Stimulating product and process innovation through HRM practices: the mediating effect of knowledge management capability

Purpose - This study aims to investigate the influence of human resource management (HRM) practices on two aspects of innovation capability namely product and process innovation. It also attempts to clarify the HRM-innovation relationship by examining the mediating roles of specific components of knowledge management capability (KMC) namely knowledge acquisition, knowledge sharing and knowledge application. Design/methodology/approach - This research used the quantitative method and structural equation modeling (SEM) approach to examine hypotheses with data obtained by survey from 325 participants in 98 Vietnamese firms. Findings - The empirical findings show the evidence on the mediating roles of components of KMC in the HRM-innovation relationship and indicate that HRM practices have a greater impact on product innovation compared to its effects on process innovation. In contrast, all three components of the KMC produce larger impacts on process innovation than on product innovation. In particular, it highlights the key role of knowledge sharing in predicting product and process innovation in comparison to the roles of knowledge acquisition and knowledge application. Practical implications - CEOs/managers should practice and manage their human resource to foster organizational capability for product and process innovation directly or indirectly via enhancing aspects of KMC namely knowledge acquisition, sharing and application. Originality/value - By investigating the mediating mechanisms of specific components of KMC, the paper has significantly contributed to advancing the body of knowledge of innovation theory and providing deeper insights on the correlation between HRM practices and aspects of innovation capability namely product and process innovation.