Creating multi-stakeholder value by leveraging high performance work practices: an intellectual capital perspective

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The global trends necessitating organizational transformation and competitiveness have challenged the effectiveness of traditional HRM practices which alone are incapable of achieving the value-creation goals of the contemporary Professional Service Firms (PSFs). The ever-increasing acceptance of High-Performance-Work-Practices (HPWPs) and their robust influence on organization’s Intellectual Capital (IC) makes it pertinent for the scholars to further evaluate and enrich this relationship particularly in a knowledge-intensive environment. This is because of the current research that indicates that PSFs being knowledge-reliant firms are faced with the challenges of how to effectively leverage HPWPs for building and enhancing their knowledge capital to achieve sustainable competitive advantage. In this context, the extant literature mostly investigates the strategic HRM practices (i.e. HPWPs) from the viewpoint of their direct effects on firm performance. However, there has been little research on how HPWPs influence some intermediary variables to consequently guide the achievement of knowledge-based competitive advantage. In particular, the qualitative and mixed-method studies are scarce. Hence, we introduced intellectual capital as an intervening variable between HPWPs and Multi-stakeholder Value Creation (MSVC) with an aim to put forward a more innovative framework of strategic HRM for the service firms. Given the above gaps, we applied mixed-method design to collect data from the executives and staff at 30 Australian Professional Service Firms (PSFs). The quantitative data involving online surveys helped in empirically evaluating and testing the association between HPWPs & IC and subsequently the role of IC in deriving value for multi-stakeholders in PSFs (HPWPs→IC→MSVC). The surveys also assisted in measuring the thoughts and opinions of the employees. Besides, the qualitative data involving face2face interviews enabled managers and executives to share their personal experience and perception on the implementation of strategic HRM practices (HPWPs) in a knowledge-based environment. In view of the research data analysis, the quantitative data initially involved descriptive data analysis that enabled preliminary data screening and ensured suitability for multivariate analyses at an advanced level which involved measurement scale analyses, followed by EFA, CFA and SEM in a consecutive order. Subsequently, the qualitative data were analyzed via ‘Thematic Analysis’ technique that yielded emerging themes, which were compared with the results of the quantitative findings with an aim to qualitatively validate the research model and draw additional insights that were not captured by the quantitative enquiry. This research theoretically contributes by offering an empirically-validated framework that successfully evaluates HPWPs influence on firm’s IC resources and how this interaction serves as a guiding mechanism for multi-stakeholder value creation in PSFs. On practical front, the results assist service firms in understanding the value phenomena from the multi-stakeholder viewpoint. It also contributes to industry practice by building an understanding on how PSFs can optimally reap their finite IC resources to derive triple value bottom-line using these resources. In short, the investigation of how HPWPs influence IC dynamics in PSFs to achieve knowledge-based competitive advantage is at the core of this research.
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