The impact of market and industry risk on family succession

This study investigates the succession decision of family firms in connection with the risk environment faced by the firm. Succession itself can rightly be considered a risk event due to managerial uncertainty. This uncertainty coupled with a high risk operating environment magnifies the critical importance of making a correct succession decision. In this paper, the primary focus is on how market and industry risk influence the selection of either a family member or a family external professional as the successor, and how this decision impacts post-succession firm performance. Our sample is comprised of 383 succession events in Taiwanese listed companies over a twenty-year period (1997–2016). Using industrial profitability risk and systematic risk as the risk measures, we find that firms operating in a high-risk environment tend to employ a non-family member as the successor which on average leads to superior post-succession performance compared to firms that choose a family member as the successor. This result particularly holds when the non-family successor is able to successfully reduce firm-level risk. Overall, our results demonstrate that the risk condition of a firm is an important determinant of the succession decision of family firms, and that a non-family successor is more competent in managing a high-risk operating environment.     

High‐commitment HR practices,employee effort,and firm performance: Investigating the effects of HR practices across employee groups within professional services firms

In this study, the authors examine the relationship between high‐commitment HR practices and firm performance in professional services firms through the mediator of employee effort. In addition, they contribute to the debate in the field of strategic HRM on whether high‐commitment HR practices should be used across all employee groups within a firm. Their study's results show that high‐commitment HR practices positively relate to firm performance through employee effort for two employee groups within professional services firms. Further, they found that the relationship between effort and performance is contingent on the value of the employee group to firm competitive advantage, suggesting that companies may only want to expend the effort and resources on building a high‐commitment HR system for employee groups that are clearly tied to creating firm competitive advantage. © 2011 Wiley Periodicals, Inc.     

Entrepreneurial orientation in family firms: the moderating role of technological intensity and performance

This paper examines how socio-emotional factors can influence family firms’ commitment to entrepreneurially- oriented activities, and how their level of commitment is moderated by the technological intensity of the sector and firm performance. We find that, while family firms are less entrepreneurially-oriented than non-family firms, this gap closes with increasing technological intensity of the sector. We find no evidence, however, to suggest any change in entrepreneurial orientation in family firms resulting from a drop in firm performance.     

Human resource practices and firm performance of multinational corporations: influences of country origin

Drawing from a cultural values perspective, we investigate the effects of country origins on HR (human resource) practices of firms from the United States, Great Britain, Japan and Hong Kong operating in Hong Kong. In general, results supported hypothesized differences in HR practices of firms from different countries. In addition, results indicated that HR practices, specifically structural training and development and retention-oriented compensation, were related to various measures of firm performance. Of further interest was the finding that country origin moderated relationships of HR practices with firm performance; in general, relationships of structural training and development and retention-oriented compensation were stronger for Hong Kong firms. Implications of the results are discussed.     

The relationship between human resource management practices,business strategy and firm performance: evidence from steel industry in Taiwan

The primary objective of this study is to investigate the relationship between human resource management (HRM) practices, business strategy and firm performance. We examined the following HRM practices: training and development; teamwork; compensation/incentives; HR planning; performance appraisal; and employment security. We surveyed 236 managers working at steel firms in Taiwan to explore their perceptions on the impact of HRM practices and business strategy on firm performance. The results of this study are summarized as follows: (1) HRM practices will be positively related to firm performance; (2) there is a close linkage between HRM practices and business strategy; (3) business strategies will be positively related to firm performance; (4) integrating HRM practices with business strategies will be positively related to firm performance.     

HRM retrenchment practices and firm performance in times of economic downturn: exploring the moderating effects of family involvement in management

A substantial number of studies have indicated a significant negative relationship between human resource management (HRM) retrenchment practices such as downsizing, and firm performance. However, a consideration of the potential effects of business family involvement in management is largely absent from the general employment restructuring literature. Using a sample of 218 Taiwanese publicly listed firms, this study seeks to further our understanding in this area by examining the moderating effects of family involvement in management on the relationship between the adoption of HRM retrenchment practices and firm performance during the period of global economic downturn that erupted in the middle of 2008. Data analysis reveals that HRM retrenchment practices had a negative influence on firm performance, and that the relationship between HRM retrenchment practices and firm performance was negatively and significantly moderated by family involvement in management.     

High-performance human resource practices and firm performance: the mediating role of employees’ competencies and the moderating role of climate for creativity

Drawing on the resource- and competency-based view, this paper examines the relationship between high-performance human resource (HR) practices and firm performance. Using a sample of 189 firms in mainland China, a positive relationship between high-performance HR practices and firm performance was found that was partially mediated by employees’ competencies. We also found the organisational climate for creativity to strengthen such relationship. The implications and future directions of these findings are discussed.     

Family ownership and environmental performance: The mediation effect of human resource practices

Previous literature has found that listed family firms underperform their nonfamily counterparts in terms of environmental performance, but has not explained why this occurs. We address this research gap by hypothesizing that training and development practices (i.e., managerial practices devoted to providing training and development for the workforce) mediate the relationship between family blockholders and environmental performance. Using a sample of 33,901 firm‐year observations from 2002 to 2016 distributed across 56 countries and employing the structural equation model technique, we find that investment in training and development practices explains almost half of the negative relationship between family blockholders and environmental performance. Our study contributes to the agency theory debate on principal–principal problems by explaining why family blockholders could damage other blockholders and minority shareholders.     

