A strategic human resource perspective of firm competitive behavior

Embedded within firms are unique stores of intangible human assets that likely influence the way firms compete. We argue that the human and social capital of a firm, particularly at the upper echelon and board of director (BOD) levels, contribute to the firm's awareness of the competitive environment and its motivation and ability to undertake numerous, complex, and forceful competitive actions. We also suggest that the firm's executive compensation systems moderate the effects of these intangible human assets on firm competitive behavior. By examining how human capital, intra-firm social capital, and executive compensation influence firm competitive behavior, we advance a strategic HRM perspective of firm competitive behavior and outline several implications for future research.     

Strategic human resource management,human capital and competitive advantage: is the field going in circles?

The resource‐based view (RBV) of the firm has been consistently used as a backdrop in strategic human resource management (SHRM) research and has the potential to bridge the ‘micro–macro’ divide. The tension between the SHRM and the strategic human capital literature, however, signifies that RBV has not reached its potential. In this paper, we begin with a brief review of the conceptual logic linking human resource management (HRM) practices and firm outcomes that aim at highlighting the different treatment of RBV in the SHRM and strategic human capital literatures. We then propose a conceptual model that suggests that HRM practices are not simple levers that enable firms to create sustainable competitive advantage, as most of the strategic human capital research postulates. On the contrary, we argue that HRM practices can contribute to a firm's sustainable competitive advantage not only by enhancing employees' ability, and offering motivation and opportunities, but also by shaping supply‐side and demand‐side mobility constraints.     

The role of HRM and social capital configuration for knowledge sharing in post-M&A integration: a framework for future empirical investigation

The literature on human resource management (HRM) indicates that HRM plays an important role in merger and acquisition (M&A) integration success, but pays little attention to the mechanisms for knowledge sharing in post-M&A integration. Limited work has been carried out to provide understanding on how social capital and HRM practices influence intra-organizational knowledge sharing in M&A integration. This paper primarily focuses on the phenomenon of social capital and HRM practices – one of the primary means by which knowledge sharing can occur within firms. The main aim of this paper is to provide an alternative framework that introduces the literature on HRM and social capital to discuss how HRM practices and the various dimensions of social capital may enhance knowledge sharing in post-M&A integration. Drawing on the literature on social capital and HRM, we offer an alternative view on the issue of knowledge sharing in M&A integration by explaining how specific HRM practices that have an impact on employees’ knowledge, skills and abilities for participating in knowledge sharing activities may depend on relational, cognitive and structural social capital. We isolate a number of HRM practices and social capital variables that may enhance knowledge sharing in post-M&A integration, and develop a research model and propositions for future empirical investigation.     

Human capital enhancing HRM systems and frontline employees in Australian manufacturing SMEs

The current study seeks to answer a number of key questions concerning the strategic management of frontline employees (e.g. individuals who do not occupy an executive, managerial or supervisory role in functions such as production, maintenance, service and clerical functions) and their contributions towards the performance of small- and medium-sized manufacturing firms in Australia. This study adopts a human capital perspective to examine the employee and organisational performance of small and medium enterprises (SMEs) in Australia. We were also interested in seeking to examine the presence of the human resource management (HRM) function of SMEs in Australia and their contribution towards employee and firm performance. Findings from the partial least square analysis identified the antecedents and consequences of a human capital enhancing (HCE) approach for the strategic HRM of frontline employees in Australia's manufacturing industry. Strategic orientations of small- and medium-sized manufacturing firms mediate the contribution of the HRM function in adopting a set of HCE HRM systems. HCE HRM system was found to have a direct and indirect impact on manufacturing performance outcomes. Frontline employees' performance was found to mediate the impact of HCE HRM system on manufacturing performance outcomes. Theoretical and practical implications are discussed in relation to the management of frontline employees in enhancing perceived employee and manufacturing performance.     

Interrelationships between human capital,HRM and innovation in Belgian start-ups aiming at an innovation strategy

Research on the impact of human resource management (HRM) on firm performance has increased since the end of the nineties. Despite the pile of studies and results, critical assessments of this literature stream point to several empirical and theoretical gaps. We focus on two empirical gaps. First, there is a lack of attention to innovation as a measure of firm performance outcome. Most articles use financial (e.g., return on assets (ROA)), organisational (e.g., productivity) and employee related (e.g., commitment) performance measures. Yet, Western knowledge economies consider innovation to be a driving force of economic growth, and international competitive advantage. Moreover, innovation is a function of a firm's ability to create, manage and maintain knowledge. Because knowledge is created by and stored within individuals, human resources as well as HRM may play an important role as drivers of innovation. Second, HRM is considered to be a large company phenomenon. Yet, small businesses provide a great environment to study the HRM-performance relationship because of their transparent nature and the small distance between an individual's and a company's performance. Next, human resources and HRM are crucial to small businesses because they have less tolerance for inefficiency. We examine a sample of small start-ups that aim for an innovation strategy, but are not necessarily successful in terms of innovative output. We expect start-ups with superior human resources and HRM to produce more innovative output. The results show that both human capital (of owners/managers and employees) and HRM are important determinants of innovation in start-ups.     

