannon, Jeff, and Brandes (1996) suggested that human resource information systems
have the potential to be the mechanism by which transnational organizations monitor
and deploy their personnel in order to attain and sustain a competitive advantage.
Viewed in combination, these arguments support the idea that the use of e-HRM is a
consequence of strategic HR management.
This second perspective is consistent with a second theoretical stream of technol-
ogy literature that is based on the notion of moderate constructivism (Barley, 1986;
Kwan & Tsang, 2001; Leonardi & Barley, 2008). In this view, actors in organizations
exert agency over the way in which information technology is deployed and any
changes that may take place (Barley, 1998). In this perspective of technology, people
have free will and are not directed by outside technological forces. Instead, all those
involved in developing and deploying technology shape how it affects organizations
and ‘construct’ the meaning and reality of technology. E-HRM therefore is a conse-
quence of a set of decisions that emanate from an HRM strategy that is implemented
by HRM personnel and others tasked with its deployment. In this theoretical model,
HR involvement in setting an organization’s business strategy is associated with
delivery decisions such as the extent to which HRM practices will be delivered
through the use of internet-based information technology such as e-HRM. This model
reflects a more proactive stance or perception of the role individuals play within the
organization in how information technology is deployed in general and specifically
the proactive role HR strategy plays in how information technology is used to
execute strategic objectives.
Based on taking a strategic management/choice theoretical perspective, we therefore
derive our second hypothesis:
 6 J.H. Marler and E. Parry

Hypothesis 2. The use of more e-HRM capabilities within an organization is the outcome
of greater involvement of HR personnel in strategic decision-making

Methods
Data and sample
The data used in this study were taken from the 2003–2005 Cranet survey, a compre-
hensive international survey of HR policies and practices at the organizational level.
Cranet is a regular comparative survey of organizational policies and practices across
the world conducted by a network of business schools operating in more than 40 coun-
tries (see Brewster, Mayrhofer, & Morley, 2004, for full details of the questionnaire
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and its methodology). The unit of analysis is the organization and the respondent is the
highest-ranking corporate officer in charge of HRM. This approach is in line with
Kumar, Stern and Anderson’s (1993) use of key informants in research and with Arthur
and Boyles′ (2007) suggestion that the use of key informants is appropriate in research
concerned with HRM at the organizational level. The questions asked were deliberately
designed to rely on only factual information about the HRM and e-HRM within the
organization, rather than asking respondents to make subjective judgments on behalf of
the organization, such that a key informant approach would not be appropriate. As the
respondents were the most senior HR managers in each firm, it was presumed that they
had the knowledge to answer these questions accurately. Respondents were advised to
leave blank any questions for which they did not know the answer, in order to
discourage ‘guessing’.
The 2003 questionnaire was developed using an iterative process between the
research team and based on the literature on HRM and on previous experience of run-
ning survey rounds since 1989. In 2003, this research team consisted of academics
from the 32 participating countries in order to ensure its relevance across cultures. The
questionnaire consisted of a number of questions about e-HRM use and sophistication,
and about HRM policies and practices at the organizational level. The questionnaire
was initially developed in English and then translated into the language of each country
by somebody with knowledge of HRM. In each case, the questionnaire was then trans-
lated back into English by a different individual with knowledge of HRM to ensure that
the meaning of each question remained the same. Any differences found after the back
translation were changed under discussion with the partner in each country, in order to
ensure that the questions in each survey retained exactly the same meaning. Full details
of this process can be found in Brewster, Mayne, and Tregaskis (1997) and in Brewster
et al. (2004).
Respondents in each country were identified via the use of a database of senior HR
managers in public and private sector organisations, provided by local HRM associa-
tions, chambers of commerce and national statistical services. Potential respondents
were contacted by letter and subsequently sent a copy of the questionnaire. To encour-
age response, non-respondents were later sent a reminder letter. We compared earlier
and later responses to the questions used in this study and found no evidence of sys-
tematic response bias. Further, as per Podsakoff, MacKenzie, Lee, and Podsakoff
(2003), in order to overcome common method variance, respondents were guaranteed
anonymity and criterion measures were placed in different sections of the questionnaire
and in different formats from predictor and demographic variables. The data were
approximately representative for the population of each country in terms of industry
 The International Journal of Human Resource Management 7