Commitment-based HR practices,different types of innovation activities and firm innovation performance

Research on human resource (HR) practices and innovation has increased in the strategic HR management literature over the last decades. Scholars suggest that commitment-based HR practices contribute to innovation performance of the firm. However, prior research puts little emphasis on the causal linkages among commitment-based HR practices, different types of innovation activities and firm innovation performance. This article opens the black box of the relationship between HR management and firm performance by examining the causal relationships among a bundle of commitment-based HR practices (i.e. a commitment-based HR system), different types of innovation activities and firm innovation performance. On the basis of a survey of 103 Turkish firms, empirical results show that a commitment-based HR system has a positive effect on process, organizational and marketing innovation activities. Furthermore, a commitment-based HR system mainly affects organizational innovation activities and shows that these innovation activities are the core drivers of process and marketing innovation activities, leading to higher rate of product innovation activities. Subsequently, product innovation activities enhance firm innovation performance, emphasizing their determinant role.     

The emergence of bifurcation bias from unbalanced families: Examining HR practices in the family firm using circumplex theory

Family firm human resource (HR) research focuses largely on examining differences in HR practices between family and nonfamily firms or between family and nonfamily employees within family firms. Few studies, however, attempt to explain why these differences emerge. We offer insight into the source of heterogeneous HR practices by investigating attributes of the owning family. We integrate a primary family science perspective, circumplex theory, to describe how an unbalanced family structure leads to unbalanced HR systems in the family firm. An unbalanced HR system is depicted as a form of bifurcation bias, or the asymmetric treatment of family and nonfamily employees via the family firm's HR practices. By integrating and extending circumplex theory into the family firm, insight is offered into how the structure of the family system influences the structure of the family business HR system, thus impacting firm outcomes. Implications for both scholars and practitioners are offered.     

HRM professionals and their perceptions of HRM and firm performance in the Philippines

This paper reports the findings of a study conducted in the Philippines that examines the extent of adoption of human capital-enhancing human resource (HR) and industrial relations (IR) practices. Differences between locally owned and other organizations in these practices and their relationship to firm performance were also investigated. Questionnaire responses were obtained from managers and union representatives from 128 organizations located in the Philippines. The results indicated that there was, on average, a fairly high level of adoption of practices consistent with a strategic approach to human resource management (HRM), with foreign-owned firms tending to show a slightly higher level of adoption of such practices. A scale representing the adoption of a more conciliatory and union-friendly IR approach was found to be a significant predictor of perceived firm performance. Surprisingly, the level of strategic integration between HRM and business planning and most human capital-enhancing HR practices were not significant predictors of perceived firm performance. Research and practical implications in relation to the role of HRM in enhancing firm performance are discussed.     

Strategic Staffing and Small‐Firm Performance

Although staffing can be a critical determinant of whether small businesses succeed or fail, there has been less research in this area than might be expected, given the large numbers of such firms. While there has been some research on specific recruiting and selection practices, there has been little attention to the strategic aspects of staffing. We investigated relationships between strategic approaches to staffing and small‐firm performance using lagged survey data from 139 founders and owners of small firms. Results indicate that recruiting approaches imitating the practices (processes) of larger businesses are positively related to a perceptual measure of firm performance. Selection approaches stressing a growth orientation are also positively related to firm performance. Finally, founders’ and owners’ perceptions of the strategic importance of human resources moderate the relationship of firm performance with imitative recruiting practices as well as with growth‐oriented selection practices. An important contribution of this article is that contextual knowledge facilitates our understanding of the performance implications of staffing practices in small firms. © 2015 Wiley Periodicals, Inc.     

HR practices and New Zealand firm performance: what matters and who does it?

We examine the impact of human resource practices, especially those considered as parts of high performance work systems, on firm performance. The analysis is unique in using data from an economy-wide official survey to determine whether firms that adopt high performance HR practices perform better than their rivals. We find that adoption of a suite of high performance practices (and adoption of specific practices pertaining to staff training and performance pay) has a causal impact on firm outcomes. The strength of the relationships differs by firm size and age. Firms that adopt high performance practices are predominantly young and in high-tech related sectors.     

The role of strategic HR practices in organisational effectiveness: an empirical investigation in the country of Jordan

This study responds to the call of researchers, and is conducted in a non-western context in the country of Jordan. The study contributes to our understanding of human resource (HR) practices' impact on organisational effectiveness. The empirical analysis is based on theoretical prepositions that motivated employees through good HR practices stay longer and contribute positively to the overall financial performance of organisations. Rigorous statistical testing of the data on the population of financial firms shows that careful recruitment and selection, training and internal career opportunities have a positive impact on reducing employee turnover. Training, in particular, is found to have a strong positive impact on financial performance measured by return on assets and return on equity. Furthermore, the findings provide strong support for the direct approach in strategic HR management–performance research that a group of best HR practices will continuously and directly generate superior performance. Despite such compelling arguments, however, we did not find evidence to support the notion that a bundle of HR practices impact better on financial performance than individual HR practices. It is possible that the optimal configuration may not only be contingent on national context, but could be due to the sector and the specific characteristics of the firm.     

