Environmental dynamism, human resource flexibility and firm performance: analysis of a multi-level causal model

Ketkar, S. and Sett, P.K. 2010. Environmental dynamism, human resource flexibility and firm performance: analysis of a multi-level causal model. International Journal of Human Resource Management. 21 (8), pp. 1173-1206.

TitleEnvironmental dynamism, human resource flexibility and firm performance: analysis of a multi-level causal model
AuthorsKetkar, S. and Sett, P.K.
Abstract

While strategic HRM scholars have conceptualized HR flexibility as an important source of sustainable superior firm performance in dynamic environments, the process through which HR flexibility creates value for the firm has not been empirically investigated. Based on a study of 98 manufacturing and 103 service firms from a wide array of industries in India, this paper attempts to illuminate the black box of causal linkages between environmental dynamism, flexibility of human assets, and firm level human-, operational-, and financial-outcomes by developing and testing a multi-level causal model. Evidence indicates that HR flexibility mediates the influence of environmental dynamism on firm performance and that irrespective of the nature of the industry and the degree of environmental turbulence, superior firm performance ensues when HR flexibility as actually possessed by the firm matches the environmental demands for such flexibility as perceived by the firm managers. The results also support the notion of HR value chain that postulates that HR system has direct impact on firm-level HR outcomes which are most proximal, and its effects on increasingly more distal operational- and financial-outcomes are mediated by HR outcomes. The findings of the study suggest that HR practices as a system have both direct and indirect (mediated by behavioral flexibility) effects on firm-level HR outcomes. Existence of significant direct effects signifies that HR practices play an important role as a structural mechanism in achieving superior firm performance.

JournalInternational Journal of Human Resource Management
Journal citation21 (8), pp. 1173-1206
ISSN0958-5192
YearJun 2010
PublisherTaylor & Francis
Digital Object Identifier (DOI)doi:10.1080/09585192.2010.483841
Publication dates
PublishedJun 2010

Related outputs

Ambidextrous Human Resource Practices and Employee Performance
Ketkar, S. and Puri, R. 2017. Ambidextrous Human Resource Practices and Employee Performance. International Conference on Strategies in Volatile and Uncertain Environment for Emerging Markets. New Delhi 14 - 15 Jul 2017

HR flexibility and firm performance: analysis of a multi-level causal model
Ketkar, S. and Sett, P.K. 2009. HR flexibility and firm performance: analysis of a multi-level causal model. International Journal of Human Resource Management. 20 (5), pp. 1009-1038.

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