sector and organization size. Representing 7,914 companies located in 32 countries,

these data cover a wide range of companies and HR policies and practices. The data
were collected over an eighteen-month period from late 2003 until mid-2005. The
response rate across countries ranged from 5 to 86%. The response rates for the coun-
tries used in our study ranged from 6 to 22%. Analyses of previous Cranet surveys
suggest that the net sample is representative of the population in each country (see
Brewster, Hegewisch, Mayne, & Tregaskis, 1994).
The final useable sample consisted of 5,665 companies in which there were no
missing data for the variables in the model. Organizations that had missing data with
respect to whether the organization had a business strategy, HR strategy, or whether the
use of external providers in HR Information systems had changed over time were not
included in the final sample. We ran ANOVA analyses on these variables to see if there
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might be differences between those organizations included in the sample and those
dropped because of these missing cases. We found no significant differences in level of
e-HRM, HR strategic involvement, business strategy, or HRIS outsourcing. We did
find, however, that those with missing data were on average smaller than the analyzed
sample.

Model development
The covariance between e-HRM and HR strategic involvement can be partitioned into
three components. As shown in Figure 1, the first two components represent causal
covariation and are portrayed as causal paths running from e-HRM to HR strategic
involvement and from HR strategic involvement to e-HRM. The third component
represents non-causal covariation resulting from a shared relationship to one or more
common causes and is portrayed as a non-causal correlation between the error terms
for e-HRM and HR strategic involvement. This specification allows us to evaluate our
theoretical perspectives. For technological determinism /technology primacy, Hypothesis
1, only the path between e-HRM and HR strategic involvement should be significant.
For strategic choice and strategic primacy, Hypothesis 2, only the path from strategic
involvement and e-HRM will be significant.

d d

+
E-HRM + HR Strategic Involvement

Figure 1. Conceptual model of the relationship between e-HRM and HR strategic involvement.
Notes: Single-headed lines represent putative causal paths and double-headed lines represent
non-causal covariation. Pluses represent the sign of the hypothesized relationships. The letter d
represents the disturbance term for each variable.
 8 J.H. Marler and E. Parry

We estimated several alternative structural equation path models of the relationship

between e-HRM and HR strategic involvement following the approach used by Frone,
Russell, and Cooper (1994) to examine evidence for causal and non-causal variation.
First, in Model A only the correlation between the construct error terms was estimated
to determine whether non-causal variation explained the relationship between e-HRM
and HR strategic involvement (e.g. from an omitted variable that was correlated with
both e-HRM and HR strategic involvement). Second, to test our hypotheses, we speci-
fied two models with a unidirectional path to see if there was a direct relationship
rather than non-causal relationship. Finally, we specified a fourth model in which three
parameters were estimated simultaneously to account for the possibility that the
relationship is reciprocal and iterative.
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Because we are testing competing causal relationships between e-HRM and HR

