Linking top management’s HR focus to innovation: the role of ownership structures and high-performance work systems

Abstract

Unraveling the intricate ties between top management, human resource management, and firm innovation is crucial in today’s dynamic business landscape. The role of firm ownership is particularly vital in understanding these processes, especially within the context of increasingly diverse ownership structures. This study leverages the signaling theory and the upper echelon theory to investigate the direct and indirect impacts of top management (TM)’s strategic human resource focus (SHF) on firm innovation and improvement (FII). We investigate the moderating effect of firm ownership structures (state-owned enterprises and privately-owned enterprises) and the mediating effect of a high-performance work system (HPWS) in these processes. Findings reveal that TM’s SHF has both a positive direct effect and a positive indirect effect on FII through the implementation of HPWS. The study affirms the moderating influence of firm ownership on the relationship between TM’s SHF and HPWS, as well as on the mediating effect of HPWS in the relationship between TM’s SHF and FII. Our analysis also uncovers distinct patterns in how firm ownership moderates the direct and indirect effects of TM’s SHF on FII. Theoretical and practical implications are discussed.