Information technology and firm performance: mediation role of absorptive capacity and corporate entrepreneurship in manufacturing SMEs

ABSTRACT

The success of small and medium-sized enterprises (SMEs) depends on dynamic capabilities, as it provides opportunities to remain competitive and perform well in the dynamic business environment. Although several studies show the significant positive impacts of dynamic capabilities on firm performance, our knowledge of the underlying mechanism through which IT capabilities affect the firm performance is not yet clear. Applying the dynamic capability view, this study investigates the intervening role of absorptive capacity and corporate entrepreneurship. The data of 417 respondents is collected from medium-sized manufacturing sector SMEs in Punjab, Pakistan. The research hypotheses have been analysed through the structural equation modelling method by using the Smart-PLS software. The research findings show that absorptive capacity and corporate entrepreneurship partially mediates the relationship between IT capabilities and firm performance. Furthermore, the sequential path of IT technical skills, absorptive capacity, corporate entrepreneurship, and firm performance is highly significant as compared to other paths.     

Examining cross-cultural compatibility of high performance work practices

This paper examines the relationship between high performance work practices (HPWPs) and cross-cultural dimensions to debate the effectiveness of HPWPs in cross-cultural settings. Using systematic review, 140 articles were identified on HPWPs and cross-cultural human resource management. Synthesizing the two literature areas results in four key findings. Many HR practices labelled as HPWPs are affected by national cultural dimensions. Also, several practices labelled as HPWPs have not been a part of the cross-cultural HR literature, and that limited studies in both area focus on the impact of cultural compatibility on outcomes. Finally, a few selected cultural dimensions have dominated the cross-cultural HR literature. Thus, more work is needed to: understand the role of national culture on effectiveness of HPWPs; increase coverage of HPWPs in the cross-cultural HR literature; understand the impact of cultural compatibility of HR practices and HPWPs on outcomes; and, incorporate additional cultural dimensions in future work.