strategic involvement, we used two statistical approaches recommended in the
management literature.
First, we use non-recursive cross-sectional data and simultaneous equation models
with maximum likelihood estimation (SEM/ML) (Frone et al., 1994; Paxton, Hipp, &
Marquart-Pyatt, 2011; Wong & Law, 1999). As Wong and Law (1999) point out, it is
not always possible for researchers to have longitudinal data that have the exact time
duration of cross-lagged effects to establish causation. Indeed such data would be close
to impossible to collect across multiple companies. Hence using a non-recursive model
with cross-sectional data is increasingly being used in management research as a viable
proxy for capturing cross-lagged causal effects (Wong & Law, 1999). Second, we also
used two-stage least squares (TSLS) because although SEM/ML has several advantages
over TSLS (Frone et al., 1994), we can better examine to what extent lack of random
sampling might affect our parameter estimates. We report the results of the SEM path
analyses here because the TSLS results were very similar.
Since we have a non-recursive SEM model, identification is an important issue.
Identification addresses the issue of whether enough information exists to yield unique
parameter estimates for possible reciprocal relations between e-HRM, HR strategic
involvement and the correlation between their error terms (Bollen, 1989; Frone et al.,
1994; Wong & Law, 1999). On its own, a reciprocal relationship is under-identified
because three parameters need to be estimated (see Figure 1), but only one covariance
is available. To solve this problem, instrumental variables are needed (Frone et al.,
1994; Paxton et al., 2011; Wong & Law, 1999). The identification problem is resolved
by incorporating at least one instrumental variable for each of the variables involved in
a reciprocal relationship. To function as an instrumental variable for identification in a
non-recursive SEM model, instrumental variables should ideally be theoretically speci-
fied as antecedent to only one of the variables that make up the reciprocal relationship
and not be an outcome of either reciprocal (endogenous) variable.
Our model was therefore expanded to include three instrumental variables (one for
e-HRM and two for HR strategic involvement) in order to estimate the reciprocal rela-
tionship between e-HRM and HR strategic involvement as shown in Figure 1. Our
choice of instrumental variables was based on identifying variables in the Cranet Sur-
vey that met the requirements stated above and had theoretical justification. For
e-HRM, we identified one instrumental variable that best met these criteria. In the
information science literature, the degree of integration of internal HRIS with other
administrative software associated with more advanced IT use (Henson, 2005; Walker,
2001). We therefore used a measure of the degree to which the organization’s HRIS
was integrated with other enterprise software. Thite, Kavanagh, and Johnson (2012)
 The International Journal of Human Resource Management 9

also differentiate e-HRM from HRIS on the basis of degree of information technology
vs. human resource management focus, indicating that HRIS is more focused on
systems and technology underlying the design and acquisition of information systems
supporting the move to e-HRM, which tends to be more the purview of information
technology specialists; whereas, e-HRM tends to be more HR-function focused. This
measure, we believe is antecedent to e-HRM because it measures the degree of existing
technological infrastructure, which is an outcome of IT specialists’ decision-making and
not HR professionals’ involvement in strategy. This variable is also temporally
antecedent to the use of e-HRM because the use of HRIS systems and enterprise soft-
ware pre-dated the development of web-based e-HRM (Henson, 2005; Walker, 2001).
Hence, we view this question as being an ideal instrumental variable. It is antecedent
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to e-HRM and yet not a domain of HRM strategy.

For HR strategic involvement, we used two instrumental variables both theoretically
related to functional strategies, the degree to which an organization formally articulated
their mission/goals and the degree to which a business strategy formalized how these
goals would be achieved (Miles & Snow, 1984; Paauwe & Boselie, 2005). Both
variables are antecedent to HR strategic involvement and not outcomes of either
e-HRM or HR strategic involvement.

Variable measures
Instrumental variables
Organization Mission. This measure reflects the degree to which an organization had a
formalized mission statement in response to the question ‘does your organization have
a mission statement?’ A value of 4 indicated having a written mission statement and a
value of 3 represented having a mission statement but unwritten, 2 represented report-
ing that there is no mission statement, and a value of 1 represented the respondents
reporting that they did not know if the company had a mission statement.
Business strategy. This measure reflects the degree to which an organization had a
formalized business strategy in response to the question ‘does your organization have
a business strategy?’ A value of 4 indicated having a written business strategy and a
value of 3 represented having a strategy but unwritten, 2 represented reporting that
there is no business strategy, and a value of one represented the respondents reporting
that they did not know if the company had a business strategy. The latter score was
given because not knowing the whether the firm has or does not have a strategy is
worse than knowing and saying we do not have a strategy. Only 1 percent of respon-
dents reported not knowing if there was a business strategy, whereas 5.5% reported no
business strategy.
HRIS Integration is measured based on the response to a question asking ‘what
type of HR information system (computer-based tool) do you have?’ Response choices
were 1, do not have a computerized HRIS, 2, have a primarily independent HR system,
or 3, have primarily interfaced/integrated into a wider management information system.
Responses to this item were normally distributed.

