human resource management practices and organizational social capital: the role of industrial...

Journal of Business Research 66 (2013) 678–687

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Journal of Business Research

Human resource management practices and organizational social capital: The role ofindustrial characteristics☆

Chih-Hsun Chuang a,⁎, Shyh-jer Chen b, Ching-Wen Chuang c

a Department of Business Administration, National Chung Hsing University, 250 Kuo Kuang Rd., Taichung 402, Taiwan, ROCb Institute of Human Resource Management, National Sun Yat-Sen University, 70, Lienhai Road, Kaohsiung 804, Taiwan, ROCc School of Management, Xiamen University, Xiamen, Fujian 361005, China

☆ This study was supported by a grant from the Natioto Chih-Hsun Chuang (NSC 96-2416-H-024-005-MY3).Huang, National Chiao Tung University, and Chiung-WeTainan, on an earlier draft were helpful in revising this⁎ Corresponding author. Tel.: +886 4 22840571x736

E-mail addresses: [email protected] (C.-H. [email protected] (S. Chen), [email protected] (C

0148-2963/$ – see front matter © 2012 Elsevier Inc. Alldoi:10.1016/j.jbusres.2012.04.002

a b s t r a c t
a r t i c l e i n f o
Article history:Received 1 September 2010Received in revised form 1 July 2011Accepted 1 April 2012Available online 12 May 2012

Keywords:Organizational social capitalHuman resource management practicesIndustrial regulationKnowledge intensity

This study investigates the relationship between human resource management (HRM) practices and organi-zational social capital (OSC) and the moderating effects of industrial characteristics. Based on a sample of 161firms, the results of this study indicate that HRM practices that focus on facilitating relationships among em-ployees are positively related to OSC, and the relationship is stronger for firms operating in less regulated indus-tries. Further, knowledge intensity itself shows no moderating effect but appears to join industrial regulation ininfluencing the link of HRM practices and OSC. The findings of a post hoc analysis suggest that HRM practiceshave a positive effect on OSC with high but not with low knowledge intensity in a more regulated context.This study presents implications for research and practice along with directions for future research.

© 2012 Elsevier Inc. All rights reserved.

1. Introduction

Social capital generally denotes the aggregate of resources embed-ded within, available through, and obtained from the relationships ofan individual or organization (Bolino, Turnley, & Blooddgood, 2002;Inkpen & Tsang, 2005; Nahapiet & Ghoshal, 1998). A firm can derivegreat benefit from both intra- and inter-organizational relationships.Internally secured social capital facilitates a firm's internal coordination,knowledge creation and accumulation, and creativity (Leana & Pil,2006; Nahapiet & Ghoshal, 1998; Tsai & Ghoshal, 1998). Social relation-ships between organizational members enhance innovation (Maurer,Bartsch, & Ebers, 2011; Subramaniam & Youndt, 2005), growth (Maureret al., 2011), and other organizational outcomes (Andrews, 2010;Batjargal, 2003). Externally secured social capital promotes innovationthrough knowledge utilization (Pérez-Luño, Cabello Medina, & CarmonaLavado, 2011), and increases a firm's competitiveness and likelihood ofsuccess (Fischer & Pollock, 2004; Inkpen & Tsang, 2005; Wu, 2008).This study follows Leana and VanBuren (1999) in conceptualizing orga-nizational social capital (OSC) as a resource that reflects the social rela-tionships within the firm, which pertains to the concept of internalsocial capital (Adler & Kwon, 2002; Leana & Pil, 2006).

nal Science Council of TaiwanComments by Shihping Kevinn Tsao, National University ofpaper.; fax: +886 4 22858040.uang),.-W. Chuang).

rights reserved.

Firmsmustmake investments to develop andmanage OSC (Ellinger,Elmadağ Baş, Ellinger, Wang, & Bachrach, 2011; Prusak & Cohen, 2001).However, this research theme has received little attention and requiresfurther exploration (Bolino et al., 2002; Payne, Moore, Griffis, & Autry,2011). Without neglecting values of the links with external stake-holders, this study focuses on the internal aspect of OSC that primarilyarises from social relationships among organizational members. To nur-ture OSC, firms should create opportunities for, and increase themotiva-tion and ability of, organizational members to build their relationships(Adler & Kwon, 2002). In this regard, human resource management(HRM) practices serve as a potential means through which firms caneffectively accumulate and develop the depth and content of their OSC(Kang,Morris, & Snell, 2007; Leana&VanBuren, 1999). Although scholarshave conceptually identifiedHRMpractices that canplay the role (Kang etal., 2007; Leana & Van Buren, 1999; Lengnick-Hall & Lengnick-Hall, 2003;Morris, Snell, & Lepak, 2005), empirical evidence remains scarce with afew studies that either examine this topic at the individual level (Gittell,Seidner, & Wimbush, 2010) or dyadic level (Kaše, Paauwe, & Zupan,2009), or use a unique sample of top management teams (Collins &Clark, 2003). The literature still lacks empirical research on how HRMpractices nurture social capital around other employees instead of topmanagers (Collins &Clark, 2003) and at the firm level (Payne et al., 2011).

OSC is a relational construct that inherently hinges on the interactionof individuals, which takes place within particular work contexts (Johns,2006; Leana&Pil, 2006). Scholars argue for the necessity of a contingencyapproach that accounts for contextual conditions that strengthen or limitthe effects of HRM practices (Datta, Guthrie, & Wright, 2005; Jackson &Schuler, 1995; Kim &Wright, 2011; Sun, Aryee, & Law, 2007). However,studies that focus on the relationship between HRM practices and OSC

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679C.-H. Chuang et al. / Journal of Business Research 66 (2013) 678–687

neglect contextual factors, particularly the firm's external environments.The current study identifies industry as a pivotal context within whichfirms frame and execute HRM practices (Datta et al., 2005; Jackson &Schuler, 1995; Kim&Wright, 2011), incorporating industrial characteris-tics (industrial regulation and knowledge intensity) into the researchframework.

This study builds on and extends existing literature (e.g., Collins &Clark, 2003; Gittell et al., 2010; Kaše et al., 2009) by exploringemployee-focused OSC and examining the relationship between HRMpractices and OSC at the firm level. More importantly, this study inves-tigates the contingent effects of industrial characteristics to identify thecontext in which HRM practices are likely to exert differential influenceon OSC. The next section formalizes the concept of OSC and identifiesHRM practices that promote relationship-building among employeeand foster OSC. It also explores the potentially moderating effects of in-dustrial regulation and knowledge intensity. Sections 3 and 4 respec-tively present the methodology and results of this empirical study.Finally, Section 5 discusses the research and managerial implicationsof the findings and highlights directions for future research.

