1 Complex RBV

THE COMPLEX RESOURCE-BASED VIEW:IMPLICATIONS FOR THEORY ANDPRACTICE IN STRATEGIC HUMAN

RESOURCE MANAGEMENT

BARRY A. COLBERTYork University

I consider the implications for research and practice in strategic human resourcemanagement (SHRM) of a complex, living-systems extension of the resource-basedview (RBV). I do so by demonstrating that concepts from complexity align well with theRBV, and I extend the RBV by considering critical but difficult aspects commonlyidentified in the RBV strategy literature. An integrated framework for SHRM is pre-sented, allowing an application of complexity principles at the appropriate level ofabstraction in the HR system.

Much of the writing in the field of SHRM has beenconcerned with either practical advice or presen-tation of empirical data. Without good theory, thefield of SHRM could be characterized as a pleth-ora of statements regarding empirical relation-ships and/or prescriptions for practice that fail toexplain why these relationships exist or shouldexist. If, in fact, the criticism that the field ofSHRM lacks a strong theoretical foundation istrue, then this could undermine the ability of bothpractitioners and researchers to fully use humanresources in support of firm strategy (Wright &McMahan, 1992: 297).

Made over a decade ago, this call for theory instrategic human resource management (SHRM)continues to ring through the literature in thefield (Delery, 1998; Snell, Youndt, & Wright, 1996;Ulrich, 1997a). Rich, integrated theoreticalframeworks will help focus and organize re-search efforts and will enable the practice of HRmanagement to become a truly strategic disci-pline (Ulrich, 1997b). SHRM is predicated on twofundamental assertions. First is the idea that anorganization’s human resources are of criticalstrategic importance—that the skills, behaviors,and interactions of employees have the poten-tial to provide both the foundation for strategyformulation and the means for strategy imple-

mentation. Second is the belief that a firm’s HRMpractices are instrumental in developing thestrategic capability of its pool of human re-sources. A stronger theoretical foundation willhelp to affirm the first assertion, connect it to thesecond, and improve the focus and effectivenessof HRM research and practice, and it will helporganizations to thrive more effectively in theirparticular operating contexts.

The basic precepts of SHRM have a naturalaffinity with the resource-based view (RBV) ofcompetitive advantage in the strategy field (Bar-ney, 1991; Grant, 1991; Wernerfelt, 1984). Propo-nents of the RBV argue that sustained competi-tive advantage can originate in a firm’s resourcebase, and thereby draw attention to the internalworkings of an organization. This view placesmore emphasis on the role of managers in theselection, development, combination, and de-ployment of a firm’s resources, and not merelyon selecting its competitive position in the oper-ating environment.

The RBV has formed an integrating ground or“backdrop” for most of the work in SHRM overthe past decade (Delery, 1998; Wright, Dunford, &Snell, 2001). While the RBV has been helpful andrelevant to the field of SHRM, there are aspectsof the view that scholars have deemed criticalbut that are difficult to deal with in research andpractice. This paper extends the RBV by consid-ering some of its difficult aspects through thelens of complexity (Kauffman, 1992; Kelly, 1994).Complexity as a research field includes thestudy of complex adaptive systems, in the many

I thank Elizabeth Kurucz and Ellen Auster for helpfulcomments on earlier drafts of this paper, and Brenda Zim-merman for her many insights on complexity. Funding sup-port for the writing of this article came from the SocialSciences and Humanities Research Council’s Initiative inthe New Economy. Thanks to Albert Cannella and three AMRreviewers for helping to shape and improve the manuscript.

� Academy of Management Review2004, Vol. 29, No. 3, 341–358.

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forms in which they appear: economies, ecosys-tems, thermodynamical systems, or computer-generated genetic algorithms, for example. Thedefining characteristics of such systems are thatthey are composed of large numbers of agents inlinear and nonlinear relationships, and they ex-hibit emergent properties and order.

My purpose in this paper is to consider theimplications for research and practice in SHRMof a complex, living-systems extension of theRBV. I do so by demonstrating that conceptsfrom complexity align well with many of thecritical but difficult aspects of the RBV. Severalof these difficult aspects, such as causal ambi-guity, social complexity, and system-level re-sources, explicitly invite a more complex, lessreductive view of organizations. This is usefulfor two reasons. First, it allows us to reframe theRBV in a way that admits some of its more im-portant strategic aspects. Second, it sets theground for the integration of a complexity viewinto the major modes of theorizing in SHRM. Ipresent an integrated framework for SHRM thatallows an application of complexity principlesat the appropriate level of abstraction in the HRsystem.

ESSENTIAL CONTRIBUTIONS OF THE PAPER

Wright et al. (2001) point out that the RBV hasplayed a key role in legitimating the relevanceof HRM to strategy research. By extending theRBV via a complexity lens, this article offers twoconclusions that are relevant to SHRM. First, itsuggests that some of the difficult aspects ofRBV/SHRM research are made difficult by theway we approach them. Causal ambiguity, forexample, is only problematic when we endeavorto disentangle the complex causal interactionsin an organization’s social system. If we acceptthat unpredictability and emergent propertiesare key features of complex systems, our focusshifts away from testing the effects of discreteHR practices (e.g., recruitment tactics, payschemes) and toward consideration of processesby which the elements of the social system (e.g.,the intentions, choices, and actions of people inthe system) mingle and interact. Second, thispaper opens a potential avenue of research inSHRM through a focus on the HR system as acoherent whole, with managerial leveragepoints centered mainly at the HR principleslevel of the HR architecture.

The paper proceeds as follows. First is anoverview of the key questions in SHRM, includ-ing the role of the RBV as an integrating groundfor HRM research. I then present a framework todescribe the general shape of existing researchin SHRM and the potential opportunities for ex-tending the conceptual range of the field. Somecritical but difficult aspects of the RBV are out-lined to demonstrate consonance with a com-plexity view in order to make a case for apply-ing complexity to SHRM. After this, I describesome key features of complexity and use living-systems principles from complexity to informthe principles level of the HR system architec-ture. The paper closes with some ideas for futureresearch.

APPLIED DOMAIN: SHRM

In this section I outline some of the key ques-tions in SHRM against the integrating ground ofthe RBV in strategy. I then draw together twoconcepts put forward independently in SHRM—specifically, the ideas of modes of theorizing inHRM research and the levels of abstraction inthe HR system addressed by researchers. Inte-gration of these two concepts will set the groundfor extending both the RBV and SHRM researchvia complexity.

Key Questions in SHRM

Research on the contribution of human re-sources (people) and HRM (practices) to organi-zational effectiveness has addressed a wide ar-ray of questions: What is the effect of HRpractices on the development of a firm’s humanresources? Which HR practices lead to greaterorganizational performance? To what degreedoes that depend on firm strategy? How does afirm ensure that its HR practices “fit” with itsstrategy? How does it ensure that its individualHR practices fit with one another, or does fiteven matter in HR practice? Must the attributesof a firm’s base of human resources alwaysalign with an a priori strategy, or can its stock ofskills, knowledge, and interactions drive strate-gic direction?

