Does competitive strategy moderate the linkage between HRM practices and company performance?

Abstract

The purpose of this study is to examine the moderating role of competitive strategies (CS) in the relationship between HRM practices and company performance (CP). Although the existing literature adequately addresses HRM practices and CS, there is limited empirical evidence linking internal resources and strategies with CP. Therefore, using the contingency approach, this study uncovers the role of CS in realizing the potential impact of HRM practices on CP. The data used to test, explore, and develop the moderating role of CS were collected from 157 manufacturing companies and analyzed using hierarchical linear regression. The results show a positive effect of HRM practices and CS on CP. The results also show that cost leadership strategy and differentiation strategy moderate the relationship between HRM practices and CP. The theoretical and managerial implications of these results are discussed.