Why knowledge-based human resource management matters for business service SMEs

Abstract

Amid limited understanding on the effect of knowledge-based human resource management on innovative outcomes as well as international performance, this paper intends to narrow these gaps by providing empirical evidence from the lens of 278 business service small and medium-sized enterprises (SMEs) from Malaysia. This is pertinent as knowledge-based human resource management, which is a performance-based HRM practice, is the key in facilitating the creation of innovative services that will lead to international performance. Our study indicates three key findings. First, knowledge-based human resource management was found to positively influence international performance. Second, innovative service offering was found to mediate the knowledge-based human resource management - international performance relationship. Third, innovative service offering's influence on international performance relationship was contingent upon foreign experiential knowledge (indicated by the number of markets that the SMEs are serving). In other words, this study uncovers a mechanism and a conditional factor for knowledge-based human resource management that will bring optimised effect on the international performance of business service SMEs.