The International Journal of Human Resource Management,

Vol. 22, No. 17, October 2011, 36183637

Is there a bigger and better future for employer branding? Facing up

to innovation, corporate reputations and wicked problems in SHRM
Graeme Martina*, Paul J. Gollanb and Kerry Griggc
a
Department of Management, University of Glasgow, Glasgow, UK;
Macquarie University, Sydney, Australia; cMonash University, Melbourne, Australia

Employer branding is becoming an increasingly important topic for research and

practice in multinational enterprises (MNEs) because it plays directly into their
corporate reputation, talent management and employee engagement agendas. In this
paper, we argue that the potential effects of employer branding have yet to be fully
understood because current theory and practice have failed to connect this internal
application of marketing and branding to the key reputational and innovation agendas
of MNEs, both of which are at the heart of another strategic agenda effective
corporate governance. However, these agendas are characterised by wicked problems
in MNEs, which have their origins in competing logics in strategic human resource
management (SHRM). These problems need to be articulated and understood before
they can be addressed. This paper proceeds by (1) setting out a definition and model of
employer branding and how it potentially articulates with corporate governance,
innovation and organisational reputations, (2) discussing and analysing the wicked
problems resulting from the sometimes contradictory logics underpinning innovation
and corporate reputations and SHRM in MNEs and (3) evaluating the potential of
employer branding as a contribution to the third SHRM approach HR strategy-inaction as a way of resolving three particularly wicked problems in MNEs. We
conclude with some ideas for research and practice on the future for employer branding.
Keywords: employer branding; innovation; reputations; SHRM; wicked problems

Introduction: connecting employer branding, governance, innovation and

organisational reputations
Our aim in this paper is to examine the links between employer branding, innovation and
reputational capital to develop a causal model for future research. In the process of doing
so, we analyse the tensions between innovation and reputations through the lens of wicked
problems (Rittel and Webber 1973) and two dominant strategic human resource
management (SHRM) logics and bodies of theory that underpin them, using the UK
financial services industry as an example. Finally, we offer some guidelines for research
and practice on employer branding based on a strategy-in-action HRM logic, which can
help resolve these wicked problems.
Our previous research into employer branding and organisational reputations
(Martin and Beaumont 2003; Martin 2009a, b; Burke, Martin and Cooper 2011; Martin and
Groen-int Woud 2011) has led us to our current definition of an employer brand as a
generalised recognition for being known among key stakeholders for providing a highquality employment experience, and a distinctive organisational identity which employees

*Corresponding author. Email: graeme.martin@glasgow.ac.uk

ISSN 0958-5192 print/ISSN 1466-4399 online
q 2011 Taylor & Francis
http://dx.doi.org/10.1080/09585192.2011.560880
http://www.tandfonline.com

The International Journal of Human Resource Management

3619

value, engage with and feel confident and happy to promote to others. Employer branding
refers to the process by which branding concepts and marketing, communications and HR
techniques are applied to create an employer brand. Until quite recently, most practitioneroriented work in the field has focused on the attraction of new talent, largely because of the
talent wars that were claimed to characterise much of the 1990s and millennium until
the onset of the global financial crisis in 2007 2008. Thus, employer branding became
associated with the external labour market application of marketing and communications
tools (e.g. recruitment advertising, publicity, events) to attract potential employees,
though this external branding of the organisation in labour markets always rested on
having existing employees live the brand because of their potential influence
on customers and potential employees (Barrow and Mosley 2005). With the onset of
recession in many countries, the focus on employer branding gradually shifted to
improving levels of employee engagement (Balain and Sparrow 2009; Chartered Institute
of Personnel and Development (CIPD) 2009, June; Sparrow and Balain 2009; Martin and
Groen-int Woud 2011; Scullion and Collings 2011).
While the importance of talent attraction and engagement makes employer branding a
serious contender for inclusion in any list of high-performance work practices (HPWPs),
we have also proposed that employer branding can play a strategic role in future-proofing
corporate reputations (Martin 2009a; Burke et al. 2011; CIPD 2010). This corporate
reputation agenda has been defined in terms of reconciling organisational needs to create
strategic value by being simultaneously different from competitors yet remaining socially
legitimate by securing general recognition, approval and esteem for providing high-quality
goods and services (Deephouse and Carter 2005; Rindova, Williamson, Petkova and Sever
2005; Martin and Hetrick 2006, 2009; Highhouse, Brooks and Gregarus 2009, 2010;
Bergh, Ketchen, Boyd and Bergh 2010).
Few would disagree that reputation management has become one of the key long-term
issues for organisations, especially for multinational enterprises (MNEs) because of the
financial and reputational costs they face in overseas markets the so-called liability of
foreignness (Zaheer 1995). Thus, reputational capital is widely seen as a valuable
intangible resource with significant effects on firm performance (Roberts and Dowling
2002; Shamsie 2003; Boyd, Bergh and Ketchen 2010). In turn, reputational capital helps
organisations compete in global markets for customers, talent, finance, business partners
and other resources (Rindova et al. 2005; Collings and Scullion forthcoming). Less
positively, the results of damaged corporate reputations can be dramatic. Good
illustrations include the perceived failure of Toyota in 2009 2010 to manage its recall
process on its recent financial performance (Economist, 12 December 2009), and the
impact on BPs share price and worldwide reputation following the Deepwater Horizon oil
spill of the east coast of American in 2010. Similarly, the social status and legitimacy of
some of the UKs largest banks, including RBS, HBOS and Northern Rock, suffered
markedly as a consequence of risky decision making and a failure to exercise good
corporate governance (Economist, 23 January 2010; Burke et al. 2011), again which also
has had important spill-over effects on the reputation of the UK financial services industry
and its supporting legal and accounting services companies (Economist, 23 January 2010).
Our research into reputational capital leads us to conclude that the wealth protection
and wealth creation roles of corporate governance (Aguilera, Filatochev, Gospel and
Jackson 2008) are the heart of the innovation and reputation agendas (Martin and Hetrick
2006). The examples from the motor vehicles, oil and gas and financial services industries
highlight a failure of stakeholders wealth protection (Martin and McGoldrick 2009),
which has been the focus of recent corporate governance and risk management literature

