High-Performance Human Resource Practices and Firm Performance: Mediating Effect of Corporate Entrepreneurship

Abstract

Corporate entrepreneurship (CE) positively affects growth and profitability of organizations by providing competitive advantage over innovation driven technological transformations and intense global competition. CE activities have an elevator role on company performance via adoption of a change-oriented structure and development of new products, processes and services. High performance human resource practices (HPHRPs) help to boost both intra-firm level entrepreneurial behavior, and also organizational outcomes. When combined with the influential effect of corporate entrepreneurship activities, HPHRPs support achievement of better organizational performance. In this study, a selected group of HPHRPs was assessed for their possible direct and indirect effects on firm performance. Moreover, the possible mediation effect of CE activities in this relationship was examined. To test the hypotheses of the study, the data were gathered from a total of 199 manufacturing and service sector companies operating in Turkish business environment. As a result of the structural equation modeling analysis conducted by AMOS, the mediation effect of CE activities between HPHRPs and firm performance was validated within the context of the current study. In addition, the results indicated a varying relationship between different HPHRPs and CE activities. Explicitly, training, clear job description, participation opportunities, employer's employment commitment, reward and performance evaluation practices were found to have distinctive effects on innovation, new business venturing and self renewal activities, which act as mediating variables between the selected HPHRPs and firm performance.