2. Theoretical background and hypotheses

2.1. Organizational social capital

Scholars use a variety of conceptualizations to emphasize various as-pects of social capital (see Adler & Kwon, 2002; Leana & Van Buren,1999). Social network theorists portray social capital as an individual at-tribute that benefits actors who possess it (e.g., Belliveau, O'Reilly, &Wade, 1996). This perspective considers social capital to be a privategood held by individuals that can help individual outcomes such ascreativity (Perry-Smith, 2006; Zhou, Shin, Brass, Choi, & Zhang, 2009)and career development (Seibert, Kraimer, & Liden, 2001). On theother hand, organizational scholars emphasize social capital as a socialunit attribute that benefits both individual members and the socialunit as a whole (e.g., Bourdieu, 1986; Coleman, 1988). This perspectiveregards social capital as a public good that resides at the collective leveland appears more frequently in recent research (e.g., Andrews, 2010;Houghton, Smith, & Hood, 2009; Leana & Pil, 2006; Subramaniam &Youndt, 2005).

OSC is a firm-level phenomenon and the study here focuses on theinternal aspect of OSC (Adler & Kwon, 2002; Leana & Pil, 2006). Concen-trating on internal OSC is appropriate because the social relationships oforganizationalmembers within the same group or unit, aswell as in thebroader social structure of the organization, can improve group or unitperformance (Merlo, Bell, Mengüç, & Whitwell, 2006; Oh, Chung, &Labianca, 2004; Tsai & Ghoshal, 1998) and benefit the whole organiza-tion (Andrews, 2010; Batjargal, 2003; Leana & Pil, 2006; Maurer et al.,2011). The presence of high trust and a shared sense of vision amongor-ganizational memberswho pursue common strategic goals can contrib-ute tofirm performance (Andrews, 2010). Previous research shows thatOSC fosters mobilization, assimilation, and use of organizational knowl-edge resources (Maurer et al., 2011), facilitates resource exchange andcombination (Tsai & Ghoshal, 1998), and increases innovation capabili-ties (Subramaniam & Youndt, 2005). On the other hand, if the relation-ships among organizational members dissolve, the resulting OSC lossesare detrimental to organizational performance (Shaw, Duffy, Johnson, &Lockhart, 2005).

OSC describes both the structure and the content of relationshipsamong actors that create internal cohesiveness (Adler & Kwon, 2002).Establishing a shared vision among employees, creating a strong identi-ty with the firm, and pursuing collective missions and goals manifestthe essence of OSC. Nahapiet and Ghoshal (1998) specify structural, re-lational, and cognitive dimensions of OSC in their framework. The struc-tural dimension of OSC refers to the network connections among actors.This aspect describes the extent of employee connections, the patternsof employee connections, and the usefulness of these connections in

different contexts (Bolino et al., 2002). The relational dimension ofOSC describes the affective relationships among employees and in-volves high levels of trust, shared norms and perceived obligations,and a sense of mutual identification (Bolino et al., 2002). Trust is a keycomponent of the relational dimension (Leana & Pil, 2006). The cogni-tive dimension of OSC represents the extent to which employees pos-sess a common language and shared narratives (Bolino et al., 2002).

2.2. Human resource management practices and organizational socialcapital

Firms should develop or adopt organizational routines that reflect andincorporate relationship resources to create value (Jackson, Chuang,Harden, & Jiang, 2006; Kang et al., 2007; Nahapiet & Ghoshal, 1998).HRM practices can play a critical role in the facilitation, accumulation,and utilization of OSC (Kang et al., 2007; Leana & Van Buren, 1999;Lengnick-Hall & Lengnick-Hall, 2003; Morris et al., 2005). Leana andVan Buren's (1999) conceptual article appears to be the first discussionof HRMpractices as the primarymechanism in fostering OSC. Lengnick-Hall and Lengnick-Hall (2003), Morris et al. (2005), and Kang et al.(2007) provide similar arguments. Gittell et al. (2010) show that HRMpractices strengthen relational coordination among employees whoperform distinct functions, while Kaše et al. (2009) indicate that HRMpractices of work design, incentives and motivation, and training anddevelopment promote interpersonal relationships.

A vast and growing amount of literature documents the strategicimportance of well-designed HRM practices (Combs, Liu, Hall, &Ketchen, 2006). Although scholars have little consensus about how toconceptualize HRM practices (Lepak, Liao, Chung, & Harden, 2006),there is more agreement in the literature that strategically alignedHRM practices reflect the strategic objective(s) that such practicesintend to achieve (e.g., see Becker & Huselid, 1998; Bowen & Ostroff,2004; Chuang & Liao, 2010; Lepak et al., 2006).

Examining HRM practices for a more narrowly conceptualized stra-tegic objective can achieve a closer alignment between HRM practicesand the specific objective (Lepak et al., 2006). Chuang and Liao (2010)and Liao, Toya, Lepak, and Hong (2009) employ this focused approachin studies investigating HRM practices for customer service employees.Zacharatos, Barling, and Iverson (2005) show that HRM practices facili-tating trust in management and promoting a safety climate result inhigher safety orientation and fewer accidents. Jackson et al. (2006) pro-pose developing HRM practices that support and facilitate knowledge-intensive teamwork. In the area of social relationships and OSC, Collinsand Clark (2003) specify a set of HRM practices that help develop andmanage the social networks of topmanagers. Gittell et al. (2010) identi-fy HRM practices that foster relational coordination among employees,and Kaše et al. (2009) pay special attention to relational implicationswhen selecting HRM practices.

Scholars recognize that traditional prescriptions of HRM practicesmay not be relevant to OSC, and HRM practices must incorporate thedevelopment of relationships (Gittell et al., 2010; Morris et al., 2005).Consistent with the OSC literature and the focused approach of HRMpractices, this study suggests that HRM practices, whose strategic focusis to promote and support OSC, should create opportunities for em-ployees to build social relationships, encourage their effort towardrelationship development, and enhance their ability to do so. The abili-ty–motivation–opportunitymodel explicitly identified in the HRM liter-ature (e.g., Batt, 2002; Boxall & Purcell, 2003; Lawler, Chen, Wu, Bae, &Bai, 2011; Lepak et al., 2006) is congruent with Adler and Kwon's(2002) framework, which proposes opportunity, motivation, and abilityas three sources of OSC. Further, Lepak et al. (2006) suggest that a set ofmore specific HRM activities can implement the objectives of thesethree HRM aspects. The following discussion focuses on HRM practicesthat address the three mechanisms.

