Strategic integration of HRM and firm performance in a changing environment in China: the impact of organisational effectiveness as a mediator

In the context of dramatic changes in China, this paper investigates the role of organisational effectiveness as a mediator in the relationship between the strategic integration of human resource management (HRM) and firm financial performance. Our study is based on the survey responses of 618 managers in state-owned and private (domestic and foreign-invested) enterprises in China. While most studies of the linkage between HRM practices and firm performance in China have measured firm financial performance or used an ad hoc combination of financial and non-financial indicators, we argue for a distinction to be made between non-financial organisational effectiveness and financial performance. As hypothesised, controlling for sector (state-owned vs. private), we find positive relationships between perceived changing business environment and strategic integration of HRM, and between strategic integration of HRM and organisational effectiveness. Our research adds an important conceptual link by showing that organisational effectiveness plays an important role as a mediator in the HRM and firm financial performance relationship and reinforces the importance of the organisational and environmental context for HRM.     

Green human resource management and the enablers of green organisational culture: Enhancing a firm's environmental performance for sustainable development

Scholars have shown that green human resource management (GHRM) practices enhance a firm's environmental performance. However, existing studies fail to explain how GHRM initiatives can enable a green organisational culture or how such a culture affects the environmental performance and sustainable development of the firm. This paper examines the relationship between GHRM practices, the enablers of green organisational culture, and a firm's environmental performance. We conduct a large‐scale survey of 204 employees at Chinese manufacturing firms. Our findings suggest that proenvironmental HRM practices including hiring, training, appraisal, and incentivisation support the development of the enablers of green organisational culture. We suggest the key enablers of green organisational culture include leadership emphasis, message credibility, peer involvement, and employee empowerment. Our paper contributes to HRM theory in terms of originality and utility of research by explaining that the enablers of green organisational culture positively mediate the relationship between GHRM practices and environmental performance. Managers are provided with a detailed understanding of the GHRM practices needed to enable an organisational culture of environmentally aware employees. Finally, we address potential implications of this work for teaching green organisational culture to future generations of responsible managers.     

Standardize or Customize: The Interactive Effects of HRM and Environment Uncertainty on MNC Subsidiary Performance

This study examines the impact of customizing (as opposed to standardizing) human resource management (HRM) practices on subsidiary performance in multinational corporations (MNCs). We examine how this relationship is influenced by environmental uncertainty. Hypotheses were tested using data from 92 subsidiaries of a large MNC operating in 27 countries. The results showed an interactive relationship between the customization of HRM practices and subsidiary environmental uncertainty on both financial (net profit) and nonfinancial (customer satisfaction) objective measures of subsidiary performance. The results of this study provide important empirical insights for researchers and practitioners into how HRM can be best configured to drive multiple performance outcomes for MNC subsidiaries. © 2014 Wiley Periodicals, Inc.     

Theoretical implications from the case of performance-based human resource management practices in Japan: management fashion,institutionalization and strategic human resource management perspectives

In Japan, a new type of human resource management (HRM) practices called ‘performance-based HRM practices’ (seika-shugi in Japanese) emerged in the 1990s, and has been adopted by many Japanese firms. In this paper, I illustrate how these type of practices emerged as a management fashion, diffused across a large number of Japanese firms, and became institutionalized in the Japanese business context; and discuss the relationship between performance-based HRM practices and firm performance. This illustration is used to develop a theoretical framework to better understand the relationship between HRM practices and firm performance by integrating theories of management fashions, institutionalization and strategic HRM. Suggestions for future research are also discussed.     

A theory of the firm's demand for HRM practices

Empirical data are presented that reveal a large variation in the pattern of HRM practice adoption across firms. The paper then develops an economics-based theory that explains this pattern. The model broadens the HRM concept; models the linkage between HRM practices and firm performance (the ‘black box’); generates an HRM input demand function and demand curve; formalizes the concept of strategic HRM; suggests a new empirical tool for HRM research; generates new hypotheses and insights on the nature of the HRM–firm performance relationship; suggests that existing theories of the HRM–firm performance relationship are seriously mis-specified; and posits that on theoretical grounds the effect of more HRM on firm performance in long-run competitive equilibrium is not positive but zero.     