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G. Martin et al.

since Enron (Clarke 2007) and of HRs lack of impact or negative impact on corporate
governance (Spector and Lane 2007; Rajan 2010). However, it should not be forgotten that
corporate governance has an equally important wealth creation function. And in a market
environment where private sector firms are required to privilege shareholder value
(Davis 2009), wealth creation is intimately linked to innovation by building strategic
capabilities to do different things or do things differently (Teece 2007; Porter 2008) in
both product and labour markets. Using the financial services industry as an example, this
is one reason why global banks have attempted to justify the retention of significant bonus
payments to key employees despite severe pressures from some national governments to
limit them. Indeed, this example shows how important an exclusive talent management
policy is to the banks, despite severe public opprobrium and proposed legislation
designed to reduce bonuses to bankers (Financial Times, 1 July 2010). It also illustrates
senior banking executives perceptions of the direct links between employer branding,
innovation and wealth creation (Rajan 2010).
Thus, the core thesis of this paper (see Figure 1) is twofold. First, employer branding
has a key role to play in creating and protecting reputational capital by facilitating
different types of innovation and wealth creation, which we outline in the next section.
Second, however, creating and protecting reputational capital and innovation are based on
inherently different SHRM logics, thus leading to potentially difficult in reconciling
wicked problems, which we discuss later in this paper.
A model of employer branding
Strong employer brands are believed to attract, engage and retain high-quality people to
build innovation, by which we mean radical and incremental changes in any or all of a
focal firms financial and business models, products or services, processes and delivery
mechanisms (Subramaniam and Youndt 2005; Todtling, Lehner and Kaufmann 2009).
However, it is not enough for firms to be innovative; rather they also have to be known for
being innovative, which is often an important element in employer brands and branding.
This link between employer branding and innovation is not direct but works by creating
two different types of capital thought to impact innovation and corporate reputations
human capital and social capital. So, drawing on the literature on intellectual capital
(Subramaniam and Youndt 2005), we propose a causal model of the relationships between
a firms employer branding process and investment in these related but distinct forms of
capital inputs. Our model also incorporates organisational capital, which enables the
creation of human and social capital, and assists in the employer branding process.
These three types of capitals combine to increase stocks and flows of intellectual
capital, and through them, different rates of innovation in firms. Although there is some
disagreement on definitions of these different types of capital inputs, for the sake of clarity
we have chosen to use the following well-established distinctions. We can define human
capital as the individual capabilities, knowledge, skills, attitudes and experience of an
organisations employees and managers, relevant to the task at hand (Dess and Picken
1999; Subramaniam and Youndt 2005). However, investment in human capital by itself
does not result in intellectual capital creation. Indeed, it has been shown to have negative
effects because human capital effectiveness relies on complementary investment in social,
or as it is sometimes called, relational capital (Subramaniam and Youndt 2005). Social
capital has been defined as the goodwill displayed by stakeholders towards an organisation
and the trust they place in it through internal bonding that ties to produce a strong sense of
corporate identity and external bridging social capital, in which individuals and

Organizational
capital
investment

Social capital
investment

Intellectual
capital of
extended firm
Wealth
protection
(through social
legitimacy)

Wealth creation
(through
innovation)

Figure 1. Modelling the effects of employer branding on innovation, reputations and corporate governance.

Employer
branding

Human capital
investment and
depletion

Reputational
capital

The International Journal of Human Resource Management

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G. Martin et al.

organisations benefit from wide and dense networks of relations with other individuals
and external organisations (Adler and Kwon 2002). Individuals or social units foster social
capital through relationships, networks, trust and co-operation, which in turn improves
the efficiency and productivity of transactions (Nahapiet and Ghoshal 1998; Lee 2009).
We elaborate on these points later in this paper when discussing wicked problems.
Both the above types of capital, however, are still human, causing difficulty to some
scholars in distinguishing between them. But, when people walk out of the door at night,
the third form of capital organisational (or structural) capital remains, which is
neither the property of individuals nor of groups (Kong 2008). Instead, it encompasses the
institutionalised knowledge and codified experiences residing within organisations in
the form of databases, filing cabinets, patents, manuals, organisational structures, routines,
processes and culture (Bontis 1998). The principal role of organisational capital is to link
the resources of the organisation together into processes that create value for customers
and sustainable competitive advantage for the organisation (Dess and Picken 1999;
Huiyan and Run-tian 2006). The interactions between its dimensions are important
because they provide employees with the motivation and opportunities to develop and use
their skills for the collective good (Kulvisaechana 2006), and in doing so, enhance an
organisations human and social capital (Bontis 1998; Johnson 2002).
Certain dimensions of organisational capital are particularly important in the
creation of intellectual capital, most notably the signals and effects associated with
HPWPs (Martin and Groen-int Woud 2011). As the banking industry illustration shows,
an organisations performance management and incentive structure will influence human
capital acquisition and development (Delaney and Huselid 1996), sometimes with
marked negative effects. Moreover, our own research has shown how organisations are
beginning to invest heavily in organisational capital through different forms of social
media, including wikis, blogs, social networking and media sharing sites, to facilitate
knowledge creation, organisational learning and employee voice (Martin, Reddington and
Kneafsey 2009).
Thus, we postulate in Figure 1 that employer branding, through the mediation and
interaction of different forms of capital, can have important effects on types of innovation
and social legitimacy and, through these dual roles of corporate governance, an impact on the
long-term reputational capital of the organisation. Employer branding helps attract and retain
talented individuals, and it also helps build trust in leadership and develop stronger bonding
ties through its impact on individual, team and organisational engagement (Burke et al. 2011;
Gittell, Seidner and Wimbush 2010). In turn, reputational capital feeds back into an
organisations employer brand and talent management processes. High-performing firms
with reputations for quality and prominence attract high-quality people (Rindova et al. 2005;
Martin and Hetrick 2006). Nevertheless, as we have already illustrated, wealth creation
through innovation and differentiation and wealth protection through social status and
legitimacy can be uneasy bedfellows. And, like many problems in MNEs, they are of the
wicked rather than tame variety (Rittel and Webber 1973; Grint 2005).
Wicked problems, MNEs and SHRM
Wicked problems
According to Grint (2005), leadership and people management problems in organisations
are often treated as tame (read rational) ones to be solved through the application of
previous knowledge, experience and by following more or less sequential but known
procedures. This notion is often (mis) used to distinguish between the problems that