First, HRM practices should provide employees with the opportunityto interact with other individuals for building interpersonal relationships.

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Firms can arrange social events and other knowledge-exchange events topromote employee interaction (Collins & Smith, 2006; Jackson et al.,2006; Lengnick-Hall & Lengnick-Hall, 2003). Firms can also invest re-sources in operating community of practices that serve as a conduit ofsocial interaction (Jackson et al., 2006; Lengnick-Hall & Lengnick-Hall,2003; Morris et al., 2005). Moving newcomers around the firm canhelp them develop familiarity with people and other parts of the firm(Jackson et al., 2006). Subsequent rotation increases each employee'scircle of acquaintances (Kaše et al., 2009; Lopez-Cabrales, Pérez-Luño,& Cabrera, 2009; Morris et al., 2005). Teams also serve as a social struc-ture inwhich employees establish social roles and build relationship re-sources (Gibson & Vermeulen, 2003; Morris et al., 2005). Involvementin team training enhances the opportunity for and intensity of interac-tion among team members (Moreland & Myaskovsky, 2000; Morris etal., 2005).

Second, HRM practices should motivate employees to build socialrelationships. Selecting employees (Leana & Van Buren, 1999) whoshare and support the firm's values, norms, and goals can contribute toOSC (Collins & Smith, 2006; Morris et al., 2005). An orientation programcan communicate the culture and values of the firm to new employeesthrough socialization processes (Collins & Smith, 2006; Lengnick-Hall& Lengnick-Hall, 2003; Morris et al., 2005). Internal promotion providesgrowth opportunities for employees (Collins & Smith, 2006), increasingtheir willingness to interactwith others. Compensation based on overallperformancemay encourage collective goal orientation and informationsharing, and thus foster the development of OSC (Leana & Van Buren,1999). Information sharing promotes social relationships by encourag-ing cooperation and mutual accountability (Sparrowe, Liden, Wayne, &Kramer, 2001). Performance appraisals and compensation are the pri-mary HRM practices for eliciting and reinforcing desired behaviors(Collins & Clark, 2003). Employees are more likely to share informationand knowledge if their performance appraisals, incentive compensation,or both, are explicitly tied to desired behaviors (Collins & Smith, 2006;Morris et al., 2005).

Third, HRM practices should develop employees' abilities to developgood relationshipswith co-workers. Employees need interpersonal skills,in addition to technical skills, to develop and retain social networks in-side and outside the organization (Swart & Kinnie, 2003). Teamworkability is also important, particularly in team settings. Therefore, selectingjob candidates and team members with interpersonal skills and team-work abilities can promote OSC (Jackson et al., 2006; Lengnick-Hall &Lengnick-Hall, 2003; Lopez-Cabrales et al., 2009). Firms should also pro-vide training for employees to improve relation-building and teamworkskills (Collins & Smith, 2006; Jackson et al., 2006; Lopez-Cabrales et al.,2009).

Based on the above discussion, the first hypothesis asserts that com-plementaryHRMpractices addressing these threemechanisms canworkin unison to create an environment that supports OSC.

H1. HRM practices whose strategic focus is to enhance social relation-ships among employees relate positively to OSC.

The discussion here considers the positive effect of HRM practiceson OSC. However, OSC is a context-specific phenomenon and the ex-tent of HRM practices on organizational outcomes may depend upona firm's environmental contexts. Recent research suggests that industrialcharacteristics should be potential contextual conditions affecting theinfluence of HRM practices (Datta et al., 2005; Kim & Wright, 2011).This study investigates two industrial factors, which are industrial regu-lation and knowledge intensity, as possible moderators of the relation-ship between HRM practices and OSC.

2.3. Industrial regulation as a moderator

Industrial regulation refers to constraints prescribed by the gov-ernmental policies on organizations. Industrial regulations posed by

governments include industry access control, new investment ratifica-tion, progress and pattern control of privatization or decentralization,and government involvement in business activities (Luo, 2003). Be-cause governments may use regulations to strategically restrict vital in-dustries, regulations can protect firms by creating barriers to new entry.Firms in a regulated environment often experience dependence on reg-ulators who act as powerful constraints on existing business (Hambrick& Finkelstein, 1987).

The assertion of industrial regulation's influence on the relationshipbetweenHRMpractices and OSC primarily rests on the theory of HRMat-tribution (Kim&Wright, 2011;Nishii, Lepak, & Schneider, 2008). HRMat-tribution (Nishii et al., 2008) suggests that the meanings employeesattach to HRM practices vary depending on employees' interpretationsof an employer's underlying motivation. Employees respond positively ifthey believe that the employer is willing to implement HRM practices,but are less likely to exhibit positive behaviors if they perceive that theadoption of HRM practices is mostly a response to external forces. Kimand Wright (2011) employ Nishii et al.'s reasoning to propose that em-ployees are more likely to believe that the adoption of HRM practices byfirms is voluntary in a loosely regulated context where legal institu-tions do not severely restrict managerial autonomy. Thus, employees aremore likely to interpret supportive HRM practices as a favor from theirfirms and tend to feel obligated to reciprocate thefirm's favor by engagingin discretionary behaviors such as cooperation with coworkers. In a sam-ple including different industries, Boselie, Paauwe, andRichardson (2003)show thatHRMpractices aremore effective in a less-institutionalized sec-tor than its more-institutionalized counterpart.