How and when matter: Exploring the interaction effects of high‐performance work systems,employee participation,and human capital on organizational innovation

Existing research on the relationship between high‐performance work systems (HPWS) and organizational innovation has paid insufficient attention to the boundary effects of employee participation and human capital. Bridging the human resource management (HRM) and employment relations literature, this study contributes to the contingency view of HRM and China‐specific research by investigating how human capital and employee participation, direct voice mechanism, and corporate governance participation jointly moderate the relationship between HPWS and organizational innovation. We test our three‐way interaction model using a sample of 108 firms and 1,250 employees in China. The results suggest that HPWS are positively associated with organizational innovation when employees with relatively less human capital are coupled with more direct voice mechanism or less corporate governance participation. In contrast, HPWS are negatively related to organizational innovation when employees possessing greater human capital are coupled with more direct voice mechanism. The theoretical and managerial implications and future research directions are discussed.     

Human resource management and organizational performance of small and medium enterprises (SMEs) in Nigeria

The link between human resource management (HRM) and firm performance of organizations has received significant research attention, generally focused on large firms from developed countries to the omission of studies focused on small and medium enterprises (SMEs) and those from developing countries. This study partially addresses this gap in the literature. We investigated the relationship between HRM practices and the financial (FIN) and non-financial performance (NONFIN) of SMEs in Nigeria. A survey design with 236 respondents was used to test the hypotheses. Multiple regression results showed that human capital development and occupational health and safety had a direct relationship with NONFIN, and employee performance management and NONFIN on FIN performance. HRM practices as a group accounted for 16% of the variance in NONFIN and 12% of the variance in FIN. Regression analyses controlled for size and age of the firm. This study partially supports a model of positive relationships between certain HRM practices and firm performance.     

Firm Productivity Moderated Link Between Human Capital and Compensation: The Significance of Task‐Specific Human Capital

The human capital of a firm as manifested by employee knowledge and experience represents a key resource of a firm's capabilities. Prior empirical studies have found that firms composed of high levels of human capital experience superior firm performance. Human capital theory proposes that an individual's general or firm‐specific human capital is positively related to compensation. However, empirical studies examining firm‐specific human capital's association with higher employee compensation have been inconclusive. The current study proposes that firm‐specific human capital be categorized as task‐specific and non‐task‐specific. Employees accumulate task‐specific human capital through duties conducted in their current position. Non‐task‐specific human capital represents experiences gained in prior positions to an employee's current job within the firm. Utilizing human capital data from 38,390 employees representing 76 firms in the IT sector, this study examines the association between forms of human capital and employee compensation at different levels of firm productivity. Results show that task‐specific human capital is associated with higher employee compensation. In addition, firm productivity moderates this association.     

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.     

Dynamizing human resources: An integrative review of SHRM and dynamic capabilities research

Human resource management (HRM) systems have been extensively analyzed in academic research yet limited attention has been paid to the role of HRM dynamic capabilities (DC) and their impact on resources and practices, employee well-being and firm performance. Our study bridges this gap by defining a new categorization of HRM DC based on their ultimate aims: building knowledge, advancing social integration and developing reconfiguration-enhancing mechanisms. In parallel, we offer an integrative framework to shed light on how strategic human resource management (SHRM) can accelerate HRM DC development. Through this conceptual process model and typology of capabilities, we deepen the discussion around the core components of HRM systems, HRM DC, and their effects on resources and practices, employee well-being and performance. In practical terms, HRM DC represent a promising driver of sustainable long-term organizational growth by enabling firms to boost their strategic agility and capacity to navigate in the presence of environmental dynamism.     