The key constructs and central debates in SHRMhave grown out of the above questions: best prac-tices versus fit (Becker & Gerhart, 1996), horizontaland vertical fit (Schuler & Jackson, 1987), fit versusflexibility (Wright & Snell, 1998), control-exerting

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versus creativity-enhancing aspects of HR sys-tems (Snell et al., 1996), univariate and multivari-ate effects (Doty, Glick, & Huber, 1993), and appro-priate theoretical frames (Delery, 1998; Delery &Doty, 1996; Lepak & Snell, 1999; Wright & McMa-han, 1992). What is common to all of this work is afocus on the links among HR practices, the humanresource pool, and organizational outcomes. At itsheart, the key strategic questions for HRM re-search and HR practice are process questions,which tie practices to resource characteristics toorganizational outcomes:

• How does a firm ensure resources arealigned to support current strategies, areadaptable to new strategies, and are able toinfluence new strategic directions?

• How does a firm actively build and contin-uously renew strategic human and organi-zational resources to fuel competitive ad-vantage?

The RBV: An Integrating Ground for SHRM

These essential questions have been exam-ined using a variety of perspectives drawn fromorganization theory, including institutional the-ory (Wright & McMahan, 1992), contingency the-ory (Lengnick-Hall & Lengnick-Hall, 1988), con-figurational approaches (Doty et al., 1993),transaction cost analysis (Jones, 1984), behav-ioral perspectives (Schuler & Jackson, 1987), andorganizational learning (Snell et al., 1996). Someof these approaches are used centrally and fre-quently and others more tangentially and infre-quently. The most prevalent perspective, oftenapplied in conjunction with other frameworks, isthe RBV of the firm (Barney, 1991, 1992; Barney &Wright, 1998; Lado & Wilson, 1994; Snell et al.,1996; Wright, McMahan, & McWilliams, 1994).The RBV has helped to build a productive theo-retical bridge between the fields of strategy andHRM (Wright et al., 2001), and it serves as abackdrop (Delery, 1998) or integrating groundagainst which much of SHRM theory and re-search is presented.

The RBV states that a firm develops competitiveadvantage by not only acquiring but also devel-oping, combining, and effectively deploying itsphysical, human, and organizational resources inways that add unique value and are difficult forcompetitors to imitate (Barney, 1991). Most re-source-based arguments are rooted in human re-sources—the skills, knowledge, and behavior of

employees—or organizational resources—controlsystems, routines, and learning mechanisms—that are products of complex social structuresbuilt over time and, thus, are difficult to under-stand and imitate (Amit & Schoemaker, 1993; Bar-ney, 1991, 1992; Conner, 1991; Mahoney & Pandian,1992; Oliver, 1997; Peteraf, 1993). The strong andobvious connection to the RBV serves the SHRMfield in two ways: (1) it foregrounds the role ofhuman resources in questions of strategy, raisingthe importance of research and practice in SHRM,and (2) it encourages a more relevant focus forHRM, away from the HR practices themselves andtoward their effect on firm resources (Delery, 1998;Wright et al., 2001).

Following an examination of two theoreticalframeworks in SHRM, I highlight particular as-pects of the RBV that suggest complexity con-cepts could help in reframing some difficultieswith the approach.

Dimensions for Theory in SHRM

The framework constructed here draws togethertwo useful concepts presented in the SHRM liter-ature. The first is the idea of implicit modes oftheorizing embedded in the SHRM field. Deleryand Doty (1996) have identified three modes—universalistic, contingency, and configurational—discernible across a broad body of research, al-though not always explicitly acknowledged by therespective authors. The second concept is one ofthe levels of abstraction in the HR system, includ-ing principles, policies, and practices, over whichtheoretical constructs are often arrayed, also typ-ically unacknowledged by the respective authors(Becker & Gerhart, 1996; Schuler, 1987; Wright,1998). By bringing these two concepts togetheragainst the backdrop of the RBV, we can identifythe room for contribution of ideas from complexity.It should be noted at the outset that this frame-work is most useful in delineating the generalcontours of the research in the field and identify-ing opportunities for advancement; I do not assertthat every piece of research fits uniquely into onecell or another of framework.

Modes of Theorizing in HR Research

Delery and Doty (1996) have identified andcontrasted universalistic, contingency, and con-figurational explanations of the effect of HRpractices on organizational performance, with a

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slightly varying definition of “strategic HR prac-tices” under each. The main differentiatingcharacteristic across these categories is thelevel of system complexity assumed by the re-searcher and the capacity of various researchapproaches for modeling system complexity.Universalistic approaches pay little attention tointeraction effects among organizational vari-ables, a contingency perspective begins to al-low for such effects, and the configurationalschool sees system interaction effects as criti-cally important.

Universalistic perspective. Universalistic or“best-practice” approaches assert that certainindependent-dependent variable relationshipshold across whole populations of organiza-tions—that is, some HR practices are alwaysbetter than others, and all organizations shouldadopt them (Miles & Snow, 1984; Pfeffer, 1994).Under a universalistic approach, “strategic HRpractices” are those that are found to consis-tently lead to higher organizational perfor-mance, independent of an organization’s strat-egy. Examples are such practices as formaltraining systems, profit sharing, voice mecha-nisms, and job definition. One might argue thatthese are not strategic in the sense used else-where in the SHRM literature (i.e., contingent onstrategy or explicitly aligned with specific strat-egy) and may simply be termed prudent, in thesense that they have been shown to consistentlyenable a given firm to perform better than itmight otherwise.

Work in the universalistic perspective islargely unconcerned with interaction effectsamong organizational variables and implicitlyassumes that the effects of HR variables areadditive (e.g., Gerhart & Milkovich, 1990). Such areductive, linear view of an organizational sys-tem ignores the notion of system-level resourc-es—an important factor in the RBV. That is not tosay that the insights provided by such ap-proaches are not valuable; rather, they are onlylimited. Delery and Doty (1996) found strong em-pirical support for the universalistic perspectivefor some of their hypothesized variables.

Research under this perspective has beenuseful in identifying discrete HR practices thatare universally sensible, but it has not contrib-uted much to HRM in the strategic sense, if wetake strategic to mean practices that differenti-ate the firm in its industry and that lead tosustainable competitive advantage. Practices

that are universally adopted would have iso-morphic rather than differentiating effects oncompeting firms. As such, the organization the-ory that best frames the best-practice approachis institutional theory (Baum, 1996; DiMaggio &Powell, 1983), which describes forces leading toa tendency to “sameness” across firms.