Managing human resources in dynamic environments to create value: role of HR options

HR options as firm investments in human assets in uncertain environments to create the capability to flexibly respond to future contingent events have been recognised as valuable. However, the black box of causal interlinkages between environmental uncertainties, HR options and firm performance is yet to be explored in strategic HRM literature. Based on the data obtained from 108 IT software firms in India, this study empirically explores these linkages using a multi-level causal model. The results suggest that the use of HR options positively mediates the effects of environmental uncertainties on firm performance. The mediating influences of different types of HR options, used by the firms to manage various types of uncertainties affecting their human assets, on the operational and the financial performance of the firms are found to be different. Implications of findings of the study for managing investments in human assets under uncertainty have been discussed.     

A Knowledge Accessing Theory of Strategic Alliances

ABSTRACT The emerging knowledge‐based view of the firm offers new insight into the causes and management of interfirm alliances. However, the development of an effective knowledge‐based theory of alliance formation has been inhibited by a simplistic view of alliances as vehicles for organizational learning in which strategic alliances have presumed to be motivated by firms’ desire to acquire knowledge from one another. We argue that the primary advantage of alliances over both firms and markets is in accessing rather than acquiring knowledge. Building upon the distinction between the knowledge generation (‘exploration’) and knowledge application (‘exploitation’), we show that alliances contribute to the efficiency in the application of knowledge; first, by improving the efficiency with which knowledge is integrated into the production of complex goods and services, and second, by increasing the efficiency with which knowledge is utilized. These static efficiency advantages of alliances are enhanced where there is uncertainty over future knowledge requirements and where new products offer early‐mover advantages. Compared with alternative learning‐based approaches to alliance formation, our proposed knowledge‐accessing theory of alliances offers the advantages of greater theoretical rigour and consistency with general trends in alliance activity and corporate strategy.     

Actions speak louder than words: how employees mind the implementation gap

Abstract

Integral to employees’ working lives are the HR policies and more importantly, the practices that follow those and their implementation, which employees experience directly. To date, research on HR implementation considers how HRM is ‘done to’ employees by management and therefore ignores the agency of individuals to shape how HRM is ‘done to them’. Taking the perspective of employees, in a qualitative study of female lawyers, this paper examines employees’ roles in shaping HR implementation, addressing a lack of understanding about the role of ‘others’ in the process. Drawing on the concept of social power, the article focuses on the implementation of agile working practices within UK-based law firms. It finds that despite lacking legitimate position power to influence processes, employees draw on a variety of other power sources (e.g. referent, information, coercive) and tactics (e.g. leveraging membership of professional networks) in order to influence their working environment with respect to HR policy and practice, particularly in response to perceived implementation gaps. The current study underlines that employees may be integral to bridging the gap between policy and practice and therefore to ensuring the link between HRM and organisational performance. It also proposes that behavioural responses to HR practices should be considered in future theorising of the HRM-performance relationship.     

Mind the gap: the role of HRM in creating,capturing and leveraging rare knowledge in hostile environments

Abstract

Multinational enterprises (MNEs) have increasingly entered markets in less developed regions of the world afflicted with weak institutions and political conflict. Some are characterised by ‘extreme’ cases of institutional voids and terrorism, creating a hostile environment for the organisation and its people. This in-depth qualitative study of a service company, a European telecommunications joint venture in Afghanistan, seeks to shed light and build theory on the human resource management (HRM) dimension of managerial learning and knowledge acquisition in hostile environments, as part of the MNE’s organisational learning process. Specifically, we investigate how knowledge gaps can be addressed through supportive HR practices, and how knowledge classified as ‘rare’ can be captured and leveraged through HR interventions such as debriefing. We stipulate that HR practices and interventions adapted to hostile environments, together with expatriate willingness to learn and share new knowledge, play a critical role in the creation, capturing and leveraging of rare knowledge for subsequent use by the MNE in other hostile locations. The study has implications for international HRM and organisational resilience, under the proposition that competitive advantage can be gained through exploitation of rare knowledge acquired in hostile environments.     

Lost in translation: exploring the link between HRM and performance in healthcare

Using data collected in 2004 from 132 Victorian (Australia) public healthcare providers, comprising metropolitan and regional hospital networks, rural hospitals and community health centres, we investigated the perceptions of HRM from the experiences of chief executive officers, HR directors and other senior managers. We found some evidence that managers in healthcare organisations reported different perceptions of strategic HRM and a limited focus on collection and linking of HR performance data with organisational performance management processes. Using multiple moderator regression and multivariate analysis of variance, significant differences were found in perceptions of strategic HRM and HR priorities between chief executive officers, HR directors and other senior managers in the large organisations. This suggested that the strategic human management paradigm is ‘lost in translation’, particularly in large organisations, and consequently opportunities to understand and develop the link between people management practices and improved organisational outcomes may be missed. There is some support for the relationship between strategic HRM and improved organisational outcomes. Implications of these findings are drawn for managerial practice.     

