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Journal cover: International Journal of Manpower

International Journal of Manpower

ISSN: 0143-7720

Online from: 1980

Subject Area: Economics

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Organizational effectiveness through technology innovation and HRM strategies


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DOI (Permanent URL): 10.1108/01437720510625403

Article citation: Zhongming Wang, (2005) "Organizational effectiveness through technology innovation and HRM strategies", International Journal of Manpower, Vol. 26 Iss: 6, pp.481 - 487


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The Authors

Zhongming Wang, Zhejiang University, Hangzhou, People's Republic of China

Acknowledgements

This paper is supported by NSFC No. 70232010.

Abstract

Purpose – This editorial aims at providing a general framework for papers in this special issue. The main theme is to understand the organizational effectiveness from recent developments in technology innovation and human resources strategies.

Design/methodology/approach – The editorial first describes the need for technology innovation and HRM integration. A three-strategy model for global technology innovation and organizational development was adopted: personnel strategy, system strategy, and organizational strategy.

Findings – The personnel strategy could play a crucial role in enhancing the effects of human resources management (HRM) and entrepreneurship by supporting the main dimensions of HRM. The system strategy was used to facilitate technology innovation through knowledge management while the organizational strategy was adopted to create positive organizational culture and high performance systems.

Originality/value – The paper suggests that globally distributed engineering and international technology entrepreneurship be new area for theory building. The strategies from this special issue have implications for the study of new information technology innovation and e-HR developmental approaches as well as professional service, customer relations modeling and strategic HRM.

Article Type:

Viewpoint

Keyword(s):

Organizational effectiveness; Innovation; Human resource strategies.

Journal:

International Journal of Manpower

Volume:

26

Number:

6

Year:

2005

pp:

481-487

Copyright ©

Emerald Group Publishing Limited

ISSN:

0143-7720

Need for strategies of tech-innovation-HRM integration

A significant approach to long-term manpower development is to achieve organizational effectiveness through technology innovation, managerial competency modeling and performance-based strategic human resource management (HRM) interventions (Osman-Gani, 1999; Wang, 2000, 2003). The rapid organizational re-structuring and globally distributed engineering have called for the needs for integrated strategies and the new ways of HRM in promoting technology innovation, organizational change and entrepreneurship (Davis et al., 1986; McLoughlin and Harris, 1998; James, 2002). Many researchers therefore focused their work on the key issues of integrated innovative tech-HRM strategies and high-performance technology work (Amabile, T. A. 1996). HRM could support technological innovation to achieve high performance while technology innovation could serve as an approach to enable HR function to focus more on value-added activities in order to realize the full potential of technology and organizational strategy (Shrivastava and Shaw, 2003). In this special issue, technology innovation and HRM are reported through various areas of research which provide systematic evidence for the three integrated HR strategies for organizational effectiveness and competitive advantage (Wang and Mobley, 1999).

In a model of formulating strategic HRM from the findings of some recent Chinese empirical studies as well as international comparative studies, three HR strategies for global technology innovation and rapid organizational development were proved to be effective for integrating person-system-organizations elements: personnel strategy, system strategy, and organizational strategy (Wang and Mobley, 1999).

Personnel strategy

This strategy focuses on a variety of HR practices facilitating employees' high-performance values, intrinsic motivation, teamwork attitude and leadership skills, and enhancing cross-functional and cross-cultural competencies in order to achieve high compatibility among work teams and technology innovation. This could involve actions such as competence modeling for technology innovation, core value building and corporate culture training, supervisory mentoring program, and leadership development programs (Wang, 2000).

System strategy

This strategy aims at formulating actions to achieve structural compatibility across organizational levels and various business networks so that effective communication channels and coordination mechanism could be built up to achieve social capital. In the technology innovation process, some effective measures include task re-design and business reengineering, virtual team networks, matrix structural change, project management systems, and e-HR distributive design (Wang, 2002).

Organizational strategy

This strategy emphasizes HR practices encouraging team responsibilities, enhancing organizational culture and building up customer relationships through participation and empowerment. It could include organizational measures such as participative decision-making, team goal-setting, innovative culture-redesign, quality circle activity, HR-strategy fit program, cross-cultural leadership team building, and organizational development programs (Wang, 1999).

Most recent studies such as the contributions from this special issue have largely demonstrated important implications for this three-strategy model of enhancing technology innovation-HRM integration.

Personnel strategy: effects and dimensions for HRM and entrepreneurship

Effects of personnel strategies

What are the main effects of different versions of personnel strategies? Many studies showed that with effective personnel strategies, technology innovation moderated the effects of HRM on entrepreneurship. Li, Zhao and Liu's paper (2004) focused on the relationship between HRM strategy and technology innovation to performance among Chinese high-tech firms. They adopted the resource-based theory and innovation theory to test hypotheses about the HRM-tech-innovation relationship with a sample of 194 high-tech firms. The results revealed that it was crucial to improve technological innovation ability by advancing HRM ability for high-tech firms. It was suggested that employee training had direct and positive effects upon technological innovation in these Chinese high-tech firms. It was not surprising that material incentives showed negative effects on the tendency for technological innovation whereas immaterial incentives had positive effects to facilitate innovation. These results demonstrate empirical evidence for the effectiveness of personnel strategy on technological innovation.