The International Journal of Human Resource Management

3623

managers (characterised by a focus on control) and leaders (characterised by a focus on

change) have to address (Bolden, Petrov and Gosling 2003).
By way of illustration, elements of the UK (and American) financial services industry
crisis can be analysed as a result of defining talent management as a tame rather than
wicked problem. As Davis (2009) has argued, an era of shareholder capitalism beginning
in the 1980s, brought about by the rise of pension and mutual funds, was justified by a
new set of technical economic and financial theories privileging markets, shareholders,
self-interest and egoist ethics, restrained only by a moral and legal requirement to do no
harm. This gave rise to bull markets throughout the 1990s, forcing financial services firms
to compete for high value-adding employees such as investment analysts, traders, product
innovators and entrepreneurial leaders with connections the so-called rainmakers.
So senior executives in investment banking turned to financial incentives to ensure that
their key stars, on whom a disproportionate amount of value creation rested, remained
with them. As a result, these individuals began to recognise their worth, demand and
receive ever-greater levels of financial incentives and were willing to move to the highest
bidder (Rajan 2010), remarkably similar to professional soccer stars. However, what began
as a practice in the investment banking sector gradually spread to other sectors of financial
services, especially among the sales and marketing functions in sectors such as retail
banking, corporate banking, mortgages and insurance. Thus, the received people
management wisdom in the industry was reduced to a rational calculation based on the
level of individual incentives paid to key staff (Martin and Hetrick 2006). Yet, as early as
1988, prominent groups were warning of the problems associated with such a strategy in
encouraging excessive risk taking (Martin and Hetrick 2006). However, as Rajan (2010)
has argued, British financial services industry executives were unable, unwilling or both to
face up to the complex problems that the regulatory body had identified. Instead, they
continued to liken the problems of innovation and increasing wallet share to puzzles, for
which there was a clear and rational management answer in the form of ratcheted targets
and increasing incentives to develop new products for new customers. As became obvious
during the global financial crisis, many of these securitised products were inherently risky.
Moreover, gaining new customers was privileged at the expense of retaining existing ones,
and much of the selling in sub-sectors such as insurance, pensions and mortgages fell into
the category of being misleaded (Martin and Hetrick 2006). Sir Brian Pitman, a former
industry leader in the UK banking industry, captured these sentiments well when he raised
important questions over collective wisdom of the financial services over incentives in his
evidence to the UK Future of Banking Commission:
Can you imagine giving incentives to staff for selling loans? Its crazy, but its happening.
And its unnecessary . . . If you give people targets, you are encouraging them to increase risk
(Scotsman Newspaper, 13 March 2010).

So, in reality, the problems facing the financial services industry were of the wicked
variety. Rittel and Webber (1973) argued that the main problem of wicked problems was
defining the problem. Moreover, wicked problems could not be removed from their
environment, solved and returned to it without affecting the environment, in part because
they were characterised by a no-stopping rule with chain consequences resulting from
previous attempts to solve the problem. Finally, there were few opportunities to learn
from mistakes since wicked problems are relatively unique and solutions cannot be easily
defined and measured. In effect, they argued that resolution and not solutions were all that
could be achieved, and such resolutions tended to be of the good or bad variety rather
than being true or false.

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G. Martin et al.