The institutional theory suggests that regulatory pressure common tofirms in the same industry increases their tendencies toward conformitywith regulations that are dominant in the industry, causing them to ex-hibit similar structures and activities (DiMaggio & Powell, 1983; Oliver,1997). According to this perspective, industrial regulation may pressurefirms to adopt certain HRMpractices (Gooderham, Nordhaug, & Ringdal,1999). However, the diffusion of such HRM practices does not necessar-ily imply that they can provide similar benefits (Kim & Wright, 2011;Meyer & Rowan, 1977). A highly regulated context limits managerialautonomy, and social justification strongly underpins organizationalactivities. Higher institutional forces may decrease employees' positiveattributions regarding HRM practices (Kim &Wright, 2011). In this situ-ation, employees may perceive the adoption of HRM practices as a wayto obtain social approval by complying with formal regulations or bymimicking other firms' actions, rather than as a discretionary choice ofthe employer. Therefore, employee attributions mitigate the effect ofHRM practices on OSC. In contrast, in an industry that is free of govern-ment control, managerial orientation is more entrepreneurial due tomarket fluctuation and intense competition, stimulating the process ofstrategic choices (Cho & Hambrick, 2006). Employees in this contexttend to believe that such an employer has a high degree of discretionand implementation of HRM practices is voluntary and oriented towardtheworkforce. Employees receivemessages fromHRMpractices that theemployer encourages them to build good relationships so that they havethe capacity andwillingness to dealwith uncertainty cooperatively. Thus,the influence of HRM practices on OSC is stronger in a less regulatedenvironment.

H2. Industrial regulation moderates the relationship between HRMpractices and OSC such that the relationship is weaker when industri-al regulation is high and stronger when industrial regulation is low.

2.4. Knowledge intensity as a moderator

Knowledge intensity refers to the extent that knowledge is a keyfactor in production or activities (Autio, Sapienza, & Almeida, 2000;Coff, 2003). Although all firms use knowledge as a production input,the importance of knowledge varies among industries due to funda-mental differences inmarkets, technologies, and the expertise deployed


(Coff, 1999). Some industries rely on general knowledge or education,whereas other industries compete based on firm-specific knowledge.Knowledge appears to have broader relevance to firms that competein knowledge-intensive industries (Grant, 1996).

The influence of HRM practices on social relationships among em-ployees is stronger for firms operating in more knowledge-intensiveindustries. Knowledge-intensive industries are generally dynamicand uncertain (Hambrick, Black, & Fredrickson, 1992), andHRMpracticesdesigned to enhance employees' skills, motivation, and performancemaybe particularly suitable for these industries (Datta et al., 2005). In thesechallenging and ambiguous environments, work tends to vary and bemore complex. There are fewer task-related constraints upon employeeperformance and the human element becomesmore integral to the busi-ness operation. As knowledge intensity increases, employees requiremore cross-disciplinary coordination and integration to effectively exe-cute their work. Thus, extensive communication among employees forcooperation and problem-solving is critical (Collins & Smith, 2006;Reed, Lubatkin, & Srinivasan, 2006). Employees may realize that theyneed not only broader professional knowledge and higher technicalskill levels but also good social relationships with other organizationalmembers. Under these circumstances, employees are more likely to rec-ognize the potential benefits of HRMpractices implemented to help themimprove interpersonal and teamwork skills and provide them more op-portunities to interact and develop good relationshipswith others. There-fore, an investment in such HRM practices can have stronger effects onthe development of OSC in higher knowledge-intensive contexts.

Further, the success of knowledge-intensive firms usually hinges onsignificant employee involvement in knowledge activities such as knowl-edge sharing and combination. Knowledge sharing facilitates transferringknowledge among organizational members, whereas knowledge com-bination involves bring together bits of knowledge from different indi-viduals or units (Jackson et al., 2006). The evaluation and articulationof knowledge during the sharing and combination process engages em-ployees in exploring new ideas and developing creative solutions (Haas& Hansen, 2005; von Krogh, Ichijo, & Nonaka, 2000). Strong relation-ships reduce the time and efforts required to share and to combineknowledge, particularly when these activities involve tacit knowledgethat is difficult to articulate and codify (Hansen, Mors, & Løvås, 2005).Under these conditions, employees may see OSC as a high potential toprovide the conditions necessary for knowledge sharing and combina-tion (Nahapiet &Ghoshal, 1998). HRMpractices that emphasize frequentand intense interactions can encourage employees to focus on coopera-tion and to share and combine complex and ambiguous knowledgerather than to conceal knowledge and pursue selfish interests. Thus,HRM practices may exert a greater influence on the development ofOSC for firms in knowledge-intensive industries than those in industriesrelying on tangible resources.

H3. Knowledge intensity moderates the relationship between HRMpractices and OSC such that the relationship is stronger when knowl-edge intensity is high and weaker when knowledge intensity is low.

3. Method

3.1. Sample and procedure

This study distributes two different questionnaires to a senior ex-ecutive and an HRM executive/manager respectively to reduce thepossibility of common method bias. The executive questionnaire in-cludes items regarding OSC, industrial regulation, knowledge intensity,structural capital, and company background information. This study fol-lows Subramaniam and Youndt (2005) and Youndt, Subramaniam, andSnell (2004) in inviting senior executives (presidents, vice presidents,or directors) as informants of OSC because it is a firm-level construct.On the other hand, the HRM questionnaire includes items regardingHRMpractices, knowledgemanagement system, and firm size. Following

previous studies on HRM practices at the firm level (e.g., Collins & Smith,2006; Datta et al., 2005; Huselid, 1995; Youndt et al., 2004), this studyasks the most appropriate and knowledgeable HRM executive/managerin the respective firm to access HRM practices.

According to Becker and Huselid (1998), survey response rates forHRM systems range from6 to 28%, with an average of 17.4%. Tomitigatea possible lower response rate resulting from a firm-level, multiple-respondent research design, this study collects data from two sourcesprovided by a major university in South China to expand the sampleframe and increase total responses. This study identifies potential re-spondents with similar hierarchy positions during the data collectionprocess to alleviate the possibility of heterogeneous samples.

This study surveys 135 firms whose senior executives are enrolledin executive MBA programs or attend training courses at the univer-sity. These senior executives complete the executive questionnairesin class and then distribute the HRM questionnaires to their most ap-propriate HRM managers with pre-paid return envelopes to ensureconfidentiality. This study also randomly selects 465 firms whose exec-utives are alumni of the university. A top executive in each firm receivesa package including two questionnaires with pre-addressed, pre-paidenvelopes, followed by a reminder letter and phone calls. Again, the ex-ecutive completes the first questionnaire and then distributes the HRMquestionnaire to an appropriate HRM executive/manager who is mostknowledgeable of the firm's HRM practices. The sets of respondentsdrawn from these two sampling processes are similar in terms of posi-tion at the executive level and the HRM level.

Overall, 166 firms of the total 600 firms respond to both question-naires, representing approximately a 28% response rate that is compa-rable to previous HRM studies (Becker & Huselid, 1998). The finalsample includes 161 firms due to missing values. The average firm ageis 14.8 years and the average number of employees is 932 employees.The majority of firms (57%) are within the service sector. Of the 161firms, 79 are privately owned, 45 are state-owned, 27 are foreign, and10 are joint ventures.