Dimensions of HRM practices and entrepreneurship

A number of recent studies focused upon the dimensions of HRM practices and entrepreneurship and their effects for organizational effectiveness. The field studies were carried out in the western regions of China to investigate the main characteristics of HRM practices and models in comparison with that of the eastern and coastal areas (Wang and Zang, 2004). The results showed that there were two major dimensions in HRM practices: functional dimension and strategic dimension. Both those dimensions significantly affected organizational and entrepreneurial performance indicators. Although entrepreneurship as a concept or strategy has been examined more in a general construct, the dimensions of entrepreneurship still needs to be identified, which is of crucial significance to the understanding of the mechanisms of entrepreneurship. Studies were also carried out to examine and identify the key dimensions of entrepreneurship among local Chinese companies (Wang, 2003; Yuan, 2004). The results of those research showed that most of entrepreneurial firms were either individually- or collectively-based in structuring the ownership and either locally- or globally-oriented in developing the business. This two-dimensional model of entrepreneurship was built to capture the key features of different types of entrepreneurship. Using this model, various kinds of entrepreneurial firms were differentially identified and the collectively-owned and globally-oriented entrepreneurship proved to be significantly correlated with the long-term effectiveness of those firms (Wang and Zang, 2004). This finding has provided a useful framework for most of local firms who are at the new phase of corporate entrepreneurship.

As recent empirical studies indicated that local entrepreneurial firms who adopted the collectively-based and globally-oriented model of entrepreneurial strategies were among the most successful companies and that the fit between strategic HRM practices, innovation strategy and entrepreneurial models significantly contributed to entrepreneurial performance and organizational effectiveness. More specifically, team- and career-focused strategic HRM have shown long-term effects upon organizational effectiveness, whereas the collective entrepreneurship model is more suitable to the Chinese context of both manpower and business development (Wang 2004).

Systems strategy: technology innovation and knowledge management

Technology innovation needs to be supported by the work systems and organizational structure. Madsen et al. (2004) studied the problems in the process of integrating technology innovation with human resources using an in-depth analysis of a real life case of new business development in Ericsson Denmark. The study went through all phases and aspects of the innovation process, from inception to field trials, representing a radical innovation based on a disruptive internet technology. They called this as dysfunctional integration. It was shown that when innovative human resources were not well integrated into the host organizational system, the new business would definitely go wrong. The organizational system needs to be re-structured in order to cope with the new requirements for entrepreneurship and technological innovations. Chen and Zhu (2004) examined the characteristics and system requirements using indicators of the corporate entrepreneurship and innovation performance. In their study, entrepreneurship was seen as the most important impetus for the development of an enterprise and even country's economy. From a microcosmic point of view, the study focused on cultivating corporate entrepreneurship by implementing some effective measures to improve corporate performance. Based on the Chinese enterprise context, they proposed a hypothetical system model for cultivating corporate entrepreneurship, with three key factors: the system of board of directors and management, the quality of the entrepreneurs and the corporate strategic management circumstances. The empirical research provided evidence for this system model indicating the effects of these three factors on corporate entrepreneurship and corporate performance. A related issue is how the system strategy could be further enhanced by knowledge management and may in turn affect the formulation of corporate strategy. Shih and Chiang (2004) studied this issue with a sample of 147 Taiwanese large companies in banking, services, and manufacturing industries. The results indicated that firms adopting different corporate strategies adopted various kinds of knowledge management strategies. The fit between KM strategy on the one hand and both corporate strategy and HRM strategy on the other hand significantly contributed to the effectiveness in terms of process performance, learning capability, and organizational outcomes. More specifically, the contingency factors (project phase, structure, technology, and position of R&D professionals) affected R&D performance measurement. With a field survey at the Korean telecommunications laboratory, Lee and Cho (2004) suggested that the project phase be an important system element in determining R&D effectiveness. They found that the goal achievement dimension and technology factors were more crucial at the earlier phases of R&D project management while the production, market and external evaluation factors became more significant at the later phases of the projects.

