This study examined the effect of task characteristics on the relationship between human resource management (HRM) control and product innovation. Results from a survey of 209 firms support a contingency approach to innovation. When task analyzability is high, output or behavior control enhances innovation; in contrast, input control results in the opposite. These findings suggest that when number of exceptions is high, input control is the appropriate HRM approach to facilitate innovation.
The pursuit of competitive advantage has aroused a great interest among the contemporary strategic management researchers (Teece, Pisano & Shuen, 1997). Innovation is frequently cited as a base for such an advantage (Tidd, Bessant, & Pavitt, 1997). The characteristics which affect innovation in firms is therefore an important area of investigation (Foss & Harmsen, 1996).
Product innovations refer to the introduction of new products or services to meet an external market or user need. The other competing dimension is process innovation which refer to the introduction into the organization's production process or service operations of new elements that are used to produce a product or render a service (Ettlie & Reza, 1992). Due to the nature of being less observable and more difficult to implement, firms usually adopt more product innovations than process innovations (Myers & Marquis, 1969). This paper chose to study product innovation because it is critical to an organization's evolution and long term success (Capon, Parley, Lehmann & Hulbert, 1992; Miller & Friesen, 1984).
It has become a widely held premise that people provide organizations with an important source of sustainable competitive advantage (Pfeffer, 1994) and that the effective management of human capital, not physical, may be the ultimate determinant of organizational performance (Reich, 1991). Rather than focusing on particular HR practices that are used in isolation, strategic human resource management (SHRM) researchers look more broadly at bundles of HR practices that are implemented in combination. Research in SHRM has been central in shifting out attention toward firmlevel issues related to managing people. One of the popular theoretical models used in the SHRM literature is the behavioral perspective (Jackson, Schuler, and Rivero, 1989; Schuler and Jackson, 1987). The theory focuses on employee behavior as the mediator between strategy and firm performance. It assumes that the purpose of various HRM practices is to elicit and control employee attitudes and behaviors.
Since HRM practices comprise the principal methods used to regulate performance, as a set, they manifest control. A control perspective is, as already stated, consistent with behavioral perspective and, therefore, used in this study to integrate HRM practices. Following the work of Snell (1992) and Snell and Youndt (1995), this study focused exclusively on bureaucratic mechanisms. This focus restricted the attention to formal human resource management practices such as staffing, training, performance appraisal, and rewards. Rather than examining particular HRM practices in isolation, this study combined them into control systems. These HRM practices can be combined into three types of control systems: behavior, output, and input control.
Though human resource activities are frequently acknowledged to play a central role in linking employee capabilities with the performance requirements of a firm, the moderating effect of contingency is still open to debate. One of the major factors is task characteristics that can be characterized by technology type as routine and nonroutine (Perrow, 1967). Perrow (1967) argued that control and coordination methods should vary with technology type. Technology is the action that an individual performs upon an object, with or without the aid of tools or mechanical devices, in order to make some change in that object (Perrow, 1967). …