Again, the case of financial services in the UK and the furore over executive bonuses
illustrates some of these points well. The impact of paying out what are generally regarded
as excessive bonuses, especially among those firms that were rescued by the government,
revealed the wicked nature of the problems faced by these banks, which still have to
compete in an increasingly global market for talent against those less affected by the crisis.
Following widespread public and government outcry, the boards of these banks
collectively followed a course of action in 2010 of publically recognising the tensions
inherent in the situation, communicating their understanding of the views of the public
(witness the new CEO of RBS, Stephen Hesters attempts to communicate that even his
mother did not understand why he was paid so much) but simultaneously stressing the
need for individual firms to compete in the exclusive market for rainmakers. This resulted
in an attempt to resolve the problem by senior managers role modelling their sympathy
with the public view and to placate governments desires for banking executives to take
some action to limit bonuses by announcing taking pay cuts or forgoing bonuses for
themselves. However, at the time of writing they are still paying out large bonuses to key
staff they regarded as creating disproportionate value.
So, one can argue that little had changed in terms of problem definition, except
bankers perceived needs to explain their predicament and to educate the public of their
plight in global labour markets for high value-adding staff, which maybe more effective
than the collective yawn senior leaders used to give when previously challenged over
bonuses. At the time of writing, we do not know the consequences of their resolution but
predict with some certainty that there will be a no-stopping rule for this problem. EU
legislation to regulate bonuses was expected to be passed in July 2010, but to what extent
this will curb the impact of markets and the ingrained bonus culture in financial services is
still open to question. So, unlike the implications of Figure 1, there is often no clear
relationship between cause and effect in the sense that we can build causal models
and apply these logics in a linear fashion. Instead, such problems are often intractable and
indeed irresolvable. To follow this analysis of wicked problems, we simply cannot manage
complex organisations and HR problems such as those evident in financial services on the
basis of rational calculation and simplified models of HR and people management used in
the UK financial services industry to drive financial performance and innovation through
employee attraction, engagement and retention. Instead, we have to recognise the whole
range of variables in our model and their potential for creating wicked problems.
The underpinning theories of wicked problems in SHRM in MNEs
Contradictory logics underpinning SHRM
The theoretical underpinnings of these wicked problems are the potentially contradictory
logics of the resource-based view (RBV) of strategy and institutional theory. These two
perspectives underpin organisational reputation research (Boyd et al. 2010) and the
integration-responsiveness problem in MNEs (Rosenzweig 2006), which is a more helpful
way of discussing the think-global-act local tension. Turning first to logic of the RBV,
this is based on the VRIO framework, which states that for a strategic resource to be
consistently valuable (V), it must be rare (R), incapable of easy imitation (I) and facilitated
by sufficient organisational resources and opportunity (O) to exploit the strategic resource
in question (Barney and Hesterly 2005). These underlying assumptions guide some of the
new prescriptions of SHRM and exclusive versions of talent management (Boudreau and
Ramstad 2007; Becker, Huselid and Beatty 2009; Huselid and Becker 2010). Strategic
capabilities and talent have to be rare so that they create a capability to be different from

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3625

other organisations which do not possess them. Similarly, the strategic capability and the
necessary talent attributes to deliver it must be inimitable. Finally, sufficient
organisational capital as defined earlier needs to be in place. However, value creation
through internal resources is not easily achieved, especially inimitability, because
resources have to be specific to firms and under their control, at least on a semi-permanent
basis (Lockett, Thompson and Morgenstern 2009). So, if a capability or talent is socially
constructed by others outside the organisation, which is the case with organisational and
personal reputations (Bergh et al. 2010), or else is highly mobile, organisations may try but
certainly do not have ultimate control over these resources. The reputational decline of
companies such as Enron and RBS, the personal reputations of their former leaders,
Ken Lay and Sir Fred Goodwin and the mobile nature of talent illustrate the unpredictably
and tenuous nature of such inimitable intangible assets.
Thus, the benefits of reputational capital, which we have argued is a key strategic
resource, are best explained by other theoretical frameworks. One of these is signalling
theory (Martin and Groen-int Woud 2011), which treats leadership and bundles of
HPWPs as signals sent out by the organisation to create an impression of a reputable
employer. Whether employees treat these signals as authentic or as honest attempts by
organisations to further mutual interests rather than fake them, it will determine the
impact of leadership behaviours and HPWPs on employee engagement. The second is
traditional institutional theory, which claims that the demands of institutional
environments lead organisations to become similar over time (DiMaggio and Powell
1983), often conforming to stakeholder demands for good governance through increased
standards of wealth protection, corporate social responsibility and citizenship behaviour
(Martin and Hetrick 2006). Thus, senior leaders desires for respectability and acceptance
by peers for themselves and their organisations cause them to accept changing norms of
legitimacy and social status, which is demonstrated in the HR field by the willingness of
firms to publicise their best practices and benchmark against those of others.
The third framework, advanced by Bergh et al. (2010), is that social status theory
rather than institutional theory which best explains reputational capital. Past performance
can earn firms good reputations for specific attributes, such as innovative or quality
products and being an employer of choice, which are often actively managed by firms
public relations, communications and HR departments. Nevertheless, they have much less
control over a firms social status, which is a more rounded, aggregate assessment of an
organisations prestige by society at large, reflected in our definition of an employer brand
at the beginning of this article. And, as researchers in this field have found out, social status
may be unrelated to past performance or performance potential (Washington and Zajac
2005). Thus, we argue it is this distinction between an organisations needs (1) to be
distinctive from others in terms of specific quality and performance attributes and to
manage its reputation for being different from others, and (2) to be socially legitimate by
accruing social status in the eyes of others, which lies at the heart of the wicked problems
faced by MNEs. We further contend that the wicked problems faced by MNEs are rooted
in the different logics governing much of the current SHRM literature and practice, to
which we now turn in more detail. In the remainder of this paper, we have highlighted
three approaches to SHRM and their implications for the impact of employer branding on
innovation and reputational capital. The first two are grounded in the contradictory logics
of differentiation and legitimacy. The third, HR strategy-in-action, is a potential way of
resolving key tensions by adopting an engaged approach to employer branding.

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G. Martin et al.