Is synergy always good? Clarifying the effect of innovation capital and customer capital on firm performance in two contexts

The resource-based view (RBV) posits that a firm can leverage the effect of existing capital on firm performance via capital configuration, complementarity, and integration, but little empirical research has addressed these issues. This study investigates the effects of innovation capital and customer capital on firm performance, whether their complementary interactions are important determinants of relative firm performance within the industry, and whether these effects considerably differ significantly between high- and low-technology manufacturing firms. Based on data collected from 312 high-technology manufacturing firms and 204 low-technology manufacturing firms in the Taiwanese manufacturing industry, the results of SEM analyses demonstrate that the main effects of both innovation and customer capital significantly and positively impact firm performance. The analytical results demonstrate that: (1) a significant interaction effect only exists in the high-technology manufacturing firms; (2) the main effect of customer capital is lower among high-technology manufacturing firms; (3) the main effect of innovation capital is the same for both high- and low-technology manufacturing firms. Additionally, this investigation also discusses the limitations of the current research, future research directions, and the theoretical and practical implications of the empirical analysis.     

HRM and performance—The role of talent management as a transmission mechanism in an emerging market context

This paper investigates the link between HRM practices, talent management (TM), and firm performance and examines the role of HRM/business strategy alignment in an emerging market context. Through survey evidence gathered from 198 respondent firms, this study shows that TM, when focused on a series of practices aimed at developing workforce networks and social capital, is a key transmission mechanism mediating the relationship between HRM and firm performance. HRM strategy and business strategy alignment increases these performance impacts but is not an essential component in the HRM‐TM‐performance link.     

Do employees reciprocate to intra-firm trainings? An analysis of absenteeism and turnover rates

This article contributes to the debate on the link between reciprocal motives of employees and HRM practices by studying the behavioral effects of intra-firm trainings on absence behavior and turnover probability. We apply the gift-exchange framework and offer a behavioral perspective that helps to explain why firms invest in trainings that provide mainly general skills. We argue that employees may reciprocate the gift of firm-sponsored training with higher levels of costly effort or commitment. We employ a stringent methodological approach based on panel data of a large multinational firm and find that, in contrast to human capital predictions, general trainings lead to a decrease in turnover rates. Most notably, we find the strongest effect for employees with the lowest levels of firm tenure. This is a quite novel result as this group should face the lowest separation costs, for instance, due to the accumulation of firm-specific human capital. Hence, intra-firm trainings are an important retention device, especially for newly or recently hired employees. Furthermore, a short-term decrease in absenteeism indicates a temporary, reciprocal reaction by employees.     

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.     

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.     

The impact of human resource management practices and corporate entrepreneurship on firm performance: evidence from Turkish firms

This paper outlines the important role of human resource management practices with a link between corporate entrepreneurship and firm performance. Data were collected from a survey of 124 firms operating in different industries in Turkey. The findings of this study indicated that human resource management (HRM) practices partially mediated the relationship between corporate entrepreneurship and firm performance. In other words, corporate entrepreneurship affects firm performance, both directly and through its effects on HRM practices. In addition to corporate entrepreneurship, it is found that HRM practices explain a significant level of additional variance (9 per cent) in firm performance. The theoretical and managerial implications are discussed.     

Knowledge capital,CEO power,and firm value: Evidence from the IT industry

Disruptive innovation dramatically changes the demand of a product market in the information technology (IT) industry. In response to the impact of disruptive innovation, IT firms that may be eliminated from the competitive race actively develop innovative products and adjust their operating strategies to strengthen their survivability in the fiercely competitive market. Thus, this study explores the factors that affect firm value in the IT industry under the impact of disruptive innovation. The empirical results reveal that knowledge capital and CEO power play crucial roles in explaining firm value. IT firms with powerful CEOs and increased knowledge capital have high firm values. The effects of knowledge capital and CEO power on firm value are especially significant for founder and duality CEO firms. Furthermore, the influence of CEO power is more prominent in periods of financial crisis.     

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.     

Learning capabilities,human resource management innovation and competitive advantage

The growing literature on innovation pays limited attention to the role of human resource management (HRM) innovation in creating competitive advantage. This paper adopts a knowledge-based approach to examine how firms design and implement HRM innovations (HRMIs) and how such innovations support competitive advantage. Drawing from multiple streams of literature and qualitative evidence from Australian manufacturing and service firms, our findings reveal that human resource (HR) functional-level learning capabilities, through which HR professionals build and nurture new knowledge configurations, facilitate the design and implementation of HRMIs. The findings also reveal that HRMIs, when coupled with top management support, can play a vital role in firm competitive advantage. Addressing the limitations of the term radical innovations to fully capture HRMIs and based on our findings and extant literature we propose a new classification that will capture the unique nature of HRMIs. In addition to contributing to theory, our paper provides valuable insights to practitioners for building and nurturing learning capabilities for HRMI-related competitive advantage.