The calculated t-statistics indicate no significant differences in age(t=.77, p=.45) or size (t=−.31, p=.76) between the two surveysolicitation approaches. Four key variables (HRM practices, OSC, in-dustrial regulation, and knowledge intensity) also exhibit no statisti-cally significant difference (all p>.05). Although this study employsdifferent sources in data collection, the two sets of respondents aredrawn from similar samples. Therefore, the authors pool two sets ofdata together in subsequent analyses to increase the sample size andstatistical power.

3.2. Measures

This study adopts several procedures to ensure measurement va-lidity. This study develops the scale of HRM practices by reviewingthe literature and interviewing several Chinese HRM executives andgeneral managers. Five HRM scholars and professionals further validatethe content of HRM practices. Two bilingual management researchershelp translate items adopted from published measures into Chinese. Toimprove the level of equivalence and ensure validity, this study adoptsthe back-translation procedure recommended by Brislin (1980), payingparticular attention to detecting misunderstandings due to translation.Finally, the authors discuss the survey readability with several Chinesemanagers and make appropriate adjustments. Unless otherwise noted,respondents rate items on 7-point Likert scales (1= “strongly disagree”to 7 = “strongly agree”).

3.2.1. HRM practicesRelatively few studies discuss HRM practices in building and en-

hancing social relationships among employees, and most work is con-ceptual or descriptive without appropriate measure items (e.g., Kanget al., 2007; Leana & Van Buren, 1999; Lengnick-Hall & Lengnick-Hall,2003; Morris et al., 2005). Among the few empirical studies, measures


of HRM practices either target unique groups, such as top manage-ment teams or orthopedic units (Collins & Clark, 2003; Gittell et al.,2010), or examine individual employees' own experiences (Kaše etal., 2009). As a result, there is no appropriate measure of HRM practicesthat is applicable to OSC development for the organization as a whole.Thus, this study uses relevant articles (e.g., Kang et al., 2007; Kaše etal., 2009; Leana & Van Buren, 1999; Lengnick-Hall & Lengnick-Hall,2003; Morris et al., 2005) as a basic template for developing a measureof HRM practices. This study also refers to other studies focusing onHRM practices for knowledge activities that also emphasize fosteringemployee interaction (e.g., Collins & Smith, 2006; Jackson et al., 2006;Lopez-Cabrales et al., 2009). Next, the authors interview several ChineseHRM executives and general managers to explore the role of HRM insupporting OSC. Based on these interviews and the literature, thisstudy develops potential measure items corresponding to three catego-ries of HRM practices for building relationships: providing opportuni-ties, enhancing motivation, and improving abilities. Three HRMscholars and two HRM practitioners familiar with the issue of OSC vali-date the items. Finally, this study uses 19 items to assess HRM practicesfor OSC (Appendix A). The coefficients of Cronbach's alpha for the di-mensions of opportunity, motivation, and ability are .96, .83, and .84, re-spectively. The internal reliability of this composite scale is .95.

This study conducts confirmatory factor analysis (CFA) to further val-idate themeasure of HRMpractices. Themodelwith threefirst-order fac-tors and a latent second-order factor achieves an acceptable fit(χ2=309.61, df=148, pb .001; rootmean square error of approximation[RMSEA]=.08, standardized root mean square residual [SRMR]=.06,non-normed fit index [NNFI]=.92, comparative fit index [CFI]=.93).All indicators significantly load on their corresponding first-order factors(pb .01), and all three first-order factors load on the second-order latentconstruct (opportunity .81, motivation .90, and ability .85). However,onemeasure item, “Internal candidates take priority over external candi-dates for job openings,” loads below .40, and this study drops the item forsubsequent analyses.

A primary principle in strategic HRM research asserts that examiningthe system of HRM practices in place rather than in isolation is more ap-propriate (Becker &Huselid, 1998; Lepak et al., 2006; Liao et al., 2009). Asystem of HRM practices represents a bundle of practices rather thanmultiple individual practices (Chuang & Liao, 2010; Datta et al., 2005;Huselid, 1995; Lawler et al., 2011). This study calculates a unitary HRMindex based on this principle. The index approach allows for equifinalitywithin anHRMsystem (Becker &Huselid, 1998), and appears frequentlyin strategic HRM research (e.g., Chuang & Liao, 2010; Datta et al., 2005;Lawler et al., 2011; Liao et al., 2009; Sun et al., 2007). The analysis aboveshows that the second-order CFA provides an adequate fit with the dataand indicates that the three HRM domains are distinct but also collec-tively reflect the overall construct. This result also supports using a sin-gle index to assess the HRM practices for OSC. Thus, this study forms asingle comprehensive measure by calculating the mean scores of allHRM practices.

3.2.2. Organizational social capitalThis study examines the structural (information sharing), rela-

tional (trust), and cognitive (shared vision) aspects of OSC by respec-tively adopting five, six, and five items from Leana and Pil (2006).Respondents assess OSC of the organization as a whole instead of in-dividual employees. A sample item is “Employees share the same am-bitions and vision for the company.” The values of internal reliabilityfor the structural, relational, and cognitive aspects are .88, .90, and .92respectively, and the Cronbach's alpha for this complete scale is .95.

This study conducts CFA to assess the validity of the multi-dimensional scale of OSC, and the three facets form an overall, higher-order construct, given that the fit indexes fall within an acceptablerange (χ2=227.75, df=101, pb .001; RMSEA=.09, SRMR=.05,NNFI=.92, CFI=.94). All indicators significantly load on their corre-sponding first-order factors (pb .01), and the three first-order factors

(i.e., structural .81, relational .98, and cognitive .86) load on the second-order latent construct. This study follows Leana and Pil (2006) in averag-ing the scores of all items to create a composite OSC index.

3.2.3. Industrial regulationNo appropriate scale is available to assess the level of industrial regu-

lation. This study uses eight aspects from Doing Business of the WorldBank (http://www.doingbusiness.org) quantity indicators on business reg-ulations, and adds an environmental aspect. Each respondent rates theextensiveness of industrial regulation (5-point Likert scale, from 1, “veryloosely regulated”, to 5, “very highly regulated”) with nine items: startinga business, dealing with licenses, employing workers, registering proper-ty, getting credit, protecting investors, paying taxes, enforcing contracts,and environmental protection. The alpha reliability for this scale is .82.