SHRM approach 1: being distinctive from others

The logic of distinctiveness and the RBV has been at the heart of recent work by a number
of well-known American strategic HR scholars. Writing from an essentially normative
perspective, they have sought to identify actionable and mid-level strategic capabilities
in firms, which are a unique source of competitive advantage for the organisations
(Lepak and Snell 2002; Becker and Huselid 2006; Boudreau and Ramstad 2007; Cascio and
Boudreau 2008; Huselid and Becker 2010). These authors focus on their own brand of high
value adding and uniquely skilled segments of the workforce (Lepak and Snell 2002)
variously described as A jobs and A-players (Becker et al. 2009) or pivotal talent
(Boudreau and Ramstad 2007) on which these strategic capabilities rest and so help form
a VRIO resource-base (Boxall and Purcell 2008) and dynamic capabilities (Teece 2007)
that makes organisations distinctive and difficult to imitate.
The common element in these new approaches to SHRM is a stress on the business unit
or line of business rather than the corporation for the source of differentiation or
novelty because (a) strategic capabilities and business model change tend to be located
at the business unit/line of business level or located in key processes and even functions
at the business unit level, (b) HR strategies, especially employer branding and talent
management, need to be aligned directly with specific business unit strategies and
(c) identity, as the social philosopher Baumann (2007) has argued, is a naturally local rather
than global phenomenon.
This logic of distinctiveness provides a strong argument for segmentation of the
workforce (Lepak and Snell 2002). For example, Becker et al. (2009) have argued against
an employer of choice strategy, which they regard as a recipe for mediocrity and argued
for an employee of choice, which stresses different employee value propositions to
different employee groups, depending on the value creation potential and uniqueness.
SHRM approach 2: social legitimacy among others
The largely internally facing logic of distinctiveness can be contrasted with an externally
focused strategic decision-making logic in which organisations seek to become well
known for being socially legitimate (King and Whetten 2008; Bergh et al. 2010). This
alternative logic points to senior executives strategic decisions being influenced by a need
to earn the approval and respect of peers, the press and the public at large for social status.
Social status may be viewed by firms as a source of differentiation, but institutional theory
argues that it is driven more by the needs of firms for prestige and honour. Moreover, as we
have noted, it is outside of the direct control of executives to actively manage social status,
since honour and prestige are in the gift of others (Rindova et al. 2005). Yet, executives
often spend a great deal of effort in attempting to influence the social status of the firm
because it has important performance outcomes, not least for their own careers. Arguably,
this is one reason why HR executives invest effort in honorific assessments such as the
Best Place to Work or HR Team of the Year Awards. It may also help explain
the growing interest in corporate social responsibility, despite a lack of evidence for the
business case for such investment (Reich 2007; Devinney 2009).
Thus, it is mimetic institutional pressures to copy others strategies and values,
and social networking and recruitment among a small cadre of business leaders
(Khurana 2002) that lead to bandwagon effects, coercive comparisons in the form of
benchmarking best practice and national legal standards or codes of conduct in accounting,
governance and CSR drive companies to achieve legitimacy by looking and feeling the
same.

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The SHRM implications of this drive towards corporateness are that firms become
similar in their employer branding propositions, seeking to become employers of choice
with a global employer brand and set of HR best practices. The audience for such signals
are largely external to sell a message to investors, governments, customers and potential
employees that they are engaging with a well-run, socially legitimate company that
produces high-quality products and services and is well known for doing so. In turn, this
help employees and business partners identify and engage with the organisation because
identity and engagement are formed by what insiders think significant outsiders feel about
their organisation their so-called construed image (Price, Gioia and Corley 2008).
Facing up to wicked problems in MNEs
As we have argued and illustrated by drawing on the example of the financial services
sector, these different strategic logics lead organisations and their corporate and business
unit managers to work with ideas that are not easily resolved because they require of them
the simultaneous need to be both (1) locally responsive and to adopt exclusive employer
branding and talent management policies, focusing on talented individuals and human
capital, and (2) be known for socially legitimacy by employing global standards of
prestige and respectability, including inclusive talent management policies and a focus on
the all-important social capital the bonds, bridges and trust among people and partners
that provide the glue which binds the organisation together. However, we have found
during our previous and current research on MNEs that these contradictory logics cause
HR practitioners and line managers great difficulty in practice (Martin and Beaumont
2001; Martin and Hetrick 2009).
(1) Tensions between global and local values.
The exhortation to think global and act local mantra is the recognition that MNEs are
characterised by multiple identities. Global companies exercise control over these
identities because of the need to have business units and their workforce on message with
the corporate logic, global cost leadership and corporate stakeholder management.
However, as we have noted earlier, philosophers and management scholars of identity have
argued that identity is essentially a local phenomenon and has to be authentic with
employees and other local stakeholders because both are a product of local cultures
(Hatch and Schultz 2004; Baumann 2007). This localisation of identity requires
organisations to resonate with local employees and other stakeholders and to encourage
constant expressions of employee voice and speaking truth to power (Gollan and Wilkinson
2007). Hatch and Schultz (2008) argue that organisations need to recognise and deal with
dysfunctional identity dynamics, which refers to excessive adaptation to the global and
the local. On the one hand, organisations are often driven towards narcissism and selfabsorption whereby they only talk to themselves and remain deaf to (local) stakeholders
(Hatch and Schultz 2008, p. 57); on the other hand, they run the risk of being overresponsive to local stakeholders and losing the benefits of a strong corporate culture by
appearing to have no identity at all or in responding to the latest trends by striving to be a
local brand.
(2) The tensions between exclusive and inclusive HR strategies.
The exclusive approach to talent management that focuses on the few at the expense
of the many has its critics (Pfeffer and Sutton 2006; Pfeffer 2010) for ethical, economic
and rational reasons (Martin and Groen-int Woud 2011). Especially among firms

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G. Martin et al.

