Strategic flexibility, innovative HR practices, and firm performance

Abstract

Purpose-The purpose of this paper is to examine the role of innovative HR practices as an important mechanism through which strategic flexibility affects firm performance as well as the role of female leadership in this relationship. Design/methodology/approach-Data were gathered from a sample of 113 firms in China. The authors collected information on organizational strategy, HR practices, CEO information, corporate social responsibility and other firm characteristics in terms of firm age, location, and financial performance. Conditional procedural analysis was conducted to test the model. Findings-The authors found strong evidence in support of the mediation relationship in which organizations with a strong focus on strategic flexibility are more likely to adopt Innovative HR Practices. Furthermore, the authors found that the extent to which firms have adopted innovative HR practices has a strong effect on employee productivity. In addition, the authors found that female leadership enhances strategic flexibility-performance relationship. Research limitations/implications-Information on strategic flexibility, HR practices and firm performance was collected at the same time. Future studies based on panel data would be helpful to establish the causal relationships in the model. Practical implications-The authors' findings suggest that practitioners should put more emphasis on developing innovative HR practices, as they are required by strategic flexibility. Social implications-Firms pursuing strategic flexibility should feel more confident when appointing a female CEO, because the results show that female leadership may enhance the positive impact of strategic flexibility on firm performance. Originality/value-This research study is the first empirical examination of the mediating influence of innovative HR practices on the relationship between strategic flexibility and firm performance. The study also shows that female leadership benefits an organization in implementing strategic flexibility. The results are of value to researchers, human resource management managers, employees, and executives who are seeking to develop practices that are flexible and innovative in order to stay competitive in dynamic environments.

Gaining a competitive advantage through strategic human resource management in Indonesian construction industry

“…Regarding the effect of safety culture, the findings are supported by Rechenthin (2004) and Fernández-Muñiz et al (2009). Meanwhile, the effect of human resource management practices on productivity was confirmed by Pahos and Galanaki (2018) and Xiu et al (2017) and the effect of safety culture on productivity is confirmed by Lamm et al (2007) and Tappura et al (2015). The results of this study suggest several important implications for competitive advantage in the construction industry in Indonesia.…”

A quarter‐century review of HRM in small and medium‐sized enterprises: Capturing what we know, exploring where we need to go

“…The nature of talent was a key factor contributing to the introduction of more extensive HRM with a positive impact found for a more highly skilled workforce (Bacon & Hoque, 2005; Barrett & Meyer, 2010; Wu, Bacon, & Hoque, 2014). Similarly, research finds support for strategy as a determinant of HR practices including TQM (Gil‐Marques & Moreno‐Luzon, 2013), entrepreneurial orientation (Messersmith & Wales, 2011), and strategic flexibility (Xiu et al, 2017), although as discussed previously the relationship between growth and HRM is less clear (de Kok & Uhlaner, 2001). Further variants included consideration of HR in the implementation of strategy including TQM (Chandler & McEvoy, 2000) and the human capital emphasis of strategy (Barrett & Meyer, 2010).…”

“…Research frequently controls for internal and/or external contextual variables (Tocher & Rutherford, 2009;Xiu et al, 2017), which conceals significant contextual influence (Johns, 2006). Only 11% of studies sought to provide explanation for HRM effects through consideration of mediators which included human capital, motivation, and employee voice The 24 qualitative studies generally utilized a case study approach with interviews as the main data collection tools, with the exception of two studies, one of which used structured interviews (Heilmann,…”

“…Research frequently controls for internal and/or external contextual variables (Tocher & Rutherford, 2009; Xiu et al, 2017), which conceals significant contextual influence (Johns, 2006). Only 11% of studies sought to provide explanation for HRM effects through consideration of mediators which included human capital, motivation, and employee voice (Shahzad, Arenius, Muller, Rasheed, & Bajwa, 2019), employee commitment (Lechuga Sancho et al, 2018), employee involvement and quit rates (Allen et al, 2013), employee creativity (Do & Shipton, 2019), strategic orientation (Teo et al, 2011), strategic flexibility and ambidexterity (Patel, Messersmith, & Lepak, 2013; Xiu et al, 2017), and organizational learning capability (Wan Hooi & Sing Ngui, 2014). Boundary conditions explored as moderators included sector (Hayton, 2003), demographic characteristics, HR practices, and employee outcomes (Chandler & McEvoy, 2000; Lai, Saridakis, & Johnstone, 2017; Lin, Chen, Huang, & Lu, 2014), philosophy and culture (Messersmith & Wales, 2011; Patel & Cardon, 2010; Triguero‐Sánchez, Peña‐Vinces, & Sánchez‐Apellániz, 2013), coupled with management features, for example the existence of an HR department (Chadwick & Li, 2018), formality (Lai, Saridakis, Blackburn, & Johnstone, 2016), and the nature of leadership (McClean & Collins, 2019).…”

“…Typically, this approach is employed to underpin the relationship between HRM practices and organizational performance in SMEs (Castrogiovanni, Urbano, & Loras, 2011;Chow, 2004;Razouk, 2011;Xiu, Liang, Chen, & Xu, 2017). It also is utilized to identify the main factors of formal HR practices (Newman & Sheikh, 2014), or simply as a justification to identify the nature of HRM practices in a specific context (Agarwal & Jha, 2015 Additionally, there is widespread use of universalistic HRM (Kerr, Way, & Thacker, 2007;Way, 2002), with surprisingly much less emphasis on the concept of either vertical or horizontal strategic fit (for exceptions see Samnani & Singh, 2013;Hsieh &McClean &Collins, 2019).…”