3.2.4. Knowledge intensityThis study adopts two items from Autio et al. (2000) and develops

three items based on Coff (1999) and Cohen and Levinthal (1990) toassess the levels of knowledge intensity. A sample item is “There is astrong knowledge component in products and services in our indus-try.” The coefficient alpha for this scale is .84.

3.2.5. Control variablesThis study also controls for the effects of several variables. Firm age

and access to resources (firm size as the proxy) may influence OSC,which is inherently evolutionary in nature, and larger firms may employmore progressive HRM practices (Collins & Smith, 2006; Jackson &Schuler, 1995). A meta-analysis shows that the influence of HRM prac-tices is larger for manufacturing firms than for service firms (Combs etal., 2006). The quality of knowledge management systems may affect afirm's ability to accumulateOSC (Sherif, Hoffman, & Thomas, 2006). Struc-tural capital can also create a context to enhance cooperation among em-ployees (Carmona-Lavado, Cuevas-Rodríguez, & Cabello-Medina, 2010).This study calculates firm age as the number of years from the foundingdate andfirm size as the natural logarithmof the number of full-time em-ployees. A dummy variable for the industry type indicates whether firmsbelong to manufacturing industries (1 = manufacturing industry, 0 =otherwise). This study adopts five items from Kulkarni, Ravindran, andFreeze (2007) and four items from Subramaniam and Youndt (2005) tomeasure knowledgemanagement systems and structural capital, with re-spective alpha values of .84 and .72.

3.2.6. Convergent and discriminant validityThis study assesses the psychometric properties of the perceptual

measures by performing CFA to examine their convergent validity anddiscriminant validity. For multi-dimensional constructs (i.e., HRM prac-tices and OSC), this study averages scores of items into dimensions andtreats different dimensions as separate indicators of their correspondingconstructs. Following the procedure suggested by Mathieu and Farh(1991), this study creates three composite indicators for other unidimen-sional constructs. Amodel with the six latent constructs fits the data well(χ2=190.03, df=120, pb .001; RMSEA=.06, SRMR=.06, NNFI=.94,CFI=.95). All factor loadings are statistically significant at the .01 level.The values of composite reliability range from .74 to .89, and the averagevariance extracted fromeach contract ranges from .50 to .73, all above thecutoff suggested by Fornell and Larcker (1981).

This study uses the six-construct model above as a baseline model tofurther examine the discriminant validity of the constructs. Using chi-square difference tests to make comparisons of the baseline model withall alternative models reveals that the baseline model fits the data best,confirming the discriminant validity of the measures.

4. Analyses and results

This study employs hierarchical multiple regression analysis totest the hypotheses. To reduce multicollinearity among predictors

Table 2Results of moderated hierarchical regression analyses.

Independent variables Organizational social capital

Model 1 Model 2 Model 3 Model 4

Control variablesFirm age .07 .05 .07 .07Firm sizea −.04 −.09 −.08 −.08Industry typeb −.02 −.02 .01 .02Knowledge management system .24⁎⁎ .03 .05 .04Structural capital .42⁎⁎⁎ .33⁎⁎⁎ .27⁎⁎⁎ .29⁎⁎⁎

Direct effectsHRM practices .31⁎⁎ .31⁎⁎ .35⁎⁎⁎

Industrial regulation .04 .03 .02Knowledge intensity .14⁎ .17⁎ .13

Two-way interactionsHRM practices×industrial regulation −.20⁎⁎ −.29⁎⁎

HRM practices×knowledge intensity .04 .05Industrial regulation×knowledgeintensity

−.10 −.01

Three-way interactionHRM practices×industrialregulation×knowledge intensity

.22⁎

R2 .28 .36 .40 .42ΔR2 .28 .08 .04 .02F change 12.26⁎⁎⁎ 6.00⁎⁎ 3.48⁎ 5.22⁎

Values are standardized estimates.a Natural logarithm of the number of employees.b Dummy variable coded as manufacturing industry, 1; otherwise 0.

⁎ pb .05.⁎⁎ pb .01.⁎⁎⁎ pb .001.


when testing moderation, this study centers the measures of HRMpractices, industrial regulation, and knowledge intensity by subtract-ing the mean of each variable from observed values (Aiken & West,1991).

Table 1 presents the means, standard deviations, and correlationsof the study variables. Table 2 presents the results of hierarchical multi-ple regression analyses.

Model 2 in Table 2 shows that the relationship between HRMpractices and OSC is significant and positive (β=.31, pb .01), indi-cating that managerial practices that emphasize interactions and re-lationships among employees enhance OSC. Therefore, the resultssupport H1.

H2 states that HRM practices have weaker influence on OSC whenindustrial regulation is high. Model 3 in Table 2 indicates that the rela-tionship between OSC and the interaction term of industrial regulationand HRM practices is significant (β=−.20, pb .01). Following Aikenand West's (1991) procedure, this study probes the significance of thesimple slopes and plots their interaction. Fig. 1 depicts a weaker rela-tionship between HRM practices and OSC for firms with high industrialregulation (β=.21, pb .10) and a stronger relationship for firms withlow industrial regulation (β=.46, pb .001). Thus, the results supportH2.

H3 states that HRM practices have stronger influence on OSCwhen knowledge intensity is high. Model 3 in Table 2 reveals a non-significant relationship between HRM practices and OSC (β=.04,ns), providing no support for the moderating effect of knowledgeintensity.

Although this finding does not offer support for H3, the investi-gation of whether the two industrial variables act as moderatorsconcurrently instead of individually may offer additional insights.This study examines the three-way interaction of HRM practices,industrial regulation, and knowledge intensity in a post hoc analy-sis. Model 4 in Table 2 shows that the coefficient of the three-wayinteraction term is significant and positive (β=.22, pb .05), indicat-ing that the relationship between HRM practices and OSC may becontingent on the interplay of industrial regulation and knowledgeintensity. Fig. 2 illustrates that, under the condition of high indus-trial regulation, HRM practices have positive and significant effectson OSC with the presence of knowledge intensity (β=.32, pb .05)but not with a low knowledge intensity (β=−.04, ns). The resultsclearly suggest that knowledge intensity moderates the HRM–OSClink in a regulated context.

On the other hand, when industrial regulation is relatively low, HRMpractices have positive and significant effects on OSC when knowledgeintensity is either high or low. Tomore accurately investigate the inter-action effects, this study includes the procedure developed by Dawsonand Richter (2006) to conduct a slope difference test. The slopes forhigh knowledge intensity and low knowledge intensity under thecondition of low industrial regulation are not significantly different(t=−.88, p=.38).

