Management Philosophy: An Internal Boundary Condition to Hpws-Sme Performance Nexus in Nigeria

By Ismail, Abdussalaam Iyanda; Abdul-Majid, Abdul-Halim et al. | Academy of Strategic Management Journal, January 1, 2017 | Go to article overview

Management Philosophy: An Internal Boundary Condition to Hpws-Sme Performance Nexus in Nigeria


Ismail, Abdussalaam Iyanda, Abdul-Majid, Abdul-Halim, Joarder, Mohd Hasanur Raihan, Academy of Strategic Management Journal


INTRODUCTION

It is common-knowledge that proliferation of well-oiled and well-off firms, the firms with competitive advantage and enhanced performance, would metamorphose in to enhanced and better national socio-economic development. Likewise, the context within which organizations operate can precipitate success or failure of such organizations. These, coupled with the fact that new streams of research have identified strategic human resource management as a basis for competitive advantage (Bamberger & Meshoulam, 2000), enhanced performance (Seidu, 2011) and the attendant nation's development (Bida, Abdul-Halim & Ismail, 2016), underscore the need for a context-specific and SHRM-based research model that would explicate robust contributory role played by high-performance work system (HPWS) in guaranteeing firms' competitive advantage and enhancing optimal firm performance.

Thus, the current research is based on effect of HPWS on SME performance. Researching Small and Medium Enterprises (SMEs) in this very period is indispensable, given that SMEs has become a mainstay of the world economic growth and has played crucial roles in nations' economic development, industrial development, job creation cum poverty reduction (International Finance Corporation (IFC), 2013; Mahmood & Hanafi, 2013).

Research efforts to substantiate that HPWS precipitates competitive advantage and enhanced performance began in the 1990s (Arthur, 1994; Huselid, 1995) and quite numbers of empirical research have emerged as a result. Human resources and its management form an indispensable part of the whole of competitive advantage (Allen & Wright, 2007). Strategic HR that enhances task, targets and performance are formed through the effective adoption of HPWS. Moreover, competitive advantage of an organization over another is connected with improvement in technical competencies, productivity and organizational performance via the instrumentality of human resources which are equipped with the required skills, knowledge and competencies needed for the execution of organizational strategy and planning (Fu, 2013; Ismail, Abdul-Halim & Joarder, 2015).

In the same vein, Mason, Bauer & Erdogan (2010) opined that enhanced organizational performance is contingent upon HPWS that connote a systematic bundle of high performance work practices (HPWPs), called HR architectures/practices, because systems or bundles of HPWPs are more influential than individual practices (Fan et al., 2014; Shin & Konrad, 2014). This might have informed the cautionary assertion made by Boxall, Guthrie & Paauwe (2016) in the editorial introduction to Human Resource Management Journal's special issue entitled "progressing our understanding of the mediating variables linking HRM, employee well-being and organizational performance", The scholars assert that researchers should take caution against measuring HRM by just putting up some HR architectures (i.e. HR practices) into a unitary index. Bundling of HPWS should be in a cost-effective manner which represents contextualization. In other word, HRM should be measured based on contexts of the study.

In addressing this, Ismail et al. (2016b) posited that configuration of HPWS is manysided but it should be context-specific. Moreover, HPWS should be employee-oriented for it to precipitate higher SME performance (Ismail et al., 2016a). Considering this explication, HPWS in this research would involve HPWPs that are context-specific and employee-oriented. Thus, HPWPs are job design/autonomy, non-financial reward, pay-for performance, employee participation and communication and training and development. This composition of HPWS is a blend of 'best practices', broads and peripherals of HR architectures and it is consistent with HPWS studies such as (Ismail et al., 2016a; Ismail et al., 2016b; Posthuma et al., 2013; Zakaria, 2013) and the host of others. This selection also supports AMO HRM model which proposed that HRM architectures are poised to play three roles. …

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