The Influence Of Human Resource Management Practices On Organizational Innovation : The Role Of Knowledge Management Effectiveness As A Mediator

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Date
2009
Authors
Tan, Cheng Ling
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Abstract
The purposes of this study were to: (a) examine the direct effect of a set of HRM practices and organizational innovation; and (b) investigate whether knowledge management effectiveness serves as a mediator in the above relationship. Organizational innovation was operationalized as comprising of three dimensions: product innovation, process innovation, and administrative innovation. HRM practices consist of five dimensions: performance appraisal, career management, training, reward system, and recruitment. Knowledge management effectiveness was conceptualized as comprising of knowledge acquisition effectiveness, knowledge sharing effectiveness, and knowledge application effectiveness. Four broadly hypothesized relationships were tested using a sample of 183 manufacturing firms located in six states: Selangor, Penang, lohor, Perak, Kedah, and Kuala Lumpur. Data were obtained via questionnaires. The factor analyses revealed that even though organizational innovation remains multidimensional, knowledge management effectiveness was found to be unidimensional. HRM practices were found to have five dimensions as theorized. From the analysis done using hierarchical regressions, it shows that only training has a positive and significant relationship with the three dimensions of organizational innovation. Performance appraisal was found to be positively and significantly related to administrative innovation. In addition, this study also demonstrates that training and performance appraisal, are positively and significantly related to knowledge management effectiveness. Knowledge management effectiveness fully mediates the relationship between training and process innovation, training and administrative innovation, and performance appraisal and administrative innovation. However, knowledge management effectiveness only partially mediates the relationship between training and product innovation. The theoretical and practical implications of the study as well as suggestions for future studies are also discussed.
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Organizational innovation was operationalized as comprising of three dimensions , product innovation, process innovation, and administrative innovation.
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