HRM in dynamic environments: Exploitative,exploratory, and ambidextrous HR architectures

Abstract

The current economic crisis has brought to the fore the need for firms to deal with ambiguity and complexity. Hence, firms need a specific balance between exploration and exploitation in order to keep pace with varying and changing environmental conditions. Hitherto, there is limited research that has examined the nexus of HR architectures, ambidexterity, and environmental dynamics. In this conceptual paper we ask: How do HR architectures serve as a means of balancing exploitative and exploratory learning in different dynamic environments? We explain how exploratory, exploitative, and ambidextrous HR architectures with their embedded HRM systems on the business unit level enable organizations to meet different environmental requirements. Thus, firms in which heterogeneous demands for flexibility and for innovation co-exist need to develop internally differentiated HR architectures. In particular, we elucidate how critical the organization’s ability is to connect different HRM systems to create an ambidextrous HR architecture to find an appropriate balance between exploration and exploitation.     

The Strategic Hrm Debate and the Resource-Based View of the Firm

This article examines the implications of the resource-based view of the firm for the theory of strategic HRM. the resource-based view points to the sources of human resource advantage in building organisational capability. In this way, it helps us to identify the various ways in which HRM contributes to the strategic management of the firm. More work must be done, however, to relate resource-based concepts to important premises in employment relations theory. While our existing research base suggests that it will be possible to identify particular firms in any industry and economy which have built human resource advantage, the article argues that comparative research will continue to show important national differences which affect the competitiveness of firms.     

Choosing strategic responses to address emerging environmental regulations: size,perceived influence and uncertainty

How companies respond to impending regulations is a significant aspect of corporate strategy. Regulations, especially environmental regulations, are expanding quickly and increasingly important to firm success. The threat of impending environmental regulation forces companies to choose levels of strategic responses on a continuum from passive to active. Using practitioner oriented research and existing theoretical models of corporate response, this study finds that the type of strategic response is negatively related to size, positively related to state uncertainty and negatively related to effect/response uncertainty. Based on existing literature and the results of this study, the paper suggests that simplifying the uncertainty construct could lead to more definitive findings in future research. The study results also suggest that a curvilinear relationship may exist between managerial perception of influence and level of strategic response. Most importantly, the findings could have a significant impact on firm decision making regarding environmental investments. For example, it is hoped that firms will be able to use the findings of this study to further understand and anticipate their competitors' decisions. Practitioners may also benefit from the conclusions on uncertainty in that they may be able to more cleanly parse the types of uncertainty immersed in impending environmental regulations. Finally, firms may be better able to understand decisions by their own managers and their competitors' managers in terms of their perceived influence over the regulatory process. Copyright © 2007 John Wiley & Sons, Ltd and ERP Environment.     

Organizational capacity for change and firm performance in a transition economy

This study explored some human resource and human systems' aspects of the competitive dynamics for firms attempting to survive and prosper within Russia, a highly volatile transition economy. Overall, this study adds to our understanding of international strategic human resource management, dynamic capabilities, and the generation of competitive advantage within transition economies.

We found that a relatively new construct derived from the dynamic capabilities and organizational change literatures, known as ‘organizational capacity for change,’ is positively associated with firm performance within a wide variety of Russian firms. Furthermore, we find that the relationship between organizational capacity for change and firm performance is stronger when there are relatively high levels of uncertainty with the task environment. Finally, we found that organizational capacity for change is an important attribute in all sizes of organizations, not just for large organizations as hypothesized.     

Impact of Environmental Performance on Firm Value for Sustainable Investment: Evidence from Large US Firms

This research examines the impact of environmental performance on firm value, applying the event study methodology to Newsweek’s ‘Green Rankings’ announcement of 2012 for large US firms. Specifically, it analyzes the impact of the absolute green score and green rank of firms on their performance in the stock market. We found that investors perceive the announcement as positive news, leading to significant positive standardized cumulative abnormal returns (SCARs). After controlling for industry‐ and firm‐specific effects, we observed that firms with repeated green rankings for enhancing environmental performance showed significantly higher SCARs than those with either reduced or unchanged environmental performance. In addition, the environmental impact score measuring environmental damage from a firm's operational activities was found to be the most influential factor in improving the firm's value. Our findings are beneficial to managers in allocating resources to different types of environmental initiative, and provide valuable insight for sustainable environmental investment. Copyright © 2014 John Wiley & Sons, Ltd and ERP Environment     