Contingency perspective. The contingencyperspective goes beyond the simple, linear,causal relationships explored in universal the-ories and allows for interaction effects and vary-ing relationships depending on the presence ofa contingent variable—most often firm strategy.The task of the researcher is to select a theory offirm strategy and then specify how individualHR practices will interact with that strategy toresult in higher organizational performance(e.g., see Fombrun, Tichy, & DeVanna, 1984, andSchuler & Jackson, 1987). Effectiveness of HRpractices is contingent on how well they meshwith other aspects of the organization (e.g., whatdiscrete HR policies would be most appropriateif an organization were to pursue a low-coststrategy or wanted to encourage new productinnovation). A contingency perspective draws acausal line from the HR policies and practices tothe organizational performance metrics, and itallows for the moderating effects of strategy.The primary concern is with vertical fit (align-ment with strategy) rather than horizontal fit (HRpractices hanging together as a coherent, self-reinforcing system). While this mode directs at-tention toward effects among variables, internalsystem interaction effects are not a centralconcern.

Configurational perspective. The configura-tional school in organization studies follows aholistic principle of inquiry and is concernedwith how patterns of multiple interdependentvariables relate to a given dependent variable(Meyer, Tsui, & Hinings, 1993; Miller & Friesen,1984). Researchers gather multiple dimensionsof organizations, such as strategies, structures,cultures, and processes, into typologies of idealtypes and treat the types as independent vari-ables. This goes beyond the contingency ap-proach, in which “researchers have been preoc-cupied with abstracting a limited set ofstructural concepts—centralization and formal-ization, for example—and measuring their rela-tionships with a limited set of abstracted situa-tional concepts, such as size, and technologicaluncertainty” (Meyer et al., 1993: 1175). A configura-


tional view focuses on patterns of HR practicesthat together form an internally consistentwhole (i.e., their effects are mutually reinforcing)and draws a correlation between those patternsand organizational performance (Doty & Glick,1994).

The purported advantage of the configuration-al perspective is that it acknowledges systeminteraction effects—that the whole may be moreor less than the sum of its parts. One significantshortcoming is that it is typically unmanage-able to construct and test more than a few con-figurations, which understates the real-worldcomplexity of organizational systems.

Levels of Abstraction in the HR System

Becker and Gerhart (1996) have argued forclarity on the level of policy under examina-tion—HR principles, HR policies, or HR practices,for instance—and proposed that an architec-tural approach be taken to understand the ef-fects of HR system components on organization-level outcomes. Wright (1998) termed thisdistinction the level of abstraction at which HRis conceptualized and added the product level tocapture the intended effects of the other three,usually in terms of the behavior of individuals,groups, or the organization. The notion of levelsof abstraction differs from the notion of levels ofanalysis in organization studies, although bothare grounds for caution and care by researchers.Where the latter normally denotes the structurallevel of a theoretical construct, such as individ-ual, group, organization, or industry (Rousseau,1985), the former is concerned with the level ofthought abstraction under consideration and theassociated construct definitions. Becker andGerhart (1996) suggest that perhaps the mixedand conflicting results in HRM research are at-tributable to confusion in construct definitionacross the levels of abstraction.

An illustrative example makes this conceptclear. A firm might adopt the guiding HR princi-ple that “employee participation in all aspectsof the business is critical to our success.” In anarchitectural approach, this principle wouldserve as a guidepost to align lower, less ab-stract policies and practices. The next levelholds the various HR policy alternatives capa-ble of enacting the guiding principles, which inthis example might be team-based work sys-tems, problem-solving mechanisms, open book

management, incentive pay, comprehensivecommunication processes, or suggestion sys-tems. Once the appropriate policies are se-lected, the firm chooses from the available arrayof HR practices, or specific tools, to execute thepolicies. Quality circles or TQM teams; variablecompensation schemes, profit sharing, or piece-work (all types of incentive pay); newsletters,learning fairs, or town hall meetings to commu-nicate—all are HR practices the firm can imple-ment and align with the policy level and guid-ing principle in this example.

The product is the metric that describes be-havior, or the effect of the behavior, induced bythe practices. Behavior in this case might beassessed by the general level of cooperation,participation levels in problem-solving exer-cises, or demonstration of business knowledgeby employees; the effects of the behavior couldbe measured by the number of problems solved,productivity, waste, or compensation payoutsresulting from corporate performance. The menuof new practices available to a given firm de-pends on its unique context and history; theexisting practices, management style, and thelabor relations climate are factors that willlikely expand or constrict the list of options. If,for example, an organization had an antagonis-tic relationship with its workforce, built over along history of tough bargaining with the union,it is unlikely that the firm could successfullyimplement cooperative problem-solving teams,at least not without first taking steps to repairthe organizational climate. Considerations ofunique firm contexts and path dependence arecritical features of the RBV.

Levels of Abstraction and Modes of Theorizing:Limitations and Opportunities

The framework offered in this article drawstogether the concepts of levels of abstractionand modes of theorizing in order to consider thetypical levels addressed by each mode and toidentify opportunities for extending these ideas.The universalistic approach is primarily con-cerned with individual practices and, thus, ismost often focused on the level of HR practices,with little consideration of system interactioneffects.

Contingency research deals with multiplepractices and their “vertical” interaction effectswith contingent variables and, thus, is implicitly

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concerned with HR policies and the relatedpractices. Interaction effects are deemed impor-tant, but only one or two variables are consid-ered at once, and, typically, the contingent vari-able is limited to firm strategy.

Configurational approaches emphasize theimportance of overall system interactions andeffects and, thus, include the HR principles levelas a critical cohesive force for the overall sys-tem. The limiting facet of the configurationalapproach is that complex organizational sys-tems are reduced to a few possible configura-tions for the sake of manageability and are castas typologies. For example, Miles and Snow’s(1978) theory of strategy, structure, and processhas been used to cast and test organizationaltypes (prospector, analyzer, defender) and re-lated sets of HR practices (Delery & Doty, 1996).Limiting the rich complexity of organizations toa few possible configurations constrains therange of possible combinations and interactioneffects and understates both the creative andadaptive potential of a complex system. Whileconfigurational approaches come closest tomodeling the complexity of organizations, theymust stop short for analytical manageability.

These two concepts in SHRM—modes of theo-rizing and levels of abstraction—form a usefulframework for considering future opportunitiesin SHRM research. In particular, they help tohighlight the difficulty of acknowledging anddealing with (rather than artificially reducing)system complexity in SHRM, as well as high-light the idea of separating the principles levelof the HR system from the focus on discrete prac-tices as a means of accessing issues of dynamiccomplexity. To relate ideas from the field of com-plexity to SHRM, it is helpful to first considersome of the opportunities for extension of theRBV in strategy, especially since the RBV is cen-tral to and has been called a backdrop of SHRMresearch.