Environmental dynamism,human resource flexibility,and firm performance: analysis of a multi-level causal model

While strategic HRM scholars have conceptualized HR flexibility as an important source of sustainable superior firm performance in dynamic environments, the process through which HR flexibility creates value for the firm has not been empirically investigated. Based on a study of 98 manufacturing and 103 service firms from a wide array of industries in India, this paper attempts to illuminate the black box of causal linkages between environmental dynamism, flexibility of human assets, and firm level human-, operational-, and financial-outcomes by developing and testing a multi-level causal model. Evidence indicates that HR flexibility mediates the influence of environmental dynamism on firm performance and that irrespective of the nature of the industry and the degree of environmental turbulence, superior firm performance ensues when HR flexibility as actually possessed by the firm matches the environmental demands for such flexibility as perceived by the firm managers. The results also support the notion of HR value chain that postulates that HR system has direct impact on firm-level HR outcomes which are most proximal, and its effects on increasingly more distal operational- and financial-outcomes are mediated by HR outcomes. The findings of the study suggest that HR practices as a system have both direct and indirect (mediated by behavioral flexibility) effects on firm-level HR outcomes. Existence of significant direct effects signifies that HR practices play an important role as a structural mechanism in achieving superior firm performance.     

Effects of HRM practices,lean production practices and lean duration on performance

Abstract

The purpose of this research is to investigate the structural relationships between HRM practices, lean production practices, operational performance and firm performance of manufacturing firms that have implemented lean production. The data were collected from the firms operating in Sri Lanka, which fulfilled the selection criteria set for the study. Statistical techniques were used to test the hypothesized relationships. It was found that lean production practices and operational performance mediate the relationship between HRM practices and firm performance; lean duration moderates the relationship between HRM practices and lean production practices in such a way that the longer the duration, the greater would be the adoption of lean production practices. The essential contribution of the findings lie in presenting empirical data valuable for the advancement of research in HRM as well as for making decisions on people management when implementing advanced manufacturing technologies.     

Exploration,exploitation and human resource management practices in cooperative and entrepreneurial HR configurations

Human resource (HR) practices for selection, performance appraisal, performance–compensation linkage and training are found to be less formalized in entrepreneurial HR configurations (exploratory) than in cooperative HR configurations (exploitative). Although less formalization may support more flexibility and improvisation, it was found to have the disadvantage of reducing process transparency, developmental feedback, performance–compensation linkage strength and the amount of training available. These findings are consistent with theories of exploration and exploitation, with their extensions to human resource management and leadership, and the view that HR systems and practice should be varied in light of the organizational processes to which they are being applied.     

The linkage of HRM and knowledge-related performance in China's technology-intensive industries

This study examines the commitment-based and knowledge-based HR types to fully understand the role of HRM in China's technology-intensive industries. The relationships between the knowledge-based HR and commitment-based HR on firm performance were examined by using 156 firms in China's high technology industry in the Pearl River Delta area. The effects of innovation capability and workforce retention between HR and performance were also explored. The firm's innovation capability has been found to be an important determinant of firm performance. Retention has no significant impact on performance outcomes. HR plays a more important role in the growth stage of organizational life cycle. Implications for research and managerial practices are provided.     

Innovative human resource management and corporate performance in the context of economic liberalization in India

The Indian economy was forced to adopt a structural adjustment programme at the beginning of 1991. The structural adjustment programme or liberalization initiated the process of the opening up of an otherwise closed economy of India. Liberalization created a hyper-competitive environment and to respond to this turbulence, Indian organizations adopted innovative changes in their HRM practices. Current research shows that HRM practices are important for enhanced corporate performance but little has been reported on the effect of HRM practices and corporate performance in the context of economic liberalization of India. This study tries to understand the role of innovative HRM practices and specifically questions how HRM practices, such as the role of HR department, recruitment, retraining and redeployment, performance appraisal and compensation, enhance corporate performance during the change process. A multiple-respondent survey of 69 Indian organizations was undertaken to study the impact of innovative HRM practices on firm performance. The survey found that the innovative recruitment and compensation practices have a positive significant relationship with firm performance. It was observed that recruitment, the role of the HR department and compensation practices seem to be significantly changing within the Indian firms in the context of India's economic liberalization. The synergy between innovative HRM practices was not significant in enhancing corporate performance during the liberalization process.     

Social capital and innovation in family firms: The moderating roles of family control and generational involvement

Drawing on the social capital literature, we examine whether the co-existence of distinct yet interacting social groups, namely family and non-family members, creates the conditions for increased family firm innovation. In particular, we theorize that family and non-family social capital have a joint positive effect on family firm innovation and this joint effect is stronger than the single effects of family and non-family social capital. In addition, we predict that while family control has a positive moderating effect, generational involvement has a negative moderating effect on the above-mentioned relationship. With supportive empirical results, our research makes important contributions to the existing literature.