Dependent variables
HR Strategic Involvement consisted of responses to two survey item questions. The first
asked at what stage HR personnel were involved in business strategy development with
four possible responses consisting of ‘from the outset’ as having the highest value of 3
 10 J.H. Marler and E. Parry

to not consulted having the ‘lowest value of 0’. The second question asked whether the
organization has a personnel/HRM strategy with four possible responses, with ‘yes,
written’ as having the highest value of 4 and a response of not knowing if a strategy
existed as having the lowest value of 1. Both responses were added to form a summed
score. Since the inter-item correlation is .35 and reliability coefficient is .48, we
corrected for this reliability error using the procedure outlined in Kline (2005).
e-HRM capabilities capture the degree to which internet-based information technol-
ogy is used to capture HR data, and to coordinate and communicate HR information
capture to employees. Respondents were asked to choose from detailed descriptions of
five levels of HR web (e.g. Internet-based/enabled) deployment. The lowest level for
this measure was 0 for no e-HRM deployment; a value of 1 represented respondents
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who selected the description of their level of HR web deployment as using the web for
one-way communication of general information (such as a static web page); a value of
2 for one-way but customized information in which personalized information is
accessed on a webpage; a value of 3 for two-way communication to update personal
information via a web-based interface; a value of 4 represented more complex two-way
interactions such ‘an employee is able to perform complex transactions and select items
(such as composition o’ benefits) which can be calculated by the system, approved/
declined and confirmed to the employee’; and a value of 5 for even more complex
two-way transactions.

Control variables
Size was measured as the total number of full-time people employed by the
organization.

Structural equation model analytic strategy

The models were estimated using AMOS 16 structural equation modeling program
(Arbuckle, 2005). Input for the simultaneous equation models depicted in Figures 2
and 3 consisted of a covariance matrix that included the all endogenous, instrumental
and control variables.

Model evaluation. To evaluate the overall fit of a model, we used the chi-square statis-
tic, which is based on a comparison of the predicted and observed covariance matrices
(Frone et al., 1994). A non-significant chi-square value indicates good fit. We also used
other goodness-of-fit indices that are less sample size dependent because the chi-square
statistic is known to be sensitive to large sample sizes (Bollen, 1989; Kline, 2005).
Therefore, we also evaluated model fit with additional recommended fit indices that
include the comparative fit index (CFI), the Root Mean Square Error (RMSEA) and the
standardized root mean square residual (SRMR) (Kline, 2005). Briefly, the CFI assesses
the relative improvement in fit of the theorized model compared with the indepen-
dence/null model which assumes no relationship between any of the variables in the
model. A rule of thumb for the CFI is that values greater than roughly .90 indicate rea-
sonably good fit (Kline, 2005). SRMR is a measure of the overall difference between
the observed and predicted correlations. SRMR values of less than .10 are generally
considered indication of good model fit (Kline, 2005). Measures of RMSEA of less
than .08 are also indications of a well-fitting model.
 The International Journal of Human Resource Management 11
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Figure 2. Unstandardized and standardized (in parentheses) path coefficients for Models A, B
and C.
Notes: Single-headed lines represent putative causal paths and double-headed lines represent
non-causal covariation. Broken lines represent non-significant parameter estimates. The letter d
represents the error term for each endogenous variable. To simplify presentation of the model,
the correlations among the instrumental /exogenous factors are not shown.

Results
Descriptive statistics and correlations among the study variables are provided in Table 1.
Model fit statistics are reported on Table 2 and model path parameter estimates are
shown in Figures 2 and 3 for each of the models estimating the relationship between
e-HRM and HR strategic involvement.
As shown on Table 1, there is a significant correlation between e-HRM and HR
strategic involvement (r = .19, p < .05). The evaluation of whether this correlation
 12 J.H. Marler and E. Parry
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Figure 3. Summary of unstandardized and standardized (in parentheses) path coefficients for
Model D.
Notes: Single-headed lines represent putative causal paths and double-headed lines represent
non-causal covariation. Broken lines represent non-significant parameter estimates. The letter d
represents the error term for each endogenous variable. To simplify presentation of the model,
the correlations among the instrumental /exogenous factors are not shown.