Opportunities for Extending the RBV andSHRM

While the RBV has focused attention on organ-izational resources and has served as an inte-grating ground for research and theory, its mainlimitations are serious for the field: it offers lit-tle, in an explicit sense, in the way of prescrip-tions for managers, thus not answering the“how” questions central to SHRM. In assessing

the issues of fit in SHRM, Delery notes that“while the resource based view provides a nicebackdrop, explaining the importance of humanresources to firm competitiveness, it does notspecifically deal with how an organization candevelop and support the human resources itneeds for competitive advantage” (1998: 290).This is due, in large measure, to the somewhatparadoxical internal logic of the RBV, at least asit has been framed to date: the strategic value offirm resources lies in their inherent complexity,and attempts to causally unravel that complex-ity are counterproductive, if not futile. In a re-cent review of the contribution of the RBV toSHRM research, Wright et al. concluded that tak-ing RBV deeper into SHRM research “requiresrecognizing that the inimitability of [organiza-tional] competencies may stem from unobserv-ability (e.g., causal ambiguity), complexity (e.g.,social complexity), and/or time compression di-seconomies (e.g., path dependence)” (2001: 709).The challenge to researchers and managers isto find a level of prescription that preserves thestrategic value of the RBV without compromis-ing its essence.

Throughout the large body of scholarly writ-ing in the RBV—in strategy and with specificrespect to SHRM—there have been a few keyaspects widely acknowledged to be both criti-cally important and exceedingly difficult to ad-equately represent. I identify four aspects here:(1) a focus on the creative as well as the adap-tive aspects of the RBV; (2) the centrality of com-plexity and causal ambiguity to its logic; (3) theimportance of disequilibrium, dynamism, andpath dependence; and (4) the idea of system-level characteristics. It is with these four criticalbut difficult aspects of the RBV, generally and asapplied to SHRM, that concepts from complexitybest align. In the following sections I brieflyelaborate on each of these aspects to set theground for integrating ideas from the study ofcomplex systems.

Focus on creativity and adaptivity. The stra-tegic nature of HRM has often been character-ized in the SHRM literature as an adaptive con-cept in terms of fit or flexibility (Wright,McMahan, McCormick, & Sherman, 1998; Wright& Snell, 1998): firms have an a priori strategy, orchosen market position, and the main chal-lenges lie in strategy implementation. But lim-iting the discussion to adaptive concepts limitsthe range and power of the RBV as originally


articulated by Penrose, who was interested inthe process of firm growth and its relation tosustained advantage. She proposed that

the availability of unused productive serviceswithin it create the productive opportunity of agiven firm. Unused productive services are, forthe enterprising firm, at the same time a chal-lenge to innovate, an incentive to expand, and asource of competitive advantage (1959: 85).

Thus, in its original conception, the RBV heldthat a firm’s resource base contains not onlyadaptive potential but also creative potential.The “unused productive services,” which inSHRM terms means the knowledge, skill, andbehavioral dynamics of individuals and groups,are forces for creativity, innovation, growth, andrelative industry advantage. To be of strategicvalue, HRM practices should be focused onbuilding and leveraging both creative andadaptive sources of competitive advantage: thelatent creative potential in the organization’shuman resource pool and the idiosyncratic ca-pabilities that serve to realize that potential andthat help the organization adapt to and thrive inits operating environment.

There have been relatively few attempts toexplore the creative aspect of the RBV in SHRM.Snell et al. did explore the processes of knowl-edge creation through organizational learningprocesses and urged emphasis on creativityover control in SHRM research:

In the context of achieving sustained competitiveadvantage, we need less research on the controlattributes of SHRM and more research on howparticipative systems can increase the potentialvalue of and impact of employees on firm perfor-mance. If human capital is valuable, we have tolearn how to unleash that value (1996: 65).

Holding the RBV as an explicit frame suggeststhat the HR system can help create advantageby recruiting, developing, and leveraging bothcreative and adaptive sources of competitiveadvantage.

Centrality of complexity and causal ambigu-ity. Under the RBV, inimitable competitive ad-vantage is protected by the interrelated condi-tions of causal ambiguity and complexity.Causal ambiguity is the basic uncertainty sur-rounding the causal relationship between ac-tions and results (Lippman & Rumelt, 1982; Reed& DeFillippi, 1990). Such uncertainty may be ir-reducible ex ante and ex post—fundamentallyirreducible causal ambiguity—or may be under-

stood only retrospectively— ex ante irreduc-ible/ex post reducible causal ambiguity (Mosa-kowski, 1997). Although both of these types serveto protect against competitors’ discerning and“reverse engineering” an organization’s strate-gic resources, the former does so more than thelatter. This feature of the RBV has been difficultto operationalize, however, because under fun-damentally irreducible causal ambiguity, eventhe firm possessing the advantage must be un-certain of its source, or else diffusion to compet-itors will result (Lippman & Rumelt, 1982). Thisprime criticism of the RBV—that is, that it istautological (Priem & Butler, 2001)—is related toits ex ante irreducibility.

Ambiguity arises from complexity as a by-product of the complex nature of organizationalinteraction. It comes from technical complexityand, more significant, from social complexity inthe way that a firm’s inputs—physical, human,and organizational—are combined (Barney,1991). Social complexity as a source of ambigu-ity, and therefore competitive advantage, is acommon theme throughout the RBV literature(Barney, 1986; Grant, 1991; Nelson & Winter, 1982;Reed & DeFillippi, 1990; Schoemaker, 1990;Wright et al., 1994). While the socially complexphenomena that give rise to ambiguity dochange over time, deliberately orchestratingthose changes is often beyond managementcontrol (Barney, 1992). Still, scholars in SHRMhave pointed specifically to the advantages in-herent in organizational complexity and to thedistributed nature of the source of advantage:

It is difficult to grasp the precise mechanisms bywhich the interplay of human resource practicesand policies generates value. To imitate a com-plex system, it is necessary to understand howthe elements interact. Are the effects additive ormultiplicative, or do they involve complex nonlin-earities? . . . It is even difficult for a competingfirm to imitate a valuable HR system by hiringaway one or a few top executives because theunderstanding of the system is an organizationalcapability that is spread across many (not just afew) people in the firm (Becker & Gerhart, 1996:787).

Constructive, socially embedded resourcesare highly strategically important (in the sensethat they are inscrutable to competitors) be-cause of their inherent complexity, but they aredifficult to deliberately build for precisely thesame reason. The question for managers is howto act within that complexity so that the organi-

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zation is encouraged to thrive, without having tounravel and codify the myriad causal effects atplay in the social dynamic of the firm.

Importance of disequilibrium, dynamism, andpath dependence. Rather than attempt to reduceand unbundle complex resources and capabili-ties in an effort to manage and control, manage-ment’s task under the RBV is to create uncertain-ty—to “continually reinvest in the factors thatcreate the ambiguity and barriers to imitation”for competitors (Reed & DeFillippi, 1990: 97).Strategy is a continuous competitive interaction,in which models should be built on ideas ofdisequilibria rather than static efficiency (Reed& DeFillippi, 1990). Similarly, Amit and Schoe-maker have argued that, for strategy to be con-ceived more dynamically, “disequilibrium andprocess dynamics loom primary” (1993: 42).