in coordinated market economies of parts of continental Europe, which have a heritage of

stakeholder governance (Whitley 1999), the liberal market philosophy and shareholder
value ethics (Davis 2009) underpinning exclusive talent management is a difficult pill to
swallow. This is reflected among many European organisations in their inclusive approach
to talent management. For example, a recent CIPD survey of UK firms showed that 63% of
firms surveyed pursued an inclusive talent management strategy while 37% had more
focused policies (CIPD 2007).
Even within the liberal market economies of the USA, however, there is emerging
evidence that an exclusive approach to talent management has not worked well and, given
the unpredictability of economic environments, cannot work well. Evidence produced by
Groysberg and colleagues have shown the negative side of the star system which the
exclusive version of talent management has helped fuel (Groysberg, Nanda and Nohria
2004; Groysberg 2008; Groysberg, Sant and Abrahams 2008). Their research into the
recruitment and performance of investment analysts demonstrated how much recruiting
star analysts could backfire on the hiring companies and on the subsequent poorer
performance of the supposed star, in part because of the resentment of lesser lights in the
hiring companies and the difficulty of stars abilities to embed themselves in new
supportive soil (see next section). More recent work on US football stars and women
managers has refined these arguments and hinted at the importance of social capital rather
than the human capital of investment in stars (Groysberg et al. 2008).
Regarding the problem of talent management in unpredictable environments, a core
premise of exclusive talent management and the ubiquitous talent pipeline metaphor used
by many organisations is that it is possible to forecast with some degree of accuracy into
the future what skills and types of people will be needed and that once recruited and
developed that such talent will remain in the pipeline. To borrow from the language of
Becker et al. (2009), you would need to be able to predict, source and align the A jobs
and A players to meet the requirements of exclusive talent management. However, as
Sparrow, Hesketh, Hird, Marsh and Balain (2008) have argued, in an increasingly
unknowable world, premises based on typical workforce talent planning assumptions such
as these are not only fraught with problems but can also lock organisations into long-term
talent strategies that are inappropriate in a volatile environment. Changes in the strategic
environment of many industries and organisations, such as those which occurred during
the early 1990s, the dot-bomb era in the early years of the millennium and the period
immediately following the global financial services in 2007 2008, have seen
unprecedented corporate dis-integration and the end of many career ladders in the private
sector (Davis 2009). Such dis-integration is rapidly becoming a feature of the UK public
sector, which is being forced to lay-off many high-paid staff recently recruited during a
sustained period of investment in sectors such as policing, education and healthcare.
Finally, as Edmonson (2008) has pointed out, the delivery of short-term high
performance, which is often a requirement of newly recruited talent to justify salary
premiums and the passing over of internal recruits, is inimical to individual and
organisational learning. Learning, particularly transformative learning necessitates
individuals and teams making errors and, more importantly, publically acknowledging
these errors for individual learning to feed forward into team and organisational learning.
An exclusive approach to talent management mitigates such learning, in part because it
needs to be justified by short-term performance claims and in part because it is not in the
interests of stars, especially leaders, to admit their mistakes to lesser beings (Grint 2009).
(3) Tensions between human and social capital and innovation.

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Related to the above, HR initiatives are increasingly being judged against how they
impact the innovation agenda in these organisations. Yet, practitioners and some
researchers often commit the fundamental attributional error of over-emphasising
individuals and their talents as the cause of innovative improvement or decline and
under-emphasising the social and organisational context in which innovation occurred.
For example, a longitudinal study of 208 US firms found that increased emphasis on
human capital had a negative impact on an organisations capacity to produce radical
innovation and only had a positive effect when combined with social capital investment
(Subramaniam and Youndt 2005). The series of studies by Groysberg mentioned in the
previous section of this paper helps explain why such counter-intuitive findings may have
occurred. Their longitudinal study of financial services analysts posed major risks
associated with hiring stars, who became so because of supportive contexts, and expecting
them to repeat similar levels of performance in new and typically unsupportive contexts.
Thus, by talking up the value of individual human capital, there is a danger that we neglect
to invest in these other key elements of context, most notably, social capital and
organisational capital. Bontis and Serenko (2009) have argued that these forms of capital
can have a greater and earlier impact on intellectual capital in certain circumstances.
SHRM approach 3: HR strategy as practice
To return to the first of our core theses that employer branding has an important potential
influence on intellectual capital formation, and on innovation and the corporate reputations
that ensue (Martin and Groen-int Woud 2011) we have found in both our research and
clinical practice with HR managers in MNEs based in different countries that they have
significant if not insurmountable difficulties in reconciling these logics of difference and
social legitimacy. So, is there an alternative SHRM perspective that might help them to do
so, and what might it imply for EB? We believe the influential emergent strategy-aspractice perspective offers some guidance in this respect (Whittington et al. 2003;
Johnson, Langley, Melin and Whittington 2007; Jarzabkowski and Spee 2009). Its key
messages are that strategy needs to be understood not necessarily as a position nor as the
outcome of legitimate actions but in terms of the problems experienced by strategists in
different functions and at different levels in organisations in how they learn to strategise
and what they do when they strategise to resolve often difficult or irreconcilable issues.
This perspective emphasises the verb, strategising rather than the outcomes of
strategy, thus focusing on three factors, strategists, the practice of strategy and strategic
practices (Jarzabkowski, Balogun and Seidl 2007). The first of these refers to the people
doing the strategising, that is, the different types and levels of practitioners involved in
creating strategic decisions who they are, how they act and what resources they draw on
when strategising. In the conventional normative strategic literature, these key actors are
typically assumed to be those senior managers involved in strategic planning teams who
draw on rational and political resources to achieve their ends. However, this is not always
or even mainly the case; HR managers, line managers, union representatives, employees at
all levels and external consultants are often heavily involved in developing as well as in
implementing strategies through their actions and conversations. One of the main
challenges facing HR in dealing with the types of wicked problems facing employer
branding in complex organisations is how to deal with the disconnected dialogues
(Martin and Groen-int Woud 2011), characterising some employer branding design
sessions when marketing, communications, line managers and HR specialists are required
to work together (Burke et al. 2011). Although close cooperation among these functions

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G. Martin et al.

