AN EXPLORATORY STUDY
OF GOVERNANCE IN THE
INTRA-FIRM HUMAN RESOURCES
SUPPLY CHAIN
ELAINE FARNDALE, JAAP PAAUWE, AND
PAUL BOSELIE
The human resource management (HRM) literature has paid insufficient atten-
tion to supply chain management (SCM) when exploring the architecture of hu-
man resources (HR). Drawing on an SCM perspective, this study develops our
understanding of (1) the intra-firm HR supply chain, and (2) how this HR supply
chain influences corporate governance processes within large organizations.
We argue that the HR function, represented as an internal professional service
supply chain, needs appropriate governance principles as it operates through
multiple delivery channels and with a wide variety of HRM practices. Explora-
tory findings from a qualitative empirical study of seven large organizations
investigating governance and risk management in the HR supply chain are pre-
sented. These in-depth interviews uncover how formal governance is relatively
easy for these organizations to achieve, supported by outcome-focused moni-
toring tools, but informal governance mechanisms can fail due to insufficient
attention. Although standardized approaches to HR delivery can maximize the
opportunity for HR governance, little evidence was found that the organizations
were considering the related governance implications explicitly. © 2010 Wiley
Periodicals, Inc.
Keywords: HR function, human resource management, HR delivery, gov-
ernance, risk management
Introduction
A
lthough it has been recognized that
the operations management litera-
ture has paid little attention to
human resource management
(HRM) (Koulikoff-Souviron & Har-
rison, 2007), the HRM literature is equally
complicit in not having paid sufficient atten-
tion to supply chain management (SCM)
when exploring the human resources (HR) ar-
chitecture. Referring to the SCM literature, the
HR function can be defined as an internal ser-
vice function, and as such corresponds with
intra-firm supply chains, specifically those fo-
cused on delivering professional services.
In the traditional manufacturing supply
chain, as defined by the Hewlett-Packard
model (Ellram, Tate, & Billington, 2004),
Correspondence to: Elaine Farndale, Labor Studies & Employment Relations, Pennsylvania State University,
5b Keller Building, University Park, PA 16802, Phone: 814-867-3320, Fax: 814-867-4169, E-mail: euf3@psu.edu
Human Resource Management, Human Resource Management, September–October 2010, Vol. 49, No. 5, Pp. 849 – 868
© 2010 Wiley Periodicals, Inc.
Published online in Wiley Online Library (wileyonlinelibrary.com).
DOI: 10.1002/hrm.20387