Path dependence and path creation in strategic Human Resource Management: a comparative study of power generators in the Latrobe Valley, Victoria, Australia

Since the early 1990s, the resource based view of the firm has been the dominant theoretical approach to strategic human resource management (SHRM). Proponents of the resource based view argue that organisations can achieve sustained competitive advantage from owning resources that are rare, valuable, inimitable and non-substitutable. Although theorists suggest resource inimitability is due in part to its 'path dependence', few SHRM studies have examined this phenomenon. This thesis addresses this gap in the literature by examining SHRM paths over time. Two research questions are developed. One seeks to explain what shapes the SHRM path. The other examines the impact of the SHRM path on the sustained competitive advantage or disadvantage of organisations. The research uses complexity theory to explore the evolution of SHRM in organisations. This approach overcomes the inhibitive assumptions of neoclassical economic theories often used in resource based studies. Complexity theory informs the design of a SHRM Path Typology. The typology identifies different change points, feedback processes, and outcomes in SHRM path dependence and path creation. Four organisations are selected as case studies to test the typology. These organisations compete in the same industry, labour, and product markets. The organisational history is the same in three of these firms until the 1990s. Qualitative data on their history, context, and SHRM are collected up to 2008. A within case study analysis explores what shapes each organisation's SHRM path. A case study comparison examines the impact of their SHRM path on their sustained competitive advantage and disadvantage. The research finds support for the SHRM Path Typology. It finds SHRM path dependence occurs when events trigger path reinforcing processes that rigidify SHRM, while SHRM path creation occurs when organisational entrepreneurs establish path adjusting processes that enable adaptive SHRM. The research finds SHRM rigidity is reinforced by: single level decision making in SHRM; lack of financial investment in SHRM; learned exploitation of HR practices; and, distrust in the SHRM system. Conversely, SHRM adaption is enabled by: multi-level decision making in SHRM; financial investment in SHRM; learned exploration of HR practices; and, trust in the SHRM system. The research also finds path dependence and rigidity in SHRM leads to sustained competitive disadvantage for an organisation, whereas, path creation and adaptivity in SHRM leads to its sustained competitive advantage. This research contributes to SHRM theory by conceptualising SHRM as an evolving path, which is shaped over time, in a process of complex interactions between: decision making; investments; learning; and, trust in SHRM. It characterises SHRM as either rigid, due to events triggering path dependency, or adaptive, due to path creation by organisational entrepreneurs. It explains how path dependence in SHRM can lead to sustained competitive disadvantage, and path creation in SHRM can lead to sustained competitive advantage in organisations. This thesis contributes to SHRM research by drawing on complexity theory to develop a SHRM Path Typology. The SHRM Path Typology identifies the change triggers, feedback processes, and outcomes of different types of SHRM paths. For practitioners, the research exposes the hidden dynamics of SHRM path dependence and creation.