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The Theoretical Foundation of Industrial Relations and its Implications for Labor Economics and Human Resource Management

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  • Bruce E. Kaufman

Abstract

The author identifies the core principle that forms the theoretical and policy foundation for the field of industrial relations—labor is embodied in human beings and is not a commodity—and argues that the field's two central dependent variables are labor problems and the employment relationship. Next, he uses this core principle, along with complementary ideas from institutional economics, to develop a theoretical framework that not only explains the nature of the employment relationship and labor problems but also reveals shortcomings in related theories from labor economics and human resource management. Finally, this framework is used to derive the “fundamental theorem†of industrial relations, demonstrate that optimal economic performance occurs in a mixed economy of imperfect labor markets and organizations, and show that a certain amount of labor protectionism promotes economic efficiency and human welfare.

Suggested Citation

  • Bruce E. Kaufman, 2010. "The Theoretical Foundation of Industrial Relations and its Implications for Labor Economics and Human Resource Management," ILR Review, Cornell University, ILR School, vol. 64(1), pages 74-108, October.
    • Handle: RePEc:sae:ilrrev:v:64:y:2010:i:1:p:74-108
    DOI: 10.1177/001979391006400104
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Bruce E. Kaufman, 2013. "Sidney and Beatrice Webb's Institutional Theory of Labor Markets and Wage Determination," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 52(3), pages 765-791, July.
    2. Dorian Aliu & Ayten Akatay & Armando Aliu & Umut Eroglu, 2017. "Public Policy Influences on Academia in the European Union," SAGE Open, , vol. 7(1), pages 21582440176, February.
    3. Neeraj Kumari & Rajnish Ratna, 2014. "Study of Factories Act Provisions and Industrial Relations in Manufacturing Sector," Journal of Public Policy & Governance, Research Academy of Social Sciences, vol. 1(1), pages 45-50.
    4. Peter Gahan & Andreas Pekarek, 2013. "Social Movement Theory, Collective Action Frames and Union Theory: A Critique and Extension," British Journal of Industrial Relations, London School of Economics, vol. 51(4), pages 754-776, December.
    5. Bruce E. Kaufman, 2014. "History of the British Industrial Relations Field Reconsidered: Getting from the Webbs to the New Employment Relations Paradigm," British Journal of Industrial Relations, London School of Economics, vol. 52(1), pages 1-31, March.
    6. Alex Bryson & Richard Freeman, 2013. "Employee Perceptions of Working Conditions and the Desire for Worker Representation in Britain and the US," Journal of Labor Research, Springer, vol. 34(1), pages 1-29, March.
    7. Martin Behrens & Andreas Pekarek, 2023. "Delivering the goods? German industrial relations institutions during the COVID‐19 crisis," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 62(2), pages 126-144, April.
    8. Alex Bryson & Richard Freeman & Rafael Gomez & Paul Willman, 2017. "The Twin Track Model of Employee Voice: An Anglo-American Perspective on Union Decline and the Rise of Alternative Forms of Voice," DoQSS Working Papers 17-13, Quantitative Social Science - UCL Social Research Institute, University College London.
    9. Bruce E. Kaufman & Benjamin I. Miller, 2011. "The Firm's Choice of Hrm Practices: Economics Meets Strategic Human Resource Management," ILR Review, Cornell University, ILR School, vol. 64(3), pages 526-557, April.
    10. Bruce E. Kaufman, 2012. "An Institutional Economic Analysis of Labor Unions," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 51, pages 438-471, April.
    11. repec:ejw:journl:v:13:y:2016:i:2:p:200-223 is not listed on IDEAS
    12. Tashlin Lakhani, 2022. "How and Why Does Franchise Ownership Affect Human Resource Practices? Evidence from the US Hotel Industry," ILR Review, Cornell University, ILR School, vol. 75(2), pages 321-347, March.
    13. Bruce Kaufman, 2014. "Explaining Breadth and Depth of Employee Voice across Firms: A Voice Factor Demand Model," Journal of Labor Research, Springer, vol. 35(3), pages 296-319, September.
    14. Özlem Özgür BÜYÜKDERE, 2019. "100.Yılında Uluslararası Çalışma Örgütü: Değişen Koşullarda Politika Tercihleri ve Yönelimler," Journal of Social Policy Conferences, Istanbul University, Faculty of Economics, vol. 0(77), pages 59-96, December.

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