Table 1Means, standard deviation, and correlations.

Variables Mean S.D. 1 2

1. Organizational social capital 4.8 .922. Firm age 14.8 12.52 .043. Firm sizea 2.4 .75 .00 .424. Industry typeb .4 .50 .04 .205. Knowledge management system 4.4 .91 .35⁎⁎ .036. Structural capital 4.7 1.16 .47⁎⁎ −.057. HRM practices 4.9 .88 .49⁎⁎ .098. Industrial regulation 3.4 .57 .12 .149. Knowledge intensity 4.8 1.16 .26⁎⁎ .07

a Natural logarithm of the number of employees.b Dummy variable coded as manufacturing industry, 1; otherwise 0.⁎ pb .05.⁎⁎ pb .01.

5. Discussion

Although OSC is a critical resource for firms, the conditions thatencourage and support this resource receive little attention. This studyinvestigates the influence of HRM practices on OSC, and more impor-tantly, the moderating role of industrial characteristics. The results ofthis study reveal that a firm's OSC increases when the firm's HRM prac-tices focus on building good relationships among employees. However,the relationship betweenHRMpractices andOSC isweaker in amore reg-ulated context. Although not hypothesized, the findings of this study in-dicate that, in a more regulated environment, HRM practices effectivelyfacilitate OSC for firms operating in comparatively high knowledge-intensive industries.

5.1. Research implications

This study contributes to the strategic HRM and social capital litera-ture and provides several research implications. First, this study pro-vides a complementary test of the HRM–OSC research by conductingfirm-level, employee-focused empirical analysis. Extending previousresearch, the results suggest that, in addition to encouraging individual

3 4 5 6 7 8

⁎⁎

⁎ .53⁎⁎

−.05 .06.08 .27⁎⁎ .14.12 .65⁎⁎ .39⁎⁎ .14.19⁎ .23⁎⁎ .03 .31⁎⁎ .07.05 .15 .18⁎ .19⁎ −.17⁎ .04

Fig. 1. Industrial regulation as a moderator of the relationship between HRM practicesand organizational social capital. +pb .10, ***pb .001.


employees or mangers to build good relationships with their peers andcoworkers as other studies have presented (Collins & Clark, 2003; Gittellet al., 2010; Kaše et al., 2009), HRM practices can also foster internal re-lationship resources of the organization as a whole. The findings are im-portant because theory and research based on multilevel approach(Kozlowski & Klein, 2000) indicate that what applies at one level (e.g.,the individual or group level) may not necessarily apply to anotherlevel (e.g., the firm level). Focusing on the firm-level phenomena, thisstudy identifies what HRM practices devised around the strategic focusare the potential antecedent of OSC and delineates how HRM practicescan facilitate OSC by addressing the threemechanisms of ability, motiva-tion, and opportunity, and offers a better understanding of the criticalrole of HRM practices in developing OSC.

Next, this study strengthens the contingency perspective by explor-ing themoderating effects of industrial regulation and knowledge inten-sity to specify the industry context in which HRM practices are likely toexert greater or smaller influence on OSC. The investigation manifeststhe context-specific attribute of OSC (Leana & Pil, 2006) and answerscalls for HRM research to address external contextual factors when ex-amining the effects of HRM practices (e.g., Datta et al., 2005; Jackson &Schuler, 1995; Kim &Wright, 2011; Sun et al., 2007).

The results support theorizing that industrial regulation serves asan important boundary condition for the influence of HRM practices onOSC. Indeed, the relationship between HRM practices and OSC is stron-ger for firms that are relatively free of regulatory pressures, while thegeneral levels of OSC change marginally as a function of HRM practicesfor more regulated firms. These findings provide preliminary supportfor Kim and Wright's (2011) assertion that the influence of HRM prac-tices depends on a regulatory context, and promote understanding ofthe cross-contextual variation of the HRM–OSC link.

Further, previous studies on industrial moderators of the relation-ship betweenHRMpractices and organizational outcomes usually focuson one industrial factor or examine the influence of multiple industrial

Fig. 2. Industrial regulation and knowledge intensity as moderators of the relationshipbetween HRM practices and organizational social capital. *pb .05, ***pb .001.

factors individually (e.g., Batt, 2002; Datta et al., 2005). However, mul-tiple industrial factors tend to exist simultaneously in the organizationalcontext and jointly influence managing practices and their outcomes.Results of this study highlight the importance of considering the inter-play between industrial regulation and knowledge intensity when ex-amining the relationship between HRM practices and OSC. Employeesare less likely to perceive the adoption of HRM practices as a voluntaryaction in a regulatory context, particularly if the environment mainlydepends on blue-collar workers without large investments in researchand development. The success of such firms depends mostly on workefficiency rather than innovation. In such an environment, social inter-action and knowledge flows within the firm are not urgent, and em-ployees are less likely to realize the benefits of good relationships. Thus,the efficacy of HRM practices is limited.

In contrast, although employees may be skeptical of the employer'sintention to adopt HRM practices in a highly regulated context, HRMpractices can still have a significant effect on OSC in an environmentwhere information-processing and knowledge sharing among em-ployees, particularly knowledge workers, plays a pivotal role in firmsuccess. Employees who receive messages through HRM practices forencouraging good quality relationships may perceive that good rela-tionships can help themwork in an effective manner and receive betterperformance evaluation and rewards. Given that internal relationship re-sources are critical for both knowledge-intensive firms and their em-ployees, firms that invest resources in HRM practices to develop OSCcan facilitate relationships among employees in amore regulated context.

Although industrial regulation seems to be a more influential mod-erator than knowledge intensity in the present study, the various condi-tions of knowledge intensity in more regulated industries also alter theHRM–OSC relationship. This study suggests a new perspective that fu-ture research on OSC and HRM may need to explore critical contextualfactors simultaneously to uncover the real picture. Such an approachavoids examining individual moderators in isolation, which limits therelevance of important contextual information.