represents non-causal variation or a unidirectional causal or reciprocal relationship is

reported in Figure 2. As shown in Figure 2 and Table 2, the sample correlation between
e-HRM and strategic HR involvement is best treated as direct causal relationships and
not as non-causal, which provides initial support for both hypotheses. Model B which
estimates a deterministic relationship in which e-HRM predicts HR strategic involve-
ment, fits the data significantly better than Model A (χ2Δ (df1) = 42, p < .001) The fit
indices for Model B are also better than Model A. As reported in Table 2, the fit
indices for Model B point to good model fit based on two of the four fit indices. The
chi-square is significant (χ2[2, N = 5,665] = 124, p = .00), and the RMSEA = .10, both
indicating poor fit. However, both the CFI and SRMR are well above the accepted fit
thresholds with CFI = .98; SRMR = .03. Model C which estimates a strategic choice/
strategic primacy relationship in which HR strategic involvement leads to greater
e-HRM capabilities, fits significantly better than Model A (χ2Δ (df1)=125, p < .001).
The fit indices for Model C also suggests much better fit than Model A and also
slightly better fit than Model B. Three out of the four indices are above accepted fit
thresholds with CFI = .99; SRMR = .02 and RMSEA = .06.
We now compare our unidirectional hypothesized models to the second alternative
model in which the direct relationship between the two constructs is reciprocal. A

Table 1. Means, standard deviations and correlations.

Variable Mean Std. 1 2 3 4 5

1 Size 2003 9991
2 HRIS integration 2.01 0.74 0.07
3 Mission 3.65 0.73 0.02 0.12
4 Business strategy 3.63 0.69 0.02 0.13 0.33
5 HR Strategic involvement 5.30 1.63 0.07 0.20 0.32 0.55
6 E-HRM capability 1.25 1.10 0.11 0.54 0.09 0.14 0.19
Note: N = 5,665 and correlations that are greater than .05 are significant at p<.05.
 The International Journal of Human Resource Management 13

Table 2. Structural model goodness of fit summary.

Model χ2 df p-value Δχ2 Δ df CFI SRMR RMSEA

Model D 0.2 1 0.69 40.8 1 *** 1.00 0.010 0.000
Model C- H2 41 2 0.00 125.0 1 *** 0.99 0.020 0.060
Model B-H1 124 2 0.00 42.0 1 *** 0.98 0.030 0.100
Model A 166 3 0.00 5457.0 12 *** 0.97 0.040 0.100
Null 5623 15 0.00 – 0.0 0.0 0.250
Notes: CFI = Comparative Fit Index, SRMR = Standardized Root Mean Residual, RMSEA = Root Mean
Squared Error.
***p < .001.
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comparison of fit between these models can be tested using a chi-square difference test
because Models B and C are nested within Model D (Bollen, 1989; Kline, 2005). In
Figure 3 and on Table 2, we show the results of this comparison. Model D fits signifi-
cantly better than either Model B or C. The chi-square difference is significant (χ2 Δ[1]
= 41, p < .001) when Model D is compared with Model B and also when Model D is
compared with Model C (χ2 Δ[1] = 125, p < .001). Moreover, all four fit indices for
Model D are well above the accepted fit thresholds with the chi-square now not signifi-
cant (χ2[1, N = 5,665] = .2, p = .69), CFI = 1; SRMR = .01 and RMSEA = .00. All
three models also show path coefficients that are significant, thus the data support
Hypothesis 1 and 2; however, these results suggest both relationships are influential
and should not be treated independently.

Discussion
The objective of this study was to empirically evaluate competing perspectives concern-
ing the relationship between e-HRM and the strategic role of HRM. When e-HRM is
described in the research and business practice literature as the way to make HRM
more strategic it suggests a context in which external forces such as technological
change, competitive markets or other external institutional forces transform the role of
HRM. In contrast, if e-HRM is perceived as a consequence of HR involvement in
strategizing, it suggests e-HRM specifically, or deployment of information technology,
more generally, is an outcome of HR managerial decision-making. In empirically exam-
ining these different theoretical frameworks using a large international data-set of com-
panies, we find support for both hypotheses. Our empirical analyses revealed that
treating these relationships as unidirectional is not sufficient. Instead, we find that both
internal and external forces appear to operate reciprocally rather than independently.
Our results are consistent with those scholars who suggest that competing perspec-
tives over simplify the role of information technology in organizations and that the way
in which information technology becomes operational within an organization is an iter-
ative process rather than either deterministic or as strategic choice (Leonardi & Barley,
2010; Orlikowski & Scott, 2008; Strohmeier, 2009). In a socio-material conception of
IT in organizations, IT has a separate material presence that is neither deterministic nor
completely malleable by managers who are charged with embedding the technology
into organizational processes (Orlikowski & Scott, 2008), particularly in the case of
software acquired from outside vendors. Major IT systems impose constraints on orga-
nizations that deploy them because they include built-in ‘deterministic’ assumptions
about business transactions, their complexity and ‘best practice’ organizational structure
 14 J.H. Marler and E. Parry

