Organisational characteristics that constitute the inner context include features that can be crucial to the practice of HR. Examples of such factors include:
- the occupational profile of the organisation (for example, whether constituted by scarce and highly paid skilled staff or a more lowly paid, low-skilled workforce)
- the ownership (e.g. whether an owner-managed, family firm or a large, shareholder-owned PLC)
- the history and culture of the organisation (e.g. whether there is a history of mistrust and conflict or conversely a context of high trust and goodwill).
Another example of an inner context which can impact significantly on HR practice is those organisations which have become part of the ‘third sector’ – that is, co-owned enterprises, social enterprises and mutual organisations. These bodies typically seek to work on a values-based approach and the notion of bosses and workers is complicated with notions of members and co-owners.
If you were a newly appointed HR specialist to an organisation you would need to learn about all of the aforementioned and, in addition, you would also need to know about the key units and departments – which groups are considered core to the operation and what are the contours of power and influence in the organisation.
The John Lewis Partnership: a video case study
Activity 2: Inside John Lewis
A very good example of the need for an HR specialist to take account of an organisation’s ‘inner context’ can be found in the case of the John Lewis Department Stores. These stores are part of the wider John Lewis Partnership – a co-owned retail business with multiple divisions, including food retailing as well as the department stores. Any attempt by a new HR manager to make strategic choices about HR would need to first take close account of the features of the inner context. The video clip below should make this point abundantly clear.
Watch the video clip and answer the following question:
Transcript: Bonus day
If you joined this retail organisation as an HR manager, what key features of the inner context do you think you would need to bear in mind?
Make your notes in the box provided below and then click ‘Save and reveal feedback’ to see our thoughts on the question.
There are many characteristic features of this organisation that you would need to take account of if you were to have any chance of making a difference or even surviving in the organisation. The retailer seeks to work within a very distinctive ‘model’, key features of which were designed decades ago by its founder. These include elements of a democratic character whereby employees (partners) expect to have a voice, to have democratic structures and to be treated as a co-owners of the business. The annual bonus is an expression of their share in rewards but they also expect – and other senior managers expect – that this is but one part of a wider sense of co-ownership which carries rights and responsibilities.
The existence of this model does not prevent change but it does influence the way changes can be introduced, and the nature and justification of any proposed changes.