and with line managers is deemed to be necessary in the design of effective employer
brands (Moroko and Uncles 2008), case study research from a strategy-as-practice
perspective has highlighted how different groups learn to strategise (Jarzabkowski and
Spee 2009) and the influence of their relative power, the values they hold and the physical
distance between them (Martin and Groen-int Woud 2011) can exacerbate the wicked
nature of the problems they were brought together to solve. Thus, a key role of HR lies in
finding ways to help connect these different dialogues and in helping different parties in
the employer branding process learn how to strategise together.
The second refers to the practice of strategy, which are the relationships between the
actions of these different levels and groups of strategists and how they are socially,
politically and economically embedded in the institutions of the particular organisations
and societies in which they act. In SHRM terms this can be illustrated by the problems that
local HR managers and line managers have in implementing corporate values, especially
in business units and contexts that are institutionally and culturally distant from
headquarters (Martin and Beaumont 2001). By way of illustration, during one exercise
we facilitated in a large European MNE, a team of local HR managers from business units
in different product divisions located in different countries frequently complained
during session that a set of centrally determined corporate values, which were to be
operationalised through employer branding, had either no obvious single meaning or
indeed too many meanings. Perhaps more to the point for the current discussion of strategy
as practice, it became obvious that their complaints were bound up with not having been
involved in the value-scoping process until too late in the day.
The third strategy-in-practice logic emphasises strategic practices, which are the
routines of behaviour consisting of mental and interpersonal activities, background
knowledge, know-how, motivations and material and discursive resources that strategists
draw on for constructing strategic activity. Again, from an SHRM perspective, this refers
to how specific HR practices such as talent management and employer branding are
used to influence strategic practice and, indeed, strategists. How the notion of talent is
constructed in an organisation for example, using an inclusive or exclusive definition
will determine who is involved in the strategy-making process, whose voices will be
listened to and thus the outcome of strategic decision-making in employer branding
(Burke et al. 2011).
Thus, the focus of this perspective is on how HR strategists, through their actions,
interactions and negotiations, skilfully accomplish situated strategic HR practice. This has
important implications for organisations, and for how they combine cognitive,
behavioural, procedural, motivational, symbolic and physical resources to construct
strategic HR practice which has meaning in specific contexts and time periods
(Whittington et al. 2003; Jarzabkowski et al. 2007; Johnson et al. 2007). As such it is
concerned with thinking your way into acting and acting your way into thinking
(Weick 2001), and seeing strategy as a planned and emergent or learning process, thus
allowing organisations to manage the inevitable tensions that face them when strategising.
Such tensions are most acute when transferring learning across business units and between
the centre and business units in multinational environments (Martin and Beaumont 2001;
Bjorkman, Barner Rasmussen, Ehrnrooth and Makela 2009) and in gaining consensus on
values over issues such as effective leadership (Burke et al. 2011).
The strategic HRM implications of this perspective are most obvious in helping
explain how organisations can and perhaps should resolve the distinctiveness social
legitimacy dilemma. By foregrounding various HR strategists, other functional specialists
and line managers, their practices and how they can construct connected dialogues, that is

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3631

putting people back into strategic management, this approach not only helps us understand
how these wicked problems are worked through but also suggests that it is only by
focusing on the journey that the skilful accomplishments of strategists and employees at
different levels in creating workable HR strategies can be realised.
The implications for employer branding research and practice
So, what does this debate imply for employer branding and can employer branding be seen
as a vehicle for resolving the wicked problems discussed earlier using a HR strategy-aspractice approach? To answer this question, we need to be clear about the changing role of
employer branding in practice. As our discussion of employer branding has suggested,
an employer brand needs to appeal to identity at the business unit, organisational and
corporate levels. And, in an MNE environment, this complex layering of identities is
overlaid by national cultural identities, though these may be less important than have
previously been thought in influencing employees identification at local level (Martin and
Hetrick 2009). As such, employer branding promises to be able to provide a powerful set
of tools and concepts to resolve some of the dilemmas of SHRM and identity issues
discussed in this paper, but what is needed for it to do so? We suggest that there are at least
three areas in which research can add significant value in this regard and which have
important implications for HR practice:
. A focus on authenticity and employer branding
. A privileging of the local and employer branding and
. A focus on employer brandings role in developing social capital
A focus on authenticity
One of our central arguments regarding the sustainability of employer branding in the
future is to move it away from being something that is designed by HR, marketing or
corporate communications departments for others, especially in subsidiaries of MNEs,
towards helping employees socially construct employer brands which are locally
responsive and authentic. Authenticity has become an important concept in recent
management literature in fields such as leadership and marketing and, we believe, needs to
be at the heart of employer branding for it to help resolve the dual logics of SHRM.
Harquail (9 June 2009) has suggested a useful definition of authenticity in arguing that
authentic voice is the expression of self-identity created when people are empowered to
speak their truth about themselves, when they tell us what they know about themselves,
when they are allowed to argue for what they care about, when they tell the world how they
see things from their unique perspective and when they argue for their own wisdom, in
their unique way.
These insights can be applied to the process of creating effective employer brands in
all complex organisations, since complexity and size, the drive towards corporateness
(Stiles et al. 2006) and the logic of similarity mitigate against the expression of authentic
voice and identity. As we have noted, an HR strategy as practice approach requires a
deeper understanding of, and hence further research into, the different values, motivations
and potential contributions of all parties to the strategy-making process, how they act in
practice and what resources they draw on as they participate in helping create and
implement strategies and, by extension, business models. The second direction for
research is to examine the importance of capturing the authentic voice of different groups
of employees and managers at all levels and locations inside and outside the organisation

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G. Martin et al.