(Kallinikos, 2004). At the same time, there still exists considerable agency on the part
of managers and employees to adapt complex technical systems to organizational
demands in ways technical designers and vendors did not envision (Dery, Hall, &
Wailes, 2006; Grant, Hall, Wailes, & Wright, 2006). For example, Dery et al., (2006)
case study of bank branch managers describes how actual use of an ERP system varied
from the ERP developers’ intended use depending on the bank manager’s perceived
job demands, organizational incentives and environmental constraints.
Applying these more recent perspectives of IT and organizations as lenses for view-
ing the relationship between e-HRM capabilities and the role of HR in the organization,
our results suggests the relationship between e-HRM capabilities and HRM co-evolves.
E-HRM provides an opportunity to reconstruct how HRM is enacted in an organization
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through business process reengineering, automation and information sharing; however,

the opportunity must coincide with managerial interests and strategic intent before it
can be realized. In this sense, the relationship between e-HRM as a material object with
determinative properties that have potential organizational implications and the role of
HRM in organizational strategic decision-making are not completely independent.
Although each relationship is significant, our results do show noticeable effect size
differences in these direct relationships between e-HRM capabilities and HR involve-
ment in strategizing. For example, a one standard deviation increase in e-HRM capabil-
ity is associated with a seven percent higher level of HR strategic involvement. In
contrast, a one standard deviation increase in HR strategic involvement is only associ-
ated with about a two percent increase in e-HRM capability. These differences suggest
that a change in e-HRM capabilities predicts a greater change in HR involvement in
strategic decision-making than the other way around. Thus, the empirical evidence in
favor of technological determinism theory is stronger than the moderate constructivism
theoretical perspective. The implication for theory is that although over the past two
decades technological determinism has fallen from favor among scholars, we find that
information technology, representing a factor external to the organization, does impact
how work is practiced and how organizations are structured apart from managerial
intent. This conclusion is consistent with the recent resurgence of a moderate view
technological determinism in which information technology is not fully socially
constructed, nor is it completely independent of managerial intent. Rather information
technology can afford and constrain organizational actions and managerial intentions
(Leonardi, 2011).
It is also possible that the degree to which external factors dominate or differ from
internal factors such as managerial strategy may depend on external environmental con-
text. Some international HRM scholars also argue that firms in highly regulated coun-
tries with pervasive national workplace legislation, trade union involvement and
workplace norms significantly constrain the strategic scope of HRM practices (c.f.
Farndale, Brewster, & Poutsma, 2008) and this may affect how e-HRM is used. In sup-
port of this, recent research from Burbach and Royle (2013) suggested that the
adoption of e-HRM in subsidiaries of a multinational corporation was affected by the
institutional contexts in which the organization was operating. In countries where multi-
ple stakeholders have greater institutionalized influence, the use of information technol-
ogy may reflect these coercive forces and therefore be constrained to improving
compliance with regulation and union contracts rather than to improving strategic out-
comes for shareholders. However, in automating complex regulatory and institutionally
mandated employment practices, information technology can also result in the reduction
of this administrative burden, therefore open up the potential for HR professionals to
 The International Journal of Human Resource Management 15

improve their strategic orientation (Parry & Tyson, 2011; Ruel et al., 2004). Thus, in
firms located in such countries, while e-HRM’s initial use may be toward achieving
institutional compliance and reduction of administrative burdens, it may also result in
greater opportunity and information for HR professionals to engage in strategic
decision-making.
To further examine this perspective, we leveraged the multi-country aspect of our
sample and analyzed our model separately for two different country samples. We com-
pared organizations in France, a highly regulated institutional environment with very
little scope for HR to differentiate themselves strategically with organizations in the US
where the institutional environments are relatively laissez-faire. Our results are reported
in Figure 4. In both countries, we find only a unidirectional causal relationships but in
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the opposite direction. These results suggest that the contextual environment does play
an important moderating role. In highly coercive institutional environments, e-HRM
appears to affect organizational structure more significantly; whereas, in more flexible
institutional environments, managerial intention is more consequential.
The difference in relationships we found between e-HRM and HR strategy across
two external environments suggest institutional contexts may strongly affect the role
information technology plays in organizations. Consistent with these results, the
varieties of capitalism literature frequently draw contrasts between companies in