Growth and rent creation are driven by cre-ative disequilibrium at both the firm and indus-try levels. Early explications of the RBV includeddynamic factors in their static descriptions ofresource characteristics. “Historical depen-dence,” “rate of decay,” “embedded” in complex-ity over time—are all dynamic concepts refer-encing the processes by which strategic resourcesemerge, are created, or are destroyed (Barney,1991; Grant, 1991). Dierickx and Cool (1989) focusedparticular attention on the process of accumulat-ing strategic assets with their concept of the “timecompression diseconomies” faced by imitators.Some strategic assets—reputation, for example—cannot be bought on the factor markets but mustbe accrued over time.

Recently, attempts have been made to identifyand examine the effects of dynamic capabilities.Dynamic capabilities are the organizationaland strategic processes through which manag-ers convert resources into new productive assetsin the context of changing markets (Galunic &Eisenhardt, 2001). Researchers have made sev-eral efforts to identify and prescribe dynamiccapabilities in theoretical terms (Luo, 2000;Teece, Pisano, & Shuen, 1997), through empiricalstudies (Griffith & Harvey, 2001; Helfat, 1997,2000; Rindova & Kotha, 2001), and through histor-ical studies of response to technological change(Rosenbloom, 2000). Scholars have explored thefactors contributing to the development of dy-namic capabilities and have found that the ef-fectiveness of capability-building mechanismsis contingent on features of the task to be

learned, such as task frequency, homogeneity,and causal ambiguity (Zollo & Winter, 2002).

The dynamic capabilities view is useful inmaking the RBV operational by identifying spe-cific organizational processes that build clearlyidentifiable valuable resources (Eisenhardt &Martin, 2000). While it has potential to contributeto SHRM research, the dynamic capabilitiesview has not, to date, been conceived to allowfor complex system interaction effects, and istherefore more limited than the focus of thisarticle. An overly reductive approach to exam-ining system dynamics (i.e., attempting to re-duce what is inherently not reducible) ignoresthe notion that irreducible system complexityand the resultant ambiguity are key to the RBVargument. Beyond this paper, there is opportu-nity to apply a dynamic capabilities approachusing the insights offered here—an issue I dis-cuss in the conclusion.

Idea of system-level characteristics. Through-out the RBV strategy literature, there is referenceto the importance of system-level, intangible re-sources. Such resources have been variouslyconceived as “organizational routines” (Grant,1991; Nelson & Winter, 1982), “cultural resources”(Wernerfelt, 1989), “core competencies” (Pra-halad & Hamel, 1990), “organizational capabili-ties” (Barney, 1992; Collis, 1994; Lado & Wilson,1994; Ulrich & Lake, 1991), and “system-level re-sources” (Black & Boal, 1994). System-level re-sources are those organizational capabilitiesthat exist only in relationships—in the interac-tions between things. In conceptual and empir-ical work, researchers have described the im-portance of the relationships between andamong resources that display “cogency,”“complementarity,” or “cospecialization” or thatgenerate rents at the system level or organiza-tion level (Amit & Schoemaker, 1993; Barnard,1938; Black & Boal, 1994; Brumagim, 1994; Collis,1994; Grant, 1991; Teece, 1986). Since such re-sources are system specific (and therefore firmspecific, if the firm is the system under consid-eration), they are arguably the most “imperfectlymobile” type of resources within a given firm.Imperfect mobility is key to sustaining economicrent, and one of the “cornerstones of competitiveadvantage” identified by Peteraf (1993).

A few writers in SHRM have focused on theimportance of system-level resources—those or-ganizational qualities that only exist in relation-ship, rather than as self-contained, discrete en-


tities. For instance, Brass (1995) took a socialnetwork perspective of HRM and focused not onthe attributes of discrete human resources buton the benefit accruing from the relationshipsamong them. Similarly, Snell (1999) reflected onthe concept of human capital, regarding humanresources from an investment and capital accu-mulation perspective, and allowed that theremay be new insight found in the concept ofsocial capital, which focuses on the value ofrelationships. However, less attention has beenpaid to this idea in SHRM than in the broaderRBV strategy literature.

With a focus on these aspects of the RBV andSHRM that are ripe for extension—a focus on thecreative as well as the adaptive; the centrality ofcomplexity and causal ambiguity; the impor-tance of disequilibrium, dynamism, and pathdependence; and the idea of system-level char-acteristics—we can consider ideas offered fromthe field of complexity.

COMPLEXITY AS AN EXTENSION OF THE RBV

These four critical but difficult aspects of theRBV are, in fact, central features of complex sys-tems. This theoretical congruence between com-plexity and the RBV (and, by extension, SHRM)suggests that transferring ideas from one do-main to the other via abstract analogical rea-soning is not only legitimate but implicitlycalled for within the RBV literature. In this sec-tion I present key features of complexity as theyalign with those of the RBV. I close the articlewith principles from the field of complexityaimed at nurturing living systems and thoughtson how those principles might be integratedusefully into the HR system architecture.

Key Features of Complex Systems

There is no one unified theory of complexity.Complexity theory generally denotes a wide-ranging body of work built on such fields aschaos theory (Gleick, 1987; Lorenz, 1963), cyber-netics (Ashby, 1956; Weiner, 1948), and dynamicsystems theory (Jantsch, 1980; Kauffman, 1992;Prigogine & Stengers, 1984). Complexity scienceincludes, but is not limited to, the study of com-plex adaptive systems (CAS)—systems char-acterized by networks of relationships thatare independent, interdependent, and layered

(Holland, 1975; Langton, 1989; Zimmerman, Lind-berg, & Plsek, 1998).

Each word in the phrase “complex adaptivesystem” is significant (Waldrop, 1992). Complexmeans more than just “complicated”; it de-scribes a system in which the component agentsoperate with some measure of autonomy, aswell as in relation to other system components—that is, independently and interdependently.That interaction gives rise to emergent proper-ties that are irreducible—that exist only in rela-tionship. (As Cilliers [1998] has noted, an airlineris merely complicated; a mayonnaise is com-plex. He describes these as “relational proper-ties” to avoid the mystical qualities associatedwith “emergence.”) Adaptive means that eachagent, as well as the collective system, activelyresponds to whatever pushes it and works toturn events to its advantage and survival. Sys-tem implies dynamism—an “alive” kind of dy-namism that arises from the many linear andnonlinear (i.e., with amplifying and dampeninginteraction effects) interrelationships amongsystem agents. Because of this adaptive, unpre-dictable dynamism, CAS have also been termedliving systems by some writers in the field (Ca-pra, 1996; Holland, 1995; Kelly, 1994).

In general terms, a CAS is composed of

a large number of agents, each of which behavesaccording to its own principles of local interac-tion. No individual agent, or group of agents, de-termines the patterns of behavior that the systemas a whole displays, or how those patternsevolve, and neither does anything outside thesystem (Stacey, Griffin, & Shaw, 2000: 106).