5.2. Managerial implications

This study has important managerial implications. The findingssupport the notion that investment in complementary HRM practicesaligned with strategic imperatives is worthwhile. Employees are es-sential to the execution of business strategies. Firms can use differentHRM configurations to achieve different strategic objectives. In order foremployees to behave toward the strategic objectives, managers need toclarify their strategies and then implement HRM practices that sendclear messages to employees. Specifically, managing employees with anemphasis on developing social relationships can encourage network-building behaviors, which are helpful in developing OSC. Further, man-agers should design HRM practices that aim at three focal mechanismsof ability, motivation, and opportunity. HRM practices can improve em-ployees' abilities to interact with coworkers, increase their willingnessto build good social relationships, provide themwithmore opportunities,and thus facilitate the accumulation of OSC.

More importantly, the findings of this study caution managers thatthe effects of HRM practices on OSC may be contingent on industrialcharacteristics such as industrial regulation and knowledge intensity.Employees receive messages embedded within HRM practices aboutthe firm's intentions. Through these practices, the firm demonstratesits investment in employees toward building good quality relationshipswithin the firm. However, the influence of HRM practices on employeesmay vary depending on the regulatory context. Managers may find thatinvestments in HRM practices produce higher returns when their firmsare operating in a more loosely regulated context. In this regard, man-agers can improve their communicationwith employees and send strongmessages in a way that the adoption of such HRM practices is for em-ployees' sake rather than for regulatory constrains. For firms in highlyregulated settings, HRM practices can facilitate OSC development in

image of Fig.�2

Measure items Factorloading

Opportunity practices1. The company sponsors various social events to encourage contactand relationship-building among employees.

.89

2. The company often arranges events for knowledge exchange (e.g.,seminar, presentation, etc.)

.91

3. New hires are moving around the organization so they can knowpeople and other parts of the organization.

.84

4. The company uses job rotation for employees to gain experience bymoving them across different functional areas or divisions.

.85

5. The company encourages employees to participate in communityof practices.

.89

6. The company invests considerable time and resources in operatingcommunity of practices.

.90

7. Employees often work in teams (project teams, cross-functionalteams, etc.)

.84

8. The company provides team training to facilitate social interaction. .85

Motivation practices9. The selection of employees emphasizes their overall fit to thecompany (values, personality, etc.)

.65

10. The company provides an extensive orientation program for newemployees to learn the history, culture, and values of the company.

.70

11. Sharing information and knowledgewith other people or unitswithinthe company is an important indicator of performance appraisals.

.80

12. The company rewards employees for sharing new informationand knowledge.

.83

13. Employees' bonuses or incentive plans are based primarily on theorganizational performance.

.70

14. Internal candidates take priority over external candidates for jobopenings.

.35

Ability practices15. The selection of employees is totally based on their technical skillsbut not interpersonal skills. (reverse-coded)

.61

16. The selection of employees emphasizes teamwork ability. .7117. The company provides training to improve the interpersonal skillsof employees to build good relationships.

.81

18. The companyprovides training to enhance team-building and team-work skills of employees.

.79

19. Employees' interpersonal relationships within and outside thecompany are considered as important in selecting team members.

.62


relatively high knowledge-intensive contexts, but they aremore difficultto do so in low knowledge-intensive settings. This study suggests thatmanagers can benefit from considering industrial characteristics whendesigning HRM practices that foster OSC.

5.3. Limitations and future research

This study has some limitations and offers directions for future re-search. First, this study does not investigate consequences of OSC andthus may limit its implications. Nonetheless, the body of literature link-ing OSCwith firm performance lends support to the advantages of OSC.This study also acknowledges the possible dark side of OSC (Gargiulo &Benassi, 1999), and the cost associated with the development of OSCcould diminish its benefits. Thus, future research should include criticalindicators of organizational performance to construct a more completeresearch framework.

Further, although two respondents for each firm who provide differ-ent information can reduce the possibility of common method bias, thisstudy collects survey data at the same time. This cross-sectional designlimits inferences of causality. Although it is unlikely that higher levels ofOSC will lead to more investment in HRM practices, a reverse flow fromthat assumed in the current study, future research on this topic wouldbenefit from longitudinal designs that can address this issue with morecertainty.

Another limitation relates to data collection. This study employsdifferent sampling processes to solicit potential participants, generatingtwo possible heterogeneous samples. Nevertheless, a series of samplecomparison tests shows no significant difference and thus offers a ratio-nal to pool the two similar samples together in subsequent analyses. Inaddition, those senior executiveswho respond to thefirst questionnairedistribute the HRM questionnaire within their firms. The authors asksenior executives to carefully identify the most appropriate and knowl-edgeable HRM executive/manager to assess HRM practices; however,this study cannot rule out the chance that the selection of the HRM re-spondents might be due to the senior executives' bias, particularly ifthere are multiple HRMmanagers. Future research can improve the re-liability of this measure by collecting HRM data from multiple respon-dents (Gerhart, Wright, McMahan, & Snell, 2000).

Additionally, although this study develops the items of HRM prac-tices based on theory and literature and several HRM researchers andpractitioners validate the scale, some relevant practices may be absent.Future research can attempt to improve the quality of the HRM mea-sure. For other scales adopted from published work, this study employsthe translation approach for scale development, which has beenwidelyused in Chinese management research (Farh, Cannella, & Lee, 2006).Despite the use of back-translation procedure and additional steps toensure validity and avoid cultural bias, the level of equivalence maybe still a concern (Farh et al., 2006). Therefore, subsequent studiesshould develop measures for OSC-related research in Chinese culture.

A related limitation is that the sample is from a Chinese context, inwhich power distance is greater than in Western countries, and thusmay limit the generalizability of the findings. However, the sample canalso be a strength because Chinese culture, which iswell known for its re-lationship emphasis (Hitt, Lee, & Yucel, 2002), provides an appropriatecultural context for testing issues related to OSC. Considering the widersample frame,many industries in China are complex and dynamic, repre-senting a rich research context for studying industrial characteristics (Luo,2003). Nevertheless, future research should examine the robustness ofthe current theoretical predictions in other cultural settings or acrosscultures.

Finally, the current results do not show consistency of the moderat-ing role of knowledge intensity. Despite a nonsignificant difference inthe slope comparison test, HRM practices exert a greater influence onOSC for firms operating in a relatively less regulated, less knowledge-intensive context. These findingsmay reflect the theory of HRMattribu-tion (Nishii et al., 2008), such that employees tend to believe that firms

with less regulation have voluntarily chosen to implement HRM prac-tices for developing OSC, and their perceptions may be stronger inindustries where knowledge is not a key factor for operating activities.Further investigation into this specific finding can offer additionalinsights.

Appendix A

Items and results of confirmatory factor analysis for HRM practices.

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