Figure 4. Unstandardized and standardized (in parentheses) path coefficients for models by
country-France and USA.
Notes: Single-headed lines represent putative causal paths and double-headed lines represent
non-causal covariation. Broken lines represent non-significant parameter estimates. The letter d
represents the error term for each endogenous variable. To simplify presentation of the model,
the correlations among the instrumental /exogenous factors are not shown.
 16 J.H. Marler and E. Parry

countries with differing environmental contexts. In particular, two main environmental

contexts are identified, one associated with coordinated market economies (CME)
which have higher levels of regulation and institutionalization of HRM activities, and
another with countries in liberal market economies (LME), which show lower levels of
regulation (Farndale et al., 2008; Hall & Soskice, 2001). Some international HRM
scholars argue that firms in highly regulated countries are constrained by legislation,
trade union involvement and workplace norms in developing HRM strategies (Farndale
et al., 2008) and therefore that firms located within LME and CME countries will have
different approaches to HRM generally (Farndale et al., 2008).
In firms operating in CME countries, such as France, HRM practices emerge out of
the need to conform to more extensive employment legislation and involvement of the
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state and also represent the result of negotiation and bargaining with stronger trade and
national unions and works councils. In contrast, in LME countries, such as the US,
HRM practices have evolved in a competitive market economy that leaves a great deal
more flexibility for organizations to develop and implement idiosyncratic HRM strate-
gies. External coercive institutional pressures are less prominent in LME countries com-
pared to CME countries. There is more flexibility, for example, to terminate
employment relationships or to outsource various HR practices to reduce costs in order
to meet strategic goals in LME countries. As such, companies in LME contexts face
less coercive pressure, however, at the same time face pressure to satisfy financial
stakeholders through value creating strategies. Thus, in firms in LME countries, such as
the US, we expect to see more evidence of a proactive strategically driven approach to
using information technology to achieve organizational objectives, particularly cost cut-
ting. Our results support these expectations. We find that strategic involvement in HR
significantly predicts e-HRM capabilities and little evidence that e-HRM is significantly
impacting HRM strategic involvement in the organization. Thus, in companies located
in LME environments, the data in this study points to a greater role for the HR
function in how information technology is used for strategic purposes. In this sense,
e-HRM in companies located in an LME context appears more likely to be the result
of strategic decision-making or strategy formulation in which the HR function is
involved. Thus, in an LME context, it appears companies are more likely to have
formulated an HR strategy and to proactively use e-HRM to execute or automate its
delivery.
In contrast, in firms in CME countries, we see a more reactive stance consistent
with the role HRM plays which is confined to complying with institutional mandates
rather than competitive market pressures. Thus, it is possible that companies in these
CME countries, for example, may be relying more on information technology to both
comply with institutional coercive forces but also to acquire ‘best practice’ HR prac-
tices rather than developing this capability internally through the HR function. These
results are consistent with a study by Strohmeier and Kabst (2009) who, for example,
found that companies located in former Eastern European countries were actually more
likely to have adopted human resource management information technologies than
Western European countries. They explained that these companies thought this would
facilitate copying best HRM practices from the more ‘legitimized’ western organiza-
tions following the collapse of communism in Eastern Europe. These results suggest
the need to consider the broader contexts in which managerial decision-making takes
place, and also that studies and theorizing that are in one homogenous socioeconomic
context may not necessarily generalize to another context. In the business literature,
stated organizational goals for e-HRM investments include cost reduction through
 The International Journal of Human Resource Management 17

streamlining HRM operations (Marler, 2009), improved effectiveness through providing

