Abstract
The primary purpose of this study is to investigate the relationship between high-commitment human resource management (HCHRM) practices and process improvement activities (i.e., manufacturing flexibility) by utilizing the theory of social exchange. We conducted an empirical study to discover the links between social exchange theory and process management from an HRM perspective. For the empirical investigation, we used data from 601 manufacturing enterprises provided by the Ministry of Trade, Industry, and Energy in South Korea. The research is conducted based on employees’ capabilities for process management as a mediator in the analysis of the impact of the HCHRM system on manufacturing flexibility (i.e., internally-driven and externally-driven flexibility). The results of the study show that the HCHRM system ultimately explains manufacturing flexibility through enhancement of employees’ capabilities.
Highlights
The fourth industrial revolution, generally referred to as Industry 4.0, is expected to have a significant impact on manufacturing industries, as it creates faster changes in technology and market conditions
The hypothesized model showed a good fit with the data (χ2 = 883.706, p < 0.01, comparative fit index (CFI) = 0.936, Tucker-Lewis index (TLI) = 0.927, root mean square error of approximation (RMSEA) = 0.059, 90% CI [0.055–0.064])
The level of employees’ capabilities is likely to increase the level of internally driven manufacturing flexibility in the firm (b = 0.208, s.e. = 0.046, p < 0.01, standardized B = 0.200), consistent with Hypothesis 2a
Summary
The fourth industrial revolution, generally referred to as Industry 4.0, is expected to have a significant impact on manufacturing industries, as it creates faster changes in technology and market conditions. In today’s business environment, represented by rapid market change and technological acceleration, researchers and practitioners recognize that manufacturing flexibility is critical for building sustainable manufacturing because the flexibility of manufacturing process enables firms to achieve customization, even in large-scale production, without sacrificing cost efficiency. We can find a positive relationship between manufacturing flexibility and sustainable competitive advantage, in terms of increasing efficiency internally and satisfying customers externally To put it concretely, if a firm has a high level of manufacturing flexibility, the firm can make good performance (i.e., profits or growth) which is known as the source of firm’s sustainability. It is important to consider that manufacturing flexibility makes a firm likely to achieve both generic goals (i.e., cost efficiency and customer satisfaction) without compromise Based on this good performance, the firm with a high level of manufacturing flexibility finds a way of sustainable improvement. Manufacturing flexibility contributes to maturing sustainable manufacturing processes because sustainable manufacturing processes connote an integrative view for economic (i.e., profitability and productivity), social, and environmental stewardship to generate the firm’s sustainable competitive advantage [11]
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