The Importance of Sectoral Differences in the Application of (Complementary) HRM Practices for Innovation Performance

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    Abstract

    Recent theoretical and empirical analysis in the field of economic organisation has focussed almost exclusively on identifying organisational practices and complementarities between such practices, invariant to the type of activity in question. However, this paper takes its point of departure in the observation from organisational theory that more knowledgeintensive production activities often involve higher degrees of strategic uncertainty for firms and performance ambiguity in relation to individual employees. Therefore, the "organic" or "clan" form of organisation — involving the application of "new" HRM practices — is expected to yield a higher outcome in terms of performance within knowledge-intensive sectors of the economy, as compared to other sectors. Moreover, knowledge-intensive activities are likely to require the utilisation of local knowledge to a higher degree than less knowledge-intensive activities. Given that the application of new HRM practices is one way of supporting such local knowledge, it should also for this reason be expected that the application of HRM practices are more effective for knowledge-intensive production activities. A sample of 726 Danish firms with more than 50 employees in manufacturing and private services is applied. The results show that HRM practices are more effective in influencing innovation performance when applied together, rather than when applied alone. In other words, organisational complementarities obtain. Moreover, it is shown that the application of (complementary) HRM practices is more effective in what is normally perceived to be more knowledge-intensive sectors as compared to less knowledge-intensive sectors.
    Original languageEnglish
    Place of PublicationFrederiksberg
    PublisherThe Link Program
    Number of pages22
    Publication statusPublished - 2001
    SeriesLINK Working Paper
    Number2001-16

    Keywords

    • Human resource management practices
    • Organisational complementarities
    • Innovation performance

    Cite this

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    abstract = "Recent theoretical and empirical analysis in the field of economic organisation has focussed almost exclusively on identifying organisational practices and complementarities between such practices, invariant to the type of activity in question. However, this paper takes its point of departure in the observation from organisational theory that more knowledgeintensive production activities often involve higher degrees of strategic uncertainty for firms and performance ambiguity in relation to individual employees. Therefore, the {"}organic{"} or {"}clan{"} form of organisation — involving the application of {"}new{"} HRM practices — is expected to yield a higher outcome in terms of performance within knowledge-intensive sectors of the economy, as compared to other sectors. Moreover, knowledge-intensive activities are likely to require the utilisation of local knowledge to a higher degree than less knowledge-intensive activities. Given that the application of new HRM practices is one way of supporting such local knowledge, it should also for this reason be expected that the application of HRM practices are more effective for knowledge-intensive production activities. A sample of 726 Danish firms with more than 50 employees in manufacturing and private services is applied. The results show that HRM practices are more effective in influencing innovation performance when applied together, rather than when applied alone. In other words, organisational complementarities obtain. Moreover, it is shown that the application of (complementary) HRM practices is more effective in what is normally perceived to be more knowledge-intensive sectors as compared to less knowledge-intensive sectors.",
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    author = "Keld Laursen",
    year = "2001",
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