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The impact of market orientation and strategic HRM on firm performance: the case of Chinese enterprises

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Abstract

This study examines market orientation as the antecedent to strategic human resource management (SHRM), and the related effects on firm performance in an emerging economy context. It is suggested that the relationship between SHRM and firm performance is moderated by ownership type and autonomy in staffing of these firms. Empirical results from a sample of Chinese firms from various industries and regions reveal that SHRM mediates the relationship between market orientation and firm performance. It is also found that the effect of SHRM on firm performance is stronger for firms with a higher degree of autonomy in staffing, and weaker for private firms. Other types of ownership (state or foreign) have no effect on this relationship.

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Acknowledgements

This paper is supported by CERG CUHK 4310/01H of Research Grant Council, Hong Kong SAR Government. The assistance of the Enterprise Survey Division of the National Bureau of Statistics, People's Republic of China, is also appreciated. An earlier draft of this paper was presented at the Academy of Management 2005 Meeting. We are grateful to the three JIBS reviewers for their constructive feedback, and to the Departmental Editor, Professor Mary Ann Von Glinow, for her insightful guidance on the revision of this paper. We also thank Michael N. Young and Hang-Yue Ngo for their helpful comments.

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Authors and Affiliations

  1. Department of Management, Hong Kong Baptist University, Hong Kong, China

    Li-Qun Wei

  2. Department of Management, Chinese University of Hong Kong, Hong Kong, China

    Chung-Ming Lau

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  1. Li-Qun Wei
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Correspondence to Li-Qun Wei.

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Accepted by Mary Ann Von Glinow, Departmental Editor, 17 July 2007. This paper has been with the authors for two revisions.

APPENDIX

APPENDIX

Measurement items of market orientation and SHRM scales

Market orientation (alpha=0.85)

  1. 1

    We have a formal market development strategy in our company.

  2. 2

    Our managers are able to understand firm strategy.

  3. 3

    We have strong commitment to our customers.

  4. 4

    We respond rapidly to competitors' action.

  5. 5

    Market information is shared with all departments.

  6. 6

    We have enough autonomy in strategy formulation and implementation.

Strategic human resource management (alpha=0.93)

  1. 1

    Match the characteristics of managers to the strategic plan of the firm.

  2. 2

    Identify managerial characteristics necessary to run the firm in the long term.

  3. 3

    Modify the compensation system to encourage managers to achieve long-term strategic objectives.

  4. 4

    Design staffing patterns to help implement business or corporate strategies.

  5. 5

    Evaluate key personnel based on their potential for carrying out strategic goals.

  6. 6

    Conduct job analysis based on what the job may entail in the future.

  7. 7

    Conduct staff development programs designed to support strategic changes.

  8. 8

    HRM department is able to deliver HR-related information for business strategic decisions.

  9. 9

    There is HR planning in your business, with clear, formal procedure.

  10. 10

    Top managers are able to communicate with employees about business goals, issues and strategies.

  11. 11

    Pay attention to employees' knowledge structure and skill level.

  12. 12

    There is a formal HR strategy in your business.

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Wei, LQ., Lau, CM. The impact of market orientation and strategic HRM on firm performance: the case of Chinese enterprises. J Int Bus Stud 39, 980–995 (2008). https://doi.org/10.1057/palgrave.jibs.8400395

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  • DOI: https://doi.org/10.1057/palgrave.jibs.8400395

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