to make employer branding more effective. With regard to this point, we have argued that
employer branding can also contribute directly to the innovation agenda by encouraging
greater participation in the process and more authentic voice in organisations through the
introduction of new social media, including open access social networking, media sharing,
blogs, wikis and on-line discussion forums (Martin and Hetrick 2009). For example, recent
evidence has demonstrated the changing nature of employee blogs, which often begin as
employee expression of opposition and cynicism to organisations policies and practices
but sometimes become collective expressions of legitimate and innovative ideas on how
organisations can be improved if they crystallise the opinions and beliefs of substantial
minorities (Richards 2007). Thus, an important direction for future research is the
impact of these new social media on voice and employer branding effectiveness
(Burke et al. 2011).
Privileging the local
Our argument for greater authenticity in employer branding compels us to focus on the
local and on the logic of difference. This is not only because identity is an essentially local
phenomenon, but, as we have noted, so too are strategic capabilities, transformative
business models and the HR architecture that supports them. In practical terms, this means
privileging the local at the expense of the global in terms of creating authentically
meaningful employer branding and employee value propositions. The outcomes may look
no different from those that might result from a traditional top down exercise infused by
the logic of similarity, especially since the process may be loosely framed in terms of
broad aspirations of values or a corporate identity that organisations would like to be
known for. However, an HR strategy-as-practice approach suggests that the outcome is
less important than the means by which it is arrived at. It is also important, to paraphrase
Edmonson (2008), that corporate learning not only takes place but is seen to take place.
And being seen to learn is dependent on all actors in the system, including corporate
headquarters management teams, admitting to making mistakes in the past in their desire
to centralise and control.
As has been argued elsewhere, however, the weight of evidence . . . suggests that the
top-down, corporate global message continues to be the dominant one, which often
represents considerable previous investment in ideas and programs, and, hence, an inbuilt
reluctance to change course or experiment (Martin and Hetrick 2009: 316). And, as we
have noted in this paper, top down employer branding reflects the compelling logic of
similarity, the benefits of integration and strong institutional and rational pressures to
remain top down, including the desire to build global customer facing brands, pressures
to meet international governance standards, investor demands, global performance
standards and HR business processes. The similarity logic requires it is not only local
responsiveness and authenticity which needs to be taken into account; but there also needs
to be a balance between the needs for and benefits of integration.
So, in privileging the local we are not arguing for a neglect of corporate or global
values and branding, but rather that they should be equivocal (Price et al. 2008) to allow
employees at local level considerable latitude in creating local expressions of these values,
authentic identities and meaningful strategies for themselves, and in doing so benefit the
corporation as a whole. To invoke the classic pluralist dictum of Alan Flanders developed
in the industrial relations climate of 1960s and 1970s of many countries (Flanders 1965),
organisations need to share control in order to regain control. In one sense, then, the
HR strategy-as-practice approach may be seen as a refreshing or re-enactment of good,

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3633

old-fashioned industrial relations pluralism of yesteryear, this time imploring employees,

especially talented ones, and HR managers to become strategists rather than adversaries
over the terms and conditions of their mutual accommodation. Thus, an important
direction for further research would be to investigate cases where equivocality in corporate
and employer branding has been attempted as a strategy to understand and learn from these
attempts to resolve the integration-responsiveness problem.
Focus on social capital
Finally, we stake a claim for employer brandings potential contribution to building bonds,
bridges and trust, the key elements of social capital, and not just focusing on the creation
of human capital. Social capital as a complementary asset and enabler of human capital
and as a precursor of intellectual capital and innovation has become amongst the
biggest games in town. And as Sparrow et al. (2008) have argued, innovative business
model change and product-market innovation need a clear explanatory framework of how
HR integrates with such changes, which provides an essential justification for employer
brandings role in learning about and communicating a discourse that binds individual,
team and organisational identities the glue that holds organisations together during
periods of change. Thus, research in this field needs to focus on the extent to which
organisations use employer branding to help create and sustain internal bonding ties
inside, perhaps through person-organisation fit, and how they go about doing so.
Since social capital is also dependent on building bridges among employees and
business partners, employer branding can help innovation, business model and strategic
change by extending its traditional focus from those employed on a contract of service,
the traditional employment contract, to those contracted for services, often pejoratively
described as the contingent workforce. These networking ties and need for integration of
business partners provide a further line of research into employer branding by addressing
the question: to what extent to organisations use employer branding to create external
bonging and networking ties and how do they go about doing so?
Conclusions
Employer branding flourished during the era of tight labour markets and talent
management, but has been questioned in the changed circumstances of world-wide
recession (CIPD 2009). We have made a case for the importance of the concept to show
how it can contribute to the strategic aims and business model change of organisations.
Our paper began by setting out a model for linking employer branding to innovation and
reputational capital, but pointed out the wicked problems resulting from contradictory
logics underpinning dominant approaches to SHRM, each leading different directions for
HR architectures, and pointed out the dangers inherent in slavishly following one or the
other. We introduced the third, HR strategy as-practice, and showed how employer
branding might be used to help reconcile the problems created by the dual logics inherent
in being distinctive and similar. Our argument is that employer branding has the
potential to help organisations become authentic, responsive and build social capital, thus
contributing to the innovation agenda and transformative business model change.
In making this case, we have outlined a number of directions for future research on
employer branding if this topic is to be advanced as a concept worthy of study and practice
beyond its traditional focus on recruitment and communications spin.
Finally, we acknowledge that some researchers may think that in this paper we have
overloaded employer branding with qualities, properties and a potential for improving

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G. Martin et al.

SHRM practice that it does not deserve, which was our initial position when we began to
investigate this topic in 2003 (Martin and Beaumont 2003). However, we have come to a
regard employer branding as a key topic for integrating HR policies and practice, and for
helping build much needed bridges between HR, reputation management, marketing,
communications and information and communications technologies. Research in this field
needs to catch up with practice as well as to inform it, so it is worth much more academic
airtime than it gets at present.

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