better delivery of HRM services (Ruel et al., 2004) and transformation of the HRM
function to a strategic business partner (Lepak & Snell, 1998). The first two goals are
consistent with strategic primacy and the notion that information technology is a tool
that managers use to achieve organizational objectives. The third goal represents a
technologically determinative perspective in which HR technology changes the role of
HRM within the organization. It may be that which of these outcomes prevail depends
on the larger institutional context in which organizations operate. Our results make
more explicit the fact that human resource decisions, practices and strategy do not
emerge solely within the organization. External stakeholders and political institutions
also play a role. As suggested by Ruel and Bondarouk (2013) closer analyses of the
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impact of national context on the use and sophistication of e-HRM might provide a
fruitful avenue for further research.
These findings also demonstrate the importance of taking a critical perspective
concerning the optimistic promises associated with purchasing HR technology from
outside suppliers. HR information technology has both a material and an organizational
component and both interact in ways that may support strategic objectives but also can
constrain expectations, depending on managerial intent, employee interests and the
intent built into the software by software developers external to the organization. This
may account for recent research that shows mixed results. For example, in an
exploratory study of HR shared service centers (SSC)1 in 15 companies located in the
Netherlands, Farndale, Paauwe, and Hoeksema (2009) reported that the deployment of
e-HRM resulted in less use of local HR generalists by line managers, contrary to the
authors’ expectation that the technology would free HR employees to spend more time
strategically supporting line managers. Thus, the reciprocal relationship suggests
information technology has the potential to create organizational change but that
managers and employees within the organization must enact these changes.

Limitations and future research

As with all research, there are limitations. First, although our data-set is large, which is
typically a challenge in conducting macro-level research, the variable measures
available in this data-set are limited because it was devised to cover a broader set of
topics. In our model, therefore we have one-item measures for one of our main con-
structs of interest, e-HRM capability, although, unlike typical one-item Likert scales,
our scale is descriptive and more complex. Furthermore, the use of one-item measures
in macro-research is not unusual and one-item measures typically correlate well with
richer measures of the same construct (Bergkvist & Rossiter, 2007; Cunny & Perri,
1991). Given the highly descriptive nature of the scale used in this survey, we believe
our single measure is representative of its conceptual construct and would correlate
strongly with a multi-item measure. Second, this data-set was collected in 2003–2005
and since then, web-based information technology has advanced in sophistication. The
essential debate addressed in this research however still remains. Even with more
advances in e-HRM technology, the issue of how information technology affects or is
affected by organizational strategy continues. An avenue of future research related to
increasingly sophisticated and widespread web-based technologies relates to firm
boundaries and who owns and manages the underlying software system and how this is
related to strategic involvement.
 18 J.H. Marler and E. Parry

In terms of statistical methodology, this study clearly indicates that future research
must account for endogeneity and environmental contingencies. Empirical studies in
which e-HRM and HR strategy are treated as unrelated and independent increase the
risk of reporting biased estimates and incorrect conclusions even after controlling for
co-varying variables such as size.

Conclusion
We began with a simple question and theoretical debate. Is technological transformation
a precursor of strategic HRM, as some suggest, or is information technology simply a
tool to execute strategic decisions, in which case HR strategy precedes the deployment
of e-HRM? In this first empirical study of this question and based on empirical evi-
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dence consisting of thousands of organizations located across multiple countries and

institutional contexts, we conclude that there is truth to both sides. Both theories are
empirically supported. Managers involved in making strategic decision can determine
the extent of an organization’s e-HRM capabilities but so too can the deployment of
E-HRM have significant effects on the strategic role of HRM in organizations. The sig-
nificance of these effects, however, seems to differ depending on the external institu-
tional environment in which the organization operates. Consequently, the relationships
within organizations, specifically with respect to innovative information technology,
may be contingent on a broader context in which organizations exist. In this regard,
our results highlight how the outcomes of combining information technology and
human resource strategy may not emerge solely within the organization but co-evolve
in tandem with external stakeholders such vendors, political institutions and market
competitors.

Note
1. SSC are characterized by electronic communications through an internet-based infrastructure
that is combined with a call center, enabling the consolidation of corporate activities into
fewer locations while spreading information to a broader audience. After automation and
consolidation, it becomes easier to outsource these activities to a third party provider (see
Beaman, 2004, 2007).

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