Difficult to concisely define, but easy to recog-nize (like organizations), complex systems aregenerally characterized by these two features:(1) a large number of interacting agents and (2)the presence of stable, observable emergentproperties—the appearance of patterns due tothe collective behavior of the components ofthe system (Morel & Ramanujam, 1999). Orderemerges as the system under observationevolves and adapts with its contextual environ-ment, although system boundaries are alwayssomewhat arbitrarily drawn. Characteristics ofCAS are recognizable across diverse domains,including ecologies, brains, ant colonies, politi-cal parties, economies, and corporations (Hol-land, 1995). Such living systems

are integrated wholes whose properties cannotbe reduced to those of smaller parts. Their essen-

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tial, or “systemic,” properties are properties of thewhole, which none of the parts have. They arisefrom the “organizing relations” of the parts—thatis, from a configuration of ordered relationshipsthat is characteristic of that particular class oforganisms, or systems. Systemic properties aredestroyed when a system is dissected into iso-lated elements (Capra, 1996: 36).

The key features of complex systems resonatewith the critical but difficult aspects of the RBVoutlined earlier. They are creatively adaptive inthat they seek novel means to evolve, by randommutation, self-organization, transformation oftheir internal models of the environment, andnatural selection (Goldstein, 1999). Any attemptto reduce organizational complexity in order toexert control and adapt to the operating environ-ment (i.e., to act as managers are taught to act)is counterproductive. In complex adaptive sys-tems, it is the process of adaptation that buildscomplexity, and from that complexity emergesperpetual novelty (Holland, 1995). Such systemsreach their creative state at far-from-equilib-rium conditions, be they economies (Arthur,1990), Boolean (binary) networks of lightbulbswired together that move to stable order basedon localized blinking rules (Kauffman, 1995), ordissipative structures in thermodynamics thatbuild up as energy moves through the system, indefiance of the second law of thermodynamics(Prigogene & Stengers, 1984). A CAS neverreaches equilibrium; if it is not creating toadapt, it is dead (Holland, 1995). As complexadaptive systems evolve through time, they doso irreversibly. Their steps cannot be retraced,

because the “arrow of time” only moves forwardthrough the evolutionary creative process (Pri-gogene & Stengers, 1984); processes of emer-gence are path dependent.

By definition, emergent properties are unpre-dictable (i.e., fundamentally causally ambigu-ous), displaying what Goldstein (1999) termsradical novelty; they have features not previ-ously evident in the complex system under ob-servation and that are not able to be anticipatedin their full richness before they actually showthemselves. Emergence is

the arising of novel and coherent structures, pat-terns, and properties during the process of self-organization in complex systems. Emergent phe-nomena are conceptualized as occurring on themacro level, in contrast to the micro level compo-nents and processes out of which they arise(Goldstein, 1999: 49).

The notion of “coherent structures, patterns, andproperties” sounds very much like the intangi-ble, system-level resources deemed importantby RBV writers.

Table 1 arrays the critical but difficult featuresof the RBV (call it “complex RBV”) alongside someof the key features of complex systems. This sim-ilarity suggests that concepts from the study ofcomplex living systems are well poised to informand extend the RBV and, by extension, SHRM.

Complex RBV: Heuristics for Building System-Level Resources

Proponents of the RBV say that competitiveadvantage flows from latent creative potential

TABLE 1Complex RBV: Critical but Difficult Features of the RBV and Key Features of Complex Systems

Key Features RBV Complexity

Creativity/adaptivity Competitive advantage grows from latentcreative potential embedded in firmresources

Complex adaptive systems learn and createnew responses to their contextualenvironment

Complexity and ambiguity Inimitability arises from social complexityand causal ambiguity

Living systems are composed of complexinterrelationships that are nonlinear,nondeterministic, and unpredictable

Disequilibrium, dynamism,path dependence

Complex relationships build over time andare historically dependent; disequilibriumis the creative state; dynamism andprocess issues are paramount

Systems thrive and create at far-from-equilibrium states; equilibrium leads tostagnation, decline, and death; historymatters; paths unfold irreversibly throughtime

System-level resources Some key strategic resources are intangibleand exist only at the system level, inrelationships

Some elements only exist at the system level,in the dynamic relationships betweenthings


and idiosyncratic capabilities (synchronouswith the specific context) and that strategic re-sources must be valuable, rare, inimitable, andorganizationally leveraged (Barney & Wright,1998). Complex RBV focuses on the complex pro-cesses that build system-level resources overtime. The value of such resources is grounded intheir synchronicity with the firm’s operatingcontext; their inimitability is secured becausethey are inscrutably embedded in the complexinteractions within the organization. Manage-ment heuristics drawn from complexity can in-fluence the organizational system toward build-ing and leveraging strategic resources. Thenotion of self-organization in the complexityframe asks us to think of an organization in aless control-oriented manner and acknowledgesthat an organization’s social system is con-structed out of the interplay among the inten-tions, choices, and actions of all organizationalactors (Stacey et al., 2000).

With an appropriate degree of humility (i.e.,abandoning the objective of control, the most weintend is influence), we acknowledge the forcesfor creativity and adaptation inevitably embed-ded in a complex social system and offer guid-ing principles consonant with that view. This isconsistent with the RBV literature, which assertsthat management is, at its core, a “heuristic dis-cipline,” and calls for the development of usefulheuristics to deal with organizational complex-ity (Amit & Schoemaker, 1993; Schoemaker, 1990).Heuristics are, according to Chambers ConciseDictionary, “principles used in making deci-sions when all possibilities cannot be fully ex-plored.”

COMPLEXITY APPLIED IN SHRM

The purpose of illustrating these points of con-gruence is that they strongly suggest there issomething to be learned from a complexity viewin order to extend the RBV. The critical but dif-ficult aspects of the RBV in strategy mark anopportunity to bring in ideas from complexity,and SHRM, with its natural affinity to the RBV, isa particularly useful means of operationalizingthose insights. Because the framework con-structed in this article is built along the dimen-sions of the levels of abstraction in the HR sys-tem and degrees of concern for systeminteraction effects in the modes of theorizing,

there is a clear point of entry for complexityprinciples.

Figure 1 illustrates the integrated frameworkfor SHRM described earlier. The modes of theo-rizing, with the addition of the complexity frame,are arrayed against the levels of abstraction.The RBV serves well as an integrating groundfor the various modes of theorizing. Articulatedwithin the RBV are the higher-order (more gen-eral, more abstract) objectives of unleashing la-tent creative potential and developing idiosyn-cratic capabilities that are common to allmodes, and more fully realized as we move fromleft to right on the spectrum. The ovals in thefigure depict the typical prescriptive range ofeach mode along the levels of abstraction, andthey are labeled with the most relevant theory oforganization for each mode.

