Intervening effects of high performance work system and firm size on relationship between organizational internal resources and performance among Malaysia manufacturers

In order to have high organizational performance, organization can implements high performance work systems (HPWS) supported by good internal resources. However internal resources such as technology, human resource flexibility, leadership, culture could significantly influences HPWS and ultimately organizational performance. Therefore this study aims to investigate the intervening effects of high performance work system (HPWS) and firm size, on the relationships between organizational internal resources and organizational performance among Federation of Malaysian Manufacturers. The study is a quantitative method using a cross-sectional design, in which questionnaire was distributed among HR managers in the manufacturing industries listed in the Federation of Malaysian Manufacturers Directory 2015, and analyzes on the impact of HPWS as mediator, firm size as moderator on the organizational performance. The research mainly focused on the relationships between company’s internal resources namely technology, human resource flexibility, leadership, and culture, with HPWS and organizational performance. The research design uses systematic random sampling procedure and employed PLS-SEM for data analysis. The research findings indicate a positive linear relationship between technology, leadership, culture on high performance work systems (HPWS); and human resource flexibility, leadership on organizational performance, providing support and extension to the resource-based view theory (RBV). PLS-SEM analysis gives a statistically non-significant mediating effect individually in the respective relationship, organizational contextual variable firms’ size moderating effect on HPWS and organizational performance is nonetheless statistically non-significant. In the descriptive analysis of variables, the results suggesting that the overall level of the manufacturers on HPWS and organizational performance are satisfactory. This empirical research has specifically contributed to the literature, practice and policy of strategically managing organizational internal resources towards the attainment of high performance work system and organizational performance by exhibiting a model of statistically significant relationships between the specified variables. The overall contribution of this research to the literature is that it has managed to further extend and strengthen the theoretical discourse on the RBV of HPWS as source of competitive advantage and attaining organizational performance as perceived by Malaysian manufacturers. The resource-based view (RBV) research identifies the attributes of these internal resources and capabilities to achieve competitive advantage. There has been scarce research on the relationship between these internal resources and the way firms are organized. This has created a gap in the body of knowledge and between the theoretical and practical aspect of managing organizations. The above findings filled the gap by further extend and strengthen the theoretical discourse on the RBV of HPWS as source of competitive advantage in particular by empirically illustrating the extent or magnitude of the relationship between organizational internal resources and organizational performance. Overall this study has managed to provide empirical evidence and support into the insight of the perception of Malaysian manufacturers on the issue of high performance work system (HPWS) as source of competitive advantage from the RBV. The findings offer managers with a practical organizational model that can be utilized to assess and understand the organizational internal resources and capabilities in implementing strategic management policy to achieve competitive advantage and enhance the level of organizational performance.

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