Organizational strategy: organizational culture and HRM effectiveness in technological innovation

In the recent years, teams and interpersonal relationship are becoming more and more important HR factors for organizational effectiveness of technological innovations (Wang and Mobley, 1999). Kratzer et al. (2004) conducted an in-depth case analysis on informal contacts and performance in innovation teams. They addressed the effects of friendly relationships among members of innovation teams on performance. In their study, the effects of non-work relationships on team performance were examined with the full network data on non-work relationships among a sample of innovation teams to provide empirical evidence for how “friendly and friendship networks” affected the performance of innovation teams. The results showed that the frequency of friendly ties had both positive and negative consequences on team performance, whereas the frequency of friendship ties positively related with team performance. This interpersonal relationship factor could be strengthened through an organizational strategy emphasizing interaction, participating and culture development. Chew and Sharma (2004) also examined the impact of organizational culture and HRM effectiveness on financial performance of merging and acquiring organizations in Singapore. Their empirical results indicated that organizations with a value profile of either elite or leadership complemented by strategic and effective human resources management experienced a better financial performance after mergers and acquisitions. Apparently, organizational culture and team development become more and more crucial with the development of globalization and virtual organizations.

New trends in technology innovation and human resource management

While the three-strategy model of person-system-organization fit provides a general framework for technology innovation and HRM, three new trends have strengthened the integration and holistic nature of strategies. In particular, there are three areas of new developments which need more empirical research and applications: the globally distributed engineering and international technology entrepreneurship, the information technology innovation and e-HR developmental approaches, the professional service, and customer relations management modeling.

Globally distributed engineering and international technology entrepreneurship

The first significant development in technology management has been the globally-distributed engineering (Harrison et al., 2001). A typical example of the GDE is the automotive manufacturing (Wang, 2005). In Harrison et al. research, the specification and deployment of enterprise modeling and component-based system concepts were developed to facilitate the distributed engineering of automotive manufacturing using the life cycle engineering approaches that improve the change capability of component-based automotive machines and the engineering environment approaches that enable distributed engineering teams. These approaches represent a more holistic model of integrating human resources, systems structure and organizations so as to enable the significant levels of complexity and uncertainty when globally engineering automotive manufacturing machines to be handled. To facilitate this process, Mills and Tanik (2000) developed a resource-focused process engineering formalism that supports the development and maintenance of distributed process systems that ensure the transformation of key resources. While distributed-technology is becoming a significant development among both the multinationals and local companies, a strategic entrepreneurship model is needed to integrate human resources, technology systems and organizational culture with more empirical research.

Information technology innovation and e-HR developmental approaches

The second new trend is the information technology innovation and the popularity of e-HR development. Ye (2002) studied the collaborative information infrastructure in a distributed virtual enterprise and presented a theoretical approach to engineering collaboration in the process of designing production systems. The process is defined as a system modeling process in which system design options emerge as a problem-solving process: identifying constraints, searching for optimal values and better design options, defining information interface between engineers, exchanging their contributions to the system model based on four levels of abstraction and the decision theory, facilitating the development of an information environment for engineering collaboration in distributed virtual enterprises. Chang et al.(2002) regarded information technology development as a process of entrepreneurship and used an advanced technology program (ATP) to support early stage technology development, especially the high-risk R&D projects, and to encourage collaboration among firms and other organizations, foster information exchange, and facilitate technology entrepreneurship activities.

Professional service, customer relations modeling and strategic HRM

The third important trend in technology innovation and HRM is the development of professional service and customer relations management in rapidly transforming product companies such as traditional electronic firms into service-centered ones (Lah et al., 2002; Heneman and Greenberger, 2002; Cunningham, 2004; Agrawal, 2004). Ekeledo and Sivakumar (2004) studied the role of e-commerce on the entry mode choice of service firms and called for the re-conceptualization of marketing theories and concepts with services as a key component. Researchers recommended to incorporate technological factors into the entry-mode conceptual framework to account for the important role of technology in the marketing of services in today's e-commerce environment. Apparently, an important factor for technology innovation effectiveness is the innovation leadership style (ILS). Bossink (2004) studied four basic types of ILSs: charismatic, instrumental, strategic, and interactive ILSs. The results showed that the four leadership styles had significant effects on the project innovativeness, ecological information, knowledge and competence. In fact, innovation has been seen as effective strategies for challenges in network markets (Sheremata, 2004). Formulating an effective business strategy for a firm is a complex task. Strategic and organizational requirements for person-system-organization fit are therefore becoming an important area of research for competitive advantage through deepening knowledge of technology, strong financial backing, learning new technological skills and information, building up the capabilities and competencies for organization design that can distribute and serve a large customer base (Lei and Slocum, 2005).

In general, to meet with these new challenges from globally-distributed technology innovation, information age and service development, a holistic approach is needed to integrate key strategies to achieve sustainable development through technology innovation and HRM. More future research is expected to build up a strategic and holistic model of human resource development so as to effectively integrate culture, organizational change and high-technology.

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Butler, T. (2003), "An institutional perspective on developing and implementing intranet- and internet based information systems", Info Systems J, Vol. 13 pp.209-31.

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Walker, A., Ellis, H. (2000), "Technology transfer: strategy, management, process and inhibiting factors: a study relating to the technology transfer of intelligent systems", International Journal of Innovation Management, Vol. 4 No.1, pp.97-122.

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