As we move from left to right across the figure,there is greater concern for the interaction ef-fects among system variables and for system-level characteristics. The complexity perspec-tive acknowledges that agent interactions areabundant and critical to system evolution andthat there is a self-organizing aspect to them. Inthe context of the HR system architecture, thismeans that process principles reflecting a com-plexity perspective can be prescribed and thatthe policies, practices, and products will “self-organize,” which can mean that they flow inconcert with the particular idiosyncratic contextof the firm, guided by the heuristics for growingCAS. The heuristics as HR principles can help toguide the dialogue processes in the organiza-tion: the interplay of the intent, choices, andactions of organizational actors (Stacey et al.,2000). From a strategic perspective, organization-al resources will be positioned to create maxi-mum value when we expand the system bound-aries to include the intent, choices, and actionsof the firm’s stakeholder base—customers, sup-pliers, shareholders, employees, operating com-munities, governments, and competitors, for ex-ample.

Dynamism and complex interaction amongsystem components are issues of organizationalprocess, which is consistent with the initial con-ception of the RBV. Penrose (1959) was concernedwith the process of growth—in the ways thatorganizations grow—in contrast with economictheory of the time, which only addressed thepros and cons of being one size or another. Pro-cess issues have also been identified as impor-

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tant in SHRM, especially in the ways that HRsystem fit emerges over time:

We would encourage researchers to examine theprocesses that lead to internal fit. Like other ele-ments of the organization’s infrastructure, creat-ing internal fit among HR practices probably hasan intentional as well as an emergent compo-nent. Researchers might try to sort out the extentto which HR systems are integrated rationallythrough a priori decision processes versusemerging over time as practices are adjusted in-crementally. SHRM, in general, is an area thathas focused far too exclusively on content issuesto the exclusion of more process-oriented con-cerns (Snell et al., 1996: 80).

The background shading in Figure 1 indicatesthe primary range of prescription available un-der each mode of theorizing. Adding a complex-ity view to the framework extends considerationof the HR system out to a domain where systeminteraction effects are accepted as critical andallows that the properties and dynamics of thesystem are complex, unpredictable, and oftenirreducible to their component parts. Doing sovia analogical abstractions will allow us to en-ter the framework at the appropriate level ofabstraction—in this case, the principles level.Prescription here is focused on process princi-ples: management heuristics for nurturing com-plex living systems.

Abstract Analogical Reasoning: TransferringInsights Across Knowledge Domains

Rather than employ one concept or anotherfrom specific areas of study in complexity (e.g.,fitness landscapes, cellular automata, nonequi-librium thermodynamics, dissipative structures,bifurcation points), we can consider living sys-tems generally and abstractly—that is, take aset of abstract concepts generally observableacross complex living systems and transfer themto the principles level of the HR architecturalframework. Tsoukas suggests that such abstrac-tions are particularly useful for theory building:

From a theory-building point of view, abstrac-tions are very important because they operate ata high level of generality, reveal the genericproperties of a variety of phenomena, and canthus be used to explain phenomena acrosswidely different domains (1993: 338).

Kelly (1994) put forward a set of abstract prin-ciples—a list of “laws” for growing living sys-tems, synthesized from diverse streams of com-

plexity research. The set of seven below isadapted from the nine offered in his wide-rangingwork:

• Distribute being: Allow that systems are notcontained in discrete bodies; living systemsare distributed over a multitude of smallerunits. All the mysteries we find most interest-ing—life, intelligence, evolution—are foundin the soil of large distributed systems.

• Control from the bottom up: When every-thing is connected to everything in a distrib-uted network, wide and fast-moving prob-lems route around any central authority.Overall governance must arise from inter-dependent acts done locally in parallel andnot from a central command.

• Cultivate increasing returns: Each time youuse an idea, a language, or a skill, youstrengthen it, reinforce it, and make it morelikely to be used again. That is known aspositive feedback or snowballing. Anythingthat alters its environment to increase pro-duction of itself is playing the game of in-creasing returns.

• Grow by chunking: Allow complex systemsto emerge out of the links among simplesystems that work well and are capable ofoperating independently. Attempts to installhighly complex organization, without grow-ing it, inevitably lead to failure. Complexityis created by assembling it incrementallyfrom simple modules that can operate inde-pendently.

• Maximize the fringes: A diverse, heteroge-neous entity can adapt to the world in a thou-sand daily minirevolutions, staying in a stateof permanent but never fatal churning. In eco-nomic, ecological, evolutionary, and institu-tional models, a healthy fringe speeds adap-tation, increases resilience, and is almostalways the source of innovations.

• Honor your errors: The process of going out-side the usual method, game, or territory isindistinguishable from error. Even the mostbrilliant act of human genius is an act oftrial and error. System evolution can bethought of as systematic error management.

• Pursue multiple goals:. Survival is a many-pointed goal. A complicated structure hasmany masters, and none of them can beserved exclusively. An adaptive systemmust trade off between exploiting a knownpath of success (optimizing a current strat-egy) and diverting energy to exploring newpaths (thereby wasting energy and reducingefficiency).

These principles can be directed toward ad-dressing the “how” questions central to HR re-search set out earlier: How does a firm encour-age alignment of resources to strategy, and how

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does it continually build human and organiza-tional (i.e., system-level) resources to fuel com-petitive advantage? As a prescription for man-agers, a complex RBV, living-systems viewsuggests that these principles be integrated intothe HR architecture.

Table 2 offers an example of how such princi-ples for nurturing living systems might translateto HR principles that are oriented toward process,focused on appropriately stirring the stew of cre-ative forces embedded in the organization’s socialsystem—the intentions, choices, and actions atplay. How these principles translate to HR policies

and practices will depend on the historical expe-rience of the organization and the nature andquality of the human relationships within the sys-tem. The third and fourth columns of Table 2 offersome possibilities of which HR practices mightcome into play, but they are only possibilities.Complex, system-level, path-dependent resourcesand capabilities only emerge out of the dynamicinterplay within a given system and with its op-erating environment; it is beyond our prescriptivecapacity to list what could, or should, be the par-ticular actions of each organization. A complexsystems view allows for the creation of valuable

TABLE 2Living-Systems Coherence: Translating Complexity Heuristics to the HR System

Heuristics for NurturingComplex Living Systems

Possible Translation to HRPrinciples

Possible Translation to HRPolicies

Possible Effect on HRProcesses

—————————————————————————————————————————————————3

Distribute being • Eradicate arbitrary borders • Encourage movement acrossdepartmental and organiza-tional boundaries

• Work assignments (postings,projects) deliberately cross-functional

• Build broad-based identityand capability

• Explicitly incorporateidentity-building values intoHR systems

• For example, recruitment,training, leadershipdevelopment, performancemanagement processes

Control from thebottom up

• Democratize the workplace • Encourage formal andinformal employeeparticipation whereverpossible

• Work structure design with astrong bias to fullengagement

• Feed information to alllevels

• Take time to create anunderstanding of thebusiness; coach at all levels

• Leadership development,internal communications

Cultivate increasingreturns

• Seek opportunities to createpositive reinforcement in thesystem

• Deliberately link reputation,external image, and internalidentity in a virtuous cycle

• External and internalcommunication practices

• Be deliberate with languageand symbols

• Use and reuse consistentmodels and language indevelopment programs

• Training—highcustomization of T&Dprograms (vs. outsourcing)