Human resource function strategic role and trade unions: exploring their impact on human resource management practices in Uruguayan firms

Organizations worldwide are confronted with different contextual constraints. Jackson and Schuler [1995, ‘Understanding Human Resource Management in the Context of Organizations and their Environments,' Annual Review of Psychology, 46, 237–264], in their classical review, highlight the importance of the impact of the internal and external organizational context on human resource management (HRM) practices. This paper uses data collected through a survey of firms located in Uruguay, in a context where HR function and trade unions have gone through significant changes, to determine their impact on the adoption of different HRM practices. The authors find that organizations with an HR function strategically involved and with higher degree of union presence have more person-centred HRM practices, while performance-centred HRM practices were positively influenced by HR function strategic role. However, the findings do not support the moderating role of trade union presence on the relationship between the HR function strategic role and HRM practices.     

Investigating effects of organisational culture and learning on environmental collaboration and performance of Korean exporting firms

This paper presents an empirical study of the effect of organisational culture and learning capability factors on environmental collaboration and performance in green supply chains. A conceptual model and variables were derived from organisational culture, learning, and collaboration theory and tested with Korean exporting firms. Learning capability was found to positively affect environmental collaboration as staff behaviour, attitudes and learning about environmental practices in a focal firm can be increased from suppliers and customers and then disseminated internally. Further, environmental collaboration was found to positively affect environmental performance due to a focal firm sharing these learned capabilities about the environment with other supply chain partners. However, organisational culture was not found to positively affect environmental collaboration. The findings suggest firms can improve environmental capabilities and performance through shared learning with supply chain partners and ensuring they are internally disseminated in the focal organisation.     

The contours of employee voice in SMEs: the importance of context

This article develops a context‐sensitive approach to analyse how and why voice operates in small‐ to medium‐sized enterprises (SMEs), an area that remains under‐theorised and under‐researched. By building on a priori frameworks with proven ability to unpack complexity and take account of the wider context of SMEs, this article explores how resources (human and social capital) and constraints (product market, labour market and strategic orientation) interact to shape voice practices. The article finds significant differences between ‘reported’ compared with ‘actual’ practices in situ, and identifies different types of firms (‘strategic market regulation’, ‘strategic market‐led’ and ‘non‐strategic market‐led’) along with the factors that influence the form and practice of voice. Overall, the article argues that researchers should further pursue research that appreciates the layered nature of ontology and the role played by firm context to explain complex organisational phenomena, if we are to advance our understanding of voice practices in SMEs and beyond.     

The role of HRM practices in product development: Contextual ambidexterity in a US MNC’s subsidiary in India

Abstract

Recent studies have started exploring the linkages between organisational ambidexterity (OA) and HRM practices. OA is noted as a critical resource in achieving product, process, and business model innovations. By adopting an inductive case study of a US MNC subsidiary in India, we found empowerment-focused HRM practices were being used for exploration of new ideas and efficiency-focused HRM practices were adopted for the exploitation of the organisation’s existing strengths. Empowerment-focused HRM practices created a culture of openness and risk-taking, which facilitated the creation of an ambidextrous context. Further, ambidextrous learning was moderated by the adoption of a managerial/leadership style that focused on ‘mirroring competencies’ between the parent operation and its subsidiary. HRM practices were aimed at developing behaviours that valued the team-based co-development of graphic processor designs by means of a ‘parallel processing’ approach to product development. Additionally, the HRM practice of offering intrinsic employee rewards and both informal and formal training facilitated OA in delivering product innovation. This study represents a pioneering exploration of multiple levels of analysis (individual, functional, and organisational) for product innovation through the lenses of ambidexterity, innovation, and HRM practices. The implications for both theory and practice are also discussed.     

Managing people across hospital networks in the UK: multiple employers and the shaping of HRM

Building on the insights from a growing number of studies on the HRM implications of inter-organisational relations, this article investigates the HR issues in two case studies of ‘best practice’, long-term collaborative working. It identifies three common challenges for HRM: (a) how to build employee commitment and identity to the partnership without putting at risk the employing organisation's goals; (b) how to establish attractive career pathways in a partnership context requiring some degree of sharing of skill standards and coordination of training provision; and (c) how to sustain partnerships in a changing policy and organisational context. The data point to inherent problems in managing employment when there is more than one employing organisation exercising influence. Differences in organisational goals and HRM approaches in hospital networks are an obstacle to long-term integration – especially in public–private arrangements where integration of goals and HRM is more difficult.