Grow by chunking • Encourage local innovation • Allow inconsistencies acrossdepartments

• Flexible interpretation of HR“rules”

• Build learning capacity • Foster knowledge exchangeacross organizational units

• Learning forums,communities of practice

Maximize the fringes • Embrace debate • Invite dialogue on alternateapproaches

• Electronic discussion groupson pros/cons of HR systems

• Experiment • Create space forexperimentation

• HR “skunkworks”—trials ofnew practices/processes

Honor your errors • Encourage reflective practice • Close learning loop onexperimentation

• Reward systems—honor“greatest learningexperiences”

Pursue multiple goals • Incorporate stakeholderperspectives/aspirations

• Assess HR system impact onall stakeholders

• HR measures—build instakeholder metrics

• Tolerate multiple aims • Create value on many frontsat once

• Solicit definition of “value”from diverse stakeholders


resources by encouraging an attitude of inclusive-ness and humility on the part of managers: inclu-siveness toward all system agents (stakeholders)and humility in that they are encouraged to relin-quish the idea of tight control and focus on build-ing “generative relationships” (Lane & Maxfield,1996).

Coherence in the HR System

In reference to Figure 1, there are single, dis-crete HR practices that researchers have identi-fied as universally beneficial for organizationsto adopt, there are HR practices that make sensein relation to particular firm strategies, andthere are typological configurations of practicesthat work well together. Moving from configura-tional approaches to complexity approachesmeans loosening the coupling between concep-tions of strategic types and full sets of relatedHR practices. It means introducing complexityprinciples at the appropriate level of the HRarchitecture and letting the system follow whatDaneke (1997) calls its “unique geometries”—which is what complex systems will do, despitemanagerial efforts at total control.

The aim here is not to generate radical newideas for HR practices in a discrete sense; eachof the practices listed in Table 2 is at work insome organization today. Rather, the purpose ofsuch a framework is to provide a measure ofcoherence and purpose to the HR system archi-tecture, informed by complexity. What the over-lapping aspects of the RBV and complexity sug-gest is that a set of principles drawn from thestudy of complex, living, thriving systems couldserve well to nurture the creative and adaptivecapabilities of the organization.

Implications for SHRM Research

The framework offered in this article suggests anumber of interesting research questions. WhatHR principles are most consistent with a complex-ity perspective? Some principles are offered here,but that list is by no means exhaustive. Whatrange of HR policies and associated practicesflows from complexity-based principles? How dothe dialogic processes in organizations contributeto the development of HR policies and practices,and what role do HR principles play in moving tooverall system coherence? Snell et al. (1996) ob-served that some HR practices emerge over time

and are not thought out a priori. Investigation intothose processes from a complex RBV perspectivemeans focusing qualitatively on the human rela-tionships in the system and on the processes ofdialogue that lead to transformative change (Sta-cey et al., 2000).

Are the modes of theorizing compatible? Thatis, can we employ insights from a universalisticapproach while at the same time injecting com-plexity principles to encourage emergent adap-tive behavior of the whole system? What spe-cific sources of advantage do organizationalmembers attribute to the complex interactionsencouraged by the HR principles? Is a complex-ity approach more appropriate for certain strat-egies, in certain industries? How does a com-plexity approach reframe the way we think ofthe concepts of “fit” and “flexibility” in SHRMresearch? Perhaps it asks us to accept that fitemerges out of ongoing, decentralized dialogicprocesses, and flexibility means adherence to aprinciples-driven view of the HR system. Thismight mean a continual, deliberate reinterpre-tation of HR policies and practices in the contextof the organization, in the way that Holland(1995) describes complex systems as constantlyrevising and rearranging their building blocksas they gain experience. If the principles guid-ing the system are drawn from living-systemstheory, versus a mechanistic organizationalview, perhaps the prosperity odds are better.

One way to approach some of these questionswould be to construct some high-level, explor-atory hypotheses tying a complexity approachin the HR architecture to perceived strategic re-sources to organizational outcomes. One couldconstruct a proposition regarding the signifi-cance of a complexity view, and another per-taining to the degree of institutionalization ofthe principles, covering the intention and exe-cution of integration. For instance:

• Complex RBV advantage flows from com-plexity principles embedded in the HR ar-chitecture.

• Greater institutionalization of complexityprinciples in the HR system is associatedwith greater relative industry performance.

A possible method for exploring these propo-sitions might be to select comparator compa-nies, who occupy relatively equal strategicpositions in the same industry, and collect qual-itative data on their respective HR architectural

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schemes, along with supporting documentation.Principles may be explicit or implied, depend-ing on the relative sophistication of the firm’sHR system. The principles in action could beassessed for “complexity content” against theframeworks suggested in this paper to deter-mine the relative presence of conditions foremergence and adaptive behavior. Qualitativedata from actors inside the firm could be used togather collective perceptions of strategic re-sources and their value to firm performance,their rarity, and conditions contributing to theirinimitability, without trying to analyticallybreak down causal ambiguity. Quantitative andqualitative comparisons of high- and low-performing firms in the same industry could beconstructed to test the general propositions andto aid in the construction of others more specific.

Most significant and perhaps generalizableout of such a study would be not just the partic-ular principles themselves but the processwithin the firm of drafting such principles (e.g.,who is involved, over what time frames, throughwhat dialogic processes, and based on whichinputs) and the further process of consistentlytranslating those principles to HR policies andpractices. The dynamic capabilities view, high-lighted earlier, could be usefully applied usingthe framework offered here. With a focus on HRprinciples, researchers could document the prin-ciples drafting and interpretation processes asstrategic dynamic capabilities. Those processesthat combine the intentions, choices, and ac-tions of agents within and outside the organiza-tion will guide the development of the HR sys-tem over time, along paths that are unique andidiosyncratic to its operation environment—acomplex RBV approach to addressing the “how”questions so important to SHRM.

CONCLUSION

My aim in this article has been to offer a generalframework for extending the field of SHRM via aprinciples-based complexity approach. I have ra-tionalized connecting these two fields of studybased on congruence of key features of the RBV, acommon strategic frame for SHRM, and key fea-tures from the study of complex living systems.While this article focuses on the particular rele-vance of these ideas to SHRM, extending the RBVvia complexity may also have implications forstrategy generally. Further work along this line

could include a complex, principles-level view ofstrategy formulation and of the dynamics of strat-egy implementation. The framework constructedhere allows for the introduction of complexity prin-ciples at the appropriate (principles) level of ab-straction in the HR system. Pursuing a line of re-search in SHRM that focuses on coherence in theHR system, infused with a living-systems perspec-tive, could help to inform the way organizationsare studied and to improve the way they aremanaged.

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Barry A. Colbert is completing his Ph.D. in strategic management in the E. K. HaubProgram in Business and Sustainability at the Schulich School of Business, followingtwenty years of work in the Canadian steel industry. His current research exploresorganizational leadership in moving toward more sustainable business practices.


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